8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): December 28, 2012

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

(Exact Name of Registrant as Specified in Charter)

DELAWARE	001-35293	54-1865271
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3000 Atrium Way, Suite 265 Mount Laurel, New Jersey		08054
(Address of Principal Executive Offices)		(Zip Code)

(856) 273-6980

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On December 28, 2012, Central European Distribution Corporation (the “Company”) and Roust Trading Ltd. (“Roust Trading”) entered into a binding term sheet (the “Term Sheet”). The Term Sheet modifies, in part, the amended and restated securities purchase agreement dated July 9, 2012, by and between the Company and Roust Trading (the “Securities Purchase Agreement”), setting forth the following terms:

• Roust Trading has agreed to permit the Company to use $50 million of cash that Roust Trading previously invested in the Company for working capital and corporate purposes;

• Promptly following the date of the Term Sheet, Roust Trading and the Company will convert $50 million of the existing $70 million of New Debt previously issued by the Company to an affiliate of Roust Trading pursuant to the Securities Purchase Agreement into a credit facility in the form of a term loan owing from the Company to Roust Trading or one of its affiliates (the “New Credit Facility Debt”). Certain subsidiaries of the Company will guarantee and grant security in respect of the New Credit Facility Debt;

• Pursuant to the Term Sheet, the Company, as borrower, and Roust Trading or one of its affiliates or an acceptable third-party, as lender, will negotiate a $15 million secured revolving credit facility;

• Roust Trading will provide up to $107 million of new capital to the Company in lieu of its commitment to backstop the purchase of the Company’s 3.00% Convertible Notes due 2013 contained in the Securities Purchase Agreement subject to and conditional upon an overall restructuring of the Company’s capital structure that is acceptable to the Company and Roust Trading;

• Both the Company and Roust Trading agree to release and waive all claims and causes of action arising under the Securities Purchase Agreement and the amended and restated governance agreement dated July 9, 2012, by and among the Company and Roust Trading (the “Governance Agreement”); and

• The Securities Purchase Agreement and the Governance Agreement will terminate on January 21, 2013.

The Term Sheet also addresses certain matters regarding management of the Company, including the following:

• The formation of an operational management committee of the board of directors of the Company (the “Board”) to oversee the day-to-day business and operations of the Company. All executive officers, including the President, Chief Executive Officer and Chief Financial Officer will report to the operational management committee. The operational management committee will be composed of three directors: Mr. Roustam Tariko, Mr. N. Scott Fine and an additional nominee of Roust Trading;

• The formation of a restructuring committee of the Board responsible for all matters related to any restructuring of the Company’s capital, including all financial matters related thereto. The Restructuring Committee will consist of three non-Russian Standard directors and Mr. Roustam Tariko;

• The appointment of Grant Winterton as Chief Executive Officer of the Company, effective as of January 10, 2013; and

• The Company shall use its best efforts to hold its annual general meeting of shareholders as soon as practicable. The directors nominated for election at the annual general meeting shall include three directors not affiliated with Roust Trading, three directors nominated by Roust Trading, and two directors, one not affiliated with Roust Trading and one affiliated with Roust Trading, only one of which may be elected by the Company’s shareholders.

The foregoing description of the Term Sheet does not purport to be complete and is qualified in its entirety by reference to the Term Sheet, a copy of which is attached as an exhibit hereto and is incorporated by reference herein.

Item 1.02 Termination of a Material Definitive Agreement

On December 28, 2012, the Company entered into the Term Sheet described in Item 1.01 hereof, pursuant to which the Securities Purchase Agreement, the Governance Agreement and the Amended and Restated Voting Agreement dated July 9, 2012, between the Company and Roust Trading shall terminate on January 21, 2013. The description of the Term Sheet and the transactions contemplated thereby contained in Item 1.01 are incorporated into this Item 1.02 by reference. The description of the Securities Purchase Agreement, the Governance Agreement and the transactions contemplated thereby contained in Item 1.01 of the Company’s Current Report on Form 8-K filed with the United States Securities and Exchange Commission on July 11, 2012, are incorporated into this Item 1.02 by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of Mr. David Bailey as Interim Chief Executive Officer of the Company

Mr. David Bailey resigned from his position as Interim Chief Executive Officer effective as of January 10, 2013.

Appointment of Mr. Grant Winterton as Chief Executive Officer

Mr. Grant Winterton has been appointed as Chief Executive Officer of the Company effective as of January 10, 2013.

Mr. Winterton (age: 42) is the current General Manager of the Russian Alcohol Group - a Company subsidiary. Mr. Winterton has over 20 years of experience working in marketing, sales and general management positions for Campbells Soup (Australia), The Coca-Cola Company (Australia, Russia, Ukraine, China), Wimm Bill Dann (Russia) and Red Bull (Russia). Mr. Winterton has lived in Russia for over 10 years, working in the consumer goods industry, and has extensive working experience across the Russia, Ukraine, Belarus and CIS markets. He joined the Company as General Manager of the Russian Alcohol Group in April 2012. Mr. Winterton has a Bachelor of Commerce Degree in Marketing/Finance from the University of New South Wales, Australia.

Resignation of Mr. Evangelos Evangelou as Chief Operating Officer of the Company

Mr. Evangelos Evangelou resigned from his position as Chief Operating Officer effective as of December 31, 2012. Mr. Evangelou will continue to serve with the Company as a manager of its operations in Poland.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
10.1	Binding Term Sheet dated December 28, 2012 by and among Central European Distribution Corporation and Roust Trading Ltd.
99.1	Press Release dated December 28, 2012

Participants in the Solicitation

The Company and certain of its respective directors and executive officers and Roust Trading Ltd. and certain of its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the Company’s proposed annual general meeting under the rules of the United States Securities and Exchange Commission (the “SEC”). Information about the directors and executive officers of the Company is included in the definitive proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on March 26, 2011 and subsequent current reports on Form 8-K filed with the SEC. Shareholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the matters to be considered at the annual general meeting, which may be different than those of Company shareholders generally, by reading the proxy statement and other relevant documents regarding the annual general meeting, when filed with the SEC.

Additional Information

In connection with its proposed annual general meeting, the Company will prepare a proxy statement to be filed with the SEC. When completed, a definitive proxy statement and a form of proxy will be mailed to stockholders of the Company. COMPANY STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND RELATED MATTERS. Company stockholders will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http:// www.sec.gov. In addition, documents filed by the Company are available at the SEC’s public reference room located at 100F Street, N.E. Washington, D.C. 20594. The Company stockholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request to Brian Morrissey, US General Counsel, at 3000 Atrium Way, suite 265, Mt. Laurel, NJ 08054, telephone (856) 273-6980 or from the Company’s website, www.cedc.com.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Central European Distribution Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION
By:	/s/ David Bailey
	David Bailey
	Interim Chief Executive Officer

Date: December 28, 2012

EXHIBIT INDEX

Exhibit No.	Description
10.1	Binding Term Sheet dated December 28, 2012 by and among Central European Distribution Corporation and Roust Trading Ltd.
99.1	Press Release dated December 28, 2012

EX-10.1

Exhibit 10.1

BINDING TERM SHEET

BY AND BETWEEN

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

AND

ROUST TRADING LTD.

Dated as of December 28, 2012

Release of $50 Million Restricted Cash Central European Distribution Corporation (“CEDC” and collectively with its direct and indirect subsidiaries, the “Company”) hereby represents that (i) it requires immediate access to $50 million of cash for working capital and general corporate purposes and (ii) upon the release of the use restrictions described in the next sentence, such cash will be advanced to or for the benefit of its direct or indirect subsidiaries which require such cash on appropriate terms. Upon receipt of a written certificate from CEDC’s Chief Restructuring Officer certifying the cash need set forth in clause (i) of the immediately preceding sentence, Roust Trading Ltd. (“RTL”) shall automatically be deemed to have released and waived the provisions of the Amended and Restated Stock Purchase Agreement dated July 9, 2012 (the “SPA”) that commit CEDC to use $50 million of cash CEDC currently holds for the repayment or repurchase of CEDC’s convertible notes due 2013, so that such cash will be available to the Company for working capital and general corporate purposes, and promptly following such date, $50 million of the existing $70 million of New Debt will be converted into a credit facility in the form of a term loan owing from CEDC to RTL or one of its affiliates (the “New Credit Facility Debt”, and the term “New Debt” shall include the New Credit Facility Debt and the remaining $20 million of notes issued by CEDC to RTL). Each of the CEDC subsidiaries signatory to this Term Sheet (each, a “Guarantor”, and collectively, the “Guarantors”), hereby absolutely, irrevocably and unconditionally, jointly and severally guarantees, as primary obligor and not merely as surety, on a senior basis, to RTL, the due and punctual performance of CEDC’s obligation to repay the New Credit Facility Debt (or, prior to the time the New Credit Facility Debt is converted into a term loan, $50 million of the New Debt), whether at stated maturity, upon acceleration or otherwise (the “Guaranteed Obligation”). The obligations of each Guarantor shall not be subject to any reduction, impairment or termination for any reason and each Guarantor hereby waives any defenses based on or arising out of any defenses of CEDC, any other Guarantor or otherwise arising under law (other than payment of the Guaranteed Obligations in full in cash) and shall not be subject to any defense of set-off, counterclaim or recoupment. The foregoing guarantee is an absolute, unconditional and continuing

guarantee of the full and punctual payment and performance by CEDC of the Guaranteed Obligation. The foregoing guarantee is a guarantee of payment and not of collection.

As security for the prompt and complete payment when due of (x) all of CEDC’s obligations under the New Credit Facility Debt and (y) each Guarantor’s obligations hereunder, (and subject to the next succeeding paragraph) CEDC and each Guarantor hereby pledges and grants to RTL a continuing security interest in all of its right title and interest in all of its property and assets, including without limitation, all of its accounts, chattel paper, deposit accounts, equipment, general intangibles, investment property, inventory, intellectual property and all proceeds and products of any and all of the foregoing. Notwithstanding the foregoing, the guarantees and security interests granted hereunder will be limited to the extent and to the maximum amount as will result in the obligations of CEDC and each Guarantor not constituting a fraudulent conveyance, fraudulent transfer, voidable preference or a violation of applicable law or director duties or the documents governing any of its other debt obligations outstanding on the date hereof. RTL and the Company shall enter into such additional documentation of the guarantees and security interests set forth above as shall be appropriate to document and perfect such guarantees and security interests and shall be reasonably satisfactory to RTL and CEDC, provided that the Company shall not be required to grant a security interest in respect of those assets as to which RTL and CEDC reasonably determine that the costs of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby. For the avoidance of doubt, the security granted hereunder shall be limited to liens that are Permitted Liens and/or Permitted Collateral Liens as defined under the 2016 Indenture (as defined below) and shall not include any security over Intercompany Loan Collateral (as defined below) except on a second priority basis (other than in the case of any security interest granted by CEDC).

The guarantees and liens provided to RTL above permit the granting of senior claims and liens (the “Intercompany Loan Collateral”) to CEDC to secure any amounts up to $50 million which CEDC may lend to its indirect operating subsidiaries for working capital and general corporate purposes.

Upon implementation of a restructuring of the Company’s capital that is acceptable to the Restructuring Committee (as defined below), RTL and the Russian Standard Relationship Committee, all obligations owed under the New Credit Facility Debt secured as set forth herein will be satisfied by, and exchanged for, capital in the Company that is junior to the 2016 Senior Secured Notes issued by CEDC Finance Corporation International, Inc. under that certain indenture, dated as of December 2, 2009 as amended by that certain first supplemental indenture dated December 29, 2009 and the second supplemental indenture, dated December 8, 2010 (the “2016 Indenture”).

	To the extent that any subsidiary of CEDC is not a signatory hereto as of the date of this Term Sheet, the Company shall use its best efforts to cause such subsidiary to execute this Term Sheet as soon as possible; provided, that this Term Sheet shall be binding immediately upon execution by RTL and CEDC.
Assistance with Working Capital Facilities and Local Guarantees	Immediately upon execution of this Term Sheet, RTL and, consistent with his fiduciary duties, Mr. Roustam Tariko, shall use commercially reasonable efforts to engage with the Company’s lenders and local guarantee providers, in particular in respect of the Company’s working capital facilities and bank guarantees in Russia, for the purpose of ensuring the Company’s continued access to sufficient working capital lines and guarantees to meet its operational requirements for the next six months.
Additional Financing	Effective upon the execution of this Term Sheet, the SPA shall be deemed amended to replace RTL’s commitment to backstop the purchase of convertible notes due 2013 with a commitment to provide $107 million of new capital to the Company, but subject to (and fully conditional upon) a restructuring of the Company’s capital that is acceptable and agreed by the Restructuring Committee, RTL (in its sole discretion) and the Russian Standard Relationship Committee; provided, that such amount shall be reduced by the amount of the commitment under the Revolving Credit Facility (as defined below). Promptly after the execution of this Term Sheet, the parties will negotiate and document (1) a $15 million revolving credit agreement (the “Revolving Credit Facility”), pursuant to which RTL or an affiliate (the “Revolving Lender”) shall make revolving loans to the Company in an amount up to $15 million, (2) guaranty agreements from each of CEDC’s direct and indirect subsidiaries that guarantee the 2016 Senior Secured Notes to provide for an unconditional guaranty of all obligations under the Revolving Credit Facility, and (3) collateral agreements granting the Revolving Lender liens and security interests that fully secure all obligations under the Revolving Credit Facility; provided, that the obligations to provide security and guarantees shall be limited as set forth above with respect to the New Credit Facility Debt (e.g. in the case of violations of law or agreements). RTL shall be permitted, however, to substitute a third party lender unaffiliated with RTL (reasonably satisfactory to the Restructuring Committee) as the Revolving Lender so long as such unaffiliated third party Revolving Lender provides the Revolving Credit Facility on terms no less favorable to the Company than set forth herein. At such time (and from time to time) as the Russian Standard Relationship Committee determines (but in no event prior to February 1, 2013), and subject only to (a) the receipt of advice from both Houlihan Lokey and the Chief Restructuring Officer, that borrowings under the Revolving Credit Facility are necessary for the Company to fund working capital needs as set forth in the customary 13-week cash flow forecast prepared by the Chief Restructuring Officer (and approved by CEDC’s Board of Directors), (b) the

Revolving Lender being reasonably satisfied that the borrowings are fully secured in customary fashion for such a revolving credit facility following consultation with Houlihan Lokey and Blackstone, and (c) the Company not being in breach of any of its material obligations as contemplated hereby, the Revolving Lender shall commence making revolving loans to the Company as requested thereunder.

Management Issues

In reliance on and as consideration for RTL’s agreements set forth in this Term Sheet, CEDC’s Board of Directors hereby forms a committee of directors to oversee all day-to-day business and operational management of the Company including operational finance (the “Operational Management Committee”) as follows: •     The Operational Management Committee shall oversee the Company’s day-to-day business and operations (other than those matters that are exclusively reserved to CEDC’s Board of Directors or other Committees of CEDC’s Board of Directors). The CEO (including any interim CEO), CFO (including any interim CFO), President (including any interim President) and all other executive officers of the Company, shall report directly to the Operational Management Committee and, if reasonably requested by members of the CEDC Board of Directors from time to time, to CEDC’s Board of Directors. •     Control of finance related to a restructuring will reside with the Restructuring Committee as set forth below. •     Extraordinary transactions and decisions with respect thereto will continue to be within the province of CEDC’s Board of Directors for consideration and approval. •     If, at any time the Company’s consolidated cash and cash equivalents shall be reduced below $10 million, any cash use shall also require the approval of the Chief Restructuring Officer. •     The Operational Management Committee shall consist of three directors: Roustam Tariko, another RTL nominee and one non-RTL nominee, who shall be Scott Fine in the first instance. Decisions of the Operational Management Committee will be taken by majority vote. Members of the Operational Management Committee may be removed by a vote of a majority of all the members of the CEDC Board of Directors then in office only upon a determination that such member is manifestly unsuitable to serve on such committee by reason of (i) violation of law, (ii) breach of fiduciary duty or (iii) acting contrary to an established resolution of the CEDC Board of Directors or committees thereof (in the case of clause (iii), not with respect to matters within the Operational Management Committee’s delegated authority).

•      For the avoidance of doubt, the engagement and regular payment of the Company’s legal and financial advisors shall not be in the control of the Operational Management Committee.

•      For the avoidance of doubt, payment of directors and named executive officers for their services to the Company shall not be in the control of the Operational Management Committee.

•      The Operational Management Committee shall be responsible for compensation decisions with respect to employees of the Company other than the named executive officers of the Company, although nothing herein shall be deemed to reduce the existing authority of the existing Compensation Committee of CEDC’s Board of Directors.

•      CEDC’s Board of Directors hereby forms a Restructuring Committee, which shall be comprised of 3 non-RTL directors and Mr. Roustam Tariko. Decisions of the Restructuring Committee will be taken by majority vote. The Restructuring Committee shall have full responsibility for all matters related to the restructuring of the Company’s capital, including financial matters related thereto; provided, that any proposals for transactions with RTL or its affiliates shall be reviewed, considered by, and subject to the approval of, the non-RTL directors who are members of the Restructuring Committee and the Russian Standard Relationship Committee.

•      The Restructuring Committee shall be entitled to retain, engage and instruct such advisors as it deems necessary to assist in the Company’s preparation for restructuring.

•      The Chief Restructuring Officer shall report to the full CEDC Board of Directors; provided, that the Chief Restructuring Officer shall be available to each of the Operational Management Committee and the Restructuring Committee with respect to matters delegated to such committees.

•      Grant Winterton shall be appointed as Chief Executive Officer effective January 10, 2013.

•      The Restructuring Committee and the Operational Management Committee shall remain in place with the composition, powers and responsibilities described in this Term Sheet until such time as the Company completes a financial restructuring.

•      From the date hereof and until the completion of a financial restructuring, if: (i) any vacancy on CEDC’s Board of Directors or any committee thereof, including the Operational Management Committee and the Restructuring Committee, is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any RTL

	director, the CEDC Board of Directors and RTL will take all actions necessary to cause the vacancy to be filled as soon as practicable by a new RTL director nominated by RTL; and, (ii) any vacancy on the CEDC Board of Directors or any committee thereof, including the Operational Management Committee and the Restructuring Committee, is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any non-RTL director, the CEDC Board of Directors and RTL will take all actions necessary to cause such vacancy to be filled as soon as practicable by a new non-RTL director nominated by the remaining non-RTL directors.
Annual General Meeting	CEDC shall use its best efforts to hold an annual general meeting of its shareholders as soon as practicable, including preparing and distributing all required proxy materials. The matters for vote at the meeting shall be limited to the election of directors and those matters traditionally reserved for an annual general meeting that, pursuant to the SEC’s proxy rules, would not require an SEC review of the proxy materials. For this purpose CEDC and RTL agree that CEDC’s proxy statement shall: •      Propose 6 directors for election pursuant to normal plurality voting, with 3 RTL nominees and 3 non-RTL nominees; •      Provide for an additional director to be chosen from among 2 nominees, one of whom will be an RTL nominee and one of whom will not be an RTL nominee. Whichever of these two nominees receives more votes at the stockholder meeting shall be elected. (This to be structured consistent with the provisions of the 2016 Senior Secured Notes Indenture). RTL shall be free to vote its shares (including the 3 million additional shares which were issued to RTL pursuant to the SPA) at the stockholder meeting as RTL determines in its sole discretion.
Other Matters	The SPA, the Amended and Restated Governance Agreement dated July 9, 2012 (“Governance Agreement”) and the Amended and Restated Voting Agreement dated July 9, 2012 (“Voting Agreement”) shall each be deemed amended so as not to prevent the Company from having restructuring discussions and negotiations with the holders of the Company’s outstanding debt obligations. The SPA, the Governance Agreement and the Voting Agreement shall remain in force and effect as modified consistent herewith until January 21, 2013, on which date they will each terminate automatically. The parties to the SPA and the Governance Agreement hereby grant each other (and each of their respective affiliates, current and former

officers, current and former directors, principals, shareholders, managers, parents, subsidiaries, members, predecessors, successors, assigns, agents, and other representatives) mutual releases of any and all claims and causes of action relating to or arising out of the SPA, Voting Agreement and/or Governance Agreement and/or any of the allegations contained in the filings with the U.S. Securities and Exchange Commission (“SEC”) made by or on behalf of CEDC or RTL and their respective affiliates, and agree not to bring any suit, action or proceeding or seek any judgment against each other (and each of their respective affiliates, current and former officers, current and former directors, principals, shareholders, managers, parents, subsidiaries, members, predecessors, successors, assigns, agents, and other representatives) for such claims or causes of action to the extent such claims or causes of action relate to or arise out of circumstances existing prior to the date hereof. Further, RTL agrees to forbear (and cause its affiliates to forbear) from the exercise of any remedies with respect to any event of default under the New Debt which relates to or arise out of circumstances existing prior to the date hereof; provided, that such forbearance shall automatically terminate upon the earliest to occur of (i) any acceleration of any other indebtedness of the Company, (ii) the maturity of CEDC’s Convertible Notes due 2013 and (iii) the occurrence of any other default under the New Debt. Notwithstanding the foregoing, nothing herein shall be deemed to release, waive or forfeit any default or event of default existing under any of the Company’s debt obligations owned by RTL or its affiliates and RTL reserves all rights and remedies. Upon the expiration of the aforementioned forbearance, RTL shall immediately be entitled to exercise any and all remedies available under law or contract.

The Company and its advisors shall use their best efforts to prepare and deliver to RTL as soon as possible (1) a customary 13-week rolling cash flow projection and (2) a customary 5-year business plan, together with appropriate supporting materials, that shall have been in each case, approved by CEDC’s Board of Directors and certified by the Chief Restructuring Officer.

The Company and its advisors shall cooperate with, and assist, RTL and its advisors in conducting the reasonable due diligence of the Company and its finances.

The parties shall issue a joint press release regarding the foregoing.

Any decision regarding the commencement of a case under Title 11 or for similar relief in any jurisdiction outside the U.S. with respect to CEDC or any of its direct or indirect subsidiaries shall, except as otherwise required by law, be decided by a majority of the CEDC Board of Directors; provided, that such decision is taken after receiving affirmative advice from CEDC’s outside legal and financial advisors and Alvarez & Marsal that the filing is consistent with the fiduciary duties of CEDC’s (or such subsidiary’s) Board of Directors, is in the best interest of the Company and not inconsistent with the duty to maximize value of the Company.

Additionally, except as otherwise required by law, the commencement

of a case under Title 11 or for similar relief in any jurisdiction outside the U.S. with respect to CEDC or any of its direct or indirect subsidiaries that is primarily based on lack of liquidity shall not occur unless CEDC first delivers to RTL prior notice of its intent to file such a proceeding, to the extent practicable, at least 5 business days in advance of such filing (and in any event no less than 72 hours in advance of such filing), and provides RTL a bona fide good faith opportunity to provide the needed liquidity.

Miscellaneous

This Term Sheet shall have binding effect on the parties hereto. Except as provided below, capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the SPA. The provisions of Article V of the Governance Agreement (other than Section 5.8) shall apply to this Term Sheet mutatis mutandis. Except as otherwise provided below, at such time as the Governance Agreement has terminated in accordance with the terms of this Term Sheet, with it being the intention of the parties hereto that this paragraph fully regulates the obligations of RTL, any Affiliate of RTL and any RTL Director with respect to corporate opportunities: (i) to the fullest extent permitted by Law, the doctrine of corporate opportunity and any analogous doctrine shall not apply to RTL, any RTL Director and any Affiliate of RTL or any RTL Director; (ii) to the fullest extent permitted by Law, CEDC, on behalf of itself and its Subsidiaries, renounces any interest or expectancy of CEDC or any of its Subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to RTL, any RTL Director or any Affiliate of RTL or any RTL Director; and (iii) RTL, each RTL Director and any Affiliate of RTL or any RTL Director who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for CEDC or any of its Subsidiaries shall not (A) have any duty to communicate or offer such opportunity to CEDC or any of its Subsidiaries and (B) to the fullest extent permitted by Law, shall not be liable to CEDC or any of its Subsidiaries or to the stockholders of CEDC for breach of any fiduciary or other duty by reason of the fact that RTL or any RTL Director pursues or acquires for, or directs such opportunity to, itself or another Person or does not communicate such opportunity or information to the Company or any of its Subsidiaries. From the time that the Governance Agreement terminates in accordance with the terms of this Term Sheet, until the earlier of such time when (i) RTL and its Affiliates cease to hold any debt obligations of the Company and (ii) RTL and its Affiliates own less than 9.0% of the Voting Securities: (i) RTL shall offer any opportunity presented to it or any of its Affiliates to acquire a business within the spirits sector that has a fair market value in excess of $35 million to CEDC in the first instance (subject to Law and confidentiality obligations). In the event CEDC does not or chooses not to actively pursue such an opportunity within twenty (20) Business Days after receiving a notice in writing with respect to such opportunity from RTL, RTL and its Affiliates shall be free to pursue any such opportunities

independently; and (ii) neither RTL nor its Affiliates shall acquire any business that it was required to offer to CEDC pursuant to this paragraph and failed to do so or denied CEDC approval to acquire pursuant to RTL’s rights under the Governance Agreement. Capitalized terms used in this paragraph and not otherwise defined in this paragraph shall have the meaning ascribed to them in the Governance Agreement.

In the event of any discrepancy, ambiguity or conflict between the provisions of this Term Sheet and the SPA or the Governance Agreement, it is intended that the provisions of this Term Sheet shall prevail.

In the event of any discrepancy, ambiguity or conflict between the provisions of this Term Sheet and the Bylaws of the Company, it is intended that the provisions of this Term Sheet shall prevail and accordingly the parties hereto shall take all action necessary and powers available to them so as to give effect to the provisions of this Term Sheet and shall further if necessary and within their powers, procure any required amendment to the Bylaws.

All agreements and arrangement between the Company and RTL (and the Company’s constituent documents) shall be amended as necessary to permit the implementation of the transactions contemplated hereby and to be consistent with the terms hereof and the parties shall implement such other agreements and arrangements (for example, to implement and perfect the guarantees and collateral security referred to herein) as may be necessary to effectuate the transactions contemplated hereby.

IN WITNESS WHEREOF, the parties to this Term Sheet have executed this Term Sheet as of December 28, 2012.

CENTRAL EUROPEAN DISTRIBUTION CORPORATION
By:	/s/ David Bailey
Name:	David Bailey
Title:	Interim Chief Executive Officer
ROUST TRADING LTD.
By:	/s/ Roustam Tariko
Name:	Roustam Tariko
Title:
By:	/s/ Wendell Malcolm Hollis
Name:	Wendell Malcolm Hollis
Title:	Director

[SIGNATURE PAGES FOR CEDC SUBSIDIARIES TO COME]

EX-99.1

Exhibit 99.1

CEDC and Russian Standard Agree to Revised Transaction

CEDC Receives Access to up to $65 Million in Funding

Russian Standard to Assume Oversight Responsibility for CEDC Operations

CEDC to Appoint Chief Executive Officer

Mt. Laurel, New Jersey – December 28, 2012 – Central European Distribution Corporation (NASDAQ: CEDC) announced today that it has agreed to a revised transaction with Russian Standard (through its affiliate, Roust Trading Ltd. (“RTL”)). This agreement represents a renewed commitment by Russian Standard to a strategic alliance with CEDC and is an important vote of confidence in the future success of CEDC’s business. The agreement also addresses the ongoing management of CEDC, with directors nominated by Russian Standard taking responsibility for CEDC’s operations through a newly-formed committee of the CEDC Board of Directors. A special committee led by CEDC directors unaffiliated with Russian Standard will retain control of any restructuring of CEDC’s capital structure. This amended transaction is intended to stabilize CEDC’s business and to pave the way for CEDC to address its balance sheet issues in an orderly fashion.

Under the revised terms, Russian Standard has:

• released restrictions on $50 million in cash previously invested in CEDC, making such funds available for working capital and general corporate purposes,

• agreed to provide a new $15 million revolving credit facility to CEDC, and

• agreed to provide up to $107 million in new capital to CEDC (reduced by the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC’s capital structure that is acceptable to CEDC and Russian Standard.

In turn, CEDC has:

• created an Operational Management Committee of the CEDC Board of Directors to be led by Mr. Tariko,

• created a Restructuring Committee of the CEDC Board of Directors to be led by non-Russian Standard directors,

• appointed Grant Winterton as Chief Executive Officer of CEDC, effective January 10, 2013. Mr. Winterton is the current General Manager of the Russian Alcohol Group - a CEDC subsidiary. Mr. Winterton has over 20 years of experience working in marketing, sales and general management positions for Campbells Soup (Australia), The Coca-Cola Company (Australia, Russia, Ukraine, China), Wimm Bill Dann (Russia) and Red Bull (Russia). Mr. Winterton has lived in Russia for over 10 years, working in the consumer goods industry, and has extensive working experience across the Russia, Ukraine, Belarus and CIS markets. He joined CEDC as General Manager of the Russian Alcohol Group in April 2012.

• agreed to call an annual shareholders’ meeting as soon as practicable to vote on a slate of directors agreed between CEDC and Russian Standard and to decide if Russian Standard nominees will comprise a majority of the CEDC Board of Directors.

CEDC and Russian Standard are implementing these revised terms pursuant to a binding term sheet signed today, which modifies the Amended and Restated Securities Purchase Agreement and Amended and Restated Governance Agreement between CEDC and RTL. These two agreements will terminate

with automatic effect on January 21, 2013, and, from today, CEDC will be permitted to have restructuring discussions and negotiations with the holders of CEDC’s outstanding debt obligations. These revised terms also represent a settlement of the issues between CEDC and Russian Standard stemming from, among other things, the restatement of CEDC’s financial statements for its 2010 and 2011 fiscal years in October of this year, with CEDC and RTL agreeing to mutually release all claims and causes of action and not to bring any legal action against the other under either agreement for matters arising prior to today.

CEDC and Russian Standard believe that these revised terms constitute a mutually beneficial way of addressing CEDC’s near-term funding and operational issues while also committing CEDC and Russian Standard to work together to address CEDC’s long-term capital requirements, including a restructuring of its current debt obligations. In that regard, CEDC and Russian Standard also believe that the changes to CEDC’s corporate governance comprise an appropriate component of CEDC’s strategy.

Terms of the Revised Transaction

Effective immediately, RTL has released contractual restrictions on $50 million in cash previously invested in CEDC to allow CEDC to use this cash for working capital and general corporate purposes, and committed to make available a $15 million revolving credit facility to CEDC (drawable no earlier than February 1, 2013), subject to definitive documentation and the provision of reasonably satisfactory security by CEDC. Russian Standard has also committed to provide CEDC with up to $107 million of new capital (reduced by the amount of the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC’s capital structure that is acceptable to CEDC and Russian Standard.

In exchange, CEDC will provide guarantees and liens on assets of its subsidiaries in respect of the debt currently evidenced by $50 million of senior CEDC notes held by Russian Standard. In addition, CEDC has agreed to certain corporate governance changes, including:

• The creation of an Operational Management Committee to oversee all day-to-day business and operational management of CEDC with CEDC management to report directly to this committee. The Operational Management Committee will consist of Mr. Roustam Tariko, Mr. Scott Fine and another CEDC board member nominated by Russian Standard.

• The creation of a Restructuring Committee with full responsibility for all matters related to any restructuring of CEDC’s capital. The Restructuring Committee will consist of three non-Russian Standard directors and Mr. Roustam Tariko.

• The appointment of Grant Winterton, the current Chief Executive Officer of the Russian Alcohol Group - a CEDC subsidiary, as Chief Executive Officer of CEDC effective January 10, 2013.

CEDC and Russian Standard have also reached agreement on the slate of directors to be proposed at the next annual general meeting of CEDC shareholders, which will be convened as soon as practicable. The slate of directors will consist of three directors nominated by Russian Standard and three directors nominated by non-Russian Standard directors. In addition, shareholders will be given the opportunity to elect a seventh director from among two candidates, one nominated by Russian Standard and one by the non-Russian Standard directors.

Finally, CEDC and Russian Standard have agreed that the Amended and Restated Securities Purchase Agreement and the Amended and Restated Governance Agreement by and between CEDC and RTL will automatically terminate on January 21, 2013 and to mutually release all claims and causes of action (and not to bring any legal action against the other) under either agreement for matters arising prior to today.

About Central European Distribution Company

CEDC is one of the world’s largest producers of vodka and Central and Eastern Europe’s largest integrated spirit beverage company. CEDC produces the Green Mark, Absolwent, Zubrowka, Bols, Parliament, Zhuravli, Royal and Soplica brands, among others. CEDC exports its products to many markets around the world, including the United States, England, France and Japan.

CEDC also is a leading importer of alcoholic beverages in Poland, Russia and Hungary. In Poland, CEDC imports many of the world’s leading brands, including Carlo Rossi Wines, Concha y Toro wines, Metaxa Liqueur, Rémy Martin Cognac, Sutter Home wines, Grant’s Whisky, Jagermeister, E&J Gallo, Jim Beam Bourbon, Sierra Tequila, Teacher’s Whisky, Campari, Cinzano, and Old Smuggler. CEDC is also a leading importer of premium spirits and wines in Russia with brands such as Concha y Toro, among others.

About Russian Standard Corporation

Russian Standard Corporation is one of Russia’s most successful private companies with business interests in premium vodka, spirits distribution, banking and insurance. Russian Standard Vodka is the global leader in authentic Russian premium vodka and the only Russian global brand with sales in over 75 markets around the world. Its 2011 sales exceeded 2.6 million 9-liter cases. Roust Inc. is one of Russia’s leading premium spirits distributors, representing such well-known brands as Gancia, Rémy Martin, Metaxa, St Remy, Cointreau, Jagermeister, Molinari, Whyte & Mackay, and Dalmore. In 2011, Russian Standard acquired a 70% stake in Gancia SPA, the legendary Italian wine-making company that created the first Italian sparkling wine. With 2000 hectares of vineyards, 5 million kilograms of grapes vinified, Gancia produces around 25 million bottles of sparkling wine, wines and aperitifs each year. Russian Standard Bank is the largest privately owned financial institution in Russia and is a leader in the Russian consumer finance market, including consumer loans and credit cards. Since 1999 the Bank has been setting new standards in consumer banking, with over 25 million clients, over US$45 billion in loans granted and 35 million credit cards issued. Russian Standard Bank is the exclusive issuer and service provider for American Express and Diners Club International cards in Russia.

Russian Standard Corporation has over 19,000 employees working in offices in Moscow, St Petersburg, New York, Paris, London and Kiev. The total assets of Russian Standard Corporation exceed US$5 billion.

Cautionary Statement about Forward-Looking Information

This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements about the expected effects of the CEDC management changes announced and statements about the terms of the revised agreement with RTL, including the availability of the new revolving credit facility and the additional capital to be provided, statements about our ability to meet our near-term funding requirements and statements about our revised governance arrangement with RTL and the operational effects thereof on our business. Forward looking statements are based on our knowledge of facts as of the date hereof and involve known and unknown risks and uncertainties that may cause the actual results, performance or achievements of CEDC to be materially different from any future results, performance or achievements expressed or implied by our forward looking statements. Such risks include, among others, meeting the relevant conditions to the availability of the new revolving credit facility and implementing the requested security and guarantee arrangements, our ability to agree an overall restructuring of CEDC’s capital structure, our ability to access our existing lines of credit, and our ability to effectively implement and maintain the revised corporate governance arrangement with RTL.

Investors are cautioned that forward looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. CEDC undertakes no obligation to publicly update or revise any forward looking statements or to make any other forward looking statements, whether as a result of new information, future events or otherwise, unless required to do so by securities laws. Investors are referred to the full discussion of risks and uncertainties included in CEDC’s Form 10-K for the fiscal year ended December 31, 2011, including statements made under the captions “Item 1A. Risks Relating to Our Business” and in other documents filed by CEDC with the United States Securities and Exchange Commission (the “SEC”).

Additional Information

CEDC will file copies of the term sheet with the SEC on a Form 8-K to which investors should refer for additional information on the terms of the revised transaction.

In connection with its proposed annual general meeting, CEDC will prepare a proxy statement to be filed with the SEC. When completed, a definitive proxy statement and a form of proxy will be mailed to stockholders of CEDC. CEDC STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND RELATED MATTERS. CEDC stockholders will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http:// www.sec.gov. In addition, documents filed by CEDC are available at the SEC’s public reference room located at 100F Street, N.E. Washington, D.C. 20594. CEDC stockholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request to Brian Morrissey, US General Counsel, at 3000 Atrium Way, suite 265, Mt. Laurel, NJ 08054, telephone (856) 273-6980 or from CEDC’s website, www.cedc.com.

CEDC and certain of its respective directors and executive officers and Roust Trading Ltd. and certain of its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the annual general meeting under the rules of the SEC. Information about the directors and executive officers of CEDC is included in the definitive proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on March 26, 2011 and subsequent current reports on Form 8-K filed with the SEC. Shareholders may obtain additional information regarding the interests of CEDC and its directors and executive officers in the matters to be considered at the annual general meeting, which may be different than those of CEDC shareholders generally, by reading the proxy statement and other relevant documents regarding the annual general meeting, when filed with the SEC.

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Contact

David Bailey

Interim Chief Executive Officer

Central European Distribution Corporation

48-22-456-6106

Anna Załuska

Corporate PR Manager

Central European Distribution Corporation

48-22-456-6061

Oleg Yegorov

Russian Standard Corporation

7-495-967-0990

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