Offering Memorandum

AMENDED AND RESTATED OFFERING MEMORANDUM, CONSENT SOLICITATION STATEMENT AND DISCLOSURE STATEMENT SOLICITING ACCEPTANCES OF A PREPACKAGED PLAN OF REORGANIZATION

CENTRAL EUROPEAN DISTRIBUTION CORPORATION CEDC FINANCE CORPORATION INTERNATIONAL, INC.

Offer to exchange (the “CEDC Exchange Offer”) all of the outstanding 3.00% Convertible Senior Notes due 2013 (collectively, the “Existing 2013 Notes”) issued by Central European Distribution Corporation for new shares of common stock of Central European Distribution Corporation (“New Common Stock”)

Offer to exchange (the “CEDC FinCo Exchange Offer” and, together with the CEDC Exchange Offer, the “Exchange Offers”) all of the outstanding 9.125% Senior Secured Notes due 2016 (the “9.125% Existing 2016 Notes”) and the 8.875% Senior Secured Notes due 2016 (the “8.875% Existing 2016 Notes” and, together with the 9.125% Existing 2016 Notes, the “Existing 2016 Notes” and, together with the Existing 2013 Notes, the “Existing Notes”) issued by CEDC Finance Corporation International, Inc. for (i) cash consideration and/or (ii) new Senior Secured Notes due 2018 (the “New Secured Notes”) and new Convertible Secured PIK Toggle Notes due 2018 (the “New Convertible Secured Notes” and, together with the New Secured Notes, the “New Notes”)

Solicitation of consents to amendments to the indenture governing the Existing 2016 Notes

The New Secured Notes offered in the CEDC FinCo Exchange Offer will bear interest, payable semi-annually, at an initial rate per annum of 8.0% with a 1.0% step-up per annum to a maximum rate per annum of 10.0% and will mature on April 30, 2018. The New Convertible Secured Notes offered in the CEDC FinCo Exchange Offer will bear interest, payable in cash or in kind, at a fixed rate per annum, payable semi-annually, equal to 10.0% and will mature on April 30, 2018. The New Convertible Secured Notes will be convertible into New Common Stock initially equal to 20% of CEDC’s outstanding common stock, and increasing up to 35% depending on the conversion time. Interest on the New Notes will be payable on April 30 and October 31 of each year, commencing October 31, 2013.

THE EXCHANGE OFFERS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON MARCH 22, 2013 UNLESS EXTENDED OR EARLIER TERMINATED BY US (SUCH DATE AND TIME, AS THE SAME MAY BE EXTENDED OR EARLIER TERMINATED, THE “EXPIRATION TIME”). IN ORDER TO RECEIVE THE CONSIDERATION (AS HEREINAFTER DEFINED) APPLICABLE TO THE EXISTING NOTES, NOTEHOLDERS (AS HEREINAFTER DEFINED) MUST VALIDLY TENDER AND NOT WITHDRAW THEIR EXISTING NOTES, AT OR PRIOR TO THE EXPIRATION TIME. HOLDERS OF EXISTING NOTES MAY TENDER THEIR NOTES IN THE EXCHANGE OFFERS WITHOUT DELIVERING ACCEPTANCES TO THE PLAN OF REORGANIZATION OR DELIVERING THEIR CONSENTS (AS HEREINAFTER DEFINED), AS APPLICABLE. HOLDERS OF EXISTING 2016 NOTES MAY DELIVER THEIR CONSENTS WITHOUT TENDERING THEIR EXISTING 2016 NOTES IN THE EXCHANGES OFFERS OR DELIVERING THEIR ACCEPTANCES TO THE PLAN OF REORGANIZATION. HOLDERS OF EXISTING NOTES MAY DELIVER ACCEPTANCES TO THE PREPACKAGED PLAN OF REORGANIZATION WITHOUT TENDERING THEIR NOTES IN THE EXCHANGE OFFERS BUT MUST DELIVER THEIR CONSENTS, AS APPLICABLE.

TENDERS OF EXISTING 2013 NOTES AND ACCEPTANCES OF THE PLAN OF REORGANIZATION MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION TIME. TENDERS OF EXISTING 2016 NOTES AND CONSENTS TO AMENDMENTS TO THE EXISTING 2016 NOTES INDENTURE MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EARLIER OF (A) THE DATE AND TIME THAT CEDC FINCO NOTIFIES THE TRUSTEE UNDER THE EXISTING 2016 NOTES INDENTURE THAT CEDC FINCO HAS RECEIVED THE REQUISITE CONSENTS (AS DEFINED BELOW), AND (B) 5:00 PM NEW YORK CITY TIME ON MARCH 14, 2013 (THE “CONSENT TIME”). HOLDERS OF EXISTING 2016 NOTES WHO VOTE TO ACCEPT THE PLAN OF REORGANIZATION PRIOR TO THE CONSENT FEE DEADLINE (AS DEFINED) BELOW MAY MODIFY THEIR VOTES AT ANY TIME PRIOR TO THE CONSENT TIME. HOLDERS OF EXISTING 2016 NOTES WHO VOTE TO ACCEPT THE PLAN OF REORGANIZATION AFTER THE CONSENT FEE DEADLINE OR WHO VOTE TO REJECT THE PLAN OF REORGANIZATION MAY MODIFY THEIR VOTES AT ANY TIME PRIOR TO THE VOTING DEADLINE (AS DEFINED BELOW).

NOTEHOLDERS SHOULD REFER TO THE SECTIONS HEREIN ENTITLED “THE EXCHANGE OFFERS AND CONSENT SOLICITATION” AND “PROCEDURES FOR VOTING ON THE PLAN OF REORGANIZATION” FOR INSTRUCTIONS ON HOW TO TENDER NOTES, CONSENT TO THE AMENDMENTS TO THE INDENTURE GOVERNING THE EXISTING 2016 NOTES AND VOTE ON THE PLAN OF REORGANIZATION.

Upon the terms and subject to the conditions set forth in this offering memorandum and consent solicitation statement (as it may be amended from time to time, the “Offering Memorandum”), disclosure statement soliciting acceptances of the Plan of Reorganization (as hereinafter defined) (as it may be amended from time to time, the “Disclosure Statement” and, together with the Offering Memorandum, this “Offering Memorandum and Disclosure Statement”) and the ballot (“Ballot”) for accepting or rejecting the Plan of Reorganization,

Each holder of Existing 2016 Notes who delivers Consents with respect to its Existing 2016 Notes by 5:00 PM, New York City time on March 14, 2013 (the “Consent Fee Deadline”), and does not validly withdraw such Consents, will receive a cash payment equal to 0.50% of the principal amount of the Existing 2016 Notes for which Consents were delivered and not withdrawn (the “Consent Fee”) promptly after the Consent Fee Deadline (the “Consent Fee Payment Date”), assuming all of the conditions to the payment of the Consent Fee are met. Holders of Existing 2016 Notes that deliver Consents after the Consent Fee Deadline will not be entitled to a Consent Fee. The Consent Fee will be payable in U.S. dollars. Payments of the Consent Fee in respect of Consents from holders of 8.875% Existing 2016 Notes will be paid based upon the prevailing euro/US dollar exchange rate in effect at the time of payment. The Consent Fee will only be payable if the Collateral and Guarantee Amendments are approved by or before the Consent Fee Deadline.

This Offering Memorandum and Disclosure Statement includes a solicitation of acceptances of the Plan of Reorganization from holders of the Existing Notes (“Noteholders”, and each a “Noteholder”). You should rely only on the information contained herein and in the related Ballot, as applicable, in making your decision to participate in the Exchange Offers, to participate in the Consent Solicitation, and/or to vote to accept the Plan of Reorganization. Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers but must deliver their Consents.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION OR THESE SECURITIES, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTION OR DETERMINED IF THIS OFFERING MEMORANDUM IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The Exchange Offers are intended to be exempt from the federal registration requirements of the U.S. Securities Act of 1933 (the “Securities Act”) pursuant to the exemption from such registration contained in Section 3(a)(9) thereof, and, therefore, considered a federal “covered security” by Section 18(b)(4)(D) (formerly, Section 18(b)(4)(C)), of the Securities Act. The Exchange Offers are exempt from state securities registration by virtue of the preemption as a covered security under Section 18(b)(4)(D) and/or the preemption for “listed securities” under Section 18(b)(1) of the Securities Act.

The date of this Offering Memorandum and Disclosure Statement is March 8, 2013.

On February 28, 2013, Roust Trading Ltd. and its affiliates (“RTL”), and the steering committee (the “Existing 2016 Notes Steering Committee”) of certain beneficial owners holding an aggregate of approximately 30% in outstanding principal amount of the Existing 2016 Notes, entered into a joint summary term sheet (the “Restructuring Term Sheet”) relating to a proposed financial restructuring of the Company. On March 7, 2013, CEDC’s Board of Directors determined that the financial restructuring proposed under the Restructuring Term Sheet was in the best interests of the Company and should be pursued. This Offering Memorandum amends and restates the Old Offering Memorandum and seeks to implement the proposed financial restructuring contemplated by the Restructuring Term Sheet. Accordingly, RTL and each of the members of the Existing 2016 Notes Steering Committee believe that the restructuring proposed herein best maximizes the value of the Company available to stakeholders under the current circumstances, and supports the Exchange Offers and Plan of Reorganization as being in the best interests of all constituents.

In the CEDC Exchange Offer, for each $1,000 principal amount of Existing 2013 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time by holders of Existing 2013 Notes, such holders will receive 8.86 shares of New Common Stock (the “Existing 2013 Notes Consideration”).

In the CEDC FinCo Exchange Offer, each of the holders (the “Tendering 2016 Noteholders”) of Existing 2016 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time (the “Tendered 2016 Notes”) shall receive cash and/or New Notes depending upon whether the Tendering 2016 Noteholder elects to participate in the Cash Option or New Notes Option (each as defined below).

The Cash Option is being conducted as a reverse “Dutch Auction” procedure. Each Tendering 2016 Noteholder may elect to receive Cash Option Consideration for its Tendered Existing 2016 Notes (the “Cash Option”), the proceeds of which will be funded by the RTL Investment of $172 million, (the “Cash Option Pool”).

CEDC FinCo will use a pure reverse Dutch auction procedure to determine which Existing 2016 Notes will be accepted for exchange in the Cash Option. The Letter of Transmittal, among other options, provides the holders of Existing 2016 Notes with the option to elect to participate in the Cash Option. Each Tendering 2016 Noteholder electing to participate in the Cash Option must specify a single Bid Price at which such Tendering 2016 Noteholder is willing to exchange its Existing 2016 Notes. The auction will stay open through the Expiration Time, and Letters of Transmittal indicating any such election are due by the Expiration Time as provided herein.

CEDC FinCo will accept for purchase the Existing 2016 Notes that elect to participate in the Cash Option in order of priority from the lowest to the highest Bid Prices (as determined based upon the percentage of the respective Existing 2016 Note’s principal amount) represented by such Bid Price until reaching the Clearing Price. In addition, holders of Existing 2016 Notes that elect to participate in the Cash Option will be subject to proration. CEDC FinCo will first accept for exchange all Existing 2016 Notes with a Bid Price less than the Clearing Price, and thereafter, Existing 2016 Notes with a Bid Price equal to the Clearing Price on a pro rata basis. In all cases, appropriate adjustments will be made to avoid purchases of Existing 2016 Notes in principal amounts other than integral multiples of $1,000 or €1,000, as applicable. All Existing 2016 Notes not accepted in the Cash Option as a result of proration or as a result of having a Bid Price above the Clearing Price will not participate in the Cash Option and will be deemed to have elected to participate in the New Notes Option. In addition, any Existing 2016 Notes for which the respective holders did not elect to participate in the Cash Option will be deemed to have elected the New Notes Option.

holder’s 8.875% Bid Price multiplied by the total principal amount of such holder’s 8.875% Existing 2016 Notes accepted for exchange in the Cash Option, divided by €1,000 and converted using the Exchange Rate, plus (b) such holder’s 9.125% Bid Price multiplied by the total amount of such holder’s 9.125% Existing 2016 Notes accepted for exchange in the Cash Option and divided by $1,000, plus (c) the full amount of the aggregate unpaid interest that has accrued on such holder’s accepted Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013 and converted using the Exchange Rate for interest accrued on 8.875% Existing 2016 Notes.

“Bid Price”, “8.875% Bid Price”, “9.125% Bid Price”, “Cash Option Consideration”, “Clearing Price” and “Exchange Rate” each have the definitions set forth under “The Exchange Offers and Consent Solicitation—CEDC FinCo Exchange Offer—Cash Option”.

As an alternative to the Cash Option, each Tendering 2016 Noteholder may instead elect (or be deemed to have elected pursuant to the Cash Option Proration) to exchange its Tendered 2016 Notes (the “New Notes Option”) for its pro rata share of (a) an aggregate principal amount of New Secured Notes equal to $450 million plus the aggregate interest accrued but unpaid on the outstanding Existing 2016 Notes not accepted for tender in the Cash Option in accordance with their existing terms in respect of the period from March 16, 2013 to the earlier of June 1, 2013 and the date preceding the date of issuance of the New Secured Notes, (b) $200 million principal amount of the New Convertible Secured Notes, and (c) to the extent the Cash Option Pool is not fully utilized, any such remaining cash (collectively, the “New Notes Consideration” and, together with the Cash Option Consideration, the “Existing 2016 Notes Consideration”). The New Notes Consideration will be determined per $1,000 principal amount of 9.125% Existing 2016 Notes and per €1,000 principal amount of 8.875% Existing 2016 Notes using an exchange rate that reflects the trailing ten-day average exchange rate through March 22, 2013 as reported by Bloomberg Finance L.P. The terms of the New Secured Notes, including the guarantees and the collateral securing those notes are described in the section entitled Description of the New Secured Notes. The terms of the New Convertible Secured Notes, including the guarantees and the collateral securing those notes are described in the section entitled “Description of the New Convertible Secured Notes”.

The Existing 2013 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The 8.875% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of €1,000 and integral multiples of €1,000 in excess thereof. The 9.125% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. Holders of the Existing 2016 Notes who do not tender all of their Existing 2016 Notes should ensure that they retain a principal amount of notes amounting to at least the authorized minimum denomination of $100,000 or €50,000, as applicable, principal amount. No alternative, conditional or contingent tenders will be accepted.

No fractional shares will be issued in exchange for tendered Existing Notes and any fractional share amounts due to Noteholders as a portion of the Consideration will be rounded down to the nearest share. No cash payment will be made in lieu of fractional shares.

interest through March 15, 2013. The per €1,000 exchange ratio in respect of 8.875% Existing 2016 Notes will be calculated using an exchange rate that reflects the trailing ten-day average exchange rate through March 22, 2013 as reported by Bloomberg Finance L.P.

CEDC FinCo is also making the Consent Solicitation in order to solicit consents (“Consents” and each a “Consent”) from holders of Existing 2016 Notes as of the Voting Record Date to certain amendments to the Existing 2016 Notes Indenture to eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing 2016 Notes Indenture (the “Covenant Amendments”) and to provide for the release of all of the liens on the collateral securing the Existing 2016 Notes and all subsidiary guarantees (the “Collateral and Guarantee Amendments” and, together with the Covenant Amendments, the “Proposed Amendments”), including by amending the Existing 2016 Notes Indenture and by terminating or amending, as applicable, the related security documents. Each holder of Existing 2016 Notes who delivers Consents with respect to its Existing 2016 Notes by the Consent Fee Deadline, and does not validly withdraw such Consents, will receive the Consent Fee in respect of the Existing 2016 Notes for which it delivered Consents on the Consent Fee Payment Date. Holders of Existing 2016 Notes who deliver their Consents after the Consent Fee Deadline will not be entitled to the Consent Fee. The Consent Fee will only be payable if the Consents of holders of at least 90% principal amount of the Existing 2016 Notes (the “Requisite Consents”) are obtained prior to the Consent Fee Deadline. If payable, the Consent Fee will be paid on the Consent Fee Payment Date. Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers, but must deliver their Consents.

The Supplemental Indenture (as defined below) will also include an amendment to the acceleration provisions in the Existing 2016 Indenture to provide that a filing by CEDC under Chapter 11 of the Bankruptcy Code will not result in automatic acceleration of obligations of the issuer of the Existing 2016 Notes (CEDC FinCo) or the non-CEDC subsidiary guarantees of the Existing 2016 Notes, but a filing by CEDC under Chapter 11 of the Bankruptcy Code would (as the Existing 2016 Indenture currently provides) result in automatic acceleration of amounts outstanding under the CEDC guarantee of the Existing 2016 Notes (such amendments, the “Bankruptcy Waiver Amendments”). The Bankruptcy Waiver Amendments can be approved with the Requisite Majority Consents. If the Bankruptcy Waiver Amendments are approved, holders of over 50% of the outstanding principal amount of the Existing 2016 Notes could accelerate (i.e. declare immediately due and payable) CEDC FinCo’s and the subsidiary guarantors’ obligations under the Existing 2016 Notes and guarantees upon a Chapter 11 filing by CEDC, subject to the terms and conditions in the Existing 2016 Notes Indenture. The Bankruptcy Waiver Amendments will become operative upon execution of the Supplemental Indenture (even if the CEDC FinCo Exchange Offer is not consummated or the Plan of Reorganization never filed).

Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers, but must deliver their Consents. Tenders of Existing 2016 Notes and deliveries of Consents may be validly withdrawn at any time prior to the Consent Time, but not thereafter. A valid withdrawal of tendered Existing 2016 Notes prior to the Consent Time will not constitute a valid revocation of such holder’s related Consents, which must be withdrawn separately. Under no circumstances may Consents be revoked after the Consent Time. When the Requisite Majority Consents have been received, the Bankruptcy Waiver Amendments, the Covenant Amendments and, if Consents from holders of at

least 90% of the aggregate principal amount of Existing 2016 Notes have been received, the Collateral and Guarantee Amendments, will be effected through the execution of one or more supplemental indentures substantially in the form attached hereto as Appendix B, (the “Supplemental Indenture”). The Supplemental Indenture will become effective upon its execution, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization (or an alternative plan of reorganization which results in the cancellation, extinguishment or other release of CEDC’s and CEDC FinCo’s obligations under the Existing 2016 Notes); the Bankruptcy Waiver Amendments will become operative upon execution of the Supplemental Indenture. A description of the Proposed Amendments and the Bankruptcy Waiver Amendments is set forth below under “Proposed Amendments”.

The consummation of the Exchange Offers is conditioned upon, among other things, (i) with respect to each Exchange Offer, the substantially concurrent consummation of the other Exchange Offer; (ii) with respect to the CEDC Exchange Offer, holders of 100% of the aggregate principal amount of Existing 2013 Notes validly tendering their Existing 2013 Notes in the CEDC Exchange Offer at or prior to the Expiration Time (the “Existing 2013 Notes Minimum Condition”); (iii) with respect to the CEDC FinCo Exchange Offer, holders of 100% of the aggregate principal amount of Existing 2016 Notes validly tendering their Existing 2016 Notes in the CEDC FinCo Exchange Offer at or prior to the Expiration Time (the “Existing 2016 Notes Minimum Condition” and, together with the Existing 2013 Notes Minimum Condition, the “Minimum Conditions”); (iv) the approval by existing stockholders of CEDC (“Existing Stockholders”) of a 65.41 to 1 reverse stock split (the “Reverse Stock Split”) and the issuance of the New Common Stock in connection with the Exchange Offers; (v) the consummation of the transactions contemplated by the RTL Investment Agreement (as defined below); (vi) the SEC declaring effective the application for qualification of the New Secured Notes Indenture on Form T-3 filed by CEDC FinCo; (vii) the SEC declaring effective the application for qualification of the New Convertible Secured Notes Indenture on Form T-3 filed by CEDC FinCo; and (viii) if applicable, the SEC declaring effective the application for qualification of the Supplemental Indenture on Form T-3 filed by CEDC FinCo giving effect to the Collateral and Guarantee Amendments for the Existing 2016 Notes.

If the conditions to either the CEDC Exchange Offer (including the Existing 2013 Notes Minimum Condition) or the CEDC FinCo Exchange Offer (including the Existing 2016 Notes Minimum Condition) are not satisfied or are not waived, we may, at our option, not consummate either of the Exchange Offers and, if the Minimum Reorganization Condition is satisfied, file petitions under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) and pursue confirmation and consummation of the Plan of Reorganization such that holders of Existing Notes would receive the treatment described in the Plan of Reorganization. Even if the conditions to the Exchange Offers are met, and whether or not the Minimum Reorganization Condition is met, CEDC and CEDC FinCo may file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization or an alternative plan of reorganization.

We may waive or amend any of these conditions or any other conditions to the consummation of the Exchange Offers without providing additional withdrawal rights except as required by the Securities Exchange Act of 1934 (the “Exchange Act”), provided that we will not waive the condition that the RTL Investment Agreement be consummated (the “RTL Investment Condition”) or the Minimum Conditions without the prior written consent of RTL and the Existing 2016 Notes Steering Committee represented by Cadwalader, Wickersham & Taft LLP and Moelis & Company UK LLP. If we do not satisfy the conditions noted above, we may allow the Exchange Offers to expire or terminate the Exchange Offers prior to the Expiration Time and seek to effectuate the Plan of Reorganization or an alternative plan of reorganization. Any votes in favor of the Plan of Reorganization delivered prior to such expiration or termination, as applicable, will be valid in the event we seek to effectuate the Plan of Reorganization or an alternative plan of reorganization.

As noted above, in the event that the conditions to the Exchange Offers are not satisfied or waived by us or if we for any reason determine that it would be more advantageous or expeditious, CEDC and CEDC FinCo (and CEDC FinCo LLC), may seek to file petitions under Chapter 11 of the Bankruptcy Code to consummate the Plan of Reorganization or an alternative plan of reorganization.

All distributions of New Common Stock under the Exchange Offers or Plan of Reorganization are subject to dilution by (i) any conversion of New Convertible Secured Notes into New Common Stock and/or (ii) New Common Stock reserved for issuance under a management incentive plan (the “MIP”) in an amount not to exceed 5% of all issued and outstanding New Common Stock on a fully diluted basis. The parameters of the MIP will be determined by the board of directors of reorganized CEDC.

The Plan of Reorganization is conditioned upon sufficient holders of Existing 2013 Notes and/or holders of Existing 2016 Notes, as applicable, voting to accept the Plan of Reorganization such that such holders’ respective class(es) constitute an accepting class for purposes of Section 1129(a)(8) of the Bankruptcy Code (the “Minimum Reorganization Condition”).

If you elect to tender your Existing Notes into the Exchange Offers you may (but are not required to) also vote to accept the Plan of Reorganization. Such vote will be counted regardless of whether the Exchange Offers expires or is terminated, and you may only change that vote by withdrawing, to the extent permitted, your Ballot prior to the Expiration Time or Consent Time, as applicable. At the Consent Time and in consideration of the results of participation in the Exchange Offers and votes to accept the Plan of Reorganization as of the Consent Time, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period

shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline (as defined below), which is also the Expiration Time; provided, however that holders of Existing 2016 Notes who vote to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time. Holders of Existing 2016 Notes that deliver acceptances of the Plan of Reorganization must also deliver Consents.

The Plan of Reorganization should be considered separately from the Exchange Offers, and any vote in favor of the Plan of Reorganization that is not withdrawn prior to the Expiration Time or Consent Time, as applicable, is final and binding, irrespective of any amendment or modification of the Exchange Offers or the related out-of-court transactions, unless we subsequently re-open withdrawal rights. In addition, in no event will the expiration or termination of the Exchange Offers or the failure by us to accept any Existing Notes tendered in the Exchange Offers affect the validity of votes in favor of the Plan of Reorganization or Consents. You may vote to accept or reject the Plan of Reorganization by providing the appropriate instruction to your nominee as contained in the Ballot. By providing an instruction to your nominee to participate in the Exchange Offers and vote to accept the Plan of Reorganization, you are making certain certifications, as contained in the Ballot, and agreeing to certain provisions contained in the Plan of Reorganization including exculpation, injunction and release provisions. If you do not tender your Notes into the Exchange Offers or you vote against, or take no action with respect to, the Plan of Reorganization, we may not be able to consummate the Exchange Offers or the Plan of Reorganization.

This Offering Memorandum and Disclosure Statement contains projected financial information and estimates of value that demonstrate the feasibility of the Plan of Reorganization and statements about our ability to continue operations upon emergence from proceedings under the Bankruptcy Code. Such information was prepared for the limited purpose of furnishing Noteholders with adequate information to make an informed judgment regarding acceptance of the Plan of Reorganization and was not prepared for the purpose of providing the basis for an investment decision relating to the Exchange Offers. The projections and estimates of value should not be relied upon in any way or manner in connection with the Exchange Offers and should not be regarded for the purpose of this Offering Memorandum and Disclosure Statement as representations or warranties by CEDC, CEDC FinCo, CEDC FinCo LLC, their affiliates or any other person as to the accuracy of such information or that any such projections or valuations will be realized.

You must rely upon your own examination of us and the terms of the Exchange Offers, the Consent Solicitation and the Plan of Reorganization, including the merits and risks involved. You should carefully consider the risk factors under “Risk Factors” in this Offering Memorandum and Disclosure Statement before deciding whether or not to participate in the Exchange Offers and the Consent Solicitation or vote to accept the Plan of Reorganization. See “Risk Factors”.

Noteholders should be aware that they may be required to bear the financial risks of their investment in the New Common Stock and the New Notes for an indefinite period of time. Neither the SEC nor any state securities commission has approved or disapproved of the securities offered hereby to Noteholders or determined if this Offering Memorandum and Disclosure Statement is truthful or complete. Any representation to the contrary is unlawful and is a criminal offense.

The Exchange Offers, the Consent Solicitation, and the Plan of Reorganization are subject to the terms and conditions set forth in this Offering Memorandum and Disclosure Statement and the Ballot.

CEDC’s Existing Common Stock is currently listed on the NASDAQ Stock Market (“NASDAQ”) and the Warsaw Stock Exchange (the “WSE”), and the Existing 2016 Notes are listed on the Global Market of the Irish Stock Exchange. We intend to apply to list the New Common Stock issued under the Exchange Offers on NASDAQ and to list the New Secured Notes and the New Convertible Secured Notes on the Global Market of

the Irish Stock Exchange. If the New Common Stock is issued under the Plan of Reorganization, such New Common Stock will not be listed on NASDAQ or the WSE unless CEDC applies for such New Common Stock to be listed thereon in compliance with the rules of NASDAQ or the WSE, as applicable.

NONE OF CEDC, CEDC FINCO, CEDC FINCO LLC, NOR ANY OF THEIR RESPECTIVE SUBSIDIARIES, THEIR RESPECTIVE BOARDS OF DIRECTORS AND MANAGERS (AS APPLICABLE), THE TRUSTEES UNDER THE INDENTURES (“TRUSTEES”), THE EXCHANGE AGENT (AS DEFINED BELOW) OR THE INFORMATION AGENT (AS DEFINED BELOW) TAKES ANY POSITION OR MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT NOTEHOLDERS SHOULD TENDER THEIR EXISTING NOTES IN THE EXCHANGE OFFERS, DELIVER CONSENTS PURSUANT TO THE CONSENT SOLICITATION, OR VOTE IN FAVOR OF THE PLAN OF REORGANIZATION.

THE TRUSTEES AND THE SECURITY AGENTS (AS DEFINED BELOW UNDER “DESCRIPTION OF NEW SECURED NOTES” AND “DESCRIPTION OF NEW CONVERTIBLE SECURED NOTES”) EXPRESS NO OPINION AS TO THE MERITS OF THE EXCHANGE OFFERS, THE CONSENT SOLICITATION, THE PLAN OF REORGANIZATION OR ANY OTHER MATTER PRESENTED OR DISCUSSED IN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT. FURTHERMORE, THE TRUSTEES AND THE SECURITY AGENTS MAKE NO ASSESSMENT OF THE IMPACT OF THE EXCHANGE OFFERS, THE CONSENT SOLICITATION OR THE PLAN OF REORGANIZATION AS PRESENTED TO NOTEHOLDERS ON THE INTERESTS OF ANY OF THE NOTEHOLDERS EITHER AS A CLASS OR CLASSES OR AS INDIVIDUALS AND MAKE NO RECOMMENDATION AS TO WHETHER ANY NOTEHOLDERS SHOULD PARTICIPATE IN THE EXCHANGE OFFERS, DELIVER CONSENTS OR VOTE WITH RESPECT TO THE PLAN OF REORGANIZATION.

THE INFORMATION PROVIDED IN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT IS PROVIDED SOLELY BY CEDC AND CEDC FINCO. NONE OF THE TRUSTEES OR THE SECURITY AGENTS HAS VERIFIED OR MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY RESPONSIBILITY, AS TO THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR OTHERWISE MAKES ANY STATEMENT, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO CEDC, CEDC FINCO, THE EXCHANGE OFFERS, THE CONSENT SOLICITATION OR THE PLAN OF REORGANIZATION. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS ON BEHALF OF ANY OF THE TRUSTEES AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SUCH TRUSTEE.

IF HOLDERS HOLDING AT LEAST A MAJORITY OF THE AGGREGATE PRINCIPAL AMOUNT OF EXISTING 2016 NOTES OUTSTANDING CONSENT TO THE PROPOSED AMENDMENTS, THEN, UNDER THE TERMS OF THE EXISTING 2016 NOTES INDENTURE, THE TRUSTEE UNDER THAT INDENTURE WILL BE AUTHORISED AND DIRECTED BY THOSE HOLDERS TO ENTER INTO ONE OR MORE SUPPLEMENTAL INDENTURES CONTAINING THE BANKRUPTCY WAIVER AMENDMENTS AND THE COVENANT AMENDMENTS. IF HOLDERS HOLDING AT LEAST 90% OF THE AGGREGATE PRINCIPAL AMOUNT OF EXISTING 2016 NOTES OUTSTANDING CONSENT TO THE PROPOSED AMENDMENTS, THEN, UNDER THE TERMS OF THE EXISTING 2016 NOTES INDENTURE, THE TRUSTEE UNDER THAT INDENTURE WILL BE AUTHORISED AND DIRECTED BY THOSE HOLDERS TO ENTER INTO ONE OR MORE SUPPLEMENTAL INDENTURES CONTAINING THE COVENANT AMENDMENTS AND THE

COLLATERAL AND GUARANTEE AMENDMENTS. THE SUPPLEMENTAL INDENTURE OR INDENTURES THAT GIVE EFFECT TO THE COVENANT AMENDMENTS AND THE COLLATERAL AND GUARANTEE AMENDMENTS WILL BECOME EFFECTIVE UPON THE EXECUTION OF THE SUPPLEMENTAL INDENTURE, BUT THE PROPOSED AMENDMENTS WILL ONLY BECOME OPERATIVE UPON CONSUMMATION OF THE CEDC FINCO EXCHANGE OFFER OR CONFIRMATION OF THE PLAN OF REORGANIZATION (OR AN ALTERNATIVE PLAN OF REORGANIZATION THAT RESULTS IN THE CANCELLATION, EXTINGUISHMENT OR OTHER RELEASE OF CEDC’S AND CEDC FINCO’S OBLIGATIONS UNDER THE EXISTING 2016 NOTES). THE BANKRUPTCY WAIVER AMENDMENTS WILL BECOME EFFECTIVE AND OPERATIVE UPON EXECUTION OF THE SUPPLEMENTAL INDENTURE. THE BANKRUPTCY WAIVER AMENDMENTS WILL PROVIDE THAT A FILING BY CEDC UNDER CHAPTER 11 WILL NOT RESULT IN AUTOMATIC ACCELERATION OF AMOUNTS OUTSTANDING UNDER THE EXISTING 2016 NOTES OR THE SUBSIDIARY GUARANTEES OF THE EXISTING 2016 NOTES, BUT WOULD PROVIDE (AS IS CURRENTLY PROVIDED IN THE EXISTING 2016 NOTES INDENTURE) THAT A CHAPTER 11 FILING BY CEDC WOULD RESULT IN AUTOMATIC ACCELERATION OF AMOUNTS OUTSTANDING UNDER THE CEDC GUARANTEE OF THE EXISTING 2016 NOTES.

THIS SOLICITATION OF ACCEPTANCES OF THE PLAN OF REORGANIZATION BY CEDC, CEDC FINCO AND CEDC FINCO LLC IS BEING CONDUCTED TO OBTAIN SUFFICIENT ACCEPTANCES OF THE PLAN OF REORGANIZATION PRIOR TO THE FILING OF A VOLUNTARY CASE UNDER CHAPTER 11 OF THE BANKRUPTCY CODE. BECAUSE NO CHAPTER 11 CASE HAS YET BEEN COMMENCED BY CEDC, CEDC FINCO OR CEDC FINCO LLC, THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY ANY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN THE MEANING OF SECTION 1125(A) OF THE BANKRUPTCY CODE. NONE OF CEDC, CEDC FINCO, CEDC FINCO LLC OR THEIR SUBSIDIARIES HAS COMMENCED CHAPTER 11 CASES, NOR HAVE THEY TAKEN ANY CORPORATE ACTION AUTHORIZING THE COMMENCEMENT OF SUCH CASES. IF THE EXCHANGE OFFERS ARE NOT CONSUMMATED, OR IF WE FOR ANY REASON DETERMINE THAT IT WOULD BE MORE ADVANTAGEOUS OR EXPEDITIOUS AND THE MINIMUM REORGANIZATION CONDITION IS MET, CEDC OR BOTH CEDC AND CEDC FINCO (AND CEDC FINCO LLC) MAY COMMENCE CHAPTER 11 CASE(S) UNDER THE BANKRUPTCY CODE TO RESTRUCTURE THEIR FINANCIAL AFFAIRS.

You should rely only on the information contained or incorporated by reference in this Offering Memorandum and Disclosure Statement or to which we have otherwise referred you. We have not authorized anyone to provide you with information that is different. This Offering Memorandum and Disclosure Statement may only be used where it is legal to offer the New Common Stock or New Notes to Noteholders and conduct the Exchange Offers and the Consent Solicitation. You should not assume that the information provided in this Offering Memorandum and Disclosure Statement is accurate as of any date other than the date of this Offering Memorandum and Disclosure Statement.

You should not construe the contents of this Offering Memorandum and Disclosure Statement as investment, legal or tax advice. You should consult your own counsel, accountant and other advisors as to legal, tax, business, financial and related aspects of any exchange of Existing Notes for Consideration or your participation in the Consent Solicitation or vote on the Plan of Reorganization and must make your own decision as to whether to exchange your Existing Notes or participate in the Consent Solicitation or the Plan of Reorganization. None of us, the Trustees, the Voting Agent (as hereinafter defined), the Information Agent (as hereinafter defined) or Exchange Agent (as hereinafter defined) is making any representation to you regarding the legality of any exchange of Existing Notes for Consideration or the participation in the Consent Solicitation or vote on the Plan of Reorganization by you under appropriate legal investment or similar laws.

This Offering Memorandum and Disclosure Statement is being provided to Noteholders for informational use solely in connection with their consideration of the transactions described herein. The use of this Offering Memorandum and Disclosure Statement for any other purpose is not authorized.

The Exchange Offers or the Consent Solicitation may be withdrawn at any time, and we reserve the right to reject any tender of Existing Notes in whole or in part and to exchange less than the full amount of Existing Notes validly tendered by any Noteholder.

No representation or warranty, express or implied, is made by the Information Agent and/or the Exchange Agent as to the accuracy or completeness of any of the information set forth in this Offering Memorandum and Disclosure Statement, and nothing contained in this Offering Memorandum and Disclosure Statement is or shall be relied upon as a promise or representation, whether as to the past or the future. This Offering Memorandum and Disclosure Statement contains summaries, believed to be accurate, of some of the terms of specific documents, but reference is made to the actual documents, copies of which will be made available upon request, at no cost, for the complete information contained in those documents. All summaries are qualified in their entirety by this reference.

The information contained in this Offering Memorandum and Disclosure Statement is as of the date of this Offering Memorandum and Disclosure Statement and is subject to change, completion or amendment without notice. Neither the delivery of this Offering Memorandum and Disclosure Statement at any time nor the offer, exchange or delivery of any security hereunder shall, under any circumstances, create any implication that there has been no change in the information contained or incorporated by reference in this Offering Memorandum and Disclosure Statement or in our affairs or the affairs of any of our subsidiaries or affiliates since the date of this Offering Memorandum and Disclosure Statement.

Although we are not under any obligation to do so, we reserve the right in the future to seek to acquire Existing Notes, other than pursuant to the Exchange Offers, by means of open market purchases, privately negotiated acquisitions, subsequent exchange or tender offers, redemptions under the provisions of the Indentures or otherwise, at prices or on terms that may be higher or lower or more or less favorable than those in the Exchange Offers, in any such case in compliance with applicable laws, including the Exchange Act. We may also conduct one or more consent solicitations in the future on terms that may be more or less favorable than those in the Consent Solicitation. In addition, in the event that we do not consummate the Exchange Offers or the Plan of Reorganization, CEDC or CEDC FinCo (and CEDC FinCo LLC) may file for bankruptcy and seek approval of a “prearranged” or “pre-negotiated” plan of reorganization. There can be no assurance that such a “prearranged” or “pre-negotiated” plan would be on more or less favorable terms than the Exchange Offers or the Plan of Reorganization.

Each prospective investor must comply with all applicable laws and regulations in force in any jurisdictions in which it participates in the Exchange Offers or possesses or distributes the Offering Memorandum and Disclosure Statement and must obtain any consent, approval or permission required for participation in the Exchange Offers under the laws and regulations in force in any jurisdictions to which such prospective investor is subject. Neither we nor any of our representatives shall have any responsibility therefor.

This Offering Memorandum and Disclosure Statement, including the documents incorporated by reference herein, the Ballots and the letter of transmittal relating to your Existing 2013 Notes or the letter of transmittal and consent relating to your Existing 2016 Notes (in each case, the “Letter of Transmittal”) contain important information that should be read before any decision is made to participate in the Exchange Offers and the Consent Solicitation, or whether to vote on the Plan of Reorganization.

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, 1995, AS AMENDED (“RSA”), WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

This Offering Memorandum and Disclosure Statement has been prepared on the basis that the Exchange Offers will be made pursuant to an exemption under the Prospectus Directive (as defined below), from the requirement to produce a prospectus for offers of the New Notes or New Common Stock. In relation to each Member State of the European Economic Area (the “EEA”) which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) no offer of New Notes or New Common Stock to the public in that Relevant Member State may be made other than: (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive (as defined below), 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of the New Notes or shares of New Common Stock shall require CEDC or CEDC FinCo to publish a prospectus pursuant to Article 3 of the Prospectus Directive. Accordingly, any person making or intending to make any offer within the EEA of the New Notes or New Common Stock should only do so in circumstances in which no obligation arises for CEDC or CEDC FinCo to produce a prospectus for such offer. For the purposes of this section, the expression an “offer of New Notes or New Common Stock” in relation to any New Notes or New Common Stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Exchange Offers and the New Notes or New Common Stock to be offered so as to enable an investor to decide to purchase or subscribe for the New Notes or shares of New Common Stock, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

We have filed a tender offer statement on Schedule TO-I/A with the SEC under the Exchange Act with regard to the CEDC Exchange Offer described in this Offering Memorandum and Disclosure Statement. The tender offer statement, including the attached exhibits, contains additional relevant information about us. We strongly encourage you to read the relevant communications related to the Exchange Offers that have been filed with the SEC. We also file annual, quarterly and current reports, proxy statements and other information with the SEC.

Our SEC filings are available to the public over the internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document that we file at the Public Reference Room of the SEC at 100 F Street, N.E., Room 1580, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site at www.sec.gov from which you may obtain copies of information regarding registrants that file electronically, including CEDC. Also, using our website, http://www.cedc.com, you can access electronic copies of documents we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments to those reports. You may request a copy of certain of the information referred to in this Offering Memorandum and Disclosure Statement, at no cost, by contacting us at the following address: Central European Distribution Corporation, 3000 Atrium Way, Suite 265, Mt. Laurel, New Jersey 08054; Attention: Secretary. Telephone requests may be directed to (856) 273-6980. Certain other information is also available on our website at http://www.cedc.com.

We are “incorporating by reference” the information indicated below that we have filed with the SEC into this Offering Memorandum and Disclosure Statement, which means that we are disclosing important information to you by referring you to those documents. Information that is incorporated by reference is an important part of this Offering Memorandum and Disclosure Statement. Certain information that we file after the date of this Offering Memorandum and Disclosure Statement with the SEC will automatically update and supersede the information included or incorporated by reference herein. We incorporate by reference into this Offering Memorandum and Disclosure Statement the documents listed below, which were filed with the SEC, and such documents form an integral part of this Offering Memorandum and Disclosure Statement:

Copies of each of the documents incorporated by reference into this Offering Memorandum and Disclosure Statement (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) may be obtained at no cost by contacting the Information Agent at its telephone number set forth on the back cover of this Offering Memorandum and Disclosure Statement.

None of the information on our website is deemed to be a part of this Offering Memorandum and Disclosure Statement. Any reference to our website and the information contained therein is for informational purposes only.

Certain statements in this Offering Memorandum and Disclosure Statement may constitute “forward-looking statements”. You may find discussions containing such forward-looking statements in “Summary”, “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”, as well as within this Offering Memorandum and Disclosure Statement generally. In addition, when used in this Offering Memorandum and Disclosure Statement, the words “believes”, “anticipates”, “expects”, “estimates”, “plans”, “projects”, “intends” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include statements other than historical information or statements of current condition and represent our beliefs regarding future events, including certain projected revenues and synergies, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Important factors that could cause actual results to differ from those in our forward-looking statements include, but are not limited to, those discussed under “Risk Factors”, as well as:

Consequently, readers of this Offering Memorandum and Disclosure Statement should consider these forward-looking statements only as our current plans, estimates and beliefs. We undertake no obligation to update or revise any forward-looking statement in this Offering Memorandum and Disclosure Statement to reflect any new events or any change in conditions or circumstances. All of the forward-looking statements in this Offering Memorandum and Disclosure Statement are expressly qualified by these cautionary statements. Even if our plans, estimates or beliefs change because of future events or circumstances after the date of these statements, or because anticipated or unanticipated events occur, we disclaim any obligation to update these forward-looking statements. The projections and estimates of value in this Offering Memorandum and Disclosure Statement should not be relied upon in any way or manner in connection with the Exchange Offers and should not be regarded for the purpose of this Offering Memorandum and Disclosure Statement as representations or warranties by CEDC, CEDC FinCo, CEDC FinCo LLC, their affiliates or any other person, as to the accuracy of such information or that any such projections or valuations will be realized.

SUMMARY

This summary highlights certain of the information contained elsewhere in this Offering Memorandum and Disclosure Statement. This summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information and financial statements (including the accompanying notes) appearing elsewhere or incorporated by reference in this Offering Memorandum and Disclosure Statement. You should read this entire Offering Memorandum and Disclosure Statement carefully, including “Risk Factors”, “Forward-Looking Statements” and the financial statements and related notes incorporated by reference herein, before making a decision as to whether to participate in the Exchange Offers and the Consent Solicitation, and whether to vote to accept the Plan of Reorganization.

References to the “Company”, “we”, “our” and “us” and similar terms mean CEDC and its consolidated subsidiaries (including CEDC FinCo and CEDC FinCo LLC), except as otherwise indicated in this Offering Memorandum and Disclosure Statement or unless the context otherwise requires.

Overview

We believe that consummation of the Exchange Offers or the Plan of Reorganization will enable us to more effectively execute our business transformation strategy by deleveraging our capital structure and improving our liquidity. To that end, we are offering to exchange New Common Stock for outstanding Existing 2013 Notes and to exchange cash consideration and/or New Notes for outstanding Existing 2016 Notes. We are also soliciting Consents to the Proposed Amendments and the Bankruptcy Waiver Amendments from holders of Existing 2016 Notes and soliciting acceptances of the Plan of Reorganization from Noteholders, in each case upon the terms and subject to the conditions set forth in this Offering Memorandum and Disclosure Statement, the accompanying Ballot, Letter of Transmittal (if applicable) and Consent Letter (if applicable).

In connection with the transactions contemplated by the Exchange Offers and the Plan of Reorganization,

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holders of Existing 2013 Notes may elect to:

(i) participate in the CEDC Exchange Offer; vote to accept the Plan of Reorganization;

(ii) participate in the CEDC Exchange Offer; vote to reject or take no action with respect to the Plan of Reorganization;

(iii) not participate in the CEDC Exchange Offer; vote to accept the Plan of Reorganization; and

(iv) not participate in the CEDC Exchange Offer; vote to reject or take no action with respect to the Plan of Reorganization.

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holders of Existing 2016 Notes may elect to:

(i) participate in the CEDC FinCo Exchange Offer; deliver Consents to the Proposed Amendments; vote to accept the Plan of Reorganization;

(ii) participate in the CEDC FinCo Exchange Offer; deliver Consents to the Proposed Amendments; vote to reject the Plan of Reorganization;

(iii) participate in the CEDC FinCo Exchange Offer; not deliver Consents to the Proposed Amendments; vote to reject or take no action with respect to the Plan of Reorganization;

(iv) not participate in the CEDC FinCo Exchange Offer; deliver Consents to the Proposed Amendments; vote to accept the Plan of Reorganization;

(v) not participate in the CEDC FinCo Exchange Offer; deliver Consents to the Proposed Amendments; vote to reject the Plan of Reorganization;

(vi) not participate in the CEDC FinCo Exchange Offer; not deliver Consents to the Proposed Amendments; vote to reject the Plan of Reorganization; and

(vii) take no action; not participate in the CEDC FinCo Exchange Offer; not deliver Consents to the Proposed Amendments; not vote on the Plan of Reorganization.

In the event that you choose to take no action with respect to the Exchange Offers or the Plan of Reorganization, you will have rejected the Exchange Offers and will not have voted on the Plan of Reorganization. If you do not tender your Notes into the Exchange Offers and you vote against, or take no action with respect to, the Plan of Reorganization, we may not be able to consummate the Exchange Offers or the Plan of Reorganization.

In such a circumstance, we may be required to seek bankruptcy protection without an agreed plan of reorganization in place. In the event of such a bankruptcy filing, we are likely to be subject to a more lengthy and costly bankruptcy process during which other parties in interest could propose competing plans of reorganization (subject to termination or expiration of our exclusive right to file a plan of reorganization). Such a filing could substantially erode our customers’ confidence in our business. Employees could be distracted or more easily attracted to other career opportunities, and it may be more difficult to attract or replace key employees. Suppliers could require prepayments or other payment restrictions. Furthermore, lenders, bank guarantors, factoring partners, and other partners could seek to terminate their relationships with us, require financial assurances or enhanced returns, or refuse to provide credit or other services on the same terms as prior to filing. Such circumstances are significantly less beneficial to us and will result in consideration to holders of Existing Notes which is less than the Consideration offered in the Exchange Offers and the Plan of Reorganization.

If we consummate the Exchange Offers, tendering Noteholders will receive the Consideration described in this Offering Memorandum and Disclosure Statement. If the conditions to either the CEDC Exchange Offer (including the Existing 2013 Notes Minimum Condition) or the CEDC FinCo Exchange Offer (including the Existing 2016 Notes Minimum Condition) are not satisfied or are not waived, we may, at our option, not consummate either of the Exchange Offers and, if the Minimum Reorganization Condition is satisfied, file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of

Reorganization such that holders of Existing Notes would receive the treatment described in the Plan of Reorganization. Even if the conditions to the Exchange Offers are met, and whether or not the Minimum Reorganization Condition is met, CEDC and CEDC FinCo may file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization or an alternative plan of reorganization.

Our Business

We are one of the world’s largest vodka producers, and the largest integrated spirit beverages business by total volume in Central and Eastern Europe. We maintain leading positions in all of our key markets – Poland, Russia and Hungary—and we are expanding in the Ukraine where we began operations in 2010. Our brand portfolio includes valuable and recognized brands like BOLS, Żubrówka, Absolwent and Soplica in Poland; Green Mark and Parliament in Russia; and Royal Vodka in Hungary. Each of these brands is one of the leaders of its segment in those markets. We are also an active exporter of our brands, in particular Żubrówka, Green Mark, Parliament and Talka. Żubrówka is delivered to over 40 countries around the world, including the United States, the United Kingdom, France and Japan.

The first company in the CEDC corporate family was founded in Poland in 1990. For our first 15 years, we concentrated on establishing ourselves as a leading distributor of alcoholic beverages in Poland. In 2005, we entered the vodka manufacturing market. Upon acquiring Polmos Białystok, a leading production plant in Poland, and BOLS, a leader in the premium vodkas segment, we became a major player in the Polish vodka market, while retaining our position as a leading spirits distributor. We thereafter continued to expand our production business, developing sales of our own vodka brands.

In 2006, we expanded beyond Poland when BOLS Hungary became a member of the CEDC corporate family. With the acquisition of BOLS Hungary, we acquired the rights to the Royal Vodka trademark, the most popular brand in the Hungarian vodka market. We then turned our focus to expansion eastward, and in 2008, commenced takeovers in Russia, the largest vodka market in the world. By acquiring Russian vodka manufacturers Russian Alcohol Group and Parliament, we became the largest vodka producer in Russia and one of the biggest vodka makers in the world.

We have also continued to develop the other pillar of our business, sales of imported spirits. We are one of the leading importers of alcoholic beverages in Poland, Russia and Hungary. Our portfolio in Poland includes many of the world’s biggest and internationally recognized brands, such as Jim Beam Bourbon, Campari, Jäegermeister, Remy Martin Cognac, Corona, Budweiser (Budvar), Sutter Home wines, Carlo Rossi wines, Concha y Toro wines, Metaxa Liqueur, Grant’s Whisky, E&J Gallo wines, Sierra Tequila, Teacher’s Whisky, Cinzano and Old Smuggler.

In Russia, our import portfolio includes E&J Gallo wines, Concha y Toro wines, Paul Masson wines, Jose Cuervo tequila, and Great Valley brandy. In addition, between 2010 and 2011, we acquired WHL Holdings Limited and its subsidiaries, a leading premium alcohols importer in Russia. Consequently, our portfolio in Russia now includes Label 5 and Glenn Grant whiskies, De Kuyper liqueurs, and Constallation and Concha y Toro wines. Our portfolio in Hungary includes such well-known brands as Metaxa, Jäegermeister, Bols, Grant’s, Remy Martin Cognac, Jose Cuervo and many others.

We have six operational manufacturing facilities located in Poland and Russia and a total workforce of approximately 4,600 employees. In 2011, the Polish and Russian operations accounted for 27.3% and 69% of revenues, respectively, and excluding impairment and certain unallocated corporate charges, 68.2% and 21.3% of our operating profit, respectively. For fiscal year 2011, we generated approximately $830 million in net sales in 2011, an increase of approximately 18.2% over net sales for fiscal year 2010, and net sales of $524.5 million in net sales in the nine months ended September 30, 2012.

A corporate organizational chart of the Company is attached to this Offering Memorandum and Disclosure Statement as Annex 1.

The Exchange Offers and the Plan of Reorganization

Overview of the Restructuring Transactions

Set forth below is an overview of the restructuring transactions, which include the Exchange Offers and the transactions contemplated by the RTL Investment (as defined below) and assume that all Existing Notes are tendered in the Exchange Offers and the Exchange Offers are consummated, the transactions contemplated by the RTL Investment Agreement are consummated and there is no filing of the Plan of Reorganization:

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RTL would make a $172 million cash investment and exchange the RTL Credit Facility for shares of New Common Stock representing no less than 85% of the New Common Stock in CEDC (the “RTL Investment”), with the proceeds of the RTL Investment used to fund the cash consideration in the CEDC FinCo Exchange Offer;

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all Existing 2016 Notes would be exchanged for (i) an aggregate principal amount of New Secured Notes equal to $450 million plus the aggregate interest accrued but unpaid on the outstanding Existing 2016 Notes not accepted for tender in the Cash Option in accordance with their existing terms in respect of the period from March 16, 2013 to the earlier of June 1, 2013 and the date preceding the date of issuance of the New Secured Notes, (ii) $200 million aggregate principal amount of New Convertible Secured Notes and (iii) $172 million in cash;

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all Existing 2013 Notes and RTL Notes would be exchanged for New Common Stock representing 10% of the New Common Stock in CEDC; and

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CEDC’s existing stockholders would have their stock holdings diluted to 5% of the total common stock of CEDC by diluting all existing stockholders on a pro rata basis.

If the proposed transactions above are consummated through the Plan of Reorganization, the treatment of the creditors and stockholders above would be the same (assuming that the class of claims constituting the Existing 2013 Notes and RTL Notes votes to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code). If the class of claims constituting the Existing 2013 Notes and RTL Notes do not vote to accept the Plan of Reorganization, such claims shall receive no recovery and RTL will receive 100% of the New Common Stock.

The Exchange Offers and Consent Solicitation

CEDC FinCo is offering to exchange for each $1,000 principal amount of 9.125% Existing 2016 Notes and each €1,000 principal amount of 8.875% Existing 2016 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time, at the election of such Tendering 2016 Noteholders, (i) the Cash Option Consideration as determined by procedure described below under “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer—Cash Option” and/or (ii) the Notes Option Consideration described below under the heading “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer—Notes Option”, in each case subject to proration as described under “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer”.

CEDC FinCo is also soliciting Consents from holders of Existing 2016 Notes to the Proposed Amendments. If holders of at least a 50.1% of the aggregate principal amount of the outstanding Existing 2016 Notes deliver

Consents (the “Requisite Majority Consents”) in the Consent Solicitation, the Covenant Amendments and the Bankruptcy Waiver Amendments will be approved. The Covenant Amendments will eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing 2016 Notes Indenture. If holders of at least 90% of the aggregate principal amount of the outstanding Existing 2016 Notes deliver Consents in the Consent Solicitation, the Collateral and Guarantee Amendments and the Covenant Amendments will be approved. The Collateral and Guarantee Amendments will release all of the collateral securing the Existing 2016 Notes and all of the subsidiary guarantees of the Existing 2016 Notes. The Proposed Amendments will become effective upon the execution of one or more supplemental indentures containing the amendments, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization (or an alternative plan of reorganization which results in the cancellation, extinguishment or other release of CEDC’s and CEDC FinCo’s obligations under the Existing 2016 Notes). Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers, but must deliver their Consents. See “The Exchange Offers and Consent Solicitation—The Consent Solicitation”.

The Supplemental Indenture will also include the Bankruptcy Waiver Amendments, which will amend the acceleration provisions in the Existing 2016 Indenture to provide that a filing by CEDC under Chapter 11 of the Bankruptcy Code will not result in automatic acceleration of obligations of the issuer of the Existing 2016 Notes (CEDC FinCo) or the subsidiary guarantees of the Existing 2016 Notes, but such a filing would (as the Existing 2016 Indenture currently provides) result in automatic acceleration of amounts outstanding under the CEDC guarantee of the Existing 2016 Notes Indenture. If the Bankruptcy Waiver Amendments are approved, holders of over 50% of the outstanding Existing 2016 Notes could accelerate (i.e. declare immediately due and payable) CEDC FinCo’s and the subsidiary guarantors’ obligations under the Existing 2016 Notes and guarantees upon a Chapter 11 filing by CEDC, subject to the terms and conditions in the Existing 2016 Notes Indenture. The Bankruptcy Waiver Amendments will become operative upon execution of the Supplemental Indenture (even if the CEDC FinCo Exchange Offer is not consummated or a Plan of Reorganization is never confirmed).

Each holder of Existing 2016 Notes who delivers its Consents, by the Consent Fee Deadline and does not validly withdraw such Consents, will receive the Consent Fee provided that the Consent Fee will only be payable if the Requisite Consents are obtained by the Consent Fee Deadline. Holders of Existing 2016 Notes who deliver Consent after the Consent Fee Deadline will not be entitled to the Consent Fee.

The Exchange Offers are conditioned upon, among other things, the approval by the Existing Stockholders of CEDC of the Reverse Stock Split the issuance of the New Common Stock in the Exchange Offers. See “Risk Factors”.

The Existing 2013 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The 8.875% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of €1,000 and integral multiples of €1,000 in excess thereof. The 9.125% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. Holders of the Existing 2016 Notes who do not tender all of their notes should ensure that they retain a principal amount of notes amounting to at least the authorized minimum denomination of $100,000 or €50,000, as applicable, principal amount. No alternative, conditional or contingent tenders will be accepted.

New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. New Notes will not be issued in increments of less than $1,000 and the principal amounts of the New Notes payable to a holder of Existing 2016 Notes in the CEDC FinCo Exchange Offer will be rounded down to the nearest $1,000. No cash will be paid as a result of rounding down to the nearest $1,000. Holders of Existing 2013 Notes and those holders of Existing 2016 Notes that elect the New Notes Option will not be entitled to receive any cash payment with respect to accrued and unpaid interest on Existing Notes accepted for exchange and any such accrued interest will be forfeited, as all per $1,000 and per €1,000 exchange ratios with respect to the Exchange Offers have been calculated to take account of accrued interest through March 15, 2013. The per €1,000 exchange ratio in respect of 8.875% Existing 2016 Notes will be calculated using an exchange rate that reflects the trailing ten-day average exchange rate through March 22, 2013 as reported by Bloomberg Finance L.P.

By tendering your Existing Notes in the Exchange Offers, you will be deemed to have waived any and all rights with respect to the Existing Notes tendered thereby (including, without limitation, any existing or past defaults by CEDC, CEDC FinCo, the Trustees or any party acting on our behalf or at our instruction and their consequences in respect of such Existing Notes), and released and discharged us and the Trustees, our affiliates, the Trustees’ affiliates, or any party acting on our behalf or at our instruction from any and all claims you may have, now or in the future, arising out of or related to the Existing Notes tendered thereby, including, without limitation, any and all claims that you are entitled to receive additional principal or interest payments with respect to the Existing Notes tendered thereby, including any accrued and unpaid interest, or to participate in any redemption of the Existing Notes tendered thereby. Notwithstanding anything to the contrary in the Existing 2016 Notes Indenture or any related agreements, votes by holders of Existing 2016 Notes Claims to accept the Plan of Reorganization, whether by submission of a Ballot accepting the Plan of Reorganization and not electing to “opt out” of the releases set forth in Article IX.C of the Plan or by blocking their Existing 2016 Notes in the CEDC FinCo Exchange Offer without submitting a Ballot, shall constitute agreement by such holders to release and discharge the non-debtor subsidiaries and affiliates of CEDC, CEDC FinCo, and CEDC FinCo LLC of all obligations relating to guarantees of the Existing 2016 Notes.

Plan of Reorganization

In the event that the conditions to the Exchange Offers are not satisfied or waived by us, or if we for any reason determine that it would be more advantageous or expeditious and the Minimum Reorganization Condition is met, CEDC, CEDC FinCo, and CEDC FinCo LLC may seek to file petitions under Chapter 11 of the Bankruptcy Code to consummate either the Plan of Reorganization or an alternative plan of reorganization. At the Consent Time and in consideration of the results of participation in the Exchange Offers and votes to accept the Plan of Reorganization as of the Consent Time, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline (as defined below), which is also the Expiration Time; provided, however that holders of Existing 2016 Notes voting to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time.

Through the Plan of Reorganization:

•

if the class of claims constituting the Existing 2013 Notes and the RTL Notes votes to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section

1126(c) of the Bankruptcy Code, then each member of such class would receive shares of New Common Stock upon substantially the same terms as the CEDC Exchange Offer as further set forth in the section entitled “The Plan of Reorganization”; provided, however that if the class of claims constituting the Existing 2013 Notes and the RTL Notes under the Plan of Reorganization does not vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then each member of such class shall receive no recovery on account of its Existing 2013 Notes and/or RTL Notes, as applicable, under the Plan of Reorganization;

•

all holders of Existing 2016 Notes will receive shares of (i) New Notes and/or (ii) cash consideration upon substantially the same terms as the CEDC FinCo Exchange Offer;

•

the holder of claims under the RTL Credit Facility would receive shares of New Common Stock as further set forth in the section entitled “The Plan of Reorganization”;

•

if the class of claims constituting the Existing 2013 Notes and the RTL Notes votes to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then holders of Existing Common Stock will receive shares of New Common Stock equal to 5% of CEDC New Common Stock issued under the Plan of Reorganization; provided, however that if the class of claims constituting the Existing 2013 Notes and the RTL Notes under the Plan of Reorganization does not vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then holders of Existing Common Stock will receive or retain no property under the Plan of Reorganization; and

•

the Existing 2013 Notes, the RTL Notes, the RTL Credit Facility, the Existing 2016 Notes and the Existing Common Stock would be cancelled.

All distributions of New Common Stock under the Exchange Offers or Plan of Reorganization are subject to dilution by (i) any conversion of New Convertible Secured Notes into New Common Stock and/or (ii) New Common Stock reserved for issuance under a MIP in an amount not to exceed 5% of all issued and outstanding New Common Stock on a fully diluted basis. The parameters of the MIP will be determined by the board of directors of reorganized CEDC.

The Plan of Reorganization is conditioned upon, among other things, the Minimum Reorganization Condition. You may only change that vote by withdrawing, to the extent permitted, the Existing Notes you have tendered in the Exchange Offers or your Ballot prior to the Expiration Time or Consent Time, as applicable.

The Plan of Reorganization should be considered separately from the Exchange Offers and any vote in favor of the Plan of Reorganization that is not validly withdrawn is final and binding, irrespective of any amendment or modification of the Exchange Offers or the related out-of-court transactions, unless we subsequently re-open withdrawal rights. In addition, in no event will the expiration or termination of the Exchange Offers or the failure by us to accept any Existing Notes tendered in the Exchange Offers affect the validity of a vote in favor of the Plan of Reorganization or the Consents. By providing an instruction to your nominee to vote to accept or reject the Plan of Reorganization, you are making certain certifications, as contained in the Ballot, and agreeing to certain provisions contained in the Plan of Reorganization including exculpation, injunction and release provisions. If you do not tender your Notes into the Exchange Offers and you vote against, or take no action with respect to, the Plan of Reorganization, we may not be able to consummate the Exchange Offers or the Plan of Reorganization. In such a circumstance, we may be required to implement an alternative restructuring which is less beneficial to us and provides consideration to holders of Existing Notes which is less than the Consideration offered in the Exchange Offers and the Plan of Reorganization and/or which may take more time to implement.

RTL Investment Agreement

CEDC and RTL have entered into a Securities Purchase Agreement which will become effective as of March 8, 2013 when executed by JSC “Russian Alcohol Group” (the “RTL Investment Agreement”) pursuant to which RTL has agreed, on the terms and subject to the conditions set forth in the RTL Investment Agreement, to invest $172 million in CEDC and terminate the RTL Credit Facility in exchange for shares of New Common Stock constituting at least 85% of the issued and outstanding New Common Stock immediately following consummation of the Exchange Offers or the Plan of Reorganization (the “RTL Investment”). The RTL Investment Agreement contains a limited number of customary representations and warranties from CEDC, including, among others, with respect to incorporation, due authorization and broker’s fees and customary representations and warranties from RTL as well as certain conditions to consummating the RTL Investment such as the accuracy of CEDC’s representations and warranties; the material performance by CEDC of its obligations in the RTL Investment Agreement; the absence of any legal prohibitions on and governmental challenges to the transactions contemplated by the RTL Investment Agreement; the receipt of antitrust and other approvals and consents; and CEDC not entering into an alternative transaction. For more details see “Certain Relationships and Related Party Transactions—RTL Investment Agreement”.

RTL Views on the Exchange Offers and the Plan of Reorganization

Prior to February 25, 2013, RTL discussed with CEDC a proposal for restructuring CEDC’s affairs. After consultation with representatives of certain holders of the Existing 2016 Notes, the Special Committee of Independent Directors of CEDC’s Board of Directors determined to pursue the restructuring proposals set forth in CEDC’s and CEDC FinCo’s Offering Memorandum, Consent Solicitation Statement and Disclosure Statement Soliciting Acceptances of a Prepackaged Plan of Reorganization, dated February 25, 2013 (the “Old Offering Memorandum”). RTL and certain of its affiliates informed the Company that they did not support, and did not agree to, the terms of the restructuring transactions described in the Old Offering Memorandum. RTL and its affiliates further informed the Company that they reserved all of their legal, equitable and contractual rights with respect to the Exchange Offers and all of the transactions contemplated in the Old Offering Memorandum.

On February 28, 2013, RTL and the Existing 2016 Notes Steering Committee entered into the Restructuring Term Sheet relating to a proposed financial restructuring of the Company. On March 7, 2013, CEDC’s Board of Directors determined that the financial restructuring proposed under the Restructuring Term Sheet was in the best interests of the Company and should be pursued. This Offering Memorandum amends and restates the Old Offering Memorandum and seeks to implement the proposed financial restructuring contemplated by the Restructuring Term Sheet. Accordingly, RTL and each of the members of the Existing 2016 Notes Steering Committee believe that the restructuring proposed herein best maximizes the value of the Company available to stakeholders under the current circumstances, and supports the Exchange Offers and Plan of Reorganization as being in the best interests of all constituents.

Alternative Proposals

On February 18, 2013, Mark Kaufman sent a letter to the Company’s Board of Directors stating that he wanted to work with the Company on a restructuring plan and his willingness to commit personal funds, immediately available in cash, of up to $75 million. Mr. Kaufman’s letter stated that his proposal would not contemplate any reduction in the principal of the Existing 2016 Notes and would take into account the current market value of the 2013 Notes. On February 19, 2013, the Company and Mr. Kaufman executed a non-disclosure agreement and engaged in preliminary discussions on a potential alternative restructuring plan.

On March 1, 2013, Mr. Kaufman sent a letter to the CEDC Board of Directors outlining his views of the transactions proposed by CEDC in the Old Offering Memorandum, and, in particular, the proposed treatment of the RTL Credit Facility. Mr. Kaufman informed the CEDC Board of Directors that he had received a copy of a

letter, dated March 1, 2013, addressed by Mikhail Khabarov, CEO of A1 Investments Company (“A1”), a member of the Alfa Group, to the Existing 2016 Notes Steering Committee in which A1 expressed its interest in putting together a consortium of investors, including Mr. Tariko, Mr. Kaufman and other undisclosed interested parties with up to $250 million of cash to invest to develop an alternative proposal for CEDC’s successful restructuring. Mr. Kaufman stated that he intended to consider A1’s invitation to participate in such a consortium and to continue discussions with all constituencies involved in the situation, including CEDC, the Existing 2016 Notes Steering Committee, A1 and Mr. Tariko.

On March 5, 2013, A1 and Mr. Kaufman sent a letter to the CEDC Board of Directors stating that they have decided to join forces to sponsor a Chapter 11 plan of reorganization for the restructuring of CEDC (the “A1 Plan”). The A1 Plan would be supported by a consortium of investors led by A1, and including Mr. Kaufman and certain other investors (the “Consortium”) and would propose to invest up to $225 million in the restructuring of CEDC in exchange for 85% of the equity of the reorganized CEDC. The A1 Plan would, if effected, be implemented through pre-arranged cases under Chapter 11 of the Bankruptcy Code with plan support agreements to be signed with members of the Existing 2016 Notes Steering Committee. CEDC intends to continue discussions with A1 and Mr. Kaufman with respect to the A1 Plan.

The main terms of the A1 Plan include:

Consideration for Existing 2016 Noteholders

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$175 million of cash, the proceeds of which would be used exclusively by CEDC to make available a cash out option;

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All remaining Existing 2016 Notes that do not elect the cash out option would receive, on a pro rata basis, $660 million in consideration comprising:

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$50 million in cash paid on a rata basis (together with any remaining portion of the cash investment not paid out in the cash out option);

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New senior secured notes due 2018 ($410 million);

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New convertible junior secured notes due 2018 ($200 million);

Consideration for unsecured debt holders and current shareholders

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Under the proposed A1 Plan, unsecured debt holders would include Existing 2013 Noteholders, the RTL Credit Facility, the RTL Notes and all other unsecured claims;

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These unsecured debt holders and current shareholders would receive no more than 15% of the reorganized equity of CEDC, subject to dilution, including by a management incentive plan;

Consideration for the Consortium

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No less than 85% of the reorganized equity of CEDC, subject to dilution, including by a management incentive plan.

Summary Comparison of the Exchange Offers and the Plan of Reorganization

Consummation of the Exchange Offers provides several benefits, including:

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substantially deleveraging our balance sheet by approximately $617 million principal of debt (assuming an exchange rate of 1.3427 to €1.00, which reflects the trailing thirty day average exchange rate through February 22, 2013, as reported by Bloomberg Finance L.P.) after giving pro forma effect to the Exchange Offers;

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decreasing debt service payments and, thereby, increasing cash balances available for future business operations;

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reducing the risk of a capital shortfall that may be caused by the impending maturity of the Existing 2013 Notes on March 15, 2013 and RTL Notes on March 18, 2013 and extending our debt maturity profile;

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improving our financial position and our ability to access local credit lines in Poland and Russia;

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effectively executing our business transformation strategy; and

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effectuating the restructuring in a short period of time.

Consummating the Exchange Offers may also avoid the potential need to seek bankruptcy protection and the related costs and potential disruptions. These costs could be material and may include:

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loss of local credit lines, factoring agreements and bank guarantees;

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possible disruptions to our business, employees and customers, and a reduction in our ability to consummate this restructuring on as expedited a basis;

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our existing portfolio of clients seeking new alcohol beverage vendors to replace their existing relationships with us;

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increased cost of obtaining financing;

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suppliers demanding prepayment for their products;

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reputational damage resulting from the filing of a bankruptcy case;

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direct costs of bankruptcy, including fees paid to attorneys and other professionals; and

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costs of implementing any debtor in possession financing that may be necessary.

On the other hand, there are potential drawbacks to consummating the Exchange Offers outside bankruptcy, including:

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the possibility that not all Noteholders tender their Existing Notes into the Exchange Offers, resulting in less debt being extinguished;

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the need to obtain stockholder and other approvals for the issuance of the New Common Stock to Noteholders; and

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the risk that we could incur significant U.S. federal income tax liability as a result of recognizing “cancellation of debt income” outside of bankruptcy.

Accordingly, effecting the restructuring through the Plan of Reorganization could provide benefits that the Exchange Offers do not, including:

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elimination of all or substantially all of the obligations under the Existing Notes;

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providing for the same treatment of all holders of claims in the same class whether or not they vote to accept the Plan of Reorganization;

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cancellation of the Existing Common Stock and the ability to issue the New Common Stock without stockholder approval; and

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allowing us to exclude any otherwise taxable “cancellation of debt income” arising as a result of consummating the Exchange Offers outside bankruptcy (at the cost of reducing certain of our tax attributes).

Effects of Bankruptcy Filing Without a “Prepackaged” or Other Approved Plan of Reorganization

It is our intention to pursue the restructuring of our capital structure through the Exchange Offers or the Plan of Reorganization. If, however, either or both of the Exchange Offers are not consummated and we do not seek confirmation of the Plan of Reorganization, we may file for bankruptcy protection and seek approval of a “prearranged” or “pre-negotiated” plan of reorganization. In the event of a bankruptcy filing without an agreed plan of reorganization, we are likely to be subject to a more lengthy and costly bankruptcy process. Such a filing could cause substantial damage to our business and reputation. In addition, such a filing could substantially erode our customers’ confidence in our business. Lenders, bank guarantors, factoring partners, and other partners could seek to terminate their relationships with us, require financial assurances or enhanced returns, or refuse to provide credit or other services on the same terms as prior to filing. Furthermore, employees could be distracted or more easily attracted to other career opportunities, and it may be more difficult to attract or replace key employees. Suppliers could require prepayments or other payment restrictions. If you do not tender your Notes in the Exchange Offers and you vote against, or take no action with respect to, the Plan of Reorganization, we may not be able to consummate the Exchange Offers or the Plan of Reorganization.

Our Business Post-Exchange Offer

Business Strategy

Following the consummation of the Exchange Offers, we will continue to pursue our broader business strategy. If consummated, we expect the Exchange Offers to significantly enhance our capital structure and liquidity position. The extension of the maturity of indebtedness represented by the Existing 2016 Notes exchanged for New Notes due in 2018 will give us greater flexibility in using any cash proceeds from other securities issued by us to pursue our business strategy.

Stockholder Approval

CEDC will hold a meeting of stockholders at which stockholders will be asked to approve an amendment to CEDC’s Certificate of Incorporation to effect the Reverse Stock Split and the issuance of New Common Stock in the Exchange Offer. This proposal will require a vote of at least a majority of the Existing Common Stock outstanding at the time of the meetings. CEDC’s Board of Directors has resolved to hold a meeting of CEDC’s stockholders on March 26, 2013, with a record date of March 1, 2013. No assurance can be given that stockholder approval will be obtained for the above proposal.

Recent Developments

Q4 2012 Trading Update

Set forth below is a discussion of trading in the fourth quarter of 2012 based on unaudited operating data.

The fourth quarter of 2012 saw a continued improvement in underlying CEDC operations with volumes down 1% compared to the same period in 2011 (including the effect of significant December distributor inventory destocking compared to the fourth quarter of 2011), a moderate increase in revenue compared to the fourth quarter of 2011 and consumer volume offtake greater than the fourth quarter of 2011. In Russia and Poland, core brands (such as Parliament) showed volume growth in the fourth quarter of 2012 compared to the same period in 2011, in line with our strategy of investing in our most important high margin brands. The 1% decline in shipments versus last year was primarily due to a decline in low margin economy vodka brands in Russia.

Our Russian vodka market share showed only a small decrease despite large price increases and significant reductions in discounts, and increased operating profitability. In Poland, our vodka market share was largely

stable, and our operating profits increased in the fourth quarter of 2012 compared to the same period in 2011. Our wine business in Russia declined due to Moet and Mondoro contract losses – excluding the effect of these contract losses, our underlying sales volumes would have increased, and our Bravo alcoholic cocktail business showed sales volume and consumer offtake growth across all of its four biggest brands in the fourth quarter of 2012 compared to the same period in 2011.

Our fourth quarter 2012 underlying operating profitability increased compared to the fourth quarter of 2011 reflecting relatively stable volumes, improved prices and mix, a reduction in discounts, and a reduction in general overhead costs compared to the fourth quarter of 2011.

We expect that net profit in the fourth quarter of 2012 will be significantly impacted by a large write down in goodwill relating to the Whitehall subsidiaries, Russian Alcohol, and our Polish operations associated with the latest assessment of future projections. This writedown is expected to be in excess of $400 million and could be significantly higher. Further, a number of additional items such as fixed asset write-downs in Russia will impact our net profit for the fourth quarter of 2012.

For discussion on our current liquidity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Other Recent Developments

On December 10, 2012, Marek Forysiak, a member of the board of directors CEDC, notified the Board of his resignation from the Board effective immediately. Mr. Forysiak, who has served as an independent director of CEDC since April 2009, was a member of CEDC’s Audit Committee.

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

On January 9, 2013, CEDC requested a hearing to appeal the Nasdaq Listing Qualification Staff determination to initiate procedures to delist CEDC’s securities from The Nasdaq Stock Market and to suspend trading of CEDC’s common stock at the opening of business on January 11, 2013. The determination was based on CEDC not having held its annual meeting of shareholders by December 31, 2012. As a result of CEDC’s request, Nasdaq has scheduled a hearing on March 28, 2013 and stayed the delisting action pending a final written decision by the Nasdaq Hearing Panel.

Mr. David Bailey resigned from his position as Interim Chief Executive Officer and Mr. Grant Winterton was appointed as Chief Executive Officer of the Company effective as of January 10, 2013. On February 21, 2013, Grant Winterton and CEDC entered into an employment agreement. See “Management”.

Upon the recommendation of the Nominating and Corporate Governance Committee, the board of directors of CEDC unanimously appointed the Honorable Joseph J. Farnan, Jr. to the board of directors of CEDC effective as of February 4, 2013. Mr. Farnan was named to the Compensation Committee and Audit Committee. See “Management”.

Information Agent and Voting Agent

Questions and requests for assistance may be directed to The Garden City Group, Inc., who is acting as the information agent in the Exchange Offers and Consent Solicitation (the “Information Agent”), and who is acting as the voting agent in connection with the Plan of Reorganization (the “Voting Agent”), in each case at the addresses and telephone numbers set forth on the back cover of this Offering Memorandum and Disclosure Statement.

SUMMARY OF THE EXCHANGE OFFERS AND THE CONSENT SOLICITATION

The Exchange Offers

CEDC is offering to exchange for each $1,000 principal amount of Existing 2013 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time, 8.86 shares of New Common Stock.

CEDC FinCo is offering to exchange for each $1,000 principal amount of 9.125% Existing 2016 Notes and each €1,000 principal amount of 8.875% Existing 2016 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time, at the election of such Tendering 2016 Noteholders, (i) the Cash Consideration as determined by procedure described below under “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer—Cash Option” and/or (ii) the Notes Option Consideration described below under the heading “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer—Notes Option”, in each case subject to proration as described under “The Exchange Offers and Consent Solicitation—The CEDC FinCo Exchange Offer”.

Number of shares of CEDC common stock outstanding (as of February 13, 2013)

81,761,652

Number of shares of CEDC common stock offered in the Restructuring Transaction

23,750,000

Number of shares of common stock outstanding after giving effect to the Restructuring Transactions and the Reverse Stock Split

25,000,000

Cash Option and New Notes Option

Holders of Existing 2016 Notes may elect to receive consideration pursuant to the Cash Option or the New Notes Option. Allocations of consideration under the Cash Option will be made pursuant to a pure reverse Dutch tender offer. See, “The Exchange Offer and Consent Solicitation—The CEDC FinCo Exchange Offer”.

The Consent Solicitation

CEDC FinCo is also soliciting Consents from holders of Existing 2016 Notes to the Proposed Amendments. If holders of at least 50.1% of the aggregate principal amount of Existing 2016 Notes deliver Consents in the Consent Solicitation, the Covenant Amendments will be approved. The Covenant Amendments will eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing 2016 Notes Indenture. If holders of at least 90% of the principal amount of the outstanding Existing 2016 Notes deliver Consents in the Consent Solicitation the Collateral and Guarantee Amendments will be approved. The Collateral and Guarantee Amendments will release all of the collateral securing the Existing 2016 Notes and all of the subsidiary guarantees of the Existing 2016 Notes.

The Proposed Amendments will become effective upon the execution of one or more supplemental indentures, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization. Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers, but must deliver their Consents. Consents will be valid whether or not we consummate the CEDC FinCo Exchange Offer or confirm the Plan of Reorganization. See “The Exchange Offers and Consent Solicitation—The Consent Solicitation”.

If the Requisite Majority Consents are obtained, the Bankruptcy Waiver Amendments will be approved. The Bankruptcy Waiver Amendments, which will amend the acceleration provisions in the Existing 2016 Indenture to provide that a filing by CEDC under Chapter 11 of the Bankruptcy Code will not result in automatic acceleration of obligations of the issuer of the Existing 2016 Notes (CEDC FinCo) or the subsidiary guarantees of the Existing 2016 Notes, but such a filing would (as the Existing 2016 Notes Indenture currently provides) result in automatic acceleration of amounts outstanding under the CEDC guarantee of the Existing 2016 Notes. If the Bankruptcy Waiver Amendments are approved, holders of at least 50% of the outstanding Existing 2016 Notes could accelerate (i.e. declare immediately due and payable) CEDC FinCo’s and the subsidiary guarantors’ obligations under the Existing 2016 Notes and guarantees upon a Chapter 11 filing, subject to the terms and conditions set forth in the Existing 2016 Notes Indenture. The Bankruptcy Waiver Amendments will become operative upon execution of the Supplemental Indenture (even if the CEDC FinCo Exchange Offer is not consummated or the Plan of Reorganization is never filed).

The Consent Fee

Each holder of Existing 2016 Notes who delivers its Consents by the Consent Fee Deadline, and does not validly withdraw such Consents, will receive a Consent Fee equal to 0.50% of the aggregate principal amount of Existing 2016 Notes for which it delivers Consents. The Consent Fee will be payable in U.S. dollars. Payments of the Consent Fee in respect of tenders of 8.875% Existing Notes will be paid based upon the prevailing euro/US dollar exchange rate in effect at the time of payment. The Consent Fee will only be payable if the Requisite Consents are obtained prior to the Consent Fee Deadline. Holders of Existing 2016 Notes who deliver Consents after the Consent Fee Deadline will not be entitled to the Consent Fee.

Expiration Time

The Exchange Offers and the Consent Solicitation will expire at 11:59 P.M., New York City time, on March 22, 2013, unless extended or earlier terminated by us. See “The Exchange Offers and Consent Solicitation—Expiration Time; Consent Time; Consent Fee Deadline; Extensions; Termination; Amendments”.

The Consent Time

The Consent Time is the later of (i) the date and time at which CEDC FinCo notifies the trustee under the Existing 2016 Notes Indenture that CEDC FinCo has received the Requisite Consents and (ii) 5:00 PM New York City time on March 14, 2013. See “The Exchange Offers and Consent Solicitation—Expiration Time; Consent Time; Consent Fee Deadline; Extensions; Termination; Amendments”.

The Consent Fee Deadline

The Consent Fee Deadline is 5:00 PM, New York City time, on March 14, 2013. See “The Exchange Offers and Consent Solicitation—Expiration Time; Consent Time; Consent Fee Deadline; Extensions; Termination; Amendments”.

Settlement Date

Subject to the satisfaction or waiver of the conditions to the Exchange Offers, the Exchange Offers will be settled and the Consideration will be delivered to validly tendering Noteholders promptly after the Expiration Time; provided, however, that if the Plan of Reorganization is consummated, the delivery of the Consideration will occur in accordance with the Plan of Reorganization. The date of delivery of Consideration is referred to herein as “Settlement Date.”

Withdrawal Rights and Revocation of Consents

You may withdraw your tender of Existing 2013 Notes at any time prior to the Expiration Time. You may withdraw your Existing 2016 Notes and Consents at any time prior to the Consent Time.

No Accrued and Unpaid Interest

Holders of Existing 2013 Notes and those holders of Existing 2016 Notes that elect the New Notes Option will not be entitled to receive any payment with respect to accrued and unpaid interest on Notes accepted in the Exchange Offers, and any such accrued interest will be forfeited, as all per $1,000 and per €1,000 exchange ratios with respect to the Exchange Offers have been calculated to take account of accrued interest through March 15, 2013. No further adjustments to the exchange ratios will be made solely due to an extension of the Expiration Date.

Conditions

Our obligation to accept for exchange any validly tendered Existing Notes by Noteholders is conditioned upon the satisfaction or waiver of certain conditions, including, among other things:

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with respect to each Exchange Offer, (i) the substantially concurrent consummation of the other Exchange Offer or (ii) the consummation of the CEDC FinCo Exchange Offer and confirmation and consummation of the Plan of Reorganization for CEDC;

•

the satisfaction of the Minimum Conditions;

•

consummation of the RTL Investment;

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the approval of the Reverse Stock Split and the issuance of New Common Stock in connection with the Exchange Offers;

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the SEC declaring effective the application for qualification of the New Secured Notes Indenture on Form T-3 filed by CEDC FinCo;

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the SEC declaring effective the application for qualification of the New Convertible Secured Notes Indenture on Form T-3 filed by CEDC FinCo; and

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if applicable, the SEC declaring effective the application for qualification of the Supplemental Indenture giving effect to the Collateral and Guarantee Amendments on Form T-3 filed by CEDC FinCo with respect to the Existing Notes.

If the conditions to either the CEDC Exchange Offer (including the Existing 2013 Notes Minimum Condition) or the CEDC FinCo Exchange Offer (including the Existing 2016 Notes Minimum Condition) are not satisfied or are not waived, we may, at our option, not consummate either of the Exchange Offers and, if the Minimum Reorganization Condition is satisfied, file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization such that holders of Existing Notes would receive the treatment described in the Plan of Reorganization. Even if the conditions to the Exchange Offers are met, and whether or not the Minimum Reorganization Condition is met, CEDC and CEDC FinCo may file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization or an alternative plan of reorganization.

At the Consent Fee Deadline and in consideration of the results of participation in the solicitation of acceptances for the Plan of Reorganization the Exchange Offers and votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline (as defined below), which is also the Expiration Time.

We may waive or amend any of these conditions or any other conditions to the consummation of the Exchange Offers, without providing additional withdrawal rights except as required by the Exchange Act, provided that we will not waive the RTL Investment Condition or the Minimum Conditions without the prior written consent of RTL and the Existing 2016 Notes Steering Committee. If we do not satisfy the

conditions noted above, we may allow the Exchange Offers to expire or terminate the Exchange Offers prior to the Expiration Time and seek to effectuate the Plan of Reorganization. Any votes in favor of the Plan of Reorganization delivered prior to such expiration or termination, as applicable, will be valid in the event we seek to effectuate the Plan of Reorganization. See “The Exchange Offers and Consent Solicitation—Conditions of the Exchange Offers and Consent Solicitation”.

Procedures for Tendering Notes

For a description of the procedures for tendering Existing Notes in the Exchange Offers, see “The Exchange Offers and Consent Solicitation”. For further information, contact the Information Agent or consult your broker, bank or other nominee or custodian for assistance.

Extensions, Termination and Amendments

We may terminate the Exchange Offers or the Consent Solicitation prior to the Expiration Time, or extend the Exchange Offers or the Consent Solicitation. In no event will the termination of the Exchange Offers or the failure by us to accept any Existing Notes tendered in the Exchange Offers affect the validity of a vote in favor of the Plan of Reorganization. In addition, we may also amend the Exchange Offers or the Consent Solicitation in certain respects. If we make certain material changes to the terms of the Exchange Offers or the Consent Solicitation, we may extend the Expiration Time if necessary to comply with applicable securities laws. See “The Exchange Offers and Consent Solicitation—Expiration Time; Consent Time; Consent Fee Deadline; Extensions; Termination; Amendments”.

Delivery of the New Common Stock and New Notes

Upon satisfaction or waiver of the conditions to the Exchange Offers, we will accept Existing Notes that are validly tendered by Noteholders and not validly withdrawn, and on the Settlement Date or promptly thereafter we will issue, or cause to be issued, the New Common Stock to such holders of Existing 2013 Notes and cash and/or New Notes to such holders of Existing 2016 Notes; provided, however, that if the transactions are consummated through the Plan of Reorganization, the delivery of the New Common Stock and New Notes will occur promptly after the confirmation of the Plan of Reorganization. See “The Exchange Offers and Consent Solicitation—Terms of the Exchange Offers and Consent Solicitation”.

Payment of the Consent Fee

Upon obtaining the Requisite Consents, we will pay the applicable Consent Fee to each holder of Existing 2016 Notes who delivered and did not withdraw Consents with respect to its Existing 2016 Notes by the Consent Fee Deadline. The Consent Fee will be payable in U.S. dollars. Payments of the Consent Fee in respect of Consents from holders of 8.875% Existing 2016 Notes will be paid based upon the prevailing euro/US dollar exchange rate in effect at the time of payment. The Consent Fee will be paid on the Consent Fee Payment Date.

Certain Consequences to Non-Exchanging Noteholders

Consummation of the Exchange Offers and, with respect to holders of Existing 2016 Notes, the Consent Solicitation and the effectiveness of the Proposed Amendments to the Existing 2016 Notes Indenture may have adverse consequences to non-tendering Noteholders and holders of Existing Notes not accepted for exchange. If the requisite Consents are received and accepted, and the Supplemental Indenture is executed, the Proposed Amendments will become operative upon consummation of the Exchange Offers or confirmation of the Plan of Reorganization, as applicable, and the Proposed Amendments and will be binding on all non-tendering Noteholders and holders of Existing 2016 Notes not accepted for exchange. If the Supplemental Indenture is executed, the Bankruptcy Waiver Amendments will be operative upon execution of the Supplemental Indenture, even if the Exchange Offers are not consummated or a Plan of Reorganization never confirmed. Consents will be valid even where we do not consummate the CEDC FinCo Exchange Offer, but instead confirm the Plan of Reorganization. In addition, the reduced amount of outstanding Notes as a result of the Exchange Offers may adversely affect the trading market, liquidity and market price of any Existing Notes that remain outstanding. See “Risk Factors”.

No Appraisal Rights

No appraisal rights are available to Noteholders in connection with the Exchange Offers.

Certain United States Federal Income Tax Consequences

For a discussion of certain tax considerations that may be relevant to Noteholders who participate in the Exchange Offers or the Consent Solicitation and to non-tendering Noteholders and holders of Existing Notes not accepted for exchange, see “ Certain United States Federal Income Tax Consequences”.

Information Agent and Voting Agent

The Garden City Group, Inc. is serving as the Information Agent in connection with the Exchange Offers and the Consent Solicitation and the Voting Agent in connection with the Plan of Reorganization. The telephone number of the Information Agent/Voting Agent is (800) 878-1684 (North America) or (614) 763-6110 (international).

Requests for additional copies of this Offering Memorandum and Disclosure Statement, the Letter of Transmittal, the Ballot and any other documents referred to in this Offering Memorandum and Disclosure Statement, the Letter of Transmittal or the Ballot should be directed to the Information Agent/Voting Agent at its address set forth on the back cover of this Offering Memorandum and Disclosure Statement.

Exchange Agent

Global Bondholder Services Corporation, Inc. is serving as the Exchange Agent (the “Exchange Agent”) in connection with the Exchange Offers. The telephone number of the Exchange Agent is +1 (212) 430-3774 (for bankers and brokers) and +1 (866) 612-1500 (collect).

Risk Factors

For a discussion of certain risk factors that may be relevant to Noteholders who participate in the Exchange Offers, the Consent Solicitation and Noteholders voting in favor of the Plan of Reorganization and the non-tendering Noteholders and holders of Existing Notes not accepted for exchange, see “Risk Factors”.

ISIN/CUSIP

Existing 2013 Notes

CUSIP: 153435AA0

ISIN: US153435AA00

9.125% Existing 2016 Notes

Regulation S CUSIP: U1259BAA6

Regulation S ISIN: USU1259BAA62

144A CUSIP: 15080BAA4

144A ISIN:US15080BAA44

8.875% Existing 2016 Notes

Regulation S ISIN: XS0468883672

144A ISIN: XS0468884217

SUMMARY OF THE PLAN OF REORGANIZATION

If we for any reason determine that it would be more advantageous or expeditious, CEDC, CEDC FinCo, and CEDC FinCo LLC may seek to restructure by filing voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and seek Bankruptcy Court approval of the proposed restructuring through confirmation of a prepackaged Plan of Reorganization. The Plan of Reorganization is attached hereto as Appendix A.

At the Consent Fee Deadline and in consideration of the results of participation in the Exchange Offers and, accordingly, votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline, which is also the Expiration Time; provided, however that holders of Existing 2016 Notes voting to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time.

To facilitate Bankruptcy Court approval of the Plan of Reorganization in the event CEDC, or each of CEDC, CEDC FinCo, and CEDC FinCo LLC (the parties filing a Chapter 11 case also referred to as the “Debtor” or “Debtors”, as the case may be), file Chapter 11 case(s), we are soliciting acceptances of the prepackaged Plan of Reorganization from holders of Existing Notes, holders of RTL Notes and holders of RTL Credit Facility claims that may be used if we determine that seeking Chapter 11 relief is appropriate. The Plan of Reorganization, if approved, would result in holders of the Existing Notes and other claimants and stockholders receiving the treatment set forth below, which differs in certain respects from the consideration provided by the Exchange Offer(s). If you do not tender your Notes into the Exchange Offers and you vote against, or take no action with respect to, the Plan of Reorganization, we may not be able to consummate the Exchange Offers or the Plan of Reorganization.

For purposes of this Summary of the Plan of Reorganization, all capitalized terms used but not otherwise defined herein have the meanings provided in the Plan of Reorganization. This Summary does not include all of the terms provided under the Plan of Reorganization. You should review the Plan of Reorganization in its entirety for a full description of terms and treatment. In the event of any inconsistencies between this Summary and the Plan of Reorganization, the Plan of Reorganization will control.

WE HAVE NOT MADE ANY DECISION AT THIS TIME TO COMMENCE ANY CHAPTER 11 CASE(S) AND RESERVE ALL OF OUR RIGHTS TO PURSUE ANY AND ALL OF OUR STRATEGIC ALTERNATIVES IN THE EVENT THE EXCHANGE OFFERS ARE NOT CONSUMMATED.

Unimpaired Classes of Claims and Interests

Claims held by certain of CEDC’s, CEDC FinCo’s, and CEDC FinCo LLC’s creditors would not be impaired under the Plan of Reorganization. With the exception of the classes of Claims and Interests described below, all creditors of the Debtor(s) will have their claims either reinstated or paid in full in cash under the Plan of Reorganization. We expect these amounts to be de minimis. In addition, CEDC’s interests in shares of CEDC FinCo and CEDC FinCo LLC will be reinstated to preserve the existing corporate structure. These unimpaired parties will not vote on the Plan of Reorganization.

No Bankruptcy of Operating Subsidiaries

None of CEDC’s Polish, Hungarian, Ukranian or Russian operating subsidiaries will commence any formal insolvency proceedings in connection with the transactions contemplated by the Plan of Reorganization, even if CEDC, CEDC FinCo, and CEDC FinCo LLC do so. The operating subsidiaries will continue to operate in the ordinary course, and obligations to employees, vendors and credit support providers will be honored without interruption.

Class 2 (Existing 2016 Notes Claims)

Estimated Amount: approximately $982.2 million (includes accrued interest through March 15, 2013 assuming a EUR/USD exchange rate of 1.3427, reflecting the thirty day average through February 22, 2013)

Claims held by holders of Existing 2016 Notes will be impaired under the Plan of Reorganization. Holders of Allowed Existing 2016 Notes Claims shall receive the treatment provided below, depending upon whether they elect to participate in the Cash Option or the New Notes Option. Holders of Allowed Existing 2016 Notes Claims will be deemed to have elected the New Notes Option for any Existing 2016 Notes to the extent that (i) they did not elect to include all or a portion of their Existing 2016 Notes as part of the Cash Option or (ii) any Existing 2016 Notes are not accepted for exchange in the Cash Option.

The Cash Option. Holders of Existing 2016 Notes who vote to accept the Plan of Reorganization may elect on their Ballot to receive up to an aggregate amount of $172 million in cash for their Existing 2016 Notes as part of a pure reverse Dutch auction. The Dutch auction is described more fully herein under the heading “The Exchange Offers and the Consent Solicitation” and in the Plan of Reorganization. The range of eligible bid prices for both the U.S. dollar and euro denominated Existing 2016 Notes are set forth in the Plan of Reorganization. We will accept for purchase the Existing 2016 Notes that elect to participate in the Cash Option in the order of the lowest to the highest Bid Prices (as determined based upon the percentage of principal amount) until reaching the Clearing Price. Bids at the Clearing Price will be accepted on a pro rata basis.

The New Notes Option. If holders of Allowed Existing 2016 Notes Claims elect on their ballots (or are deemed to elect pursuant to the terms of the Plan of Reorganization) to exchange their Existing 2016 Notes pursuant to the New Notes Option, such holders shall receive their pro rata shares of (A) the New Secured Notes, (B) the New Convertible Secured Notes, and (C) to the extent that the $172 million available for the Cash Option is not fully used, any such remaining cash.

Estimated Recovery for holders of Existing 2016 Notes Claims: 83.7% (excluding the aggregate interest accrued but unpaid on the outstanding Existing 2016 Notes not accepted for tender in the Cash Option in accordance with their existing terms in respect of the period from March 16, 2013 to the earlier of June 1, 2013 and the date preceding the date of issuance of the New Secured Notes.

Class 3 (RTL Credit Facility Claims)

Estimated Amount: approximately $50.7 million (includes accrued interest through March 15, 2013)

Claims held by RTL pursuant to the RTL Credit Facility, will be impaired under the Plan of Reorganization. RTL will receive shares of New Common Stock, as set forth in the RTL Investment Agreement, in full satisfaction of its Class 3 claims.

Estimated Recovery for holders of RTL Credit Facility Claims: 64.5%, assuming (i) New Common Stock valued at mid-point of Enterprise Value (as defined herein) range and (ii) the RTL Credit Facility receives its pro rata portion of 85% of the New Common Stock.

Class 5 (Unsecured Notes Claims)

Estimated Amount: approximately $282.0 million (includes accrued interest through March 15, 2013)

Claims held by holders of the Existing 2013 Notes and the RTL Notes are classified together as Unsecured Notes. Such Claims are impaired under the Plan of Reorganization. On the date the Plan of Reorganization becomes effective, if the class of claims constituting the Unsecured Notes votes to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, the holders of the Unsecured Notes will receive a total of 2,500,000 shares of New Common Stock, representing 10% of the New Common Stock of CEDC in full satisfaction of their claims. If the class of claims constituting the Unsecured Notes does not vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then each member of such class shall receive no recovery on account of its Unsecured Notes under the Plan of Reorganization.

Estimated Recovery for holders of Unsecured Notes Claims: 6.0%, assuming: (i) acceptance of the Plan of Reorganization by Class 5 Unsecured Notes Claims and (ii) New Common Stock valued at mid-point of Enterprise Value (as defined herein) range.

Class 9 (Existing Common Stock )

If Class 5 Unsecured Notes Claims vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then holders of Existing Common Stock will receive 1,250,000 shares of New Common Stock. Such shares will represent 5% of all New Common Stock issued under the Plan of Reorganization. If Class 5

Unsecured Notes Claims do not vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then holders of Existing Common Stock will receive or retain no property under the Plan of Reorganization.

Impaired Classes of Claims and Interests Receiving No Recovery

Claims that are subordinated pursuant to section 510(b) of the Bankruptcy Code, which include claims arising from or relating to the purchase or sale of stock (e.g., stock, shares, options, warrants, put rights and certain causes of action relating to such purchases or sales), will be terminated and will not receive any distribution under the Plan of Reorganization.

For a more detailed discussion of treatment under the Plan of Reorganization, see the section of this Offering Memorandum and Disclosure Statement entitled “The Plan of Reorganization—Certain Matters Regarding Classification and Treatment of Claims and Interests”.

RTL New Equity Investment

Pursuant to the terms of the RTL Investment Agreement, RTL will invest $172 million to fund cash distributions to holders of Existing 2016 Notes and convert the RTL Credit Facility Claims into equity in exchange for (i) approximately 85% of the shares of New Common Stock if Class 5 holders of Existing 2013 Notes vote to accept the Plan in accordance with section 1126(c) of the Bankruptcy Code or (ii) 100% of the shares of New Common Stock if Class 5 holders of Existing 2013 Notes do not vote to accept the Plan in accordance with section 1126(c) of the Bankruptcy Code.

Releases

As of the date that the Plan of Reorganization becomes effective, the Debtor(s), RTL, the Steering Committee for holders of Existing 2016 Notes, as well as all of their respective subsidiaries, affiliates members, and the current and former directors and officers of the Debtor(s) who were serving in such capacity on or after December 1, 2012, and professionals (the “Released Parties”) among others, shall be deemed released and discharged by the Debtors, their bankruptcy estate(s), and the reorganized Debtors from any and all claims and causes of action that otherwise could be asserted by the Debtors and that arise prior to the effective date of the Plan of Reorganization. Moreover, each holder of a claim who votes to accept the Plan of Reorganization and does not opt out of certain releases shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever, released and discharged the Released Parties from any and all claims and causes of action arising prior to the effective date of the Plan of Reorganization.

Guarantees of Non-Debtor Subsidiaries

Notwithstanding anything to the contrary in the Existing 2016 Notes Indenture or any related agreements, votes by holders of Existing 2016 Notes Claims who vote to accept the Plan and who do not elect to opt out of certain releases shall constitute agreement by such

holders to release and discharge the non-Debtor subsidiaries and affiliates of the Debtors of all obligations relating to guarantees of the Existing 2016 Notes and a waiver and surrender of any rights that might otherwise be available with respect to such guarantees.

Exculpation

The Released Parties shall be exculpated from any claim related to any act or omission in connection with, relating to or arising out of, among other things, CEDC’s, CEDC FinCo’s, and/or CEDC FinCo LLC’s in- or out-of-court restructuring efforts, Chapter 11 cases, the Plan of Reorganization (other than willful misconduct or fraud, to the extent imposed by applicable non-bankruptcy law), and upon Bankruptcy Court approval of the Plan of Reorganization shall be deemed to have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code with regard to the solicitation and distribution of securities pursuant to the Plan of Reorganization.

Voting on the Plan of Reorganization

The “Voting Record Date” for purposes of determining holders of Existing Notes that are eligible to vote on the Plan of Reorganization is March 4, 2013. The “Voting Deadline” is the Expiration Time, which is March 22, 2013 at 11:59 P.M. New York City time. To be counted, an appropriate instruction, in the form of the Ballot, Letter of Transmittal or otherwise must be provided to the nominee prior to the Voting Deadline. All Master Ballots and Ballots (each as defined below) tendered by the Voting Deadline may be utilized by us in connection with determining acceptances and rejections of the Plan of Reorganization at any time. Thus, all votes represented by such Master Ballots and Ballots (each as defined below) shall be deemed continuously effective until such time. Under the Bankruptcy Code, for purposes of determining whether the requisite acceptances of the Plan of Reorganization have been received, only holders who vote will be counted. Holders of Existing Notes who do not follow the instructions provided herein for indicating a vote on the Plan of Reorganization will not be counted for purposes of determining whether the Plan of Reorganization has been accepted by the requisite number and amount of votes.

Upon expiration of the Consent Fee Deadline and in consideration of the results of participation in the Exchange Offers and, votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline; provided, however that holders of Existing 2016 Notes voting to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time. Holders of Existing 2016 Notes who vote to accept the Plan of Reorganization must deliver their Consent to the Covenant Amendments and the Collateral and Guarantee Amendments and effectuation of the Supplemental Indenture pursuant to the Plan of Reorganization.

Management Incentive Plan

On or after the consummation of the Plan of Reorganization, the Reorganized Debtors may implement a management incentive plan for management, selected employees and directors of the Reorganized Debtors, providing incentive compensation in the form of, among other things, stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock awards, performance awards and/or other stock-based awards in Reorganized CEDC in an aggregate amount up to 5% of the New Common Stock, determined on a fully diluted basis. The specific form of and terms applicable to awards granted under the incentive plan for management, including vesting conditions, shall be determined by the new board of Reorganized CEDC; provided that the aggregate price paid for all repurchased, redeemed, acquired or retired New Common Stock issued pursuant to the Management Incentive Plan may not exceed $3.0 million in each twelve-month period from the date of issuance of the New Secured Notes (with any unused amounts in any preceding twelve-month period being carried over to the succeeding twelve-month period).

Covenant Amendments and Supplemental Indenture

On and after the confirmation of the Plan of Reorganization, the following actions shall be deemed authorized and approved in all respects, without the need for further approval or agreement under the Existing 2016 Notes Indenture, by the directors or officers of the Debtors or the Reorganized Debtors, the Existing 2016 Notes Indenture Trustee, or any security agent under the Existing 2016 Notes Indenture, or otherwise and pursuant to entry of the order confirming the Plan of Reorganization: (i) the Supplemental Indenture (giving effect to the Covenant Amendments, if holders of a majority of outstanding Existing Notes have delivered Consents and giving effect to the Collateral and Guarantee Amendments and the Covenant Amendments if holders of 90% of the outstanding Existing Notes have delivered Consents) shall be and shall be deemed to be executed and effective in all regards and in accordance with its terms; (ii) CEDC FinCo shall deliver notice to the Existing 2016 Notes Indenture Trustee that it designates all non-debtor affiliates as Unrestricted Subsidiaries (as defined in the Existing 2016 Notes Indenture) under the Existing 2016 Notes Indenture following the execution and effectiveness of the Supplemental Indenture; and (iii) upon designation of such Non-Debtor Affiliates as Unrestricted Subsidiaries, the guarantees by such Unrestricted Subsidiaries of the Existing 2016 Notes shall be automatically released pursuant to section 10.4(3) of the Existing 2016 Notes Indenture and all liens on assets of such Non-Debtor Affiliates designated as Unrestricted Subsidiaries that secure the Existing 2016 Notes shall be automatically released pursuant to section 11.9(2) of the Existing 2016 Notes Indenture.

SUMMARY DESCRIPTION OF NEW SECURED NOTES

The following summary contains basic information about the New Secured Notes and is not intended to be complete. It may not contain all the information that is important to you. For a more complete understanding of the New Secured Notes, you should read the section of this Offering Memorandum and Disclosure Statement entitled “Description of New Secured Notes”.

Issuer

CEDC Finance Corporation International, Inc., an indirect wholly-owned subsidiary of CEDC.

New Secured Notes Offered

An aggregate principal amount of New Secured Notes equal to $450 million plus the aggregate interest accrued but unpaid on the outstanding Existing 2016 Notes not accepted for tender in the Cash Option in accordance with their existing terms in respect of the period from March 16, 2013 to the earlier of June 1, 2013 and the date preceding the date of issuance of the New Secured Notes.

Maturity Date

April 30, 2018

Interest

The New Secured Notes offered in the CEDC FinCo Exchange Offer will bear interest, payable semi-annually, at the rates per annum set forth below:


Earlier of (i) June 1, 2013 and (ii) the issue date until April 30, 2014	8.00	%
May 1, 2014 — April 30, 2015	9.00	%
May 1, 2015 and thereafter	10.00	%

Interest Payment Dates

Semi-annually in arrears on April 30 and October 31 of each year, commencing on October 31, 2013. Interest will accrue from the earlier of (i) June 1, 2012 and (ii) the issue date of the New Secured Notes.

Ranking

The New Secured Notes will be senior obligations of CEDC FinCo. CEDC FinCo will have no indebtedness outstanding other than the New Secured Notes, the New Convertible Secured Notes and any Existing 2016 Notes that remain outstanding following the CEDC FinCo Exchange Offer, which will rank pari passu with the New Secured Notes. The New Secured Notes Indenture limits the ability of CEDC FinCo to issue any other indebtedness other than in the form of additional notes and substantially similar debt securities.

Guarantees

The New Secured Notes will be guaranteed (the “Guarantees”), by CEDC and the subsidiaries that currently guarantee the Existing 2016 Notes (the “Subsidiary Guarantors” and, together with CEDC, the “Guarantors”), except that Copecresto Enterprises Limited, Lugano Holding Limited, OOO Parliament Distribution, OOO Parliament Production, ISF GmbH (under liquidation) and Ardy Investments Limited (together, the “Copecresto Subsidiaries”), which collectively represented 3.3% of EBITDA of the Parent and its Restricted

Subsidiaries for the nine months ended September 30, 2012, and which guarantee the Existing Notes, will not be Guarantors of the New Secured Notes.

As of and for the nine months ended September 30, 2012, CEDC and the Subsidiary Guarantors would have accounted for 89.5% of the sales of CEDC and its Restricted Subsidiaries, 90.4% of EBITDA of CEDC and its Restricted Subsidiaries and 86.9% of assets of CEDC and its Restricted Subsidiaries.

As of September 30, 2012, after giving pro forma effect to the Exchange Offers (and assuming that all Existing Notes are tendered), (i) we had approximately $783.2 million of debt outstanding, of which $728.4 million is secured debt, (ii) the Subsidiary Guarantors had approximately $744.7 million of debt outstanding, of which $689.9 million is secured debt and (iii) our Restricted Subsidiaries that are not Subsidiary Guarantors had approximately $38.5 million of debt outstanding.

Ranking of Guarantees

The Guarantees by CEDC and the Subsidiary Guarantors will be:

•

senior obligations of CEDC and the Subsidiary Guarantors;

•

pari passu in right of payment with any other senior obligations of CEDC and the Subsidiary Guarantors that are not expressly subordinated including the guarantees of any Existing 2016 Notes that remain outstanding following the CEDC FinCo Exchange Offer and including the guarantees of the New Convertible Secured Notes;

•

senior in right of payment to all subordinated indebtedness of CEDC and the Subsidiary Guarantors; and

•

effectively subordinated to (i) the existing and future indebtedness of CEDC or such Subsidiary Guarantee secured by assets other than those pledged to secure the New Notes to the extent of the value of such assets securing such debt, and (ii) the indebtedness of any subsidiary of CEDC or such Subsidiary Guarantor that is not also a Subsidiary Guarantor.

Security

The New Secured Notes and the Guarantees will be secured by:

•

a first-priority pledge or charge over the shares of CEDC FinCo and each Guarantor (other than CEDC);

•

a first-priority pledge over the shares of Whitehall Securities; (as defined below);

•

a first-priority pledge or, in an applicable jurisdiction, assignment of rights under certain bank accounts of each Guarantor (other than the Russian Alcohol Guarantors) or withdrawal rights agreements for Russian bank accounts of OOO Glavspirttirest having at least $10.0 million in deposits;

•

a first-priority pledge of the intercompany loans made by CEDC FinCo;

•

a first-priority mortgage over certain real property and fixtures in Poland; and

•

security over certain intellectual property rights owned CEDC International sp. z o.o.

The New Secured Notes and the Guarantees will also be secured by the intercompany loans made by the Issuer to Jelegat Holdings Limited, which in turn will be secured by:

•

first-priority registered pledges of shares (or participatory interests) in all of the Russian Alcohol Guarantors;

•

a first-priority assignment of rights under certain non-Russian bank accounts and withdrawal rights agreements for each Russian bank account of each Russian Alcohol Guarantor, in each case having at least $10.0 million in deposits; and

•

a first-priority mortgage over certain real property and fixtures in Russia

The collateral that will secure the New Secured Notes will consist of substantially the same assets that secure the Existing Notes except that (i) the shares and assets of the Copecresto Subsidiaries, which secure the Existing Notes, will not secure the Notes and (ii) the shares of the Whitehall Subsidiaries which do not secure the Existing Notes will secure the Notes. The Copecresto Subsidiaries represented 3.3% of our consolidated EBITDA for the nine months ended September 30, 2012, and the Whitehall Subsidiaries represented 6.4% of our consolidated EBITDA for the nine months ended September 30, 2012.

The collateral that will secure the New Secured Notes will also secure the New Convertible Secured Notes, although the New Secured Notes will be entitled to priority with respect to the proceeds from an enforcement sale of the collateral. See “Description of Other Indebtedness—Intercreditor Agreement”.

Certain of the security to be granted for the benefit of the New Secured Notes will not be delivered on the issue date of the New Secured Notes. CEDC has agreed to use its reasonable efforts to deliver certain security as soon as practicable after the issue date of the new Secured Notes “Description of New Secured Notes—Certain Covenants—Delivery of Security and Guarantees”.

For a more detailed description of the security, please see the section entitled “Description of New Secured Notes”.

Optional Redemption

CEDC FinCo may redeem all or a part of the New Secured Notes at any time at the redemption prices (expressed as percentages of principal amount) set forth under “Description of New Secured Notes—Optional Redemption” plus accrued and unpaid interest on the New Secured Notes redeemed, to the applicable redemption date, if redeemed during the periods indicated below, subject to the rights of holders of New Secured Notes on the relevant record date to receive interest on the relevant interest payment date.

Mandatory Redemption

CEDC FinCo is required to use the proceeds from any Asset Sale (as defined in “Description of New Secured Notes”) with proceeds in excess of $20 million to redeem the New Secured Notes at a price equal to 100% of the principal amount of the New Secured Notes to be redeemed plus accrued and unpaid interest.

Covenants

The New Secured Notes Indenture will contain covenants that limit, among other things, the ability of CEDC and its Restricted Subsidiaries to:

•

incur additional indebtedness;

•

make certain restricted payments;

•

transfer or sell assets;

•

enter into transactions with affiliates;

•

create certain liens;

•

create restrictions on the ability of Restricted Subsidiaries to pay dividends or other payments;

•

issue guarantees of indebtedness by Restricted Subsidiaries;

•

enter into sale and leaseback transactions;

•

merge, consolidate, amalgamate or combine with other entities;

•

designate Restricted Subsidiaries as unrestricted subsidiaries; and

•

engage in any business other than a permitted business.

Each of the covenants is subject to a number of important exceptions and qualifications. Please see the sections entitled “Description of the Existing Notes” and “Description of Other Indebtedness”.

Denominations

The New Secured Notes will be issued and transferable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

New Secured Notes in denominations of less than $1,000 will not be available.

Forms

We will issue the New Secured Notes in the form of one or more global notes in definitive, fully registered book-entry form that will be deposited with or on behalf of DTC.

Transfer Restrictions

The New Secured Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction. Please see the section entitled “Federal and Other Securities Laws Matters”.

No Prior Market

The New Secured Notes will be new securities for which there is currently no market. Accordingly, we cannot assure you that a liquid market for the New Secured Notes will develop or be maintained.

Listing

We intend to make an application for the New Secured Notes to be admitted to list the New Secured Notes on the Global Exchange Market of the Irish Stock Exchange. There can be no assurance that such admission will take place.

Trustee

U.S. Bank National Association.

Security Agents

TMF Trustee Limited.

Deutsche Bank AG, London Branch.

Registrars, Transfer and Paying Agent

Deutsche Bank Trust Company Americas.

Governing Law of the New Secured Notes Indenture

New York.

Governing Law of the Security Documents

Laws of, or in jurisdictions within, Poland, Hungary, Russia, Cyprus, Luxembourg and New York.

Risk Factors

You should refer to the section titled “Risk Factors” in this Offering Memorandum and Disclosure Statement for a discussion of certain factors you should carefully consider before deciding to invest in the New Secured Notes.

SUMMARY DESCRIPTION OF NEW CONVERTIBLE SECURED NOTES

The following summary contains basic information about the New Convertible Secured Notes and is not intended to be complete. It may not contain all the information that is important to you. For a more complete understanding of the New Convertible Secured Notes, you should read the section of this Offering Memorandum and Disclosure Statement entitled “Description of New Convertible Secured Notes”.

Issuer

CEDC Finance Corporation International, Inc., an indirect wholly-owned subsidiary of CEDC.

New Convertible Secured Notes Offered

Up to $200 million aggregate principal amount of New Convertible Secured Notes due 2018.

Maturity Date

April 30, 2018

Interest

The New Convertible Secured Notes will bear interest from the date of issuance at a rate of 10.0% per annum.

Interest will be payable, at the election of the CEDC FinCo (made by delivering a notice to the trustee prior to the beginning of each interest period), (1) entirely in cash (“Cash Interest”) or (2) by increasing the principal amount of the outstanding New Convertible Secured Notes or by issuing additional PIK notes (“PIK Interest”) or (3) with a 25%/75%, 50%/50% or 75%/25% combination of Cash Interest and PIK Interest. CEDC FinCo will pay the first interest payment in PIK Interest. Following an increase in the principal amount of any outstanding global New Convertible Secured Notes as a result of a payment of PIK Interest, such global New Convertible Secured Notes will bear interest on such increased principal amount from and after the date of such payment.

Interest Payment Dates

Semi-annually in arrears on April 30 and October 31 of each year, commencing on October 31, 2013. Interest will accrue from the earlier of (x) the issue date of the New Convertible Secured Notes and (y) June 1, 2013.

Ranking

The New Convertible Secured Notes will be senior obligations of CEDC FinCo. CEDC FinCo will have no indebtedness outstanding other than the New Convertible Secured Notes, the New Secured Notes and any Existing 2016 Notes that remain outstanding following the CEDC FinCo Exchange Offer, which will rank pari passu with the New Convertible Secured Notes. The New Convertible Secured Notes Indenture limits the ability of CEDC FinCo to issue any other indebtedness other than in the form of additional notes and substantially similar debt securities.

The New Secured Notes will rank senior in right of payment to the New Convertible Secured Notes in the event of an insolvency. See “Description of Other Indebtedness—Intercreditor Agreement”.

Guarantees

The New Convertible Secured Notes will be guaranteed (the “Convertible Guarantees”), by the Guarantors except that the Copecresto Subsidiaries, which collectively represented 3.3% of EBITDA of the Parent and its Restricted Subsidiaries for the nine months ended September 30, 2012, and which guarantee the Existing Notes will not be Guarantors of the New Convertible Secured Notes.

As of and for the nine months ended September 30, 2012, after adjusting for the completion of the Exchange Offers, CEDC and the Subsidiary Guarantors would have accounted for 89.5% of the sales of CEDC and its Restricted Subsidiaries, 90.4% of EBITDA of CEDC and its Restricted Subsidiaries and 86.9% of assets of CEDC and its Restricted Subsidiaries.

As of September 30, 2012, after giving pro forma effect to the Exchange Offers (and assuming that all Existing Notes are tendered), (i) we would have had approximately $783.2 million of debt outstanding, of which $728.4 million would have been secured debt, (ii) the Subsidiary Guarantors would have had approximately $744.7 million of debt outstanding, of which $689.9 million would have been secured debt and (iii) our Restricted Subsidiaries that are not Subsidiary Guarantors would have had approximately $38.5 million of debt outstanding.

Ranking of Convertible Guarantees

The Convertible Guarantees by CEDC and the Subsidiary Guarantors will be:

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senior obligations of CEDC and the Subsidiary Guarantors;

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senior in right of payment to all subordinated indebtedness of CEDC and the Subsidiary Guarantors; and

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effectively subordinated to (i) the existing and future indebtedness of CEDC or such Subsidiary Guarantor secured by assets other than those pledged to secure the New Convertible Secured Notes to the extent of the value of such assets securing such debt and (ii) the indebtedness of any subsidiary of CEDC or such Subsidiary Guarantor that is not also a Subsidiary Guarantor.

Security

The New Convertible Secured Notes and the Convertible Guarantees will be secured by:

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a first-priority pledge or charge over the shares of CEDC FinCo and each Guarantor (other than CEDC);

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a first-priority pledge over the shares of the Whitehall Securities; (as defined below)

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a first-priority pledge of the intercompany loans made by CEDC FinCo;

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a first-priority mortgage over certain real property and fixtures in Poland; and

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security over certain intellectual property rights owned CEDC International sp. z o.o.

The New Convertible Secured Notes and the Convertible Guarantees will also be secured by the intercompany loans made by the Issuer to Jelegat Holdings Limited, which in turn will be secured by:

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first-priority registered pledges of shares (or participatory interests) in all of the Russian Alcohol Guarantors;

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a first-priority mortgage over certain real property and fixtures in Russia

The collateral that will secure the New Convertible Secured Notes will consist of substantially the same assets that secure the Existing 2016 Notes except that (i) the shares and assets of the Copecresto Subsidiaries, which secure the Existing 2016 Notes, will not secure the New Convertible Secured Notes and (ii) the shares of the Whitehall Subsidiaries which do not secure the Existing 2016 Notes will secure the New Convertible Secured Notes. The Copecresto Subsidiaries represented 3.3% of our consolidated EBITDA for the nine months ended September 30, 2012, and the Whitehall Subsidiaries represented 6.4% of our consolidated EBITDA for the nine months ended September 30, 2012.

The collateral that will secure the New Convertible Secured Notes will also secure the New Secured Notes, although the New Secured Notes will be entitled to priority with respect to the proceeds from an enforcement sale of the collateral. See “Description of Other Indebtedness—Intercreditor Agreement”.

Certain of the security to be granted for the benefit of the New Convertible Secured Notes will not be delivered on the issue date of

the New Convertible Secured Notes. CEDC has agreed to use its reasonable efforts to deliver certain security as soon as practicable after the issue date of the New Convertible Secured Notes. See “Description of New Convertible Secured Notes—Certain Covenants—Delivery of Security and Guarantees”.

For a more detailed description of the security, please see the section entitled “Description of New Convertible Secured Notes”.

Optional Redemption

CEDC FinCo may redeem all or part New Convertible Secured Notes at any time at redemption prices described under “Description of New Convertible Notes—Optional Redemption”.

Mandatory Redemption

CEDC FinCo is required to use the proceeds from any Asset Sale (as defined in “Description of New Convertible Secured Notes”) with proceeds in excess of $20 million to redeem the New Convertible Secured Notes at a price equal to 100% of the principal amount of the New Convertible Secured Notes to be redeemed plus accrued and unpaid interest.

CEDC FinCo is also required to use the proceeds from any Asset Sale with proceeds in excess of $20 million to redeem the New Secured Notes, although the New Secured Notes will be entitled to priority with respect to such proceeds if there are any New Secured Notes outstanding. See “Description of Other Indebtedness—Intercreditor Agreement”.

Covenants

The New Convertible Secured Indenture will contain covenants that limit, among other things, the ability of CEDC and its Restricted Subsidiaries to:

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incur additional indebtedness;

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make certain restricted payments;

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transfer or sell assets;

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enter into transactions with affiliates;

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create certain liens;

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create restrictions on the ability of Restricted Subsidiaries to pay dividends or other payments;

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issue guarantees of indebtedness by Restricted Subsidiaries;

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enter into sale and leaseback transactions;

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merge, consolidate, amalgamate or combine with other entities;

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designate Restricted Subsidiaries as unrestricted subsidiaries; and

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engage in any business other than a permitted business.

Conversion Rights

On or after the date which is 18 months after the issuance of the New Convertible Secured Notes, holders may convert their New Convertible Secured Notes (other than PIK Notes) for the applicable Conversion Price set forth under the caption “Description of New Senior Secured New Convertible Secured Notes—Conversion Rights,” provided that any conversion must be with respect to New Convertible Secured Notes with a minimum aggregate principal amount of $100,000 and in integral denominations of $1,000.

Minority Shareholder Protections

Upon conversion of the New Convertible Secured Notes, the resulting equity shall have certain minority shareholder protections to be agreed, including but not limited to tag rights, registration rights, preemption rights, approval rights on certain transactions and, subject to appropriate ownership levels, the right to nominate one director for election to the Company’s Board of Directors.

Denominations

The New Convertible Secured Notes will be issued and transferable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

Forms

We will issue the New Convertible Secured Notes in the form of one or more global notes in definitive, fully registered book-entry form that will be deposited with or on behalf of DTC.

Transfer Restrictions

The New Convertible Secured Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction. Please see the section entitled “Federal and Other Securities Laws Matters”.

No Prior Market

The New Convertible Secured Notes will be new securities for which there is currently no market. Accordingly, we cannot assure you that a liquid market for the New Convertible Secured Notes will develop or be maintained.

Listing

We intend to make an application for the New Convertible Secured Notes to be admitted to list the New Convertible Secured Notes on the Global Exchange Market of the Irish Stock Exchange. There can be no assurance that such admission will take place.

Trustee

U.S. Bank National Association.

Security Agents

TMF Trustee Limited.

Deutsche Bank AG, London Branch.

Registrars, Transfer and Paying Agent

Deutsche Bank Trust Company Americas.

Governing Law of the Convertible Secured Indenture

New York.

SUMMARY OF SUPPLEMENTAL INDENTURE

If the Consents of holders of at least 50.1% in principal amount of the outstanding Existing 2016 Notes are received, the Covenant Amendments (which will eliminate substantially all of the restrictive covenants and certain events of default and related provisions in the Existing 2016 Notes Indenture) and the Bankruptcy Waiver Amendments will be approved. These amendments may be effected through the execution of one or more Supplemental Indentures. If the Consents of holders of at least 90% of the principal amount of the outstanding Existing 2016 Notes are received, the Collateral and Guarantee Amendments as well as the Covenant Amendments and the Bankruptcy Waiver Amendments will be approved. These amendments may be effected through the execution of the Supplemental Indenture. The Supplemental Indenture containing the Proposed Amendments will become effective upon the execution, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization. The Bankruptcy Waiver Amendments will become operative when the Supplemental Indenture containing these amendments is executed.

Covenant Amendments

The Covenant Amendments will remove substantially all of the restrictive covenants and events of default from the Existing 2016 Notes Indenture, including:

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Maintenance of Office or Agency (Section 4.2);

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Incurrence of Indebtedness and Issuance of Preferred Stock (Section 4.3);

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Limitation on Restricted Payments (Section 4.4);

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Corporate Existence (Section 4.5);

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Payment of Taxes and Other Claims (Section 4.6);

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Maintenance of Properties and Insurance (Section 4.7);

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Compliance with Laws (Section 4.8);

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Limitation on Liens (Section 4.9)

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Waiver of Stay; Extension or Usury Laws (Section 4.10);

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Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries (Section 4.11)

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Asset Sales (Section 4.12);

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Limitation on Transactions with Affiliates (Section 4.13);

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Reports (Section 4.14);

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Limitation on Business Activities (Section 4.15);

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Change of Control (Section 4.16);

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Payment of Non-Income Tax and Similar Charges (Section 4.18);

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Limitation on Sale and Leaseback Transactions (Section 4.21);

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Additional Security and Guarantees (Section 4.22);

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Delivery of Security and Guarantees (Section 4.23);

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Impairment of Security Interest (Section 4.24);

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Amendments to or Prepayments of the Intercompany Loan (Section 4.26);

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Limitations on Activities of the Issuer (Section 4.27);

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Limitations on Activities of Russian Alcohol Finance Limited (Section 4.28);

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Listing (Section 4.29);

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Payments for Consent (Section 4.30); and

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Events of Default (Section 6.01(3) through (11));

The Covenant Amendments also, among other things, eliminate certain restrictions on CEDC FinCo’s ability to enter into mergers and will eliminate certain events of default and other related provisions, and will amend the provision which permits us to designate restricted subsidiaries as unrestricted subsidiaries to permit us to designate any restricted subsidiary as an unrestricted subsidiary under the Existing 2016 Notes Indenture.

Release of Collateral and Guarantees

The Collateral and Guarantee Amendments will release all of the liens on the collateral securing the Existing 2016 Notes and all subsidiary guarantees of the Existing 2016 Notes, in conjunction with the termination or amendment, as applicable, of the related security documents.

Bankruptcy Waiver Amendments

The Bankruptcy Waiver Amendments will amend the acceleration provisions in the Existing 2016 Indenture to provide that a filing by CEDC under Chapter 11 of the Bankruptcy Code will not result in automatic acceleration of obligations of the issuer of the Existing 2016 Notes (CEDC FinCo) or the subsidiary guarantees of the Existing 2016 Notes, but such a filing would (as the Existing 2016 Indenture currently provides) result in automatic acceleration of amounts outstanding under the CEDC guarantee of the Existing 2016 Notes. If the Bankruptcy Waiver Amendments are approved, holders of over 50% of the outstanding Existing 2016 Notes could accelerate (i.e., declare immediately due and payable) CEDC FinCo’s and the subsidiary guarantors’ obligations under the Existing 2016 Notes and guarantees upon a Chapter 11 filing by CEDC, subject to the terms and conditions of the Existing 2016 Notes Indenture.

Effectiveness of the Supplemental Indenture

When the required Consents from Noteholders have been received, CEDC FinCo, CEDC, the trustee under the Existing 2016 Notes Indenture, and other relevant parties will be authorized to execute one or more supplemental indentures containing the Proposed Amendments and the Bankruptcy and Waiver Amendment. The Supplemental Indenture will become effective upon the execution of the Supplemental Indenture, but the Covenant Amendments and, if Noteholders representing 90% of the aggregate principal amount of outstanding Existing 2016 Notes have provided Consents, the

Collateral and Guarantee Amendments, will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization (or an alternative plan of reorganization which results in the cancellation, extinguishment or other release of CEDC’s and CEDC FinCo’s obligations under the Existing 2016 Notes). However, the Bankruptcy Waiver Amendments will become operative when the Supplemental Indenture is executed.

Concurrently with the execution of the Supplemental Indenture, giving effect to the Collateral and Guarantee Amendments, Deutsche Bank AG, London Branch will resign as trustee under the Existing 2016 Notes Indenture. Such resignation is required because the CEDC FinCo has applied to qualify the Supplemental Indenture giving effect to the Collateral and Guarantee Amendments under United States Trust Indenture Act of 1939 (the “TIA”). The TIA establishes certain eligibility standards for trustees serving under indentures, which Deutsche Trustee Company Limited does not meet. CEDC FinCo intends to appoint Deutsche Bank Trust Company Americas as trustee.

If the Exchange Offers are not consummated but we receive Consents from holders of at least 50.1% of the outstanding Existing 2016 Notes, the Bankruptcy Waiver Amendments, the Covenant Amendments and if holders of 90% of the outstanding Existing 2016 Notes have delivered Consents, the Collateral and Guarantee Amendments will be effected without further action by CEDC, CEDC FinCo, any of the subsidiary guarantors or the trustee or security agent pursuant to entry of the order confirming the Plan of Reorganization as follows: (i) the Supplemental Indenture shall be and shall be deemed to be executed and effective in all regards and in accordance with its terms; provided that the requisite consents to the Covenant Amendments (or, if applicable, the Collateral and Guarantee Amendments) have been obtained; (ii) CEDC FinCo shall deliver notice to the Existing 2016 Notes Indenture Trustee that it designates all non-debtor affiliates as Unrestricted Subsidiaries (as defined in the Existing 2016 Notes Indenture) under the Existing 2016 Notes Indenture following the execution and effectiveness of the Supplemental Indenture; and (iii) the release of all liens on all assets of such non-debtor affiliates designated as Unrestricted Subsidiaries that secure the Existing 2016 Notes and the release of all guarantees of such non-debtor affiliates designated as Unrestricted Subsidiaries.

You should read the form of the Supplemental Indenture, included herein as Appendix B, which contains the terms of the Covenant Amendments and the Collateral and Guarantee Amendments.

The Exchange Offers and the Plan of Reorganization each involve a high degree of risk and uncertainty. You should carefully consider the risks and uncertainties described below as well as the other information appearing elsewhere in this Offering Memorandum and Disclosure Statement before making a decision whether to participate in the Exchange Offers and the Consent Solicitation, and vote to accept the Plan of Reorganization. We have described the risks and uncertainties that we believe are material, but these risks and uncertainties may not be the only ones we face. Additional risks and uncertainties of ours that are not currently known to us, or that we currently deem immaterial, may also have an adverse effect on our business, financial condition, results of operations or future prospects. If this occurs, the trading price of the New Notes or New Common Stock may decline, and investors could lose all or part of their investment.

The order in which the risks are presented does not necessarily reflect the likelihood of their occurrence or the magnitude of their potential impact on our business, financial condition, results of operations, or the trading price of the New Notes or New Common Stock. Noteholders should carefully consider whether an investment in the New Notes or New Common Stock is suitable for them in light of the information in this Offering Memorandum and Disclosure Statement.

Risks Related to Failure to Consummate the Exchange Offers or the Plan of Reorganization

The Existing 2013 Notes mature on March 15, 2013. A failure to pay the outstanding principal amount under the Existing Notes when due would trigger an event of default under the Existing 2016 Notes and other indebtedness.

Our Existing 2013 Notes are due and payable on March 15, 2013. Our current cash on hand, estimated expected cash from operations and amounts available under our existing credit facilities will not be sufficient to make the required payments upon maturity of our Existing 2013 Notes and we may default on the Existing 2013 Notes. The outstanding principal amount under the Existing 2013 Notes is $257.9 million. As of February 13, 2013, we have $59.0 million available cash on hand, and approximately $17.7 million available under our credit facilities.

A failure to make a payment of principal amount upon the maturity of the Existing 2013 Notes would constitute an event of default under the terms of the indenture governing the Existing 2013 Notes, and would result in an event of default under the Existing 2016 Notes and other indebtedness. In the event of such an event of default under the Existing 2016 Notes, the trustee or holders of 25% of the aggregate principal amount of those notes will be able to declare all amounts due thereunder (there is currently $957.4 million outstanding principal amount of Existing 2016 Notes assuming an exchange rate of $1.3427 to €1.00, which reflects the trailing thirty day average exchange rate through February 22, 2013 as reported by Bloomberg Finance L.P).

In addition, we had $112.2 million outstanding under credit facilities as of February 13, 2013, and under most of these loan agreements if it is determined that a material adverse change has occurred, the loan agreement can be immediately terminated by the lending bank. We do not have sufficient liquidity to repay our bank facilities if they were terminated.

Further, a failure to make the maturity payment on the Existing 2013 Notes and any resulting cross-defaults and acceleration of our other debt (including the Existing 2016 Notes) could result in the termination of or in the refusal to extend certain factoring agreements or bank guarantee arrangements that are critical to our operations, and may also result in our suppliers refusing to provide trade credit and demanding prepayment for necessary inputs. For example, one of our factors recently notified us that it would not renew its factoring agreement with us. Any of these consequences could have a material impact on our financial condition and our ability to conduct business operations and would hinder our ability to continue to operate as a going concern. As a result of these considerations, the Company’s auditors’ report for the year ended December 31, 2011 expressed substantial doubt about the Company’s ability to continue as a going concern.

Because the maturity date on the Existing 2013 Notes is prior to the Expiration Time, we will be unable to consummate the Exchange Offers prior to maturity. The actions of our creditors, suppliers and trade partners in response to a failure to make the maturity payment on the Existing 2013 Notes may prevent us from consummating the Exchange Offers under the terms provided herein. The failure to consummate the Exchange Offers could require us to file a petition for bankruptcy protection under Chapter 11 in the Bankruptcy Court and similar insolvency proceedings in the countries in which we operate, whether or not the Plan of Reorganization is approved by the holders of Existing Notes.

If we are unable to consummate the Exchange Offers or a Plan of Reorganization, we may be unable to continue to access bank guarantee lines for excise taxes payable in respect of vodka sales in Russia which are critical to our operations in Russia.

Our business in Russia depends on access to bank guarantees in respect of excise taxes payable in respect of vodka sales in Russia. Certain of Russian subsidiaries, including Russian Alcohol, have guarantee lines in place for excise taxes of approximately $1 billion. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Bank Guarantees”. If we did not have access to these bank guarantee lines, we would be required to prepay these excise taxes and we do not have sufficient liquidity to make such prepayments, and therefore a loss of these guarantee lines would significantly impair our ability to conduct operations in Russia. Our guarantee lines renew periodically and we will need to renew these lines for the second half of 2013. If providers of bank guarantees in Russia cancel or do not renew these guarantee lines due to a failure to consummate the Exchange Offers or a Plan of Reorganization or otherwise, this would have a significant adverse effect on our Russian business.

The Exchange Offers may not be consummated and our restructuring efforts may not be successful.

If the conditions to the Exchange Offers are not satisfied or waived, including the condition that our Existing Shareholders approve the Reverse Stock Split and the issuance of New Common Stock, we will not be obligated to accept any Existing Notes tendered in the Exchange Offers. We may also terminate the Exchange Offers at any time. See “The Exchange Offers and the Consent Solicitation”.

The Exchange Offers are being made as part of a larger group of restructuring transactions designed to improve our consolidated balance sheet and capital structure over time by decreasing our outstanding consolidated debt and significantly reducing our annual interest expense. However, these efforts may not be successful. Accordingly, we cannot assure you that we will be able to achieve our objectives with respect to the business restructuring strategy, regardless of whether the Exchange Offers are consummated.

If the Exchange Offers are not consummated, including as a result of the expiration of the Exchange Offers or termination by us, but CEDC or CEDC FinCo (and CEDC FinCo LLC) receives sufficient votes to accept the Plan of Reorganization, Noteholders that did not vote to accept the Plan of Reorganization may nevertheless receive the New Common Stock cash and New Notes, as applicable, in exchange for their Existing Notes.

If we choose to effectuate the restructuring of both CEDC and CEDC FinCo (and CEDC FinCo LLC) in the Bankruptcy Court through the Plan of Reorganization, all Noteholders will receive the same treatment as other Noteholders in their class of claims and will be bound by the terms of the Plan of Reorganization whether or not they vote to accept the Plan of Reorganization. If the Plan of Reorganization is approved, holders of Existing 2016 Notes that did not vote to accept the Plan of Reorganization will nevertheless receive cash consideration and/or New Notes in exchange for their Existing 2016 Notes. If the Plan of Reorganization is approved, holders of Existing 2013 Notes and RTL Notes that did not vote to accept the Plan of Reorganization will nevertheless receive New Common Stock in exchange for their Existing 2013 Notes and RTL Notes, as applicable; provided, however that if the class of claims constituting the Existing 2013 Notes and the RTL Notes under the Plan of Reorganization does not vote to accept the Plan of Reorganization in sufficient number and amount to

constitute an accepting class under section 1126(c) of the Bankruptcy Code, then each member of such class shall receive no recovery on account of its Existing 2013 Notes and/or RTL Notes, as applicable, under the Plan of Reorganization.

We believe that restructuring through the Exchange Offers or the Plan of Reorganization is critical to our continuing viability. If the Exchange Offers are not consummated and the Plan of Reorganization is not confirmed, we will likely need to seek relief under the Bankruptcy Code without the benefit of a plan of reorganization approved by our creditors prior to commencement of any bankruptcy cases. If we seek bankruptcy relief under such circumstances, Noteholders may receive consideration that is substantially less than what is being offered in the Exchange Offers or the Plan of Reorganization and it will take longer to receive.

We believe that seeking relief under the Bankruptcy Code other than in connection with the prepackaged Plan of Reorganization could materially adversely affect the relationships between us and our existing and potential customers, employees, credit support providers, partners and other stakeholders. For example:

If the Exchange Offers are not consummated and the Plan of Reorganization is not confirmed, our operating subsidiaries may be subject to proceedings, including insolvency proceedings, by our creditors in Russia, Poland, Hungary and other non-U.S. jurisdictions.

In the event that we are unable to consummate the transactions contemplated herein, either through the Exchange Offers and/or the Plan of Reorganization, creditors of our non-operating subsidiaries may bring actions (including potential involuntary insolvency proceedings) against our operating subsidiaries in Europe on account of the Existing Notes and/or any alleged cross-defaults under our subsidiaries’ local credit facilities. Even if we consummate the Exchange Offer or a Plan of Reorganization is confirmed, or if we are in the process of doing so, our operating subsidiaries in Europe which could be subject to actions which could disrupt their operations or the Exchange Offer or Plan of Reorganization, as applicable.

If the Exchange Offers are not consummated and the Plan of Reorganization is not confirmed, lenders under local credit lines with our non-U.S. operating subsidiaries may cease funding and/or seek to terminate such lines.

In the event that we are unable to consummate the transactions contemplated herein, lenders to our non-U.S. operating subsidiaries, including trade creditors and factoring providers, may seek to cease present and future funding obligations to such operating subsidiaries or terminate such credit lines, thereby creating a liquidity issue for our operating subsidiaries which may negatively affect our businesses and ability to meet our obligations as they come due. This may lead to insolvency of these subsidiaries. Even if we consummate the Exchange Offer or a Plan of Reorganization is confirmed, or if we are in the process of doing so, the business reputation of our non-U.S. operating subsidiaries could suffer.

If the Exchange Offers are not consummated and the Plan of Reorganization is not confirmed, our non-U.S. operating subsidiaries’ reputation could deteriorate and commercial partners may seek to terminate commercial contracts with them.

In the event that we are unable to consummate the transactions contemplated herein, business reputation of our non-U.S. operating subsidiaries could deteriorate and their business partners may take this opportunity to require additional security or apply general clauses such as “material adverse change” to terminate commercial agreements, which may negatively affect our business.

If the Exchange Offers are not consummated and the Plan of Reorganization is not confirmed, the security granted by our non-U.S. operating subsidiaries may be enforced and as a result thereof may be deprived of their significant assets.

In the event that we are unable to consummate the transactions contemplated herein, the security granted by our non-U.S. operating subsidiaries, including in respect of under Existing 2016 Notes, may be enforced and as a result thereof our non-U.S. operating subsidiaries may be deprived of their significant assets, which may negatively affect our business and potentially lead to the insolvency of our non-U.S. operating subsidiaries.

A long and protracted restructuring could cause us to lose key management employees and otherwise adversely affect our business.

If we fail to consummate the Exchange Offers or the Plan of Reorganization, any alternative we pursue, whether in or out of court, may take substantially longer to consummate than the Exchange Offers or the Plan of Reorganization. A protracted financial restructuring could disrupt our business and would divert the attention of our management from operation of our business and implementation of our business plan, and could result in a loss of key management and employees. A loss of key management would likely make it difficult for us to complete a financial restructuring.

The uncertainty surrounding a prolonged financial restructuring could also have other adverse effects on us. For example, it could also adversely affect:

Risks Related to Consummating the Exchange Offers or the Plan of Reorganization

Even if we successfully complete the Exchange Offers or the Plan of Reorganization, our remaining indebtedness may impair our financial condition and our ability to grow and compete; we may also incur additional debt.

As of September 30, 2012, our total consolidated debt was approximately $1.4 billion. After giving effect to the Exchange Offers, our total consolidated debt would be approximately $783.2 million on a pro forma basis as of September 30, 2012. Though we anticipate that the Exchange Offers will significantly lower our consolidated debt, we still will have substantial debt upon consummation of the Exchange Offers. Our debt has important consequences for our financial condition, including:

We may incur additional debt in the future. The terms of the indentures that will govern the New Notes will restrict our ability to incur, but will not prohibit us from incurring, additional debt. If we were to incur additional debt, the related risks we now face could become greater.

Servicing our debt will require a significant amount of cash, and our ability to generate sufficient cash depends upon many factors, some of which are beyond our control.

Our ability to make payments on and refinance our debt, fund planned capital expenditures and execute our business strategy depends on our ability to generate cash flow in the future. To some extent, this is subject to general economic, financial, competitive and other factors that are beyond our control. Even if the Exchange Offers or the Plan of Reorganization are consummated, there can be no assurance that our business will continue to generate cash flows at or above current levels or that we will be able to meet our cash needs, including with respect to the repayment of our indebtedness, including any cash payments due upon the maturity of such indebtedness, including the New Notes. If we are unable to service our debt or experience a significant reduction in our liquidity, we could be forced to reduce or delay planned capital expenditures and other initiatives, sell assets, restructure or refinance our debt or seek additional equity capital, and we may be unable to take any of these actions on satisfactory terms or in a timely manner, or at all. Further, any of these actions may not be sufficient to allow us to service our debt obligations or may have a materially adverse effect on our results of operations and financial condition. Our existing debt agreements, and the indentures governing the New Notes, limit and will limit our ability to take certain of these actions. Our failure to generate sufficient operating cash flows to pay our debts or refinance our indebtedness could have a material adverse effect on our results of operations and financial condition. If we cannot make scheduled payments on our debt, including the New Notes, we would be in default, and as a result, holders of such debt could declare all outstanding principal and interest to be due and payable and our existing and future lenders could, under certain circumstances, terminate their commitments to lend us money and foreclose against the assets securing our borrowings. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”.

The restructuring of the Existing Notes may result in a significant tax liability and/or a loss of our existing tax attributes.

If the Exchange Offers are completed, we expect to realize cancellation of indebtedness income (“COD income”) for U.S. tax purposes to the extent that the aggregate amount of the Consideration exchanged for the Existing Notes (generally, the fair market value of the New Common Stock, and the “issue price” of the New Notes exchanged for the Existing Notes) is less than the aggregate “adjusted issue price” of the Existing Notes. The exact amount of COD income that we will realize in connection with the Exchange Offers will not be determinable until the closing of the Exchange Offers, but we expect this be a significant amount.

If either CEDC or CEDC FinCo is not considered “insolvent” for U.S. tax purposes immediately before the consummation of the Exchange Offers, and the cancellation of indebtedness occurs outside of a Chapter 11 case, we would generally be required to recognize the full amount of COD income realized by such entity in connection with the Exchange Offers. In this event, we may be able to offset a portion of such COD income with our available net operating losses and net operating loss carryforwards. It is anticipated, however, that the amount of includible COD income would significantly exceed such losses and loss carryforwards. Any amount of COD income that we recognize in excess of such available tax attributes would result in a current tax liability.

If, however, either CEDC or CEDC FinCo is considered “insolvent” for U.S. tax purposes immediately before the consummation of the Exchange Offers, and the cancellation of indebtedness occurs outside of a Chapter 11 case, any COD income realized by such entity in connection with the Exchange Offers would generally be excluded from our taxable income to the extent of the entity’s insolvency. If the cancellation of indebtedness were to occur pursuant to a reorganization under Chapter 11 (as contemplated by the Plan of Reorganization), all COD income that we realize with respect to the Existing Notes would generally be excluded from our taxable income regardless of whether CEDC or CEDC FinCo is considered insolvent for U.S. tax purposes.

If and to the extent that any amount of COD income is excluded from our taxable income pursuant to the insolvency or bankruptcy exception as described in the preceding paragraph, we would generally be required to reduce certain of our tax attributes, including, but not limited to, our net operating losses, our loss and credit carryforwards, and the tax basis of certain of our assets. If the excluded COD income exceeds the amount of our

tax attributes that are available for reduction, the excess would be permanently excluded from our taxable income. Thus, whether or not the COD income that we realize is covered by the insolvency or bankruptcy exception, we expect that the restructuring of the Existing Notes would result in a significant reduction in (and possibly eliminate) our existing tax attributes and could potentially increase our future taxable income.

In addition, the issuance of New Common Stock pursuant to the Exchange Offers or the Plan of Reorganization is expected to cause us to undergo an “ownership change” under section 382 of the Internal Revenue Code of 1986, as amended. An ownership change could limit our ability to utilize our remaining tax attributes, including our net operating loss carryforwards (if any).

We may need to obtain additional financing to fund our business, and we cannot assure you that such financing will be available in amounts or on terms acceptable to us, or at all. The current recessionary global market and economic conditions, as well as the continuing difficulties in the credit and capital markets, may make it even more difficult for companies to obtain additional financing in the future or refinance their obligations, particularly for companies with a credit profile similar to ours. The Exchange Offer and/or Plan of Reorganization, and the potential effects of these on our reputation could make it difficult or more expensive for us to raise additional funds. If we raise funds by incurring further debt, our operations and finances may become subject to further restrictions and we may be required to limit or cease our operations or capital expenditure activities, or otherwise modify our business strategy. If we fail to comply with financial or other covenants required in connection with any such financing or refinancing, our lenders may be able to exercise remedies that could substantially impair our ability to operate or have a material adverse effect on our results of operations or financial condition.

We will incur significant costs in conducting the Exchange Offers and the Plan of Reorganization.

The Exchange Offers and the Plan of Reorganization will result in significant costs to us, including advisory and professional fees paid in connection with evaluating our alternatives with respect to our capital structure and pursuing the Exchange Offer and/or Plan of Reorganization.

Noteholders who receive New Common Stock in the CEDC Exchange Offer or the Plan of Reorganization, or upon the conversion of the New Convertible Secured Notes, may be subject to greater risks than the risks to which Noteholders are currently or may in the future be subject.

If you tender your Existing Notes in the Exchange Offers, or the Plan of Reorganization is confirmed by the Bankruptcy Court and you receive shares of New Common Stock, or you convert your New Convertible Secured Notes into New Common Stock, you will hold equity of CEDC rather than debt of CEDC or CEDC FinCo, which will have important consequences to you. For example, the rights of holders of New Common Stock will be junior to our existing and future indebtedness including the New Notes and other obligations. If, after consummation of the Exchange Offers, we were to become subject to bankruptcy protection, Noteholders that do not exchange such Existing Notes in the Exchange Offers, or do not convert their New Convertible Secured Notes into New Common Stock, may receive value greater than the value, if any, received by Noteholders in the Exchange Offers that do exchange Existing Notes and receive shares of New Common Stock and Noteholders that do not convert their New Convertible Secured Notes into New Common Stock. This result is more pronounced for the holders of Existing 2013 Notes, whose consideration does not include New Notes because, by law, any claims of holders of the non-tendered Existing Notes and holders of our other indebtedness have priority over the claims of holders of our equity securities.

In addition, Noteholders accepting the Exchange Offers will be waiving all prior existing claims against us in respect of their exchanged Existing Notes and forfeit all rights of Noteholders under the Indentures.

The Exchange Offers and the Plan of Reorganization are conditioned upon the RTL Investment, which itself is subject to certain conditions outside of our control.

The Exchange Offers and the Plan of Reorganization are conditioned upon the RTL Investment. Additionally, the RTL Investment is conditioned upon, among other things, receiving required regulatory approvals. No assurance can be given that the regulatory approvals required to consummate the RTL Investment will be granted. If the RTL Investment is not consummated by the Expiration Time, the Exchange Offers will be terminated and either CEDC or both CEDC and CEDC FinCo may file for bankruptcy under Chapter 11 of the Bankruptcy Code.

Upon the consummation of the Exchange Offers or Plan of Reorganization, RTL will become a controlling stockholder in CEDC.

Upon the consummation of the contemplated Restructuring Transactions, and if the RTL Investment is completed, RTL will beneficially own no less than 85% of our outstanding common stock. As a result, RTL will possess significant influence, giving it the ability, among other things, to control the composition of our board of directors. RTL’s ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

If all Noteholders do not tender their Existing Notes, we will continue to have obligations related to the Existing Notes.

The Existing 2016 Notes Indenture requires us, among other things, to make interest payments on the Existing 2016 Notes on a semi-annual basis. If we consummate the Exchange Offers and not a Plan of Reorganization, we will continue to incur certain of these ongoing obligations until any of the Existing 2016 Notes that are not tendered mature or are repaid in full. In addition, if we consummate the Exchange Offers and not a Plan of Reorganization, we will continue to have obligations with respect to the payment due at maturity relating to any Existing 2013 Notes that are not tendered in the CEDC Exchange Offer.

The consummation of the Exchange Offers and the Consent Solicitation may be delayed or may not occur.

We are not obligated to consummate the Exchange Offers and the Consent Solicitation under certain circumstances and unless and until certain conditions are satisfied. We may also terminate the Exchange Offers or the Consent Solicitation at any time. Even if the Exchange Offers and the Consent Solicitation are completed, they may not be completed on the schedule described in this Offering Memorandum and Disclosure Statement. Accordingly, Noteholders participating in the Exchange Offers and the Consent Solicitation may have to wait longer than expected to receive their Consideration.

The Reverse Stock Split and the issuance of New Common Stock, which are conditions to consummation of the Exchange Offers, are subject to approval by the Existing Stockholders.

The Exchange Offers are conditioned upon the approval by the Existing Stockholders of CEDC of the Reverse Stock Split and the issuance of the New Common Stock in the CEDC Exchange Offer. No assurance can be given that such approvals will be obtained. If such approvals are not obtained, we may file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation of the Plan of Reorganization or an alternative plan of reorganization.

An exchange of Existing 2016 Notes for New Notes, which are due in 2018, will be subject to the risk that we will be unable to repay (or refinance) the New Notes when they mature.

Holders of Existing 2016 Notes are being offered New Notes with a later maturity than the Existing 2016 Notes they presently hold. Holders who tender their Existing 2016 Notes and whose tender is accepted for

exchange will be exposed to the risk of nonpayment on the securities they hold for a longer period of time than non-tendering holders. Accordingly, holders of the New Notes will continue to be subject to various risks, including bankruptcy or similar proceedings, following the maturity date, and potential payment in full, of the Existing Notes.

The Consideration offered in the Exchange Offers does not reflect any independent valuation of the Existing Notes or the New Notes.

We have not obtained or requested a fairness opinion from any banking or other firm as to the fairness of the exchange ratios or the relative values of Existing Notes and New Notes. If you tender your Existing Notes, you may or may not receive more or as much value than if you choose to keep them. We also have not obtained any opinions as to, or otherwise determined, the relative value of the New Notes being offered.

Risks to Non-Tendering Noteholders Related to the Exchange Offers and Consent Solicitation

The effects of the Proposed Amendments to the Existing 2016 Notes Indenture could materially and adversely affect the credit risk inherent in and significantly reduce protections afforded to Existing 2016 Notes not validly tendered and accepted pursuant to the Exchange Offers.

Notes not validly tendered pursuant to the Exchange Offers will remain outstanding (assuming that we elect to consummate one or both of the Exchange Offers and neither CEDC nor CEDC FinCo (and CEDC FinCo LLC), as applicable, commences a bankruptcy case to implement the Plan of Reorganization). If the Covenant Amendments become operative, many of the restrictive covenants and events of default and other related provisions and certain other provisions contained in the Existing 2016 Notes Indenture relating to the release of collateral will be eliminated. As a result, non-tendering Noteholders will no longer be entitled to the benefit of such provisions. The Existing 2016 Notes Indenture, as so amended, will continue to govern the terms of all Existing 2016 Notes that remain outstanding after the consummation of the Exchange Offers. The elimination of these restrictive covenants, events of default and other related provisions may permit us and our subsidiaries to, among other things, incur debt, grant liens, pay dividends, repurchase stock or make other restricted payments and enter into transactions with affiliates, in each case under circumstances which otherwise may not have been permitted pursuant to the Existing 2016 Notes Indenture. In addition, if the Covenant Amendments become effective, the Existing 2016 Notes Indenture will permit us to designate all of our subsidiaries as unrestricted, in which case we would be permitted to release a significant portion of the collateral that secures the Existing 2016 Notes and the guarantees of the Existing 2016 Notes by subsidiaries of CEDC. It is likely that if any such actions are permitted, the credit risk faced by the non-tendering Noteholders with respect to us and our subsidiaries will increase or the interests of such non-tendering Noteholders will be materially adversely affected.

If the Collateral and Guarantee Amendments become effective, all of the collateral securing the Existing 2016 Notes and all of the subsidiary guarantees of the Existing 2016 Notes will be released. In this case, the credit support for the Existing 2016 Notes will be substantially reduced which would likely have a significant adverse effect on the market value of the Existing 2016 Notes.

The liquidity of the Existing 2016 Notes will be reduced if the Exchange Offers are consummated.

There are currently limited trading markets for the Existing 2016 Notes. The trading markets for any Existing 2016 Notes not tendered in the CEDC FinCo Exchange Offer that remain outstanding could become even more limited or nonexistent due to the reduction in the amount of the Existing 2016 Notes outstanding after the consummation of the CEDC Finco Exchange Offer. If markets for non-tendered Existing 2016 Notes exist after the consummation of the Exchange Offers, the Existing 2016 Notes may trade at a discount to the price at which they would have traded if the Exchange Offers had not been consummated, depending on prevailing interest rates, the market for similar securities and other factors. There can be no assurance that active markets in the non-tendered Existing 2016 Notes will exist or be maintained and there can be no assurance as to the prices at which the non-tendered Existing 2016 Notes may be traded.

The Existing 2013 Notes are and if the Collateral and Guarantee Amendments are approved and become effective or if there is otherwise a release of collateral, the Existing 2016 Notes will be, effectively junior to our secured debt, and debt of subsidiaries of CEDC and if a default occurs we may not have sufficient funds to satisfy our obligations under any non-tendered Existing Notes.

The Existing 2013 Notes are currently and, if the Collateral and Guarantee Amendments are approved and become effective or if there is otherwise a release of collateral, the Existing 2016 Notes will be, unsecured obligations of CEDC that rank equal in right of payment with all CEDC’s existing and future unsecured debt and effectively junior to all of our secured debt to the extent of assets securing such debt and any debt of our subsidiaries. Any debt that we incur in connection with the Exchange Offers may also have a materially adverse impact on the value of any Existing Notes that remain outstanding after the Exchange Offers. If a default occurs under any of our debt agreements, we may not have sufficient funds to satisfy our obligations under any non-tendered Existing Notes.

We cannot assure non-tendering Noteholders that, if we consummate the Exchange Offers, the Existing Notes will maintain their credit ratings.

We cannot assure you that, if the Exchange Offers are consummated, the rating agencies, including Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings, will not downgrade or negatively comment upon the ratings for Existing Notes that remain outstanding after the Exchange Offers, or withdraw such ratings. Any downgrade, negative comment or withdrawal would likely materially adversely affect the market price of the Existing Notes.

The contemplated restructuring and related transactions involve the issuance of substantial amounts of new shares of our common stock, which will be dilutive and could result in a significant decrease in the price of our common stock.

The contemplated restructuring transactions and related transactions will involve our issuing substantial amount of new shares of our common stock to RTL and future holders of New Convertible Secured Notes who convert such notes into New Common Stock. Issuance of New Common Stock upon conversion of the New Convertible Secured Notes could dilute shareholders by up to 35%. Without adjusting for the Reverse Stock Split, we may have many times more shares of common stock outstanding after the conclusion of these transactions than before. Accordingly, you should not expect that any recent market price for our common stock to be indicative of the market price that might prevail after the conclusion of these transactions.

The price of the Existing Common Stock historically has been volatile. This volatility may affect the price at which you could sell your common stock.

The sale price for our common stock varied between a high of $6.38 and a low of $1.46 in the twelve month period ended December 31, 2012. This volatility may affect the price at which you could sell the common stock and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risks related to our business” and in the documents we have incorporated by reference into this report; variations in our quarterly operating results from our expectations or those of securities analysts or investors; downward revisions in securities analysts’ estimates; and announcement by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments.

Delaware law and provisions in our charter documents may impede or discourage a takeover, which could cause the market price of our shares to decline.

CEDC is a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to the Existing Stockholders. In addition, our board of directors has the power, without stockholder approval, to designate the terms of one or more series of preferred stock and issue shares of preferred stock. On September 6, 2011, our board of directors implemented a Shareholder Rights Plan. The Shareholder Rights Plan, the ability of our board of directors to create and issue a new series of preferred stock, and certain provisions of Delaware law and our Certificate of Incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock. See “Description of Common Stock”.

We do not intend to pay cash dividends on our common stock in the foreseeable future.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends in the next few years.

Enforcing legal liability against us and our directors and officers might be difficult.

CEDC, CEDC FinCo and CEDC FinCO LLC are organized under the laws of the State of Delaware of the United States. Therefore, investors are able to effect service of process in the United States upon us and may be able to effect service of process upon our directors and executive officers. We are a holding company, however, and substantially all of our operating assets are located in Poland, Hungary and Russia. Further, most of our directors and executive officers, and those of most of our subsidiaries, are non-residents of the United States, and our assets and the assets of our directors and executive officers are located outside the United States. As a result, you may not be able to enforce against our assets (or those of certain of our directors or executive officers) judgments of United States courts predicated upon the civil liability provisions of United States laws, including federal securities laws of the United States. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Poland or Russia.

The sale of substantial amounts of our common stock could adversely affect its market price.

Upon the consummation of the contemplated restructuring transactions, and if the RTL Investment is completed, RTL will beneficially own no less than 85% of our common stock. The announcement or consummation of sales by RTL, especially in large numbers, could lead to a substantial drop in the price of our common stock, including any New Common Stock to be issued in the Exchange Offers or the Plan of Reorganization. If these were to happen, it would not only adversely affect the price of any New Common Stock, but it could make it more difficult for us to raise any needed capital through the issuance of equity securities.

Our Existing Common Stock is listed on the NASDAQ and we intend to list the shares of New Common Stock issued under the Exchange Offers on the NASDAQ upon completion of the Exchange Offers. In addition, a significant portion of the Existing Common Stock has been approved for listing on the WSE. We cannot assure you that upon completion of the Reverse Stock Split, the WSE and the Polish National Depository for Securities (“NDS”) will reflect the Reverse Stock Split in their respective records in a proper and timely manner and that the WSE, the NDS or the Polish Financial Supervision Authority (“PFSA”) will not impose on us additional obligations or requirements to maintain the listing of our shares on the WSE. In addition, we cannot assure you that upon completion of the Exchange Offers we will commence the process to approve the remaining portion of our outstanding shares, including the New Common Stock, for listing on NASDAQ or the WSE. Such a process on the WSE, which requires us, among others, to apply for the approval of the listing prospectus with the PFSA,

typically takes several months. To date only a portion of our shares has been approved for listing on the WSE and upon completion of the Reverse Stock Split and the Exchange Offers a portion of our shares approved for listing on the WSE will be significantly smaller than the number of all our outstanding shares. If there is a significant movement of our shares from trading on the NASDAQ to trading on the WSE at the time when not all of our shares are admitted to trading on the WSE, our shareholders’ ability to trade CEDC’s shares on the WSE could be significantly limited.

Our shares are listed on NASDAQ and the WSE, and accordingly, you may need to comply with requirements of both U.S. and Polish law.

CEDC is incorporated under the laws of the State of Delaware, and we are therefore subject to the provisions of Delaware General Corporation Law. Additionally, as CEDC is a public company in the United States, listed on NASDAQ, we and stockholders of our company are also subject to the federal securities laws of the United States. In addition, as a result of our listing on the WSE, CEDC and stockholders of our company need to comply with the relevant Polish regulations, including regulations regarding substantial holding disclosure requirements and mandatory tender offer rules. The application of Polish and U.S. legal regulations in respect of our shareholders’ rights and obligations is ambiguous in certain respects. Therefore, prior to making any decision regarding the Exchange Offers you should seek legal advice in order to determine the scope of the obligations applicable to you as a stockholder of our company, and consider any possible divergence between the regulations under the relevant legal systems. If you fail to comply with applicable obligations arising under relevant Polish and U.S. laws, you may be subject to severe sanctions resulting from either or both of these legal regimes. See “Applicability of Certain Polish Securities Laws and Regulations”.

Listing of our shares of common stock on NASDAQ and the WSE may be cancelled, in which case your ability to transfer your shares will be limited.

We cannot assure you that the cancellation process with respect to CEDC’s shares listed and traded on the WSE will not expose us to additional risks, costs or obligations imposed on us by the PFSA, the management board of the WSE or the NDS which cannot be currently properly assessed due to the precedential character of such a transaction on the Polish market. In addition, upon the completion of the Plan of Reorganization CEDC’s New Common Stock will not be listed on NASDAQ and the WSE unless we apply for such listings, which may be costly and time consuming. As a result any holder of our New Common Stock may be not able to sell CEDC’s shares of New Common Stock at their fair market value, if at all. In addition, we cannot assure that CEDC will apply for listing of the New Common Stock on NASDAQ or on the WSE in the near future.

Pursuant to the WSE Regulations, the management board of the WSE may suspend trading in CEDC’s common stock listed on the WSE, for a period of up to three months: (i) upon CEDC’s motion (provided that we satisfy the conditions imposed by the management board of the WSE), (ii) if it determines that such exclusion is required by the interests and safety of the trading participants, (iii) if we infringe regulations governing the trading on the WSE. Additionally, the management board of the WSE will exclude CEDC’s common stock from trading on the WSE in the following events: (i) if CEDC’s shares’ transferability is restricted; (ii) upon the PFSA’s demand made pursuant to the provisions of applicable law; (iii) if CEDC’s shares are reverted from book-entry form; (iv) if CEDC’s shares are excluded from trading by the PFSA. The management board of the WSE can also exclude our common stock from trading on the WSE: (i) upon CEDC’s motion (provided that it satisfies the conditions imposed by the management board of the WSE), (ii) if it determines that such exclusion is required by the interests and safety of the trading participants, (iii) if CEDC continuously infringes regulations

governing the trading on the WSE; (iv) if CEDC’s shares do not satisfy the requirements for admission to trading on a regulated market operated by the WSE, (v) if CEDC decides to merge with another company, de-merge or transform our company, (vi) if CEDC is subject to bankruptcy, or liquidation proceedings are opened, (vii) if, throughout a period of three months, there are no transactions in CEDC’s shares on the WSE, or (viii) if CEDC undertakes any activity prohibited by law. Moreover, under Polish law, the PFSA is empowered to direct the WSE to suspend trading in CEDC’s common stock quoted on the WSE for a period of no more than one month. The PFSA exercises this right where trading in CEDC’s common stock may constitute a threat to the proper functioning of the WSE or the safety of trading on the WSE, or where investors’ interests have been infringed, among other reasons. During the suspension of securities trading, investors are unable to purchase and sell the affected securities on the stock market, which may adversely affect liquidity levels.

Since the Exchange Offers or the initiating of other transactions described hereing including Chapter 11 proceedings in respect to a company listed on the WSE are of a precedential character and the criteria allowing for the suspension of trading in CEDC’s shares on the WSE or the delisting of CEDC common stock from trading on the WSE (by the WSE itself or at the request of the PFSA) are general and, such suspension, or even delisting, may not be excluded as a result of the above mentioned transactions. The suspension or exclusion of our common stock from trading on the WSE would adversely affect the liquidity of our shares in Poland.

Our substantial debt could adversely affect our financial condition or results of operations and prevent us from fulfilling our obligations under the New Notes.

We are highly leveraged and have significant debt service obligations. As of September 30, 2012, as adjusted to give effect to the Exchange Offers (and assuming that all Existing Notes are tendered), our indebtedness would amount to approximately $783.2 million.

Our substantial debt could have important consequences to you as a holder of the New Notes. For example, it could:

The terms of the indentures governing the New Notes will restrict our ability to incur, but will not prohibit us from incurring, additional debt. If we were to incur additional debt, the related risks we now face could become greater.

We require a significant amount of cash to service our indebtedness. Our ability to generate sufficient cash depends on a number of factors, many of which are beyond our control.

Our ability to make payments on or repay our indebtedness will depend on our future operating performance and ability to generate sufficient cash. This depends, to some extent, on general economic, financial, competitive, market, legislative, regulatory and other factors discussed in these “Risk Factors”, many of which are beyond our control.

Historically, we met our debt service and other cash requirements with cash flows from operations and our existing revolving credit facilities. As a result of certain acquisitions and related financing transactions, however, our debt service requirements have increased significantly. We cannot assure you that our business will generate sufficient cash flows from operating activities, or that future debt and equity financing will be available to us in an amount sufficient to enable us to pay our debts when due or to fund our other financing needs.

If our future cash flows from operations and other capital resources are insufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to:

In addition, the terms of the indentures governing the New Notes will limit our ability to pursue any of these alternatives. If we obtain additional debt financing, the related risks we now face would intensify. Furthermore, significant changes in market liquidity conditions resulting in a tightening in the credit markets and a reduction in the availability of debt and equity capital could impact our access to funding and our related funding costs, which could materially and adversely affect our ability to obtain and manage liquidity, to obtain additional capital and to restructure or refinance any of our existing debt.

The New Notes and the Guarantees thereunder will be structurally subordinated to indebtedness and other liabilities of our non-guarantor subsidiaries, and certain other senior indebtedness will be secured by collateral that will not be pledged to secure the New Notes.

Not all of our subsidiaries will guarantee the New Notes. As of September 30, 2012, after giving pro forma effect to the Exchange Offers (and assuming that all Existing Notes are tendered), (i) we would have had approximately $783.2 million of debt outstanding, of which $728.4 million would have been secured debt, (ii) the Subsidiary Guarantors would have had approximately $744.7 million of debt outstanding, of which $689.9 million would have been secured debt and (iii) our Restricted Subsidiaries that are not Subsidiary Guarantors would have had approximately $38.5 million of debt outstanding. In the event of a liquidation, winding up, administration, reorganization or any other insolvency, our non-guarantor subsidiaries would pay the holders of their debt and their trade creditors before they would be able to distribute any of their assets to us.

Following the Exchange Offers (and assuming that all Existing Notes are tendered), we will have existing secured debt of approximately $728.4 million under the New Notes and the various credit facilities and we will be able to incur certain additional debt on a senior secured basis under the indentures governing New Notes. Our lending banks have taken first ranking security over certain assets that have not been pledged to secure the New Notes. To the extent that assets not pledged as collateral (as herein after defined) for the New Notes are pledged to third parties to secure debts, any claim on the guarantees is effectively subordinated to the obligations secured by such pledges to the extent of the value of the collateral pledged.

We must rely on payments from our subsidiaries to make cash payments on the New Notes, and our subsidiaries are subject to various restrictions on making such payments.

We are a holding company and hold most of our assets at, and conduct most of our operations through, direct and indirect subsidiaries. In order to make payments on the New Notes or to meet our other obligations, we depend upon receiving payments from our subsidiaries. In particular, we may be dependent on dividends and other payments by our direct and indirect subsidiaries to service our obligations. You will not have any direct claim on the cash flow or assets of our non-guarantor operating subsidiaries and our non-guarantor operating subsidiaries have no obligation, contingent or otherwise, to pay amounts due under the New Notes or the

subsidiary guarantees, or to make funds available to us for those payments. In addition, the payment of dividends and the making of loans and advances to us by our subsidiaries may be subject to various restrictions. Existing and future debt of certain of these subsidiaries may prohibit the payment of dividends or the making of loans or advances to us. In addition, the ability of our subsidiaries to make payments, loans or advances to us may be limited by the laws of the relevant jurisdictions in which such subsidiaries are organized or located. Any of the situations described above could make it more difficult for us to service our obligations in respect of the New Notes. If payments are not made to us by our subsidiaries, we may not have any other sources of funds available that would permit us to make payments on the New Notes.

Covenant restrictions under the indentures governing the New Notes impose significant operating and financial restrictions on us and may limit our ability to operate our business and consequently to make payments on the New Notes.

The indentures governing the New Notes will contain, and other financing arrangements that we may enter into in the future may contain, covenants that restrict our ability to finance future operations or capital needs or to take advantage of other business opportunities that may be in our interest. These covenants restrict our ability to, among other things:

Events beyond our control, including changes in general business and economic conditions, may affect our ability to meet these requirements. A breach of any of these covenants could result in a default under the indentures governing the New Notes.

We may elect not to pay any cash interest accrued on the New Convertible Secured Notes.

Pursuant to the indenture governing the New Convertible Secured Notes, we may elect not to pay cash interest due on the New Convertible Secured Notes on any interest payment date, and may elect to pay PIK interest. In the absence of such an election, interest on the New Convertible Secured Notes will be payable as cash interest. The failure to pay cash interest on the New Convertible Secured Notes on any interest payment date will not constitute an event of default under the indenture governing the New Convertible Secured Notes. Under such circumstances, interest will be paid in the form of PIK interest by increasing the principal amount of the New Convertible Secured Notes or by issuing new New Convertible Secured Notes. To the extent we choose to pay PIK interest the amount of shares into which the New Convertible Notes will convert will not increase. See “Description of New Convertible Secured Notes—Principal, Maturity and Interest.”

Upon the occurrence of certain change of control events, we will be required to make an offer to you in cash to repurchase all or any part of your New Notes at 101% of their principal amount, plus accrued and unpaid interest. If a change of control occurs, we may not have sufficient funds at that time to pay the purchase price for all tendered New Notes, particularly if that change of control event triggers a similar repurchase requirement for, or results in the acceleration of, any of our other debt. Any debt agreements we enter into in the future may contain similar provisions.

An active trading market may not develop for the New Notes, in which case your ability to transfer the New Notes will be more limited.

The New Notes are new securities for which there currently is no market. Although we intend to apply for the New Notes to be admitted to trading on the Global Exchange Market of the Irish Stock Exchange, we cannot assure you that such admission will take place or that we will be able to continue to maintain such listing in the future. The liquidity of any market for the New Notes will depend on the number of holders of the New Notes, prevailing interest rates, the market for similar securities and other factors, including general economic conditions and our own financial condition, performance and prospects, as well as recommendations of securities analysts. We cannot assure you that an active trading market for the New Notes will develop or, if one does develop, that it will be maintained. If no active trading market develops, you may not be able to resell your New Notes at their fair market value, if at all.

The liquidity of, and trading market for, the New Notes may also be hurt by declines in the market for high yield securities generally. Such a general decline may be caused by a number of factors, including but not limited to the following:

Such a decline may affect the liquidity and trading of the New Notes independent of our financial performance and prospects.

Both classes of New Notes will likely be issued with original issue discount, which could cause certain Noteholders to recognize significant “phantom” taxable income.

We expect that both the New Secured Notes and the New Convertible Secured Notes will be issued with original issue discount (“OID”) for U.S. federal income tax purposes. If a class of New Notes is issued with OID, a U.S. Holder (as defined in “Certain United States Federal Income Tax Consequences”) that receives such New Notes pursuant to the CEDC FinCo Exchange Offer or the Plan of Reorganization will generally be required to recognize ordinary taxable income in respect of that class of New Notes in advance of the receipt of cash to which the income is attributable, regardless of the U.S. Holder’s regular method of tax accounting. Moreover, a U.S. Holder that has an unrealized loss in its Existing 2016 Notes would generally be required to recognize such “phantom” taxable income with respect to its New Notes even if, as expected, the U.S. Holder cannot recognize such loss in connection with the CEDC FinCo Exchange Offer or the Plan of Reorganization (and instead takes a “carryover” tax basis in the New Notes). However, if a U.S. Holder’s tax basis in a class of New Notes exceeds the “issue price” of such New Notes, the U.S. Holder would generally be treated as acquiring that class of New Notes with “amortizable bond premium” or “acquisition premium.” In such a case, the U.S. Holder may be able to exclude, or offset, all or a portion of the OID that would otherwise be taxable with respect to the New Notes.

Noteholders are urged to consult their independent tax advisors regarding the tax consequences of exchanging their Existing 2016 Notes for the Existing 2016 Notes Consideration, as well as any other tax consequences of the Proposed Amendments, the Exchange Offers, and the Plan of Reorganization. See the summary set forth below in “Certain United States Federal Income Tax Considerations.”

The New Notes and the Guarantees thereunder will not be directly secured by Russian Alcohol, and if we violate covenants in respect of the loans secured by the assets of Russian Alcohol such security may be effectively invalidated or unenforceable.

Due to limitations under Russian law, the New Notes and the Guarantees thereunder will not be directly secured by Russian Alcohol. Jelegat Holdings Limited, a Cypriot corporation, will be used for the purpose of lending to Russian Alcohol to facilitate the perfection of security interests on intercompany loans to Russian Alcohol. The $264.0 million (as such amounts may be reduced in connection with the reduction in aggregate principal amount of secured notes debt in the Exchange Offer) intercompany loan from CEDC FinCo to Jelegat Holdings Limited, the corresponding $264.0 million (as such amounts may be reduced in connection with the reduction in aggregate principal amount of secured notes debt in the Exchange Offer) on-loans to Russian Alcohol and the shares of Jelegat Holdings Limited will all be pledged as security for the New Notes and the Guarantees thereunder. The on-loans from Jelegat Holdings Limited to Russian Alcohol, in turn, have been secured by share pledges over the Russian Alcohol Guarantors, assignments of rights under certain non-Russian bank accounts and withdrawal rights agreements for certain Russian bank accounts of the Russian Alcohol Guarantors and mortgages over certain real property and fixtures in Russia. As a result of this structure, the amount that can be realized from the enforcement of the security interest over Russian Alcohol is limited to the amount of the debt secured, which is the $264.0 million intercompany loans from Jelegat Holdings Limited to Russian Alcohol.

After the consummation of the CEDC FinCo Exchange Offer, it is expected that a portion of the existing intercompany loans will be cancelled and/or exchanged for equity of the applicable Intercompany Borrower, such that the aggregate principal amount of the Intercompany Loans will reflect the aggregate principal amount of the New Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer. It is expected that the terms of the Intercompany Loans (e.g., interest rate and maturity) will reflect those of the New Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer.

The shares of Jelegat Holdings Limited are wholly owned by CEDC International sp. z o.o. The loans securing the New Notes and Guarantees thereunder from Russian Alcohol are, therefore, effectively controlled by CEDC. If we do not comply with the covenants limiting the activities of Jelegat Holdings Limited, the collateral that secures that loan may be effectively invalidated or unenforceable, in which case the holders of New Notes will only have unsecured claims over the assets of Russian Alcohol.

A refinancing or replacement of certain indebtedness could result in a release of the liens on the collateral. Although the security may be reinstated on substantially similar terms, the security could be subject to avoidance by an insolvency administrator or third-party creditors.

The Security Documents provide that in connection with the refinancing or replacement of certain indebtedness, security interests in the property and assets securing the New Notes and/or the Guarantees thereunder as such may be amended, modified, restated, supplemented or replaced from time to time may be released, provided that such security interests are re-taken on substantially similar terms to secure the New Notes. Although such re-taken security interests would, subject to registration, perfection or any other required actions, be established on substantially the same terms as the original security interests, in certain jurisdictions there will be new hardening periods applicable to such re-taken security interests following the date on which such replacement occurs during which, under the laws of those jurisdictions, the transaction creating the new security interests may be avoided by an insolvency administrator or third-party creditors if the entity granting such security interest becomes insolvent. See “Description of New Notes—Security”.

Fraudulent conveyance laws, bankruptcy regulations and other limitations on the guarantees may adversely affect their validity and enforceability.

The Subsidiary Guarantors will guarantee the payment of the New Notes on a senior secured basis. The Subsidiary Guarantors are organized under the laws of Poland, Russia, Hungary, Cyprus and Luxembourg. Although laws differ among various jurisdictions, in general, under fraudulent conveyance and other laws, a court could subordinate or void any guarantee and, if payment had already been made under the relevant guarantee, require that the recipient return the payment to the relevant guarantor, if the court found that:

The measure of insolvency for purposes of fraudulent conveyance laws varies depending on the law applied. Generally, however, a guarantor would be considered insolvent if it could not pay its debts as they become due and/or if its liabilities exceed its assets. If a court decided any guarantee was a fraudulent conveyance and voided the guarantee, or held it unenforceable for any other reason, you would cease to have any claim in respect of the guarantor and would be a creditor solely of the issuer and the remaining guarantors.

The guarantees and securities granted by the Lion/Rally Lux 1 S.A., Lion/Rally Lux 2 S.à r.l. and Lion/Rally Lux 3 S.à r.l., to the extent that they secure obligations of companies other than such Subsidiary Guarantors and their subsidiaries (i.e., upstream and cross-stream guarantees/securities), will generally contain express limitation language that limits the scope of the obligations secured thereunder in order to preserve the corporate interest of such guarantors/pledgors.

In addition to the limitations on the enforcement of the guarantees set out above, the following limitations specific to the laws of Poland, Russia and Hungary will apply.

Under Polish bankruptcy law, in addition to the fraudulent conveyance rules (actio pauliana):

CEDC, CEDC FinCo and the Subsidiary Guarantors are related entities under Polish bankruptcy regulations, and CEDC controls CEDC FinCo.

In Hungary, similar rules apply. A creditor or the liquidator may submit a claim to the court within ninety days from the time of gaining knowledge, or within a one-year forfeit deadline from the date of publication of the notice of liquidation, to rescind – among others – agreements concluded or other commitments made (i) within two years preceding the filing of a liquidation claim and thereafter, if it was intended to transfer the debtor’s assets without consideration or to encumber any part of the debtors’ assets without consideration, or if the stipulated consideration constitutes unreasonable and extensive benefits to a third party; or (ii) within five years preceding the filing of a liquidation claim and thereafter, if intended to conceal the debtor’s assets or to defraud any one creditor or the creditors, and the other party had or should have had knowledge of such intent. In this respect bad faith and/or gratuitous nature shall be presumed in the case of contracts with a controlled company, with a shareholder, or with a company that is controlled by the same person or the same entity that is controlling the liquidated company.

Under Cyprus law, according to section 301 of the Companies Cap 113 any conveyance, charge, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company within 6 months before the commencement of its winding up which, had it been made or done by or against an individual within 6 months before the presentation of a bankruptcy petition on which he is adjudged bankrupt, would be deemed in his bankruptcy a fraudulent preference, shall in the event of the company being wound up be deemed a fraudulent preference of its creditors and be invalid accordingly. Section 47 of the Bankruptcy Law Cap. 5, stipulates that every conveyance or transfer of property, or charge thereon made, every payment made, every obligation incurred and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor, or of any person in preference over the other creditors, shall, if the person making, taking, paying or suffering the same is adjudged bankrupt on a bankruptcy petition presented within three months after the date of making or, taking, paying, or suffering the same, be deemed fraudulent and void as against the trustee in the bankruptcy. Furthermore, it is possible under Cyprus law that in cases where a transaction involved fraudulent actions by the directors such transaction to be tainted with illegality and be rendered void irrespective of how long such transaction took place before the commencement of the winding up of the company.

The hardening period under Russian law for a bankruptcy ranges from 30 days to three years, and is counted from the date of formal acceptance by a Russian court of a bankruptcy claim. Generally, the following transactions entered into during a hardening period may be set aside (voided) under the Russian bankruptcy law:

Where any related party is involved in any foregoing transaction, Russian law provides for more stringent criteria. CEDC FinCo is likely to be deemed to be a related party in respect of the Russian obligors.

Given the relative novelty of the above-mentioned Russian bankruptcy law provisions, there is currently no published court practice or legislative guidance on their application. It is therefore unclear how Russian courts would apply the foregoing criteria to the Russian law security where a relevant Russian obligor is in bankruptcy.

Under Hungarian law, any payments to the shareholders of a guarantor are mandatorily subordinated to the claims of other creditors if the liquidation of such guarantor company is ordered by a court. Quota pledges are no longer enforceable after the commencement of a liquidation procedure.

Certain of the security to be granted for the benefit of the New Notes will not be delivered on the issue date of the New Notes. CEDC FinCo has agreed to use its reasonable efforts to deliver certain security as soon as reasonably practicable following the issue date of the New Notes. Please see the sections entitled “Description of New Secured Notes—Security” and “Description of New Convertible Secured Notes—Security” for descriptions of the security to be delivered after the issue date of the New Notes. If CEDC FinCo defaults or becomes insolvent before such security is granted, the holders of the New Notes will have a less comprehensive security package at the time of such default and/or insolvency. Accordingly, prospects for recovery would be diminished.

The security over certain of the Collateral will be granted to the applicable Security Agent as a separate creditor rather than as an agent for the holders of the New Notes. The ability of such Security Agent to enforce the Collateral may be restricted by local law.

The ability of the applicable Security Agent to enforce the security is subject to mandatory provisions of the laws of each jurisdiction in which security over the Collateral is taken. There is some uncertainty under the laws of certain jurisdictions as to whether obligations to beneficial owners of the New Notes that are not identified as registered holders in a security document will be validly secured.

In several jurisdictions the security over the Collateral that will constitute security for the obligations under each of the indentures governing the New Notes will not be granted directly to the holders of the New Notes or not only to the holders of the New Notes but in favor of the applicable Security Agent as beneficiary of parallel debt obligations (the “Parallel Debt”). The Parallel Debt is in the same amount and payable at the same time as the guarantee of the relevant security grantor in respect to the obligations of CEDC FinCo under the indentures in respect of the New Notes (the “Principal Obligations”). Any payment in respect of the Principal Obligations shall discharge the corresponding Parallel Debt, and any payment in respect of the Parallel Debt shall discharge the corresponding Principal Obligations. In respect of the security interests granted to secure the Parallel Debt, the holders of the New Notes will not have direct security and will not be entitled to take enforcement actions in respect of such security, except through the applicable Security Agent. As a result, the holders of the New Notes bear some risks associated with a possible insolvency or bankruptcy of the applicable Security Agent. There is no assurance that such Parallel Debt structure will be effective before all courts, as there is no judicial or other guidance as to its efficiency.

The value of the Collateral may not be sufficient to satisfy CEDC FinCo’s and the Guarantors’ obligations under the New Notes and the Guarantees, and the Collateral securing the New Notes may be reduced or diluted under certain circumstances.

In the event of foreclosure on the Collateral, the proceeds from the sale of the Collateral may not be sufficient to satisfy the obligations under the New Notes. No appraisals of any of the Collateral have been prepared by us or on our behalf in connection with the offering of the New Notes. The value of the Collateral and the amount to be received upon a sale of such Collateral will depend upon many factors, including, among others, whether or not our business is sold as a going concern, the condition of the Collateral and the industry in which we operate, the ability to sell the Collateral in an ordinary sale, the condition of the international, national and local economies and the availability of buyers. The book value of the Collateral should not be relied upon as a measure of realizable value for such assets. By their nature, portions of the Collateral, including any pledged capital stock of any of our subsidiaries, may be illiquid and may have no readily ascertainable market value.

In addition, the indentures governing the New Notes permit the granting of certain liens other than those in favor of the holders of New Notes on assets constituting Collateral. To the extent that holders of other secured

indebtedness or third parties enjoy liens, including statutory liens, whether or not permitted by the indentures governing the New Notes or the security documents governing the security for the New Notes, such holders or third parties may have rights and remedies with respect to all or a portion of the Collateral that, if exercised, could reduce the proceeds available to satisfy our obligations under the New Notes. Moreover, if we issue additional New Notes under the indentures governing the New Notes, holders of such additional New Notes will benefit from the same Collateral and guarantees as the holders of the New Notes being offered, effectively diluting your ability to benefit from the liens on the Collateral and the Guarantees.

Under the general understanding of Russian law, a creditor may only take and hold security for the purposes of securing its own claim. Russian law does not envisage granting a pledge to a third party acting for the benefit of a creditor (such as a security agent or a security trustee). The pledge created under the Russian law pledge agreements in favor of the applicable Security Agent will secure the Parallel Debt obligation of CEDC FinCo to pay to such Security Agent, as creditor in its own right and not as representative of the holders of New Secured Notes, any amounts payable to the holders of New Notes under the indentures governing the New Notes. However, such arrangements have not been tested in a Russian court, and to the extent that enforcement of the security established by such Security Documents requires the involvement of the Russian courts, the lack of precedent and experience of the Russian courts may make it difficult for such Security Agent to establish its entitlement to such security.

Similar rules and problems apply in Hungary: the concept of Security Agent is not expressly regulated by Hungarian law. Although it is not forbidden by Hungarian law to engage the Security Agent with the collection of the secured obligations under certain circumstances, this concept has not been challenged before courts so far and consequently the outcome of a lawsuit in which the right of the Security Agent to collect the secured obligations is challenged, is unpredictable.

The tax consequences of these collateralizations and guarantees have not been fully examined.

The enforcement of the security is subject to certain risks under local law.

The establishment and perfection of certain security instruments in Poland require the execution of certain documents and entry in the registers. The establishment of the mortgages on real estate in Poland will require execution of a deed before a Polish notary public and entry in the land and mortgage registers held by the Polish court.

The establishment of the registered pledge will require execution of the registered pledge agreements and the entry of each registered pledge in the appropriate register held by the Polish court.

CEDC International Sp. z o.o. (the “Polish Guarantor”) will execute deeds on establishment of the mortgages and enter into registered pledge agreements and will file motions for the registration of the mortgages and registered pledges with the appropriate courts on or about the issue dates of the New Notes. However, the registration proceedings are expected to last up to several months and, until they are completed, the mortgages or, respectively, the registered pledges will not legally exist. Once they are registered, the statutory priority of the mortgages or registered pledges will be determined by the priority of the filing motions for the registration thereof. In respect of movable assets and certain rights (e.g., shares) on which the registered pledges are to be established, from the moment of the pledge agreement execution until the entry of the registered pledges in the registers, the payment obligations under the New Notes will be secured by ordinary or financial pledges, which give the secured creditors only some of the rights the registered pledges entail.

As a general rule, the establishment of the pledges (registered and ordinary or financial) or mortgages over the assets of the Polish Guarantor will not prevent third-party creditors from initiating enforcement proceedings under the Polish Code of Civil Procedure (the “PCCP”) to satisfy their claims from the assets encumbered by the pledges or mortgages. In such event, the applicable Security Agent will be able to participate in the distribution of funds resulting

from such enforcement. In such case, claims will have priority over unsecured claims of third parties (except for certain court-enforcement expenses, alimony claims and employee and pension claims) and claims secured with the lower-ranking pledges or mortgages according to the order of priorities set forth in accordance with the PCCP.

In the event that the Polish Guarantor is declared bankrupt, only ordinary pledges, financial pledges, registered pledges, mortgages, or assignments of movable assets or rights for security purposes will allow secured creditors to rely on such security instruments in enforcing their claims.

Additionally, Polish law does not recognize the enterprise pledge/mortgage (i.e., one security interest over the whole business of an entity). In particular, without limitation, mortgages on real estate and pledges on movable assets or transferrable rights are separate security interests from which the secured creditors have to satisfy separately.

Claims secured by registered pledges and ordinary pledges or financial pledges will be satisfied directly from the sale proceeds of the assets encumbered with such pledges (after subtracting the costs of such sale). However, the proceeds of the sale of shares will be of limited economic value when the issuer of such shares becomes insolvent. In addition, in respect of the registered pledges, the applicable Security Agent will generally have the right to satisfy claims secured with such registered pledges by assuming title to the pledged assets on the terms set out in the respective pledge agreements or by the sale of such assets via an auction made by a notary public or a court enforcement officer. However, if third-party creditors initiate enforcement proceedings to satisfy their claims from the assets encumbered by such pledges, the applicable Security Agent may not be able to exercise any specific methods of enforcement of the registered pledges (e.g., by taking the title to the encumbered assets or by sale of such assets via an auction made by a notary public or a court enforcement officer), but may only be entitled to enforcement of such pledges via a standard court enforcement process which is usually more lengthy and costly for the secured creditor. Additionally, the receiver retains the discretion to prevent the applicable Security Agent from acquiring title to the pledged assets or from sale of such assets via an auction made by a notary public or a court enforcement officer and to sell the entire business of the bankrupt entity (entire bankruptcy estate) as a going concern if such a sale would be more commercially beneficial.

As a general principle of Polish law, any third-party creditor of a Polish Guarantor may challenge the effectiveness of the security interests to be created under the Polish law security documents if such creditor can prove that the entity which granted the security interests acted with the intention to impair the creditors’ rights and the applicable Security Agent was aware, or ought to have been aware, that the establishment of such security interests was prejudicial to such creditors’ rights.

The court, acting upon a motion of a bankruptcy receiver, or administrator or similar officer, will decide that security interests in the form of mortgage, pledge, registered pledge or other security interests established on assets of the bankrupt entity are ineffective for the bankruptcy estate, if the bankrupt entity established such security interests to secure the obligations of a third party, such security interest was established within one year prior to filing a motion for bankruptcy of such entity, and the bankrupt entity did not receive consideration for establishing such security interest or such consideration received is significantly lower than the value of the security interests so established. However, irrespective of the value of the consideration received, the court will decide that the security interests established on assets of the bankrupt entity are ineffective for the bankruptcy estate if they secure obligations of an entity related to the bankrupt entity (in particular, without limitation, an entity which controls the bankrupt entity). CEDC, CEDC FinCo and the Polish Guarantor are related entities under Polish bankruptcy regulations, and CEDC controls CEDC FinCo.

Further, under Polish law, mortgages and pledges are considered accessory to the underlying secured obligations, which automatically terminate if the secured obligations become void or terminate. Furthermore, in case of foreclosure on a pledge on shares in a Polish company not only do the Polish procedural rules with respect to a foreclosure of a right of pledge have to be followed, but also the provisions of Polish company law with respect to the transfer of shares have to be abided, which may lead to complications and difficulties with foreclosing the pledged shares and/or lower revenue from the foreclosure, which may adversely affect the position of the holders of the New Notes.

We will enter into two intercreditor agreements to regulate the sharing of certain security with our existing bank creditors (see below under the caption “Description of Other Indebtedness”). Under Polish law, the priority of the security over pledged shares that is shared with other creditors depends on the termination of existing pledges or agreement on priority with the beneficiaries of the existing pledges. There is uncertainty in Polish law whether registered pledges expire upon delivery of a release statement (zrzeczenie) or actual deregistration from the pledge registry. If a registered pledge expires only upon deregistration, then the old registered pledges in favor of the bank creditors may have priority of ranking ahead of the pledges in favor of the Security Agent, until the old registered pledges have been de-registered and the new equal-ranking, first priority pledges in favor of the bank creditors and the applicable Security Agent are established.

The security established for the benefit of the applicable Security Agent in Poland includes the establishment of both financial pledges and registered pledges over the same assets. The co-existence of registered and financial pledges established as encumbrances over a single asset, securing the same claim, is not expressly provided for under Polish law and we cannot assure you that the validity of the coexisting registered and financial pledges in favor of the bank creditors and the applicable Security Agent would not be subject to challenge.

Although Russian security documents provide that the security period terminates when the secured obligations are irrevocably discharged, the concept of “irrevocability” of performance has no distinctive meaning under Russian law.

Russian law withdrawal rights agreements do not create a security interest per se; rather, they seek to restrict the ability of an account holder to dispose of funds in a bank account and provide a creditor with the right to withdraw funds in a bank account without the instruction of the account holder. The provisions of Russian law that establish the order of priority of withdrawals from a bank account where the aggregate amount of the claims against the account exceeds its balance may affect the creditor’s rights under withdrawal rights agreements. It is unclear under Russian law whether any restrictions on the ability of an account holder to dispose of funds in a bank account are enforceable. It is further unclear whether rights of a third party to dispose of funds in a bank account are revocable by the account holder. Also, the account holder may close its bank account at any time, unless there are any restrictions regarding disposal of funds on that account (such as arrest of funds, suspension of operation on a bank account upon request of tax authority or the like).

Under Polish, Russian and other laws under which we operate, there are restrictions on acquiring control over certain assets. Pursuant to the Polish Antimonopoly Law (Ustawa o ochronie konkurencji i konsumentów), taking control over an entrepreneur by way of, inter alia, an acquisition of shares or any part of its assets or an acquisition of a right to exercise voting rights of shares in such entrepreneur may require prior approval of the Polish Antimonopoly Authority or antimonopoly authorities of other countries and/or the European Commission. Therefore, if the applicable Security Agent enforces the registered pledges by way of an acquisition of title to the encumbered shares or by exercising the voting rights in respect of shares encumbered by pledges (registered or financial pledges), it may require prior approval(s) of the respective antimonopoly authority(ies). Such approval may be subject to certain conditions, such as sale of some or all of the assets of the entrepreneurs participating in the acquisition. Violation of the Antimonopoly Law or other respective antimonopoly laws or regulations may result in fines imposed on the participating companies and their management.

Under the Polish Law on the Acquisition of Real Estate by Foreigners (Ustawa o nabywaniu nieruchomoś- ci przez cudzoziemców), the acquisition of real estate in Poland or the acquisition of shares in a Polish company which owns real estate in Poland or any other action through which such Polish company becomes controlled by a foreign entity, in certain situations requires a permit from the Polish Ministry of the Interior (an “MOI Permit”). Only persons domiciled in countries which are members of the EEA are exempted from the duty to obtain an MOI Permit. The exemption referred to above is not absolute. For example, it does not apply to certain types of land such as agricultural land and forests. Pursuant to the provisions of the Law on the Acquisition of Real Estate

by Foreigners, if the Polish Guarantor holds or acquires land which may be purchased by persons domiciled in EU Member States only subject to prior receipt of an MOI Permit, an acquisition, by the applicable Security Agent or by other entities, of shares in such Polish Guarantor in the course of enforcement of the pledges established on such shares, may also require such an MOI Permit.

The Russian Alcohol Guarantors will grant multiple pledges in connection with the RAG On-Loans (as defined under “Description of New Secured Notes” and “Description of New Convertible Secured Notes”) in order to secure the performance of the obligations of the borrowers under such loans. These pledges will be of different priority with respect to each other, but no other pledges shall rank senior to such pledges, and will effectively secure the aggregate amount of the RAG On-Loans. Upon an event of default under the New Notes, the holders of the New Notes would need to rely on cross-default provisions in the RAG On-Loans to enforce security provided by the Russian Alcohol Guarantors. The shares (or participatory interests) of OOO Glavspirttirest will be pledged both to secure the New Notes on a first priority basis and the Guarantee of Latchey Limited, its parent company, on a second priority basis, with no other pledges ranking senior to such pledges.

In the event that the applicable Security Agent enforces on the real estate mortgages over Russian assets (except for the land plots and buildings of non-industrial use), the consent of the Russian Federal Antimonopoly Service (“FAS”) in Russia may be required where the balance sheet value of the assets enforced upon exceeds 20% of the aggregate book value of the key production and intangible assets (such as intellectual property) of the mortgagor.

Under Russian law, collateral (which includes, among others, pledges and mortgages) are considered secondary obligations, which automatically terminate if the secured obligations become void. Generally, the parties may agree on court or out-of-court pledge enforcement procedure. However, in certain cases there is a statutory requirement for enforcement through court (which overrules any agreement of the parties to the contrary) which may substantially delay the enforcement. To the extent the security is enforced through court, a court in certain circumstances may delay such public sale for a period of up to one year upon a pledgor’s application. Also, the foreclosure on the pledged asset (irrespectively of the chosen enforcement method) is not permitted if the debtor’s default is immaterial and the value of the claim is clearly disproportional to the value of the collateral provided.

In the event of an out-of-court enforcement of an asset pledged under a Russian law pledge agreement, the initial sale price of such asset in most cases should be fixed on the basis of its market value, as determined by an independent appraiser, which may affect the timing of enforcement.

A mortgage under Russian law is a pledge over real property, such as land and buildings, which requires state registration to be valid. Under Russian law, a participatory interest pledge agreement shall be certified by a notary public. Due to the novelty of such requirement with respect to Russian law pledge of participatory interests, there may be practical difficulties in obtaining the above-mentioned certification.

In general, Russian law has no pledge perfection system for collateral other than mortgages, shares in Russian joint stock companies and from July 1, 2009, participatory interests in Russian limited liabilities companies, which may lead to unexpected or conflicting claims of secured creditors upon the pledged property. Therefore, holders of New Notes may have difficulty foreclosing on collateral or enforcing other security if there is a default, which may adversely affect our financial condition and results of operations.

The provisions of Russian law that establish the order of priority of withdrawals from a bank account where the aggregate amount of the claims against the account exceeds its balance may affect the creditor’s rights pursuant to Russian law withdrawal rights agreements. It is unclear under Russian law whether any restrictions on the ability of an account holder to dispose of funds in a bank account are enforceable. Also, the account holder may close its bank account at any time.

Further, under Russian law, the right to issue guarantees (as primary obligations independent from the secured obligations) is reserved to banks, other credit institutions and insurance companies while other corporate entities (such as the Russian Guarantors) are only capable to provide suretyship which are considered as secondary obligations the validity of which depends on the validity of the principal obligation (for example, the suretyship automatically terminates (i) if the principal obligation secured by a suretyship terminates or becomes invalid; or (ii) the obligations secured by such suretyship are altered without the surety’s consent, and such alteration increases the liability of the surety or has other adverse consequences for it). While the Guarantees to be provided by the Russian Guarantors are expected to be governed by the laws of the State of New York, it is unclear whether their intended effect will be preserved given the Russian law provisions relating to the right to issue guarantees.

Under Cyprus contract law, there are certain requirements which, if not fulfilled, will render any pledge over shares in a Cyprus company invalid and unenforceable. These requirements include giving formal notice of the pledge together with a certified copy thereof to the company in which the pledged shares are held, the company making a memorandum of such pledge in its register of shareholders against the shares in respect of which the notice has been given, and the company delivering to the pledgee a certificate confirming that a memorandum of such pledge has been made in its register of shareholders.

In order to ensure that certain classes of security over its assets are not rendered void against a liquidator or any creditor, a company registered in Cyprus must deliver the instrument creating or evidencing the security, together with the prescribed particulars thereof, to the Registrar of Companies for registration within 21 days after the creation of such security. The Registrar of Companies will then issue a certificate of registration of charge, which is conclusive evidence that the procedure required by the legislation to register with the Registrar of Companies in Cyprus the security concerned has been complied with. There is no authority in Cyprus as to what the position would be were a Cyprus company to go insolvent between the date of the filing of the security at the companies registry and the Registrar issuing the certificate of registration of charge.

Any rights of a pledgee holding a pledge over shares in a Cyprus company to sell the pledged shares will be subject to the provisions of the articles of association of that company. A transfer of shares in a Cyprus company is not complete until and unless it is entered into the company’s register of members. Following the commencement of the winding up of a Cyprus company no transfer of shares in, nor any transfer of assets of, such company can take place unless the court otherwise orders.

The effectiveness of Cyprus law share pledges has not been tested under Cypriot law by any Cypriot court to date. Further, according to section 303 of the Cypriot Companies Law Cap. 113 where a company is being wound up, a floating charge on the undertaking or property of the company created within 12 months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except to the amount of any cash paid to the company at the time of or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the rate of 5% per annum or such other rate as may for the time being be prescribed by order of the Accountant-General.

Under Hungarian law, certain types of security interests (such as mortgages over real property and pledges over the quotas in Hungarian companies) are established and perfected upon registration by the competent Hungarian authorities (e.g., the land registry office or a company court of registration), in addition to and following the execution of the relevant security documents. Registration takes place within 30 days following a request to the relevant authority and is done retroactively to the date of the execution of the security document in case of share pledges. Under the pledge agreement relating to the shares held in Bols Hungary Kft. (the “Hungarian Guarantor”), the pledgor is expected to undertake to file the registration request with the competent

company court of registration within 30 days following the execution of the pledge agreement. Enforcement is subject to applicable Hungarian rules that provide for both judicial and extra-judicial (private sale) enforcement methods. Pledges incorporated into notary deeds are subject to simplified judicial enforcement procedure.

Under Hungarian law, the foreclosure of the pledge shall take place on the basis of a court decision if the parties have not agreed on the terms of private sale, or such private sale is not successful within a certain period of time. Obtaining such court decision might take months or even years if the creditor needs to commence litigation against the obligor in the absense of directly enforceable public deed relating to the pledge.

In the event that the Hungarian Guarantor is declared insolvent and the liquidation of such guarantor is ordered by the court, any of the creditors or the liquidator may challenge before the court contracts or undertakings which (i) conceal the debtors assets or defraud the creditors, or (ii) are aimed at the transfer of the guarantors’ assets without due compensation, or (iii) are intended to encumber any part of guarantors’ assets; or (iv) ensure unreasonable and extensive benefits to a third party or (v) gives preference to creditors in any way (including providing securities to such creditor).

According to Luxembourg conflict of law rules, the courts in Luxembourg will generally apply the lex rei sitae or lex situs (the law of the place where the assets or subject matter of the pledge or security interest is situated) in relation to the creation, perfection and enforcement of security interests over such assets. As a consequence, Luxembourg law will apply in relation to the creation, perfection and enforcement of security interests over assets located or deemed to be located in Luxembourg, such as registered shares in Luxembourg companies, bank accounts held with a Luxembourg bank, receivables or claims governed by Luxembourg law and/or having debtors located in Luxembourg, tangible assets located in Luxembourg, securities which are held through an account located in Luxembourg, bearer securities physically located in Luxembourg, etc. If there are assets located or deemed to be located in Luxembourg, the security interests over such assets will be governed by Luxembourg law and must be created, perfected and enforced in accordance with Luxembourg law.

The Luxembourg law of 5 August 2005 on financial collateral arrangements, as amended (the “Luxembourg Collateral Law”) governs the creation, validity, perfection and enforcement of pledges over shares, bank accounts and receivables located or deemed to be located in Luxembourg.

Under the Luxembourg Collateral Law, the perfection of security interests depends on certain registration, notification and acceptance requirements. A share pledge agreement must be (i) acknowledged and accepted by the company which has issued the shares (subject to the security interest) and (ii) registered in the shareholders’ register of such company. If future shares are pledged, the perfection of such pledge will require additional registration in the shareholders’ register of such company. A pledge over receivables becomes enforceable against the debtor of the receivables and third parties from the moment when the agreement pursuant to which the pledge was created is entered into between the pledgor and the pledgee. However, if the debtor has not been notified of the pledge or if he did not otherwise acquire knowledge of the pledge, he will be validly discharged if he pays the pledgor. A bank account pledge agreement must be notified to and accepted by the account bank. In addition, the account bank has to waive any pre-existing security interests and other rights in respect of the relevant account. If (future) bank accounts are pledged, the perfection of such pledge will require additional notification to, acceptance and waiver by the account bank. Until such registrations, notifications and acceptances occur, the pledge agreements are not effective and perfected against the debtors, the account banks and other third parties.

Article 11 of the Luxembourg Collateral Law sets forth the following enforcement remedies available upon the occurrence of an enforcement event:

As the Luxembourg Collateral Law does not provide any specific time periods and depending on (i) the method chosen, (ii) the valuation of the pledged assets, (iii) any possible recourses, and (iv) the possible need to involve third parties, such as, e.g., courts, stock exchanges and appraisers, the enforcement of the security interests might be substantially delayed.

Foreign law-governed security interests and the powers of any receivers or administrators may not be enforceable in respect of assets located or deemed to be located in Luxembourg. Security interests or arrangements, which are not expressly recognized under Luxembourg law and the powers of any receivers or administrators might not be recognized or enforced by the Luxembourg courts, in particular where the Luxembourg security grantor becomes subject to Luxembourg insolvency proceedings or where the Luxembourg courts otherwise have jurisdiction because of the actual or deemed location of the relevant rights or assets, except if ‘‘main insolvency proceedings’’ (as defined in the EU Council Regulation No. 1346/2000 of May 29, 2000 on insolvency proceedings (the “EU Insolvency Regulation”)) are opened under Luxembourg law and such security interests/arrangements constitute rights in rem over assets located in another Member State in which the EU Insolvency Regulation applies, and in accordance of article 5 of the EU Insolvency Regulation.

The perfection of the security interests created pursuant to the pledge agreements does not prevent any third-party creditor from seeking attachment or execution against the assets, which are subject to the security interests created under the pledge agreements, to satisfy their unpaid claims against the pledgor. Such creditor may seek the forced sale of the assets of the pledgors through court proceedings, although the beneficiaries of the pledges will in principle remain entitled to priority over the proceeds of such sale (subject to preferred rights by operation of law).

Under Luxembourg law, certain creditors of an insolvent party have rights to preferred payments arising by operation of law, some of which may, under certain circumstances, supersede the rights to payment of secured or unsecured creditors, and most of which are undisclosed preferences (priviléges occultes). This includes in particular the rights relating to fees and costs of the insolvency official as well as any legal costs, the rights of employees to certain amounts of salary, and the rights of the Luxembourg Treasury and certain assimilated parties (such as social security bodies), which preferences may extend to all or part of the assets of the insolvent party. This general privilege takes in principle precedence over the privilege of a pledgee in respect of pledged assets.

Insolvency laws and other limitations on the Guarantees and security may adversely affect their validity and enforceability.

CEDC FinCo’s obligations under the New Notes will be guaranteed and secured by certain assets of CEDC FinCo and the Guarantors. The Guarantors are organized under the laws of Poland, Russia, Hungary, Cyprus, Luxembourg and the United States. Although laws differ among jurisdictions, in general, applicable insolvency laws and limitations on the enforceability of judgments obtained in New York courts in such jurisdictions would limit the enforceability of judgments against CEDC FinCo and the Guarantors of the New Notes and the Guarantees. The following discussion of insolvency laws, although an overview, describes generally applicable terms and principles, which are defined under the relevant jurisdictions’ insolvency statutes. In an insolvency proceeding, it is possible that creditors of the Guarantors or an appointed insolvency administrator may challenge the Guarantees and security, and intercompany obligations generally, as fraudulent transfers or conveyances or on other grounds. In certain situations the respective bankruptcy court may also act ex officio and declare the Guarantees or other security interests as ineffective, unenforceable or void. If so, such laws may permit the court, if it makes certain findings, to:

Different jurisdictions evaluate insolvency on various criteria, but a Guarantor is generally considered insolvent at the time it issued a Guarantee or created any security if:

We cannot assure you which standard a court would apply in determining whether a Guarantor was “insolvent” as of the date the Guarantees were issued or security was created or at any other date or time or that, regardless of the method of valuation, a court would not determine that a Guarantor was insolvent on any such date or time, or that a court would not determine, regardless of whether or not a Guarantor was insolvent on any such date or time, that payments to holders of the New Notes constituted fraudulent conveyance (transfers) or are ineffective, unenforceable, void or voidable on any other grounds.

Additionally, under the bankruptcy regulations in EU Member States, the bankruptcy proceedings may be initiated not only in the country where the entity is registered (incorporated) but also in other EU Member States where the bankrupt entity conducts or conducted its business activity or where the assets of the bankrupt entity are located. Irrespective of the attempts to harmonize the bankruptcy regulations in EU Members States, the regulations in various states differ and the bankruptcy proceedings conducted in more than one state may create additional legal risks and costs for the creditors of the bankrupt entity.

Furthermore, Russian law does not recognize the concept of subordination of payment arrangements (with certain limited exceptions) and the operation of the provisions of the New Notes Indenture and/or the Guarantees implementing such a concept is subject to significant uncertainty. Moreover, any provisions of the indentures governing the New Notes and/or the Guarantees contemplating the subordination in right of payment of the claims to a Russian obligor would not be effective in the event of insolvency proceedings against such obligor.

Under Cyprus law a continuing guarantee may, at any time be revoked by the surety, as to future transactions, by notice to the creditor. Also, any variance, made without the surety’s consent, in the terms of the contract between the principal and the creditor, discharges the surety as to transactions subsequent to the variance. The surety is discharged by any contract between the creditor and the principal debtor, by which the principal debtor is released, or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor. A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or not to sue, the principal debtor, discharges the surety, unless the surety assents to such contract. If the creditor does any act which is inconsistent with the rights of the surety, or omits to do any act which his duty to the surety requires him to do, and the eventual remedy of the surety himself against the principal debtor is thereby impaired, the surety is discharged. Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor. Also, a surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the contract of suretyship is entered into, whether the surety knows of the existence of such security or not; and, if the creditor loses or, without the consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security.

Under Polish laws the subordination of payment arrangements and/or intercreditor agreements may be ineffective for the bankruptcy receiver or any similar officer of a party which is a party to such arrangements on agreements.

Under Hungarian law, in the case of a company restructuring proceeding there is a moratorium period of 90 days which may be extended to up to 365 days if certain circumstances are met. During this moratorium period, no payment occurs to creditors and no claim can be enforced against a guarantor.

The allocation of proceeds from the sale of a pledged asset in bankruptcy proceedings of a Russian entity is made as follows:

Lion/Rally Lux 1 S.A., Lion/Rally Lux 2 S.à r.l. and Lion/Rally Lux 3 S.à r.l. are incorporated under the laws of Luxembourg, and as such any insolvency proceedings applicable to such companies are in principle governed by Luxembourg law. The insolvency laws of Luxembourg may not be as favorable to your interests as creditors as the laws of the United States or other jurisdictions with which you may be familiar.

Under Luxembourg law, the following types of proceedings (collectively referred to as “insolvency proceedings”) may be opened against a company with registered office in Luxembourg having its centre of main interests in Luxembourg or an establishment within the meaning of the EU Insolvency Regulation (in relation to secondary proceedings):

In addition to these proceedings, your ability to receive payment may be affected by a decision of a court to grant a reprieve from payments (sursis de paiement) or to put the company into judicial liquidation (liquidation judiciaire). Judicial liquidation proceedings may be opened at the request of the public prosecutor against companies pursuing an activity that violates criminal laws or that are in serious breach or violation of the commercial code or of the Luxembourg law dated August 10, 1915 on commercial companies, as amended (the ‘‘Companies Act’’). The management of such liquidation proceedings will generally follow rules similar to those applicable to bankruptcy proceedings. Liability of the company in respect of the relevant debt will, in the event of a liquidation of the company following bankruptcy or judicial liquidation proceedings, only rank after the cost of liquidation (including any debt incurred for the purpose of such liquidation) and those debts of the relevant entity that are entitled to priority under Luxembourg law. Preferential debts under Luxembourg law include, among others:

Assets over which a security interest has been granted will in principle not be available for distribution to unsecured creditors (except after enforcement and to the extent a surplus is realized), and subject to application of the relevant priority rule and liens and privileges arising mandatorily by law.

During such insolvency proceedings, all enforcement measures by unsecured creditors are suspended. The ability of certain secured creditors to enforce their security interest may also be limited, particularly in the event of controlled management proceedings providing expressly that the rights of secured creditors are frozen until a final decision has been taken by the court as to the petition for controlled management, and may be affected thereafter by a reorganization order given by the court. A reorganization order requires the prior approval by more than 50% of the creditors representing more than 50% of the relevant Luxembourg company’s liabilities in

order to take effect. Furthermore, declarations of default and subsequent acceleration (such as acceleration upon the occurrence of an event of default) may not be enforceable during controlled management proceedings.

Luxembourg insolvency law may affect transactions entered into or payments made by the company during the period before bankruptcy, the ‘‘suspect period’’ (periode suspecte), which is a maximum of six months from the date on which the Commercial Court formally adjudicates a person bankrupt and, as for specific payments and transactions, during an additional period of ten days before the commencement of such period preceding the judgment declaring bankruptcy, except that in certain specific situations the court may set the start of the suspect period at an earlier date, if the bankruptcy judgment was preceded by another insolvency proceeding (e.g., a suspension of payments or controlled management proceedings) under Luxembourg law.

In principle, a bankruptcy order rendered by a Luxembourg court does not result in automatic termination of contracts except for intuitu personae contracts, that is, contracts for which the identity of the company or its solvency were crucial. The contracts, therefore, subsist after the bankruptcy order. However, the insolvency receiver may choose to terminate certain contracts so as to avoid worsening the financial situation of the company. As of the date of adjudication of bankruptcy, no interest on any unsecured claim will accrue vis-á-vis the bankruptcy estate. Insolvency proceedings may therefore have a material adverse effect on a Luxembourg company’s business and assets and the Luxembourg company’s respective obligations under the New Secured Notes.

The bankruptcy receiver decides whether or not to continue performance under ongoing contracts (i.e., contracts existing before the bankruptcy order). The bankruptcy receiver may elect to continue the business of the debtor, provided the bankruptcy receiver obtains the authorization of the court and such continuation does not cause any prejudice to the creditors. However, two exceptions apply:

The bankruptcy receiver may elect not to perform the obligations of the bankrupt party that are still to be performed after the bankruptcy under any agreement validly entered into by the bankrupt party prior to the bankruptcy. The counterparty to that agreement may make a claim for damages in the bankruptcy and such claim will rank pari passu with claims of all other unsecured creditors and/or seek a court order to have the relevant contract dissolved. The counterparty may not require specific performance of the contract.

Enforcing legal liability against us and our directors and officers might be difficult.

We are organized under the laws of the State of Delaware of the United States. Therefore, investors are able to effect service of process in the United States upon us and may be able to effect service of process upon our directors and executive officers. We are a holding company, however, and substantially all of our operating assets are located in Poland, Russia and Hungary. Further, most of our directors and executive officers, and those of most of our subsidiaries, are non-residents of the United States, and our assets and the assets of our directors and executive officers are located outside the United States. The Russian courts will not recognize or enforce any judgment obtained in the courts of any other country unless such enforcement is envisaged by an international treaty to which Russia is a party or by an “ad hoc” treaty in effect between such country and Russia providing for enforcement of such judgments on a reciprocal basis and only in accordance with the terms of such treaty. Russia is not a party to any such treaty with the United States. As a result, you may not be able to enforce against our assets (or those of certain of our directors or executive officers) judgments of United States courts predicated upon the civil liability provisions of United States laws, including federal securities laws of the United States. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Poland or Russia.

Additionally, the courts of the respective jurisdictions may have exclusive jurisdiction in certain matters. In particular, without limitation, Polish courts have exclusive jurisdiction in any matters related to rights to real properties located in Poland (ownership and other rights in rem) or the possession of such real properties. In such matters judgments of any courts other than Polish courts will not be recognized or enforced in Poland.

There is no international treaty between Hungary and the United States regarding the recognition and execution of non-arbitral decisions. In addition, there is no reciprocity between Hungary and the United States with respect to commercial matters either. A decision of a U.S. court will be recognized in Hungary and enforced against a Hungarian guarantor only if the jurisdiction of the U.S. court rendering the decision had been agreed by the parties in writing. There is no international treaty between Poland and the United States regarding the recognition and enforcement of court judgments (non-arbitral awards). A foreign court judgment issued by the courts of New York may be enforceable in Poland subject to an enforcement order given by the Polish court. The Polish court will issue the enforcement order with respect to a foreign court judgment (e.g. the court of New York) only if the judgment is enforceable in a country in which the judgment was issued and none of the following circumstances exist: (i) such judgment is not final in the country where it was issued; (ii) it was issued in a case which belongs to the exclusive jurisdiction of Polish courts; (iii) the defendant, who has not engaged in dispute as to the substance of the matter, has not been served with a letter initiating the proceedings in a due manner and in a time enabling him to defend his rights; (iv) a party has been deprived of the right to defend its rights before a court; (v) an action based on the same claim and between the same parties was filed with the Polish court (or any other competent Polish authority) before being filed with the foreign court; (vi) a judgment, issued in the case based on the same claim and between the same parties, is contrary to the previous final judgment of the Polish court (or any other competent Polish authority) or a previous final judgment of the foreign court (or any other competent foreign authority) provided that such earlier foreign court judgment (or decision of any other competent foreign authority) fulfills the conditions necessary for its recognition by the Polish court; or (vii) the enforcement of the judgment would be contrary to the basic principles of the laws of Poland (ordre publique).

Holders of the New Convertible Secured Notes will not be entitled to any rights with respect to CEDC’s common stock, but will be subject to all changes made with respect to them.

Holders of the New Convertible Secured Notes will not be entitled to any rights with respect to CEDC’s common stock (including voting rights and rights to receive any dividends or other distributions on CEDC’s common stock), but holders of the New Convertible Secured Notes will be subject to all changes affecting CEDC’s common stock. Holders of the New Convertible Secured Notes will be entitled to the rights afforded holders of CEDC’s common stock only if and when they become or are deemed to become the holder of record of the shares of CEDC’s common stock delivered to them upon the conversion of their New Convertible Secured Notes. For example, in the event that an amendment is proposed to our Certificate of Incorporation or Bylaws requiring shareholder approval and the record date for determining the shareholders of record entitled to vote on the amendment occurs prior to a converting noteholder becoming the holder of record of the shares of CEDC’s common stock deliverable upon the conversion of their New Convertible Secured Notes, such holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting CEDC’s common stock.

Conversion of the New Convertible Secured Notes will dilute the ownership interest of existing shareholders, including holders who had previously converted their New Convertible Secured Notes.

When CEDC issues shares of its common stock upon conversion of the New Convertible Secured Notes, such issuance will dilute the ownership interests of existing shareholders, including holders who have received shares of CEDC’s common stock upon prior conversion of New Convertible Secured Notes. Issuance of New Common Stock upon conversion of the New Convertible Secured Notes could dilute shareholders by up to 35%. Any sales in the public market of shares of CEDC’s common stock issuable upon such conversion could adversely affect prevailing market prices of CEDC’s common stock.

The commencement of a Chapter 11 case for the purpose of implementing the Plan of Reorganization may result in a number of adverse consequences.

We are principally engaged in producing and exporting alcoholic beverages through our operating subsidiaries. Although we intend to continue to produce and export alcoholic beverages to our customers in the normal course, there can be no assurances that counterparties will continue to conduct business with us while we are in Chapter 11. The failure to produce and export alcoholic beverages will result in material losses.

If the requisite tenders are not received to consummate the Exchange Offers and we decide not to proceed with the Plan of Reorganization, we may seek an alternative restructuring.

If the Exchange Offers are not consummated and we obtain the requisite votes to accept the Plan of Reorganization in accordance with the requirements of the Bankruptcy Code, either CEDC or CEDC and CEDC FinCo (and CEDC FinCo LLC) may file voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code and seek, as promptly as practicable thereafter, confirmation of the Plan of Reorganization. In the event we decide not to proceed with the Plan of Reorganization, we may or may not file petitions for relief under Chapter 11 or Chapter 7 of the Bankruptcy Code. In such event, we may seek to accomplish an alternative restructuring of our obligations to creditors.

If we receive the requisite votes to accept the Plan of Reorganization and file for bankruptcy under Chapter 11 of the Bankruptcy Code, there can be no assurance that the Bankruptcy Court will confirm the Plan of Reorganization.

Although CEDC, CEDC FinCo and CEDC FinCo LLC may obtain the requisite votes to accept the Plan of Reorganization, there can be no assurance that parties will not seek to oppose confirmation of the Plan of Reorganization or that the Bankruptcy Court may otherwise decline to confirm the Plan of Reorganization.

If the Plan of Reorganization is confirmed, there can be no assurance that the effective date of the Plan of Reorganization will occur.

Although we believe that the effective date of the Plan of Reorganization will occur reasonably soon after the date the Plan of Reorganization would be confirmed, there can be no assurance as to such timing or as to whether it will occur.

If we file for bankruptcy under Chapter 11 of the Bankruptcy Code and seek confirmation of the Plan of Reorganization, there can be no assurance that the Bankruptcy Court will approve the classification scheme in the Plan of Reorganization.

The Bankruptcy Court, which sits as a court of equity, may exercise substantial discretion in connection with the Plan of Reorganization. Section 1122 of the Bankruptcy Code requires that a plan of reorganization classify claims against, and interests in, the debtor(s). The Bankruptcy Code also provides that a plan of reorganization may place a claim or interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class. We believe that all claims and interests have been appropriately classified in the Plan of Reorganization. There can be no assurance, however, that the Bankruptcy Court will conclude that such claims and interests are properly classified in the Plan of Reorganization.

If the Bankruptcy Court determines that our solicitation or the votes on the Plan of Reorganization did not comply with the requirements of the Bankruptcy Code, we may need to resolicit acceptances which would delay confirmation of the Plan of Reorganization.

Section 1126(b) of the Bankruptcy Code provides that the holder of a claim against, or interest in, a debtor who accepts or rejects a plan before the commencement of a Chapter 11 case is deemed to have accepted or rejected such plan under the Bankruptcy Code so long as the solicitation of such acceptance was made in accordance with applicable nonbankruptcy law governing the adequacy of disclosure in connection with such solicitations, or, if such laws do not exist, such acceptance was solicited after disclosure of “adequate information”, as defined in section 1125 of the Bankruptcy Code. In addition, Bankruptcy Rule 3018(b) provides that a holder of a claim or interest who has accepted or rejected a plan before the commencement of the case under the Bankruptcy Code will not be deemed to have accepted or rejected the plan if the court finds after notice and a hearing that the plan was not transmitted in accordance with reasonable solicitation procedures.

We believe that our solicitation of votes to accept or reject the Plan of Reorganization is proper under applicable non-bankruptcy law, rules, and regulations, and contains adequate information as defined by section 1125(a) of the Bankruptcy Code. We cannot be certain, however, that the solicitation of acceptances or rejections will be approved by the Bankruptcy Court. The Bankruptcy Court may decide that the solicitation failed to meet the requirements of section 1126(b) of the Bankruptcy Code. If the Bankruptcy Court determines that the solicitation did not comply with the requirements of section 1126(b) of the Bankruptcy Code, we may seek to resolicit acceptances, and, in that event, confirmation of the Plan of Reorganization could be delayed and possibly jeopardized.

Our actual financial results may vary significantly from the projections filed with the Bankruptcy Court

The Offering Memorandum and the Disclosure Statement contain projected financial information and estimates of value that demonstrate the feasibility of the Plan of Reorganization and our ability to continue

operations upon emergence from proceedings under the Bankruptcy Code. The information was prepared for the limited purpose of furnishing recipients of the Offering Memorandum and Disclosure Statement with adequate information to make an informed judgment regarding acceptance of the Plan of Reorganization, and was not prepared for the purpose of providing the basis for an investment decision relating to the New Common Stock and the New Notes. The projections and estimates of value should not be relied upon in any way or manner in connection with the Exchange Offers and should not be regarded as representations or warranties by us or any other person as to the accuracy of such information or that any such projections or valuations will be realized. Those projections and estimates of value have not been, and will not be, updated on an ongoing basis, and they were not audited or reviewed by independent accountants. They reflect numerous assumptions concerning our anticipated future performance and with respect to prevailing and anticipated market and economic conditions that were, and remain, beyond our control. Projections and estimates of value are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and the assumptions underlying the projections or valuation estimates may be wrong in material respects. Actual results may vary and may continue to vary significantly from those contemplated by the projections or valuation estimates. As a result, you should not rely on those projections or valuation estimates in deciding whether to participate in the Exchange Offers. We will not know the terms or outstanding amount of all of our post-emergence debt until the solicitation of approvals contemplated by the Plan of Reorganization is completed.

In the event that we are unable to reduce our indebtedness through either the Exchange Offers or the Plan of Reorganization, there is substantial doubt about our ability to continue as a going concern.

If we are unable to complete the Exchange Offers or the Plan of Reorganization, we may need to seek bankruptcy protection without the benefit of a prepackaged plan, and we may not be able to continue as a going concern.

The Exchange Offers, the Plan of Reorganization and the transactions related thereto, which contemplate transactions that will modify our capital structure, are based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, our plan may be unsuccessful in its execution and we may be unable to continue as a going concern.

The Exchange Offers, the Plan of Reorganization and the transactions related thereto, contemplate transactions that will affect our capital structure and are based upon assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we consider appropriate under the circumstances. Whether actual future results and developments will be consistent with our expectations and assumptions depends on a number of factors, including but not limited to: (i) our ability to obtain adequate liquidity and financing sources and establish an appropriate level of debt, including our ability to consummate the Exchange Offers or the Plan of Reorganization; (ii) our ability to restore customers’ confidence in our viability as a continuing entity and to attract and retain sufficient customers; (iii) our ability to retain key employees in those businesses that we intend to continue to emphasize; (iv) our ability to obtain local credit support for our non-U.S. operating subsidiaries, and (v) the overall strength and stability of general economic conditions, both in the United States and in global markets and the other matters referred to under “Forward Looking Statements”. The failure of any of these factors could materially adversely affect the successful execution of the restructuring of our businesses.

In addition, the Exchange Offers and the Plan of Reorganization rely upon financial forecasts, including with respect to revenue growth, improved earnings before interest, taxes, depreciation and amortization, improved interest margins, and growth in cash flow. Financial forecasts are necessarily speculative, and it is likely that one or more of the assumptions and estimates that are the basis of these financial forecasts will not be accurate. Accordingly, we expect that our actual financial condition and results of operations will differ, perhaps materially, from what we have anticipated. Consequently, there can be no assurance that the results or

developments contemplated by the Exchange Offers or the Plan of Reorganization will occur or, even if they do occur, that they will have the anticipated effects on us and our subsidiaries or our businesses or operations. The failure of any such results or developments to materialize as anticipated could materially adversely affect the successful execution of the transactions contemplated by the Exchange Offers and the Plan of Reorganization. In addition, the accounting treatment required for a restructuring through the Exchange Offers will result in a different presentation of our financial information than would be required if we restructured in bankruptcy. These differences may have an impact on our results going forward.

The alcoholic beverages production and distribution industries in our markets are intensely competitive. The principal competitive factors in these industries include product range, pricing, distribution capabilities and responsiveness to consumer preferences, with varying emphasis on these factors depending on the market and the product.

In Poland, we have seen significant growth of sales through the key account and discounters channels. These channels tend to operate on lower price levels from producers such as us and therefore can contribute to lower gross and operating profit margins.

In Russia, hypermarket and large retail chains continue to grow their share of the trade. Traditional trade outlets typically provide us with higher margins from sales as compared to hypermarkets and large retail chains. There is a risk that the expansion of hypermarkets and large retail chains will continue to occur in the future, thus reducing the margins that we may derive from sales to wholesalers that primarily serve the traditional trade. Additionally as our discount structure is a percent of our sales price to the customers as our prices increase to offset higher excise taxes the amount of rebate paid to our customers may continue to grow greater than what we can recover from the price increase if we cannot get the full price increase in place to offset this.

As a manufacturer of vodka in Poland and Russia, we face competition from other local producers. We compete with other alcoholic and nonalcoholic beverages for consumer purchases in general, as well as shelf space in retail stores, restaurant presence and distributor attention. In addition, we compete for customers on the basis of the brand strength of our products relative to our competitors’ products. Our success depends on maintaining the strength of our consumer brands by continuously improving our offerings and appealing to the changing needs and preferences of our customers and consumers. While we devote significant resources to the continuous improvement of our products and marketing strategies, it is possible that competitors may make similar improvements more rapidly or effectively, thereby adversely affecting our sales, margins and profitability.

Our results are linked to economic conditions and shifts in consumer preferences, including a reduction in the consumption of alcoholic beverages.

Our results of operations are affected by the overall economic trends in Poland, Russia, Hungary and Ukraine, the level of consumer spending, the rate of taxes levied on alcoholic beverages and consumer confidence in future economic conditions. The current negative economic conditions and outlook, including volatility in energy costs, severely diminished liquidity and credit availability, falling equity market values, weakened consumer confidence, falling consumer demand, declining real wages and increased unemployment rates, have contributed to a global recession. The effects of the global recession in many countries, including Poland, Russia, Hungary and Ukraine have been quite severe and it is possible that an economic recovery in those countries will take longer to develop.

During the current period of economic slowdown, reduced consumer confidence and spending may result in reduced demand for our products and may limit our ability to increase prices and finance marketing and promotional activities. A continued recessionary environment would likely make it more difficult to forecast

operating results and to make decisions about future investments, and a major shift in consumer preferences or a large reduction in sales of alcoholic beverages could have a material adverse effect on our business, financial condition and results of operations.

Changes in the prices of supplies and raw materials could have a material adverse effect on our business.

Prices for raw materials used for vodka production may take place in the future, and our inability to pass on these increases to our customers could reduce our margins and profits and have a material adverse effect on our business. We cannot assure you that the price of raw spirits will not continue to increase and cannot assure you that we will not lose the ability to maintain our inventory of raw spirits, either of which would have a material adverse effect on our financial condition and results of operations, as we may not be able to pass this cost on to the consumers. During 2010 and 2011, spirit prices increased annually on average by 35% in Poland and 41% in Russia resulting in approximately $26.0 million of higher annual cost of goods sold.

Reliance on single source suppliers could have a material adverse effect on our business and our financial results.

In Russia, because we purchase spirits primarily from a single source, we have increased risks for supply disruptions and price increases. If we experience supply disruptions, we may not be able to develop alternative sourcing in a timely manner. Any disruption of our production schedule caused by a shortage of raw materials could adversely affect our business. If raw material suppliers increase prices, we may not be able to find an economically feasible alternative. Any increased cost caused by an increase in raw materials could adversely affect our financial results.

If we are not able to hire and retain managers with the experience we need to run our businesses, it could have a material adverse effect on our financial condition and results of operations.

We have a management team that is limited in size, and in the event our financial condition does not improve or we default on our indebtedness, we may not have sufficient expertise or depth to address the issues that may arise in a timely matter or at all. In addition, we are seeking to fill important management vacancies in our Russian operations and we cannot assure you that we will be able to hire and retain managers and executives with the requisite experience and skills. Our inability to retain key management or fill important management vacancies, or to possess or obtain the requisite depth and experience necessary to confront the challenges we may face, would have a material adverse effect on our financial condition and our ability to run our business and execute our business plan.

We are exposed to exchange rates that could have a material adverse effect on our financial results and comparability of our results between financial periods.

Our functional currencies are the Polish zloty, Russian ruble, Hungarian forint and Ukranian gravna. Our reporting currency, however, is the U.S. dollar, and the translation effects of fluctuations in exchange rates of our functional currencies into U.S. dollars may materially impact our financial condition and net income and may affect the comparability of our results between financial periods.

In addition, the proceeds of the issuances of the Existing Notes were on-lent to certain of our operating subsidiaries that have the Polish zloty and Russian ruble as their functional currencies. Movements in the exchange rate of the U.S. dollar to Polish zloty and Russian ruble could therefore increase the amount of cash, in Polish zloty and Russian ruble, that must be generated in order to pay principal and interest on our New Notes.

The impact of translation could have a material adverse effect on our reported earnings. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rates which could result in a significant impact in the results of our operations as of September 30, 2012 on a pro forma basis giving effect to the Exchange Offers.

Foreign exchange rates may be influenced by various factors, including changing supply and demand for a particular currency; government monetary policies (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or on investment by residents of a country in other countries); changes in trade balances; trade restrictions; and currency devaluations and revaluations. Additionally, governments from time to time intervene in currency markets, directly or by regulation, in order to influence prices. These events and actions are unpredictable and could materially and adversely impact our business, results of operations and financial condition.

Weather conditions may have a material adverse effect on our sales or on the price of grain used to produce spirits.

We operate in an industry where performance is affected by the weather. Extreme changes in weather conditions may result in lower consumption of vodka and other alcoholic beverages. In particular, unusually cold spells in winter or high temperatures in the summer can result in temporary shifts in customer preferences and impact demand for the alcoholic beverages we produce and distribute. Similar weather conditions in the future may have a material adverse effect on our sales which could affect our business, financial condition and results of operations. In addition, inclement weather may affect the availability of grain used to produce raw spirit, which could result in a rise in raw spirit pricing that could negatively affect margins and sales.

We are subject to extensive government regulation and are required to obtain and renew various permits and licenses; changes in or violations of laws or regulations or failure to obtain or renew permits and licenses could materially adversely affect our business and profitability.

Our business of producing, importing and distributing alcoholic beverages in Poland and Hungary is subject to regulation by national and local governmental agencies and European Union authorities. In addition, our business in Russia is subject to extensive regulation by Russian authorities. These regulations and laws address such matters as licensing and permit requirements, regarding the production, storage and import of alcoholic products; competition and anti-trust matters; trade and pricing practices; taxes; distribution methods and relationships; required labeling and packaging; advertising; sales promotion; and relations with wholesalers and retailers. Loss of production capacity due to regulatory issues can negatively affect our sales and increase our operating costs as we attempt to increase production at other facilities during that time to offset the lost production. It is possible that these and other similar issues will adversely impact our sales and operating costs. Additionally, new or revised regulations or requirements or increases in excise taxes, customs duties, income taxes, or sales taxes could materially adversely affect our business, financial condition and results of operations.

In addition, we are subject to numerous environmental and occupational, health and safety laws and regulations in the countries in which we operate. We may incur significant costs to maintain compliance with evolving environmental and occupational, health and safety requirements, to comply with more stringent enforcement of existing applicable requirements or to defend against challenges or investigations, even those without merit. Future legal or regulatory challenges to the industry in which we operate or our business practices and arrangements could give rise to liability and fines, or cause us to change our practices or arrangements, which could have a material adverse effect on us, our revenues and our profitability.

Governmental regulation and supervision as well as future changes in laws, regulations or government policy (or in the interpretation of existing laws or regulations) that affect us, our competitors or our industry generally, strongly influence our viability and how we operate our business. Complying with existing laws, regulations and government policy is burdensome, and future changes may increase our operational and administrative expenses and limit our revenues.

Additionally, governmental regulatory and tax authorities have a high degree of discretion and may at times exercise this discretion in a manner contrary to law or established practice. Such conduct can be more prevalent in jurisdictions with less developed or evolving regulatory systems like Russia. Our business would be materially and adversely affected if there were any adverse changes in relevant laws or regulations or in their interpretation or enforcement. Our ability to introduce new products and services may also be affected if we cannot predict how existing or future laws, regulations or policies would apply to such products or services.

We are subject to Russian regulatory requirements that we obtain bank guarantees for the payment of statutory excise duties, the loss of which would have a material adverse impact on our business and financial condition.

Under Russian law, Russian manufacturers of alcohol and excisable ethanol containing products, prior to purchasing the ethanol for the purposes of manufacturing of alcohol and excisable ethanol containing products, are required to make an advance payment of the applicable statutory excise duty to the state budget in the Russian Federation. The statutory excise duty is to be made on the basis of the total volume of the alcohol / ethanol containing products to be purchased (transferred) by the manufacturers within the tax period following the current tax period.

In order to be exempted from making an advance payment of the applicable statutory excise duty, the manufacturers shall submit to the tax authority of the place of registration of the manufacturers a bank guarantee issued by the relevant bank on behalf of the manufacturer and notify such tax authority of the exemption from the obligation to make the advance payment of the applicable statutory excise duty. A bank guarantee and a notice of exemption from making an advance payment of excise duty, must be submitted to the tax authority not later than on the 18th day of the current tax period.

The loss of a bank guarantee to pay the statutory excise duty will prevent our ability to purchase ethanol, a key component of our manufactured products and, thus, would have a material adverse impact on our business operations and future prospects.

We own and license trademarks (for, among other things, our product names and packaging) and other intellectual property rights that are important to our business and competitive position, and we endeavor to protect them. However, we cannot assure you that the steps we have taken or will take will be sufficient to protect our intellectual property rights or to prevent others from seeking to invalidate our trademarks or block sales of our products as a violation of the trademarks and intellectual property rights of others. In addition, we cannot assure you that third parties will not infringe on or misappropriate our rights, imitate our products, or assert rights in, or ownership of, trademarks and other intellectual property rights of ours or in marks that are similar to ours or marks that we license or market. In some cases, there may be trademark owners who have prior rights to our marks or to similar marks. Moreover, Russia generally offers less intellectual property protection than in Western Europe or North America. We are currently involved in opposition and cancellation proceedings with respect to trademarks similar to some of our brands and other proceedings, both in the Poland and elsewhere. If we are unable to protect our intellectual property rights against infringement or misappropriation, or if others assert rights in or seek to invalidate our intellectual property rights, this could materially harm our future financial results and our ability to develop our business.

We have incurred, and may in the future incur, impairment charges on our other trademarks and goodwill

At September 30, 2012, the Company had goodwill and other intangible assets of $1,193.7 million which constituted 60% of our total assets. While we believe the estimates and judgments about future cash flows used in the goodwill impairment tests are reasonable, we cannot provide assurance that future impairment charges will not be required if the expected cash flow estimates as projected by management do not occur, especially if an economic recession occurs and continues for a lengthy period or becomes severe, or if acquisitions made by the Company fail to achieve expected returns. We incurred impairment charges in 2011 and each of the preceding two years and we expect to recognize a significant impairment of intangible assets for the fourth quarter of 2012. Additional impairment charges related to our goodwill and other intangible assets could have a material adverse effect on our financial position and results of operations.

Our import contracts and agency brands contracts and licenses may be terminated.

As a leading importer of major international brands of alcoholic beverages in Poland and Hungary, we have been working with the same suppliers in those countries for many years and either have verbal understandings or written distribution agreements with them. In addition, we have distribution contracts in Russia through Whitehall. Where a written agreement is in place, it is usually valid for between one and five years and is terminable by either party on three to six months’ notice.

Although we believe we are currently in compliance with the terms and conditions of our import and distribution agreements, there is no assurance that all our import agreements will continue to be renewed on a regular basis, or that, if they are terminated, we will be able to replace them with alternative arrangements with other suppliers. Moreover, our ability to continue to distribute imported products on an exclusive basis depends on some factors which are out of our control, such as ongoing consolidation in the wine, beer and spirit industry worldwide, or producers’ decisions from time to time to change their distribution channels, including in the markets in which we operate. Additionally, in the event the CEDC, CEDC FinCo and/or CEDC FinCo LLC commence bankruptcy cases to seek confirmation of the Plan of Reorganization, import contract counterparties with our subsidiaries may seek to terminate such contracts due to such bankruptcy filing(s).

Further, in the event of any filing under Chapter 11 for bankruptcy protection, our agency brand contracts and licenses may be subject to termination by the counterparties. The termination of these agency brands contracts or licenses would have a material adverse impact on our business and results of operations.

Our business, results of operations and financial condition may be adversely affected if we undertake acquisitions of businesses that do not perform as we expect or that are difficult for us to integrate.

At any particular time, we may be in various stages of assessment, discussion and negotiation with regard to one or more potential acquisitions, not all of which will be consummated. We make public disclosure of pending and completed acquisitions when appropriate and required by applicable securities laws and regulations.

Acquisitions involve numerous risks and uncertainties. If we complete one or more acquisitions, our results of operations and financial condition may be affected by a number of factors, including the failure of the acquired businesses to achieve the financial results we have projected in either the near or long term; the assumption of unknown liabilities; the fair value of assets acquired and liabilities assumed; the difficulties of imposing adequate financial and operating controls on the acquired companies and their management and the potential liabilities that might arise pending the imposition of adequate controls; the challenges of preparing and consolidating financial statements of acquired companies in a timely manner; the difficulties in integration of the operations, technologies, services and products of the acquired companies; and the failure to achieve the strategic objectives of these acquisitions. In addition, we may acquire a significant, but non-controlling, stake in a business, which could expose us to the risk of decisions taken by the acquired business’ controlling shareholder. Acquisitions in developing economies, such as Russia, involve unique risks in addition to those mentioned above, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political, and regulatory risks associated with specific countries.

We have acquired businesses in Russia and have experienced some of these risks, including difficulties in obtaining relevant financial information, hiring and retaining key management, and incurring significant losses and impairment charges. We cannot assure you that we will not experience the same or similar issues in the future.

Future acquisitions or mergers may result in a need to issue additional equity securities, spend our cash, or incur debt, liabilities or amortization expenses related to intangible assets, any of which could reduce our profitability.

Sustained periods of high inflation in Russia may materially adversely affect our business

Russia has experienced periods of high levels of inflation since the early 1990s. Despite the fact that inflation has remained relatively stable in Russia during the past few years, our profit margins from our Russian business could be adversely affected if we are unable to sufficiently increase our prices to offset any significant future increase in the inflation rate.

The developing legal system in Russia creates a number of uncertainties that could have a materially adverse effect on our business

Russia is still developing the legal framework required to support a market economy, which creates uncertainty relating to our Russian business. We have limited experience operating in Russia, which could increase our vulnerability to the risks relating to these uncertainties. Risks related to the developing legal system in Russia include:

The recent nature of much of Russian legislation, the lack of consensus about the scope, content and pace of economic and political reform and the rapid evolution of this legal system in ways that may not always coincide with market developments place the enforceability and underlying constitutionality of laws in doubt and result in ambiguities, inconsistencies and anomalies. Any of these factors could have a material adverse effect on our Russian business.

The tax system in Russia is unpredictable and gives rise to significant uncertainties, which complicate our tax planning and decisions relating to our Russian businesses. Tax laws in Russia have been in force for a relatively short period of time as compared to tax laws in more developed market economies and we have less experience operating under Russian tax regulations than those of other countries.

Russian companies are subject to a broad range of taxes imposed at the federal, regional and local levels, including but not limited to value added taxes, excise duties, profit taxes, payroll-related taxes, property taxes, and taxes or other liabilities related to transfer pricing and other taxes. Russia’s federal and local tax laws and regulations are subject to frequent change, varying interpretations and inconsistent or unclear enforcement. During the peak of our 2010 Christmas production season, we were unable to obtain excise stamps from Russian authorities to be used at our largest production plant in Russia due to an administrative issue, over usage of old stamps, that blocked us from obtaining new excise stamps. Excise stamps are typically purchased every two to three weeks from the Russian authorities and are required to be purchased prior to the production of any vodka. Without these stamps, which must be affixed to each container of an alcoholic beverage exceeding 9% alcohol by volume produced in Russia, this plant was unable produce vodka during the peak of our production season. This loss of production capacity negatively affected our sales and increased our costs as we attempted to increase production at other facilities to offset the lost production. It is possible that we could have similar issues in the future that will adversely impact our sales and costs.

In addition, it is not uncommon for differing opinions regarding legal interpretation to exist between companies subject to such taxes, ministries and organizations of the Russian government and different branches of the Russian government such as the Federal Tax Service and its various local tax inspectorates, resulting in uncertainties and areas of conflict. Tax declarations are subject to review and investigation by a number of tax authorities, which are enabled by law to impose penalties and interest charges. The fact that a tax declaration has been audited by tax authorities does not bar that declaration, or any other tax declaration applicable to that year, from a further tax review by a superior tax authority during a three-year period. As previous audits do not exclude subsequent claims relating to the audited period, the statute of limitations is not entirely effective. In some instances, even though it may potentially be considered unconstitutional, Russian tax authorities have applied certain taxes retroactively. Within the past few years the Russian tax authorities appear to be taking a more aggressive position in their interpretation of the legislation and assessments, and it is possible that transactions and activities that have not been challenged in the past may be challenged. As a result, significant additional taxes, penalties and interest may be assessed. In addition, our Russian business is and will be subject to periodic tax inspections that may result in tax assessments and additional amounts owed by us for prior tax periods. Uncertainty relating to Russian transfer pricing rules could lead tax authorities to impose significant additional tax liabilities as a result of transfer pricing adjustments or other similar claims, and could have a material adverse effect on our Russian businesses and our company as a whole.

Frequent changes in Polish tax regulations may have an adverse effect on our results of operations and financial conditions.

The Polish tax system is characterized by instability. Tax regulations are frequently amended, often to the disadvantage of taxpayers. Tax laws in Poland may also need to be amended in order to implement new European Union legislation. These frequent changes in tax regulations have had and may in the future have negative effects on our business, financial condition, results of operations and prospects. Further, the lack of stability in the Polish tax regulations may hinder our ability to effectively plan for the future and to implement our business plan. The instability of the Polish tax system stems not only from changes in law but also from reliance by tax regulators on court implementations, which are also subject to potential changes and reversal.

Continued significant increases in excise tax in Russia may either reduce overall demand for vodka or reduce our margins.

In January 2013, excise taxes for above 9% alcohol in Russia were increased by 33%. Excise taxes are scheduled to be increased by an additional 25% in July 2014. Excise tax increases require us to raise prices which could in turn reduce demand for our products as price-sensitive consumers shift to lower cost products. In addition, because our rebates to customers are based on a percentage of gross sales revenue, an increase in excise tax without a corresponding price increase will negatively impact our gross margins.

We may be required to seek additional financing to meet our future capital needs and our failure to raise capital when needed could harm our competitive position, business, financial condition and results of operations.

From time to time, our business may require additional capital. In the future, it is possible that we will be required to raise additional funds through public or private financings, collaborative relationships or other arrangements. Global credit markets and the financial services industry have been experiencing a period of unprecedented turmoil, characterized by the bankruptcy, failure or sale of various financial institutions and an unprecedented level of intervention from the U.S. and other governments. These events have led to unparalleled levels of volatility and disruption to the capital and credit markets and have significantly adversely impacted global economic conditions, resulting in additional, significant recessionary pressures and further declines in investor confidence and economic growth. Despite significant government intervention, global investor confidence remains low and credit remains relatively scarce. These disruptions in the financial markets, including the bankruptcy and restructuring of certain financial institutions, may adversely impact the current availability of credit and the availability and cost of credit in the future. Accordingly, if we need to seek additional funding, we may be significantly reduced in our ability to attract public or private financings or financial partners or relationships as a source of additional capital. In addition, this additional funding, if needed, may not be available on terms attractive to us, if at all. Furthermore, any additional debt financing, if available, may involve restrictive covenants that could restrict our ability to raise additional capital or operate our business. Our failure to raise capital when needed could harm our competitive position, business, financial condition and results of operations.

The Company and certain of its officers and directors were named as parties in class action lawsuits which could be costly, protracted and divert management’s attention, and harm our business.

On October 24, 2011, a class action complaint titled Steamfitters Local 449 Pension Fund vs. Central European Distribution Corporation, et al., was filed in the United States District Court, District of New Jersey on behalf of a putative class of all purchasers of our common stock from August 5, 2010 through February 28, 2011 against us and certain of our officers. The complaint seeks unspecified money damages and alleges violations of federal securities law in connection with alleged materially false and misleading statements and/or omissions regarding our business, financial results and prospects in our public statements and public filings with the SEC for the second and third quarters of 2010, relating to declines in our vodka portfolio, our need to take an impairment charge relating to the deterioration in fair value of certain of our brands in Poland and negative

financial results from the launch of Żubrówka Biała. Subsequent to the above complaint, a second, substantially similar class action complaint titled Tim Schuler v. Central European Distribution Corporation, et al., was filed in the same court. By court orders dated August 22, 2012, the Steamfitters action and the Schuler action were consolidated and are now proceeding in the District of New Jersey under the caption In re Central European Distribution Corp. Securities Litigation, 11-cv-6247 (JBS-KMW). The Arkansas Public Employees Retirement System and the Fresno County Employees’ Retirement Association have been named lead plaintiffs in this action. Pursuant to an order of the court, the lead plaintiffs are expected to file an amended complaint by February 18, 2013. Defendants will then have 60 days to answer or move to dismiss the complaint.

On June 8, 2012, a purported securities fraud class action titled Grodko v. Central European Distribution Corporation, et al., was filed against the Company in the United States District Court for the Southern District of New York. The plaintiff in the lawsuit, who is suing purportedly on behalf of a class of all purchasers of the Company’s common stock between March 1, 2010 and June 4, 2012, alleges that the Company made false and/or misleading statements related to and/or failed to disclose that (1) the Company’s reported net sales in the years ended December 31, 2010 and 2011 were materially inflated; (2) as a result of a failure to account for retroactive trade rebates provided to the customers of Russian Alcohol, the Company anticipates restating its reported consolidated net sales, operating profit and related accounts for these periods; and (3) as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times. On August 7, 2012 a second, substantially similar class action complaint titled Puerto Rico System of Annuities and Pension for Teachers v. Central European Distribution Corporation, et al., was filed in the same court. By court orders dated September 4, 2012, the Grodko action and the Puerto Rico System of Annuities and Pension for Teachers action were transferred to the United States District Court for the District of New Jersey, where the actions have been consolidated and are proceeding under the caption Grodko v. Central European Distribution Corporation, et. al, No. 12-cv-5530 (JBS-KMW). The Puerto Rico System of Annuities and Pensions for Teachers has been named lead plaintiff in this Action. On February 15, 2013, the lead plaintiff filed an amended complaint and the defendants now have 30 days to answer or move to dismiss the complaint.

By complaints dated December 13, 2012, a single plaintiff filed two separate “derivative” actions against seven current and former CEDC directors, and against CEDC as a “nominal” defendant. The seven current and former directors named as defendants are: William Carey, Christopher Biedermann, David Bailey, Marek E. Forysiak, Markus Sieger, N. Scott Fine, Robert P. Koch and William S. Shanahan. These two actions were filed in the Superior Court of New Jersey, Burlington County, Chancery Division. Both complaints allege breaches of fiduciary duty, waste of corporate assets, and unjust enrichment. One complaint deals with alleged violations of the Foreign Corrupt Practices Act. The other complaint deals with alleged GAAP violations resulting from the Russian Alcohol Group trade rebate issue. The Company has until early April to respond to the complaints.

In December 2012, a shareholder filed a “books and records” complaint in Delaware state court, seeking to compel inspection of CEDC’s books and records. The case, captioned Khakshour v. Central European Distribution Corp., C.A. No. 8113-ML, is currently pending before the Court of Chancery.

Although we believe the allegations in the class and derivative complaints are without merit, these types of lawsuits can be protracted, time-consuming, distracting to management and expensive and, whether or not the claims are ultimately successful, could ultimately have an adverse effect on our business.

Our results are linked to economic conditions and shifts in consumer preferences, including a reduction in the consumption of alcoholic beverages, which could have an adverse effect on our financial performance.

Our results of operations are affected by the overall economic trends in Poland, Russia, Hungary and other regions in which we operate and sell our products, including the level of consumer spending, the rate of taxes levied on alcoholic beverages and consumer confidence in future economic conditions. The current market environment including consumer trends, raw spirit price increases, excise increases, volatility in energy costs, diminished liquidity and credit availability, weakened consumer confidence and falling consumer demand, have

contributed to lower levels of consumer spending, including consumption of alcoholic beverages. The effects of the global recession in many countries, including Russia and Hungary, have been quite severe, and it is possible that an economic recovery in those countries, and a related increase in consumer spending, will take longer to develop. While Poland’s GDP has increased in each of 2010 and 2011 and was forecasted to grow again in 2012, the Polish economy as well as the global economy continues to be volatile and forecasted growth in Poland may fail to materialize.

During the current period of volatility, reduced consumer confidence and spending may result in continued reduced demand for our products and may limit our ability to increase prices and finance marketing and promotional activities. These factors could have an adverse effect on our results of operations. For example, during 2011 the Company observed an overall market environment of declining vodka consumption and significant price sensitivities in its core markets of Poland and Russia. Additionally the Company experienced other key changes in market conditions, including changing of sales channel and product mix and market disruptions from relicensing in Russia. As such, the Company updated its goodwill impairment testing during the third quarter and fourth quarter of 2011 and took a charge of $930.1 million for goodwill impairment in Poland and Russia for the year. We also experienced the related underperformance of certain brands in Poland, primarily Bols Vodka, due to, among other factors, the movement of consumer purchasing from the sub-premium sector, where Bols Vodka is the leading brand, to the mainstream sector. As a result, the Company also took an impairment charge for certain Polish and Russian trademarks during the third quarter of 2011 of $127.7 million. Also, for example, due to the continued lower performance of certain brands as compared to our expectations in 2010, primarily Absolwent and Bols, we determined that the fair value of the trademarks related to these brands had deteriorated and recorded an impairment charge of $131.8 million during the fourth quarter of 2010 that included an impairment to the carrying values of our trademarks related predominantly to the Absolwent and Bols brand in Poland and an impairment charge of $20.3 million for the twelve months ended December 31, 2009 related to the Bols brand in Poland. We cannot assure you that we will not recognize further asset impairments or experience further declines in our financial performance in connection with continued market instability. A continued recessionary environment would likely make it more difficult to forecast operating results and to make decisions about future investments, and a major shift in consumer preferences or a large reduction in sales of alcoholic beverages could have a material adverse effect on our business, financial condition and results of operations.

Our business is subject to seasonality that may affect our quarterly operating results and impact the market price of our common stock.

Our business is dependent on weather conditions and subject to seasonality. Lower demand for vodka occurs during the first three fiscal quarters, which can result in seasonal financial results in certain markets in which we operate. Historically, sales in the fourth quarter have been significantly higher than in the other quarters of the year due to higher demand for vodka during the Christmas season. Results of a single financial quarter might therefore not be a reliable basis for the expectations of a full fiscal year and may not be comparable with the results in the other financial quarters. Seasonality effects may also increase our working capital requirements. In addition, any interruptions during our peak production season, such as those interruptions we experienced in the fourth quarter of 2010 in obtaining excise stamps from Russian authorities to produce and sell our product in Russia for a 14-day period, could materially adversely affect our business, financial condition and results of operations if they occur with unusual intensity or last for an extended period of time.

We have identified material weaknesses in our internal controls over financial reporting.

As a result of management’s assessment of our internal control over financial reporting as of December 31, 2011, management concluded that there were four material weaknesses in our internal control over financial reporting, specifically in relation to our financial statement closing process, the development of certain

management estimates, our internal controls with respect to the recording of retroactive trade rebates and trade marketing refunds at Russian Alcohol Group and our internal control over financial reporting regarding the implementation of our policy on compliance with applicable laws as of December 31, 2011. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. While we have identified four material weaknesses, we believe that our consolidated audited financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

While we are taking action to remediate our identified material weaknesses, the decentralized nature of our operations and the manual nature of many of our controls increases our risk of control deficiencies. No evaluation can provide complete assurance that our internal controls will detect or uncover all failures of persons within our company to disclose material information otherwise required to be reported. The effectiveness of our controls and procedures could also be limited by simple errors or faulty judgments. We may in the future identify material weaknesses or significant deficiencies in connection with our internal controls over financial reporting. Any future material weaknesses in internal control over financial reporting could result in material misstatements in our financial statements. Moreover, any future disclosures of additional material weaknesses, or errors as a result of those weaknesses, could result in a negative reaction in the financial markets if there is a loss of confidence in the reliability of our financial reporting. Management continues to devote significant time and attention to improving our internal controls, and we will continue to incur costs associated with implementing appropriate processes, which could include fees for additional audit and consulting services, which could negatively affect our financial condition and operating results.

The Public Company Accounting Oversight Board, or PCAOB, is currently unable to inspect the audit work and practices of auditors operating in Poland, including our auditor.

Auditors of U.S. public companies are required by law to undergo periodic PCAOB inspections that assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. Certain European Union, or EU, countries do not permit the PCAOB to conduct inspections of accounting firms established and operating in EU countries, even if they are part of major international firms. Accordingly, because our auditor is located in Poland, the PCAOB is prevented from inspecting our auditor. As a result, unlike the stockholders of most U.S. public companies, our stockholders are deprived of the possible benefits of such inspections, including an evaluation of our auditor’s performance of audits and its quality control procedures.

The following table sets forth CEDC’s and its consolidated subsidiaries’ cash and capitalization as of September 30, 2012 (i) on an actual basis and (ii) as adjusted to give pro forma effect to the Exchange Offers as if they had occurred on September 30, 2012. We reserve the right to modify certain components of the Exchange Offers. Any such modifications could cause the table presented below to change.

The information presented below should be read in conjunction with, and is qualified in its entirety by, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements incorporated by reference in this Offering Memorandum and Disclosure Statement. The pro forma adjustments relating to the Exchange Offers have been prepared on the basis of the following assumptions:

The Exchange Offers may not be consummated unless the related conditions are satisfied or waived. The pro forma information below assumes that all Existing Notes are tendered in the Exchange Offers.

Any Existing Notes that are validly tendered and exchanged pursuant to the Exchange Offers will be retired and cancelled. Accordingly, the Exchange Offers will not result in any cash proceeds to us. The proceeds of the RTL Investment will be used for payment of the cash consideration in the CEDC FinCo Exchange Offer.

The following table sets forth (i) the ratio of earnings to fixed charges on a consolidated basis and (ii) book value per share for each of the periods indicated. For the purposes of computing the ratio of earnings to fixed charges, earnings are defined as income before income taxes plus fixed charges. Fixed charges consist of interest expense (including capitalized interest) and the portion of rental expense that is representative of the interest factor.

The following summary unaudited pro forma condensed consolidated financial data for the fiscal year ended December 31, 2011, and as of and for the nine months ended September 30, 2012 have been derived by the application of pro forma adjustments to our historical consolidated financial statements included elsewhere in this Offering Memorandum and Disclosure Statement. The unaudited pro forma summary selected consolidated balance sheet as of September 30, 2012, gives effect to the exchange of the Existing Notes for New Secured Notes and New Common Stock, including fees and expenses, assuming that 100% of our outstanding Notes are exchanged for New Secured Notes and New Common Stock, as if all such transactions had occurred on September 30, 2012. The unaudited pro forma summary selected condensed consolidated statements of operations for the year ended December 31, 2011 and the nine months ended September 30, 2012, give effect to the foregoing transactions as if they had occurred on December 31, 2010.

The unaudited pro forma condensed consolidated financial data are presented for illustrative purposes only and are not necessarily indicative of the financial position or results of operations that actually would have been reported had the foregoing transactions been completed, nor are they indicative of our future financial position or results of operations.

The pro forma condensed consolidated financial data are unaudited and based on assumptions that we believe are reasonable and should be read in conjunction with “Capitalization” herein and our consolidated financial statements and related notes incorporated by reference herein. These assumptions include the following:

The pro forma condensed consolidated data assumes that all of the outstanding Existing 2013 Notes and Existing 2016 Notes will be tendered in the Exchange Offers.

You should read the following discussion and analysis of CEDC’s financial condition and results of operations together with CEDC’s consolidated financial statements and the related notes and other financial information included or incorporated by reference elsewhere in this Offering Memorandum and Disclosure Statement. Some of the information contained in this discussion and analysis or set forth elsewhere in this Offering Memorandum and Disclosure Statement, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should review “Risk Factors” and “Forward-Looking Statements” in this Offering Memorandum and Disclosure Statement for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

The Company is one of the world’s largest vodka producers and Central and Eastern Europe’s largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. During 2011, the Company continued its strategy of integrating the business in Russia following the buyout of the remaining stake in the Whitehall Group in the first quarter of 2011 where the Company took full economic and controlling ownership of the business. In addition, the Company continued to focus on developing sales volumes in its key markets of Poland and Russia. Overall, both the Polish and Russian vodka markets continued to see an overall market decline, however in Poland the Company was able to see year on year domestic volume growth for year ending December 31, 2011 of 33% primarily due to the continued success of its recently launched Żubrówka Biała brand. Additionally the Company also began to show progress in the higher margin flavored segment with a successful launch of Jeżówka and the re-launch of Soplica which grew by 27% during the fourth quarter of 2011. Total Russian volumes were down which was driven by lower domestic volumes partially offset by higher export volumes. On the domestic front, sales volumes for the year 2011 in Russia were down by 18% as compared to 2010. This was due to factors including an overall weak spirit market and the continued impact of the wholesaler relicensing process during the first three quarters, and market share losses to competitors during 2011. Finally spirit, which is the main ingredient in vodka production, continued to see higher price levels as compared to 2010, which together with higher levels of market investment resulted in a contraction of gross margins as compared to the prior year and impacted total gross margins by $36.7 million in 2011 as compared to the prior year.

A failure to make a payment of principal upon the maturity of the Existing 2013 Notes would result in an event of default under the Existing 2016 Notes ($957.4 million principal amount outstanding assuming an exchange rate of $1.3427 to €1.00, which reflects the trailing thirty day average exchange rate through February 22, 2013 as reported by Bloomberg Finance L.P.) and other indebtedness, which could lead to such debt being accelerated. In addition, we had $112.2 million outstanding under credit facilities as of February 13, 2013, and under most of these loan agreements if it is determined that a material adverse change has occurred, the loan agreement can be immediately terminated by the lending bank, and we do not have sufficient liquidity to repay our bank facilities if they were terminated. As a result of these considerations, the Company’s auditors’ report for the year ended December 31, 2011 expressed substantial doubt about the Company’s ability to continue as a going concern.

The failure to consummate the Exchange Offers could require us to file a petition for bankruptcy protection under Chapter 11 in the Bankruptcy Court and similar insolvency proceedings in the countries in which we operate, whether or not the Plan of Reorganization is approved by the holders of Existing Notes. See “Risk Factors—The Existing 2013 Notes mature on March 15, 2013. A failure to pay the outstanding principal amount under the Existing Notes when due would trigger an event default under the Existing 2016 Notes and other indebtedness.”

The Company restated its consolidated financial statements for the years ended December 31, 2011 and 2010. The restatement corrects certain accounting errors primarily related to the accounting for retroactive rebates provided to customers during those periods, accounting for revenue transactions, assets write offs, cut off errors and income taxes. The restatement also includes reclassifications of accounts payable for periods prior to 2011 to conform to the current presentation.

The restatement arose upon the following circumstances. The Company changed its senior management at its principal operating subsidiary in Russia, the Russian Alcohol Group (“RAG”), during April 2012. Following this change, senior Company management requested that the new management team review Russian Alcohol Group’s business operations and internal controls, including an assessment of the resources and needs of the corporate finance and reporting departments. Based on the preliminary findings of that review, senior management concluded that the Company’s financial statements for the years ended December 31, 2011 and 2010 should no longer be relied upon because of a failure to reflect the timely reporting of the full amount of retroactive trade rebates and trade marketing refunds provided to RAG’s customers in Russia.

Thereafter, the Audit Committee of the Company’s board of directors initiated an internal investigation, with the assistance of outside counsel and forensic accountants engaged by outside counsel, regarding the Company’s retroactive trade rebates, trade marketing refunds and related accounting issues. The Audit Committee, through its counsel, voluntarily notified the SEC of the investigation and is cooperating with the SEC. The Audit Committee has completed its accounting investigation, and has identified accounting irregularities at Russian Alcohol Group, which resulted in the understatement of retroactive trade rebates and trade marketing refunds, as well as certain other errors that were concealed from both the Company’s senior management and the independent auditors. Certain reclassifications have also been made to conform data for all periods presented with the current presentation.

As a result of the investigation, the Company has also determined that a control deficiency existed which contributed to the incorrect accounting for the Company’s retroactive trade rebates and trade marketing refunds for customers giving rise to the restatement and that this deficiency constituted a material weakness in internal control over financial reporting. In connection with the investigation, the Company’s management also identified a material weakness in the Company’s internal control over financial reporting regarding the implementation of our policy on compliance with applicable laws as of December 31, 2011. Furthermore, the Company has expanded certain disclosure items related to income and deferred taxes.

On February 24, 2011, a subsidiary of the Company, namely CEDC International Sp. z o.o., (“CEDC International”) entered into factoring arrangements (“Factoring Agreements”) with ING Commercial Finance Polska (“ING Polska”) for the sale up to 290.0 million Polish zlotys (approximately $91.3 million) of receivables. On January 1, 2012, the total limit under the Factoring Agreements was reduced from 290.0 million Polish zlotys ($91.3 million) to 250.0 million Polish zlotys ($78.7 million) and from March 1, 2012 it was further reduced to 220.0 million Polish zlotys ($69.2 million). The Factoring Agreements were to mature on April 30, 2012, however on April 25, 2012 the Company extended these agreements until September 30, 2012 with a further decrease of the total limit to 200.0 million Polish zlotys (approximately $62.9 million). On September 28,

2012 the Company further extended these agreements until December 31, 2012 with a decrease of the total limit to 170.0 million Polish zlotys (approximately $53.5 million). As of September 30, 2012, the total balance of receivables under factoring amounted to 95.9 million Polish zlotys (approximately $30.2 million) of the 170.0 million Polish zlotys limit available.

For the three and nine months ended September 30, 2012, CEDC International sold receivables in the amount of 282.3 million Polish zlotys ($88.8 million) and 979.7 million Polish zlotys ($308.3 million), respectively and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 2.8 million Polish zlotys ($0.8 million) and 9.1 million Polish zlotys ($2.7 million), respectively in respect of the non-recourse factoring.

Furthermore, CEDC International signed in June 2011 and in January 2012 factoring agreements with ING Polska and with Bank Handlowy w Warszawie Spółka Akcyjna (“Bank Handlowy”), respectively. These agreements allow CEDC International to sell to the banks receivables of three of CEDC International’s distributors named in these agreements. There is no financing limit in any of the two agreements. As a result of the agreement with ING Polska, in the three and nine month periods ended September 30, 2012 CEDC International sold receivables in the amount of 20.9 million Polish zlotys ($6.6 million) and 76.6 million Polish zlotys ($24.1 million), respectively and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 0.14 million Polish zlotys ($0.04 million) and 0.50 million Polish zlotys ($0.15 million). As a result of the agreement with Bank Handlowy, in the three and nine month periods ended September 30, 2012 CEDC International sold receivables in the amount of 21.1 million Polish zlotys ($6.6 million) and 65.3 million Polish zlotys ($20.5 million), respectively and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 0.10 million Polish zlotys ($0.03 million) and 0.3 million Polish zlotys ($0.09 million).

Additionally, in August 2012, CEDC International signed agreements with its distributor and Bank Zachodni WBK S.A. for non-recourse factoring of the receivables from the distributor and its related parties. There is no financing limit fixed in these agreements. As a result of these agreement, in the three and nine month period ended September 30, 2012 CEDC International sold receivables in the amount of 129.9 million Polish zlotys ($40.9 million) and recognized a loss on the sale in the statement of operations and comprehensive income in the amount of 1.3 million Polish zlotys ($0.4 million). CEDC International has no continuing involvement with the sold non-recourse receivables.

As of September 30, 2012, the liabilities from factoring with recourse amounted to $1.7 million and are included in the short term bank loans in the balance sheet. Corresponding receivables from factoring with recourse are presented under accounts receivable in the balance sheet.

ING Polska has notified us that they will not extend the Factoring Agreements beyond February 2013 and no new receivables will be factored beyond January 2013.

On July 9, 2012, the Company entered into an amended stock purchase agreement (the “Amended SPA”) with RTL, which amended and restated, in its entirety, the securities purchase agreement, dated April 23, 2012 between the Company and RTL (the “SPA”). The Amended SPA was terminated on January 21, 2013.

Pursuant to the Amended SPA, at the initial closing (the “Initial Closing”), which occurred on May 4, 2012 and was concluded on May 7, 2012, RTL purchased for cash (i) 5,714,286 shares (the “Initial Shares”) of common stock, par value $0.01 per share, of the Company for an aggregate purchase price of $30 million, or $5.25 per share, and (ii) an aggregate principal amount of $70 million RTL Notes. The Company has paid an aggregate amount of $1.05 million of interest on the RTL Notes. The proceeds (net of fees and expenses) of the

issuance of the Initial Shares and the RTL Notes had been required to be used by the Company over a period of time to repurchase a portion of the Existing 2013 Notes. Additionally, in accordance with the Amended SPA, on December 19, 2012, the Company issued 3 million shares of common stock to RTL for no additional purchase price.

Concurrently with the Amended SPA, the Company also entered into an amended and restated governance agreement (the “Amended Governance Agreement”) with RTL, which amended and restated, in its entirety, the governance agreement, dated April 23, 2012 between the Company and RTL. Under the Amended Governance Agreement, RTL obtained various governance, veto and other rights related to its investment in the Company. The Amended Governance Agreement was terminated on January 21, 2013.

Concurrently with the Amended SPA, the Company also entered into the Amended Voting Agreement (the “Amended Voting Agreement”), which reaffirmed the obligations of RTL and each member of the board of directors, respectively, to vote in favor of certain financing transactions. The Amended Voting Agreement was terminated on January 21, 2013.

On December 28, 2012, CEDC and RTL entered into the Term Sheet. The Term Sheet terminated the Amended SPA, Amended Governance Agreement and the Amended Voting Agreement, and both the Company and RTL agreed to release certain claims and causes of action arising under circumstances existing prior to the date of the Term Sheet. In addition, the Term Sheet released $50 million of funds RTL invested in the Company at the Initial Closing, constituting the remaining funds held by the Company after the repurchase of Existing 2013 Notes, for general corporate purposes. CEDC also agreed to convert $50 million in RTL Notes held by RTL into a term loan under the RTL Credit Facility.

The Term Sheet also addresses certain matters regarding management of the Company, including the following: (1) the formation of an operational management committee of the board of directors of the Company to oversee the day-to-day business and operations of the Company (including operational finance); (2) the formation of a restructuring committee of the board of directors responsible for all matters related to any restructuring of the Company’s capital; (3) the appointment of Grant Winterton as Chief Executive Officer of the Company, effective as of January 10, 2013; and (4) the Company shall use its best efforts to hold its annual general meeting of stockholders as soon as practicable. Notwithstanding the provisions in the Term Sheet related to the election of one of two alternative directors at the annual general meeting, the Company and RTL have mutually agreed to nominate Joseph Farnan for election as director of the Company.

RTL also agreed to forbear from exercising any remedies with respect to any event of default under the RTL Notes which relates to or arise out of circumstances existing prior to the date of the Term Sheet. RTL will be permitted to exercise its remedies and the forbearance will automatically terminate upon the earliest to occur of (i) any acceleration of any other indebtedness of the Company, (ii) the maturity of the Company’s Existing 2013 Notes and (iii) the occurrence of any other default under the RTL Notes.

In addition, in light of the termination of the Amended Governance Agreement, RTL and the Company agreed to maintain the corporate opportunity provisions that had been included in the Amended Governance Agreement. Consequently, RTL and the Company agreed that the doctrine of corporate opportunity would not apply to RTL, any director nominated by RTL or any affiliate of RTL. If RTL (or an affiliate) acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company, RTL will not (A) have any duty to communicate or offer such opportunity to the Company and (B) to

the fullest extent permitted by law, will not be liable to the Company or to the Company’s stockholders for breach of any fiduciary or other duty by reason of the fact that RTL or any affiliate, including directors nominated by RTL, pursues or acquires for, or directs such opportunity to, itself or another person or does not communicate such opportunity or information to the Company.

The board of directors recognizes that actual or potential conflicts of interest may arise from time to time resulting from Mr. Roustam Tariko’s position on the board of directors and management of the Company, on the one hand, and his position as controlling stockholder of RTL and as a major stockholder in the Company and as a significant holder of Existing 2013 Notes, on the other. The board of directors seeks to mitigate any conflict of interest that may arise in the following manners: (i) the board of directors has formed the Russian Standard Relationship Committee to negotiate and evaluate future transactions with RTL. Messrs. Fine and Bailey, each of whom is an “independent director” under Rule 5605(a)(2) of the NASDAQ Marketplace Rules and none of whom have any prior relationship with RTL, serve on the Russian Standard relationship committee. The board of directors has also formed a special committee to advise in all instances where a conflict-of-interest between the Company and RTL may arise. Messrs. Fine, Bailey, Farnan and Sieger, each of whom not affiliated with RTL, constitute the special committee of the board of directors; (ii) Mr. Tariko will report regularly on any transactions that involve actual or potential conflicts of interest and in the event that Mr. Tariko and/or the Russian Standard relationship committee believe a review of any such transaction is appropriate they will be permitted to conduct such a review.

Pursuant to the Term Sheet, CEDC and RTL have entered into the RTL Credit Facility. Pursuant to the terms of the RTL Credit Facility, $50 million aggregate principal amount of the RTL Notes was converted into a new term loan from RTL to CEDC in an equal principal amount of $50 million (the “Conversion”) and the aggregate outstanding principal amount of RTL Notes was reduced to $20 million.

Most of CEDC’s subsidiaries are guarantors under the RTL Credit Facility. The RTL Credit Facility benefits from security granted by certain CEDC subsidiaries in Russia over inventory of specified brands with an aggregate value of goods in circulation at any time not less than 2,170,000,000 Russian rubles (approximately $70 million) calculated by reference to the balance sheet value of the goods (excluding VAT).

A CEDC subsidiary, Sibirsky LVZ, and Russian Standard Bank have entered into a 465 million Russian ruble (approximately $15 million) credit facility (the “Sibirsky Credit Facility”). The Sibirsky Credit Facility provides for a commitment of 465 million Russian rubles and will have a maturity date of one year with an interest rate fixed at 12% per annum, to be paid quarterly. The terms of the Sibirsky Credit Facility are described in detail in “Description of Other Indebtedness”. As of February 27, 2013, Sibirsky had drawn down all 465 million Russian rubles under the Sibirsky Credit Facility.

On January 29, 2013, RTL sought to exercise its claimed put right under Section 8.13 of the Amended SPA. The Company asserts that this put right, and all other provisions in the Amended SPA and all related agreements, have been terminated and may no longer be exercised by RTL. RTL, through its beneficial ownership report filed on Schedule 13D/A, has expressed disagreement with the Company’s position. The Company and RTL subsequently entered into a forbearance agreement dated February 6, 2013, pursuant to which the parties agreed that neither will pursue any further action in respect of the put right notice for a period ending April 30, 2013, after which either party may assert any and all remedies available to it.

On May 23, 2008, the Company and certain of its affiliates entered into, and closed upon, a Share Sale and Purchase Agreement and certain other agreements whereby the Company acquired shares representing 50% minus one vote of the voting power, and 80% of the economic interests in the Whitehall Group (“Whitehall”).

On February 7, 2011, the Company entered into a definitive Share Sale and Purchase Agreement and registration rights agreement, in accordance with the terms that were agreed by the parties on November 29, 2010, and disclosed in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 3, 2010. Pursuant to these agreements, among other things and upon the terms and subject to the conditions contained therein, we received the remaining 20% of the economic interest and 50% plus one vote of the voting interest in Whitehall previously not owned by us, as well as the global intellectual property rights for the Kauffman Vodka brand. In exchange we paid total consideration of $93.2 million including $17.5 million for the intellectual property rights for the Kauffman Vodka brand.

As a result of this transaction, the Company acquired 100% of the voting and economic interest in Whitehall and changed the accounting treatment for interest in Whitehall from the equity method of accounting to consolidation starting from February 7, 2011.

Substantially all of Company’s operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is due to the movement of the average exchange rate used to restate the statements of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint.

Because the Company’s reporting currency is the U.S. dollar, the translation effects of fluctuations in the exchange rate of our functional currencies have impacted the Company’s financial condition and results of operations and have affected the comparability of our results between financial periods.

The Company also has borrowings including its Existing 2013 Notes and Existing 2016 Notes that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value, respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rates which could result in a significant impact in the results of the Company’s operations.

The Company has continued to observe an overall market environment of declining vodka consumption and significant price sensitivities in its core markets of Poland and Russia. Additionally the Company experienced

other key changes in market conditions, including changing of sales channel and product mix and market disruptions from relicensing in Russia. As such the Company determined that an impairment indicator exists, performed a goodwill impairment test during the third quarter of 2011 and fourth quarter of 2011, and took an impairment charge of $930.1 million related to its core businesses in Poland and Russia during 2011. We also experienced related underperformance of certain brands in Poland, primarily Bols Vodka, due to among other factors the movement of consumer purchasing from the sub-premium sector, where Bols Vodka is the leading brand, to the mainstream sector. Therefore, the Company also took an impairment charge for trademarks during the third quarter of 2011 of $127.7 million.

We also have experienced impairment charges in prior periods, which affect our period to period comparability. Due to the continued lower performance of certain brands as compared to our expectations in 2010, primarily Absolwent and Bols, we determined that the fair value of the trademarks related to these brands had deteriorated and recorded an impairment charge of $131.8 million during the fourth quarter of 2010 that included an impairment to the carrying values of our trademarks related predominantly to the Absolwent and Bols brands in Poland and an impairment charge of $20.3 million for the twelve months ended December 31, 2009 related to the Bols brand in Poland.

The Company expects to recognize significant impairment of intangible assets for the fourth quarter of 2012. The Company is also confirming new methodologies in the recognition of costs in its projected cashflows. We cannot assure you that we will not recognize further asset impairments or experience declines in our financial performance in connection with the ongoing challenges that we are facing in our core markets.

Nine months ended September 30, 2012 compared to nine months ended September 30, 2011

A summary of the Company’s operating performance (expressed in thousands except per share amounts) is presented below.

Net sales represent total sales net of all customer rebates, excise tax on production and imports and value added tax. Total net sales decreased by approximately 4.0%, or $21.8 million, from $546.3 million for the nine months ended September 30, 2011 to $524.5 million for the nine months ended September 30, 2012.

The decrease was driven by the impact of foreign exchange translation of $53.4 million and lower local currency sales value of $26.1 million. Decrease was partially offset by the consolidation of Whitehall only for eight months in 2011 comparing to full three quarters in 2012 of $6.5 million, increase in export sales of $6.3 million and increase of $44.8 due to price mix. In Russia although sales volumes were lower, this was offset by improved pricing and lower trade marketing spend in the quarter.

Our business split by segment, which represents our primary geographic locations of operations, Poland, Russia and Hungary, is shown below:

Sales for Poland decreased by $3.7 million from $163.5 million for the nine months ended September 30, 2011 to $159.8 million for the nine months ended September 30, 2012. This decrease was driven mainly by a weaker Polish zloty against the U.S. dollar which accounted for approximately $21.6 million of sales in U.S. dollar terms offset by higher volume sales of $18.0 million. In 2012, the Company continued to see strong demand for its Żubrówka Biała, as well as higher margin flavored vodkas including Soplica.

Sales for Russia decreased by $14.7 million from $362.4 for the nine months ended September 30, 2011 to $347.7 for the nine months ended September 30, 2012. For the first half of the year sales for Russia remained stable and in the third quarter sales for Russia decreased by $14.7 million. This decline resulted from the impact of foreign exchange translation of $12.7 million, higher value of export sales of $4.9 million due to the increased lower value sales to the Ukraine partially offset by domestic sales value decrease of $6.9 million.

Sales for Hungary decreased by $3.4 million from $20.5 million for the nine months ended September 30, 2011 to $17.1 million for the nine months ended September 30, 2012 resulting primarily from weakening of the Hungarian forint against the U.S. dollar.

Total gross profit increased by approximately 3.4%, or $7.0 million, to $212.5 million for the nine months ended September 30, 2012, from 205.5 million for the nine months ended September 30, 2011. Gross profit margins as a percentage of net sales increased by 2.9 percentage points from 37.6% to 40.5% for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011. The improvement in gross margin percentage was driven by a number of factors including improved product and channel mix in Poland and price increases taken in Russia. Part of the improvement in pricing coming from the Russian market was offset by the year on year growth of spirit pricing which resulted in approximately $11.3 million of additional cost in the nine months period of 2012.

Operating expenses consist of selling, general and administrative, or “S,G&A” expenses, advertising expenses, non-production depreciation and amortization, and provision for bad debts. Total operating expenses

decreased by approximately 77.8%, or $659.6 million, from $847.5 million for the nine months ended September 30, 2011 to $187.9 million for the nine months ended September 30, 2012. This change includes a one-time gain in the nine month period ended September 30, 2011, amounting to $7.9 million in operating income based on the remeasurement of previously held equity interests in Whitehall to fair value and $674.5 of impairment charge. For comparability of costs between periods, items of operating expenses excluding this fair value adjustment and impairment charge are shown separately in the table below. Operating expenses, excluding fair value adjustments and impairment charge as a percent of net sales increased from 33.1% for the nine months ended September 30, 2011 to 35.8% for the nine months ended September 30, 2012. Operating expenses, net of fair value adjustments and impairment charge increased by $7.1 million, from $180.8 million for the nine months ended September 30, 2011 to $187.9 million for the nine months ended September 30, 2012.

S,G&A consists of salaries, warehousing and transportation costs, administrative expenses and bad debt expense. S,G&A expenses increased by $6.9 million, from $156.0 million for the nine months ended September 30, 2011 to $162.9 million for the nine months ended September 30, 2012. The increase in S,G&A is primarily due to the inclusion of full three quarters of Whitehall in 2012 of $4.0 million, redundancy costs of $7.5 million, $13.5 million of additional legal costs incurred in the third quarter 2012 related to restatement of financial statements for 2010 and 2011 and additional bad debt provision in Russia of $3.2 million offset by the impact of weaker local currencies against the U.S. dollar.

Marketing expenses increased by $1.7 million, from $16.4 million for the nine months ended September 30, 2011 to $18.1 million for the nine months ended September 30, 2012 mainly due to higher marketing spending in Russia and Ukraine.

Depreciation and amortization decreased by $1.6 million, from $8.5 million for the nine months ended September 30, 2011 to $6.9 million for the nine months ended September 30, 2012.

Total operating income increased by approximately 103.8%, or $666.5 million, from a loss of $641.9 million for the nine months ended September 30, 2011 to $24.6 million income for the nine months ended September 30, 2012, which is primarily driven by impairment charge of $674.5 million charged in 2011. The table below summarizes the segmental split of operating profit.

Underlying operating income in Poland excluding fair value adjustments increased by approximately 29.7%, or $6.3 million, from $21.2 million for the nine months ended September 30, 2011 to $27.5 million for the nine months ended September 30, 2012. The operating income in Russia excluding fair value adjustments increased by $14.2 million from $6.0 million for the nine months ended September 30, 2011 to $20.2 million for the nine months ended September 30, 2012. The changes in operating income in both of these segments were driven by all of the factors described above.

General corporate overhead increased by $19.8 million, from $3.9 million for the nine months ended September 30, 2011 to $23.7 million for the nine months ended September 30, 2012. This increase mainly was driven by $12.6 million of additional costs related to restatement and $4.4 million of redundancy costs.

Total interest expense decreased by approximately 6.2%, or $5.2 million, from $83.3 million for the nine months ended September 30, 2011 to $78.1 million for the nine months ended September 30, 2012. This decrease is mainly a result of the weaker euro as compared to the U.S. dollar, as a significant portion of the long-term borrowings are denominated in euro.

The Company recognized $80.6 million of unrealized foreign exchange rate gains in the nine months ended September 30, 2012, primarily related to the impact of movements in exchange rates on our U.S. dollar and euro denominated liabilities, as compared to $120.8 million of expense in the nine months ended September 30, 2011. These gains resulted mainly from the appreciation of the Polish zloty and Russian ruble against the U.S. dollar and euro. During the nine months ended September 30, 2012, the Company recognized $1.9 million gain on debt extinguishment related to repurchased part of Existing 2013 Notes.

Total other non-operating expenses decreased by $3.3 million, from $14.3 million for the nine months ended September 30, 2011 to $11.0 million for the nine months ended September 30, 2012. This decrease is mainly a result of write-off of assets held for sale in 2011, which represent $7.4 million of the decrease. The decrease was

offset by higher costs related to factoring of receivables in 2012, which represent $6.5 million of expense for the nine months ended September 30, 2012 comparing to $3.7 million for the nine months ended September 30, 2011.

Our effective tax rate for the nine months ended September 30, 2012 was 48.6% as compared to an average blended statutory rate of 21%. The difference between the statutory and effective tax rates was due primarily to permanent tax differences related to valuation allowances recorded against tax loss carry forwards that the Company believes will not be utilized in the future.

Equity in net losses for the nine months ended September 30, 2011 include the Company’s proportional share of net income from its investment in the Moet Hennessey Russia Joint Venture for the period from January 1, 2011 to March 30, 2011 and Whitehall for the period from January 1, 2011 to February 7, 2011.

A summary of the Company’s operating performance (expressed in thousands except per share amounts) is presented below.

Net sales represent total sales net of all customer rebates, excise tax on production and imports and value added tax. Total net sales increased by approximately 18.2%, or $127.5 million, from $702.1 million for the year ended December 31, 2010 to $829.6 million for the year ended December 31, 2011. The overall increase was driven primarily by the consolidation of Whitehall starting from February of 2011, as it was not consolidated in 2010, giving additional $154.6 million. Excluding the impact of sales increase from the consolidation of Whitehall our sales value decreased by $27.1 million which was primarily a function of lower domestic sales of $79.5 million in Russia due to lower domestic sales volume, higher trade marketing spend, decrease in sales due to higher market investments and product sales mix in total of $31.4 million as well as lower local currency sales in Hungary of $1.5 million. This was offset by higher local currency sales in Poland of $21.1 million and by higher sales from foreign exchange translation of $24.8 million and higher export sales in Russia of $39.4 million.

Our business split by segment, which represents our primary geographic locations of operations, Poland, Russia and Hungary, is shown below:

Sales for Poland increased by $1.1 million from $225.3 million for the year ended December 31, 2010 to $226.4 million for the year ended December 31, 2011. This increase was driven mainly by a strengthening of the Polish zloty against the U.S. dollar which accounted for approximately $11.4 million of sales in U.S. dollar terms and higher volume sales of $21.1 million offset by a decrease in sales due to higher market investments and product sales mix in total of $31.4 million. The main drivers of our sales volume growth was the continued success of the Żubrówka Biała brand which grew by 473% from 2010 to reach 22 million liters. Offsetting some of this growth were declines in Bols and Absolwent which were down 27% and 30% respectively. Although overall net volumes were up, the mix impact of Bols decline had a negative impact on overall gross margins in Poland when compared to the prior year.

Sales for Russia increased by $125.8 million from $446.3 million for the year ended December 31, 2010 to $572.1 million for the year ended December 31, 2011. Included in the sales growth was a sales increase of $154.6 million from the consolidation of Whitehall into sales starting from February 2011. Additionally, sales increased by $11.3 million in U.S. dollar terms due to strengthening of the Russian ruble against the U.S. dollar. Export sales grew by $39.4 million; however export sales primarily to Ukraine, which represented 68% of these exports, contributed a lower gross margin percentage than domestic sales. Offsetting this was mainly lower local currency sales of $79.5 million including a $3.4 million decrease in sales for Bravo in the first quarter due to suspended production caused by its production license not being timely renewed. In early April, Bravo received its production license and normal sales continued again from this point with higher sales of its ready to drink products of $2.4 million in comparison to second quarter 2010. Although overall vodka brands were down in 2011 as compared to 2010, the Company successfully launched the Talka brand during the year which reached over 5.2 million liters of volume sales during the year and is expected to be a key driver in 2012.

Sales for Hungary increased by $0.5 million from $30.5 million for the year ended December 31, 2010 to $31.0 million for the year ended December 31, 2011 which results in a $1.5 million decrease in volumes in local currency terms as well as an increase resulting from strengthening of the Hungarian forint against the U.S. dollar which accounted for approximately $2.0 million of sales in U.S. dollar terms.

Total gross profit decreased by approximately 3.4%, or $10.6 million, to $299.1 million for the year ended December 31, 2011, from $309.7 million for the year ended December 31, 2010. Gross profit margins as a percentage of net sales declined by 8.0 percentage points from 44.1% to 36.1% for the year ended December 31, 2011 as compared to the year ended December 31, 2010. The overall impact of higher cost of goods which includes the higher spirit pricing resulted in a $26.0 million impact on gross margins for the year ended December 31, 2011 compared to the same period in 2010. In addition to higher spirit prices, higher trade marketing spend and lower sales volumes reduced the overall gross margin in Russia. Within the Polish market the main factor driving the lower gross profit margins is that the Polish market continues to experience a strong competitive environment from other producers and retailers, especially discounters, making it difficult to increase prices in line with the spirit cost increases.

Operating expenses consist of selling, general and administrative, or “S,G&A” expenses, advertising expenses, non-production depreciation and amortization, provision for bad debts and impairment charges. Total operating expenses increased by $944.8 million, from $367.3 million for the year ended December 31, 2010 to $1,312.1 million for the year ended December 31, 2011. This change is primarily driven by a non-cash impairment charge for Poland and Russia recorded as of December 31, 2011 of $1,057.8 million, and a one-time gain recognized in the year ended December 31, 2011, amounting to $7.9 million based on the re-measurement of previously held equity interests in Whitehall to fair value. For comparability of costs between periods, items of operating expenses after excluding these fair value adjustments are shown separately in the table below. Operating expenses, excluding fair value adjustments as a percent of net sales decreased from 33.5% for the year ended December 31, 2010 to 31.6% for the year ended December 31, 2011. Operating expenses, net of fair value adjustments increased by $26.8 million, from $235.4 million for the year ended December 31, 2010 to $262.2 million for the year ended December 31, 2011. The increase resulted primarily from the consolidation of the results of Whitehall giving additional $37.2 million of costs, relicensing and restructuring costs in Russia of $21.2 million, as well as strengthening of the Russian ruble and Polish zloty against the U.S. dollar which accounted for approximately $5.2 million of sales in U.S. dollar terms offset by cost savings achieved in Poland and Russia.

S,G&A consists of salaries, warehousing and transportation costs, administrative expenses and bad debt expense. S,G&A expenses increased by $28.2 million, from $192.3 million for the year ended December 31, 2010 to $220.5 million for the year ended December 31, 2011. This increase was primarily a result of $32.9 million from the consolidation of Whitehall in 2011.

Depreciation and amortization increased by $2.8 million, from $8.0 million for the year ended December 31, 2010 to $10.8 million for the year ended December 31, 2011. Of this increase $1.7 million is from the consolidation of Whitehall Group in 2011.

The Company assessed recent events and current circumstances, including current and future performance, re-launch and rebranding plans in 2011 and 2012. As a result of these events, the Company identified certain impairment indicators during third quarter of 2011 that would trigger the need for an impairment test of both goodwill and intangible assets. As a result the Company performed an impairment test on September 30, 2011 and annual impairment test on December 31, 2011 both of which resulted in a total impairment charge in the year of $930.1 million for goodwill and $127.7 million for intangible assets.

Total operating loss increased by $955.4 million, from $57.6 million loss for the year ended December 31, 2010 to $1,013.0 million loss for the year ended December 31, 2011, primarily driven by an impairment charge for Poland and Russia recorded as of December 31, 2011 of $1,057.8 million. The table below summarizes the segmental split of operating loss. Excluding the impact of fair value adjustments incurred in 2011 and corporate overhead, underlying operating income decreased from $82.7 million to $43.8 million. Fair value adjustments recorded in 2011 include a one-time gain on the re-measurement of previously held equity interests in Whitehall at the time of consolidation of $7.9 million and impairment charges of $213.7 million for Poland and $844.1 million for Russia.

Underlying operating income in Poland excluding fair value adjustments decreased by approximately 4.2%, or $1.2 million, from $28.5 million for the year ended December 31, 2010 to $27.3 million for the year ended December 31, 2011. The operating income in Russia excluding fair value adjustments decreased by 77.5%, or $37.8 million from income of $48.8 million for the year ended December 31, 2010 to $11.0 million for the year ended December 31, 2011. The changes in operating income in both of these segments were driven by all of the factors described above.

Total interest expense increased by approximately 8.8%, or $8.9 million, from $101.3 million for the year ended December 31, 2010 to $110.2 million for the year ended December 31, 2011. This increase is mainly a result of a stronger euro during most of the year as compared to the U.S. dollar, as a significant portion of the long-term borrowings are denominated in euros.

The Company recognized $139.1 million of foreign exchange rate losses in the year ended December 31, 2011, primarily related to the impact of movements in exchange rates on our U.S. dollar and euro denominated liabilities, as compared to $3.0 million of gain in the year ended December 31, 2010. These losses resulted mainly from the depreciation of the Polish zloty and Russian ruble against the U.S. dollar and euro.

Total other non-operating expenses increased by $4.0 million, from $13.9 million for the year ended December 31, 2010 to $17.9 million for the year ended December 31, 2011. Expenses in 2010 consisted of a one-time charge of $14.1 million related to the early call premium when the Senior Secured Notes due 2012 were repaid early in January 2010. Moreover they included the write-off of the unamortized offering costs related to the Senior Secured Notes due 2012 of $4.1 million. This was offset by a final dividend of $7.6 million received prior to disposal of the distribution business. In 2011 total balance primarily consists of $7.4 million representing write-off of assets related to Tula facility to net realizable value. Additionally it includes $5.7 million of other losses which primarily related to the costs of factoring in Poland and bank guarantees in Poland and Russia for customs and excise taxes. The Company began to factor receivables in 2011 which represent $2.9 million of expense for the year ended December 31, 2011. In Russia due to changes in legislation in 2011, the Russian business is required or prepay to have a bank guarantee to cover the excise tax related to six months of production at the time of spirit purchase, which resulted in $2.0 million of cost in 2011.

Our tax charge for 2011 was $35.3 million which represents an effective tax rate for the year ended December 31, 2011 of (2.8%). The statutory tax rates in our key jurisdictions are 19% in Poland, 20% in Russia and 35% in the US. However due to the underlying performance of certain of the Company’s subsidiaries the Company determined that an additional non-cash valuation allowance for deferred tax assets of $61.3 million was required and took the charge during the year. Additionally, the Company did not recognize a tax asset for losses at these subsidiaries. Therefore the tax expense for the profitable entities was not offset by a tax benefit at loss making entities. The net increase in the Company’s uncertain income tax position, excluding the related accrual for interest and penalties, for 2011 resulted from additions for prior year tax positions of $5.0 million. As of December 31, 2011, the uncertain income tax position balance was $7.1 million. This resulted in a net tax charge even though on a consolidated basis the Company incurred a pre-tax loss.

Equity in net losses for the year ended December 31, 2011 include the Company’s proportional share of net income from its investment in the Moet Hennessey Russia Joint Venture for the period from January 1, 2011 to March 30, 2011 and Whitehall for the period from January 1, 2011 to February 7, 2011.

A summary of the Company’s operating performance (expressed in thousands except per share amounts) is presented below.

Total net sales increased by approximately 1.8%, or $12.7 million, from $689.4 million for the twelve months ended December 31, 2009 to $702.1 million for the twelve months ended December 31, 2010. The increase was driven primarily by the consolidation of Russian Alcohol Group during the full period in 2010, as it was not consolidated in the first quarter of 2009, resulting in an increase of $80 million. This increase was offset by a reduction of sales in each of our markets further discussed below. Our business split by segment, which represents our primary geographic locations of operations, Poland, Russia and Hungary, is shown below:

Sales for Poland decreased by $33.4 million from $258.7 million for the twelve months ended December 31, 2009 to $225.3 million for the twelve months ended December 31, 2010. This decrease was driven mainly by an overall reduction of the vodka market impacted by the mourning associated with the presidential death in April 2010, the extreme heat during the summer months as well as an overall soft alcohol beverage sector. On top of an estimated 5% drop in the overall vodka market in Poland, the Company lost approximately 3% of market share. In November 2010, the Company launched a new product, Żubrówka Biała (White Zubrowka) which has been very positively received by the market, resulting in a December 2010 market share of 2.3% in volumes and 2.1% in value terms of total vodka market following its initial launch. However since this product was only launched at the back end of the year, the impact of this launch was not enough to make up for the lower volumes incurred earlier in the year. Additionally the product was initially launched together with significant marketing spend in the form of rebates which reduced the impact the incremental sales had on net sales revenue and negatively impacted gross margin. These introductory market support programs which we began in November 2010 were however discontinued at the end of December, 2010. We also took the decision to invest more behind our other core vodka brands during the last half of the fourth quarter to start to reverse a two year slide of market share. These investments had an impact on the profitability in 2010, however we were encouraged by the initial market share results which saw our market share grow from 20.2% in November 2010 to 25.2% in January 2011. Further increasing the drop in sales value was the impact of channel mix in the market. The Polish market also saw a large increase of sales going through the key account and discounter channels and drop in sales through traditional accounts and small shops. The rebates given to key accounts and discounters are higher than those received by other channels thus further reducing our sales value as well as impacting gross margin.

Although the bulk of our business in Poland is the sales of our domestic vodkas, our export sales and sales of import brands increased by 20% and 9% respectively in volume terms for the year. Exports represent approximately 4% of our sales volume and exclusive import brands represent approximately 19% of our total sales value for the Polish operations.

These decreases in local currency sales value were partially offset by stronger Polish zloty against the U.S. dollar in the first half of the year which resulted in an overall year on year increase of approximately $4.8 million of sales in U.S. dollar terms.

Sales for Russia increased by $52.2 million from $394.1 million for the twelve months ended December 31, 2009 to $446.3 million for the twelve months ended December 31, 2010. This increase was driven by a combination of the strengthening of the Russian ruble against the U.S. dollar for the first three quarters of 2010 which accounted for approximately $5.2 million of the increase and the consolidation of Russian Alcohol Group

which was completed in April 2009, which accounted for approximately $80.0 million of the increase. The increase was partially offset due to decreases in our sales in Russia which we believe resulted from higher trade marketing spend and the heat wave in the summer as well as delays in obtaining excise stamps in November as described earlier. Our underlying liter volume sales in Russia were generally flat for 2010 as compared to 2009 in the overall vodka market that we estimated declined by 4%–5%. We were one of the few vodka companies in Russia to grow market share during the year. Although we were able to gain market share, our sales value declined by approximately 3% due to the impact of product sales mix as well as higher trade marketing spend. With regards to mix, as we had higher sales growth of our lower priced brands such as Yamskaya, Urozhay and Gerbovaya as compared to our more premium and mainstream products. These lower priced economy products contribute less to both net sales revenue and gross margins than the higher priced mainstream and premium products. Higher trade marketing, which was recorded as a reduction of net sales revenue, was incurred to incentive customers in December 2010 following our production delays due to a lack of excise stamps as described above. For our Russian business, export sales increased by 68% in volume terms in 2010 as compared to the prior year to 1.4 million cases, driven primarily to sales to the Ukraine which grew by 265% to 0.75 million cases in 2010. Exports represent 7.7% of our sales volume of Russia.

The Hungarian sales decline was driven mainly by the soft consumer environment and an excise tax increase on January 1, 2010, which accounted for approximately $4.8 million of the total decrease of $6.1 million, as well as weakening of the Hungarian forint versus U.S. dollar in 2010 which resulted in $1.3 million of sales decrease in U.S. dollar terms.

Total gross profit decreased by approximately 11.2%, or $39.2 million, to $309.7 million for the twelve months ended December 31, 2010, from $348.9 million for the twelve months ended December 31, 2009.

Gross profit margins as a percentage of net sales declined by 6.5 percentage points from 50.6% to 44.1% for the twelve months ended December 31, 2010 as compared to the twelve months ended December 31, 2009. This decline was primarily driven by the factors noted above, impacting our sales value, namely channel mix, higher market investments and the Żubrówka Biała product launch in Poland, product mix and excise stamp delays in Russia as well as higher spirit pricing in both segments. The increase in spirit cost in August 2010 and towards the end of 2010 resulted in an increase in cost of goods sold by approximately $9.5 million.

Total operating expenses increased by approximately 123.3%, or $202.8 million, from $164.5 million for the twelve months ended December 31, 2009 to $367.3 million for the twelve months ended December 31, 2010. The factors contributing to this increase were the full year consolidation of the Russian Alcohol Group of $30.7 million of additional operating expenses, a prior year one-off benefit from the fair value adjustment of $48.6 million (described further below), impairment charges in Poland and one-time costs associated with the integration of the Russian Alcohol Group and Parliament in Russia of $11.0 million. These cost increases were offset by the underlying cost savings of the integration of $18.4 million and the impact of foreign exchange rates of approximately $2.0 million.

For comparability of costs between periods, operating expenses after excluding the fair value adjustments incurred in 2009 as well as impairment charges taken in 2009 and 2010 are shown separately in the table below. As a percentage of net sales they slightly increased from 28.0% for the year ended December 31, 2009 to 33.5% for the year ended December 31, 2010. Operating expenses net of fair value adjustments, impairment charges and corporate overhead increased by $42.6 million, from $192.8 million for the year ended December 31, 2009 to $235.4 million for the year ended December 31, 2010. The increase was mainly due to full year consolidation of the Russian Alcohol Group in 2010 in comparison to 9 months period of consolidation in 2009 resulting in lower costs in 2009 by $30.7 million. This was partially offset by cost reduction programs implemented in Poland and

Russia as well as lower sales as compared to the same quarter in the prior year. The table below sets forth the items of operating expenses.

The Company recognized impairment charges of $131.8 million for the twelve months ended December 31, 2010 related predominately to the Absolwent brand in Poland, and an impairment charge of $20.3 million for the twelve months ended December 31, 2009 related to the Bols brand in Poland.

S,G&A increased by approximately 28.8%, or $43.0 million, from $149.3 million for the twelve months ended December 31, 2009 to $192.3 million for the twelve months ended December 31, 2010. The change in total S,G&A was primarily caused by the factors mentioned above, offset by cost savings initiatives.

Total operating income decreased by approximately 131.2%, or $242.1 million, from income of $184.5 million for the twelve months ended December 31, 2009 to loss of $57.6 million for the twelve months ended December 31, 2010. However, excluding the impact of impairment charges in 2010 and 2009 as well as the fair value adjustments incurred in 2009, the underlying operating profit went from $164.5 million to $82.7 million. Fair value adjustments recorded in 2009 include a one-time gain on the re-measurement of previously held equity interests in Russian Alcohol Group at the time of consolidation of $225.6 million, offset by $162.0 million of one-off charges related to non amortized discount of deferred consideration resulting from the accelerated buyout of Lion Capital’s interest in Russian Alcohol Group and a contingent consideration true-up of $15.0 million.

Excluding the impact of the gain, the impairment and true-up of contingent consideration described above, as a percent of net sales, operating profit margin decreased from 23.9% to 11.8%. The table below summarizes the segmental split of operating profit.

Underlying operating income in Poland decreased by approximately 57.9%, or $39.2 million, from $67.7 million for the twelve months ended December 31, 2009 to $28.5 million for the twelve months ended December 31, 2010. The operating income in Russia decreased by approximately 46.2%, or $41.9 million, from $90.7 million for the twelve months ended December 31, 2009 to $48.8 million for the twelve months ended December 31, 2010. The changes in operating income in both of these segments were driven by all of the factors described above.

Total interest expense increased by approximately 37.8%, or $27.8 million, from $73.5 million for the twelve months ended December 31, 2009 to $101.3 million for the twelve months ended December 31, 2010. This increase is mainly a result of the additional interest from the Existing 2016 Notes. The incremental borrowings were used primarily to finance the remaining buy out of Russian Alcohol Group which was completed in January 2010.

The Company recognized $3.0 million of foreign exchange rate gains in the twelve months ended December 31, 2010, primarily related to the impact of movements in exchange rates on our U.S. dollar and euro denominated liabilities, as compared to $25.2 million in the twelve months ended December 31, 2009. This decrease resulted from the appreciation of the Polish zloty and Russian ruble against the U.S. dollar and euro.

Total other non-operating expenses increased by $13.0 million, from $0.9 million for the twelve months ended December 31, 2009 to $13.9 million for the twelve months ended December 31, 2010. This increase is mainly a result of the one-time charge of $14.1 million related to the early call premium when the Senior Secured Notes due 2012 were repaid early in January 2010. Further increase was due to the write-off of the unamortized offering costs related to the Senior Secured Notes due 2012 as well as the professional services expense incurred in connection with the sale of the distribution business in Poland which was offset with the dividend received. The table below summarizes the split of other non-operating expenses.

Our effective tax rate for the twelve months ended December 31, 2010 was 15.7%, which is driven by the statutory tax rates of 19% in Poland and 20% in Russia. The difference between the statutory and effective tax rates was primarily due to permanent tax differences.

Equity in net earnings for the twelve months ended December 31, 2010 include the Company’s proportional share of net income from its investments in Whitehall. Total results of equity investments attributable to CEDC increased from loss of $5.6 million for the twelve months ended December 31, 2009 to income of $13.4 million for the twelve months ended December 31, 2010. This increase is mainly a result of the foreign exchange losses that Russian Alcohol Group incurred during the first quarter of 2009 as Russian Alcohol Group was still consolidated under equity method for this period.

During the nine months ended September 30, 2012 and the twelve months ended December 31, 2011, the Company’s primary sources of liquidity were cash flows generated from operations, credit facilities, and proceeds from exercised options. The Company’s primary uses of cash were to fund its working capital requirements, service indebtedness, finance capital expenditures and fund acquisitions. The following table sets forth selected information concerning the Company’s consolidated cash flow during the periods indicated.

Net cash flow from operating activities represents net cash from operations and interest. Overall cash flow from operating activities decreased from cash generation of $46.4 million for the nine months ended September 30, 2011 to cash utilization of $69.0 million for the nine months ended September 30, 2012. The primary factors contributing to this lower cash generation in 2012 are due to the fact that in the first quarter of 2011, the Company entered into factoring arrangements in Poland for the first time which resulted in higher cash collection during this quarter. In 2011, the Polish operations received the cash inflow from the peak sales from the fourth quarter of 2010 as well as the cash from the factored receivables of the quarter, resulting in a one-off benefit in cash flow for the period. During the same period in 2012, the Polish operations only received the normal factored cash flow from the first quarter of 2012.

Overall working capital movements of accounts receivable, inventory and accounts payable resulted in cash outflow approximately $15.6 million of cash during the nine months ended September 30, 2012. Days sales outstanding (“DSO”) as of September 30, 2012 amounted to 39 days as compared to 44 days as of September 30, 2011. The number of days in inventory as of September 30, 2012 amounted to 135 days as compared to 85 days as of September 30, 2011. In addition, the ratio of our current assets to current liabilities, net of inventories, was 0.58 as of September 30, 2012 as compared to 1.54 as of September 30, 2011.

Net cash flows used in investing activities represent net cash used to acquire subsidiaries and fixed assets. Net cash outflow for the nine months ended September 30, 2012 was $7.6 million as compared to $47.7 million for the nine months ended September 30, 2011.

Net cash flow from financing activities represents cash used for servicing indebtedness, borrowings under credit facilities. Net cash inflow in financing activities was $81.1 million for the nine months ended September 30, 2012 as compared to an outflow of $1.8 million for the nine months ended September 30, 2011. The primary inflow in the nine months ended September 30, 2012 was $100 million of cash invested by RTL and its affiliates offset by cash used for repayment of part of Existing 2013 Notes and loans by the Company.

Net cash flow from operating activities represents net cash from operations and interest. Overall cash flow from operating activities increased from cash utilization of $28.1 million for the year ended December 31, 2010 to cash generation of $30.0 million for the year ended December 31, 2011. The primary factors contributing to this higher cash generation in 2011 were due to the factoring program entered into in Poland which greatly improved the cash flow cycle. For the year ended December 31, 2011 the Company had $74.6 million of cash inflows from accounts receivable collection as compared to an inflow of $25.4 million for the year ended December 31, 2010.

Overall working capital movements of accounts receivable, inventory and accounts payable provided approximately $85.8 million of cash during the year ended December 31, 2011. DSO as of December 31, 2011 amounted to 79 days. The number of days in inventory as of December 31, 2011 amounted to 81 days. In addition, the ratio of our current assets to current liabilities, net of inventories, amounted to 1.15 as of December 31, 2011.

Net cash flows used in investing activities represent net cash used to acquire subsidiaries and fixed assets. Net cash outflows for the year ended December 31, 2011 was $56.9 million as compared to an inflow of $464.9 million for the year ended December 31, 2010. This outflow primarily represents the cash obligations paid as a result of the February 2011 acquisition of Whitehall of $36.8 million, net of cash acquired on consolidation, payment for the acquisition of the Kauffman Vodka trademark of $17.5 million, and payment of the remaining part of deferred consideration for Russian Alcohol Group of $5 million offset by proceeds received from disposal of the Moet Hennessy Joint Venture of $17.7 million.

Net cash flow from financing activities represents cash used for servicing indebtedness, borrowings under credit facilities and cash inflows from private placements and exercise of options. Net cash generated in financing activities was $10.1 million for the year ended December 31, 2011 as compared to an outflow of $426.8 million for the year ended December 31, 2010. The primary use in the year ended December 31, 2011 was repayment of loans by the Company offset by certain loans drawn in Russia.

Available Cash and Liquidity; Maturity Payment for Existing 2013 Notes due March 15, 2013

Our Existing 2013 Notes are due and payable on March 15, 2013. The outstanding principal amount under the Existing 2013 Notes is $257.9 million. As of February 13, 2013, we had $59.0 million available cash on hand, and approximately $17.7 million available under our credit facilities (including overdraft facilities, of which $9.9 million will terminate by March 7, 2013). We also have an interest installment due on our Existing 2016 Notes on June 1, 2013 equal to $43.5 million. Our current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment on the Existing 2013 Notes. As a result, the Company is conducting the Restructuring Transaction contemplated by this Offering Memorandum and Disclosure Statement. See “Risk Factors—The Existing 2013 Notes mature on March 15, 2013. A failure to pay the outstanding principal amount under the Existing Notes when due would trigger an event default under the Existing 2016 Notes and other indebtedness.”

As of February 13, 2013, Whitehall has outstanding liability of €26.0 million ($34.8 million) from the term loans from JSC “Alfa-Bank”, Bank ZENITH (JSC) and JSC “Raiffeisenbank” drawn by LLC “Whitehall-Center”:

As of February 13, 2013, Russian Alcohol has outstanding term loans of 2,338 million Russian rubles ($77.4 million) from MKB Bank, Alfabank, Sberbank and JSC Grand Invest Bank, all drawn by Russian Alcohol Group, as well as, an overdraft facility from Nomos-Bank:

Each of our loan facilities contains a covenant that there will be no material adverse change in our financial position. In the event that it is determined that such a material adverse change has occurred, the loan agreement can be terminated immediately by the lending bank.

In accordance with current legislation in Russia each producer of spirit beverages must acquire excise stamps and must pay excise tax in full before buying spirit for production purposes. For each lot of stamps purchased, the alcohol producer must provide the relevant body with a bank guarantee in the full amount of payment for the excise tax to secure the legality of usage of the excise stamps. This bank guarantee serves as insurance against the illegal usage of excise stamps by an alcohol producer.

In addition, under new legislation effective since August 1, 2011 the producer purchasing spirit alcohol must

Russian Alcohol has in place a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 27.7 billion Russian rubles (approximately $918.0 million) for a period of 1 to 4 years. As of February 13, 2013, 18.1 billion Russian rubles (approximately $601.0 million) were utilized.

Bravo Premium signed a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 464.0 million Russian rubles (approximately $15.3 million) for a period from 1 to 2 years. As of February 13, 2013, 175 million Russian rubles ($5.8 million) were utilized.

Whitehall has in place a guarantee line agreement with multiple banks pursuant to which it was provided with a guarantee limit of 1.2 billion Russian rubles (approximately $38.8 million) as insurance against the illegal usage of excise stamps. As of February 13, 2013, 769 million Russian rubles ($25.5 million) were utilized.

According to the agreements, companies have the right to obtain bank guarantees during the agreement term for each purchase of excise stamps and for the purchase of spirit. The guarantees for excise stamps are held by Rosalkoregulirovanie (the Federal Service for Alcohol Market Regulation), during the whole production period for which the excise stamps were purchased. The guarantee for excise tax is held by the beneficiary (the tax body) for 6 months after the end of month the spirit was purchased.

As of February 13, 2013, the Company has bank guarantees related to customs duties and excise on imported goods in Poland of 4.7 million Polish zlotys (approximately $1.5 million) as well some other bank guarantees related to payments of $0.7 million.

As of February 13, 2013, Bols Hungary has bank guarantees related to payment of excise tax and office rental fee of 50 million Hungarian forints (approximately $0.2 million).

See “Risk Factors—If we are unable to consummate the Exchange Offers or a Plan of Reorganization, we may be unable to continue to access bank guarantee lines for excise taxes payable in respect of vodka sales in Russia which are critical to our operations in Russia.”

On February 24, 2011, CEDC International entered into factoring arrangements for the sale of receivables. As of September 30, 2012, the total balance of receivables under factoring amounted to 95.9 million Polish zlotys (approximately $30.2 million) of the 170.0 million Polish zlotys limit available. In January 2013, these factoring agreements were terminated.

Furthermore, CEDC International signed in June 2011 and in January 2012 factoring agreements with two institutions. These agreements allow CEDC International to sell receivables of three of CEDC International’s distributors named in these agreements. There is no financing limit in any of the agreements.

Additionally, in August 2012, CEDC International signed agreements for non-recourse factoring of the receivables from another distributor and its related parties. There is no financing limit fixed in these agreements. CEDC International has no continuing involvement with the non-recourse receivables that have been sold.

See “Management’s Discussion and Analysis of Financial Conditions and Results of Operation—Sales of Accounts Receivable” for further information on our factoring agreements.

On December 2, 2009, the Company issued $380 million 9.125% Existing 2016 Notes and €380 million ($491.9 million) 8.875% Existing 2016 Notes in an unregistered offering to institutional investors. The Company used a portion of the net proceeds from the Existing 2016 Notes to redeem the Company’s outstanding 2012 Notes, having an aggregate principal amount of €245.4 million ($317.7 million) on January 4, 2010. The remainder of the net proceeds from the Existing 2016 Notes was used to (i) purchase Lion Capital’s remaining equity interest in Russian Alcohol Group by exercising the Lion Option and the Co-Investor Option, pursuant to the terms and conditions of the Lion Option Agreement and the Co-Investor Option Agreement, respectively (ii) repay all amounts outstanding under Russian Alcohol Group credit facilities; and (iii) repay certain other indebtedness.

On December 9, 2010, the Company issued an additional €50.0 million ($64.7 million) 8.875% Existing 2016 Notes in an unregistered offering to institutional investors. The Company used the net proceeds from the additional Existing 2016 Notes to repay its term loans and overdraft facilities with Bank Handlowy w Warszawie S.A and Bank Zachodni WBK S.A.

The Existing 2016 Notes are guaranteed on a senior basis by certain of the Company’s subsidiaries. We are required to ensure that subsidiaries representing at least 85% of our consolidated EBITDA, as defined in the Existing 2016 Notes Indenture, guarantee the Existing 2016 Notes. The Existing 2016 Notes are secured, directly or indirectly, by a variety of our and our subsidiary’s assets, including shares of CEDC FinCo notes and subsidiaries in Poland, Cyprus, Russia and Luxembourg, certain intercompany loans made by CEDC FinCo and Jelegat in connection with the issuance of the Existing 2016 Notes, trademarks related to the Soplica brand registered in Poland, European Union trademarks for the Parliament brand registered in Germany, and bank accounts over $5.0 million. We have also provided mortgages over our Polmos and Bols production plants and the Russian Alcohol Siberian and Topaz Distilleries.

The Existing 2016 Notes Indenture contains certain restrictive covenants, including covenants limiting the Company’s ability to: incur or guarantee additional debt; make certain restricted payments; transfer or sell assets; enter into transactions with affiliates; create certain liens; create restrictions on the ability of restricted subsidiaries to pay dividends or other payments; issue guarantees of indebtedness by restricted subsidiaries; enter into sale and leaseback transactions; merge, consolidate, amalgamate or combine with other entities; designate restricted subsidiaries as unrestricted subsidiaries; and engage in any business other than a permitted business. The Existing 2016 Notes Indenture also contains a cross-acceleration covenant, which would apply in the event that we do not repay when due our Existing 2013 Notes or any other indebtedness which equals or exceeds $30 million. In addition, in the event of a change of control (as that term is used in our indenture), we would be required to offer to repay the outstanding indebtedness under the Existing 2016 Notes at a price equal to 101% of the aggregate principal amount thereof.

On March 7, 2008, the Company completed the issuance of $310 million aggregate principal amount of Existing 2013 Notes. Interest is due semi-annually on the 15th of March and September, beginning on September 15, 2008. The Existing 2013 Notes are convertible in certain circumstances into cash and, if applicable, shares of our common stock, based on an initial conversion rate of 14.7113 shares per $1,000 principal amount, subject to certain adjustments. Upon conversion of the Existing 2013 Notes, the Company will deliver cash up to the aggregate principal amount of the Existing 2013 Notes to be converted and, at the election of the Company, cash or shares of common stock in respect to the remainder, if any, of the conversion obligation. The proceeds from the Existing 2013 Notes were used to fund the cash portions of the acquisitions of Copecresto Enterprises Limited and Whitehall. The indenture governing the Existing 2013 Notes also contains a cross-acceleration covenant, which would apply in the event that we do not repay when due any indebtedness which equals or exceeds $30 million. In addition, in the event of a fundamental change (as that term is used in our indenture), we would be required to offer to repay the outstanding indebtedness under the Existing 2013 Notes in cash at a price equal to 100% of the aggregate principal amount thereof.

In May 2012, the Company repurchased $36.6 million principal amount of Existing 2013 Notes in four tranches for $35.3 million. Additionally, in July and September 2012, the Company repurchased $15.0 million and $0.5 million principal amount of Existing 2013 Notes for $14.4 million and $0.46 million, respectively.

These terms were amended by the Term Sheet. Pursuant to the Term Sheet, RTL and CEDC entered into the RTL Credit Facility pursuant to which $50 million of the existing $70 million of RTL Notes was converted into the RTL Credit Facility. Following Conversion, there is $20 million outstanding under the remaining RTL Notes, which mature on March 18 , 2013.

On February 7, 2011, the Company and Mark Kaufman entered into a definitive Share Sale and Purchase Agreement and registration rights agreement as to which the terms of each were agreed by the parties on November 29, 2010.

Pursuant to the Share Sale and Purchase Agreement, among other things and upon the terms and subject to the conditions contained therein, on February 7, 2011 (a) Polmos Bialystok S.A. (i) received 1,500 Class B shares of Peulla Enterprises Limited, a private limited liability company organized under the laws of Cyprus and the parent of WHL Holdings Limited (“Peulla”), representing the remainder of the economic interests in Peulla not owned by Polmos and (ii) delivered to Seller and Kaufman an aggregate $68.5 million in cash in immediately available funds; and (b) the Company (i) received 3,751 Class A shares of Peulla, representing the remainder of the voting interests in Peulla not owned by the Company or Polmos and (ii) issued to Kaufman 959,245 shares of the Company’s common stock, par value $0.01 per share. The issued shares had an aggregate value of $23.0 million based on the 30 day volume weighted average price of a share of our common stock on the day prior to the closing. In addition, if the aggregate value of such shares (based on the lower of the trading price of a share of our common stock or the 10 day volume weighted average price) is less than $23.0 million on the day prior to filing a registration statement for resale of the shares or the day shares are sold under Rule 144 of the Securities Act, the recipient of such shares is entitled to a payment in cash equal to such difference in value. Such amount is not yet determinable. Subsequent to the merger of Polmos Bialystok into CEDC International sp. z o.o., CEDC International sp. z o.o. became the holder of the Peulla shares.

On April 22, 2010, in accordance with the terms of the Option Agreement dated November 19, 2009, the Company exercised its right to issue to Cayman 4 and Cayman 5, in settlement of consideration owed under the Lion Option Agreement, 799,330 shares and 278,745 shares, respectively, of the Company’s common stock (the “Share Issuance”). The impact of the Share Issuance was to repay $45 million of the $50 million of deferred consideration recorded as a liability as of March 31, 2010. The remaining $5 million was settled in cash on February 4, 2011.

Our net capital expenditure on tangible fixed assets for the twelve months ended December 31, 2011, 2010, and 2009 was $15.1 million, $6.2 million and $16.1 million, respectively. Capital expenditures during the twelve months ended December 31, 2011, 2010 and 2009 were used primarily for production equipment and fleet.

We have estimated that maintenance capital expenditure for 2012, 2013 and 2014 for our existing business combined with our acquired businesses will be approximately $10.0 to $15.0 million per year. Future capital expenditure is expected to be used for our continued investment in information technology, and routine improvements to production facilities. A substantial portion of these future capital expenditure amounts are discretionary, and we may adjust spending in any period according to our needs. We currently intend to finance all of our capital expenditure through cash generated from operating activities.

The following table summarizes our contractual obligations as of September 30, 2012, which has not been adjusted to take account of the Exchange Offers.

Actual inflation in Poland was 4.6% in 2011, compared to inflation of 3.1% in 2010. In Russia and Hungary respectively, the actual inflation for 2011 was at 6.1% and 4.1%, compared to actual inflation of 8.8% and 4.7% in 2010. Inflation in Poland, Russia and Hungary is projected at 3.8%, 5.2% and 5.7% for 2012, respectively.

Substantially all of the Company’s operating cash flows and assets are denominated in Polish zloty, Russian ruble and Hungarian forint. This means that the Company is exposed to translation movements both on its balance sheet and statement of operations. The impact on working capital items is demonstrated on the cash flow statement as the movement in exchange on cash and cash equivalents. The impact on the statement of operations is by the movement of the average exchange rate used to restate the statement of operations from Polish zloty, Russian ruble and Hungarian forint to U.S. dollars. The amounts shown as exchange rate gains or losses on the face of the statements of operations relate only to realized gains or losses on transactions that are not denominated in Polish zloty, Russian ruble or Hungarian forint.

The Company has borrowings including its Existing 2013 Notes and Existing 2016 Notes that are denominated in U.S. dollars and euros, which have been lent to its operations where the functional currency is the Polish zloty and Russian ruble. The effect of having debt denominated in currencies other than the Company’s functional currencies is to increase or decrease the value of the Company’s liabilities on that debt in terms of the Company’s functional currencies when those functional currencies depreciate or appreciate in value respectively. As a result of this, the Company is exposed to gains and losses on the re-measurement of these liabilities. The table below summarizes the pre-tax impact of a one percent movement in each of the exchange rate which could result in a significant impact in the results of the Company’s operations.

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of net sales, expenses, assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

Revenues of the Company include sales of its own produced spirit brands, imported wine, beer and spirit brands as well as other third party alcoholic products purchased locally. The sale of each of these revenues streams are all processed and accounted for in the same manner. For all of its sources of revenue, the Company recognizes revenue when persuasive evidence of an arrangement exists, delivery of product has occurred, the sales price charged is fixed or determinable and collectability is reasonably assured. This generally means that revenue is recognized when title to the products are transferred to our customers. In particular, title usually transfers upon shipment to or receipt at our customers’ locations, as determined by the specific sales terms of the transactions.

Sales are stated net of sales tax (VAT) and reflect reductions attributable to consideration given to customers in various customer incentive programs, including pricing discounts on single transactions, volume discounts, promotional listing fees and advertising allowances, cash discounts and rebates. Net sales revenue includes excise tax except in the case where the sales are made from the production unit or are related to imported goods, in which case it is recorded net of excise tax.

Accounts receivables are recorded based on the invoice price, inclusive of VAT (sales tax), and where a delivery note has been signed by the customer and returned to the Company. The allowances for doubtful accounts are based on our experience with past due accounts, collectability, history of write-offs, aging of accounts receivable, our analysis of customer data and our relationships with and the economic status of our customers. Individual trade receivables are provided against when management deems them not to be fully collectable. The Company typically does not provide for past due amounts due from large international retail chains (hypermarkets and supermarkets) as there have historically not been any issues with collectability of these amounts.

Certain sales contain customer acceptance provisions that grant a right of return on the basis of either subjective criteria or specified objective criteria. Where appropriate a provision is made for product return, based upon a combination of historical data as well as depletion information received from our larger clients. The Company’s policy is to closely monitor inventory levels with key distribution customers to ensure that we do not create excess stock levels in the market which would result in a return of sales in the future. Historically sales returns from customers has averaged less than 1% of our net sales revenue.

Goodwill and certain intangible assets having indefinite lives are not subject to amortization. Their book values are tested annually for impairment, or earlier upon the occurrence of certain events or substantive changes

in circumstances that indicate goodwill is more likely than not impaired, which could result from significant adverse changes in the business climate and declines in the value of our business. Such indicators may include a sustained decline in our stock price; a decline in our expected future cash flows; adverse change in the economic or business environment; the testing for recoverability of a significant asset group, among others. Fair value measurement techniques, such as the discounted cash flow methodology, are utilized to assess potential impairments. The testing of goodwill is performed at each reporting unit level. The Company performs impairment test in two stages. If the first stage does not indicate that the carrying values of the reporting unit exceeds it’s fair values, the second stage is not required. When the first stage indicates potential impairment, the Company completes the second stage of the impairment test and compares the implied fair value of the reporting units goodwill to the corresponding carrying value of goodwill.

Intangible assets with an indefinite life are not amortized but are reviewed at least annually for impairment or more frequently, if facts and circumstances indicate such need. Intangible assets consist primarily of acquired trademarks. The Company has acquired trademark rights to various brands, which were capitalized as part of the purchase price allocation process in connection with acquisitions of Bols, Polmos Bialystok S.A., Parliament and Russian Alcohol. These trademarks include Soplica, Żubrówka, Absolwent, Royal, Palace, Parliament, Green Mark, Zihuravli, Kauffman Vodka, Urozhay and the trademark rights to Bols Vodka in Poland, Hungary and Russia. Management considers trademarks associated with high or market-leader brand recognition within their market segments to be indefinite-lived assets, based on the length of time they have existed, the comparatively high volumes sold and their general market positions relative to other products in their respective market segments.

Based on this and together with the evidence provided by analyses of vodka products life cycles, market studies, competitive and environmental trends, we believe that these trademarks will continue to generate cash flows for an indefinite period of time, and that the useful lives of these trademarks are therefore indefinite. In order to support value of trademarks the Company calculates the fair value of trademarks using a discounted cash flow approach based on five year forecast discounted to present value. Additional intangible assets include the valuation of customer contracts arising as a result of acquisitions, these intangible assets are amortized over their estimated useful life of 8 years.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows the asset is deemed to be impaired. An impairment charge is recognized for the amount by which the carrying amount of an asset exceeds its estimated fair value.

Effective January 1, 2009, all business combinations are accounted for in accordance with ASC Topic 805 “Business Combinations”.

In June 2009, the FASB issued new guidance on variable interest entities. ASU 2009-17, Consolidations (Topic 810) Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (“VIE”), amended prior guidance requiring an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a VIE. Determining who

consolidates a VIE is based on two requirements: (i) who has the power over key decisions, and (ii) who has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. If one party has both, then that party consolidates the entity. Power is based on who controls the decisions that most significantly impact the economic activities of the entity.

ASU 2009-17 was effective for the Company from January 1, 2010. Due to the revision of ASC Topic 810, including the redefining of ‘control’, and because the day-to-day control over the business has been delegated to the CEO—Mark Kaufman and the list of activities for which the Company has overview is limited, the Company changed the accounting treatment for its 49% voting interest in Whitehall from consolidation to the equity method of accounting.

Adoption of the requirements of ASC Topic 810 resulted as of December 31, 2009 in a net decrease in assets of $108 million, liabilities of $85 million and non-controlling interest of $23 million As of December 31, 2010 the Company held 50% minus one vote of the voting power and 80% of the total economic shares of Whitehall.

On February 7, 2011, the Company entered into a definitive Share Sale and Purchase Agreement and registration rights agreement, in accordance with the terms that were agreed by the parties on November 29, 2010. Pursuant to these agreements, among other things and upon the terms and subject to the conditions contained therein, we received 20% of the economic and 51% of the voting interest in Whitehall previously not owned by us, as well as the global intellectual property rights for the Kauffman Vodka brand. In exchange we paid total consideration of $93.2 million including $17.5 million for the intellectual property rights for the Kauffman Vodka brand.

The Company recorded contingent consideration representing the fair value of a right given to Mark Kauffman as a share price indemnity until the registration date. The fair value of this contingent consideration was recorded at $1.7 million as of the acquisition date on provisional basis. This consideration was settled in March 2011 through a payment by the Company of $0.7 million in cash and the issuance of 938,501 additional shares to Mark Kauffman.

As a result of this transaction, the Company acquired full voting and economic control over Whitehall and changed the accounting treatment for its interest in Whitehall from the equity method of accounting to consolidation beginning on February 7, 2011.

On February 4, 2011, pursuant to the agreement dated November 9, 2009, with Kylemore International Invest Corporation (“Kylemore”), an indirect minority stockholder of the Russian Alcohol Group (“Russian Alcohol”), the Company paid $5 million as a final settlement related to Russian Alcohol acquisition.

For the purpose of financial reporting Management analyzed the requirements of U.S. GAAP (mainly ASC 360-10 PP&E and ASC 205-20 Presentation of Financial Statements) and concluded that the Company’s activities meet the required criteria and therefore it is necessary to present its distribution business in Poland, described below, as a component held for sale and as discontinued operations. On August 2, 2010 the Company has closed the sale of 100% of its distribution business in Poland to Eurocash S.A. for a purchase price of 378.6 million Polish zlotys ($124.2 million) in cash, on a debt free, cash free basis, after all price adjustments.

On July 28, 2011, the Company committed to sell Tula, a production plant in Russia. As part of the ongoing restructuring process in Russia, in order to optimize the efficiency of the Russian segment of the Company’s

operations, the Company decided to shut down Tula’s operations. Starting in August 2011, all production activity has been suspended and all of the employees were terminated. The Company recognized a RUR 221.6 million (approximately $7.4 million) loss, related to the classifications of the assets at the lower of carrying amount or estimated fair value less costs to sell. The Company was looking for a buyer of Tula’s assets and would expect to close this transaction within one-year timeframe. However, due to a lack of suitable buyers for these assets, the Company will write down the assets in full for the fourth quarter of 2012.

In the consolidated balance sheet we present in a separate line fixed assets of Tula as of December 31, 2011 and December 31, 2010 of $0.7 million and $8.6 million respectively, as assets held for sale.

Involvement of the Company in VIEs and continuing involvement with transferred financial assets.

On May 23, 2008, the Company and certain of its affiliates, entered into, and closed upon, a Share Sale and Purchase Agreement and certain other agreements whereby the Company acquired shares representing 50% minus one vote of the voting power, and 75% of the economic interests, in Whitehall. In consideration for additional payments made to the seller on February 24, 2009, the Company received an additional 375 Class B shares of Whitehall, which represents an increase of the Company’s economic stake in Whitehall from 75% to 80%.

Except for the amount of $7.5 million that was lent at market rates as working capital by the Company to Whitehall there were no transfers of financial assets to VIE as Whitehall is a self-financing body. Including the $7.5 million transfer, the Company does not have any continuing involvement with transferred financial assets that allow the transferors to receive cash flows or other benefits from the assets or requires the transferors to provide cash flows or other assets in relation to the transferred financial assets.

Upon original acquisition of Whitehall it was determined that the entity was a variable interest entity and that CEDC was the primary beneficiary. CEDC consolidated the Whitehall Group as a business combination as of May 23, 2008, on the basis that the Whitehall Group was a Variable Interest Entity (“VIE”) and the Company had been assessed as being the primary beneficiary. Included within the Whitehall Group is a 50/50 joint venture with Möet Hennessy. This joint venture is accounted for using the equity method and is recorded on the face of the balance sheet as Equity method investment in affiliates interest initially recorded at fair value on the face of the balance sheet. The Company is currently in negotiations with Moet Hennessy concerning the future of the joint venture, following our acquisition of control of the Whitehall Group.

In June 2009, the FASB issued ASC Topic 810, which changes how a company determines whether an entity should be consolidated. Upon the adoption of ASC Topic 810, the Company reassessed who is the primary beneficiary based on the accounting definition of ‘control’ and power. Based on that reassessment the Company changed the method of consolidation of Whitehall Group, in which the Company controls 49% of the voting interest from consolidation to the equity method of accounting. This change was applied retrospectively to all the periods presented in the financial statements.

Grant-date fair value of stock options is estimated using a lattice-binomial option-pricing model. We recognize compensation cost for awards over the vesting period. The majority of our stock options have a vesting period between one to three years.

In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The ASU makes certain technical corrections and clarifications and improvements to the Codification. Additionally, the ASU includes amendments that identify when the use of fair value should be linked to the definition of fair value in Topic 820. ASU 2012-04 is effective for fiscal periods beginning after December 15, 2012. The Company will analyze and implement requirements of ASU 2012-04 for the first quarter of the period started 1 January 2013.

In July 2012, the FASB issued ASU 2012-02, Intangibles — Goodwill and Other (Topic 350), Testing Indefinite-Lived Intangible Assets for Impairment. The ASU adds an optional qualitative assessment for determining whether an indefinite-lived intangible asset is impaired. Companies have the option to first perform a qualitative assessment to determine whether it is more likely than not (a likelihood of more than 50%) that an indefinite-lived intangible asset is impaired. If a company determines that it is more likely than not that the fair value of such an asset exceeds its carrying amount, it would not need to calculate the fair value of the asset in that year. However, if a company concludes otherwise, it must calculate the fair value of the asset, compare that value with its carrying amount and record an impairment charge, if any. ASU 2012-02 is effective for annual reporting periods beginning after September 15, 2012, with early adoption permitted. The Company adopted the provisions of ASU 2012-02 in 2012 and the adoption did not have a material impact on the Company’s results of operations, financial condition or its disclosures.

In December 2011, the FASB issued ASU 2011-11 — Disclosures about Offsetting Assets and Liabilities (ASC 210). It requires new disclosures for recognized financial instruments and derivative instruments that are either: (1) offset on the balance sheet in accordance with the offsetting guidance in ASC 210-20-45 or ASC 815-10-45 (collectively, the offsetting guidance) or (2) subject to an enforceable master netting arrangement or similar agreement, regardless of whether they are offset in accordance with the offsetting guidance. Recognized assets and liabilities within the scope of the ASU include financial instruments such as derivatives, repurchase agreements, reverse repurchase agreements and securities lending and borrowing arrangements subject to master netting arrangements. Financial instruments outside the scope of the ASU include loans and customer deposits at the same institution (unless they are offset in the statement of financial position) and financial instruments that are subject only to a collateral agreement (e.g., collateralized loans). Furthermore, in January 2013 the FASB issued ASU 2013-01 that clarifies provisions of ASU 2011-11. The Update clarifies that the scope of ASU 2011-11 applies to derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement. Both, ASU 2011-11 and ASU 2013-01 are effective for interim and annual reporting periods beginning after 1 January 2013. The Company does not expect the adoption to have a material impact on its results of operations, financial condition or disclosures.

In December 2011, the FASB issued ASU 2011-10 — Derecognition of in Substance Real Estate — a Scope Clarification (EITF Issue 10-E; ASC 360). It clarifies the guidance in ASC 360-20, Property, Plant, and Equipment: Real Estate Sales, on when a subsidiary that is in-substance real estate may be derecognized. Under the amendments in ASU 2011-10, parents that cease to have a controlling financial interest in a subsidiary that is in-substance real estate because the subsidiary defaults on its nonrecourse debt, will be required to apply the provisions of ASC 360-20 to determine whether the subsidiary should be derecognized. ASU 2011-10 is effective for interim and annual reporting periods beginning after 15 June 2012. The Company does not have subsidiaries that are in-substance real estate therefore ASU 2011-10 will not have a material impact on the Company’s results of operations, financial condition or disclosures.

In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment” (“ASU 2011-08”), which simplifies testing for impairment by allowing an entity to first assess qualitative factors and determine if it is more likely than not (defined as 50% or more) that the fair value of the reporting unit is less than its carrying

amount. That determination can then be used to decide if it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, which corresponds to the Company’s first quarter of current fiscal year. The Company adopted ASU 2011-08 during the current fiscal year.

In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), which was issued to enhance comparability between entities that report under U.S. GAAP and IFRS, and to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. However, in December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”), which deferred the guidance on whether to require entities to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement where net income is presented and the statement where other comprehensive income is presented for both interim and annual financial statements. ASU 2011-12 reinstated the requirements for the presentation of reclassifications that were in place prior to the issuance of ASU 2011-05 and did not change the effective date for ASU 2011-05. For public entities, the amendments in ASU 2011-05 and ASU2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. The Company adopted both ASU 2011-05 and ASU 2011-12 during the first quarter of the current fiscal year. The adoption of ASU 2011-05 and ASU 2011-12 did not have a material impact on the Company’s consolidated financial statements, other than presentation of comprehensive income.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. The Company adopted ASU 2011-04 during the first quarter of the current fiscal year. The adoption of ASU 2011-04 did not have a material impact on the Company’s consolidated financial statements other than disclosures related to fair value measurements.

In April 2011, the FASB issued ASU 2011-03 Transfers and Servicing (Topic 860), Reconsideration of Effective Control for Repurchase Agreements. It changes the rules for determining when these transactions should be accounted for as financings. The new rules eliminate from the assessment of effective control the requirement that the transferor has the ability to repurchase or redeem the financial asset that was transferred. Under the new rules, the amount of cash collateral received by the transferor will be irrelevant when determining if the repo should be accounted for as a sale. ASU 2011-03 is effective for annual reporting periods beginning after December 15, 2011. The Company adopted ASU 2011-03 during the current fiscal year. The adoption of ASU 2011-03 did not have a material impact on the Company’s consolidated financial statements.

The Company is one of the world’s largest vodka producers, and is the largest integrated spirit beverages business by total volume in Central and Eastern Europe. The Company maintains leading positions in all of its key markets – Poland, Russia and Hungary – and is expanding in the Ukraine where it began operations in 2010. The Company’s brand portfolio includes valuable and recognized brands like BOLS, Żubrówka, Absolwent and Soplica in Poland; Green Mark and Parliament in Russia; and Royal Vodka in Hungary. Each of these brands one of the leaders of its segment in those markets. The Company is also an active exporter of its brands, in particular Żubrówka, Green Mark and Parliament. Żubrówka is delivered to over 40 countries around the world, including the United States, the United Kingdom, France and Japan.

The first company in the CEDC corporate family was founded in Poland in 1990. For its first 15 years, the Company concentrated on establishing itself as a leading distributor of alcoholic beverages in Poland. In 2005, the Company entered the vodka manufacturing market. Upon acquiring Polmos Białystok, a leading production plant in Poland, and BOLS, a leader in the premium vodkas segment, the Company became a major player in the Polish vodka market, while retaining its position as a leading spirits distributor. The Company thereafter continued to expand its production business, developing sales of its own vodka brands.

In 2006, the Company expanded beyond Poland when BOLS Hungary became a member of the CEDC corporate family. With the acquisition of BOLS Hungary, the Company acquired the rights to the Royal Vodka trademark, the most popular brand in the Hungarian vodka market. The Company then turned its focus to expansion eastward, and in 2008, commenced takeovers in Russia, the largest vodka market in the world. By acquiring Russian vodka manufacturers Russian Alcohol Group and Parliament, the Company became the largest vodka producer in Russia and one of the biggest vodka makers in the world.

The Company has also continued to develop the other pillar of its business, sales of imported spirits. It is a leading importer of alcoholic beverages in Poland, Russia and Hungary. Its portfolio in Poland includes many of the world’s biggest and internationally recognized brands, such as Jim Beam Bourbon, Campari, Jägermeister, Remy Martin Cognac, Corona, Budweiser (Budvar), Sutter Home wines, Carlo Rossi wines, Concha y Toro wines, Metaxa Liqueur, Grant’s Whisky, E&J Gallo wines, Sierra Tequila, Teacher’s Whisky, Cinzano and Old Smuggler.

In Russia, the Company’s import portfolio includes E&J Gallo wines, Concha y Toro wines, Paul Masson wines, Jose Cuervo tequila, and Great Valley brandy. In addition, between 2010 and 2011, the Company acquired Whitehall, a leading premium alcohols importer in Russia. Consequently, the Company’s portfolio in Russia now includes Label 5 and Glenn Grant whiskies, De Kuyper liqueurs, and Constallation and Concha y Toro wines. The Company’s portfolio in Hungary includes such well-known brands as Metaxa, Jaegermeister, Bols, Grant’s, Remy Martin Cognac, Jose Cuervo and many others.

The Company has six operational manufacturing facilities located in Poland and Russia as of December 31, 2011 and a total workforce of approximately 4,600 employees. In 2011, the Polish and Russian operations accounted for 27.3% and 69% of revenues, respectively, and excluding impairment and certain unallocated corporate charges, 68.2% and 21.3% of its operating profit, respectively. For fiscal year 2011, the Company generated approximately $830 million in net sales, an increase of approximately 18.2% over net sales for fiscal year 2010.

Leading Brand Portfolio in Poland, Russia and Hungary—In Poland, Russia and Hungary, we have a leading portfolio of domestic vodkas covering all key segments. In addition to our domestic vodka portfolio we have a complementary import portfolio of leading import wines and spirits. This combined portfolio gives us a distinct advantage in the market by allowing us to provide a full spectrum portfolio of top domestic and import brands.

Depth of market position in Poland—We are a leading producer and importer of alcoholic beverages in Poland. Our portfolio includes top-selling brands that we produce as well as brands that we import on an exclusive basis. Our broad range of products, including our own vodka brands as well as imported wine and spirit brands, allows us to address a wide range of consumer tastes and trends as well as wholesaler needs and provides us with a solid portfolio base. Additionally, we have the scope and ability to bring new products to market in a timely and cost efficient manner to meet the changing desires of our consumers.

Solid platform for further expansion in the fragmented Russian spirits market—In 2011, we were the largest vodka producer in Russia, producing approximately 16.6 million nine-liter cases. Our large portfolio of alcoholic beverages consists of our own brands, including Green Mark, which for 2011 was the top-selling mainstream vodka brand in Russia and the third largest vodka brand by volume in the world, Parliament and Zhuravli, one of the top-selling sub-premium vodka brands in Russia and imported products. We believe our combined size and the geographic coverage of our sales force enable us to benefit from the ongoing consolidation in the Russian spirits market. Furthermore, we believe we have the necessary infrastructure to introduce new brands to the market place in the segments where consumer demand is strongest.

Our sales force in Russia includes people allocated to Exclusive Sales Teams, or ESTs. ESTs are employed by wholesalers that carry our vodka products but focus exclusively on the merchandising, marketing and sale of our portfolio. Because spirits advertising is heavily regulated in Russia, we believe that this structure provides us with meaningful marketing benefits as it allows us to maintain direct relationships with retailers and to ensure that our products receive prominent shelf space. Wholesalers who employ our ESTs are solely compensated through a rebate on purchases of our vodka brands. This arrangement enables us to maintain an expansive and exclusive sales force covering almost all regions of Russia with limited associated fixed overhead costs.

Attractive import platform for international spirit companies to market and sell products in Poland, Russia and Hungary—Our existing import platform, under which we are the exclusive importer of numerous brands of spirits and wines into each of our core markets, combined with our sales and marketing organizations in Poland, Russia and Hungary provide us with an opportunity to continue to expand our import portfolio. We believe we are well-positioned to serve the needs of other international spirit companies that wish to sell products in these markets.

Capitalize on the Russian market consolidation—The Russian vodka market is currently fragmented, and we believe we will be able to take market share from smaller competitors in the near and long-term. We estimate that the top five vodka producers in Russia accounted for estimated 55% of the total market share in 2011 as compared to 26% estimated in 2006. We believe, based on our experience of consolidation trends in Poland, that the combined market share of the top five vodka producers in Russia could increase from 55% in the next five years as the Russian market continues to consolidate. We intend to capitalize on our leading brand position, our breadth of portfolio, our ability to bring new brands to market and our expansive sales and distribution network to expand our market share in Russia.

Develop our portfolio of exclusive import brands—In addition to the development of our own brands, our strategy is to be the leading importer of wines and spirits in the markets where we operate. We have already developed an extensive wine and spirit import portfolio within Poland. In Russia, we intend to capitalize on the well-developed import platform and our sales and marketing strength by developing new import opportunities and capitalizing on the overall growth in imports. We also plan to utilize the platform we have developed in Ukraine for import wine and spirit opportunities.

Continue to focus on sales of our domestic and export brands and exclusive import brands—Within Poland we intend to continue our marketing efforts behind Żubrówka and Żubrówka Biała which we launched in November 2010, with further extensions planned for the Żubrówka family for the forseeable future. We will also

continue to develop extension for our other vodka brands such as Soplica which was repackaged with new flavors during 2011. We are also in the process of completing an extensive program to develop new packaging and marketing programs for Bols and Absolwent vodka in our core markets. We also plan to introduce flavor extensions of our Soplica and Żubrówka brands.

Develop export opportunities for our vodka brands— We also intend to seek new export opportunities for our vodka brands, such as Żubrówka, Green Mark, Kauffman and Parliament, through new export package launches and product extensions. During 2011 we developed a new export structure within the group to leverage the portfolio strength of our brands to develop further export opportunities.

The total net value of the alcoholic beverage market in Poland (including beer, wine and spirits) was estimated to be approximately $7 to $9 billion in 2011. Total sales value of alcoholic beverages at current prices decreased by approximately 1.3 % from December 2010 to December 2011. We believe that this decrease was due, for the most part, to the continued effects of the world-wide economic crisis. Poland fared better than most countries in the region, but was nevertheless affected. Beer and vodka account for approximately 88% of the value of sales of all alcoholic beverages.

We are one of the leading producers of vodka in Poland. We compete primarily with five other major spirit producers in Poland, most of which are privately-owned and the remainder still being state-owned. The spirit market in Poland is dominated by the vodka market. Domestic vodka consumption dominates the Polish spirits market with over 90% market share, as Poland is the fourth largest market in the world for the consumption of vodka and one of the top 25 markets for total alcohol consumption worldwide. The Polish vodka market is divided into four segments based on quality and price:

We produce vodka in key market segments and have our largest market share in the mainstream and sub-premium segments. Though vodka brands compete against each other from segment to segment, the most competition is found within each segment. As we have a number of top-selling vodka brands in Poland, and have approximately a 24% market share measured by value, we are in a good position to compete effectively in all three segments.

In terms of value, the top premium and imported segment accounts for approximately 3.7% of total sales volume of vodka, while the sub-premium segment accounts for approximately 13.7% of total sales volume. The mainstream segment, which is the largest, now represents 58.7% of total sales volume. Sales in the economy segment currently represent 23.7% of total sales volume.

The Polish wine market, which grew to an estimated 109 million liters in 2011, is represented primarily by two categories: table wines, which account for 2.1% of the total alcohol market, and sparkling wines, which account for 0.7% of the total alcohol market. As Poland has almost no local wine production, the wine market has traditionally been dominated by imports, with lower priced Bulgarian wines representing the bulk of sales. However, over the last four years, sales of new world wines from regions such as the United States, Chile, Argentina, Australia, New Zealand and South Africa have seen rapid growth. In 2011, it is estimated that sales of wine from these regions grew by 8.2% in volume. Also in 2011, our exclusive agency brand, Carlo Rossi, continued to be the number one selling wine in Poland by value.

We believe that consumer preference is trending towards higher priced table wines. The best selling wines in Poland previously retailed for under $3 per bottle. Currently, the best selling wines retail in the $4-$7 range.

Poland is the fourth largest beer market in Europe. Sales of beer remained stable in volume in 2011 but still account for 51% of the total sales value of alcoholic beverages in Poland. Three major international producers, Heineken, SAB Miller and Carlsberg, control 82% of the market through their local brands.

Russia, with its official production of approximately 940 million liters in 2011, is by far the largest vodka market worldwide. The Russian vodka market is fragmented with, in our estimation, the top five producers having a combined volume market share of approximately 55% in 2011. This number is up from 2006 when the top five producers only had an estimated 26% market share. Further sector consolidation has been ongoing in recent years, with the potential to continue in the near term despite the market being down approximately 9% in 2011. We believe we are well-positioned to participate in the consolidation of the Russian vodka market in 2012 as we have the leading brands by volume and value in the mainstream and sub-premium categories together with a dedicated sales force and ESTs. In addition, the Russian government has put in place very restrictive policies on the advertising of spirits. We believe these policies make it difficult for any competitor to buy market share by out-spending its rivals.

We believe that a key factor that will impact the Russian vodka market will be the continued role of the Russian government in the form of further controls to reduce the black market as well as planned excise tax increases. On the one hand the government has continued to develop policies to reduce the number of players who operate in the grey market. This was further evidenced in 2011 through the overall industry re-licensing process which left a number of producers and distributors unable to operate as their licenses were not renewed. We believe a continuation of this policy will be to the benefit of the larger legitimate vodka producers in the market including our Russian operations. At the same time, the government has taken steps to increase excise taxes which in turn will increase the shelf price of vodka in the market. For 2012, two excise tax increases were taken with the first 10% increase having occurred in January 2012 and a second 18% increase in July of 2012. In January 2013, there was a further 33% increase in excise tax. This is compared to annual average historical increases of 9%-10% during the last five years. We expect that this trend of higher excise will continue for the next 2-3 years.

The Russian spirit market has also been impacted by higher spirit pricing, since the beginning of 2010, spirits prices in the market have increased by 92% which has impacted our production cost by $3.7 million in 2010 and $18.1 million in 2011. As the supply of spirit in Russia is generally controlled by a small number of producers and we purchase spirits primarily from a single source that effectively controls market pricing, we do not expect to see reductions in spirit pricing in the upcoming periods, and we may see further increases in spirit pricing. We cannot assure you that we will be able to offset the effects of higher spirit prices or excise taxes through price or volume increases or whether the recent declines in the vodka market will impact our ability to do so.

We believe however, that producers who operate in higher priced segments of the markets will have less negative impact as a result of lower consumer demand from higher shelf prices as the excise tax is fixed per liter of spirit and thus the percent increase will impact higher priced brands less. Additionally, as the largest producer of vodka in Russia, we believe we have the purchasing power to obtain the most competitive spirit prices in the market. Therefore although prices may increase we believe that given our purchasing power we will have advantageous spirit pricing vis-à-vis some of our competitors. Our strategy over the last few years in Russia has been focused on the mainstream and sub-premium price points and we believe we have a well-placed vodka portfolio, together with higher priced import brands, to best weather these upcoming challenges.

Vodka consumption dominates the Russian spirits market with over 90% market share. The Russian vodka market is generally divided into five segments based on quality and price: premium, sub-premium, mainstream, economy and cheap. In terms of value, the premium segment accounts for approximately 1.5% of total sales volume of vodka, while the sub-premium segment accounts for approximately 9.6% of total sales volume. The mainstream segment now represents 43.8% of total sales volume. Sales in the economy and cheap segment currently represent 45.2% of total sales volume. We believe the economy sector grew vis-à-vis the other sectors in 2011 as a result of the implementation of minimum pricing, as described above.

Vodka represented over 90% of the total Russian spirits market in 2011. The vodka market decreased approximately 3% in 2011 versus 2010, and we believe that the market will continue to see volume declines in the next few years. However as before, we believe the premiumization process should most benefit the mainstream and sub-premium brands, particularly in light of the planned excise tax increases and thus we would expect overall value in the market to grow. We believe we are well-positioned for this with the bestselling brands in both the sub-premium and mainstream sectors. In addition, with our current capacity and relatively little capitalization expense, we plan to introduce new brands to the market to capture sales in any sector that we believe will have the most dynamic growth potential.

The Russian vodka market is quite fragmented, with the top five producers only having an estimated 55% market share in 2011 as compared to an estimated 90% market share in Poland and an estimated 84% market share in the Ukraine. We believe that the Russian market will experience trends similar to those experienced in the Polish market and will continue to see further consolidation of the market as the retail infrastructure further consolidates and develops and the effects of the economic crisis stabilize and diminish. We believe that this consolidation post crisis will increase significantly over the next 3-5 years.

According to market data, Russia has relatively low wine consumption per capita (about 5.6 liters per year). It is expected to grow at an estimated 3-4% annual growth rate during the period from 2012-2016.

Currently the fastest growing category in the Russian wine market is sparkling wine. In 2011, sparkling wine sales grew 7% by volume and 10% by value terms, according to Euromonitor. Despite the fact that domestic wines prevail on the market, the share of imported higher quality wines has been constantly growing. We believe we can benefit in the future from the growing Russian wine market through the import and distribution of high-value wines and the addition of new wines to our import and distribution portfolio in Russia. Through Whitehall, we import wines from Constellation and Concha y Toro among others.

The ready to drink (or long drink) market in Russia consists of pre-mixed beverages with 9% or less alcohol content. The key segments of the market are gin-based drinks, alco-energy drinks and fruit-based drinks. Over the last few years, we have focused our portfolio away from lower margin PET packaging into higher margin

trendy glass packaging, targeted towards females. Our portfolio includes the gin-based Bravo Classic brand, which accounts for approximately 50% of our long drinks sales volume, and the new higher end brands, Amore and Elle have doubled in volume to greater than 44%. As of year-end 2011, we held a 6.39% market share in the RTD category. We have focused over the last two years on improving the profitability of these products through a combination of more targeted selling and mix improvement. The long drinks business continues to show significant margin and operating profit improvement over prior years.

The Government has implemented changes in the legislation for low alcohol content products affecting the market for RTD’s, including limitations on the package sizes for spirit based RTD’s. We believe we are well positioned to address these changes and where required move to a wine based RTD which will be allowed in prior package sizes. This is evidenced by a number of toll filling contracts we entered into at the end of 2011 for production of other parties’ brands due to the limited number of producers in the market who are positioned to address these regulatory changes.

The Hungarian spirit market is dominated primarily by bitters and brown spirits. According to trade statistics, the most popular spirit drinks during 2011 were Jägermeister, Royal Vodka, Fütyülos, Kalinka Vodka, Unicom, Metaxa, Ballantines and Johnnie Walker. The current significant trends in the Hungarian spirit market are the overall decrease in total spirit consumption and a pronounced move by the consumer to branded imported spirits. Our Royal Vodka brand is the number one selling vodka in Hungary. In addition, Hungary is the third largest market in the world for sales of our exclusive agency brand, Jägermeister.

We believe that the total size of the spirit market in Hungary is approximately 59 million liters which has declined in 2011 by approximately 7.5%. However, despite the decreasing total sales volume of spirits, we believe that the share of imported spirits, the segment in which we operate, is stable, while the consumption of local spirits is in decline. The increasing share of imported spirits was a result of eliminated custom duty and the improving purchasing power since the European Union accession, as well as the continuous marketing and advertising activities of the imported spirit brands.

The spirit market is split into two major segments in Hungary: local producers and importers. The local producers are primarily dealing with low-cost, mainstream or below, local products, as well as, with premium fruit-based spirits (Palinka). CEDC introduced in 2011 its own Palinka-like brand—Esti Kornel—to participate in this important segment of the market. The import spirit market is more competitive and relatively fragmented. The major players are the market leader Zwack Unicum Zrt (with an interest in both the local and import spirit segment), CEDC as the largest spirit importer, Duna Pro (Bacardi-Martini portfolio), Pernod Ricard Hungary and Heinemann. Our advantage in Hungary is the combination of our wide portfolio which has the number one leading brands in the vodka, bitter and imported brandy categories, and our experienced sales and marketing team which offers premium service and builds strong brand equities.

We are one of the leading producers of vodka by value and volume in Poland. We own two production sites in Poland one in Oborniki and one in Białystok. In the Oborniki distillery, we produce the Bols and Soplica vodka brands, among other spirit brands. In Białystok we produce Absolwent and Żubrówka which have been two of the leading vodkas in Poland. Absolwent and Soplica have consistently been two of the top ten mainstream selling vodkas in Poland. Żubrówka is also exported out of Poland to many markets around the world, including the United States, England, Japan and also France, where in 2011 it was the number one imported premium vodka by volume. In addition to the Absolwent and Żubrówka brands, in Białystok we produces the Żubrówka Biała brand which showed significant growth in 2011 and had a market share of 5.7% at the end of 2011.

We are the leading importer of spirits, wine and beer in Poland. We currently import on an exclusive basis approximately 40 leading brands of spirits, wine from over 30 producers and 2 brands of beer.

We sold approximately 10.7 million nine-liter cases of vodka, wine and spirits through our Polish business in 2011 including both our own produced vodka brands as well as our exclusive agency import brands.

Our mainstream vodkas are represented by the Absolwent, Soplica, Żubrówka and Żubrówka Biała brands among others. Of our brands, in 2011 Żubrówka Biała was the top selling brand with over 2.6 nine-liter cases sold in 2011 together with Absolwent being one of the top-selling brands in Poland for over 8 years with sales of over 1.7 million nine-liter cases in 2011. Soplica clear and flavor has been a fixture in the mainstream category over the last several years, and we plan to introduce additional flavor extensions in 2012, which we expect will further enhance this position. Our Żubrówka brand is the second best selling flavored and colored vodka in Poland and is exported to markets around the world. In 2011, we sold approximately 191 thousand nine-liter cases of Żubrówka outside of Poland. As mentioned above Żubrówka Biała, which has sold extremely well since its launch in November 2010, and has captured significantly more market share than management had anticipated. We look for Żubrówka Biała to continue to sell well in 2012.

Bols vodka continues to be our best-selling premium vodka both in Poland and Hungary. In Poland we own and produce the top selling vodka in Hungary, Royal Vodka, which we distribute through our subsidiary Bols Hungary.

We have exclusive rights to import and distribute approximately 70 leading brands of spirits, wine and beer into Poland and distribute these products throughout the country. We also provide marketing support to the suppliers who have entrusted us with their brands.

The following table illustrates the breakdown of our sales in Poland in the twelve months ended December 31, 2011, 2010 and 2009:

We have a number of Polish and Russian brands that we believe have export potential. In the second half of 2011, we restructured our export operations to create one business unit offering a portfolio of Polish and Russian brands for export markets. We believe that this focus together with a strong core export portfolio will allow us to increase sales of our exports over the upcoming years.

During 2011, our core export brand from Poland, Żubrówka, which was primarily exported to the United Kingdom, France, Japan and the United States, was also introduced to the Ukrainian market.

We are continuing to develop our third party private label export business in which we produce vodka to be sold under labels other than our own. Customers range from major retail chains in Europe to premium brand owners in the United States. For example, we currently produce Ultimat vodka (an ultra-luxury vodka sold primarily in the United States) for Patron as well as other similar agreements.

Polish labor laws require that certain benefits be provided to employees, such as a certain number of vacation days, maternity leave and retirement bonuses. The law also restricts us from terminating employees without cause and, in most instances, requires a severance payment of one to three months’ salary. Additionally, we are required to contribute monthly payments to the governmental health and pension system. Most of our employees are not unionized, and we have had no significant employee relations issues. In addition to the required Polish labor law requirements, we maintain an employee incentive stock option plan for key management and provide supplemental health insurance for qualified employees.

With the acquisitions of Polish distilleries, we became the owners of vodka brand trademarks. The major trademarks we have acquired are: the Bols vodka brand (we have a perpetual, exclusive, royalty-free and sub-licensable trademark agreement for Poland, Russia and Hungary), the Soplica brand, Absolwent and Żubrówka brands. We also have the trademark for Royal Vodka which is produced in Poland and which we currently sell in Hungary through our Bols Hungary subsidiary. See “Risk Factors—We may not be able to protect our intellectual property rights”.

We are the leading integrated spirits beverages business in Russia with an approximate 15.1% market share by volume in vodka production for the year ended December 31, 2011. We produce Green Mark, the number one selling vodka in Russia and as well as the leading sub-premium vodkas in Russia, Parliament and Zhuravli. In 2011, we introduced new brands to the Russian market Talka, Sotka and Silver Blend. We also produce Yamskaya, an economy vodka in Russia, and premixed alcohol drinks (or long drinks).

The hypermarkets and large retail chains are expanding throughout Russia with different sized formatted stores, which are expected to better cover and penetrate those areas outside of the major cities of Russia. As we have central agreements in place with these hypermarkets and large retail chains, as well as a large trademark budget for spirits in Russia and the leverage it brings, we expect to benefit from this expansion.

We also own Whitehall, which holds the exclusive rights to the import of such leading premium wine and spirit brands as Concha y Toro, Paul Masson, Robert Mondavi, DeKuyper, Jose Cuervo and Label 5. In addition to these import activities, Whitehall has distribution centers in Moscow, Saint Petersburg, and Rostov as well as a wine and spirits retail network located in Moscow.

We produced and sold approximately 16.6 million nine-liter cases of vodka through our Russian business in 2011 in the main vodka segments in Russia: premium, sub-premium, mainstream, economy and cheap. In addition we produced and sold approximately 2.8 million nine-liter cases of long drinks.

In the mainstream segment we produce Green Mark, the number one selling brand in Russia, as well as Zhuravli and Parliament which are among the leading sub-premium brands. In the first half of 2008, we introduced Yamskaya, which is among the leading economy vodkas in Russia. In the second half of 2009, we introduced Gerbovaya and Urozhay, both lower mainstream brands. In October of 2010, we introduced Black Sail brandy in 3, 4 and 5 star versions. In 2011 we introduced three new brands to the Russian market Talka, Sotka and Silver Blend.

We are one of the leading importers of wine and spirits in Russia. Whitehall, our main import company, has exclusive rights to import and distribute a number of brands of spirits and wines into Russia. Through Whitehall, we have one of the leading platforms for importing and distributing faster growing imported brown spirits and wines in Russia. Exclusively imported brands include the following:

We are the leading exporter of vodka in Russia with our key export markets of the Ukraine (where we have set up our own import and distribution company), the Baltics and other CIS countries. In January 2012 CEDC has signed an exclusive distribution agreement with First Drinks Brands, part of William Grant & Sons, on distribution of Green Mark, Żubrówka and Kauffman Vodka in the United Kingdom. The agreement will strengthen presence of CEDC brands in the UK market, as First Drinks Brands is the leading distributor on the market, with expertise in development of premium spirit brands, cooperating with both of trade and on trade segment.

In Russia, we have a strong sales team that sells directly to the key retail accounts and primarily relies on third-party distribution through wholesalers to reach the small to medium sized outlets. For sales of our vodka brands we also have ESTs that were introduced in 2006. We staff ESTs that currently cover the majority of Russia. The mission of these teams is to maintain direct relationships with retailers and ensure that the Company’s products are properly positioned on the shelf. Members of ESTs are generally on the distributors’ payrolls, which are indirectly remunerated by us via discounts granted to distributors. ESTs exclusively deal with our vodka products and currently control deliveries to approximately 69,000 points-of-sale (which is about 57% of all points-of-sale in Russia).

With the acquisition of Parliament and Russian Alcohol we became the owners of vodka brand trademarks in Russia. The main trademarks we have are Parliament, Green Mark and Zhuravli vodka brands. We also have trademarks with other brands we own in Russia. See “Risk Factors—We may not be able to protect our intellectual property rights”.

In July of 2006, we acquired the trademark for Royal Vodka, which we produce in Poland and which we currently sell in Hungary through our Bols Hungary subsidiary. Royal Vodka is the number one selling vodka in Hungary with market share of approximately 53%.

In Hungary, we employ approximately 23 sales people who cover primarily on-trade and key account customers throughout the country.

As of December 31, 2011, we employed 50 employees in Hungary including 48 persons employed on a full time basis.

The principal components in the production of our distilled spirits are products of agricultural origin, such as rectified spirit, as well as flavorings, such as bison grass for Żubrówka, and packaging materials, such as bottles, labels, caps and cardboard boxes. We purchase raw materials by contractual arrangement and through purchases on the open market. Agreements with the suppliers of these raw materials are generally negotiated with indefinite terms, subject to each party’s right of termination upon six months’ prior written notice. Prices for these raw materials excluding spirits are negotiated on average every year. Spirit prices are influenced by underlying grain price trends which can fluctuate quickly and therefore tend to be purchased on short term or spot rate agreements.

We have several suppliers for each raw material in order to minimize the effect on our business if a supplier terminates its agreement with us or if disruption in the supply of raw materials occurs for any other reason. We have not experienced difficulty in satisfying our requirements with respect to any of the products needed for our spirit production and consider our sources of supply to be adequate at the present time. We do not believe that we are dependent on any one supplier in our production activities. In certain instances, primarily spirit in Russia, we purchase raw materials primarily from a single source which increases our risks for price increases and supply disruptions. See “Risk Factors – Reliance on single source suppliers could have a material adverse effect on our business and our financial results”.

Alcohol and spirit markets are subject to extensive government regulations in Poland and Russia. We are subject to a range of regulations in the countries in which we operate including laws and regulations on the environment, trademark and brand registration, packaging and labeling, distribution methods and relationships, pricing and price changes, sales promotions and public relations. As explained below in “Risk Factors”, we may be required to obtain permits and licenses to operate our facilities. We are also subject to rules and regulations relating to changes in officers or directors, ownership or control.

As discussed earlier, on January 1, 2012, the Russian government increased excise taxes for spirits from 231 Ruble per liter of 100% spirit to 254 Ruble per liter of 100% spirit, a 10% increase. The government has announced a 100 Ruble per annum increase in excise tax each year until 2015. This excise tax increase has also been matched by other government’s regulations imposed to curb the black market for spirits in Russia. Actions included the changing of the payment structure for excise taxes as well as requiring a bank guarantee for the excise value when purchasing spirits.

The RTD business was also impacted in 2012 by changes in the Russian government regulation which restrict the package sizes that spirit based RTD can be sold in. As such, the Company plans to move to a wine based formulation for the majority of the RTD products which will be allowed to be sold in existing packaging formats.

We believe we are in material compliance with all applicable governmental laws and regulations in the countries in which we operate and expect all material governmental permits and consents to be renewed by the relevant governmental authorities upon expiration. We believe that the administration and compliance costs with the applicable laws and regulations, and our liability thereunder, do not and are not expected to have a material adverse impact on our financial condition, results of operations or cash flows.

Polish and Russian regulations do not allow any form of “above-the-line advertising and promotion”, which is an advertising technique that is conventional in nature and impersonal to customers, using current traditional media such as television, newspapers, magazines, radio, outdoor, and internet mass media for alcoholic beverages with greater than 18% alcohol content.

We believe we are in material compliance with the government regulations regarding above-the-line advertising and promotion and we have not been notified of any violation of these regulations.

We are subject to a variety of laws and regulations relating to land use and environmental protection, including the Polish Environmental Protection Law of April 27, 2001 (Dz.U. 2008.25.150, as amended), the Polish Waste Law of December 14, 2012 (Dz.U. 2013.21 as amended), the Polish Water Management Law of July 18, 2001 (Dz.U.2012.145, as amended) and the Polish Act on Entrepreneurs’ obligations regarding the management of some types of waste and product charges of May 11, 2001 (Dz.U. 2007.90.607, as amended). We are not required to receive an integrated permit to operate our Białystok and Oborniki production plants. However, we receive certain permits for the economic use of the environment, including water permits, permits for production and storage of waste and permits for discharge of pollutants into the atmosphere. In addition, we have entered into certain agreements related to the servicing and disposal of our waste, including raw materials and products unsuitable for consumption or processing, paper, plastic, metal, glass and cardboard packaging, filtration materials (used water filter refills), used computer parts, unsegregated (mixed) residential waste, damaged thermometers and alcoholmeters, used engine and transmission oils, batteries and other waste containing hazardous substances. In addition, we pay required environmental taxes and charges related primarily to packaging materials and fuel consumption and we believe we are in material compliance with our regulatory

requirements in this regard. While we may be subject to possible costs, such as clean-up costs, fines and third-party claims for property damage or personal injury due to violations of or liabilities under environmental laws and regulations, we believe we are in material compliance with applicable requirements and are not aware of any material breaches of said laws and regulations.

The Corporate Operations and Other division includes traditional corporate-related items including executive management, corporate development, corporate finance, human resources, internal audit, investor relations, legal and public relations.

We operate in the following tax jurisdictions: the United States, Poland, Hungary, Russia, Ukraine, Cyprus and Luxembourg. In Poland, Russia, Hungary and Ukraine we are primarily subject to value added tax (VAT), corporate income tax, payroll taxes, excise taxes and import duties. In the United States we are primarily subject to federal and New Jersey state income taxes, Delaware franchise tax and local municipal taxes. We believe we are in material compliance with all relevant tax regulations.

Excise taxes comprise significant portions of the price of alcohol and their calculations differ by country. In Poland and Russia, where our production takes place, the value of excise tax rates for 2011 amounted to PLN 49.6 ($14.51) and RUB 231 ($7.17) per liter of 100% alcohol.

We do not have a separate research and development unit, as new product developments are primarily performed by our marketing and production department. Our activity in this field is generally related to development of new brands as well as improvements in packaging and extensions to our existing brand portfolio or revised production processes leading to improved taste.

Production and rectification facilities. Our production facilities in Poland comprise two plants, one in Białystok, one in Oborniki Wielkopolskie. The Białystok facility is located on 78,665 square meters of land which is leased from the government on a perpetual usufruct basis. The production capacity of our plant in Bialystok is approximately 23.2 million liters of 100% alcohol per year and currently, we use approximately 70-75% of its production capacity. In the Białystok distillery we produce Żubrówka Bison Grass, Żubrówka Biała, Absolwent and its taste variations, Batory, Białowieska, Cytrynówka, Czekoladowa, Kompleet Vodka, Liberty Blue, Lider, Ludowa, Nalewka Wiśniowa, Nalewka Miodowa and Palace Vodka, Winiak Białostocki, Winiak Pałacowy, Wódka Imbirowa. The plot on which the Białystok facility is located has been pledged as part of the collateral to our Existing 2016 Notes.

The Oborniki facility is located on 80,519 square meters of which 58,103 square meters are owned by us and 22,416 square meters are leased from the government on a perpetual usufruct basis. In the Oborniki distillery we produce, Bols Vodka and its taste variations, Soplica and its taste variations and Boss, Śląska, Niagara and Royal Vodka. The plot on which the Oborniki facility is located has been pledged as part of the collateral to our Existing 2016 Notes.

Our production facilities in Russia comprise four active plants that we refer to as Topaz, Siberia, Parliament and Bravo Premium and one plant in Tula (“PKZ”) that is inactive.

The Topaz distiller is the main vodka plant in Russia and is one of the most advanced enterprises in Russia. It is certified to be in compliance with ISO 9001 and HACCP. The factory has ten, modern, hi-tech filling lines, its own rectifying equipment for processing raw spirit, and a unique “stream” processor. The Topaz distillery produces, among others, the Green Mark, Zhuravli and Yamskaya brands. The plant, which was founded in 1995, is located on 65,400 square meters and has a production capacity of over 136 million liters annually. Currently we use about 61% of the plant’s production capacity.

The Siberia facility is a modern vodka plant located in Novosibirsk. Due to the strategic location of the plant the Company is able to obtain transport costs efficiencies in order to serve the eastern part of Russia. The Siberia facility has the ability to produce almost all of the vodka brands in the CEDC portfolio. It is located on 55,000 square meters. The production capacity of the Siberia facility is 114 million liters per year, at the moment its usage is about 30%. The Siberia plant has been pledged as part of the collateral to our Existing 2016 Notes.

The Parliament production plant uses an unique biological milk purification method. Milk, added at a certain stage of production, absorbs all impurities and harmful substances. The milk is then removed in a multistage filtration process, leaving pure vodka of the highest quality. The Parliament plant is located on the area of 25,400 square meters. It has a production capacity of 44 million liters of 100% alcohol annually, currently we use 37% of its capacity. The building is a security for a loan from Grandinvestbank.

The Tula facility was shut down on July 28, 2011 the Company committed to look for a buyer or keep the plant idle as part of the ongoing restructuring process in Russia, in order to optimize efficiency. Starting in August 2011, all production activity has been suspended and all of the employees were terminated. The Company recognized a RUR 221.6 million (approximately $7.4 million) loss, related to the classifications of the assets at the lower of carrying amount or estimated fair value less costs to sell. In the consolidated balance sheet we present in a separate line fixed assets of Tula as of December 31, 2011 and December 31,2010 of $0.7 million and $8.6 million respectively, as assets held for sale. The Tula facility has been pledged as part of the collateral to our Existing 2016 Notes.

The Bravo Premium distillery was the first in Russia to bottle alcoholic cocktails, beer and non-alcoholic beverages in aluminum cans. The company has been affiliated with Russian Alcohol since 2005 and became part of the CEDC Group in 2008. In recent years Bravo Premium has gone through an intensive modernization of the manufacturing process, purchased new pouring lines, built new plant facilities and expanded its distribution network. Today, Bravo Premium is a premier facility for the production of alcoholic cocktails, with three pouring lines for cans, plastic bottles and glass containers. The factory produces such cocktails as Amore, Elle and Bravo Classic. The factory is certified to be in compliance with ISO 9001. It is located on 12,061 square meters. We use about 30% of its 80 million liters production capacity.

Office, distribution, warehousing and retail facilities. We own three warehousing and distribution sites located in various regions of Poland as well as four retail facilities located in various regions of Poland. In Russia we own properties in the Balashika, Moscow region where the Parliament production site is located, the Mitishi, Moscow region where the Topaz production site is located, Tula where the PKZ production site is located, and Novosibirsk where the Siberian production site is located. In Ukraine we rent one warehouse and one office. During 2011, the PKZ factory was shut down and is now idle as is accounted for as a held for sale asset.

Leased Facilities. Our primary corporate office is located in Warsaw, Poland, and we have a rented corporate office in Budapest, Hungary. In addition we operate over three warehousing and distribution sites and four retail facilities located in various regions of Poland. In Russia we lease over 60 office, warehouse and retail locations primarily related to the RAG and Parliament business. The lease terms expire at various dates and are generally renewable.

The Company has various agreements covering its sources of supply, which, in some cases, may be terminated by either party on relatively short notice. Thus, there is a risk that a portion of the Company’s supply of products could be curtailed at any time.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financing Arrangements—Bank Guarantees”.

The Company makes rental payments for real estate, vehicles, office, computer, and manufacturing equipment under operating leases. The following is a schedule by years of the future rental payments under the non-cancelable operating lease as of September 30, 2012:

During 2012, the Company continued its policy of renewing its transportation fleet by way of capital leases. The future minimum lease payments for the assets under capital lease as of September 30, 2012 are as follows:

From time to time we are involved in legal proceedings arising in the normal course of our business, including opposition and cancellation proceedings with respect to trademarks similar to some of our brands, and other proceedings, both in the United States and elsewhere. Except as set forth below, we are not currently involved in or aware of any pending or threatened proceedings that we reasonably expect, either individually or in the aggregate, will result in a material adverse effect on our consolidated financial statements.

the SEC for the second and third quarters of 2010, relating to declines in our vodka portfolio, our need to take an impairment charge relating to the deterioration in fair value of certain of our brands in Poland and negative financial results from the launch of Żubrówka Biała. Subsequent to the above complaint, a second, substantially similar class action complaint titled Tim Schuler v. Central European Distribution Corporation, et al., was filed in the same court. By court orders dated August 22, 2012, the Steamfitters action and the Schuler action were consolidated and are now proceeding in the District of New Jersey under the caption In re Central European Distribution Corp. Securities Litigation, 11-cv-6247 (JBS-KMW). The Arkansas Public Employees Retirement System and the Fresno County Employees’ Retirement Association have been named Lead Plaintiffs in this action. Pursuant to an Order of the Court, Lead Plaintiffs are expected to file an amended complaint by February 18, 2013. Defendants will then have 60 days to answer or move to dismiss the complaint.

On June 8, 2012, a purported securities fraud class action titled Grodko v. Central European Distribution Corporation, et al., was filed against the Company in the United States District Court for the Southern District of New York. The plaintiff in the lawsuit, who is suing purportedly on behalf of a class of all purchasers of the Company’s common stock between March 1, 2010 and June 4, 2012, alleges that the Company made false and/or misleading statements related to and/or failed to disclose that (1) the Company’s reported net sales in the years ended December 31, 2010 and 2011 were materially inflated; (2) as a result of a failure to account for retroactive trade rebates provided to the customers of Russian Alcohol, the Company anticipates restating its reported consolidated net sales, operating profit and related accounts for these periods; and (3) as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times. On August 7, 2012 a second, substantially similar class action complaint titled Puerto Rico System of Annuities and Pension for Teachers v. Central European Distribution Corporation, et al., was filed in the same court. By court orders dated September 4, 2012, the Grodko action and the Puerto Rico System of Annuities and Pension for Teachers action were transferred to the United States District Court for the District of New Jersey, where the actions have been consolidated and are proceeding under the caption Grodko v. Central European Distribution Corporation, et. al, No. 12-cv-5530 (JBS-KMW). The Puerto Rico System of Annuities and Pensions for Teachers has been named lead plaintiff in this action., On February 15, 2013, the lead plaintiff filed an amended complaint and the defendant now has 30 days to answer or move to dismiss the complaint.

The Company intends to mount a vigorous defense to the claims asserted. Although we believe the allegations in the above complaints are without merit, these types of lawsuits can be protracted, time-consuming, distracting to management and expensive and, whether or not the claims are ultimately successful, could ultimately have an adverse effect on our business, operating results and cash flows.

As noted in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2011, filed with the SEC on October 5, 2012, the Audit Committee, through its counsel, voluntarily notified the SEC of its internal investigation regarding the Company’s retroactive trade rebates, trade marketing refunds and related accounting issues. The Company has subsequently been contacted by the Fraud Division of the Criminal Division of the US Department of Justice (“DOJ”) regarding the disclosure in the Form 10-K/A for the year

ended December 31, 2011, filed with the SEC on October 5, 2012 that there has been a breach of the books and records provisions of the Foreign Corrupt Practices Act (“FCPA”) of the United States and potentially other breaches of the FCPA. The Company has been asked to provide information about these matters on a voluntary basis to the SEC and DOJ. The Company is fully cooperating with the SEC and DOJ. Any action by the SEC or DOJ could result in criminal or civil sanctions against the Company and/or certain of its current or former officers, directors or employees.

The following table sets forth information regarding our directors and certain of our executive officers, including their ages as of February 25, 2013.

Roustam Tariko was appointed Chairman of the board of directors on July 9, 2012 and, from October 23, 2012 to January 10, 2013, served as Interim President of the Company. Mr. Tariko is the founder of Russian Standard, one the largest Russian privately owned companies working in the consumer market. Russian Standard has leading positions in banking, premium vodka, sparkling wines and spirits distribution. Dating back to 1992, the Russian Standard family of companies today includes Russian Standard Vodka (a number one premium vodka in Russia, present in over 75 countries), Roust Inc. (a leading Russian distributor of alcoholic beverages), Gancia (a legendary Italian producer of sparkling wines and vermouths founded in 1850), Russian Standard Bank (a leading consumer lending and credit card bank in Russia) and Russian Standard Insurance. Mr. Tariko is a graduate of the Moscow Institute for Railway Engineering with a degree in economics and INSEAD Executive School.

N. Scott Fine has been a director of the Company since January 2003, and was previously a director in 2001. Mr. Fine was appointed Lead Director of the board of directors on July 9, 2012 and Vice Chairman of the board of directors on October 23, 2012. Mr. Fine is an investment banker at Scarsdale Equities, a New York based investment-banking firm. Mr. Fine has been involved in corporate finance for over 25 years. Previously, Mr. Fine was an investment banker at Fine Equities, focusing on small- to medium-cap companies and managing high net worth individuals and small institutions. Mr. Fine was a member of the team of underwriters that co-managed the Company’s initial public offering. He has also worked on a series of transactions domestically and internationally in the healthcare and consumer products area. Mr. Fine currently sits on the Deans Advisory Board for The University of Connecticut’s Neag School of Education at Storrs, Connecticut.

Jose L. Aragon has been a director of the Company since May 16, 2012. Since January 2001, Mr. Aragon has been president of Aragon Consulting Corporation. In 2006, he was President of Russian Standard Vodka USA, and between 2000 and 2005, he was a member of the board of directors of Russian Standard Vodka. From 1999 to 2000, he was the vice president of marketing for Spherion Corporation. Mr. Aragon has also held several positions at Bacardi, including, from 1997 to 1999 the North American vice president of marketing and a member of the board of directors of Bacardi USA, from 1993 to 1997 the European vice president and director of marketing for Bacardi-Martini B.V., and from 1980 to 1997 the assistant vice president of marketing and then vice president of human resources for Bacardi USA. From 1975 to 1980, Mr. Aragon worked in brand management at Procter & Gamble Spain and USA. Mr. Aragon was designated as a nominee to the board of directors by Roust Trading pursuant to the Amended Governance Agreement.

David Bailey has been a director of the Company since December 2003 and from July 9, 2012 to January 10, 2013 served as Interim Chief Executive Officer of the Company. Mr. Bailey joined International Paper in 1968 and has held various levels of responsibility within that company including President IP Poland, and Managing Director Eastern Europe, including Russia. He was Chairman of the Board for OAO Svetogorsk (Russia), and Chairman of the board for IP Kwidzyn (Poland). He retired from International Paper in 2008, and

has opened a private strategic planning consulting business for Poland and Russia. He has also been responsible for the creation and development of the most popular tissue brand in Poland, Velvet. In addition, he served on the board of directors for the American Chamber of Commerce in Poland for 9 years, is on the board of Litewska Children’s Hospital Foundation, United Way Poland, and was a member of the Polish Business Roundtable for 13 years. Mr. Bailey served in the United States Army and graduated with a Chemical Engineering Degree from Oregon State University.

Judge Joseph Farnan, Jr has been a director of the Company since February 4, 2013. From September 1970 until June 1973, Judge Farnan was Dean of Students and Director of the Criminal Justice Program at Wilmington University. After leaving the university as an administrator and faculty member, he continued as an adjunct faculty member until 1981. From December 1971 until December 1976, Judge Farnan was engaged in the private practice of law in Wilmington, Delaware. During this time he also served as a part-time Assistant Public Defender. In December 1976, he was appointed County Attorney for New Castle County, Delaware. He served in this position until January 1979, when he was appointed Chief Deputy Attorney General for the State of Delaware. In August 1981, he was appointed the United States Attorney for the District of Delaware by President Ronald Reagan. In July 1985, Judge Farnan was appointed to the United States District Court for the District of Delaware by President Reagan. Judge Farnan served as Chief Judge of the District Court from July 1997 until July 2000. Judge Farnan is admitted to practice in New Jersey and Delaware and is now engaged in the private practice of law with Farnan LLP. Judge Farnan received his Bachelor of Arts degree in Political Science from King’s College, Wilkes-Barre, Pennsylvania, in June 1967. Judge Farnan received his Juris Doctor degree from the University of Toledo College of Law in June 1970.

Markus Sieger has been a director of the Company since August 2005 and holds a degree in Economics from the University of Applied Sciences for Business and Administration, Zurich. He started his career in 1981 with Zurich Insurance Group where he specialized in building up and managing complex information systems and organizational projects. In 1994, he joined fincoord and is today managing partner of ffc fincoord finance coordinators AG, which is an M&A and strategic advisory firm focusing since 1991 on growth markets in Central Europe and Asia. He is also the founder and Chairman of iscoord AG, an award winning IT company. He has been a director of both public and private companies, in the United States, the European Union and Switzerland.

Alessandro Picchi has been a director of the Company since April 23, 2012. He is a lawyer enrolled on the Bar of Milan and the Bar of the Italian Highest Court. From December 2011 to April 15, 2012 he was General Counsel of Russian Standard Corporation. From 2006 to 2011 he was a partner of Morri, Cornelli & Associates, a Tax and Law Firm with offices in Milan and Rome. From 2000 to 2006 he was Chairman of the Board of Directors of Globalfin International with headquarters in Switzerland and director of Motorel Investments BV. From 1996 to 2000 he was General Counsel of Globalfin International SA and a member of the Board of Directors. Mr. Picchi was designated as a nominee to the board of directors by Roust Trading pursuant to the Amended Governance Agreement.

Our business and affairs are managed under the direction of our board of directors.

On February 1, 2013 the board of directors scheduled CEDC’s annual general meeting of shareholders for Tuesday, March 26, 2013 and fixed the close of business on Friday, March 1, 2013 as the record date for the determination of shareholders eligible to vote at the annual general meeting or any adjournment or postponement thereof. At the annual general meeting of shareholders CEDC will ask shareholders to, among other things, elect seven directors nominated by the board of directors to serve on the board of directors. The seven directors nominated by the board of directors for election include: Roustam Tariko, N. Scott Fine, Jose Aragon, David Bailey, Joseph Farnan, Alessandro Picchi, and Markus Sieger. On February 11, 2013, Mark Kaufman notified the

Company of his nomination of William V. Carey, Tom Wilen, Philippe Leopold and himself as candidates for election to the board of directors of the Company to be voted on at the annual meeting of shareholders.

The board of directors held 21 meetings in 2011, in addition to acting by unanimous written consent 7 times. Each incumbent director who was also a director in 2011 attended at least 75% of the total number of meetings of the board of directors and meetings of the committees of the board of directors on which he served in 2012.

The board of directors has seven standing committees: an audit committee (which is a separately designated audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act), a compensation committee, a nominating and corporate governance committee, a special committee (which addresses certain corporate decisions where a conflict-of-interest with Russian Standard may exist), a Russian Standard relationship committee, a restructuring committee and an operational management committee. The functions performed by the audit committee, the compensation committee, the nominating and corporate governance committee, the operational management committee, the Russian Standard relationship committee and the special committee are summarized below. All of the members of the audit committee, the compensation committee and the nominating and corporate governance committee are independent directors as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules. Each of these three committees can hire its own advisors.

On August 10, 2009, at the recommendation of the nominating and corporate governance committee, the board of directors adopted a policy limiting the number of public boards of directors on which our directors may serve to two, in addition to the board of directors of the Company.

Audit Committee. The audit committee operates under a written charter adopted by the board of directors that may be amended by the board of directors at any time. A current copy of the audit committee’s charter is available in the ‘Investor Relations’ section of the Company’s website at http://www.cedc.com, under the heading ‘Corporate Governance.’ Messrs. Fine, Picchi and Farnan currently constitute the audit committee. Mr. Fine currently serves as the chairman of the audit committee. The board of directors has determined that Mr. Fine qualifies as an “audit committee financial expert” as defined in Items 401(h) and 407(d)(5) of Regulation S-K, and that each of the members of the audit committee is independent in accordance with applicable NASDAQ standards and SEC rules and regulations. Each member of the audit committee must meet certain independence and financial literacy requirements. The audit committee oversees our corporate financial reporting process, internal accounting controls, audit plans and results and financial reports. In addition, the audit committee appoints, compensates, retains and oversees the work of the firm of independent auditors employed by the Company to conduct the annual audit examination of the Company’s financial statements. The members meet with the independent auditors and financial management to review the scope of the proposed audit for the year, the audit procedures to be utilized, audit fees, and, at the conclusion of the audit, the audit reports. In addition, the audit committee reviews the financial statements, the related footnotes and the independent auditors’ report thereon and makes related recommendations to the board of directors as the audit committee deems appropriate. The audit committee met 22 times during 2011. The report of the audit committee is set forth later in this proxy statement.

Compensation Committee. The compensation committee operates under a written charter adopted by the board of directors that may be amended by the board of directors at any time. A current copy of the compensation committee’s charter is available in the ‘Investor Relations’ section of the Company’s website at http://www.cedc.com, under the heading ‘Corporate Governance.’ The compensation committee’s responsibilities include (i) making recommendations to the board of directors on salaries, bonuses and other forms of compensation for the Company’s officers and other key management and executive employees, (ii) consulting with independent outside compensation consultants regarding the Company’s executive officer and director compensation policies, (iii) administering the Company’s 2007 Stock Incentive Plan, referred to herein as the Option Plan, and (iv) reviewing management recommendations for grants of stock options and any proposed

plans or practices of the Company relating to compensation of its employees and directors. Messrs. Sieger, Aragon and Farnan currently constitute the compensation committee, each of whom is an “independent director” as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules. Mr. Sieger serves as the chairman of the compensation committee. The compensation committee held 6 meetings during 2011. The report of the compensation committee is set forth later in this proxy statement.

Nominating and Corporate Governance Committee. The nominating and corporate governance committee operates under a written charter adopted by the board of directors that may be amended by the board of directors at any time. A current copy of the nominating and corporate governance committee’s charter is available in the ‘Investor Relations’ section of the Company’s website at http://www.cedc.com, under the heading ‘Corporate Governance.’ The nominating and corporate governance committee monitors the independence of the board of directors by identifying individuals qualified to become board members and selecting, or recommending that the board of directors select, the director nominees for election at the Company’s annual meetings of stockholders. The nominating and corporate governance committee also recommends to the board of directors candidates for filling positions on the board of directors resulting from the death or resignation of directors. The nominating and corporate governance committee also recommends directors for appointment to the committees of the board of directors. In addition, the nominating and corporate governance committee reviews and assesses the adequacy of the Company’s corporate governance principles and, if appropriate, develops and recommends to the board of directors additional corporate governance principles. These responsibilities include oversight of the process of evaluating the performance of the board of directors, its committees and individuals directors, maintenance of the Company’s succession plan, convening executive sessions of the board of directors at which no members of management or other representatives of the company are present and recommending to the board of directors a candidate for Lead Director. The current Lead Director is Mr. Fine. Messrs. Fine, Picchi and Sieger currently constitute the nominating and corporate governance committee, each of whom is an “independent director” as defined by rule 5605(a)(2) of the NASDAQ Marketplace Rules. Mr. Fine serves as the chairman of the nominating and corporate governance committee. The nominating and corporate governance committee held 3 meetings in 2011.

The nominating and corporate governance committee believes that, in order to be effective, a board of directors must consist of directors with varying experiences and personal backgrounds. In particular for a company that has operations around the world, the nominating and corporate governance committee believes that the board of directors should include representatives from the territories and regions that are relevant to the company’s business. To this end, the nominating and corporate governance committee highly values diversity of experience and geographic background in considering candidates for membership on the board of directors. The current directors and nominees for election to our board of directors include citizens or full time residents of Italy, Poland, Russia, Switzerland and the United States. They also have diverse professional experience, having worked internationally in investment and commercial banking, the practice of law, the international alcoholic beverage industry and the consumer retail sector for both publicly traded and privately held companies. This diversity contributes significantly to the insight that our board of directors has into the challenges facing the Company.

Operational Management Committee. The operational management committee was established by resolution of the board of directors on December 28, 2012. The Operational Management Committee oversees the Company’s day-to-day business and operations (other than those matters that are exclusively reserved to the Company’s board of directors or committees thereof). The Chief Executive Officer of the Company reports directly to the operational management committee. Messrs. Fine, Tariko and Aragon currently constitute the operational management committee. Messrs. Fine and Aragon are each an “independent director” as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules.

Russian Standard Relationship Committee. The Russian Standard relationship committee was established by resolution of the board of directors on July 8, 2012. The Russian Standard relationship committee is responsible for evaluating any transactions between Roust Trading and its affiliates, on the one hand, and the Company and

its subsidiaries, on the other. Messrs. Fine and Sieger currently constitute the Russian Standard relationship committee, each of whom is an “independent director” as defined by Rule 5605(a)(2) of the NASDAQ Marketplace Rules. None of Messrs. Fine and Sieger have any prior relationship or affiliation with Roust Trading or its affiliates, excluding the Company.

Special Committee of the Board of Directors. On June 9, 2012 an ad hoc committee of the board of directors was formed to consider and advise on, with the assistance of its legal and financial advisors, all matters relating to the Company’s relationship with Roust Trading where a conflict-of-interest may exist. The special committee is made up of all directors who do not have any prior relationship or affiliation with Roust Trading. Messrs. Fine, Farnan and Sieger currently constitute the special committee, each of whom is an “independent director” as defined by rule 5605(a)(2) of the NASDAQ Marketplace Rules. Mr. Bailey’s independence has not been evaluated since his service as interim Chief Executive Officer ended.

The following table sets forth information regarding our executive officers, including their ages as of February 25, 2013.

Grant Winterton was appointed as Chief Executive Officer of CEDC on January 10, 2013. Prior to his appointment, Mr. Winterton served as the 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. Mr. Winterton serves on the board of directors of VelleOats. He has a Bachelor of Commerce Degree in Marketing/Finance from the University of New South Wales, Australia.

Ryan Lee was appointed Chief Financial Officer of CEDC by the CEDC board of directors on January 22, 2013. Prior to his appointment, Mr. Lee served as Chief Financial Officer of Russian Alcohol Group, a CEDC subsidiary, from April 2012. Mr. Lee has over 23 years of international work experience including 13 years in Russia, 5 years in Switzerland, and 2 years in each of the UK and the Netherlands. From November 2008 to March 2012, Mr. Lee worked for Eldorado as Vice President Finance. From November 1999 to November 2008, Mr. Lee worked for Japan Tobacco International, Geneva as Vice President Finance, Business Service Centres & Integration, Vice President Finance, Financial Planning & Analysis, and Vice President Corporate Tax, and for Japan Tobacco International, Russia as Chief Financial Officer, Vice President Finance and Financial Controller. From August 1989 to October 1999, Mr. Lee held accounting, finance and commercial positions at Unilever PLC and its group subsidiaries. Mr. Lee graduated in 1990 from the University of Wales Cardiff with a BA joint honors in Law and Italian, and has been a Chartered Accountant since 1992.

The following discussion relates to the compensation of Mr. Grant Winterton, the Company’s Chief Executive Officer; and Mr. Ryan Lee, the Company’s Chief Financial Officer (collectively, the “Named Executive Officers”) who were employed by the Company as of February 25, 2013.

The primary purpose of our compensation philosophy is to attract and retain a qualified, talented team of executive officers in a way that is aligned with the long-term interests of our stockholders. Therefore, several components of our compensation program are not fixed and instead will vary based on the actual performance of the company. This performance is measured against annual and long-term goals established by the Compensation Committee with the objective of increasing stockholder value.

Base salaries of executive officers are determined at the time a person initially becomes an executive officer by evaluating the responsibilities of the position, the experience and knowledge of the individual and the competitive marketplace at that time for executive talent, including a comparison to base salaries for comparable positions (considered in the context of the total compensation paid by such companies). Salaries are reviewed from time to time thereafter, generally in connection with the expiration of employment agreements or when other considerations warrant such consideration in the discretion of the compensation committee and board of directors, considering the foregoing factors as well as the executive’s performance and the other factors considered in setting total compensation described above. The Company has historically maintained a policy of setting base salary at the lower end of market levels in preference to emphasizing the incentives provided by the executive bonus and equity incentive programs.

The Company has historically paid annual cash bonuses to its executive officers based on corporate performance, as measured by reference to factors which the compensation committee believes reflect objective performance criteria over which management generally has the ability to exert some degree of control.

A third component of executive officers’ compensation is in the form of equity grants. We believe that equity awards tied to corporate performance or vesting requirements enable us to retain and motivate our executive officers.

The Company entered into an employment agreement with Grant Winterton on February 21, 2013. The Company has not entered into an employment agreement with Ryan Lee, the Company’s new Chief Financial Officer. The Company is in the final stages of completing this employment agreement.

Mr. Winterton serves as the Company’s Chief Executive Officer. Pursuant to the terms of his employment agreement, Mr. Winterton is paid an annual base salary at the rate of $750,000 and is eligible to receive a yearly cash bonus and an equity bonus. The amounts of his yearly cash bonus and equity bonus are based upon the achievement of certain performance and financial targets to be established by the Company’s Board of Directors in consultation with Mr. Winterton at the beginning of each fiscal year. Mr. Winterton participates in benefit plans and fringe benefits available to all other senior executives of the Company. As part of his participation in the benefit plans and fringe benefits available to the Company’s senior executives, Mr. Winterton receives health insurance coverage, a company mobile phone, a laptop and a company car. The agreement will terminate automatically upon Mr. Winterton’s death. If the agreement is terminated under certain circumstances, including a change in control of the Company, the Company must pay Mr. Winterton termination benefits.

For the first half of 2011, each European-based director (Messrs. Bailey, Forysiak and Sieger) was entitled to receive an annual fee of $36,000 and each non-European-based director (Messrs. Fine, Koch and Shanahan) was entitled to receive an annual fee of $30,000 for serving as a member of the board of directors. The chairman of the board of directors was entitled to receive an additional annual fee of $20,000. The Lead Director and chairman of the nominating and corporate governance committee was entitled to receive an additional annual fee of $15,000. The chairmen of the audit committee and the compensation committee were each entitled to receive an additional annual fee of $10,000.

For the second half of 2011, each director was entitled to receive an annual fee of $75,000 for serving as a member of the board of directors and a fee of $2,500 for each physical board meeting attended. The Lead Director and chairman of the nominating and corporate governance committee was entitled to receive an additional annual fee of $25,000. The chairmen of the audit committee and the compensation committee were each entitled to receive an additional fee of $5,000. Members of the audit and compensation committees were each entitled to receive an additional fee of $10,000. Members of the nominating and corporate governance committee were each entitled to receive an additional fee of $2,500.

Equity awards granted to directors in 2011 were based on the following program. The chairman of the board of directors was entitled to receive an option grant of 20,000 shares. Each member of the audit committee was entitled to receive an option grant of 5,000 shares, and, in addition, the chairman of the audit committee was entitled to receive an option grant of 3,000 shares. The chairman of the compensation committee was entitled to receive an option grant of 5,500 shares and each member of the compensation committee was entitled to receive an option grant of 4,500 shares. The Lead Director and chairman of the nominating and corporate governance committee was entitled to receive an option grant of 10,000 shares and each member of the nominating and corporate governance committee was entitled to receive an option grant of 4,000 shares. Directors also had the choice to receive a portion of their annual equity grant in the form of restricted stock.

Beginning in 2012, compensation of our directors was revised. Directors are currently compensated in the form of equity awards and annual, monthly and daily fees. As equity compensation, each director receives an annual grant of restricted stock valued at $100,000. In addition, our Vice Chairman is to receive a one time equity award valued at $50,000. Annual director fees consist of a base fee of $75,000, Chairman fee of $50,000, Lead Director & Vice Chairman fee of $50,000, audit committee member fee of $10,000, audit committee chair fee of $10,000, compensation committee member fee of $10,000, compensation committee chair fee of $10,000 and nominating & corporate governance member fee of $2,500. The nominating & corporate governance chair fee is included in the Lead Director & Vice Chairman fee. Monthly director fees consist of operational management committee member fee of $7,500, operational management committee chair fee of $2,500, restructuring committee member fee of $7,500, restructuring committee chair fee of $2,500, Russian Standard Relationship Committee member fee of $7,500 and Russian Standard Relationship Committee chair fee of $2,500. Daily director fees consist of physical board meeting fee of $2,500, operational management committee meeting fee of $1,500, restructuring committee meeting fee of $1,500 and Russian Standard Relationship Committee meeting fee of $1,500. The Company also reimburses directors for out-of-pocket travel expenses relating to their service on the board of directors.

A related party transaction is defined as any transaction in which (1) the Company is a participant, (2) any related person has a direct or indirect material interest and (3) the amount involved exceeds $120,000 but excludes any transaction that does not require disclosure under Item 404(a) of Regulation S-K. A related person is:

It is the Company’s policy that directors, officers and any other related persons are required to report any related party transactions to the Chief Executive Officer. All such transactions also are required to be reported to the audit committee, which, with the assistance of legal counsel and such other advisors as it deems appropriate, is responsible for reviewing and approving or ratifying any related party transaction. The audit committee intends to approve only those related party transactions that it believes are in, or not inconsistent with, the best interests of the Company. A written policy to this effect has been adopted by the board of directors.

In addition, every quarter, a report maintained by the Company’s accounting staff is reviewed and approved by the Chief Executive Officer and Chief Financial Officer. The audit committee of the board of directors conducts an annual review of all transactions between related parties and the Company.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Agreements With Roust Trading Ltd.” and “Description of Other Indebtedness” for descriptions of transactions with RTL and its affiliates.

RTL, which owned approximately 19.47% of CEDC’s Existing Common Stock as of February 15, 2013, owns approximately $102.5 million aggregate principal amount of Existing 2013 Notes and will be eligible to participate in the CEDC Exchange Offer. Roustam Tariko, chairman of the board of directors of CEDC, indirectly owns all of the shares of and controls RTL.

On March 8, 2013, CEDC, RTL and JSC “Russian Alcohol Group” entered into a Securities Purchase Agreement (the “RTL Investment Agreement”). This summary may not contain all of the information about the RTL Investment Agreement that may be important to you and does not purport to be complete. We encourage you to read the RTL Investment Agreement carefully and in its entirety.

RTL has agreed, on the terms and subject to the conditions set forth in the RTL Investment Agreement, to invest $172 million in CEDC and terminate the RTL Credit Facility in exchange for shares of New Common

Stock constituting at least 85% of the issued and outstanding New Common Stock immediately following consummation of the Exchange Offers or the Plan of Reorganization (the “RTL Investment”).

The RTL Investment Agreement contains a limited number of customary representations and warranties from CEDC, including, among others, with respect to incorporation, authority, authorization and broker’s fees and customary representations and warranties from RTL.

The obligation of RTL to consummate the RTL Investment is conditioned upon, among other things:

The RTL Investment Agreement contains termination rights for both parties, including: (i) if a governmental entity prohibits the transactions contemplated thereby; (ii) if the closing of the transactions contemplated thereby have not occurred by October 15, 2013; (iii) if the Restructuring Transactions are implemented through the Plan of Reorganization, if the case is dismissed or converted into a chapter 7 case; and (iv) the other party materially breaches the RTL Investment Agreement.

CEDC also has the right to terminate the RTL Investment Agreement in order to concurrently enter into an alternative transaction agreement with respect to a superior proposal, so long as CEDC complies with certain procedural requirements and pays RTL the Break-Up Fee (as defined below).

The RTL Investment Agreement provides that the board of directors of CEDC, if it determines in good faith that (x) any proposal it receives regarding an alternative transaction is a Superior Proposal (as defined in the RTL Investment Agreement), after giving RTL notice thereof and an opportunity to negotiate changes to the RTL Investment Agreement in response thereto, and (y) a failure to terminate the RTL Investment Agreement and enter into an alternative transaction agreement with respect to such Superior Proposal would be inconsistent with the CEDC Board’s fiduciary duties, shall have the right to terminate the RTL Investment Agreement to enter into such alternative transaction if CEDC pays a break-up fee in the amount of $10 million (the “Break-Up Fee”). The Break-Up Fee is also payable if: (i) RTL terminates the RTL Investment Agreement for a material breach by CEDC of its representations, warranties or covenants (subject to a cure period); (ii) RTL terminates the RTL Investment Agreement because CEDC enters into an alternative transaction agreement; (iii) if the RTL Investment Agreement is terminated by either party because the transactions contemplated thereby have not closed by October 15, 2013 or because a required stockholder approval was not obtained, and an alternative transaction proposal was made to CEDC or publicly announced, and CEDC consummates any alternative transaction within 18 months of such termination.

The RTL Investment Agreement provides that if the transactions contemplated thereby are consummated, CEDC will reimburse RTL for all expenses it incurs in connection therewith. It also provides that, if the RTL Investment Agreement is terminated (other than in the circumstances in which the Break-Up Fee is payable (and paid) or a termination by CEDC for a material breach by RTL of its representations, warranties or covenants), CEDC shall reimburse RTL for its expenses, but the maximum amount of such reimbursement will be capped at $3.5 million.

CEDC has the right to make a claim for money damages if RTL breaches the RTL Investment Agreement (with RTL’s liability capped at $172 million). Alternatively, CEDC can seek an order for specific performance requiring RTL to consummate the transactions contemplated by the RTL Investment Agreement if: (i) all conditions to RTL’s obligations to consummate such transactions have been satisfied; (ii) RTL has failed to close such transactions as required thereunder; (iii) CEDC has confirmed to RTL in writing that all conditions to CEDC’s obligations have been satisfied or will be waived; and (iv) such closing would occur substantially contemporaneously with the closing of the Restructuring Transactions.

The RTL Investment Agreement provides for an indemnity by CEDC in favor of RTL for third party claims arising out of any breaches of CEDC’s representations, warranties, or covenants.

JSC “Russian Alcohol Group”, an indirect wholly-owned subsidiary of CEDC is jointly and severally liable with CEDC with respect to certain payment obligations of CEDC thereunder, but only if a bankruptcy court approves the RTL Investment Agreement.

The RTL Investment Agreement contains a mutual release of certain claims between CEDC and RTL and certain of their related parties (including RTL’s exercise of its put right under the Amended SPA) which will be effective upon the consummation of the transactions contemplated thereby.

The following table sets forth certain information regarding the beneficial ownership of the Company’s outstanding common stock as of February 12, 2013 (or as of the date indicated in the footnotes below): (i) by each person who is known by the Company to beneficially own more than 5% of the common stock; (ii) by each of the named executive officers of the Company; (iii) by each director and nominee for director of the Company; and (iv) all directors and executive officers of the Company as a group. All information in this section is given on the basis of outstanding securities plus securities deemed outstanding under Rule 13d-3 of the Exchange Act. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise noted below, the address of each named executive officer and director is c/o Central European Distribution Corp., 3000 Atrium Way, Suite 265, Mt. Laurel, NJ, 08034.

In the CEDC Exchange Offer, upon the terms and subject to the conditions set forth in this Offering Memorandum and Disclosure Statement, CEDC is offering to exchange for each $1,000 principal amount of Existing 2013 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time, 8.86 shares of New Common Stock.

The Existing 2013 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. No fractional shares will be issued in exchange for tendered Existing 2013 Notes and any fractional share amounts due to Noteholders as a portion of the Consideration will be rounded down to the nearest share. No cash payment will be made in lieu of fractional shares. Holders of Existing 2013 Notes will not be entitled to receive any cash payment with respect to accrued and unpaid interest on Existing 2013 Notes accepted for exchange and any such accrued interest will be forfeited, as the per $1,000 exchange ratio with respect to the CEDC Exchange Offer has been calculated to take account of accrued interest through March 15, 2013.

In the CEDC FinCo Exchange Offer, upon the terms and subject to the conditions set forth in this Offering Memorandum and Disclosure Statement, CEDC FinCo is offering to exchange for each $1,000 principal amount of 9.125% Existing 2016 Notes and each €1,000 principal amount of 8.875% Existing 2016 Notes validly tendered, and not validly withdrawn, at or prior to the Expiration Time, at the election of such Tendering 2016 Noteholders, (i) the Cash Option Consideration as determined by procedure described below under “Cash Option” and/or (ii) the Notes Option Consideration described below under the heading “Notes Option”, in each case subject to proration as set forth below.

The 8.875% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of €50,000 and integral multiples of €1,000 in excess thereof. The 9.125% Existing 2016 Notes may be tendered and accepted for payment only in principal amounts equal to minimum denominations of $100,000 and integral multiples of $1,000 in excess thereof. Holders of the Existing 2016 Notes who do not tender all of their Existing 2016 Notes should ensure that they retain a principal amount of Existing 2016 Notes amounting to at least the authorized minimum denomination of $100,000 of €50,000, as applicable, principal amount. No alternative, conditional or contingent tenders will be accepted.

New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. New Notes will not be issued in increments of less than $1,000 and the principal amounts of the New Notes payable to a holder of Existing 2016 Notes in the CEDC FinCo Exchange Offer will be rounded down to the nearest $1,000. With respect to Tendering 2016 Noteholders electing the Cash Option, no cash will be paid as a result of rounding down to the nearest $1,000. Tendering 2016 Noteholders electing the New Notes Option will not be entitled to receive any cash payment with respect to accrued and unpaid interest on Existing 2016 Notes accepted for exchange and any such accrued interest will be forfeited, as all per $1,000 and per €1,000 exchange ratios with respect to the Exchange Offers have been calculated to take account of accrued interest through March 15, 2013. No further adjustments to the exchange ratios will be made solely due to an extension of the Expiration Date. With respect to the Cash Option Consideration and/or the Notes Option Consideration, as applicable, the per €1,000 exchange ratio in respect of 8.875% Existing 2016 Notes will be calculated using an exchange that reflects the trailing ten-day average exchange rate through March 22, 2013 as reported by Bloomberg Finance L.P.

The Cash Option is being conducted as a reverse “Dutch Auction” procedure. Each Tendering 2016 Noteholder may elect to elect to participate in the Cash Option, the proceeds of which will be funded by the RTL Investment of $172 million.

CEDC FinCo will use a pure reverse Dutch auction procedure to determine which Existing 2016 Notes will be accepted for exchange in the Cash Option. The Letter of Transmittal, among other options, provides the holders of Existing 2016 Notes with the option to elect to participate in the Cash Option. The auction will stay open through the Expiration Time, and Letters of Transmittal indicating any such election are due by the Expiration Time as provided herein.

CEDC FinCo will accept for purchase the Existing 2016 Notes that elect to participate in the Cash Option in the order of the lowest to the highest Bid Prices (as defined below) (as determined based upon each Bid Price’s percentage of the respective Existing 2016 Note’s principal amount) until reaching the Clearing Price. In addition, holders of Existing 2016 Notes that elect to participate in the Cash Option will be subject to proration. CEDC FinCo will first accept for exchange all Existing 2016 Notes with a Bid Price less than the Clearing Price and thereafter, Existing 2016 Notes with a Bid Price equal to the Clearing Price on a pro rata basis. In all cases, appropriate adjustments will be made to avoid purchases of Existing 2016 Notes in principal amounts other than integral multiples of $1,000 or €1,000, as applicable. All Existing 2016 Notes not accepted in the Cash Option as a result of proration or as a result of having a Bid Price above the Clearing Price will not participate in the Cash Option and will be deemed to have elected to participate in the New Notes Option. In addition, any Existing 2016 Notes for which the respective holders did not elect to participate in the Cash Option will be deemed to have elected the New Notes Option.

If Tendering 2016 Noteholders elect to participate in the Cash Option by indicating as such on their Letter of Transmittal and submitting such Letter of Transmittal by the Expiration Time as provided herein, each such holder shall receive, subject to the foregoing, its portion of the Cash Option Consideration equal to (a) such holder’s 8.875% Bid Price multiplied by the total principal amount of such holder’s 8.875% Existing 2016 Notes accepted for exchange in the Cash Option, divided by €1,000 and converted using the Exchange Rate, plus (b) such holder’s 9.125% Bid Price multiplied by the total amount of such holder’s 9.125% Existing 2016 Notes accepted for exchange in the Cash Option and divided by $1,000, plus (c) the full amount of the aggregate unpaid interest that has accrued on such holder’s accepted Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013 and converted using the Exchange Rate for interest accrued on 8.875% Existing 2016 Notes.

“Bid Price” means, collectively, the 8.875% Bid Price and the 9.125% Bid Price.

“8.875% Bid Price” means, with respect to any holder of 8.875% Existing 2016 Notes that elects on its Letter of Transmittal to participate in the Cash Option, the price specified by such holder on its Letter of Transmittal for which it would be willing to exchange each €1,000 principal amount of 8.875% Existing 2016 Notes it chooses to exchange in the Cash Option; provided, however, that (i) the 8.875% Bid Price must be in increments of €10.00 and within a range between €600 and €850, (ii) if the 8.875% Bid Price is not submitted in a whole increment of €10.00, such 8.875% Bid Price will be rounded down to the nearest €10.00 increment, (iii) if a holder of 8.875% Existing 2016 Notes elects to participate in the Cash Option but does not specify its 8.875% Bid Price or it specifies an 8.875% Bid Price that is less than €600, then the 8.875% Bid Price for such holder shall be €600, and (iv) if the holder specifies an 8.875% Bid Price that is greater than €850, then such holder’s 8.875% Existing 2016 Notes will not be accepted for exchange in the Cash Option and will not be used for purposes of calculating the Clearing Price or the Cash Option Consideration.

“9.125% Bid Price” means, with respect to any holder of 9.125% Existing 2016 Notes that elects on its Letter of Transmittal to participate in the Cash Option, the price specified by such holder on its Letter of Transmittal for which it would be willing, subject to the terms of the Plan, to exchange each $1,000 principal

amount of 9.125% Existing 2016 Notes it chooses to exchange in the Cash Option; provided, however, that (i) the 9.125% Bid Price must be in increments of $10.00 and within a range between $600 and $850, (ii) if the 9.125% Bid Price is not submitted in a whole increment of $10.00, such 9.125% Bid Price will be rounded down to the nearest $10.00 increment, (iii) if a holder of 9.125% Existing 2016 Notes elects to participate in the Cash Option but does not specify its 9.125% Bid Price or it specifies a 9.125% Bid Price that is less than $600, then the 9.125% Bid Price for such holder shall be $600, and (iv) if the holder specifies a 9.125% Bid Price that is greater than $850, then such holder’s 9.125% Existing 2016 Notes will not be accepted for exchange in the Cash Option and will not be used for purposes of calculating the Clearing Price or the Cash Option Consideration.

“Cash Option Consideration” means cash, in an amount not to exceed $172 million (using the Exchange Rate, in the case of payments in respect of 8.875% Existing 2016 Notes) and representing the sum of (i) the aggregate purchase price of all Existing 2016 Notes accepted for exchange in the Cash Option and (ii) the full amount of the aggregate unpaid interest that has accrued on such accepted Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013.

“Clearing Price” means the lowest Bid Price, as determined based upon each Bid Price’s percentage of the respective Existing 2016 Note’s principal amount, such that the sum of (i) the aggregate purchase price to purchase all Existing 2016 Notes electing to participate in the Cash Option and (ii) the aggregate amount of unpaid interest that has accrued on such purchased Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013, would equal or exceed $172 million; provided, however, that the Debtors shall use the Exchange Rate in determining such aggregate purchase price and aggregate unpaid interest, which may include Euro denominated 8.875% Bid Prices.

“Exchange Rate” means the average exchange rate of United States dollars (USD) to euros (EUR) for the ten (10) calendar days ending on March 22, 2013, as reported by Bloomberg Finance L.P.

As an alternative to the Cash Option, each Tendering 2016 Noteholder may instead elect (or be deemed to have elected) to receive the New Notes Consideration by selecting the New Notes Option when tendering their Existing 2016 Notes.

Each Tendering 2016 Noteholder that elects the New Notes Option will receive the New Notes Consideration, which consists of its pro rata share of (a) an aggregate principal amount of New Secured Notes equal to $450 million plus the aggregate interest accrued but unpaid on the outstanding Existing 2016 Notes not accepted for tender in the Cash Option in accordance with their existing terms in respect of the period from March 16, 2013 to the earlier of June 1, 2013 and the date preceding the date of issuance of the New Secured Notes, (b) $200 million principal amount of the New Convertible Secured Notes, and (c) to the extent the Cash Option Pool is not fully utilized, any such remaining cash.

The terms of the New Secured Notes, including the guarantees and the collateral securing those notes are described in the section of this Offering Memorandum and Disclosure Statement entitled “Description of the New Secured Notes”. The terms of the New Convertible Notes, including the guarantees and the collateral securing those notes are described in the section of this Offering Memorandum and Disclosure Statement entitled “Description of the New Convertible Secured Notes”

Concurrently with the Exchange Offers, CEDC FinCo is also soliciting Consents from holders of Existing 2016 Notes as of the Voting Record Date to the Proposed Amendments. If holders of at least 50.1% of the aggregate principal amount of Existing 2016 Notes deliver Consents in the Consent Solicitation, the Covenant

Amendments and the Bankruptcy Waiver Amendments will be approved. The Covenant Amendments will eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the Existing 2016 Notes Indenture. Holders of Existing 2016 Notes may tender their Existing 2016 Notes in the Exchange Offers without delivering acceptances to the Plan of Reorganization or delivering their Consents, as applicable. Holders of Existing 2016 Notes may deliver their Consents without tendering their Existing 2016 Notes in the Exchange Offers or delivering acceptances to the Plan of Reorganization. Holders of Existing 2016 Notes may deliver their acceptances to the Plan of Reorganization without tendering their Existing 2016 Notes in the Exchange Offers, but must deliver their Consents.

The Bankruptcy Waiver Amendments will amend the acceleration provisions in the Existing 2016 Indenture to provide that a filing by CEDC under Chapter 11 of the Bankruptcy Code will not result in automatic acceleration of obligations of the issuer of the Existing 2016 Notes (CEDC FinCo) or the subsidiary guarantees of the Existing 2016 Notes, but such a filing would (as the Existing 2016 Notes Indenture currently provides) result in automatic acceleration of amounts outstanding under the CEDC guarantee of the Existing 2016 Notes. If the Bankruptcy Waiver Amendments are approved, holders of over 50% of the outstanding Existing 2016 Notes could accelerate (i.e. declare immediately due and payable) CEDC FinCo’s and the subsidiary guarantors’ obligations under the Existing 2016 Notes and guarantees upon a Chapter 11 filing by CEDC, subject to the terms and conditions of the Existing 2016 Notes Indenture.

If holders of at least 90% of the principal amount of the outstanding Existing 2016 Notes deliver Consents in the Consent Solicitation, the Collateral and Guarantee Amendments will be approved. The Collateral and Guarantee Amendments will release all of the collateral securing the Existing 2016 Notes and all of the subsidiary guarantees of the Existing 2016 Notes, in conjunction with the termination or amendment, as applicable, of the related security documents.

The Proposed Amendments will become effective upon the execution of the Supplemental Indenture, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization. However, the Bankruptcy Waiver Amendments will become operative when the Supplemental Indenture is executed.

See “Proposed Amendments” and the Form of Supplemental Indenture attached as Annex B hereto. There are no restrictions in the Existing 2016 Notes Indenture on the ability of any of our affiliates (other than our subsidiaries) to deliver Consents to the Proposed Amendments.

When Consents from holders of Existing 2016 Notes representing at least a majority of the aggregate principal amount of Existing 2016 Notes have been received, CEDC FinCo, CEDC the trustee under the Existing 2016 Notes Indenture and any other relevant parties will execute the Supplemental Indenture to give effect to the Covenant Amendments and Bankruptcy Waiver Amendments (and if holders of at least 90% of the outstanding principal amount of Existing 2016 Notes have been received, the Collateral and Guarantee Amendments). If the Supplemental Indenture giving effect to the Covenant Amendments and Bankruptcy Waiver Amendments but not the Collateral and Guarantee Amendments has been executed, but we subsequently receive sufficient Consents to approve the Collateral and Guarantee Amendments, a second Supplemental Indenture will be executed to give effect to the Collateral and Guarantee Amendments. The Supplemental Indenture will become effective upon the execution of the Supplemental Indenture, but the Proposed Amendments will only become operative upon consummation of the CEDC FinCo Exchange Offer or confirmation of the Plan of Reorganization. However, the Bankruptcy Waiver Amendments will become operative when the Supplemental Indenture is executed. We expect to announce our entry into the Supplemental Indenture by public announcement (press release) shortly after the requisite number of Consents are received to execute such Supplemental Indenture.

If the Supplemental Indenture does not become operative for any reason, the Proposed Amendments will not become operative and the Existing 2016 Notes Indenture will remain in effect in its current form without giving

effect to the Proposed Amendments. However, the Bankruptcy Waiver Amendments will become operative when the Supplemental Indenture is executed and will remain in effect even if the Exchange Offers are not consummated or a Plan of Reorganization never confirmed.

If we receive Consents from holders of at least 50.1% of the outstanding Existing 2016 Notes, the Covenant Amendments (and if holders of 90% of the outstanding Existing 2016 Notes have delivered Consents, the Collateral and Guarantee Amendments) will be effected without further action by CEDC, CEDC Finco, any of the subsidiary guarantors or the trustee or security agent pursuant to entry of the order confirming the Plan of Reorganization as follows: (i) the Supplemental Indenture shall be and shall be deemed to be executed and effective in all regards and in accordance with its terms; provided that the requisite consents to the Covenant Amendments have been obtained; (ii) CEDC FinCo shall deliver notice to the trustee under the Existing 2016 Notes Indenture that it designates all non-debtor affiliates as Unrestricted Subsidiaries (as defined in the Existing 2016 Notes Indenture) under the Existing 2016 Notes Indenture following the execution and effectiveness of the Supplemental Indenture; and (iii) the release of all liens on all assets of such non-debtor affiliates designated as Unrestricted Subsidiaries that secure the Existing 2016 Notes and the release of all guarantees of such non-debtor affiliates designated as Unrestricted Subsidiaries.

We will be deemed to have accepted validly tendered Existing Notes in the Exchange Offers when, as and if we have given oral or written notice thereof to the Exchange Agent. We will be deemed to have validly received Consents in the Consent Solicitation when, as and if we have given oral or written notice thereof to the Information Agent. We will give such notice with respect to all Notes validly tendered in the Exchange Offers and with respect to all Consents received in the Consent Solicitation. The Exchange Agent will act as agent for the tendering Noteholders and will provide the necessary information to the transfer agent (the “Transfer Agent”) for the issuance and delivery of the New Common Stock to holders of Existing 2013 Notes and the trustees under the indentures governing the New Notes for the issuance and delivery of the New Notes to holders of Existing 2016 Notes. In the event that the Consideration is increased, such increased Consideration will be paid with regard to all Existing Notes accepted in the applicable Exchange Offer, including those accepted before the announcement of such increase. The Consideration will be delivered by CEDC for Existing Notes accepted for exchange in the Exchange Offers promptly after the Expiration Time.

Each holder of Existing 2016 Notes who delivers its Consents by the Consent Fee Deadline (March 14, 2013), and does not validly withdraw such Consents, will receive the Consent Fee. Holders of Existing 2016 Notes who deliver Consents after the Consent Fee Deadline will not be entitled to the Consent Fee. The Consent Fee will be payable in U.S. dollars; payments of the Consent Fee in respect of 8.875% Existing Notes for which Consents were delivered will be paid based upon the prevailing euro/US dollar exchange rate in effect at the time of payment. The Consent Fee will only be payable if the Requisite Consents are obtained by the Consent Fee Deadline. The Consent Fee will be delivered by CEDC FinCo for Consents that are delivered prior to the Consent Fee Deadline. Only holders of Existing 2016 Notes who deliver their Consents prior to the Consent Fee Deadline will be eligible to receive the Consent Fee. The Bankruptcy Waiver Amendments will become operative upon execution of the Supplemental Indenture (even if the Exchange Offers are not consummated or a Plan of Reorganization never confirmed), and the Consent Fee will not be payable if the Collateral and Guarantee Amendments are not approved. So holders that consent to the Bankruptcy Waiver Amendments will not receive a Consent Fee, even if the Bankruptcy Waiver Amendments becomes operative, if the Collateral and Guarantee Amendments are not approved.

We reserve the right in the future to seek to acquire Existing Notes by means of open market purchases, privately negotiated acquisitions, subsequent exchange or tender offers, redemptions under the provisions of the Indentures or otherwise, at prices or on terms that may be higher or lower or more or less favorable than those in the Exchange Offers, in each case in accordance with applicable law, including the Exchange Act and the rules promulgated thereunder. We may also conduct one or more consent solicitations in the future, which may be on

terms more or less favorable than the Consent Solicitation. In addition, in the event that we do not consummate the Exchange Offers or the Plan of Reorganization, we may file bankruptcy and seek approval of a plan of reorganization and there can be no assurance that such a plan would be on more or less favorable terms than the Exchange Offers or the Plan of Reorganization.

Noteholders who validly tender their Existing Notes in the Exchange Offers will not be required to pay brokerage commissions or fees to the Exchange Agent. Noteholders who tender their Existing Notes through a nominee may be required to pay a commission or a service charge. We will pay all fees, charges and expenses, other than such commissions or service charges and certain applicable taxes, in connection with the Exchange Offers and Consent Solicitation.

No appraisal rights are available to Noteholders in connection with the Exchange Offers and Consent Solicitation.

If you wish to tender your Existing Notes in the Exchange Offers or deliver your Consent to the Proposed Amendments, you must follow the procedures described under “—Procedures for Tendering Existing 2013 Notes and 9.125% Existing 2016 Notes (together, “Dollar Notes”) and 8.875% Existing 2016 Notes and Consenting to the Proposed Amendments, and Voting on Plan of Reorganization; Applicable Deadlines” below. If your Existing Notes are registered in the name of a nominee, you must contact such nominee to tender your Existing Notes and, with respect to holders of Existing 2016 Notes, deliver your Consent to the Proposed Amendments.

The Letter of Transmittal, contain various terms and conditions that are part of the Exchange Offers and Consent Solicitation. With respect to holders of Existing 2016 Notes, if you decide to not tender your Existing 2016 Notes in the CEDC FinCo Exchange Offer but wish to participate in the Consent Solicitation, you must simultaneously deliver a Letter of Transmittal and the Ballot to the Information and Voting Agent. Accordingly, you should read the Ballot, the Letter of Transmittal relating to your Existing Notes carefully. For the avoidance of doubt, holders of 8.875% Existing 2016 Notes will not receive a Letter of Transmittal, Holders of Existing 2013 Notes will not receive a Consent Letter.

Expiration Time; Consent Time; Consent Fee Deadline; Extensions; Termination; Amendments

The Exchange Offers and the Consent Solicitation will expire at the Expiration Time, which will be 11:59 PM, New York City time, on March 22, 2013, unless extended or earlier terminated. The Consent Time is the earlier of (A) the date and time at which CEDC FinCo notifies the trustee under the Existing 2016 Notes that the CEDC FinCo has received the Requisite Consents. and (B) 5:00 PM, New York City time, on March 14, 2013. The Consent Fee Deadline is 5:00 PM, New York City time, on March 14, 2013.

We expressly reserve the right, at any time or from time to time, subject to applicable law, (1) to extend the period of time during which any of the Exchange Offers or the Consent Solicitation are open and thereby delay acceptance for exchange of any Existing Notes or acceptance of any Consents, by giving verbal or written notice of such extension to the Exchange Agent, (2) to amend any of the Exchange Offers or the Consent Solicitation in any respect by giving verbal or written notice of such amendment in accordance with applicable law, and (3) to waive or amend certain conditions, and accept for exchange all Existing Notes that are validly tendered, and not validly withdrawn, pursuant thereto prior to the Expiration Time without providing additional withdrawal rights except as required by the Exchange Act, provided that we will not waive the RTL Investment Condition or the Minimum Conditions without the prior written consent of RTL and the Existing 2016 Notes Steering Committee. We reserve the right to consummate the Exchange Offers or Consent Solicitation upon any such amended terms without reinstating or providing additional withdrawal rights except as provided in the foregoing sentence. In addition, we may terminate the Exchange Offers or the Consent Solicitation prior to the Expiration Time, or extend the Exchange Offers or the Consent Solicitation. In no event will the termination of the CEDC Exchange Offer, the Consent Solicitation or the failure by us to accept any Existing 2013 Notes tendered in the CEDC

Exchange Offer or Consents delivered in the Consent Solicitation affect the validity of a vote in favor of the Plan of Reorganization. If the Exchange Offers or Consent Solicitation are amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the Noteholders of such amendment. If we make other material changes to the terms of the Exchange Offers or the Consent Solicitation, we may extend the Expiration Time if necessary to comply with applicable securities laws.

At the Consent Fee Deadline and in consideration of the results of participation in the Exchange Offers and votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline (as defined below), which is also the Expiration Time; provided, however that holders of Existing 2016 Notes voting to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time.

If we extend the Exchange Offers or the Consent Solicitation, or if, for any reason, the acceptance for exchange of Existing Notes is delayed or if we are unable to accept for exchange Existing Notes pursuant to the Exchange Offers, then, without prejudice to our rights under the Exchange Offers, the tendered Existing Notes may be retained on our behalf, and such Existing Notes may not be withdrawn except to the extent tendering Noteholders are entitled to withdrawal rights as described under “—Withdrawal Rights”.

In the event that we shall terminate the Exchange Offers, we will give immediate notice thereof to the Information Agent and Exchange Agent, and all Existing Notes theretofore tendered and not accepted for exchange shall be returned promptly to the tendering Noteholders thereof. In the event that the Exchange Offers or the Consent Solicitation are withdrawn or otherwise not completed, Existing Notes otherwise validly tendered for exchange will not be exchanged.

Any extension, amendment or termination will be followed as promptly as practicable by a public announcement thereof, with the announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Time, as applicable. Without limiting the manner in which we may choose to make any public announcement, we shall not have any obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to business wire.

Notwithstanding any other provision of the Exchange Offers or the Consent Solicitation, any extension of the Exchange Offers or the Consent Solicitation, and without limiting our rights to otherwise extend or amend the Exchange Offers or the Consent Solicitation, we shall not be required to accept for exchange any Existing Notes or accept any Consents, or issue any New Common Stock or New Notes and we may, in our sole discretion, terminate the Exchange Offers or the Consent Solicitation for any reason, including if at any time prior to the consummation of the Exchange Offers or Consent Solicitation, we determine that any of the following conditions has not been satisfied:

The foregoing conditions are for our sole benefit and may be asserted by us, in our sole discretion, regardless of the circumstances giving rise to any such condition (including any action or inaction by us) and may be waived by in whole or in part, at any time and from time to time in our sole discretion without providing additional withdrawal rights except as required by the Exchange Act, provided that we will not or the condition that the

RTL Investment be consummated without providing additional withdrawal rights (if not otherwise available) following announcement of such a waiver, and provided further that we will not waive the Minimum Conditions without the prior written consent of RTL and the Existing 2016 Notes Steering Committee.

If the conditions to either the CEDC Exchange Offer (including the Existing 2013 Notes Minimum Condition) or the CEDC FinCo Exchange Offer (including the Existing 2016 Notes Minimum Condition) are not satisfied or are not waived, we may, at our option, not consummate either of the Exchange Offers and, if the Minimum Reorganization Condition is satisfied, file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization such that holders of Existing Notes would receive the treatment described in the Plan of Reorganization. Even if the conditions to the Exchange Offers are met, and whether or not the Minimum Reorganization Condition is met, CEDC and CEDC FinCo may file petitions under Chapter 11 of the Bankruptcy Code and pursue confirmation and consummation of the Plan of Reorganization or an alternative plan of reorganization.

At the Consent Fee Deadline and in consideration of the results of participation in the Exchange Offers and votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline (as defined below), which is also the Expiration Time; provided, however that holders of Existing 2016 Notes who vote to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time.

We may waive or amend any of these conditions or any other conditions to the consummation of the Exchange Offers without providing additional withdrawal rights except as required by the Exchange Act, provided that we will not waive the RTL Investment Condition or the Minimum Conditions without the prior written consent of RTL and the Existing 2016 Notes Steering Committee. If we do not satisfy the conditions noted above, we may let the Exchange Offers expire or terminate the Exchange Offers prior to the Expiration Time and seek to effectuate the Plan of Reorganization. Any votes in favor of the Plan of Reorganization will be valid in the event we seek to effectuate the Plan of Reorganization.

Procedures for Tendering Existing 2013 Notes and 9.125% Existing 2016 Notes (together, the “Dollar Notes”) and 8.875% Existing 2016 Notes, Consenting to the Proposed Amendments, and Voting on Plan of Reorganization; Applicable Deadlines

In order for any beneficial holder (“Beneficial Holder”) of Existing Notes to validly tender its Existing Notes, consent to the Proposed Amendments, each such Beneficial Holder must provide appropriate instructions to their respective nominees.

Upon receipt of such instructions, nominees will tender the Beneficial Holders’ Existing Notes into the appropriate “contra” CUSIP through DTC or the “blocking account” through Euroclear or Clearstream, as applicable, in accordance with the instructions. Accordingly, this Offering Memorandum and Disclosure Statement attaches as Appendix C (a) the Ballot for Beneficial Holders (the “Beneficial Ballot”), (b) the Ballot for nominees to reflect the votes of their Beneficial Holders (the “Master Ballot”) and (c) the Letter of Transmittal (or an Agent’s Message (as defined below) in lieu of the Letter of Transmittal), in each case included herewith. Beneficial Holders will receive their Beneficial Ballots, Beneficial Holders of Dollar Notes will also receive their Letters of Transmittal from their nominees. In order to participate in the Exchange Offers and vote on the Plan of Reorganization, Beneficial Holders of Dollar Notes must provide instructions to their respective nominees in accordance with the instructions contained in the Ballot and the Letter of Transmittal. Upon receipt of instructions from the Beneficial Holders of Existing Notes exercising Option 1 or 2 below, the respective nominees will tender the Beneficial Holders’ Existing Notes into the appropriate “contra” CUSIP through DTC or the “blocking account” through Euroclear or Clearstream, as applicable. Nominees of Beneficial Holders must reflect the votes of their Beneficial Holders on the applicable form of Master Ballot included therewith.

OPTION 1. PARTICIPATE in the CEDC Exchange Offer; vote to ACCEPT the Plan of Reorganization.

OPTION 2. PARTICIPATE in the CEDC Exchange Offer; vote to REJECT the Plan of Reorganization.

OPTION 3. NOT PARTICIPATE in the CEDC Exchange Offer; vote to ACCEPT the Plan of Reorganization.

OPTION 4. NOT PARTICIPATE in the CEDC Exchange Offer; vote to REJECT the Plan of Reorganization.

OPTION 5. Take no action; NOT PARTICIPATE in the CEDC Exchange Offer; NOT VOTE on the Plan of Reorganization. Note that Beneficial Holders of Existing 2013 Notes that instruct their Nominee to take no action, or fail to provide timely instructions, may nevertheless be bound by the terms of the Plan of Reorganization and have the relevant treatment applied to their Existing 2013 Notes if the Plan of Reorganization is consummated.

By providing instructions to their nominees holding their Existing 2013 Notes to tender into the CEDC Exchange Offer or to vote on the Plan of Reorganization, Beneficial Holders of Existing 2013 Notes are directing that their nominee (1) tender the underlying Existing 2013 Notes on their behalf in accordance with the instructions provided and/or (2) execute a Master Ballot on the Beneficial Holder’s behalf that reflects their instructions with respect to the Plan of Reorganization (including such holder’s exercise or non-exercise of the right to opt out of the releases set forth in Article IX.C of the Plan of Reorganization), as applicable.

Beneficial Holders of Existing 2016 Notes have seven voting options, as follows:

OPTION 1. PARTICIPATE in the CEDC FinCo Exchange Offer; CONSENT to the Proposed Amendments; vote to ACCEPT the Plan of Reorganization.

OPTION 2. PARTICIPATE in the CEDC FinCo Exchange Offer; CONSENT to the Proposed Amendments; vote to REJECT the Plan of Reorganization.

OPTION 3. PARTICIPATE in the CEDC FinCo Exchange Offer; NOT CONSENT to the Proposed Amendments; vote to REJECT the Plan of Reorganization.

OPTION 4. NOT PARTICIPATE in the CEDC FinCo Exchange Offer; CONSENT to the Proposed Amendments; vote to ACCEPT the Plan of Reorganization.

OPTION 5. NOT PARTICIPATE in the CEDC FinCo Exchange Offer; CONSENT to the Proposed Amendments; vote to REJECT the Plan of Reorganization.

OPTION 6. NOT PARTICIPATE in the CEDC FinCo Exchange Offer; NOT CONSENT to the Proposed Amendments; vote to REJECT the Plan of Reorganization.

OPTION 7. Take no action; NOT PARTICIPATE in the CEDC FinCo Exchange Offer; NOT CONSENT to the Proposed Amendments; NOT VOTE on the Plan of Reorganization. Note that Beneficial Holders of Existing 2016 Notes that instruct their nominee to take no action, or fail to provide timely instructions, may nevertheless be bound by the terms of the Plan of Reorganization and have the relevant treatment applied to their Existing 2016 Notes if the Plan of Reorganization is consummated.

By providing instructions to their nominees holding their 9.125% Existing 2016 Notes to tender into the CEDC FinCo Exchange Offer, deliver Consents to the Proposed Amendments and the Bankruptcy Waiver Amendments or to vote on the Plan of Reorganization, Beneficial Holders of 9.125% Existing 2016 Notes are directing that their nominee (1) tender the underlying 9.125% Existing 2016 Notes on their behalf in accordance with the instructions provided (2) deliver Consents in accordance with the instructions provided and/or (3) execute a Master Ballot on the Beneficial Holder’s behalf that reflects their instructions with respect to the Plan of Reorganization (including such holder’s exercise or non-exercise of the right to opt out of the releases set forth in Article IX.C of the Plan of Reorganization), as applicable.

Holders of Existing Notes voting to accept the Plan of Reorganization shall and shall be deemed to, by so voting, indicate their consent to the relief sought by CEDC, CEDC FinCo and CEDC FinCo LLC (as applicable) pursuant to the First Day Motions (as defined below).

Holders of Existing 2016 Notes voting to accept the Plan of Reorganization must deliver their Consent to the Covenant Amendments and the Collateral Guarantee Amendments and effectuation of the Supplemental Indenture pursuant to the Plan of Reorganization.

Beneficial Holders of Existing Notes who wish to participate in the Exchange Offers, vote on the Plan of Reorganization and, with respect to Beneficial Holders of Existing 2016 Notes, participate in the Consent Solicitation must otherwise provide the appropriate instructions to their respective nominees in sufficient time to enable their respective nominees to tender their Existing Notes, deliver Consents and/or complete the Master Ballot and deliver it to the Voting Agent by the Expiration Time or the Consent Fee Deadline. For nominees to validly reflect the votes of their Beneficial Holders of Existing Notes, nominees must send Master Ballots to the Voting Agent so as to be actually received by the Voting Agent on or before the Expiration Time or the Consent Fee Deadline, as applicable.

We have the right to waive any defects in your tender, Consent or vote. However, we are not required to waive defects and are not required to notify you of defects in your tender or Consent. Once a Beneficial Holder’s Existing Notes have been tendered or blocked, as applicable, the Existing Notes will not be able to be traded. Withdrawals from the Exchange Offers and modifications to votes to accept or reject the Plan of Reorganization will not be permitted after the Expiration Time with respect to holders of Existing 2013 Notes. Withdrawals of tenders or Consents and modifications to votes to accept the Plan of Reorganization will not be permitted after the Consent Time with respect to holders of Existing 2016 Notes who have voted to accept the Plan of Reorganization prior to the Consent Fee Deadline. Votes to accept the Plan of Reorganization after the Consent Fee Deadline and votes to reject the Plan of Reorganization by holders of Existing 2016 Notes may be modified at any time prior to the Voting Deadline. If the Exchange Offers are not successful and we do not commence a prepackaged bankruptcy case, any Existing Notes tendered will be returned to the nominee that tendered the Existing Notes.

For a Noteholder to validly tender Dollar Notes and/or deliver Consents pursuant to the Exchange Offers and Consent Solicitation, a properly completed and duly executed Letter of Transmittal (or facsimile thereof), as applicable, with any required signature guarantee, or (in the case of a book-entry transfer) an Agent’s Message in lieu of the applicable Letter of Transmittal, and any other required documents, must be submitted by such holder’s nominee to the Exchange Agent at or prior to the Expiration Time. In addition, prior the Expiration

Time, Dollar Notes must be tendered into the appropriate “contra” CUSIP pursuant to the procedures for book-entry transfer described below (and a confirmation of such tender must be received by the Exchange Agent, including an Agent’s Message if the tendering holder has not delivered the applicable Letter of Transmittal). To validly tender Dollar Notes through book-entry transfer, nominees should transmit their acceptance through ATOP on behalf of each Noteholder and DTC will then verify the acceptance and send an Agent’s Message to the Exchange Agent for its acceptance. Noteholders should contact the Information Agent at the telephone number or address set forth on the back cover with any questions regarding tendering procedures.

The term “Agent’s Message” means a message transmitted by DTC, and received by the Exchange Agent and forming part of the confirmation of a book-entry transfer, which states that DTC has received an express or deemed acknowledgment from a participant tendering outstanding Existing Notes and that the participant has received and agrees to be bound by the terms of the Letter of Transmittal, and that we may enforce that agreement against the participant. Delivery of an Agent’s Message will also constitute an acknowledgement from the tendering participant that the representations contained in the appropriate Letter of Transmittal and described below are true and correct.

Guarantee of Signature. Signatures on a Letter of Transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, unless the Existing Notes tendered thereby are tendered (a) by a/the holder of record of such Existing Notes and that such holder has not completed either of the boxes entitled “A. Special Issuance/Delivery Instructions” or “B. Special Exchange Instructions” on the Letter of Transmittal, or (b) for the account of a firm that is a member of a registered national securities exchange or Financial Industry Regulatory Authority, Inc. or is a commercial bank or trust company having an office in the United States (each, an “Eligible Institution”).

Book-Entry Delivery of the Dollar Notes; Tender through ATOP. As soon as practicable after the date of this Offering Memorandum and Disclosure Statement, the Exchange Agent will establish ATOP accounts with respect to the Dollar Notes at DTC for purposes of the Exchange Offers. Any nominee that is a participant in the DTC system may make book-entry delivery of Dollar Notes by causing DTC to transfer such Dollar Notes into the applicable “contra” CUSIP in accordance with DTC’s procedure for such transfer.

Delivery of the Agent’s Message by DTC will satisfy the terms of the Exchange Offers in lieu of execution and delivery of the Letter of Transmittal by the participant identified in the Agent’s Message. Accordingly, the applicable Letter of Transmittal need not be completed by a Noteholder tendering through ATOP.

The tendering of 8.875% Existing 2016 Notes pursuant to the CEDC FinCo Exchange Offer will be deemed to have occurred upon receipt by Euroclear or Clearstream, as applicable, of valid electronic blocking instructions in accordance with the requirements of such clearing systems. The receipt of such electronic blocking instructions by Euroclear or Clearstream, as applicable, will be acknowledged in accordance with the standard practices of Euroclear or Clearstream, as applicable, and will result in the blocking of the relevant 8.875% Existing 2016 Notes in Euroclear or Clearstream, as applicable, so that no transfers may be effected in relation to such 8.875% Existing 2016 Notes, from the date the relevant tender of 8.875% Existing 2016 Notes is made until the earlier of (i) the time of the settlement on the Settlement Date, and (ii) the date on which CEDC FinCo rejects the tenders of such 8.875% Existing 2016 Notes.

Holders of 8.875% Existing 2016 Notes must take the appropriate steps through Euroclear or Clearstream, as applicable, so that no transfers may be effected in relation to such blocked 8.875% Existing 2016 Notes at any time after the date of submission of such electronic offer instructions, in accordance with the requirements of the Euroclear or Clearstream, as applicable, and the deadlines required by the applicable clearing system. By blocking such 8.875% Existing 2016 Notes in Euroclear or Clearstream, as applicable, each direct participant will be deemed to consent to have such clearing system provide details concerning such direct participant’s identity to the Exchange Agent and CEDC FinCo.

Only direct participants may submit electronic offer instructions. Each holder of 8.875% Existing 2016 Notes that is not a direct participant must arrange for the direct participant through which it holds the relevant 8.875% Existing 2016 Notes to submit the electronic offer instruction on its behalf to the applicable clearing system by the deadlines specified by such clearing system.

By providing voting instructions to Euroclear or Clearstream on behalf of a Beneficial Holder of 8.875% Existing 2016 Notes, each nominee (also referred to as a “direct participant”) certifies (i) that the nominee is the record holder of the 8.875% Existing 2106 Notes submitted for “blocking” and holds the 8.875 % Existing 2016 Notes in “street name” for underlying Beneficial Holders, and accordingly, has full power and authority to vote to accept or reject the Plan of Reorganization on behalf of such underlying Beneficial Holders of such 8.875% Existing 2016 Notes; (ii) that each Beneficial Holder of 8.875% Existing 2016 Notes whose votes are being transmitted has received copies of this Offering Memorandum and Disclosure Statement; (iii) that the nominee received instructions from each Beneficial Holder whose vote is transmitted in accordance with the option selected; and (iv) that the nominee authorizes the depository through which the 8.875% Existing 2016 Notes have been blocked to provide the appropriate confirmation to the exchange agent, Global Bondholder Services Corporation.

Electronic offer instructions may only be withdrawn by a holder of 8.875% Existing 2016 Notes, or the relevant direct participant on its behalf by submitting a valid electronic revocation instruction to Euroclear or Clearstream, as applicable. To be valid, such instruction must specify the 8.875% Existing 2016 Notes to which the original electronic offer instructions related, the securities account to which such 8.875% Existing 2016 Notes are credited and any other information required by Euroclear or Clearstream, as applicable.

Custodians, direct participants, Euroclear and Clearstream might have deadlines prior to the Expiration Time for receiving instructions and you should contact any such intermediary through which you hold your 8.875% Existing 2016 Notes as soon as possible to ensure the proper and timely delivery of instructions.

You are solely responsible for arranging for timely delivery of your electronic offer instructions. Do not send acceptances to CEDC FinCo or the trustee under the 8.875% Existing 2016 Notes.

Tender Instructions. The term Tender Instructions means irrevocable instructions: (i) to block any attempt to transfer a holders 8.875% Existing 2016 Notes on or prior to the Settlement Date and (ii) to debit the holders of 8.875% Existing 2016 Notes account on the Settlement Date in respect of the Securities that have been tendered by the holder. To be valid, a Tender Instruction must specify:

The tendering of any series of 8.875% Existing 2016 Notes in the Exchange Offers will be deemed to have occurred upon receipt by the Exchange Agent, via Clearstream or Euroclear, as applicable, of a valid Tender Instruction in accordance with the requirements of such clearing system. The receipt of such Tender Instruction by Clearstream or Euroclear, as applicable, will be acknowledged in accordance with the standard practices of such Clearing System and will result in the blocking of the 8.875% Existing 2016 Notes in such Clearing System so that no transfers may be effected in relation to such 8.875% Existing 2016 Notes.

You must take the appropriate steps through Clearstream or Euroclear, as applicable, so that no transfers may be effected in relation to such blocked 8.875% Existing 2016 Notes at any time after the date of submission of such Tender Instruction, in accordance with the requirements of such clearing system and the deadlines required by such Clearing System. Holders of 8.875% Existing 2016 Notes are responsible for informing themselves of these deadlines and arranging for timely delivery of Tender Instructions to Clearstream or Euroclear.

By submitting a Tender Instruction, holders authorize Clearstream and Euroclear, as applicable, to (i) disclose to the Exchange Agent, CEDC FinCo and CEDC the name of the direct participant through which the holder tendered and (ii) provide to the Exchange Agent, CEDC FinCo and CEDC (without disclosing the identity of the holder) a report that includes the account number of each tendering holder and the amount (in Euros) of the 8.875% Existing 2016 Notes tendered. All of the 8.875% Existing 2016 Notes tendered by the holder will be debited from the holder’s account, unless a lesser portion of such 8.875% Existing 2016 Notes are accepted by us. The debit will occur upon receipt of an instruction from the Exchange Agent. In the event the CEDC Exchange Offer is terminated by us prior to the Settlement Date, as notified to Clearstream or Euroclear by the Exchange Agent, the irrevocable instructions will be automatically withdrawn.

By taking these actions with respect to either Tender Offer, you and any custodial entity which holds your tendered securities will be deemed to have agreed (i) to the terms and conditions of the Tender Offers as set forth in this Offering Memorandum and Disclosure Statement and the Ballot and (ii) that we and the depositary may enforce the terms and conditions against you and your custodian.

You must deliver any other required documents to the Exchange Agent (not DTC, Euroclear or Clearstream, as applicable) in order for your tender to be valid.

General. The valid tender or blocking, as applicable, of the Existing Notes pursuant to the Exchange Offers by one of the procedures set forth above will constitute (a) an agreement among the tendering Noteholder and us in accordance with the terms and subject to the conditions of the Exchange Offers, and (b) with respect to holders of Existing 2016 Notes, the Consent of the tendering Noteholder to the Proposed Amendments.

By tendering Dollar Notes, each holder of Dollar Notes will be deemed to make certain acknowledgements, representations, warranties and undertakings to the CEDC or CEDC FinCo, as applicable, the trustee under the applicable indenture governing such notes, the Information Agent and Exchange Agent contained in the Letter of Transmittal.

Representations, Warranties and Undertakings for the 8.875% Existing 2016 Notes

By tendering the Existing Notes via electronic offer instructions through Euroclear or Clearstream, each holder of 8.875% Existing 2016 Notes will be deemed to make certain acknowledgements, representations, warranties and undertakings to CEDC FinCo, the trustee under the Existing 2016 Notes Indenture, the Information Agent and the Exchange Agent that:

The holder of 8.875% Existing 2016 Notes understands that CEDC FinCo’s obligation to consummate the CEDC FinCo Exchange Offer for Existing 2016 Notes is conditioned on, among other things, the Existing 2016 Minimum Condition.

By submitting an instruction to reject the Plan of Reorganization or to “opt-out” of the releases provided for in Article IX.C of the Plan of Reorganization, holders authorize Clearstream and Euroclear, as applicable, (i) to disclose to the Exchange Agent, CEDC FinCo and CEDC the name of the direct participant through which the holder is voting to reject the Plan of Reorganization or “opting-out” of Article IX.C of the Plan of Reorganization and (ii) to provide to the Exchange Agent, CEDC FinCo and CEDC (without disclosing the identity of the

holder) a report that includes (A) the account number of each holder voting to reject the Plan of Reorganization and the amount (in Euros) of the 8.875% Existing 2016 Notes voting to reject and (B) the account number of each holder electing to “opt-out” of the releases provided for in Article IX.C of the Plan of Reorganization and the amount (in Euros) of the 8.875% Existing 2016 Notes opting out.

Any 8.875% Existing 2016 Note tendered pursuant to the terms of the CEDC FinCo Exchange Offer may not be withdrawn after the Consent Time, unless withdrawal rights are required by applicable law.

The holder of 8.875% Existing 2016 Notes understands that, upon the terms and subject to the conditions of the CEDC FinCo Exchange Offer, 8.875% Existing 2016 Notes properly tendered and accepted will be exchanged for the Consideration. The holder of 8.875% Existing 2016 Notes further understands that by accepting the CEDC FinCo Exchange Offer through, it has agreed to exchange its 8.875% Existing 2016 Notes.

The holder of 8.875% Existing 2016 Notes understands that, under certain circumstances, CEDC FinCo may not be required to accept any of the 8.875% Existing 2016 Notes tendered (including any such 8.875% Existing 2016 Notes tendered after the Expiration Time). If any 8.875% Existing 2016 Notes are not accepted for exchange for any reason, such unexchanged 8.875% Existing 2016 Notes will be returned without expense to the holder of 8.875% Existing 2016 Note’s account at Euroclear or Clearstream, as applicable, as promptly as practicable after the expiration or termination of the CEDC FinCo Exchange Offer.

Subject to, and effective upon, acceptance for exchange of, and payment for, the principal amount of 8.875% Existing 2016 Notes tendered upon the terms and subject to the conditions of the CEDC FinCo Exchange Offer, the holder of 8.875% Existing 2016 Notes:

The holder of 8.875% Existing 2016 Notes understands that tenders of 8.875% Existing 2016 Notes pursuant to any of the procedures described in this Offering Memorandum and Disclosure Statement, if and when accepted by CEDC FinCo, will constitute a binding agreement between the holder of 8.875% Existing 2016 Notes and CEDC FinCo upon the terms and conditions of the CEDC FinCo Exchange Offer.

The holder of 8.875% Existing 2016 Notes irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the holder of 8.875% Existing 2016 Notes with respect to the 8.875% Existing 2016 Notes tendered (with full knowledge that the Exchange Agent also acts as the agent of CEDC FinCo) with full powers of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to:

All authority conferred or agreed to be conferred by this Offering Memorandum and Disclosure Statement shall not be affected by, and shall survive, the death or incapacity of the holder of 8.875% Existing 2016 Notes, and any obligation of the holder of 8.875% Existing 2016 Notes hereunder shall be binding upon the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the holder of 8.875% Existing 2016 Notes.

The holder of 8.875% Existing 2016 Notes hereby represents, warrants and agrees as follows:

The holder of 8.875% Existing 2016 Notes recognizes that CEDC FinCo has no obligations under the Offering Memorandum and Disclosure Statement to effect the transfer of any 8.875% Existing 2016 Notes from the holder(s) thereof if CEDC FinCo does not accept for exchange any of the principal amount of the 8.875% Existing 2016 Notes tendered pursuant to this Offering Memorandum and Disclosure Statement.

The acknowledgments, representations, warranties and agreements of a holder tendering 8.875% Existing 2016 Notes will be deemed to be repeated and reconfirmed on and as of the Expiration Time and the effective on the Settlement Date.

All questions as to the form of documents and validity, eligibility (including time of receipt), acceptance for exchange and withdrawal of tendered Existing Notes with respect to the Exchange Offers will be determined by us, and this determination will be final and binding. We reserve the absolute right to reject any and all tenders of Existing Notes that we determine are not in proper form or for which the acceptance for exchange may, in the opinion of counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of Existing Notes of any particular Noteholder, whether or not similar conditions, defects or irregularities are waived in the case of other Noteholders.

The interpretation of the terms and conditions of the Exchange Offers and Consent Solicitation (including, with respect to holders of Dollar Notes, the instructions in the Letter of Transmittal, if applicable) by us will be final and binding. None of CEDC, CEDC FinCo, the Information Agent, the Exchange Agent, the Voting Agent, the Trustees or any other person will be under any duty to give notice of any defects or irregularities in tenders or any notices of withdrawal or will incur any liability for failure to give any such notice.

Existing 2013 Notes validly tendered prior to the Expiration Time may be withdrawn at any time at or prior to the Expiration Time and, if the Existing 2013 Notes have not yet been accepted for payment, any time beginning 40 business days after the date of this Offering Memorandum and Disclosure Statement. Existing 2016 Notes validly tendered prior to the Expiration Time (and accordingly, votes to accept the Plan of Reorganization), may be withdrawn at any time at or prior to the Consent Time. A Noteholder who validly withdraws previously tendered Existing Notes will not receive the applicable Consideration with respect to such withdrawn Existing Notes.

Tenders of Existing 2016 Notes in the CEDC FinCo Exchange Offer and Consents delivered in the Consent Solicitation may be withdrawn at any time at or prior to the Consent Time. After the Consent Time, tenders of Existing 2016 Notes may not be withdrawn except as required by applicable law or in the event we waive the Minimum Conditions or the condition that the RTL Investment be consummated following the Consent Time.

For a withdrawal to be effective, the Exchange Agent must receive a computer-generated notice of withdrawal transmitted by DTC on behalf of the Noteholder in accordance with the standard operating procedures of DTC.

If outstanding Existing Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name of the nominee, the number of the nominee’s account at DTC, Euroclear or Clearstream, as applicable, the Beneficial Holder’s account number at its nominee, and the Vol number (or its equivalent at Euroclear or Clearstream), to be credited with the withdrawn outstanding Existing Notes and otherwise comply with the procedures of the facility.

We will determine all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal, and our determination shall be final and binding on all parties. We will deem any outstanding Existing Notes so withdrawn not to have been validly tendered for exchange for purposes of the Exchange Offers or to constitute votes to accept or reject the Plan of Reorganization. We will return any outstanding Existing Notes that have been tendered for exchange but that are not exchanged for any reason to their Noteholder without cost to the Noteholder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn outstanding Existing Notes by following one of the procedures described under the caption “—Procedures for Tendering Existing 2013 Notes and 9.125% Existing 2016 Notes (together, Dollar Notes) and 8.875% Existing 2016 Notes, Consenting to the Proposed Amendments, and Voting on Plan of Reorganization; Applicable Deadlines” above at any time on or before expiration of the Exchange Offers.

By tendering your Existing Notes in the Exchange Offers, you will be deemed to have waived any and all rights with respect to the Existing Notes tendered thereby (including, without limitation, any existing or past defaults by CEDC, CEDC FinCo, CEDC FinCo LLC, the Trustees or any party acting on our behalf or at our instruction and their consequences in respect of such Existing Notes), and released and discharged us and the Trustees, our affiliates, subsidiaries, and current former directors and officers and professionals, the Trustees’ affiliates, or any party acting on our behalf or at our instruction from any and all claims and causes of action you may have, now or in the future, arising out of or related to the Existing Notes tendered thereby, including, without limitation, any and all claims that you are entitled to receive additional principal or interest payments with respect to the Existing Notes tendered thereby, including any accrued and unpaid interest, or to participate in any redemption of the Existing Notes tendered thereby. Notwithstanding anything to the contrary in the Existing 2016 Notes Indenture or any related agreements, votes by holders of Existing 2016 Notes Claims to accept the Plan of Reorganization, whether by submission of a Ballot accepting the Plan(s) of Reorganization and

not electing to “opt out” of the releases set forth in Article IX.C of the Plan of Reorganization or by tendering or blocking, as applicable, their Existing 2016 Notes in the CEDC FinCo Exchange Offer without submitting a Ballot, shall constitute agreement by such holders to release and discharge the non-Debtor subsidiaries and affiliates of the Debtors of all obligations relating to guarantees of the Existing 2016 Notes.

Other than with respect to the Information Agent, the Exchange Agent and the Voting Agent, neither we nor any of our affiliates has engaged, or made any arrangements for, and has no contract, arrangement or understanding with, any broker, dealer, agent or other person regarding the exchange of Existing Notes hereunder and no person has been authorized by us or any of our affiliates to provide any information or to make any representations in connection with the Exchange Offers and Consent Solicitation, other than those expressly set forth in this Offering Memorandum and Disclosure Statement, and, if so provided or made, such other information or representations must not be relied upon as having been authorized by us or any of our affiliates. The delivery of this Offering Memorandum and Disclosure Statement shall not, under any circumstances, create any implication that the information set forth herein is correct as of any time subsequent to the date hereof. We have entered into arrangements whereby we have agreed to reimburse the legal and financial advisors for certain ad hoc groups of Noteholders for fees and expenses incurred in connection with their representation of such ad hoc groups in regard to the transactions contemplated herein. RTL has also requested to be reimbursed for its legal and financial advisor for fees and expenses incurred in connection with their representation of RTL in regard to the transactions contemplated herein.

We are not aware of any jurisdiction in which the Exchange Offers and Consent Solicitation are not in compliance with applicable law. If we become aware of any jurisdiction in which the Exchange Offers and Consent Solicitation would not be in compliance with applicable law, we will make a good faith effort to comply with any such law. If, after such good faith effort, we cannot comply with any such law, the Exchange Offers or Consent Solicitation will not be made to the Noteholders residing in such jurisdiction, as applicable.

The Company’s common stock has been traded on the NASDAQ National Market, and its successor, the NASDAQ Global Select Market, under the symbol “CEDC” since June 1999. Prior thereto it traded on the NASDAQ Small Cap Market since our initial public offering in July 1998. On September 22, 2008 the Company’s stock was added to the NASDAQ Q-50 Index. The following table sets forth the high and low bid prices for the common stock, as reported on the NASDAQ Global Select Market, for each of the Company’s fiscal quarters in 2010, 2011 and 2012 and through February 20, 2013. These prices represent inter-dealer quotations, which do not include retail mark-ups, mark-downs or commissions and do not necessarily represent actual transactions.

As of March 6, 2013, the last reported sale price of our common stock on NASDAQ was $0.61.

CEDC has never declared or paid any dividends on its capital stock. The Company currently intends to retain future earnings for use in the operation and expansion of its business. Future dividends, if any, will be subject to approval by the Company’s board of directors and will depend upon, among other things, the results of the Company’s operations, capital requirements, surplus, general financial condition and contractual restrictions and such other factors as the board of directors may deem relevant. In addition, Existing 2016 Notes Indenture may limit the payment amount of cash dividends on its common stock to amounts calculated in accordance with a formula based upon our net income and other factors.

The Company earns the majority of its cash in non-USD currencies and any potential future dividend payments would be impacted by foreign exchange rates at that time. Additionally, the ability to pay dividends may be limited by local equity requirements, therefore retained earnings are not necessarily the same as distributable earnings of the Company.

The following description is a summary of the material terms and provisions of CEDC’s common stock and is qualified in its entirety by reference to the terms and provisions of CEDC’s Certificate of Incorporation, and relevant sections of the General Corporation Law of the State of Delaware. This description does not restate the Certificate of Incorporation in its entirety. You may obtain copies of the Certificate of Incorporation from us upon written request. See “Incorporation by Reference; Additional Information”.

CEDC’s Certificate of Incorporation authorizes the issuance of 121,000,000 shares of capital stock, consisting of 120,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”), of which 81,761,652 shares of common stock and no shares of preferred stock were issued and outstanding as of February 13, 2013. In the event that the Exchange Offers are consummated, we would issue 23,750,000 shares of New Common Stock, which would result after the Reverse Stock Split, in 25,000,000 shares of common stock outstanding. The common stock is subject to the express terms of the preferred stock and any series thereof. It is a condition to the consummation of the Exchange Offers that the Existing Stockholders approve certain amendments to the Certificate of Incorporation to effect the Reverse Stock Split.

The holders of common stock have the same rights, preferences, privileges, interests and attributes and are subject to the same limitations as every other holder of common stock, subject to the limitations in CEDC’s Certificate of Incorporation. Subject to the voting limitations described in the next paragraph, at each annual or special meeting of stockholders, each holder of common stock shall be entitled to one vote in person or by proxy for each share of common stock standing in such person’s name on the stock transfer records in connection with all actions submitted to a vote of stockholders. CEDC’s Certificate of Incorporation does not provide for cumulative voting, and accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors. CEDC’s Certificate of Incorporation provides that whenever there is paid, or declared and set aside for payment, to the holders of the outstanding shares of any class of stock having preference over the common stock as to the payment of dividends, the full amount of dividends and of sinking fund or retirement fund or other retirement payments, if any, to which such holders are entitled, then dividends may be paid on the common stock out of any assets legally available therefore, but only when and as declared by the board of directors. CEDC’s Certificate of Incorporation also provides that in the event of any liquidation, dissolution or winding up of CEDC, after there is paid to, or set aside for the holders of any class of stock having preference over the common stock, the full amount to which such holders are entitled, then the holders of the common stock shall be entitled, after payment or provision for payment of all debts and liabilities of CEDC, to receive the remaining assets of CEDC available for distribution, in cash or in kind. The holders of common stock have no preemptive, subscription, redemption or conversion rights. The rights, privileges, preferences and priorities of holders of common stock will be subject to the rights of the holders of any shares of any series of Preferred Stock that CEDC may issue in the future.

CEDC’s Certificate of Incorporation provides that the board of directors is authorized to issue Preferred Stock in series and to fix and state the voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights of the shares of each such series and the qualifications, limitations and restrictions thereof. Such action may be taken by the board of directors without stockholder approval. Under the Certificate of Incorporation, each share of each series of Preferred Stock is to have the same relative rights as, and be identical in all respects with, all other shares of the same series.

While providing flexibility in connection with possible financings, acquisitions and other corporate purposes, the issuance of Preferred Stock, among other things, could adversely affect the voting power of the holders of common stock and, under certain circumstances, be used as a means of discouraging, delaying or preventing a change in control of CEDC. There will be no shares of Preferred Stock outstanding upon completion of the Exchange Offers and CEDC has no present plan to issue shares of its Preferred Stock.

Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”) authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breach of directors’ fiduciary duty of care. Although Section 102(b)(7) of the DGCL does not change the directors’ duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. CEDC’s Certificate of Incorporation limits the liability of directors to the Company or its stockholders to the fullest extent permitted by Section 102(b)(7) of the DGCL. Specifically, directors of CEDC are not personally liable for monetary damages to the Company or its stockholders for breach of the director’s fiduciary duty as a director, except for liability: (a) for any breach of the director’s duty of loyalty to the Company or its stockholders; (b) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; (c) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or (d) for any transaction from which the director derived an improper personal benefit.

To the maximum extent permitted by law, CEDC’s Bylaws and indemnification agreements with directors and officers provide for mandatory indemnification of directors and officers of CEDC against any expense, liability and loss to which they may become subject, or which they may incur as a result of being or having been a director or officer of CEDC. In addition, CEDC must advance or reimburse directors and officers for expenses incurred by them in connection with indemnifiable claims. CEDC also maintains directors’ and officers’ liability insurance.

CEDC’s Certificate of Incorporation and the Bylaws contain, among other things, certain provisions described below that may reduce the likelihood of a change in the board of directors or voting control of CEDC without the consent of the board of directors. These provisions could have the effect of discouraging, delaying, or preventing tender offers or takeover attempts that some or a majority of the stockholders might consider to be in the stockholders’ best interest, including offers or attempts that might result in a premium over the market price for the common stock.

Any vacancy occurring in the board of directors, including any vacancy created by an increase in the number of directors, shall be filled by the vote of a majority of the directors then in office, whether or not a quorum, and any director so chosen shall hold office until such director’s successor shall have been elected and qualified. Directors may only be removed with cause by the affirmative vote of the holders of at least a majority of the outstanding shares of capital stock then entitled to vote for the election of directors.

Any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders, unless such consent is unanimous.

Special meetings of stockholders may be called at any time by the board of directors, the chairman of the board, the chief executive officer or the president, and shall be called by the president or the secretary of CEDC at the request in writing of stockholders possessing at least 10% of the voting power of the issued and outstanding capital stock of CEDC entitled to vote generally in the election of directors. Such a request shall include a statement of the purpose or purposes of the proposed meeting.

The stockholders may amend the Bylaws by the affirmative vote of the holders of at least a majority of the outstanding shares of stock of CEDC entitled to vote thereon. Directors also may amend the Bylaws by an affirmative vote of at least a majority of the directors then in office.

Except as set forth in CEDC’s Certificate of Incorporation or as otherwise specifically required by law, no amendment of any provision of the Certificate of Incorporation shall be made unless such amendment has been first proposed by the board of directors upon the affirmative vote of at least a majority of the directors then in office and thereafter approved by the affirmative vote of the holders of at least a majority of the outstanding shares of stock of CEDC entitled to vote thereon; provided however, if such amendment is to the provisions in the Certificate of Incorporation relating to the authorized number of shares of Preferred Stock, board authority to issue Preferred Stock, number of directors, the limitation on directors’ liability, amendment of Bylaws or consent of stockholder in lieu of meetings, such amendment must be approved by the affirmative vote of the holders of at least two-thirds of the outstanding shares of stock entitled to vote thereon.

With certain exceptions, CEDC’s Bylaws require that stockholders intending to present nominations for directors or other business for consideration at a meeting of stockholders must notify CEDC’s secretary not less than 60 days, and not more than 90 days, before the date of the meeting.

The Board of Directors adopted a Rights Agreement in which one preferred stock purchase right will be distributed as a dividend on each common share held of record as of the close of business on September 19, 2011 (the “Rights”). Initially, the Rights will be represented by the Company’s common stock certificates, or to the registration of uncertificated Common Shares in the Company’s share register, and will not be exercisable.

The Rights Agreement is designed to deter coercive takeover tactics and to prevent an acquiror from gaining control of the Company without offering a fair price to all of the Company’s stockholders. The Rights will not prevent a takeover, but should encourage anyone seeking to acquire the Company to negotiate with the Board of Directors prior to attempting a takeover.

Each Right, if and when it becomes exercisable, entitles the holder to buy one one-thousandth of a share of a new series of junior participating preferred stock for $45.00. If any person or group becomes the beneficial owner of 10% or more of the Company’s common stock (which, as provided in the Rights Agreement, includes stock referenced in derivative transactions and securities), then each Right not owned by such holder will entitle its holder to purchase, at the Rights’ then-current exercise price, common shares having a market value of twice the Rights’ then-current exercise price. In addition, if, after any person has become a 10% or more stockholder, the Company is involved in a merger or other business combination transaction with another person, each Right will entitle its holder (other than such 10% or more stockholder) to purchase, at the Right’s then-current exercise price, common shares of the acquiring company having a value of twice the Rights’ then-current exercise price.

Section 203 of the DGCL provides, in general, that a stockholder acquiring more than 15% of the outstanding voting shares of a corporation subject to the DGCL (an “Interested Stockholder”), but less than 85% of such shares, may not engage in certain “Business Combinations” (as defined below) with such corporation for a period of three years subsequent to the date on which the stockholder became an Interested Stockholder unless (a) prior to such date the corporation’s board of directors approved either the Business Combination or the transaction in which the stockholder became an Interested Stockholder or (b) the Business Combination is approved by the corporation’s board of directors and authorized by a vote of at least two-thirds of the outstanding voting stock of the corporation not owned by the Interested Stockholder.

Section 203 of the DGCL defines the term “Business Combination” to encompass a wide variety of transactions with or caused by an Interested Stockholder in which the Interested Stockholder receives or could receive a benefit on other than a pro rata basis with other stockholders, including mergers, certain asset sales, certain issuances of additional shares to the Interested Stockholder, transactions with the corporation which increase the proportionate interest of the Interested Stockholder or a transaction in which the Interested Stockholder receives certain other benefits.

Immediately following the completion of the Restructuring Transactions CEDC’s Certificate of Incorporation will be amended and restated to provide holders of CEDC’s shares of common stock (other than RTL and its Affiliates) with certain minority shareholder protections set forth below. None of the minority shareholder protection rights set forth below shall be removed or amended in a manner adverse to any shareholder other than RTL and its Affiliates without a ‘majority of the minority’ shareholder vote, as described below.

CEDC’s Restated Certificate of Incorporation shall contain provisions so that from and after the date the Convertible Secured Notes are first Convertible all holders of shares of common stock (including holders of shares of common stock issued on conversion of New Convertible Secured Notes (“Conversion Shares”)) shall have pre-emption rights on the issuance of any new shares of CEDC common stock (or securities convertible into shares of CEDC common stock) pro rata to their existing holdings of shares of common stock (other than with respect to share issuances (other than pursuant to the MIP) after the initial conversion date of the New Convertible Secured Notes that in aggregate do not exceed 5% of the shares then outstanding, for employee share options, equity ‘kickers’ in connection with borrowings, issuances of equity as acquisition currency ,and other de minimus share issuances).

CEDC’s Restated Certificate of Incorporation shall provide that certain material non-ordinary course transactions takeover bid, an RTL ‘take private’ offer (including (a) any merger or consolidation or purchase or

sale of material assets involving the Company, including when the Company is the buyer, and including situations where common stock is used as acquisition currency and (b) any changes to the minority shareholder protections then in effect) must be approved by both (i) holders of a majority of shares of common stock, and (ii) holders of a majority of shares of common stock not owned by RTL (or any affiliate of RTL).

CEDC shall provide for registration rights in favour of holders of shares of common stock so that:

Holders of at least 10% of the outstanding shares, shall be entitled to nominate one (1) director for election to CEDC’s Board of Directors.

Until all New Secured Notes have been redeemed or repaid in their entirety and all New Convertible Secured Notes have been redeemed, repaid or converted in their entirety and for so long as any Conversion Shares remain outstanding CEDC shall remain incorporated and domiciled in and subject to the laws of the State of Delaware.

In the event of any sale, transfer or other disposition by RTL (or an Affiliate) in one transaction or a series of transactions (i) of more than 30% shares of CEDC’s shares of common stock, or (ii) that results in RTL and/or its Affiliates owning less than 50% of the outstanding shares of CEDC common Stock, RTL (or its Affiliate as applicable) shall be required to provide prior notice of such transfer to each other holder of CEDC’s shares of common stock (an “Other Holder”). Each Other Holder shall have the right (but not the obligation) to participate in such proposed transfer on a pro rata basis, on identical terms and conditions and for the same consideration as RTL (or its Affiliate as applicable), subject to customary permitted transfers (including to Affiliates of RTL, provided that any such Affiliate that acquires shares from RTL shall itself be required to adhere to and be fully bound by the tag-along provisions, and public offerings); provided that if RTL (and/or its Affiliates as applicable) sell, transfer or otherwise dispose of (including by means of a merger) more than a majority of the outstanding shares of CEDC Common Stock, Other Holders shall have the right (but not the obligation) to sell the entirety of their shareholdings, and not a pro rata portion only.

In the event of any sale, transfer or other disposition of by RTL (or an Affiliate) of more than a majority of the outstanding shares of CEDC’s shares of common stock to a third party (including by means of a merger), RTL (and/or its Affiliates as applicable) may exercise a drag-along right in connection with such transaction to compel all Other Holders to dispose of their shares of common stock on identical terms and conditions and for the same per share amount and form of consideration, provided that the Other Holders shall only be required to sell the same percentage of their shares as RTL and its Affiliates are selling of their shares, and provided that the Other Holders shall only be required to sell the same percentage of their shares as RTL and its Affiliates are selling of their shares and provided further the Other Holders shall not be obligated to sell their shares (a) at a price lower than a fair price for the common stock established by an independent internationally recognised investment banking firm in a written fairness opinion; or (b) for consideration other than cash.

The Tag-along Rights and Drag-along Rights (the “Tag-along and Drag-along Rights”) referred to above shall apply when CEDC’s shares of common stock are not listed on any securities exchange, and shall continue while CEDC’s shares of common stock are listed, if permitted by the listing rules of the relevant exchange.

Subject to the Tag-along and Drag-along Rights, holders of common stock shall have full rights to sell their shares when, where, to whom, and at whatever price, they choose, free from rights of first offer or refusal.

The minority shareholder protections shall include the provisions summarised above as well as any other minority shareholder protection rights not explicitly provided for herein, but provided in the Restructuring to any other holder of the common stock (other than RTL and its Affiliates). The minority shareholder protections shall take effect on the closing of the Restructuring, and shall remain in effect (whether or not the New Convertible Secured Notes are converted) until RTL and its Affiliates shall collectively own less than 30% of the common stock then outstanding, provided that provisions by their nature of indefinite duration (including those described above under ‘Pre-emption Rights’, ‘Registration Rights’ and ‘Jurisdiction of incorporation) shall endure permanently unless otherwise approved by holders of a majority of the shares of common stock not owned by RTL (or any affiliate of RTL). All of the minority shareholder protections shall be set forth in CEDC’s Restated Certificate of Incorporation, unless RTL and the Steering Committee determine that it is more appropriate to implement these protections through a shareholders agreement or otherwise.

If the CEDC Exchange Offer is consummated, any Existing 2013 Notes not tendered or not accepted by CEDC in the Exchange Offers will remain outstanding and will be our unsecured obligations. In the event CEDC elects to file a petition with the Bankruptcy Court to effectuate the Plan of Reorganization and the Plan of Reorganization is approved and consummated, all Existing 2013 Notes will be cancelled and holders of Existing 2013 Notes will be issued New Common Stock. See “The Plan of Reorganization”. For a description of the Existing 2013 Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Arrangements—Existing 2013 Notes”.

If the CEDC FinCo Exchange Offer is consummated, no Existing 2016 Notes will remain outstanding. In the event CEDC FinCo elects to file a petition with the Bankruptcy Court to effectuate the Plan of Reorganization, and the Plan of Reorganization is approved and consummated, all Existing 2016 Notes will be cancelled and holders of Existing 2016 Notes will be issued New Notes. See “The Plan of Reorganization”. For a description of the Existing 2016 Notes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Arrangements—Existing 2016 Notes”.

On May 7, 2012, the Company issued $70 million principal amount of senior notes due March 18, 2013, bearing an interest rate of 3.00% to Russian Standard Bank, an affiliate of Russian Standard Corporation. The RTL Notes are not secured or guaranteed. Pursuant to the Amended SPA, the final maturity date for the RTL Notes was to be extended to July 31, 2016. These terms were amended by the Term Sheet. Pursuant to the Term Sheet, RTL and the Company agreed that $50 million of RTL Notes would be converted into a loan. In accordance with the Term Sheet, RTL and CEDC entered into the RTL Credit Facility, under which $50 million of the existing $70 million of RTL Notes was converted into the RTL Credit Facility. Following Conversion, there is $20 million outstanding under the remaining RTL Notes, which mature on March 18, 2013.

The RTL Credit Facility has a final maturity date falling 12 months after the date on which Conversion takes place (the “Final Maturity Date”). Subject to certain conditions, CEDC may voluntarily prepay the whole or any part of the RTL Credit Facility by giving not less than 5 business days’ notice to RTL (or such shorter period as RTL may agree).

The RTL Credit Facility bears interest at 3.00% per annum and accrued interest under the RTL Credit Facility will be payable by CEDC on March 18, 2013, September 18, 2013 and the Final Maturity Date. On the

last day of the first interest period under the RTL Credit Facility, CEDC will also pay to RTL an amount equal to the amount of interest accrued on $50 million of the RTL Notes between September 18, 2012 and the day falling immediately prior to the date on which Conversion takes place.

The RTL Credit Facility requires CEDC and the guarantors to make a number of customary representations and comply with a number of customary undertakings.

The RTL Credit Facility contains certain events of default, the occurrence of which would, subject to any applicable grace periods and agreed exceptions, allow RTL to accelerate, among other things, the outstanding term loan, cancel its commitment under the RTL Credit Facility, declare that all or part of the term loan be payable on demand and/or exercise any or all of its rights, remedies, powers or discretion under the RTL Credit Facility, the security documents or any other Finance Documents (as defined in the RTL Credit Facility). The events of default, subject to certain agreed exceptions, include: (a) non-payment; (b) breach of other obligations under the RTL Credit Facility, security documents or any other Finance Documents (as defined in the RTL Credit Facility); (c) misrepresentation; (d) insolvency, insolvency proceedings and creditors’ process in respect of any significant subsidiary of CEDC (other than ISF GmbH, Pasalba Limited, Peulla Enterprises Limited and CEDC FinCo); (e) unlawfulness and invalidity; and (f) repudiation.

An event of default under the RTL Credit Facility will also occur if there is an “event of default” under:

The RTL Credit Facility is governed by and construed in accordance with English law.

Neither the Exchange Offers nor the Plan of Reorganization will have an effect on the Bank Facilities, Loans and Bank Guarantees described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

A CEDC subsidiary, Sibirsky LVZ, and Russian Standard Bank have executed a 465 million Russian ruble (approximately $15 million) credit facility. The Sibirsky Credit Facility provides for a commitment of 465 million Russian rubles and will have a maturity date of one year with an interest rate fixed at 12% per annum, to be paid quarterly.

The Sibirsky Credit Facility contains common representations and warranties and common undertakings, as well as common negative covenants such as no reorganization of the borrower. The Sibirsky Credit Facility also contains certain events of default linked to the breach of undertakings and covenants, an inability to service debts and insolvency of the borrower with a default interest rate of 30% per annum.

The Sibirsky Credit Facility is secured by certain pledges of inventory, Russian-law suretyship agreements entered into with certain Russian entities and an agreement to allow Russian Standard Bank to debit funds from the borrower’s account.

As of February 27, 2013, Sibirsky LVZ had drawn down all 465 million Russian rubles under the Sibirsky Credit Facility.

It is anticipated that, following the implementation of the Restructuring Transactions, the Security Agents, CEDC FinCo, CEDC, the trustee under the New Secured Notes Indenture, the trustee under the New Convertible Secured Notes Indenture, the New Secured Notes Representative and the Subsidiary Guarantors will enter into the Intercreditor Agreement, which will establish the seniority in right of payment on insolvency of the New Secured Notes relative to the New Convertible Secured Notes.

The New Secured Notes Representative will be initially TMF Trustee Limited (as Security Agent in respect of Collateral other than the collateral identified under “—Security-Poland” below). Pursuant to the terms of the Intercreditor Agreement, at any time at which the New Secured Notes are outstanding, the New Secured Notes will determine the time and method by which the security interests in the Collateral will be enforced.

The Security Agents appointed in respect of the collateral relating to the New Convertible Secured Notes (the “Junior Security Agents”) or the trustee under the New Convertible Secured Notes Indenture will not be able to take any enforcement action (including acceleration or the enforcement of collateral) in connection with the New Convertible Secured Notes even if any Event of Default under the Indenture relating to the New Convertible Secured Notes (the “New Convertible Secured Notes Indenture”) has occurred and the New Convertible Secured Notes have been accelerated except (a) in any insolvency or liquidation proceeding, as necessary to file a claim or statement of interest with respect to such New Convertible Secured Notes or (b) as necessary to take any action in order to create, prove, preserve, perfect or protect (but not enforce) its rights in the Collateral.

At any time at which all New Secured Notes have been discharged in full, the Junior Security Agents in accordance with the provisions of the New Convertible Secured Notes Indenture and the Security Documents will distribute all cash proceeds (after payment of the costs of enforcement and collateral administration) of the Collateral received by it under the Security Documents for the New Convertible Secured Notes. The proceeds from the sale of the Collateral remaining after the satisfaction of all New Secured Notes may not be sufficient to satisfy the obligations owed to the holders of the New Convertible Secured Notes. By its nature some or all of the Collateral will be illiquid and may have no readily ascertainable market value. Accordingly, the Collateral may not be able to be sold in a short period of time, if saleable.

In addition, the Security Documents and the Intercreditor Agreement will provide that, so long as there are New Secured Notes outstanding (1) the holders of New Secured Notes may direct the New Secured Notes Representative to take actions with respect of the Collateral (including whether to take enforcement action) without the consent of the holders of the New Convertible Secured Notes; and (2) the holders of the New Secured Notes may change, waive, modify or vary the Security Documents without the consent of the holders of the New Convertible Secured Notes, provided that any such change, waiver or modification does not materially adversely affect the rights of the holders of the New Convertible Secured Notes and not the other secured creditors in a like or similar manner.

Nothing in the Intercreditor Agreement will prevent CEDC FinCo from redeeming the New Convertible Secured Notes in accordance with the terms of the New Secured Notes Indenture and New Convertible Secured Notes Indenture.

The Intercreditor Agreement will provide that, if CEDC FinCo, CEDC or any Subsidiary Guarantors are subject to any bankruptcy, insolvency, liquidation or other debtor-relief proceeding (an Insolvency Proceeding”), the trustee under the New Convertible Secured Notes Indenture and the holders of the New Convertible Secured Notes:

Notwithstanding the foregoing, in any Insolvency Proceeding, (i) if any holders of New Secured Notes are granted adequate protection in the form of additional collateral in connection with any debtor-in-possession financing or use of cash collateral, then the trustee under the New Convertible Secured Notes Indenture or the

holders of the New Convertible Secured Notes may seek or request adequate protection in the form of a replacement Lien on such additional collateral, which Lien is subordinated to the First-Priority Liens and the Liens securing such debtor-in-possession financing on the same basis as the Liens securing the New Convertible Secured Notes are subordinated to the First-Priority Liens under the Intercreditor Agreement and (ii) in the event any holder of the New Convertible Secured Notes (or the trustee under the New Convertible Secured Notes Indenture on behalf of itself or any holder of New Convertible Secured Notes) receives adequate protection in the form of additional collateral, then the applicable holders of New Secured Notes shall be granted a senior Lien on such additional collateral as security for the applicable New Secured Notes, and any Lien on such additional collateral securing the New Secured Notes shall be subordinated to the Liens on such collateral securing the New Secured Notes and any other Liens granted to the holders of New Secured Notes as adequate protection on the same basis as the Liens securing the New Convertible Secured Notes are so subordinated to the First-Priority Liens under the Intercreditor Agreement.

Subject to the terms of the Security Documents, CEDC FinCo and the Guarantors will have the right to remain in possession and retain exclusive control of the Collateral securing the New Convertible Secured Notes and the Guarantees, to freely operate the Collateral and to collect, invest and dispose of any income therefrom.

CEDC FinCo, CEDC and the Subsidiary Guarantors will be entitled to the releases of property and other assets included in the Collateral from the Liens securing the New Convertible Secured Notes and the related Guarantees under any one or more of the following circumstances and as provided in the Intercreditor Agreement:

NONE OF CEDC, CEDC FINCO OR THEIR SUBSIDIARIES HAS COMMENCED CHAPTER 11 CASES UNDER THE BANKRUPTCY CODE, NOR HAVE THEY TAKEN ANY CORPORATE ACTION AUTHORIZING THE COMMENCEMENT OF SUCH CASES. IF THE EXCHANGE OFFERS ARE NOT CONSUMMATED, OR IF WE FOR ANY REASON DETERMINE THAT IT WOULD BE MORE ADVANTAGEOUS OR EXPEDITIOUS AND THE MINIMUM REORGANIZATION CONDITION IS MET, CEDC OR EACH OF CEDC, CEDC FINCO, AND CEDC FINCO LLC MAY COMMENCE CHAPTER 11 CASE(S) UNDER THE BANKRUPTCY CODE TO RESTRUCTURE THEIR FINANCIAL AFFAIRS. THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT SOLICITS THE ADVANCE ACCEPTANCE OF THE PLAN OF REORGANIZATION FROM HOLDERS OF EXISTING NOTES, AND CONTAINS IMPORTANT INFORMATION RELEVANT TO YOUR DECISION TO ACCEPT THE PLAN OF REORGANIZATION. A COPY OF THE PLAN OF REORGANIZATION IS ATTACHED TO THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT AS APPENDIX A. PLEASE READ THE PLAN OF REORGANIZATION COMPLETELY AND CAREFULLY.

To enhance the likelihood that we will succeed in our restructuring efforts, we have formulated the Plan of Reorganization for reorganization under Chapter 11 of the Bankruptcy Code. Terms used under the heading “The Plan of Reorganization” and “Material Terms of the Plan of Reorganization” but not otherwise defined herein have the meaning provided in the Plan of Reorganization. The Plan of Reorganization annexed hereto as Appendix A covers CEDC, CEDC FinCo, and CEDC FinCo LLC and provides the treatment set forth below to holders of Claims against and Interests in CEDC and CEDC FinCo, which treatment differs in certain material respects from the treatment provided pursuant to the Exchange Offers. In the event that the conditions to the Exchange Offers are not satisfied or waived, or if we for any reason believe that it would be more advantageous or expeditious to pursue the Plan of Reorganization, CEDC or each of CEDC, CEDC FinCo, and CEDC FinCo LLC may seek to file case(s) under Chapter 11 of the Bankruptcy Code. If the Plan of Reorganization is confirmed and consummated, all holders of Claims against and Interests in CEDC and, if applicable, CEDC FinCo (and CEDC FinCo LLC), would receive the treatment set forth below, whether or not they vote for acceptance of the Plan of Reorganization.

The statements contained in this Offering Memorandum and Disclosure Statement include summaries of the provisions contained in the Plan of Reorganization and in documents referred to therein. The statements contained in this Offering Memorandum and Disclosure Statement do not purport to be precise or complete statements of all the terms and provisions of the Plan of Reorganization or documents referred to therein, and reference is made to the Plan of Reorganization and to such documents for the full and complete statements of such terms and provisions.

The Plan of Reorganization itself and the documents referred to therein control the actual treatment of Claims against and Interests in CEDC FinCo and CEDC FinCo LLC, under the Plan of Reorganization and will, upon the Effective Date, be binding upon all holders of Claims against and Interests in CEDC FinCo and CEDC FinCo LLC, and the Estates, the Reorganized Debtors and other parties in interest. In the event of any conflict between this Offering Memorandum Disclosure Statement, on the one hand, and the Plan of Reorganization or any other operative document, on the other hand, the terms of the Plan of Reorganization and such other operative document(s) are controlling.

We reserve all of our rights to pursue any and all of our strategic alternatives in the event the out-of-court alternative is not consummated.

As set forth above, we are offering the Exchange Offers to the holders of the Existing Notes simultaneously with the solicitation of the requisite acceptances of the Plan of Reorganization (prior to the filing of any voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code) and from holders of Existing Notes. In the event that the Minimum Conditions for the Exchange Offers are not satisfied or waived, or if we for

any reason believe that it would be more advantageous or expeditious to pursue the Plan of Reorganization, CEDC, CEDC FinCo, and CEDC FinCo LLC may seek to commence a case under Chapter 11 of the Bankruptcy Code and pursue confirmation of the Plan of Reorganization. We anticipate that by conducting the solicitation in advance of commencing any Chapter 11 Case, if a Chapter 11 Case(s) is commenced, the duration of the Chapter 11 Case(s) will be significantly shortened, and the administration of the cases, which otherwise could be lengthy, complex, and extremely expensive, will be greatly simplified and much less costly.

In the event that the conditions of the Exchange Offers are not satisfied or waived by us, or if we for any reason determine that it would be more advantageous or expeditious and the Minimum Reorganization Condition is met, CEDC, CEDC FinCo, and CEDC FinCo LLC may seek to file petitions under Chapter 11 of the Bankruptcy Code to consummate the Plan of Reorganization. Upon expiration of the Consent Fee Deadline and in consideration of the results of participation in the Exchange Offers and, votes to accept the Plan of Reorganization as of the Consent Fee Deadline, CEDC, CEDC FinCo and/or CEDC FinCo LLC may determine to terminate the Exchange Offers and commence bankruptcy cases and seek approval of the Plan of Reorganization prior to the Expiration Time. Notwithstanding any such commencement of bankruptcy cases prior to the Expiration Time, the voting period shall remain open and parties may nonetheless submit votes to accept or reject the Plan of Reorganization until the Voting Deadline; provided, however that holders of Existing 2016 Notes voting to accept the Plan of Reorganization at or prior to the Consent Time may not withdraw such vote(s) after the Consent Time.

At the time that any Chapter 11 Case(s) is commenced, all creditor actions and proceedings against CEDC, CEDC FinCo or CEDC FinCo LLC, as applicable, and all acts to obtain property from CEDC, CEDC FinCo or CEDC FinCo LLC, as applicable, will be stayed under section 362 of the Bankruptcy Code. CEDC and CEDC FinCo, as applicable, will continue to operate their businesses and manage their respective properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

We do not expect the Chapter 11 Case(s) to be protracted. To expedite emergence from Chapter 11, on the Petition Date, in addition to filing this Offering Memorandum and Disclosure Statement and the Plan of Reorganization, CEDC, CEDC FinCo or CEDC FinCo LLC, as applicable, would file motions seeking the relief detailed below, among other relief, from the Bankruptcy Court (collectively, the “First Day Motions”). Such relief, if granted, will facilitate the administration of the Chapter 11 Case(s); there can be no assurance, however, that the Bankruptcy Court will grant the relief sought. Holders of Existing Notes voting to accept the Plan of Reorganization shall, and shall be deemed to, by so voting, indicate their consent to the relief sought by CEDC, CEDC FinCo and CEDC FinCo LLC (as applicable) pursuant to the First Day Motions.

We intend to seek an order scheduling a combined hearing on this Offering Memorandum and Disclosure Statement and confirmation of the Plan of Reorganization (the “Confirmation Hearing”) for a date not more than 45 days following the Petition Date. At the Confirmation Hearing, CEDC, CEDC FinCo and CEDC FinCo LLC, will seek approval of the confirmation of the Plan of Reorganization pursuant to sections 1125, 1128 and 1129 of the Bankruptcy Code. At that time, CEDC, CEDC FinCo, and CEDC FinCo LLC, will also request that the Bankruptcy Court approve the prepetition solicitation of votes on the Plan of Reorganization. There can be no assurance that the Bankruptcy Court will approve the request to schedule the Confirmation Hearing within 45 days of the Petition Date will be granted.

Motion For Authority To Pay Prepetition Employee Wages And Associated Benefits

Our employees are an integral part of our businesses, and their continued dedication is crucial to our success. None of our employees in Poland, Hungary or Russia will be implicated by any Chapter 11 Case(s) and hence, their wages, salaries and benefits will be honored in the ordinary course without interruption. While each

of CEDC, CEDC FinCo, and CEDC FinCo LLC has a small workforce, we believe that we have a valuable asset in that workforce and that any delay in paying prepetition compensation or benefits to our employees would destroy our relationships with employees and irreparably harm employee morale at a time when the continued dedication, confidence and cooperation of our employees is most critical. We are grateful to our employees for their help, without which a restructuring would not be possible. Accordingly, CEDC, CEDC FinCo, and CEDC FinCo LLC, as applicable, will seek authority to pay compensation and benefits in the Chapter 11 Case(s) which were accrued but unpaid as of the Petition Date and to continue their employee programs during the pendency of the Chapter 11 Case(s).

Because we expect the Chapter 11 Case(s) to be pending for less than two (2) months, and because of the administrative hardship that any operating changes would impose, CEDC, CEDC FinCo, and CEDC FinCo LLC intend to seek authority to continue using the existing cash management system, bank accounts and business forms and to follow internal investment and deposit guidelines. Absent the Bankruptcy Court’s authorization of the continued use of the cash management system, our cash flow could be impaired to the detriment of the Estate(s) and creditors.

Continued use of our existing cash management system will facilitate a smooth and orderly transition into the Chapter 11 Case(s), minimize the disruption of businesses while in Chapter 11, and expedite emergence from Chapter 11. As a result of set-up time and expenses, requiring CEDC, CEDC FinCo, and CEDC FinCo LLC, as applicable, to adopt and implement a new cash management system would likely increase the costs of the Chapter 11 Case. For the same reasons, requiring CEDC, CEDC FinCo, and CEDC FinCo LLC, as applicable, to close existing bank accounts and establish new accounts or requiring the creation of new business forms would only frustrate efforts to reorganize expeditiously.

If we file for Chapter 11, we may need to obtain short-term working capital financing. While we do not, as of the date hereof, have a commitment for such financing, we would expect to obtain such a commitment prior to the Petition Date.

Section 521 of the Bankruptcy Code and Bankruptcy Rule 1007 direct that, unless otherwise ordered by the court, a debtor must prepare and file certain schedules of claims, executory contracts and unexpired leases and related information (the “Schedules”) and a statement of financial affairs (the “Statement”) within fifteen (15) days of the commencement of a Chapter 11 case. The purpose of this requirement is to provide a debtor’s creditors, equity security holders and other interested parties with sufficient information to make informed decisions with respect to the debtor’s reorganization. In appropriate circumstances, however, a bankruptcy court may modify or dispense with the filing of the Schedules and the Statement pursuant to section 521 of the Bankruptcy Code. We believe that such circumstances would exist in the Chapter 11 Cases, and that we should not be required to file the Schedules and the Statement. CEDC, CEDC FinCo, and CEDC FinCo LLC, thus intend to request that the Bankruptcy Court waive the necessity of filing the Schedules and the Statement.

We intend to seek retention of certain professionals to represent and assist in connection with the Chapter 11 Case. These professionals were intimately involved with the negotiation and development of the restructuring transactions and the Plan of Reorganization. These professionals include, among others, Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Houlihan Lokey Capital, Inc., as investment banker; and Alvarez & Marsal North American, LLC, as financial advisor.

Assuming that the Bankruptcy Court approves the Offering Memorandum and Disclosure Statement and confirms the Plan of Reorganization on the schedule requested, CEDC, CEDC FinCo, and CEDC FinCo LLC, would seek to emerge from Chapter 11 within approximately two (2) months of the Petition Date. There can be no assurance, however, that the Bankruptcy Court’s orders will permit the Chapter 11 Case to proceed as expeditiously as anticipated.

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under Chapter 11 of the Bankruptcy Code, a debtor is authorized to reorganize its business for the benefit of itself, its creditors and interest holders. Another goal of Chapter 11 is to promote equality of treatment for similarly situated creditors and similarly situated interest holders. The commencement of a Chapter 11 case creates an estate that is comprised of all of the legal and equitable interests of the debtor as of the filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession”.

The consummation of a plan of reorganization is the principal objective of a Chapter 11 case. A plan of reorganization sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a plan of reorganization by the Bankruptcy Court makes the plan binding upon the debtor, any issuer of securities under the plan, any person or entity acquiring property under the plan and any creditor of or equity security holder in the debtor, whether or not such creditor or equity security holder (i) is impaired under or has accepted the plan or (ii) receives or retains any property under the plan. Subject to certain limited exceptions and other than as provided in the plan itself or the confirmation order, the confirmation order discharges the debtor from any debt that arose prior to the date of confirmation of the plan and substitutes therefore the obligations specified under the confirmed plan, and terminates all rights and interests of equity security holders.

THE REMAINDER OF THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE AND MEANS FOR IMPLEMENTATION OF THE PLAN OF REORGANIZATION, AND OF THE CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN OF REORGANIZATION, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN OF REORGANIZATION (AS WELL AS THE EXHIBITS THERETO AND DEFINITIONS THEREIN), WHICH ARE ANNEXED TO THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT AS APPENDIX A.

THE STATEMENTS CONTAINED IN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT INCLUDE SUMMARIES OF THE PROVISIONS CONTAINED IN THE PLAN OF REORGANIZATION AND IN DOCUMENTS REFERRED TO THEREIN. THE STATEMENTS CONTAINED IN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT DO NOT PURPORT TO BE PRECISE OR COMPLETE STATEMENTS OF ALL THE TERMS AND PROVISIONS OF THE PLAN OF REORGANIZATION OR DOCUMENTS REFERRED TO THEREIN, AND REFERENCE IS MADE TO THE PLAN OF REORGANIZATION AND TO SUCH DOCUMENTS FOR THE FULL AND COMPLETE STATEMENTS OF SUCH TERMS AND PROVISIONS.

THE PLAN OF REORGANIZATION ITSELF AND THE DOCUMENTS REFERRED TO THEREIN CONTROL THE ACTUAL TREATMENT OF CLAIMS AGAINST AND EQUITY INTERESTS IN CEDC AND CEDC FINCO, AS APPLICABLE, UNDER THE PLAN OF REORGANIZATION AND WILL, UPON OCCURRENCE OF THE EFFECTIVE DATE, BE BINDING UPON ALL HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN CEDC AND CEDC FINCO, AS APPLICABLE, THE ESTATE, THE REORGANIZED DEBTORS, ALL PARTIES RECEIVING PROPERTY UNDER THE PLAN OF REORGANIZATION, AND OTHER PARTIES IN INTEREST. IN THE EVENT OF ANY CONFLICT BETWEEN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT, ON THE ONE HAND, AND THE PLAN OF REORGANIZATION, OR ANY OTHER OPERATIVE DOCUMENT, ON THE OTHER HAND, THE TERMS OF THE PLAN OF REORGANIZATION OR SUCH OTHER OPERATIVE DOCUMENT WILL CONTROL.

In addition, as more fully described below, the Plan of Reorganization designates separate classes of Claims against and Interests in CEDC, CEDC FinCo and CEDC FinCo LLC (other than Administrative Claims and Priority Tax Claims). Holders of Class 2 Claims, which Class is comprised of Existing 2016 Note Claims, Class 3 Claims, which Class is comprised of RTL Credit Facility Claims, and Class 5 Claims, which Class is comprised of Unsecured Notes Claims (i.e., Existing 2013 Note Claims and RTL Notes Claims), would be Impaired under the Plan of Reorganization and only the votes of such Classes would be solicited. In addition to holders of Administrative Claims and Priority Tax Claims (which are not classified under the Plan of Reorganization), holders of Class 1, Class 4, Class 6 and Class 7 Claims and Class 10 Interests are Unimpaired by the Plan of Reorganization, would not be entitled to vote to accept or reject the Plan of Reorganization, and would be deemed to have accepted the Plan of Reorganization. Holders of Class 8 Claims (those arising from ownership of equity interests and subordinated under Bankruptcy Code Section 510(b)) and Class 9 Interests in CEDC would be Impaired under the Plan of Reorganization, and would be deemed to have rejected the Plan of Reorganization. Such Claim and Interest holders would not be entitled to vote to accept or reject the Plan of Reorganization.

Bankruptcy Rule 3018(b) prescribes the conditions that must be satisfied to count the ballots solicited with respect to a plan of reorganization prior to the commencement of a Chapter 11 case. Bankruptcy Rule 3018(b) requires that (i) the Chapter 11 plan of reorganization must have been disseminated to substantially all impaired creditors and equity security holders in the class(es) entitled to vote, (ii) the time prescribed for voting on the plan of reorganization must be sufficient and (iii) the solicitation must have been conducted in accordance with section 1126(b) of the Bankruptcy Code, which requires compliance with all applicable non-bankruptcy laws, rules, or regulations or, if there are no such applicable laws, rules or regulations, that the disclosure with respect to the plan of reorganization contains “adequate information” as defined in section 1125(a) of the Bankruptcy Code. Section 1125(a)(1) defines “adequate information” as information of a kind and in sufficient detail as far as is reasonably practicable in light of the nature and history of a company and the condition of such company’s books and records, as would enable a hypothetical reasonable investor typical of holders of claims or equity interests of the relevant class to make an informed judgment about the plan of reorganization. We believe that all of the requirements of Bankruptcy Rule 3018(b) would be satisfied in the event that we sought confirmation of the Plan of Reorganization.

Certain Matters Regarding Classification and Treatment of Claims and Interests

Section 1123 of the Bankruptcy Code provides that a plan of reorganization must classify the claims and interests of a debtor’s creditors and equity interest holders. As described above, the Plan of Reorganization divides Claims and Interests into Classes and sets forth the treatment for each Class (other than Administrative Claims and Priority Tax Claims which, pursuant to section 1123(a)(1), need not and have not been classified). We believe that the Plan of Reorganization has classified all Claims and Interests in compliance with the provisions of section 1122 of the Bankruptcy Code, which requires that Classes contain Claims and Interests that are substantially similar to the other Claims and Interests in such Class if Chapter 11 Cases were to be commenced.

It is possible, however, that a holder of a Claim or Interest may challenge our classification of Claims and Interests and that the Bankruptcy Court may find that a different classification is required for the Plan of Reorganization to be confirmed. In that event, we would intend, to the extent permitted by the Bankruptcy Code, the Plan of Reorganization and the Bankruptcy Court, to make such reasonable modifications of the classifications through the Plan of Reorganization to permit confirmation and to use the acceptances of the Plan of Reorganization that are marked on the Ballots received in this Solicitation Package for purpose of obtaining the approval of the reconstituted Class or Classes of which each accepting holder ultimately would be deemed to be a member. Any such reclassification could adversely affect the Class in which such holder initially was a member, or any other Class in the Plan of Reorganization, by changing the composition of such Class and the vote required of that Class for approval of the Plan of Reorganization. Furthermore, a reclassification of a Claim or Interest after approval of the Plan of Reorganization could necessitate a resolicitation of acceptances of the Plan of Reorganization.

We believe that the consideration, if any, that would be provided through the Plan of Reorganization to holders of Claims and Interests would reflect an appropriate resolution of their Claims and Interests, and would take into account the differing nature and priority (including applicable contractual subordination) of such Claims and Interests. The Bankruptcy Court would be required to find, however, that a number of statutory tests are met before it could confirm the Plan of Reorganization. Many of these tests are designed to protect the interests of holders of Claims or Interests who would not be entitled to vote on the Plan of Reorganization, or would not vote to accept the Plan of Reorganization, but who would be bound by the provisions of the Plan of Reorganization if it were confirmed by the Bankruptcy Court. The “cramdown” provisions of section 1129(b) of the Bankruptcy Code, for example, permit confirmation of the Plan of Reorganization in certain circumstances even if the Plan of Reorganization has not been accepted by all Impaired Classes of Claims and Interests. Although we believe that the Plan of Reorganization could be confirmed under section 1129(b), there can be no assurance that the requirements of such section would be satisfied.

If CEDC, CEDC FinCo, and CEDC FinCo LLC, commence the Chapter 11 Cases, the Bankruptcy Court would schedule a hearing on the confirmation of the Plan of Reorganization. At the Confirmation Hearing, the Bankruptcy Court would consider whether the Plan of Reorganization satisfies the various requirements of the Bankruptcy Code, including whether the Plan of Reorganization is feasible and whether the Plan of Reorganization is in the best interests of the holders of Claims against and Interests in CEDC, CEDC FinCo and CEDC FinCo LLC. At that time, CEDC, CEDC FinCo, and CEDC FinCo LLC would submit a report to the Bankruptcy Court concerning the votes for acceptance or rejection of the Plan of Reorganization by the parties entitled to vote thereon.

Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to confirmation of the Plan of Reorganization. Any objection to confirmation of the Plan of Reorganization would have to be made in writing and filed with the Bankruptcy Court and served on all required parties by the objection deadlines set by the Bankruptcy Court. Unless an objection to confirmation is timely served and filed, it may not be considered by the Bankruptcy Court.

At the Confirmation Hearing, the Bankruptcy Court could confirm the Plan of Reorganization only if all of the requirements of section 1129 of the Bankruptcy Code are met. Among the requirements for confirmation of a plan of reorganization are that the plan is (i) accepted by all impaired classes of claims and equity interests or, if rejected by an impaired class, that the plan “does not discriminate unfairly” and is “fair and equitable” as to such class, (ii) feasible and (iii) in the “best interests” of creditors and interest holders that are impaired under the plan of reorganization.

Confirmation Without Acceptance of All Impaired Classes: The “Cramdown” Alternative

Under the Plan of Reorganization, Classes 8 and 9 are deemed to have rejected the Plan of Reorganization. In view of the deemed rejection by such Claim and Interest holders, CEDC, CEDC FinCo, and/or CEDC FinCo LLC will seek confirmation of the Plan of Reorganization pursuant to the “cramdown” provisions of the Bankruptcy Code.

Specifically, Section 1129(b) of the Bankruptcy Code provides that a plan can be confirmed even if the plan is not accepted by all impaired classes, as long as at least one impaired class of claims has accepted it. A Bankruptcy Court may confirm a plan of reorganization at the request of the debtors if the plan “does not discriminate unfairly” and is “fair and equitable” as to each impaired class that has not accepted the plan of reorganization.

A plan does not discriminate unfairly within the meaning of the Bankruptcy Code if a dissenting class is treated equally with respect to other classes of equal rank. A plan is fair and equitable as to a class of claims which rejects a plan if the plan provides (a) for each holder of a claim included in the rejecting class to receive or

retain on account of that claim property that has a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (b) that the holder of any claim or interest that is junior to the claims of such class will not receive or retain on account of such junior claim or interest any property at all.

A plan is fair and equitable as to a class of equity interests that rejects a plan if the plan provides (a) that each holder of an interest included in the rejecting class receive or retain on account of that interest property that has a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; or (b) that the holder of any interest that is junior to the interests of such class will not receive or retain any property at all on account of such junior interest under the plan.

This summary of material terms does not include all of the terms provided under the Plan of Reorganization. You should review the Plan of Reorganization in its entirety for a full description of terms and treatment. In the event of any inconsistencies between this summary and the Plan of Reorganization, the Plan of Reorganization will control.

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims are not classified and holders of such Claims are not entitled to vote on the Plan of Reorganization.

Except with respect to Administrative Claims that are Claims for Accrued Professional Compensation, each holder of an Allowed Administrative Claim shall receive, in full satisfaction, settlement, release and discharge of and in exchange for its Administrative Claim, on the latest of (i) the first Distribution Date, (ii) the date on which its Administrative Claim becomes an Allowed Administrative Claim, (iii) the date on which its Administrative Claim becomes payable under any agreement with the Debtors relating thereto, (iv) in respect of liabilities incurred in the ordinary course of business, the date upon which such liabilities are payable in the ordinary course of the Debtors’ business, consistent with past practice, or (v) such other date as may be agreed upon between the holder of such Allowed Administrative Claim and the Debtors or the Reorganized Debtors, as the case may be, Cash equal to the unpaid portion of its Allowed Administrative Claim.

The legal and equitable rights of the holders of Priority Tax Claims are Unimpaired by the Plan of Reorganization. Unless the holder of such Claim and the Debtors agree to a different treatment, on the Effective Date, each holder of an Allowed Priority Tax Claim shall have its Claim Reinstated.

Impaired Classes 2, 3, and 5 shall have accepted the Plan of Reorganization if (i) the holders of at least two-thirds in amount of the Allowed Claims actually voting in such classes have voted to accept the Plan of Reorganization and (ii) the holders of more than one-half in number of the Allowed Claims actually voting in such classes have voted to accept the Plan of Reorganization, in each case not counting the vote of any holder designated under section 1126(e) of the Bankruptcy Code.

Pursuant to the terms of the Plan of Reorganization, each of the holders of Claims and Interests in Classes 1 through 10 will receive the treatment described below.

Treatment: Unless the holder of such Claim and the Debtors agree to a different treatment, on the Effective Date, each holder of an Allowed Priority Non-Tax Claim shall have its Claim Reinstated.

Treatment: On the Effective Date, except to the extent that holders of Allowed Existing 2016 Notes Claims and the Debtors agree to less favorable treatment, the holders of Allowed Existing 2016 Notes Claims shall receive the treatment provided below, depending upon whether they elect to participate in the Cash Option or the

New Notes Option; provided, however, that an election of the New Notes Option will be deemed with respect to (i) any Existing 2016 Notes for which the respective holders did not elect to participate in the Cash Option and (ii) any Existing 2016 Notes that are not accepted for exchange in the Cash Option.

If holders of Allowed Existing 2016 Notes Claims elect to participate in the Cash Option, each such holder shall receive its portion of the Cash Option Consideration equal to the sum of (a) such holder’s 8.875% Bid Price multiplied by the total principal amount of such holder’s 8.875% Existing 2016 Notes accepted for exchange in the Cash Option, divided by €1,000 and converted using the Exchange Rate, plus (b) such holder’s 9.125% Bid Price multiplied by the total principal amount of such holder’s 9.125% Existing 2016 Notes accepted for exchange in the Cash Option and divided by $1,000, plus (c) the full amount of the aggregate unpaid interest that has accrued on such holder’s accepted Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013 and converted using the Exchange Rate for interest accrued on 8.875% Existing 2016 Notes. In determining which Existing 2016 Notes shall be accepted for exchange in the Cash Option, the Debtors shall use the Dutch auction procedures described in Article V.Q of the Plan.

If holder of Allowed Existing 2016 Notes Claims elect (or are deemed to elect pursuant to the terms of the Plan of Reorganization) to exchange their Allowed Existing 2016 Notes pursuant to the New Notes Option, such holders shall receive their Pro Rata shares of (A) the New Secured Notes, (B) the New Convertible Secured Notes, and (C) any Cash from the RTL New Equity Infusion not otherwise distributed pursuant to the Cash Option.

Treatment: On the Effective Date, except to the extent that a holder of an RTL Credit Facility Claim and the Debtors agree to less favorable treatment, each holder of an Allowed RTL Credit Facility Claim shall receive its share of the RTL Investment New Common Stock Allocation as set forth in the RTL Investment Agreement.

Treatment: Unless the holder of such Claim and the Debtors agree to a less favorable treatment, on the Effective Date, each holder of an Allowed Other Secured Claim shall have its Claim Reinstated.

Treatment: On the Effective Date, each holder of an Unsecured Notes Claim shall be entitled to receive (i) if Class 5A votes to accept the Plan of Reorganization in accordance with section 1126(c) of the Bankruptcy Code, its Pro Rata share of the Unsecured Notes Claims New Common Stock Allocation or (ii) if Class 5A does not vote to accept the Plan of Reorganization in accordance with section 1126(c) of the Bankruptcy Code, the holders of Unsecured Notes Claims shall not receive or retain any property under the Plan of Reorganization on account of such Claims.

Treatment: Unless the holder of such Claim and the Debtors agree to different treatment, on the Effective Date, each holder of an Allowed General Unsecured Claim shall have its Claim Reinstated; provided, however, that all Allowed General Unsecured Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases as set forth in Article VI of the Plan of Reorganization shall be paid the full amount of such Allowed Claim in Cash.

Treatment: On the Effective Date, all net Allowed Intercompany Claims (taking into account any setoffs of Intercompany Claims) held by the Debtors between and among the Debtors or between one or more Debtors and any Affiliate of one of the Debtors that is not itself a Debtor shall, at the election of the Reorganized Debtors, be either (a) Reinstated, (b) released, waived, and discharged, (c) treated as a dividend, or (d) contributed to capital or exchanged for equity by the obligor.

Treatment: The holders of Subordinated 510(b) Claims shall not receive or retain any property under the Plan of Reorganization on account of such Subordinated 510(b) Claims and the obligations of the Debtors and Reorganized Debtors on account of Subordinated 510(b) Claims shall be discharged. All Subordinated 510(b) Claims are Disputed Claims.

Treatment: On the Effective Date, Existing Common Stock shall be deemed automatically cancelled without further action by the Debtors or Reorganized Debtors and the obligations of the Debtors and Reorganized Debtors thereunder shall be discharged. Holders of Existing Common Stock shall receive (i) if Class 5A votes to accept the Plan of Reorganization in accordance with section 1126(c) of the Bankruptcy Code, their Pro Rata share of the Stockholder New Common Stock Allocation or (ii) if Class 5A does not vote to accept the Plan of Reorganization in accordance with section 1126(c) of the Bankruptcy Code, no property under the Plan of Reorganization on account of such Interests.

Treatment: Class 10 Claims shall be Reinstated and rendered Unimpaired in accordance with section 1124 of the Bankruptcy Code.

All Cash consideration necessary for the Reorganized Debtors to make payments or distributions pursuant hereto shall be obtained from the RTL New Equity Infusion and other Cash on hand of the Debtors, including Cash derived from business operations. Further, the Debtors and the Reorganized Debtors, as the case may be, will be entitled to transfer funds from Non-Debtor Affiliates as they determine to be necessary or appropriate to enable the Reorganized Debtors to satisfy their obligations under the Plan of Reorganization. Except as set forth herein, any changes in intercompany account balances resulting from such transfers will be accounted for and settled in accordance with the Debtors’ historical intercompany account settlement practices and will not violate or otherwise be affected by the terms of the Plan of Reorganization.

On the Effective Date, Reorganized CEDC shall issue (i) shares of New Common Stock for distribution to RTL on account of the RTL Investment in accordance with the RTL Investment New Common Stock Allocation, (ii) shares of New Common Stock for distribution to the holders of Allowed Unsecured Notes Claims in accordance with the Unsecured Notes Claims New Common Stock Allocation and subject to the conditions set forth in Article III.C.5, (iii) shares of New Common Stock for distribution to holders of Existing Common Stock in accordance with the Stockholder New Common Stock Allocation and subject to the conditions set forth in Article III.C.9; and (iv) the New Notes in partial exchange for the Existing 2016 Notes. If Class 5A does not vote to accept the Plan of Reorganization in accordance with section 1126(c) of the Bankruptcy Code, the shares of New Common Stock that would otherwise be distributed to holders of Allowed Unsecured Notes Claims and Existing Common Stock will instead be distributed to RTL on account of the RTL New Equity Infusion in accordance with the RTL Investment New Common Stock Allocation. All of the shares of New Common Stock issued pursuant to the Plan of Reorganization shall be duly authorized, validly issued, fully paid and nonassessable. Additionally, the Reorganized CEDC or New CEDC, as the case may be, shall be authorized, without the need for further stockholder action, to issue the shares of New Common Stock necessary to satisfy any conversion of the New Convertible Secured Notes implemented pursuant to the terms of those securities after the Effective Date. Each distribution and issuance referred to in Article VII shall be governed by the terms and conditions set forth in the Plan of Reorganization applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Person receiving such distribution or issuance.

Except as otherwise specifically provided for in the Plan of Reorganization, on the Effective Date: (1) all indentures, notes, bonds, purchase rights, instruments, guarantees, certificates, warrants, options, puts, agreements (including registration rights agreements), and other documents evidencing the RTL Credit Facility, the Existing 2013 Notes, the RTL Notes, the Existing Common Stock, the RTL Put Right, and any other indebtedness of or Interests in the Debtors (except as provided in Article III.C.10 of the Plan of Reorganization) shall be deemed cancelled, and the obligations of the Debtors thereunder and in any way related thereto shall be fully satisfied, released, and discharged, and (2) in the case of the Plan of Reorganization (i) all indentures, notes, bonds, purchase rights, instruments, guarantees, certificates, and other documents evidencing the Existing 2016 Notes shall be deemed cancelled, and the obligations of the Debtors thereunder and in any way related thereto shall be fully satisfied, released, and discharged and (ii) the Custodian (as defined in the Existing 2016 Notes Indenture) shall mark the Global Dollar Note (as defined in the Existing 2016 Notes Indenture) and the Global Euro Note (as defined in the Existing 2016 Notes Indenture), as applicable, as cancelled and deliver such cancelled Global Dollar Note and Global Euro Note, as applicable, to Reorganized CEDC FinCo; provided, however, notwithstanding Confirmation or the occurrence of the Effective Date, any such indenture or agreement that governs the rights of the holder of a Claim shall continue in effect solely for purposes of (a) allowing holders of Existing 2016 Notes Claims, RTL Credit Facility Claims, and the Unsecured Notes Claims (as applicable) to receive distributions under the Plan of Reorganization as provided herein, and (b) allowing the Indenture Trustees, if applicable, to make distributions under the Plan of Reorganization as provided herein; provided further, however, that the preceding proviso shall not affect the discharge of Claims or Interests pursuant to the Bankruptcy Code, the Confirmation Order or the Plan of Reorganization, or result in any expense or liability to the Reorganized Debtors, except to the extent set forth in or provided for under the Plan of Reorganization; provided further, however, that the cancellation of indentures, notes, instruments, guarantees, certificates, and other documents hereunder shall not itself alter the obligations or rights among third parties (apart from the Debtors, the Reorganized Debtors, and the Non-Debtor Affiliates). Upon cancellation of the Existing 2016 Notes Indenture and the Existing 2013 Notes Indenture, all duties and responsibilities of the Indenture Trustees under the Existing 2016 Notes Indenture and the Existing 2013 Notes Indenture, as applicable, shall be discharged except to the extent required in order to effectuate the Plan of Reorganization.

The issuance of the New Common Stock and New Notes distributed to creditors on account of their Claims shall be authorized under section 1145 of the Bankruptcy Code as of the Effective Date without further act or action by any person, unless required by provision of the relevant corporate documents or applicable law, regulation, order or rule, and shall thereby be exempt from the requirements of Section 5 of the Securities Act, as amended, and any state or local laws requiring registration for the offer and sale of a security; and all documents evidencing the same shall be executed and delivered as provided for in the Plan of Reorganization or the Plan Supplement.

On the Effective Date, the Corporate Governance Documents of the Debtors shall be amended in a form as may be required to be consistent with the provisions of the Plan of Reorganization and the Bankruptcy Code (including, without limitation, section 1123(a)(6) of the Bankruptcy Code), shall be included in the Plan Supplement, and shall contain certain minority stockholder protections that are effective if and when the New Convertible Secured Notes are converted, including but not limited to registration rights, preemptive rights and, subject to appropriate ownership levels, and shall otherwise be reasonably acceptable to RTL and a majority in principal amount of the Existing 2016 Notes represented by the Steering Committee.

Except as otherwise provided herein, in the Corporate Governance Documents or elsewhere in the Plan Supplement, each Debtor, as Reorganized, shall continue to exist after the Effective Date as a separate corporate entity or limited liability company, as the case may be, with all the powers of a corporation or limited liability company, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated. After the Effective Date, each Reorganized Debtor may amend and restate its Corporate Governance Documents as permitted by the laws of its respective states, provinces, or countries of formation and its respective charters and bylaws.

The identity of the members of the new board of each of the Reorganized Debtors shall be determined by RTL in its sole discretion, and will be identified in the Plan Supplement or in a filing with the Bankruptcy Court at or prior to the Confirmation Hearing.

Except as otherwise provided herein, on and after the Effective Date, the Reorganized Debtors may: (1) honor, in the ordinary course of business, any contracts, agreements, policies, programs and plans for, among other things, compensation (other than equity based compensation related to Interests), health care benefits, disability benefits, deferred compensation benefits, travel benefits, savings, severance benefits, retirement benefits, welfare benefits, workers’ compensation insurance and accidental death and dismemberment insurance for the directors, officers and employees of any of the Debtors who served in such capacity at any time and (2) honor, in the ordinary course of business, Claims of employees employed as of the Effective Date for accrued vacation time arising before the Petition Date; provided, however, that the Debtors’ or Reorganized Debtors’ performance under any employment agreement will not entitle any person to any benefit or alleged entitlement under any policy, program or plan that has expired or been terminated before the Effective Date, or restore, reinstate or revive any such benefit or alleged entitlement under any such policy, program or plan. Nothing herein shall limit, diminish or otherwise alter the Reorganized Debtors’ defenses, claims, Causes of Action or other rights with respect to any such contracts, agreements, policies, programs and plans.

the form of, among other things, stock options, stock appreciation rights, restricted stock, phantom stock awards, performance awards and/or other stock-based awards in Reorganized CEDC in an aggregate amount equal to up to 5% of the New Common Stock, on a fully diluted basis (the “Management Incentive Plan”). Reorganized CEDC shall be authorized to adopt the Management Incentive Plan without the need for any further stockholder action. The specific form of and terms applicable to awards granted under the Management Incentive Plan shall be determined by the new board of Reorganized CEDC; provided that the aggregate price paid for all repurchased, redeemed, acquired or retired New Common Stock issued pursuant to the Management Incentive Plan may not exceed $3.0 million in each twelve-month period from the date of issuance of the New Notes (with any unused amounts in any preceding twelve-month period being carried over to the succeeding twelve-month period).

Except as otherwise provided in the Plan of Reorganization or any agreement, instrument or other document incorporated therein, on the Effective Date, all property in each Estate and all Causes of Action (except those released pursuant to the Releases by the Debtors) shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges or other encumbrances. On and after the Effective Date, except as otherwise provided in the Plan of Reorganization, the Reorganized Debtors may operate its business and may use, acquire or dispose of property and compromise or settle any Claims, Interests or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

On the Effective Date or as soon as reasonably practicable thereafter, the Reorganized Debtors may take all actions as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by or necessary to effectuate the Plan of Reorganization, including: (1) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution or liquidation containing terms that are consistent with the terms of the Plan of Reorganization and that satisfy the applicable requirements of applicable law and any other terms to which the applicable Persons may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption or delegation of any asset, property, right, liability, debt or obligation on terms consistent with the terms of the Plan of Reorganization and having other terms for which the applicable Persons agree; (3) the filing of appropriate certificates or articles of incorporation or amendments thereof, reincorporation, merger, consolidation, conversion or dissolution pursuant to applicable state law; and (4) all other actions that the applicable Persons determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law. On the Effective Date, pursuant to section 1123(a)(5)(B) of the Bankruptcy Code, at the election of the Debtors and the Plan Support Parties, CEDC may transfer to a newly-formed Delaware entity (“New CEDC”) all or substantially all of its assets and all Claims and Interests that are Reinstated and/or Unimpaired, and in consideration of such transfer, New CEDC shall make the distributions as specified in Article III.C of the Plan of Reorganization.

other actions that the applicable Persons determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law. On the Effective Date, pursuant to section 1123(a)(5)(B) of the Bankruptcy Code, at the direction of the Debtors, RTL, and a majority in principal amount of the Existing 2016 Notes represented by the Steering Committee, CEDC shall transfer (by way of merger, consolidation, share exchange, sale of assets, or otherwise) to a newly-formed Delaware corporation (“New CEDC”) all or substantially all of its assets and all Claims and Interests that are Reinstated and/or Unimpaired, and in consideration of such transfer, New CEDC shall make the distributions as specified in Article III.C of the Plan.

Upon the Effective Date, all actions contemplated by the Plan of Reorganization shall be deemed authorized and approved in all respects, including (1) selection of the directors and officers of the Reorganized Debtors; (2) the distribution of the New Common Stock as provided herein; and (3) all other actions contemplated by the Plan of Reorganization (whether to occur before, on or after the Effective Date). All matters provided for in the Plan of Reorganization involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan of Reorganization shall be deemed to have occurred and shall be in effect, without any requirement of further action by the directors or officers of the Debtors or the Reorganized Debtors.

On or (as applicable) before the Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors, as applicable, shall be authorized and directed to issue, execute and deliver the agreements, documents, securities, certificates of incorporation, operating agreements and instruments contemplated by the Plan of Reorganization (or necessary or desirable to effect the transactions contemplated by the Plan of Reorganization) in the name of and on behalf of the Reorganized Debtors. The authorizations and approvals contemplated by Article V of the Plan of Reorganization shall be effective notwithstanding any requirements under non-bankruptcy law.

On and after the Effective Date, the Reorganized Debtors and the officers and members of the board of directors thereof are authorized to issue, execute, deliver, file or record such contracts, securities, instruments, releases and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement and further evidence the terms and conditions of the Plan of Reorganization and the securities issued pursuant to the Plan of Reorganization in the name of and on behalf of the Reorganized Debtors, without the need for any approvals, authorization or consents except for those expressly required pursuant to the Plan of Reorganization.

Pursuant to section 1146(a) of the Bankruptcy Code, any transfers of property in contemplation of, in connection with, or pursuant to the Plan of Reorganization shall not be subject to any stamp tax or other similar tax or governmental assessment in the United States, and the Confirmation Order shall direct and be deemed to direct the appropriate state or local governmental officials or agents to forgo the collection of any such tax or governmental assessment and to accept for filing and recordation instruments or other documents pursuant to such transfers of property without the payment of any such tax or governmental assessment. Such exemption specifically applies, without limitation, to (1) the creation of any mortgage, deed of trust, lien or other security interest; (2) the making or assignment of any lease or sublease; (3) any restructuring transaction authorized by Article V of the Plan of Reorganization; or (4) the making or delivery of any deed or other instrument of transfer under, in furtherance of or in connection with the Plan of Reorganization, including: (a) any merger agreements; (b) agreements of consolidation, restructuring, disposition, liquidation or dissolution; (c) deeds; or (d) assignments executed in connection with any transaction occurring under the Plan of Reorganization.

Notwithstanding anything herein to the contrary, as of the Effective Date, the D&O Liability Insurance Policies and Indemnification Provisions belonging or owed to directors, officers, and employees of the Debtors (or the Estates) who served or were employed at any time by the Debtors shall be deemed to be, and shall be treated as though they are, executory contracts and the Debtors shall assume (and assign to the Reorganized Debtors if necessary to continue the D&O Liability Insurance Policies in full force) all of the D&O Liability Insurance Policies and Indemnification Provisions pursuant to section 365(a) of the Bankruptcy Code. Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the Debtors’ foregoing assumption of each of the D&O Liability Insurance Policies and Indemnification Provisions. On or before the Effective Date, the Reorganized Debtors shall obtain reasonably sufficient tail coverage (i.e., D&O insurance coverage that extends beyond the end of the policy period) under a directors and officers’ liability insurance policy for the current and former directors, officers and managers for a period of six (6) years.

In accordance with section 1123(b) of the Bankruptcy Code, and except where such Causes of Action have been expressly released (including, for the avoidance of doubt, pursuant to the Releases by the Debtors provided by Article IX.B of the Plan of Reorganization), the Reorganized Debtors shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, and the Reorganized Debtors’ rights to commence, prosecute or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Reorganized Debtors may pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. No Person may rely on the absence of a specific reference in the Plan of Reorganization or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action against them. Except with respect to Causes of Action as to which the Debtors or Reorganized Debtors have released any Person or Person on or before the Effective Date (including pursuant to the Releases by the Debtors or otherwise), the Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Person, except as otherwise expressly provided in the Plan of Reorganization. Unless any Causes of Action against a Person are expressly waived, relinquished, exculpated, released, compromised or settled in the Plan of Reorganization or a Bankruptcy Court order, the Reorganized Debtors expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches, shall apply to such Causes of Action upon, after or as a consequence of the Confirmation or Consummation.

Holders of Allowed Claims may assert such Claims against each Debtor obligated with respect to such Claim, and such Claims shall be entitled to share in the recovery provided for the applicable Class of Claims against each obligated Debtor based upon the full Allowed amount of the Claim. Notwithstanding the foregoing, in no case shall the aggregate value of all property received or retained under the Plan of Reorganization on account of Allowed Claims exceed 100% of the underlying Allowed Claim.

The Debtors shall use a pure reverse Dutch auction procedure to determine which Existing 2016 Notes will be accepted for exchange in the Cash Option. The Ballots will, among other options, provide the holders of Existing 2016 Notes with the option to elect to participate in the Cash Option. The auction will stay open through the Auction Closing Date, and Ballots indicating any such election are due by the Voting Deadline as provided herein.

The Debtors will accept for purchase the Existing 2016 Notes that elect to participate in the Cash Option in the order of the lowest to the highest Bid Prices (as determined based upon each Bid Price’s percentage of the respective Existing 2016 Note’s principal amount) until reaching the Clearing Price. In addition, holders of Existing 2016 Notes that elect to participate in the Cash Option will be subject to proration. The Debtors will first accept for exchange all Existing 2016 Notes with a Bid Price less than the Clearing Price, and thereafter, Existing 2016 Notes with a Bid Price equal to the Clearing Price on a Pro Rata basis. In all cases, appropriate adjustments will be made to avoid purchases of Existing 2016 Notes in principal amounts other than integral multiples of $1,000 or €1,000, as applicable. All Existing 2016 Notes not accepted in the Cash Option as a result of proration will not participate in the Cash Option and will be deemed to have elected to participate in the New Notes Option. In addition, any Existing 2016 Notes for which the respective holders did not elect to participate in the Cash Option will be deemed to have elected the New Notes Option.

If holders of Allowed Existing 2016 Notes Claims elect to participate in the Cash Option by indicating as such on their Ballot and submitting such Ballot by the Voting Deadline as provided herein, each such holder shall receive, subject to the foregoing, its portion of the Cash Option Consideration equal to (a) such holder’s 8.875% Bid Price multiplied by the total principal amount of such holder’s 8.875% Existing 2016 Notes accepted for exchange in the Cash Option, divided by €1,000 and converted using the Exchange Rate, plus (b) such holder’s 9.125% Bid Price multiplied by the total amount of such holder’s 9.125% Existing 2016 Notes accepted for exchange in the Cash Option and divided by $1,000, plus (c) the full amount of the aggregate unpaid interest that has accrued on such holder’s accepted Existing 2016 Notes in accordance with the terms of the Existing 2016 Notes Indenture from December 2, 2012 to March 15, 2013 and converted using the Exchange Rate for interest accrued on 8.875% Existing 2016 Notes.

As of the entry of the Confirmation Order, the various transfer registers for each of the Classes of Claims or Interests as maintained by the Debtor or their respective agents shall be deemed closed, and there shall be no further changes made to reflect any new record holders of any Claims or Interests. The Debtor shall have no obligation to recognize any transfer of Claims or Interests occurring on or after the Distribution Record Date.

Except as otherwise provided in the Plan of Reorganization, on the Effective Date or as soon as reasonably practicable thereafter (or if a Claim is not an Allowed Claim on the Effective Date, on the date that such a Claim becomes an Allowed Claim, on the next Distribution Date or as soon as reasonably practicable thereafter), each holder of an Allowed Claim against the Debtor shall receive the full amount of the distributions that the Plan of Reorganization provides for Allowed Claims in the applicable Class and in the manner provided herein. In the event that any payment or act under the Plan of Reorganization is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date. If and to the extent that there are Disputed Claims, distributions on account of any such Disputed Claims shall be made pursuant to the provisions set forth in Article VIII of the Plan of Reorganization. Except as otherwise provided herein, holders of Claims shall not be entitled to interest, dividends or accruals on the distributions provided for herein, regardless of whether such distributions are delivered on or at any time after the Effective Date.

Except as otherwise provided herein, all distributions under the Plan of Reorganization shall be made by the Reorganized Debtor as Disbursing Agent or such other Person designated by the Reorganized Debtor as a Disbursing Agent on the Effective Date.

The Disbursing Agent shall be empowered to: (a) affect all actions and execute all agreements, instruments and other documents necessary to perform its duties under the Plan of Reorganization; (b) make all distributions contemplated hereby; (c) employ professionals to represent it with respect to its responsibilities; and (d) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court, pursuant to the Plan of Reorganization, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions of the Plan of Reorganization.

Except as otherwise ordered by the Bankruptcy Court, the amount of any reasonable fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement claims (including reasonable attorney fees and expenses) made by the Disbursing Agent shall be paid in Cash by the Reorganized Debtor in its reasonable discretion.

Distributions made after the Effective Date to holders of Disputed Claims that are not Allowed Claims as of the Effective Date but which later become Allowed Claims shall be deemed to have been made on the Effective Date.

Notwithstanding any provision otherwise in the Plan of Reorganization and except as may be agreed to by the Debtor or the Reorganized Debtor, on the one hand, and the holder of a Disputed Claim, on the other hand, no partial payments and no partial distributions shall be made with respect to any Disputed Claim until all Disputed Claims held by the holder of such Disputed Claim have become Allowed Claims or have otherwise been resolved by settlement or Final Order.

Except as otherwise provided in the Plan of Reorganization, distributions to holders of Allowed Claims shall be made to holders of record as of the Distribution Record Date by the Disbursing Agent: (a) to the signatory set forth on any of the Proof of Claim filed by such holder or other representative identified therein (or at the last known addresses of such holder if no Proof of Claim is filed or if the Debtors have been notified in writing of a change of address); (b) at the addresses set forth in any written notices of address changes delivered to the Disbursing Agent after the date of any related Proof of Claim; (c) at the addresses reflected in the Schedules if no Proof of Claim has been filed and the Disbursing Agent has not received a written notice of a change of address; (d) on any counsel that has appeared in the Chapter 11 Cases on the holder’s behalf or (e) at the addresses reflected in the Debtors’ books and records. Distributions under the Plan of Reorganization on account of Allowed Claims shall not be subject to levy, garnishment, attachment or like legal process, so that each holder of an Allowed Claim shall have and receive the benefit of the distributions in the manner set forth in the Plan of Reorganization. None of the Debtors, the Reorganized Debtors and the applicable Disbursing Agent shall incur any liability whatsoever on account of any distributions under the Plan of Reorganization except for willful misconduct or fraud.

Except as otherwise provided in the Plan of Reorganization, (i) all distributions to holders of Existing 2016 Notes shall be governed by the Existing 2016 Notes Indenture, and shall be deemed completed when made to the

Existing 2016 Notes Indenture Trustee, who shall in turn make distributions in accordance with the Existing 2016 Notes Indenture and (ii) all distributions to holders of Existing 2013 Notes shall be governed by the Existing 2013 Notes Indenture, and shall be deemed completed when made to the Existing 2013 Notes Indenture Trustee, who shall in turn make distributions in accordance with the Existing 2013 Notes Indenture.

In the event that any distribution to any holder is returned as undeliverable, no distribution to such holder shall be made unless and until the Disbursing Agent has determined the then current address of such holder, at which time such distribution shall be made as soon as practicable after such distribution has become deliverable or has been claimed to such holder without interest; provided, however, that such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code and forfeited at the expiration of six months from the applicable Distribution Date. After such date, all “unclaimed property” or interests in property shall revert to the Reorganized Debtor (notwithstanding any applicable federal or state escheat, abandoned or unclaimed property laws to the contrary), and the Claim of any holder to such property shall be discharged and forever barred.

In connection with the Plan of Reorganization and all instruments issued in connection therewith, the Disbursing Agent shall comply with all applicable withholding and reporting requirements imposed by any federal, state or local taxing authority, and all distributions under the Plan of Reorganization shall be subject to any such withholding or reporting requirements.

Except as set forth herein, the Debtor and the Reorganized Debtor may withhold (but not set off except as set forth below) from the distributions called for under the Plan of Reorganization on account of any Allowed Claim an amount equal to any claims, equity interests, rights and Causes of Action of any nature that the Debtor or the Reorganized Debtor may hold against the holder of any such Allowed Claim. In the event that any such claims, equity interests, rights and Causes of Action of any nature that the Debtor or the Reorganized Debtor may hold against the holder of any such Allowed Claim are adjudicated by Final Order or otherwise resolved, the Debtor may, pursuant to section 558 of the Bankruptcy Code or applicable non-bankruptcy law, set off against any Allowed Claim and the distributions to be made pursuant hereto on account of such Allowed Claim (before any distribution is made on account of such Allowed Claim) the amount of any adjudicated or resolved claims, equity interests, rights and Causes of Action of any nature that the Debtor or the Reorganized Debtor may hold against the holder of any such Allowed Claim, but only to the extent of such adjudicated or resolved amount. Neither the failure to effect such a setoff nor the allowance of any Claim under the Plan of Reorganization shall constitute a waiver or release by the Debtor or the Reorganized Debtor of any such claims, equity interests, rights and Causes of Action that the Debtor or the Reorganized Debtor may possess against any such holder, except as specifically provided herein.

The Debtor or the Reorganized Debtor, as applicable, shall reduce in part or in full a Claim to the extent that the holder of such Claim receives payment in part or in full on account of such Claim from a party other than the Debtor or Reorganized Debtor. To the extent a holder of a Claim receives a distribution on account of such Claim from a party other than the Debtor or Reorganized Debtor, such holder shall, within two weeks of receipt thereof, repay or return the distribution to the Reorganized Debtor, to the extent the holder’s total recovery on account of such Claim from the third party and under the Plan of Reorganization exceeds the amount of such Claim as of the date of any such distribution under the Plan of Reorganization.

No distributions under the Plan of Reorganization shall be made on account of Allowed Claims until the holder of such Allowed Claim has exhausted all remedies with respect to the Debtor’s Insurance Policies. To the extent that one or more of the Debtor’s insurers agrees to satisfy in full a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately upon such insurers’ agreement, such Claim may be expunged without a Claims objection having to be filed and without any further notice to or action, order or approval of the Bankruptcy Court.

Except as otherwise provided in the Plan of Reorganization, distributions to holders of Allowed Claims shall be made in accordance with the provisions of any applicable Insurance Policy. Nothing contained in the Plan of Reorganization shall constitute or be deemed a waiver of any Cause of Action that the Debtor or any Person may hold against any other Person, including insurers under any policies of insurance, nor shall anything contained herein constitute or be deemed a waiver by such insurers of any defenses, including coverage defenses, held by such insurers.

To the extent that any Claim entitled to a distribution under the Plan of Reorganization is comprised of indebtedness and accrued but unpaid interest thereon, such distribution shall, for U.S. federal income tax purposes, be allocated on the Debtor’s books and records to the principal amount of the Claim first and then, to the extent the consideration exceeds the principal amount of the Claim, to the accrued but unpaid interest.

The Debtors (before the Effective Date) or the Reorganized Debtors (on or after the Effective Date), as applicable, shall have the exclusive authority to file, settle, compromise, withdraw or litigate to judgment any objections to Claims as permitted under the Plan of Reorganization. From and after the Effective Date, the Reorganized Debtors may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. The Debtors reserve all rights to resolve any Disputed Claim outside the Bankruptcy Court under applicable governing law.

Except as expressly provided herein or in any order entered in the Chapter 11 Cases before the Effective Date (including the Confirmation Order), the Reorganized Debtors after the Effective Date will have and retain any and all rights and defenses held by the Debtors with respect to any Claim as of the Petition Date. All claims of any Person against any Debtor shall be disallowed unless and until such Person pays, in full, the amount it owes each such Debtor.

On the Distribution Date following the date that the order or judgment of the Bankruptcy Court allowing any Disputed Claim becomes a Final Order, the Disbursing Agent shall provide to the holder of such Claim the distribution (if any) to which such holder is entitled under the Plan of Reorganization as of the Effective Date, without any interest to be paid on account of such Claim.

502(c) of the Bankruptcy Code regardless of whether an objection was previously filed with the Bankruptcy Court with respect to such Claim, or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any Disputed Claim, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim against any party or Person, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim, the Debtors (before the Effective Date) or the Reorganized Debtors (after the Effective Date), may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim. All of the objection, estimation, settlement and resolution procedures set forth in the Plan of Reorganization are cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, objected to, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

Any objections to Claims, if any, shall be filed no later than the Claims Objection Bar Date; provided, however, that the Debtors’ failure to file an objection by the Claims Objection Bar Date shall not cause any Claim to be deemed an Allowed Claim nor shall it prejudice the Debtors’ right ability to resolve any Disputed Claim outside the Bankruptcy Court under applicable governing law.

Except as otherwise provided herein, or in any contract, instrument, release, indenture or other agreement or document entered into in connection with the Plan of Reorganization, each of the Debtors’ Executory Contracts and Unexpired Leases shall be deemed assumed as of the Effective Date, unless such Executory Contract or Unexpired Lease: (1) was assumed or rejected previously by the Debtors; (2) expired or terminated pursuant to its own terms before the Effective Date; (3) is the subject of a motion to reject filed on or before the Effective Date; or (4) is identified as an Executory Contract or Unexpired Lease to be rejected pursuant to the Plan Supplement before the Effective Date.

Entry of the Confirmation Order shall constitute a Bankruptcy Court order approving the assumptions or rejections of such Executory Contracts or Unexpired Leases as set forth in the Plan of Reorganization, all pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Unless otherwise indicated, all assumptions or rejections of Executory Contracts and Unexpired Leases pursuant to the Plan of Reorganization are effective as of the Effective Date. Each Executory Contract or Unexpired Lease assumed pursuant to the Plan of Reorganization or by Bankruptcy Court order but not assigned to a third party before the Effective Date shall revest in and be fully enforceable by the applicable contracting Reorganized Debtor in accordance with its terms, except as such terms may have been modified by such order. Notwithstanding anything to the contrary in the Plan of Reorganization, the Debtors or the Reorganized Debtors, as applicable, reserve the right to alter, amend, modify or supplement the list of Executory Contracts and Unexpired Leases identified in the Plan Supplement at any time before the Effective Date. After the Effective Date, the Reorganized Debtors shall have the right to terminate, amend or modify any intercompany contracts, leases or other agreements without approval of the Bankruptcy Court.

All Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, must be filed with the Bankruptcy Court within 30 days after the date of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection. Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not filed with the Bankruptcy Court within such time will

be automatically disallowed, forever barred from assertion and shall not be enforceable against the Debtors or the Reorganized Debtors, the Estates or their property without the need for any objection by the Reorganized Debtors or further notice to, or action, order or approval of the Bankruptcy Court. All Allowed Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as Class 7 General Unsecured Claims against the applicable Debtor and shall be treated in accordance with Article III of the Plan of Reorganization.

Any monetary amounts by which any Executory Contract or Unexpired Lease to be assumed under the Plan of Reorganization is in default shall be satisfied, under section 365(b)(1) of the Bankruptcy Code, by Cure. If there is a dispute regarding (i) the nature or amount of any Cure, (ii) the ability of the Reorganized Debtors to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed or (iii) any other matter pertaining to assumption, Cure shall occur following the entry of a Final Order of the Bankruptcy Court resolving the dispute and approving the assumption.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan of Reorganization or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the effective date of the assumption.

Notwithstanding anything herein to the contrary, as of the Effective Date, the Debtors shall assume (and assign to the Reorganized Debtors if necessary to continue the Insurance Policies in full force) all of the Insurance Policies pursuant to section 365(a) of the Bankruptcy Code. Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the Debtors’ foregoing assumption of each of the Insurance Policies.

Neither the exclusion nor inclusion of any Executory Contract or Unexpired Lease on the Rejected Executory Contract and Unexpired Lease List, nor anything contained in the Plan of Reorganization, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that any Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors or Reorganized Debtors, as applicable, shall have 45 days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the Debtor or Reorganized Debtor in the ordinary course of its business. Accordingly, such contracts and leases (including any assumed Executory Contracts and Unexpired Leases) will survive and remain unaffected by entry of the Confirmation Order.

The following are conditions precedent to confirmation of the Plan of Reorganization, each of which must be satisfied or waived in accordance with the Plan of Reorganization.

1. The Bankruptcy Court shall have entered an order in form and substance reasonably acceptable to the Debtors and the Consenting Noteholders approving the Disclosure Statement with respect to the Plan of Reorganization as containing adequate information within the meaning of section 1125 of the Bankruptcy Code.

2. The Confirmation Order (a) shall be, in form and substance, reasonably acceptable to the Debtors and the Consenting Noteholders, (b) shall include a finding by the Bankruptcy Court that the New Common Stock to be issued on the Effective Date will be authorized and exempt from registration under applicable securities law pursuant to section 1145 of the Bankruptcy Code, (c) shall approve the Amendment Transactions and (d) shall not be subject to any stay or subject to an unresolved request for revocation under section 1144 of the Bankruptcy Code.

3. The Plan of Reorganization and the Plan Supplement, including any schedules, documents, supplements and exhibits thereto shall, in form and substance, be reasonably acceptable to the Debtors and the Consenting Noteholders.

The following are conditions precedent to the occurrence of the Effective Date, each of which must be satisfied or waived in accordance with the Plan of Reorganization.

1. The Bankruptcy Court shall have entered one or more orders (which may include the Confirmation Order) authorizing the assumption and rejection of Executory Contracts and Unexpired Leases by the Debtors as contemplated herein in form and substance acceptable to the Debtors.

2. The Confirmation Order, in form and substance, reasonably acceptable to the Debtors and the Consenting Noteholders, shall have been entered by the Bankruptcy Court and shall not be subject to any stay subject to an unresolved request for revocation under section 1144 of the Bankruptcy Code.

3. The Amendment Transactions shall have been effectuated upon or following entry of the Confirmation Order.

4. All of the schedules, documents, supplements and exhibits to the Plan of Reorganization shall have been filed in form and substance reasonably acceptable to the Debtors and the Consenting Noteholders.

5. All authorizations, consents, and regulatory approvals required, if any, in connection with the consummation of the Plan of Reorganization shall have been obtained.

6. All actions, documents, certificates, and agreements necessary to implement the Plan of Reorganization shall have been effected or executed and delivered to the required parties and, to the extent required, filed with the applicable governmental units in accordance with applicable laws.

The conditions to Confirmation of the Plan of Reorganization and to Consummation of the Plan of Reorganization set forth in Article X of the Plan of Reorganization may be waived at any time upon receipt of written waivers from each of the Debtors and the Consenting Noteholders.

If the Consummation of the Plan of Reorganization does not occur, the Plan of Reorganization shall be null and void in all respects and nothing contained in the Plan of Reorganization or the Disclosure Statement shall: (1) constitute a waiver or release of any Claims against or Interests in the Debtors; (2) prejudice in any manner the rights of the Debtors, any holders of Claims or any other Person; or (3) constitute an admission, acknowledgment, offer or undertaking by the Debtors, any holders or any other Person in any respect.

Pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan of Reorganization, the provisions of the Plan of Reorganization shall constitute a good faith compromise of all Claims, Interests and controversies relating to the contractual, legal and subordination rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Interest, or any distribution to be made on account of such Allowed Claim or Interest. The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise or settlement of all such Claims, Interests and controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, their Estates and holders of Claims and Interests and is fair, equitable and reasonable. In accordance with the provisions of the Plan of Reorganization, pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019(a), without any further notice to or action, order or approval of the Bankruptcy Court, after the Effective Date, the Reorganized Debtors may compromise and settle Claims against them and Causes of Action against other Persons.

Pursuant to section 1123(b) of the Bankruptcy Code and to the extent allowed by applicable law, and except as otherwise specifically provided in the Plan or the Plan Supplement, for good and valuable consideration, including the service of the Released Parties to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by the Plan, on and after the Effective Date, the Released Parties are deemed released and discharged by the Debtors, the Reorganized Debtors, the Estates, and Non-Debtor Affiliates from any and all claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of the Debtors, the Reorganized Debtors, their Estates and Non-Debtor Affiliates, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity or otherwise, that the Debtors, the Reorganized Debtors, the Estates, or the Non-Debtor Affiliates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Interest or other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale or rescission of the purchase or sale of any security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor, Reorganized Debtor, Estate or Non-Debtor Affiliate and any Released Party, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Plan, the Disclosure Statement, the Plan Supplement, RTL Investment Agreement or related agreements, instruments or other documents, or upon any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date; provided, however, that nothing in this Article IX.B shall be construed to release any party or entity from intentional fraud, willful misconduct, or criminal conduct, as determined by a Final Order.

Except as otherwise provided in the Plan of Reorganization, as of the Effective Date, each holder of a Claim who affirmatively votes to accept this Plan and does not elect to opt out of the releases contained in this Section IX.C by making such election on its timely submitted ballot shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever, released and discharged the Debtors, the Reorganized Debtors, their Estates, Non-Debtor Affiliates and the Released Parties from any and all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative Claims, assertable on behalf of a Debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Debtors’ restructuring, the Debtors’ Chapter 11 Cases, the purchase, sale or rescission of the purchase or sale of any security of the Debtors or the Reorganized Debtors, including (without limitation) any tender rights provided under any applicable law, rule, or regulation, the subject matter of, or the transactions or events giving rise to, any Claim that is treated in the Plan, the business or contractual arrangements between the Debtors and any Released Party, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Plan, the Disclosure Statement, the RTL Investment Agreement, the Plan Supplement or related agreements, instruments or other documents, upon any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Confirmation Date; provided, however, that nothing in this Article IX.B shall be construed to release any party or entity from intentional fraud, willful misconduct or criminal conduct, as determined by a Final Order; provided further, however that this Article IX.C shall not release the Debtors, the Reorganized Debtors, their Estates, Non-Debtor Affiliates and the Released Parties from any Cause of Action held by a governmental entity existing as of the Effective Date based on (i) the Internal Revenue Code or other domestic state, city, or municipal tax code, (ii) the environmental laws of the United States or any domestic state, city, or municipality, (iii) any criminal laws of the United States or any domestic state, city, or municipality, (iv) the Exchange Act (as now in effect or hereafter amended), the Securities Act (as now in effect or hereafter amended), or other securities laws of the United States or any domestic state, city or municipality, (v) the Employee Retirement Income Security Act of 1974, as amended, or (vi) the laws and regulations of the Bureau of Customs and Border Protection of the United States Department of Homeland Security. Notwithstanding anything to the contrary in the Existing 2016 Notes Indenture, the Existing 2016 Notes, or the instruments, guarantees, certificates, and other documents related thereto, votes by holders of Existing 2016 Notes Claims to accept this Plan and not opt out of the releases contained in this Article IX.C shall constitute agreement by such holders to have conclusively, absolutely, unconditionally, irrevocably and forever, released and discharged the Non-Debtor Affiliates from any and all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether known or unknown, direct or indirect, foreseen or unforeseen, existing or hereafter arising, that relate to guarantees of the Existing 2016 Notes, and any collateral of Non-Debtor Affiliates securing the Existing 2016 Notes except as otherwise set forth in the Plan of Reorganization.

Except as otherwise specifically provided in the Plan of Reorganization or Plan Supplement, no Exculpated Party shall have or incur, and each Exculpated Party is hereby released and exculpated from, any Exculpated Claim, obligation, cause of action or liability for any Exculpated Claim, except for intentional fraud or willful misconduct (to the extent such duty is imposed by applicable non-bankruptcy law), but in all respects such Persons shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan of Reorganization. The Debtors and the Reorganized Debtors (and each of their respective Affiliates, agents, directors, officers, employees, advisors and attorneys) have, and upon Confirmation of the Plan of Reorganization shall be deemed to have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code

with regard to the solicitation and distribution of the Plan of Reorganization securities pursuant to the Plan of Reorganization, and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule or regulation governing the solicitation of acceptances or rejections of the Plan of Reorganization or such distributions made pursuant to the Plan of Reorganization.

Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan of Reorganization, the distributions, rights and treatment that are provided in the Plan of Reorganization shall be in full and final satisfaction, settlement, release and discharge, effective as of the Effective Date, of all Claims, Interests and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan of Reorganization on account of such Claims and Interests, including demands, liabilities and Causes of Action that arose before the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, in each case whether or not: (1) a Proof of Claim or Interest based upon such Claim, debt, right or Interest is filed or deemed filed pursuant to section 501 of the Bankruptcy Code; (2) a Claim or Interest based upon such Claim, debt, right or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the holder of such a Claim or Interest has accepted the Plan of Reorganization. Except as otherwise provided herein, any default by the Debtors or their Affiliates with respect to any Claim or Interest that existed before or on account of the filing of the Chapter 11 Cases shall be deemed cured on the Effective Date. The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Effective Date occurring, except as otherwise expressly provided in the Plan of Reorganization.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE PLAN OF REORGANIZATION, THE PLAN SUPPLEMENT OR RELATED DOCUMENTS, OR FOR OBLIGATIONS ISSUED PURSUANT TO THE PLAN OF REORGANIZATION, ALL PERSONS WHO HAVE HELD, HOLD OR MAY HOLD CLAIMS OR INTERESTS THAT HAVE BEEN RELEASED PURSUANT TO ARTICLE IX.B OR ARTICLE IX.C OF THE PLAN OF REORGANIZATION, DISCHARGED PURSUANT TO ARTICLE IX.E OF THE PLAN OF REORGANIZATION, OR ARE SUBJECT TO EXCULPATION PURSUANT TO ARTICLE IX.D OF THE PLAN OF REORGANIZATION, ARE PERMANENTLY ENJOINED, FROM AND AFTER THE EFFECTIVE DATE, FROM TAKING ANY OF THE FOLLOWING ACTIONS: (1) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS OR INTERESTS; (2) ENFORCING, ATTACHING, COLLECTING OR RECOVERING BY ANY MANNER OR MEANS ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST SUCH PERSONS ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS OR INTERESTS; (3) CREATING, PERFECTING OR ENFORCING ANY ENCUMBRANCE OF ANY KIND AGAINST SUCH PERSONS OR THE PROPERTY OR ESTATES OF SUCH PERSONS ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS OR INTERESTS; AND (4) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS OR INTERESTS RELEASED, SETTLED OR DISCHARGED PURSUANT TO THE PLAN OF REORGANIZATION.

THE RIGHTS AFFORDED IN THE PLAN OF REORGANIZATION AND THE TREATMENT OF ALL CLAIMS AND INTERESTS HEREIN SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION OF ALL CLAIMS AND INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING

ANY INTEREST ACCRUED ON CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTORS OR ANY OF THEIR ASSETS, PROPERTY OR ESTATES. ON THE EFFECTIVE DATE, ALL SUCH CLAIMS AGAINST THE DEBTORS SHALL BE FULLY RELEASED AND DISCHARGED, AND THE INTERESTS SHALL BE CANCELLED.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR HEREIN OR IN OBLIGATIONS ISSUED PURSUANT HERETO FROM AND AFTER THE EFFECTIVE DATE, ALL CLAIMS AGAINST THE DEBTORS SHALL BE FULLY RELEASED AND DISCHARGED, AND ALL INTERESTS SHALL BE CANCELLED, AND THE DEBTORS’ LIABILITY WITH RESPECT THERETO SHALL BE EXTINGUISHED COMPLETELY, INCLUDING ANY LIABILITY OF THE KIND SPECIFIED UNDER SECTION 502(G) OF THE BANKRUPTCY CODE. ALL PERSONS SHALL BE PRECLUDED FROM ASSERTING AGAINST THE DEBTORS, THE DEBTORS’ ESTATES, THE REORGANIZED DEBTORS, EACH OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND EACH OF THEIR ASSETS AND PROPERTIES, ANY OTHER CLAIMS OR INTERESTS BASED UPON ANY DOCUMENTS, INSTRUMENTS OR ANY ACT OR OMISSION, TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED BEFORE THE EFFECTIVE DATE.

To the extent such Claims are not otherwise released pursuant to Article IX.C of the Plan of Reorganization, the Confirmation Order approving the Plan of Reorganization shall act as a temporary injunction against the enforcement of any such default against the Debtors or any Non-Debtor Affiliate obligated under the Existing 2016 Notes. Holders of Existing 2016 Note Claims shall be enjoined from commencing or continuing any action, employment of process, or act to collect, offset, or recover any Claim relating to the Existing 2016 Notes so long as the Debtors continue to provide or cause to be provided such treatment to holders of Existing 2016 Notes Claims as provided under the Plan of Reorganization. The temporary injunction will expire automatically if the Reorganized Debtors default under the Plan of Reorganization by failing to provide or cause to be provided such treatment to holders of Existing 2016 Notes Claims as provided under the Plan of Reorganization and fail to cure such default within 30 days after receipt by the Debtors of written notice of such default from the trustee(s) of the New Notes.

Unless otherwise provided in the Plan of Reorganization or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan of Reorganization or the Confirmation Order) shall remain in full force and effect until the Effective Date. All injunctions or stays contained in the Plan of Reorganization or the Confirmation Order shall remain in full force and effect in accordance with their terms.

Except as otherwise provided herein or in any contract, instrument, release or other agreement or document created pursuant to the Plan of Reorganization, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan of Reorganization and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges or other security interests against any property of the Estates shall be fully released and discharged, and all of the right, title and interest of any holder of such mortgages, deeds of trust, Liens, pledges or other security interests shall revert to the Reorganized Debtors and their successors and assigns. For the avoidance of doubt, all mortgages, deeds of trust, Liens, pledges or other security interests against any property of the Estates shall be fully released and discharged on the Effective Date without any further action of any party, including, but not limited to, further order of the Bankruptcy Court or filing updated schedules or statements typically filed pursuant to the Uniform Commercial Code.

Except as otherwise specifically provided herein and with the consent of RTL and a majority in principal amount of the Existing 2016 Notes represented by the Steering Committee, the Debtors reserve the right to modify the Plan of Reorganization as to material terms and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not re-solicit votes on such modified Plan. Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan of Reorganization, and with the consent of RTL and a majority in principal amount of the Existing 2016 Notes represented by the Steering Committee, the Debtors expressly reserve their rights to alter, amend or modify materially the Plan of Reorganization with respect to the Debtors one or more times, after Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend or modify the Plan of Reorganization or remedy any defect or omission, or reconcile any inconsistencies in the Plan of Reorganization, the Disclosure Statement or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan of Reorganization.

Entry of a Confirmation Order shall mean that all modifications or amendments to the Plan of Reorganization occurring after the solicitation of the Plan of Reorganization are approved pursuant to section 1127(a) of the Bankruptcy Code and do not require additional disclosure or re-solicitation under Bankruptcy Rule 3019.

The Debtors reserve the right to revoke or withdraw the Plan of Reorganization before the Effective Date. If the Debtors revoke or withdraw the Plan of Reorganization, or if Confirmation or Consummation does not occur, then: (1) the Plan of Reorganization shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan of Reorganization (including the fixing or limiting to an amount certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected by the Plan of Reorganization, and any document or agreement executed pursuant to the Plan of Reorganization, shall be deemed null and void; and (3) nothing contained in the Plan of Reorganization shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of the Debtors or any other Person; or (c) constitute an admission, acknowledgement, offer or undertaking of any sort by the Debtors or any other Person.

Professionals or other Persons asserting a Claim for Accrued Professional Compensation for services rendered before the Effective Date must file and serve on the Debtors and such other Persons who are designated by the Bankruptcy Rules, the Confirmation Order, the Interim Compensation Order or other order of the Bankruptcy Court an application for final allowance of such Claim for Accrued Professional Compensation no later than 30 days after the Effective Date. Objections to any Claim for Accrued Professional Compensation must be filed and served on the Reorganized Debtors, the Creditors’ Committee, the Office of the U.S. Trustee and the requesting party no later than 50 days after the Effective Date.

Upon the Effective Date, any requirement that Professionals comply with sections 327 through 331 and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Reorganized Debtors may employ and pay any Professional for services rendered or expenses incurred after the Effective Date in the ordinary course of business without any further notice to any party or action, order or approval of the Bankruptcy Court.

Upon entry of the Confirmation Order, the Debtors will be deemed to have solicited votes on the Plan of Reorganization in good faith and in compliance with the Bankruptcy Code and any applicable non-bankruptcy law, and pursuant to section 1125(e) of the Bankruptcy Code, the Debtors and their respective Affiliates, agents, representatives, members, principals, shareholders, officers, directors, employees, advisors and attorneys will be deemed to have participated in good faith and in compliance with the Bankruptcy Code in the offer, issuance, sale and purchase of Plan securities offered and sold under the Plan of Reorganization, and, therefore, will have no liability for the violation of any applicable law, rule or regulation governing the solicitation of votes on the Plan of Reorganization or the offer, issuance, sale or purchase of the New Common Stock offered and sold under the Plan of Reorganization.

The Bankruptcy Code requires that the Bankruptcy Court determine that confirmation of a plan of reorganization is not likely to be followed by liquidation or the need for further financial reorganization of the debtor(s). For purposes of showing that the Plan of Reorganization meet this feasibility standard, we have analyzed our ability, to meet the obligations under the the Plan of Reorganization and retain sufficient liquidity and capital resources to conduct business. We believe that with a deleveraged capital structure, we will be able to support the financial projections set forth in Appendix D to this Offering Memorandum and Disclosure Statement (the “Projections”).

Holders of Claims against and Interests in CEDC and CEDC FinCo (and CEDC FinCo LLC) are advised, however, that the Projections were not prepared with a view toward compliance with the published guidelines of the American Institute of Certified Public Accountants or any other regulatory or professional agency or body or generally accepted accounting principles. FURTHERMORE, CEDC’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS HAVE NOT COMPILED, EXAMINED OR PERFORMED ANY OTHER PROCEDURES TO THE PROJECTIONS AND, ACCORDINGLY, DO NOT EXPRESS ANY OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT THERETO AND ASSUME NO RESPONSIBILITY FOR THE PROJECTIONS.

In addition to the assumptions footnoted in the Projections themselves, the Projections also assume that (i) the Plan of Reorganization will be confirmed and consummated in accordance with its terms, (ii) there will be no material adverse change in legislation or regulations, or the administration thereof, including environmental legislation or, regulations, that will have an unexpected effect on the operations of the Reorganized Debtor(s), (iii) there will be no change in United States generally accepted accounting principles that will have a material effect on the reported financial results of the Reorganized Debtor(s), and (iv) there will be no material contingent or unliquidated litigation or indemnity claims applicable to the Reorganized Debtor(s). To the extent that the assumptions inherent in the Projections are based upon future business decisions and objectives, they are subject to change. In addition, although they are presented with numerical specificity and considered reasonable by us when taken as a whole, the assumptions and estimates underlying the Projections are subject to significant business, economic and competitive uncertainties and contingencies, many of which will be beyond the control of the Reorganized Debtor(s).

Accordingly, the Projections are only estimates that are necessarily speculative in nature. It can be expected that some or all of the assumptions in the Projections will not be realized, and that actual results will vary from the Projections, which variations may be material and are likely to increase over time. The Projections should therefore not be regarded as a representation by CEDC, CEDC FinCo or any other person that the results set forth in the Projections will be achieved. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections. The Projections should be read together with the information in the sections of this Offering Memorandum and Disclosure Statement entitled “Risk Factors” and “The Plan of Reorganization—Risks Associated with Plan of Reorganization” which set forth important factors that could cause actual results to differ from those in the Projections.

We do not intend to update or otherwise revise the Projections, including any revisions to reflect events or circumstances existing or arising after the date of this Offering Memorandum and Disclosure Statement or to reflect the occurrence of unanticipated events, even if any or all of the underlying assumptions do not come to fruition. Furthermore, we do not intend to update or revise the Projections to reflect changes in general economic or industry conditions. Whether actual results will conform to the Projections is subject to a number of risks and uncertainties, including:

Pursuant to section 1129(a)(7) of the Bankruptcy Code (often referred to as the “Best Interests Test”), each holder of an impaired claim or interest must either (a) accept the plan or (b) receive or retain under the plan property of a value, as of the effective date of the plan, that is not less than the value such non-accepting holder would receive or retain if the debtor’s assets were to be liquidated under Chapter 7 of the Bankruptcy Code on the effective date. In determining whether the Best Interests Test has been met, the dollar amount that would be generated from a hypothetical liquidation of the debtor’s assets in a Chapter 7 proceeding must be determined. Such amount then would be reduced by the costs and expenses of the liquidation. Prior to determining whether the Best Interests Test has been satisfied, available cash and the proceeds from the liquidation of the debtor’s assets would be applied to secured claims (to the extent of the value of the underlying collateral) and to satisfy administrative, priority tax and other priority claims, all of which are senior in priority to general unsecured claims, including any incremental administrative claims that may result from the termination of the debtor’s business and the liquidation of their assets. Any remaining cash would be available for distribution to general unsecured claims and stockholders in accordance with the distribution hierarchy established by section 726 of the Bankruptcy Code.

The liquidation analysis annexed to this Offering Memorandum and Disclosure Statement as Appendix D (“Liquidation Analysis”) was prepared by CEDC and CEDC FinCo with assistance from their financial advisors, and represents each of CEDC’s and CEDC FinCo’s best estimate of the cash proceeds, net of liquidation related costs, which would be available for distribution to the holders of claims and equity interests if each were to be liquidated in Chapter 7 cases that do not preserve the going concern value of their estates. Underlying the Liquidation Analysis are a number of estimates and assumptions regarding liquidation proceeds that, although developed and considered reasonable by the Debtors and their professionals, are inherently subject to significant business, economic, and competitive uncertainties and contingencies beyond the control of the Debtors and their management.

THE INFORMATION SET FORTH IN THE LIQUIDATION ANALYSIS IS PRELIMINARY AND IS SUBJECT TO MODIFICATION AND SUPPLEMENTATION BY THE DEBTORS AT ANY TIME UP TO THE CONFIRMATION HEARING. THERE CAN BE NO ASSURANCE THAT THE VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF CEDC, CEDC FINCO AND CEDC FINCO LLC WERE, IN FACT, TO UNDERGO SUCH A LIQUIDATION UNDER CHAPTER 7, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM THOSE ESTIMATED HERE.

The Liquidation Analysis is premised upon a number of estimates and assumptions that, although developed and considered reasonable by CEDC, CEDC FinCo, CEDC FinCo LLC and their financial advisors, are inherently subject to significant business, economic and competitive uncertainties and contingencies that are beyond the control of the CEDC, CEDC FinCo, CEDC FinCo LLC and their management. Accordingly, there can be no assurance that the estimated values reflected in the Liquidation Analysis would be realized if CEDC’s, CEDC FinCo’s and CEDC FinCo LLC’s estates were, in fact, to undergo a liquidation under Chapter 7. In addition, any such liquidation would take place under future circumstances that cannot be predicted with certainty. Accordingly, although the analysis that follows is necessarily presented with numerical specificity, if CEDC’s, CEDC FinCo’s and CEDC FinCo LLC’s estates were in fact liquidated as described herein, the actual liquidation proceeds could vary significantly from the amounts set forth in the Liquidation Analysis. Such actual liquidation proceeds could be materially higher or lower than the amounts set forth herein, and no representation or warranty can be or is being made with respect to the actual proceeds that would be generated from a liquidation of CEDC, CEDC FinCo and CEDC FinCo LLC under Chapter 7 of the Bankruptcy Code.

Asset values used in the Liquidation Analysis reflect the audited book values of CEDC’s, CEDC FinCo’s and CEDC LLC’s assets as of September 30, 2012. Estimates of hypothetical liquidation values were determined primarily by assessing classes of assets at percentage discounts to book value, as opposed to appraising specific assets. Neither CEDC nor CEDC FinCo retained third party experts to value individual assets in preparing the Liquidation Analysis.

CEDC, CEDC FinCo and CEDC FinCo LLC are holding companies that have no business operations and generate only limited revenues through the receipt of dividends and extension of intercompany loans. These holding companies depend on the local business units (“Operating Subsidiaries”), including RAG, CEDC International Sp. z.o.o and the Whitehall, to generate revenue and pay debt service. As a result, any liquidation of CEDC, CEDC FinCo and CEDC FinCo LLC for value would necessitate a liquidation of the Operating Subsidiaries. The Liquidation Analysis assumes that the Operating Subsidiaries would be forced to cease substantially all operations almost immediately upon conversion of CEDC’s, CEDC FinCo’s and CEDC FinCo LLC’s Chapter 11 Cases to Chapter 7 cases. Further, it assumes that commencing liquidation proceedings in multiple jurisdictions would require the Operating Subsidiaries to hire numerous liquidators and counsel and incur substantial related expenses. The likely consequences of the conversion to Chapter 7 include the following:

The liquidating Operating Subsidiaries’ workforce consists of employees (specifically their sales force) who will likely be able to gain employment elsewhere in a relatively short timeframe (particularly given the relatively strong job market in jurisdictions such as Russia). With the Operating Subsidiaries facing certain liquidation, those employees are therefore likely to quickly leave the Operating Subsidiaries, which would not only make an orderly wind down significantly more problematic but also render difficult the possibility of continuing operations in an effort to complete a going concern sale. The inability to retain employees for a transitional period would be further complicated by concerns over the Operating Subsidiaries’ ability to fund ongoing payroll obligations. In such circumstances, the Operating Subsidiaries may incur substantial severance and related costs. For the purposes of this analysis, only a portion of the severance and related costs have been included. To the extent that severance and other related costs and additional wages paid as a means of retaining certain employees in facilitating an orderly liquidation are incurred, the wind down costs could rise significantly. This would further reduce the expected recovery levels from the Operating Subsidiaries.

Substantially all of Operating Subsidiaries’ revenues are derived from the sale of spirits. Customers have the ability to shift their purchases from the Operating Subsidiaries’ brands and products to competing brands and/or other mediums. It is highly unlikely that a liquidator could maintain many, if any, of the Operating Subsidiaries’ customers for any meaningful period of time upon the commencement of the wind down. The current inventory would effectively be sold at a discount to market rates. Liquidating inventory would be further complicated by a likely loss of CEDC’s licenses to sell spirits. Such licenses could be revoked upon an announcement of a liquidation and would therefore prohibit the Operating Subsidiaries from continued sales in both Poland and Russia. The loss of such licenses has not been factored into the Liquidation Analysis and therefore represents a substantial downside scenario to these figures.

In addition to inventory, outstanding receivables would be difficult to collect in full. Although the liquidator would retain certain existing employees of CEDC to run a collection effort for the existing accounts receivable, such collection efforts would be significantly less effective than compared to an ongoing business situation. However, there are few levers to obtain these receivables.

The majority of the Operating Subsidiaries’ property, plant and equipment (“PP&E”) consists of depreciated production facilities and warehouses. The Operating Subsidiaries lease substantially all of their office space and warehouses. These assets have limited value in the secondary market and it is unlikely that any meaningful value would be realized from the liquidation of such assets.

A substantial portion of the Operating Subsidiaries’ assets are intangible and are in the form of brand names and trademarks. While the value of these assets would be compromised in a liquidation scenario, some value would likely be realized from such a sale.

All asset proceeds and creditor recoveries are shown at nominal amounts and the Liquidation Analysis does not consider the discounting of values over time. The discounting of values would result in lower recoveries to creditors than presented in the Liquidation Analysis.

We believe that the Plan of Reorganization meets the Best Interests Test. We believe that the members of each of (i) Impaired Classes 8 and 9 will receive the same or greater distribution under the Plan of Reorganization as in a liquidation (i.e., zero or, in the case of holders of Existing Common Stock, potentially 5% of New Common Stock) and (ii) Impaired Classes 2, 3, and 5 will receive more under the Plan of Reorganization than they would receive in a liquidation (provided that, if the class of claims constituting the Existing 2013 Notes and the RTL Notes under the Plan of Reorganization does not vote to accept the Plan of Reorganization in sufficient number and amount to constitute an accepting class under section 1126(c) of the Bankruptcy Code, then holders of Existing 2013 Notes and the RTL Notes will receive or retain no property under the Plan of Reorganization and, therefore, receive the same under the Plan of Reorganization as in a liquidation (i.e., zero)).

Although we believe that the Plan of Reorganization meets the Best Interests Test, there can be no assurance that the Bankruptcy Court will determine that the Plan of Reorganization meet this test. Notwithstanding the foregoing, we believe that any liquidation analysis with respect to CEDC, CEDC FinCo and CEDC FinCo LLC, as applicable, is inherently speculative. The Liquidation Analysis necessarily contains estimates of the net proceeds that would be received from a forced sale of assets or business units, as well as the amount of Claims that will ultimately become Allowed Claims. The estimate of the amount of Allowed Claims set forth in the liquidation analysis should not be relied on for any other purpose, including, without limitation, any determination of the value of any distribution to be made on account of Allowed Claims.

Houlihan Lokey, our investment banker, has determined the estimated range of enterprise value of CEDC, excluding cash on hand, to be approximately $840.0 million to $1,050.0 million (with a mid-point estimate of approximately $945.0 million) as of an assumed valuation date of January 1, 2013. This estimate is based on a number of assumptions, including a successful reorganization of our business and finances in a timely manner, the implementation of CEDC’s business plan and the achievement of Projections reflected therein, the continuing leadership of the existing senior management team of CEDC following consummation of the Plan of Reorganization or Exchange Offers contemplated in this Offering Memorandum, the general financial and market conditions will not differ materially from those conditions prevailing as of the date of this Offering Memorandum or through the projection period, projected foreign exchange rates utilized in the Projections, the Plan of Reorganization becoming effective in accordance with the estimates and other assumptions discussed herein. The valuation is supported by the analysis (the “Valuation Analysis”) attached hereto as Appendix F and will be further supported by the presentation at the Confirmation Hearing. The valuation assumptions are not a prediction or reflection of post-Confirmation trading prices of the New Common Stock. Such securities may trade at substantially lower or higher prices because of a number of factors. The trading prices of securities issued under a plan of reorganization are subject to many unforeseeable circumstances and therefore cannot be predicted.

Alternatives to Confirmation and Consummation of the Plans of Reorganization

Absent consummation of the Exchange Offers, we believe that the Plan of Reorganization afford holders of Claims the potential for the greatest recovery and, therefore, is in the best interests of such holders. If, however, the requisite acceptances are not received, or the Plan of Reorganization is not confirmed and consummated, the theoretical alternatives include: (i) formulation of an alternative plan of reorganization or (ii) liquidation of CEDC and CEDC FinCo under Chapter 7 or Chapter 11 of the Bankruptcy Code.

If the requisite acceptances are not received or if the Plan of Reorganization is not confirmed, CEDC and its subsidiaries may file Chapter 11 petitions and attempt to formulate and propose a different plan of reorganization. Such a plan might involve either a reorganization and continuation of the Company’s businesses or an orderly liquidation of assets. The Company’s businesses could suffer from increased costs,

erosion of customer confidence and liquidity difficulties if they remained debtor in possession during a lengthy Chapter 11 process while trying to negotiate a plan of reorganization.

We believe that the Plan of Reorganization enable creditors to realize the greatest possible value under the circumstances and that, compared to any later alternative plan of reorganization, the Plan of Reorganization have the greatest chance to be confirmed and consummated.

If no plan is confirmed, CEDC and its subsidiaries may be forced to liquidate under Chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be elected or appointed to liquidate the Company’s assets for distribution to creditors in accordance with the priorities established by the Bankruptcy Code. CEDC believes that in a liquidation under Chapter 7, before creditors received any distribution, additional administrative expenses involved in the appointment of a trustee or trustees and attorneys, accountants and other professionals to assist such trustees would cause a substantial diminution in the value of the Estate(s). The assets available for distribution to creditors would be reduced by such additional expenses and by Claims, some of which would be entitled to priority, which would arise by reason of the liquidation.

We believe that a failure to restructure CEDC’s, CEDC FinCo’s and CEDC FinCo LLC’s debt obligations pursuant to the Exchange Offers and/or the Plan of Reorganization, as applicable, would jeopardize our operating subsidiaries. Such scenario could result in a liquidation of CEDC and CEDC FinCo (and CEDC FinCo LLC) under either Chapter 7 or Chapter 11 of the Bankruptcy Code. We believe that such a scenario could lead to insolvency proceedings in non-U.S. jurisdictions by our operating subsidiaries, which would result in a rapid deterioration of our assets and businesses.

We believe that any alternative liquidation under Chapter 7 or Chapter 11 is a much less attractive alternative to creditors than the Plan of Reorganization because of the greater return we believe is provided to creditors under the Plan of Reorganization.

This Offering Memorandum and Disclosure Statement is being transmitted to holders of Claims in Classes 2, 3, and 5 of the Plan of Reorganization. ALL SUCH HOLDERS ARE ENCOURAGED TO READ THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT AND ITS APPENDICES CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO VOTE EITHER TO ACCEPT OR TO REJECT THE PLAN OF REORGANIZATION. This Offering Memorandum and Disclosure Statement contains important information about the Plan of Reorganization and considerations pertinent to acceptance or rejection of the Plan of Reorganization.

THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT IS THE ONLY DOCUMENT TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES ON THE PLAN OF REORGANIZATION. No solicitation of votes may be made except after distribution of this Offering Memorandum and Disclosure Statement, and no person has been authorized to distribute any information concerning CEDC or CEDC FinCo other than the information contained herein.

CERTAIN OF THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT IS BY ITS NATURE FORWARD LOOKING AND CONTAINS ESTIMATES, ASSUMPTIONS, AND PROJECTIONS THAT MAY BE MATERIALLY DIFFERENT FROM ACTUAL, FUTURE RESULTS. Except with respect to the Projections and except as otherwise specifically and expressly stated herein, this Offering Memorandum and Disclosure Statement does not reflect any events that may occur subsequent to the date hereof and that may have a material impact on the information contained in this Offering Memorandum and Disclosure Statement. CEDC does not intend to update the Projections; thus, the Projections will not reflect the impact of any subsequent events not already accounted for in the assumptions underlying the Projections. Further, CEDC does not anticipate that any amendments or supplements to this Offering Memorandum and Disclosure Statement will be distributed to reflect such occurrences. Accordingly, the delivery of this Offering Memorandum and Disclosure Statement will not under any circumstance imply that the information herein is correct or complete as of any time subsequent to the date hereof.

EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY AN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND HAS NOT BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.

By providing instructions to be included on a Master Ballot, each holder of Existing 2016 Notes Claims in Class 2 and each holder of Existing 2013 Notes Claims in Class 5 of the Plan of Reorganization will be confirming that (i) such holder or legal and financial advisors acting on its behalf has had the opportunity to ask questions of, and receive answers from, CEDC and CEDC FinCo (and CEDC FinCo LLC), as applicable, concerning the terms of the Plan of Reorganization, the business of CEDC and CEDC FinCo (and CEDC FinCo LLC), as applicable, and other related matters, (ii) CEDC and CEDC FinCo (and CEDC FinCo LLC), as applicable have made available to such holder or its agents all documents and information relating to the Plan of Reorganization and related matters reasonably requested by or on behalf of such holder and (iii) except for information provided by CEDC and CEDC FinCo, as applicable, in writing, and by its own agents, such holder has not relied on any statements made or other information received from any person with respect to the Plan of Reorganization.

By providing instructions to be included on a Master Ballot, each holder of Claims in Class 2 Existing 2016 Notes Claims and each holder of Existing 2013 Notes Claims in Class 5 of the Plan of Reorganization also acknowledges that the interests being offered pursuant to the Plan of Reorganization are not being offered pursuant to a registration statement filed with the SEC and represents that any such securities will be acquired for its own account and not with a view to any distribution of such interests in violation of the Securities Act. It is expected that if issued pursuant to the Plan of Reorganization such interests will be exempt from the registration

requirements of the Securities Act by virtue of Section 1145 of the Bankruptcy Code and may be resold by the holders thereof subject to the provisions of such Section 1145.

By providing instructions to their nominees holding their Existing 2013 Notes, Beneficial Holders of Existing 2013 Notes are directing that their nominee execute a Master Ballot on the Beneficial Holder’s behalf that reflects their instructions with respect to the Plan of Reorganization (including such holder’s exercise or non-exercise of the right to opt out of the releases set forth in Article IX.C of the Plan of Reorganization).

By providing instructions to their nominees holding their 9.125% Existing 2016 Notes Beneficial Holders of 9.125% Existing 2016 Notes are directing that their nominee execute a Master Ballot on the Beneficial Holder’s behalf that reflects their instructions with respect to the Plan of Reorganization (including such holder’s election with respect to the cash option and the New Notes option and such holder’s exercise or non-exercise of the right to opt out of the releases set forth in Article IX.C of the Plan of Reorganization).

By providing instructions to their nominees, holders of 8.875% Existing 2016 Notes are directing their custodian to deliver their acceptances of the Plan of Reorganization (including such holder’s election with respect to the cash option and the New Notes option and such holder’s exercise or non-exercise of the right to opt out of the releases set forth in Article IX.C of the Plan of Reorganization).

Holders of Existing 2016 Notes voting to accept the Plan of Reorganization must deliver their Consent to the Covenant Amendments, the Bankruptcy Waiver Amendments and the Collateral Guarantee Amendments and effectuation of the Supplemental Indenture pursuant to the Plan of Reorganization.

See “Procedures for Tendering Existing 2013 Notes and 9.125% Existing 2016 Notes (together, the “Dollar Notes”) and 8.875% Existing 2016 Notes, Consenting to the Proposed Amendments, and Voting on Plan of Reorganization; Applicable Deadlines” for a detailed description of the processes and procedures for participating in the Exchange Offers and voting on the Plan of Reorganization.

Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, and revocation or withdrawal of Letters of Transmittal/Ballots or Master Ballots will be determined by CEDC, CEDC FinCo or CEDC FinCo LLC, in their sole discretion, which determination will be final and binding. As indicated above under “The Exchange Offers and Consent Solicitation—Withdrawal Rights”, effective withdrawals of Ballots must be delivered to the Information Agent and the Exchange Agent prior to the Expiration Time or Consent Time, as applicable. We reserve the absolute right to contest the validity of any such withdrawal. We also reserve the right to reject any and all Ballots not in proper form, the acceptance of which would, in the opinion of CEDC, CEDC FinCo or CEDC FinCo LLC, as applicable, or their counsel, be unlawful. We further reserve the right to waive any defects or irregularities or conditions of delivery as to any particular Ballot.

The interpretation (including the Ballot and the respective instructions thereto) by CEDC, CEDC FinCo or CEDC FinCo LLC, as applicable, unless otherwise directed by the Bankruptcy Court, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with deliveries of Ballots must be cured within such time as CEDC, CEDC FinCo or CEDC FinCo LLC (or the Bankruptcy Court) determine. Neither CEDC, CEDC FinCo nor CEDC FinCo LLC, as applicable, nor any other person will be under any duty to

provide notification of defects or irregularities with respect to deliveries of Ballots nor will any of them incur any liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of such Ballots will not be deemed to have been made until such irregularities have been cured or waived. Ballots previously furnished (and as to which any irregularities have not theretofore been cured or waived) will be invalidated.

If you have any questions or require further information about the voting procedure for voting your Claim or about the packet of material you received, please contact the Information Agent and Voting Agent at (800) 878-1684 (toll free North America) or (614) 763-6110 (direct-dial toll international). If you wish to obtain an additional copy of the Plan of Reorganization, the Offering Memorandum and Disclosure Statement, or any exhibits or appendices to such documents (at your own expense, unless otherwise specifically required by Bankruptcy Rule 3017(d)), please contact the Information Agent and Voting Agent toll free at (800) 878-1684 (toll free North America) or (614) 763-6110 (direct-dial toll international), whose contact information is set forth on the back cover of this Offering Memorandum and Disclosure Statement.

Certain material differences between the Existing 2016 Notes and the New Secured Notes are illustrated in the table below. Except as described below, and for certain changes to accommodate the issuance of the New Convertible Secured Notes the terms of the New Secured Notes are similar to the terms of the Existing 2016 Notes. The table below is qualified in its entirety by the information contained elsewhere in this Offering Memorandum and Disclosure Statement and the documents governing the Existing 2016 Notes. For a detailed description of the New Secured Notes, see “Description of the New Secured Notes”. For a more detailed description of the Existing 2016 Notes, see the Confidential Offering Memorandum, dated November 24, 2009, copies of which are available from the Exchange Agent upon request. Capitalized terms below have the meanings ascribed thereto under “Description of the New Secured Notes.”

You can find the definitions of certain terms used in this description under the subheading “—Certain Definitions.” In this description, the word “Issuer” refers only to CEDC Finance Corporation International, Inc., a Delaware corporation, and not to any other entity.

The Issuer will issue U.S. dollar-denominated senior secured notes (the “Notes”) under an indenture (the “Indenture”) among, inter alios, itself, Central European Distribution Corporation, a Delaware corporation, as guarantor (the “Parent”), the other Guarantors, U.S. Bank National Association as trustee (the “Trustee”), TMF Trustee Limited, as security agent (the “Security Agent”), Deutsche Bank AG, London Branch, as Polish Security Agent (as defined below), and Deutsche Bank Trust Company Americas, as principal paying agent, transfer agent and registrar, in a private transaction that is not subject to the registration requirements of the Securities Act. See “Notice to Investors.”

The following description is a summary of the material provisions of the Notes, the Guarantees, the Indenture and the Security Documents. It does not restate those agreements in their entirety. The terms of the Notes include those expressly set forth in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). We urge you to read the Indenture (including the form of Notes and the form of Guarantees attached to the Indenture) and the Security Documents because they, and not this description, define your rights as Holders (as defined below) of the Notes. Copies are available as set forth below under “—Additional Information.” Certain defined terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the Indenture.

The registered Holder of a Note will be treated as the owner of it for all purposes. Only registered Holders will have rights under the Indenture.

We intend to apply to admit the Notes to the Official List and to trading on the Global Exchange Market of the Irish Stock Exchange.

The Issuer’s only material assets are the Intercompany Loans. The Issuer will be entirely dependent upon payments by the Intercompany Borrowers on the Intercompany Loans to make payments on the Notes.

As of September 30, 2012, after giving pro forma effect to the settlement of the Exchange Offer and assuming that all holders of Existing Notes tender their notes in the Exchange Offers:

Not all of the Parent’s Subsidiaries will guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us. As of and for the nine months ended September 30, 2012, the Parent and the other Guarantors on the issue date of the Notes would have accounted for 89.5% of the sales of the Parent and its Restricted Subsidiaries, 90.4% of EBITDA of the Parent and its Restricted Subsidiaries and 86.9% of assets of the Parent and its Restricted Subsidiaries.

The Guarantors of the Notes will consist of the Parent and each subsidiary of the Parent that guarantees the Existing Notes, except that Copecresto Enterprises Limited, Lugano Holding Limited, OOO Parliament Distribution, OOO Parliament Production, ISF GmbH (under liquidation) and Ardy Investments Limited (together, the “Copecresto Subsidiaries”), which together represented 3.3% of EBITDA of the Parent and its Restricted Subsidiaries for the nine months ended September 30, 2012, and which guarantee the Existing Notes will not be Guarantors of the Notes.

As of the Issue Date, all of the Parent’s Subsidiaries, including the Issuer, will be “Restricted Subsidiaries”. However, under the circumstances described below under the subheading “—Certain Definitions—Unrestricted Subsidiaries”, the Parent will be permitted to designate certain of its Subsidiaries, other than the Issuer, as “Unrestricted Subsidiaries”. Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture.

After the consummation of the CEDC FinCo Exchange Offer, it is expected that a portion of the existing intercompany loans that secure the Existing Notes will be cancelled and/or exchanged for equity of the applicable intercompany borrower, such that the aggregate principal amount of the Intercompany Loans will reflect the aggregate principal amount of the Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer. It is expected that the terms of the Intercompany Loans (e.g., interest rate and maturity) will reflect those of the Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer.

The Issuer will issue an aggregate principal amount of Notes in this offering equal to (x) $450 million plus (y) an amount equal to the interest accrued but unpaid for the period from March 16, 2013 to the earlier of (i) June 1, 2013 and (ii) the date preceding the Issue Date, with respect to the Existing Notes not tendered or not accepted for cash payment in the CEDC FinCo Exchange Offer. The Issuer may issue additional Notes (“Additional Notes”) from time to time after this offering. Any issuance of Additional Notes is subject to all of the covenants in the Indenture, including the covenant described below under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preference Stock.” The Notes and Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture. The Issuer will issue Notes in denominations of $2,000 principal amount and integral multiples of $1,000 above $2,000. The Notes will mature on April 30, 2018.

Interest on the Notes will accrue from (and including) the earlier of (x) the Issue Date and (y) June 1, 2013 (the “Interest Accrual Date”). Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Interest on the Notes will accrue at the rates per annum and for the periods indicated in the table below:

Interest on the Notes will be payable semi-annually in arrears on April 30 and October 31, commencing on October 31, 2013. The Issuer will make each interest payment to the Holders of record on the immediately preceding April 15 and October 15.

If the due date for any payment in respect of any Note is not a business day at the place in which such payment is due to be paid, the Holder thereof will not be entitled to payment of the amount due until the next succeeding business day at such place, and will not be entitled to any further interest or other payment as a result of any such delay.

Principal of, premium and interest on Notes held in global form will be payable at the corporate office of the Principal Paying Agent (as defined below). The Principal Paying Agent will, in turn, make such payments to the U.S. Paying Agent for further credit to DTC, which will in turn distribute such payments in accordance with its procedures. See “Book Entry; Delivery and Form—Payments on Global Notes.”

If any definitive registered Notes are issued in the future, principal of, or premium and interest on any such definitive registered Notes will be payable at the office of one or more Paying Agents (as defined below) in New York as maintained for such purposes. In addition, interest on definitive registered notes may be paid by check mailed to the Person entitled thereto as shown on the register for definitive registered notes.

The Issuer will maintain one or more paying agents (each, a “Paying Agent”) for the Notes in the City of New York (the “Principal Paying Agent”). Also, if for so long as the Notes are listed on the Global Exchange Market of the Irish Stock Exchange and its rules so require, then we will maintain a paying agent in Dublin. The rules of the Irish Stock Exchange currently do not require a paying agent in Ireland. The initial Paying Agent will be Deutsche Bank Trust Company Americas, as Principal Paying Agent.

The Issuer will also maintain a registrar (the “Registrar”) with offices in the City of New York and a transfer agent in the City of New York. The Registrar and transfer agent will be Deutsche Bank Trust Company Americas in New York. The Registrar and the transfer agent in New York will maintain a register reflecting ownership of any definitive registered Notes outstanding from time to time and will make payments on and facilitate transfer of definitive registered Notes on the behalf of the Issuer.

Upon notice to the Trustee, the Issuer may change the Paying Agents, the Registrar or the transfer agents without prior notice to the Holders; provided, however, that in no event shall the Issuer appoint a Principal Paying Agent in any European Union Member State where the Principal Paying Agent would be obligated to withhold or deduct tax in connection with any payment made by it in relation to the Notes unless the Principal Paying Agent would be so obligated in each of the other European Union Member States if it were located in that European Union Member State.

The Parent may from time to time designate a Restricted Subsidiary as an additional guarantor of the Notes (an “Additional Guarantor”) by causing it to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will become a Guarantor.

Any Additional Guarantee shall be issued on substantially the same terms as the Guarantees. For purposes of the Indenture and this “Description of the Notes”, references to the Guarantees include references to any Additional Guarantees and references to the Guarantors include references to any Additional Guarantors.

The Indenture will provide that a Guarantee shall be released automatically and without further action on the part of any Holder of the Notes or the Trustee:

The Trustee is authorized, without the consent of any Holder, to take all necessary actions (including directing the Security Agents) to effectuate any release in accordance with these provisions. At the request and expense of the Issuer, the Parent or any Subsidiary of the Parent, the Trustee and the Security Agents will at the Issuer’s cost execute and deliver any document reasonably requested to evidence such release and discharge.

Deutsche Bank AG, London Branch and TMF Trustee Limited are expected to act as security agents (the “Security Agents”) under the Security Documents and the Indenture until such time, if any, that a new Security Agent is appointed under the provisions of the Security Documents. Deutsche Bank AG, London Branch (the “Polish Security Agent”) shall only act as Security Agent in respect of the collateral identified under “—Security—Poland” below.

The collateral that will secure the Notes will consist of the same assets that secure the Existing Notes except that (i) the shares and assets of the Copecresto Subsidiaries, which secure the Existing Notes, will not secure the Notes and (ii) the shares of the Whitehall Subsidiaries, which do not secure the Existing Notes, will secure the Notes.

The Notes and the Guarantees will be secured by first-priority Liens as follows:

The RAG On-Loans which secure the Notes and the Guarantees will, in turn, be secured by:

The Collateral that will secure the Notes will also secure the New Convertible Secured Notes. See “—Intercreditor Agreement and Additional Intercreditor Agreements.”

Certain of the security to be granted for the benefit of the Notes will not be delivered on the Issue Date. The Parent has agreed to use its reasonable efforts to deliver certain security within set timeframes on a reasonable efforts basis as set out in the covenant under the caption “—Delivery of Security and Guarantees”, subject to completion of corporate and registration proceedings and any perfection requirements under applicable law, including filing requirements. The enforcement of the security is subject to certain risks under local law.

Any acquisition of direct or indirect control over Russian Alcohol for fixed assets of Russian Alcohol, or any entity which controls Russian Alcohol by way of an enforcement action, including any enforcement action with respect to the Golden Share, would require the prior consent from the FAS in Russia, the Antimonopoly Committee of the Ukraine and any other relevant jurisdiction requiring such approval. There is no assurance such approval would be obtained.

The terms of certain existing agreements governing Indebtedness may restrict the ability to provide security over certain Specified Bank Accounts. The Parent has agreed to use reasonable best efforts to obtain the relevant consents to allow such security to be granted as set out in the covenant under the caption “—Delivery of Security and Guarantees.” The Parent does not anticipate that such agreements will prevent it from providing security over any material amount of the Specified Bank Accounts.

Guarantees”, subject to perfection requirements under applicable law, including filing requirements. See “Risk Factors—The enforcement of the security is subject to certain risks under local law” and, if the Collateral is stock of a Guarantor, in connection with any merger, consolidation, amalgamation or other combination in which such Guarantor is not the surviving corporation if the transaction does not violate the covenant described under the caption “—Certain Covenants—Merger, Consolidation and Sale of Assets.”

The enforceability of the security and Guarantees will be subject to significant limitations under relevant local laws. See “Risk Factors—Risks Relating to Indebtedness and Notes.”

The Collateral will also secure any Additional Notes and may also secure significant additional Indebtedness incurred as permitted by the Indenture. The Collateral will also secure the Convertible Secured Notes, subject to the provisions of the Intercreditor Agreement. See “—Intercreditor Argeement and Additional Intercreditor Agreements.”

No appraisals of any of the Collateral have been prepared by or on behalf of the Issuer or the Guarantors in connection with the issuance of the Notes and the Guarantees. There can be no assurance that the proceeds from the sale of the Collateral remaining after the satisfaction of all obligations owed to the holders of Liens that have priority over the Liens securing the Notes would be sufficient to satisfy the obligations owed to the Holders of the Notes and any other creditor whose Indebtedness is secured with the property and assets that secure the Notes. By its nature, some or all of the Collateral will be illiquid and may have no readily ascertainable market value. Accordingly, there can be no assurance that the Collateral will be able to be sold in a short period of time, if at all. The Parent and its Subsidiaries will be permitted to incur additional Indebtedness, which may be secured Indebtedness, in accordance with the terms of the Indenture.

The Trustee will, and by accepting a Note, each Holder will be deemed to have, irrevocably agreed to the appointment of the Security Agents to act as its agent and security trustee under the Security Documents. The Trustee has, and by accepting a Note, each Holder will be deemed to have, irrevocably authorized each Security Agent to: (i) perform the duties and exercise the rights, powers and discretions that are specifically given to it under or any of the Security Documents, together with any other incidental rights, power and discretions; and (ii) execute each document expressed to be executed by such Security Agent on its behalf.

The Issuer’s obligations under the Notes and the Indenture also will be secured by a first-ranking assignment of the Issuer’s rights under the Intercompany Loans. The assignment of the Intercompany Loans as provided in the Security Documents will be granted in favor of one or both Security Agents on a first-priority basis. Such assignment of the Intercompany Loans shall be released upon the full repayment and cancellation of the Intercompany Loans.

Liens on Collateral securing the Notes and the Guarantees (other than the Intercompany Loans) will be automatically and unconditionally released:

The Security Documents provide that the Security Agents are authorized to release and each Holder, by accepting a Note, is deemed to authorize the relevant Security Agent to release (and the relevant Security Agent will, at the request of the Parent or Issuer, release) the security interest in all or any portion of the Collateral in connection with the granting of any Permitted Collateral Lien as contemplated by the covenant described under “—Certain Covenants—Liens.” The Indenture will require that the Issuer or the relevant Guarantor will regrant to the relevant Security Agent or the Trustee and the relevant Security Agent, immediately after such Permitted Collateral Lien is granted, a security interest in such released Collateral; provided that: (i) the release and re-taking of any security interest in the Collateral in accordance with the terms of this paragraph shall only be undertaken to the extent necessary, as determined in good faith by the Issuer or the relevant Guarantor (which determination shall be conclusive) to be required to grant the Permitted Collateral Lien, and (ii) the Issuer or the relevant Guarantor shall provide the relevant Security Agent or the Trustee with an opinion of counsel regarding the validity and enforceability of any security interest securing the Notes that is re-taken, which opinion may be subject to exceptions, limitations and exclusions reasonably determined by such counsel to be necessary or appropriate, including in light of applicable law. The release and re-taking of the security interests in the Collateral could restart preference or hardening periods which could be of significant duration. See “Risk Factors—A refinancing or replacement of certain indebtedness could result in a release of the liens on the Collateral. Although the security may be reinstated on substantially similar terms, the security could be subject to avoidance by an insolvency administrator or third-party creditors.”

The Trustee and/or the Security Agents are authorized, without the consent of any Holder, to take all necessary actions to effectuate any release in accordance with these provisions. At the request and expense of the Issuer or any Guarantor, the Trustee and/or the Security Agents will execute any document reasonably requested to evidence such release and discharge.

The Indenture will provide that the Issuer, each Guarantor, the Security Agent and the Trustee will be authorized (without any further consent of the Holders) to enter into the Intercreditor Agreement in favor of the holders of the Senior Secured Notes and holders of New Convertible Secured Notes and any Additional Intercreditor Agreement. The Indenture will provide that it will be subject to the terms of such Intercreditor Agreement and Additional Intercreditor Agreement. For a description of the Intercreditor Agreement, see “Description of Other Indebtedness—Intercreditor Agreement.”

Pursuant to the terms of the Intercreditor Agreement, any liability in respect of obligations under the Indenture and the Notes will have priority (over the obligations under the New Convertible Secured Notes) to any proceeds received upon any enforcement action over any Collateral. For a description of the Intercreditor Agreement, see “Description of Other Indebtedness—Intercreditor Agreement.” Any proceeds received upon any enforcement over any Collateral, after all obligations will be applied (i) first, pro rata in repayment of all obligations under the Indenture and the Notes, and (ii) when all obligations under the Indenture and the Notes have been repaid or discharged, any remaining proceeds will be applied pro rata in repayment of all obligations under the New Convertible Secured Notes Indenture and the New Convertible Secured Notes.

In addition, the Indenture will provide that at the request of the Issuer, at the time of, or prior to, any Incurrence of Senior Debt that is permitted to share the Collateral, amend the Intercreditor Agreement to reflect such additional Indebtedness or enter into an Additional Intercreditor Agreement with the holders of such Debt (or their duly authorized representatives) on substantially the same terms as the Intercreditor Agreement, including with respect to enforcement instructions, distributions and releases of Guarantees and Collateral; provided that any amendment to the Intercreditor Agreement or any Additional Intercreditor Agreement will not impose any personal obligations on the Trustee or the Security Agent or adversely affect the rights, duties, liabilities or immunities of the Trustee under the Indenture or the Intercreditor Agreement as in effect on the Issue Date.

The Indenture will also provide that, at the written direction of the Issuer and without the consent of the Holders, the Trustee and the Security Agent shall from time to time enter into one or more amendments to the Intercreditor Agreement or any Additional Intercreditor Agreement to: (1) cure any ambiguity, omission, defect or inconsistency of any such agreement, (2) increase the amount or types of Debt covered by the Intercreditor Agreement or any such Additional Intercreditor Agreement that may be Incurred by the Issuer or its Restricted Subsidiaries that is subject to the Intercreditor Agreement or any such Additional Intercreditor Agreement, respectively; provided that such Debt is Incurred in compliance with the Indenture, (3) add Guarantors or other Restricted Subsidiaries to the Intercreditor Agreement or any Additional Intercreditor Agreement, (4) further secure the Notes (including Additional Notes), (5) make provision for equal and ratable pledges of the Collateral to secure Additional Notes or to implement any Permitted Collateral Liens or (6) make any other change that does not adversely affect the Holders of Notes in any material respect. The Issuer shall not otherwise direct the Trustee or Security Agent to enter into any amendment to the Intercreditor Agreement or any Additional Intercreditor Agreement without the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding, except as otherwise permitted below under “—Amendments and Waivers” or as permitted by the terms of the Intercreditor Agreement or such Additional Intercreditor Agreement, as applicable, and the Issuer may only direct the Trustee or Security Trustee to enter into any amendment to the extent such amendment does not impose any personal obligations on the Trustee or Security Agent or, in the opinion of the Trustee or Security Agent, adversely affect their respective rights, duties, liabilities or immunities under the Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement.

The Indenture will also provide that each Holder, by accepting such Note, will be deemed to have:

Neither the Trustee nor the Security Agent shall not be required to seek the consent of any Holders to perform its obligations under and in accordance with this covenant.

The Issuer may redeem all or a part of the New Secured Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the New Secured Notes redeemed, to the applicable redemption date, if redeemed during the periods indicated below, subject to the rights of holders of New Secured Notes on the relevant record date to receive interest on the relevant interest payment date:

Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the New Secured Notes or portions thereof called for redemption on the applicable redemption date.

Except as set forth in the following paragraph, the Issuer is not required to make mandatory redemption or sinking fund payments with respect to the New Secured Notes.

Within 30 days of the receipt of Net Proceeds from any Asset Sale, the Issuer shall give notice of redemption of a principal amount of the New Secured Notes equal to the Net Proceeds from the Asset Sale at a price equal to 100% of the principal amount of the New Secured Notes to be redeemed plus accrued and unpaid interest on the New Secured Notes redeemed to the applicable redemption date. The redemption notice shall provide for redemption upon not less than 30 and note more than 60 days from the date the redemption notice is given.

The Issuer’s ability to redeem Notes with Net Proceeds of an Asset Sale may be limited by a number of factors. Certain existing and future Indebtedness of the Parent or its Subsidiaries contain or may contain prohibitions on the occurrence of certain events that would constitute Asset Sale or require such Indebtedness to be repurchased or repaid upon an Asset Sale. The terms of other Indebtedness of the Parent or its Subsidiaries may prohibit the Issuer’s prepayment of the Notes or any payment by the Issuer or restrict the ability of the Parent or its Subsidiaries to fund any such payments. Consequently, if the Parent or its Subsidiaries is not able to prepay or cause to be prepaid the Indebtedness outstanding under any such Indebtedness (to the extent containing such restrictions) or obtain requisite waivers or consents, the Issuer may be unable to fulfill its mandatory redemption obligations, resulting in a default under the Indenture.

If less than all of the Notes are to be redeemed at any time, the Trustee or the Registrar (as the case may be) will select Notes for redemption on a pro rata basis or by such other method as the Trustee in its sole discretion will deem to be fair and appropriate and as required by law or mandatory requirements, rules or regulations of the relevant clearing systems including by pool factor. The Trustee or the Registrar (as the case may be) will not be liable for selections made by it in accordance with this paragraph.

Definitive registered Notes, if any, in a principal amount of $2,000 or less cannot be redeemed in part. Notices of redemption will be transmitted at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Any such redemption or notice may be subject to the satisfaction of one or more conditions precedent at the Issuer’s discretion.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount of that Note that is to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder of Notes upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for redemption unless the Issuer defaults in the payment of the redemption price.

All payments made by any of the non-U.S. Guarantors with respect to any Guarantee will be made free and clear of and without withholding or deduction for, or on account of, any present or future Taxes unless the withholding or deduction of such Taxes is then required by law. If any deduction or withholding for, or on account of, any Taxes imposed or levied by or on behalf of any jurisdiction in which any non-U.S. Guarantor (including any successor entity), is then incorporated, engaged in business or resident for tax purposes or any jurisdiction by or through which payment is made or any political subdivision thereof or therein (each, a “Tax Jurisdiction”), will at any time be required to be made from, or any Taxes are imposed directly on any Holder or beneficial owner of the Notes on, any payments made by any of the non-U.S. Guarantors with respect to any Guarantee, including payments of principal, redemption price, purchase price, interest or premium, the relevant non-U.S. Guarantor, will pay such additional amounts as may be necessary in order that the net amounts received and retained in respect of such payments by each Holder (including such additional amounts) after such withholding, deduction or imposition will equal the respective amounts that would have been received and retained in respect of such payments in the absence of such withholding, deduction or imposition; provided, however, that no such additional amounts will be payable with respect to:

If a Change of Control occurs, the Issuer must offer to repurchase all the Notes pursuant to an offer on the terms set forth in the Indenture (“Change of Control Offer”). In the Change of Control Offer, the Issuer will offer a payment in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest on the Notes repurchased to the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, the Issuer and the Parent will mail a notice to each Holder (with a copy to the Trustee and the relevant Paying Agent) describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date (the “Change of Control Payment Date”) specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, compliance by the Issuer and the Parent with the applicable securities laws and regulations will not be deemed to be a breach of their obligations under the Change of Control provisions of the Indenture.

The Paying Agent will promptly pay (by wire transfer of immediately available funds, by mail or otherwise) to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate, or cause an authentication agent appointed by it, to authenticate and mail (or cause to be transferred by book entry) to each Holder a new note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. To the extent payments are made to the Holders by the Parent or any other Guarantor in respect of the Change of Control Offer, the amount of the Intercompany Loans shall be correspondingly reduced and deemed repaid proportionally by the obligors thereon to the Issuer to the extent of such reduction.

The provisions described above that require the Issuer to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that the Issuer repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.

The Issuer will not be required to make a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer; or (ii) notice of redemption has been given pursuant to the Indenture as described above under the caption “—Optional Redemption”, unless and until there is a default in payment of the applicable redemption price. A Change of Control Offer may be made in advance of a Change of Control (and will satisfy the Issuer’s obligation to make such an offer upon such Change of Control) if a definitive agreement is in place at the time of the making of the Change of Control Offer that would, upon consummation, result in a Change of Control, and such Change of Control Offer is otherwise made by the Issuer or such third party in compliance with the provisions of this covenant.

The Issuer’s ability to repurchase Notes issued by it pursuant to a Change of Control Offer may be limited by a number of factors. Certain existing and future Indebtedness of the Parent or its Subsidiaries contain or may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require such Indebtedness to be repurchased or repaid upon a Change of Control. Moreover, the exercise by the Holders of their right to require the Issuer to repurchase the Notes could cause a default under, or require a repurchase of, such Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Issuer. Finally, the Issuer’s ability to pay cash to the Holders upon a repurchase may be limited by the Issuer’s then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases.

Even if sufficient funds were otherwise available, the terms of other Indebtedness of the Parent or its Subsidiaries may prohibit the Issuer’s prepayment of the Notes or any payment by the Issuer or restrict the ability of the Parent or its Subsidiaries to fund any such payments before the scheduled maturity of the Notes. Consequently, if the Parent or its Subsidiaries is not able to prepay or cause to be prepaid the Indebtedness outstanding under any such Indebtedness (to the extent containing such restrictions) or obtain requisite waivers or consents, the Issuer may be unable to fulfill its repurchase obligations if Holders exercise their repurchase rights following a Change of Control, resulting in a default under the Indenture.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Parent and its Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all”, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require the Issuer to repurchase its Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Parent and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.

For purposes of the definition of Change of Control, the definition of Continuing Directors includes directors who were nominated or elected to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board at the time of such nomination or election. In San Antonio Fire & Police Pension Fund v. Amylin Pharmaceuticals, Inc. et al. (May 2009), the Delaware Chancery Court issued a decision, based in part on its interpretation of New York law, that raises issues regarding a change of control provision similar to that contained in the Indenture. Among other things, the court held that continuing directors could “approve” (within the meaning and for purposes of the indenture) a slate of candidates for director nominated by stockholders, without endorsing or recommending them, even though simultaneously recommending and endorsing their own slate. This decision suggests that, in the event that incumbent directors are replaced as a result of a contested election, issuers may nevertheless avoid triggering a change of control under a clause similar to clause (3) of the definition of “Change of Control”, if the outgoing directors were to approve the new directors for the purpose of such change of control clause. Accordingly, the ability of a Holder of Notes to require the Issuer to repurchase its Notes as a result of a change in the composition of the Board of Directors may be uncertain.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

The Issuer shall apply the Net Proceeds of an Asset Sale to redeem Notes as described under the caption “—Mandatory Redemption”. Any consideration for an Asset Sale other than cash or Cash Equivalents shall be considered “Non-Cash Consideration.”

Pending the final application of any Net Proceeds, the Parent or any Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the Indenture.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”),

save that, the Parent may make the payment of a dividend on common stock of the Parent and execute any Share buy backs if at the time of and after giving effect to such dividend a Share buy back:

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Parent or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. If the Fair Market Value of any Restricted Payment (other than cash) exceeds $40.0 million, any determination thereof must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur”), with respect to any Indebtedness (including Acquired Debt), and the Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that, any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) that is expressly subordinated to both the Notes and the Convertible PIK Toggle Notes, if (i) the Fixed Charge Coverage Ratio for the Parent’s most recently ended four full fiscal quarters for which publicly available financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-fiscal quarter period and (ii) if the Consolidated Leverage Ratio for the Parent’s most recently ended four full fiscal quarters for which publicly available financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been equal to or less than 4.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred or the preferred stock had been issued, as the case may be, at the beginning of such four-fiscal quarter period.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

As of February 13, 2013 we had approximately $112.2 million outstanding under Credit Facilities.

will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (8);

The Parent will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Parent or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the applicable Guarantee; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Parent solely by virtue of being unsecured or by virtue of being secured on a junior or second Lien basis or by virtue of not being Guaranteed.

For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item or portion of an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuer, the Parent and any Restricted Subsidiary of the Parent will be permitted to classify such item or portion of an item of Indebtedness on the date of its incurrence, and later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant, except that all Indebtedness outstanding on the Issue Date under any Credit Facilities shall be deemed initially incurred under clause (1) of the second paragraph of this covenant. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. For the avoidance of doubt, any Indebtedness permitted to be incurred pursuant to the covenant described under this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant may also include (without double-counting) any “parallel debt” or similar obligations created in respect thereto.

agreement or arrangement determined in U.S. dollars in accordance with the first clause of this sentence. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Parent and its Restricted Subsidiaries may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

In each case above, Indebtedness permitted to be incurred also is permitted to include any “parallel debt” or similar obligations created in respect thereof.

The Issuer will not, and the Parent will not cause or permit the Issuer to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind against or upon any of its property other than Issuer Permitted Liens.

The Parent will not, and will not cause or permit any of its Restricted Subsidiaries (other than the Issuer) to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind against or upon any property or assets of the Parent or any of its Restricted Subsidiaries constituting Collateral, whether owned on the Issue Date or acquired after the Issue Date other than Permitted Collateral Liens.

The Parent will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens (other than Permitted Liens) of any kind against or upon any property or assets of the Parent or any of its Restricted Subsidiaries not constituting Collateral, whether owned on the Issue Date or acquired after the Issue Date securing Indebtedness unless contemporaneously with the incurrence of such Liens provision is made to secure the Indebtedness due under the Notes (including any Additional Notes) or, in respect of Liens on any Guarantor’s property or assets, any Guarantee of such Guarantor, equally and ratably with the Indebtedness secured by such Lien for so long as such Indebtedness is so secured.

Any such Lien in favor of the Trustee and the Holders of the Notes will be automatically and unconditionally released and discharged concurrently with (i) the release of the Lien which gave rise to the Lien in favor of the Trustee and the Holders of the Notes (other than as a consequence of an enforcement action with respect to the assets subject to such Lien); (ii) upon the full and final payment of all amounts payable by the Issuer and the Guarantors under the Notes, the Indenture and the Guarantees; or (iii) upon legal defeasance or satisfaction and discharge of the Notes as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge.”

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

provided that (x) the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common Capital Stock and (y) the subordination of (including but not limited to, the application of any standstill requirements to) loans or advances made to the Parent or any Restricted Subsidiary to other Indebtedness Incurred by the parent or any Restricted Subsidiary, shall not be deemed to constitute such an encumbrance or restriction.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

Neither the Parent nor the Issuer may, directly or indirectly: (x) merge, consolidate, amalgamate or otherwise combine with or into another Person (whether or not the Parent or the Issuer (as applicable) is the surviving corporation); or (y) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Parent and its Restricted Subsidiaries taken as a whole or the Issuer and its Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

In addition, neither the Parent nor the Issuer may, directly or indirectly, lease all or substantially all of its properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.

Any successor entity (if other than a Guarantor or the Issuer, as the case may be) will succeed to, and be substituted for, and may exercise every right and power of, the non-surviving Guarantor or the Issuer, as the case may be, under the Indenture, the Notes, the non-surviving Guarantor’s Guarantee, the Intercompany Loans and the Security Documents (and other relevant agreements hereunder), in each case, to the extent a party thereto, and, upon such substitution, the predecessor Person shall be released.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Parent (each, an “Affiliate Transaction”) or series of transactions having a value greater than $2.5 million, unless:

The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

The Parent will not, and will not permit any of its Restricted Subsidiaries to, engage in any business other than a Permitted Business, except to such extent as would not be material to the Parent and its Restricted Subsidiaries taken as a whole.

activities in connection therewith, (b) undertaken with the purpose of fulfilling any obligations under the Notes, the Additional Notes, the Indenture the New Convertible Secured Notes Indenture, the New Convertible Secured Notes (including any New Convertible Secured Notes issued as pay-in kind interest) or any Capital Markets Debt or any security documents or other agreements relating to any of the foregoing, (c) directly related to the establishment and/or maintenance of the Issuer’s corporate existence, or (d) performing any act incidental to or necessary in connection with any of the above or (e) other activities that are not specified in (a) through (d) above that are de minimis in nature.

The Issuer shall not (a) incur any Indebtedness other than the Indebtedness represented by the Notes and, subject to compliance with the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock”, Additional Notes, the New Convertible Secured Notes (including any New Convertible Secured Notes issued as pay-in-kind interest) and any Capital Markets Debt, (b) issue any Capital Stock other than the issuance of its ordinary shares to the Parent, any Wholly Owned Restricted Subsidiary of the Parent or otherwise in a de minimis amount to local residents to the extent required by applicable law or (c) make any Restricted Payment or Permitted Investment, other than cash, Cash Equivalents and Intercompany Loans.

The Issuer shall not create, incur, assume or suffer to exist any Lien of any kind (other than Issuer Permitted Liens) against or upon any of its property or assets, or any proceeds therefrom.

The Issuer shall at all times remain a Wholly-Owned Restricted Subsidiary of the Parent.

The Issuer shall not merge, consolidate, amalgamate or otherwise combine with or into another Person except the Parent or a wholly owned Guarantor, or sell, convey, transfer, lease or otherwise dispose of (other than any Issuer Permitted Collateral Lien, or any Restricted Payment or Permitted Investment permitted by the covenant described under this caption “—Limitation on Activities of the Issuer”) any material property or assets to any Person except the Parent or a wholly owned Guarantor, provided that, in the event it so combines with the Parent or a wholly owned Guarantor or so disposes of property or assets to the Parent or a wholly owned Guarantor, then immediately after such transaction the Parent or such wholly owned Guarantor shall (a) assume all of the obligations of the Issuer under the Indenture and the Notes pursuant to a supplemental indenture in form reasonably satisfactory to the Trustee and (b) deliver to the Trustee an Officers’ Certificate which complies with applicable provisions of the Indenture or investments in the Notes, the Guarantees, Existing Notes and the guarantees of the Existing Notes.

For so long as any Notes are outstanding, none of the Issuer, the Parent or any other Guarantor will commence or take any action to cause a winding-up or liquidation of the Issuer.

Except as provided in the Indenture, the Issuer shall not, and the Parent shall procure that the Issuer does not, assign or novate its rights under the Intercompany Loans.

subsidiaries; (e) have any employees (for the avoidance of doubt, the Directors of Jelegat Holdings Limited do not constitute employees); (f) issue any shares (other than such shares as are in issue as at the Issue Date) and other Equity Interests (other than Disqualified Stock) issued to CEDC International sp z.o.o.) nor redeem or purchase any of its issued share capital; (g) amend any term or condition of any of the Proceeds Loan or the RAG On-Loans (save in accordance with the terms of the Indenture including amendments permitted under the covenant entitled “Amendments to or Prepayments of the Intercompany Loans”); (h) incur any Indebtedness for borrowed money or any guarantees other than in respect of the Proceeds Loan or any document entered into in connection with the Proceeds Loan or the sale thereof or pursuant to the terms of the Indenture; (i) enter into any reconstruction, amalgamation, merger or consolidation; (j) enter into any lease in respect of, or own premises; (k) agree to any amendment to any provision of or grant any waiver or consent under the RAG Transaction Documents to which it is a party or execute any agreement (save in accordance with the terms of the Indenture); or (l) otherwise than as contemplated in the RAG Transaction Documents, release from or terminate the appointment of a collateral manager under a collateral management agreement or a collateral administrator under a collateral administration agreement (including in each case any transactions entered into thereunder) or release any of them from any executory obligation thereunder.

Jelegat Holdings Limited will pay its debts as they fall due. Jelegat Holdings Limited will do all such things as are necessary to maintain its corporate existence.

If the Parent or any Restricted Subsidiary acquires or creates another Significant Subsidiary, then: (i) such Significant Subsidiary shall become a Guarantor, within 20 Business Days of having been acquired or created; (ii) the parent of such Significant Subsidiary shall have executed one or more Security Documents granting to the relevant Security Agent for the benefit of the Holders of the Notes a first priority pledge of shares in such Significant Subsidiary within such 20 Business Day period (subject to Permitted Collateral Liens); and (iii) the parent of such Significant Subsidiary shall have taken all reasonably required steps under applicable law and undertaken other customary procedures in connection with the granting of such security interests, provided, however, that no Significant Subsidiary will be required to become a Guarantor nor shall its shares be required to be so pledged to the extent and for so long as the incurrence of such Guarantee: (x) would be reasonably likely to result in any violation of applicable law that cannot be avoided or otherwise prevented through measures reasonably available to the parent or such Significant Subsidiary, any liability for the officers, directors or shareholders of such Significant Subsidiary or any current or future cost expense, liability or obligation (including any tax) other than de minimis costs and expense; (y) would be prohibited by the terms of any agreement with holders of a direct or indirect minority interest in such Restricted Subsidiary, provided that the Parent or the relevant Restricted Subsidiary has used commercially reasonable efforts to obtain consent from the holders of the minority equity interest in such Restricted Subsidiary; or (z) would be prohibited by any Acquired Debt in respect of such new Significant Subsidiary and such Acquired Debt is otherwise permitted to be incurred under the Indenture and provided such Acquired Debt has not been incurred in contemplation of, or in connection with, the transaction or series of transactions pursuant to which such Person becomes a Significant Subsidiary of or was otherwise acquired by the Parent or a Restricted Subsidiary. Each new Guarantor shall execute a supplemental indenture. Notwithstanding the foregoing, the Copecresto Subsidiaries will not be required to become Guarantors, regardless of whether they become Significant Subsidiaries, provided that on each Guarantor Testing Date (as defined below), the total number of Guarantees provided by the Restricted Subsidiaries does not fall below the 85% threshold set forth in the following paragraph.

quarterly report in accordance with the provisions set out in the covenant “Reports”, in each case after giving pro forma effect to any sales or other distributions of assets not reflected therein, and in each case except to the extent that the incurrence of such Guarantees: (i) would be reasonably likely to result in any violation of applicable law that cannot be avoided or otherwise prevented through measures reasonably available to Parent or such Significant Subsidiary, any liability for the officers, directors or shareholders of such Significant Subsidiary or any current or future cost, expense, liability or obligation (including any tax) or than de minimis costs and expenses; (ii) would be prohibited by the terms of any agreement with holders of a minority equity interest in such Restricted Subsidiary, provided that the Parent or the relevant Restricted Subsidiary has used commercially reasonable efforts to obtain consent from the holders of the minority equity interest in such Restricted Subsidiary; or (iii) would be prohibited by any Acquired Debt in respect of such new Restricted Subsidiary and such Acquired Debt is otherwise permitted to be incurred under the Indenture and provided such Acquired Debt has not been incurred in contemplation of, or in connection with, the transaction or series of transactions pursuant to which such Person becomes a Restricted Subsidiary.

The Parent will cause any Significant Subsidiary that is not a Guarantor (other than one or more of the Copecresto Subsidiaries) that guarantees any third-party interest bearing Indebtedness for borrowed money of any Guarantor or the Issuer to execute and deliver to the Trustee a supplemental indenture pursuant to which such Significant Subsidiary will, to the maximum extent permitted by law, guarantee payment of the Notes on substantially the same terms and conditions as those set forth in the Indenture; provided, however, that no Restricted Subsidiary will be required to become a Guarantor to the extent and for so long as a consequence of the incurrence of such Guarantee would be reasonably likely to result in any violation of applicable law that cannot be avoided or otherwise prevented through measures reasonably available to the Parent or such Significant Subsidiary, any liability for the officers, directors or shareholders of such Significant Subsidiary or any current or future cost, expense, liability or obligation (including any tax) other than de minimis costs and expenses.

The Board of Directors of the Parent may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default, provided that in no event will the business currently operated by any of the Parent and CEDC International, be transferred to or held by an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Parent and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant described above under the caption “—Restricted Payments” or under one or more clauses of the definition of Permitted Investments, as determined by the Parent; provided that this restriction shall not apply if the subsidiary has less than $1,000 of total assets. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the Parent may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a Default.

Any designation of a Subsidiary of the Parent as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “—Restricted Payments.” If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Parent as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock”, the Parent will be in default of such covenant. The Board of Directors of the Parent may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Parent of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation

will only be permitted if: (i) such Indebtedness is permitted under the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock”, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (ii) no Default or Event of Default would be in existence following such designation.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that any Guarantor may enter into a sale and leaseback transaction if:

The Parent shall not and shall not permit any Restricted Subsidiary to take or knowingly or negligently omit to take any action which action or omission would have the result of materially impairing the security interest with respect to the Collateral (it being understood that the incurrence of Liens on the Collateral permitted by the definition of Permitted Collateral Liens (including the release and re-taking of one or more Liens in connection with the incurrence of Permitted Collateral Liens) shall under no circumstances be deemed to materially impair the security interest with respect to the Collateral) for the benefit of the Trustee and the Holders of the Notes (including any Additional Notes), and the Parent shall not, and shall not permit any Restricted Subsidiary to, grant to any Person other than the Security Agents, for the benefit of the Trustee and the Holders of the Notes (including any Additional Notes) and the other beneficiaries described in the Security Documents, any interest in any of the Collateral; provided that the Parent and its Restricted Subsidiaries may incur Liens on the Collateral permitted by the definition of Permitted Collateral Liens; provided further, however, that (a) nothing in this provision shall restrict the release or replacement of any Collateral in compliance with the terms of the Indenture, the Security Documents and any intercreditor agreements; and (b) any Collateral or any Security Document relating to any Collateral may be amended, extended, renewed, restated, supplemented or otherwise modified or replaced (i) if contemporaneously with any such action, the Parent delivers to the Trustee an Officers’ Certificate confirming that the Parent is solvent or an opinion of counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, modification or replacement (an “Amendment”), the Lien or Liens (other than in respect of Liens on assets that have been added to the Collateral as a result of such Amendment) created under any Security Document relating to any Collateral so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens enforceable in accordance with their terms against the grantor of the Liens and not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such Amendment; or (ii) to allow for the conversion of an entity the shares of which constitute Collateral to another form of Person (or to allow for conversion, recapitalization or similar transactions involving the shares or other Equity Interests of any such entity) if contemporaneously with any such action, the Parent delivers to the Trustee an opinion of counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such an Amendment, the Lien or Liens created in respect of such Collateral so amended, extended,

renewed, restated, supplemented, modified or replaced are valid Liens enforceable in accordance with their terms against the grantor of the Liens. In the event that the Parent complies with the requirements of this covenant, the Trustee and the Security Agents shall consent to any such Amendment without the need for instructions from Holders of the Notes.

The Parent will use its reasonable efforts to deliver on the Issue Date or as soon as practicable thereafter: (i) pledges (or charges) of shares in the Issuer and the U.S. Guarantors (other than the Parent), and, subject to filing, registration and similar requirements, Dancraig Wine & Spirits Trading, the Whitehall Subsidiaries and the Luxembourg Guarantors, and evidence of the deposit for filing, application for registration thereof or compliance with other similar requirements; (ii) financial pledges and executed registered pledge agreements, subject to registration, of the Polish Guarantor shall be required to be so pledged on the Issue Date; (iii) pledges of, or in the applicable jurisdictions, assignments of rights under, each Specified Bank Account of the Issuer and each Guarantor (other than the Russian Guarantors) as of the Issue Date; and (iv) a pledge (or assignment) of the Intercompany Loan made by the Issuer to CEDC International and, upon funding, pledges (or assignments) of the Intercompany Loan made by the Issuer to Jelegat Holdings Limited and the RAG On-Loans.

The Parent will use its reasonable efforts to, within 15 Business Days after the Issue Date or as soon as is reasonably practicable thereafter: (i) deliver pledges of shares in the Cyprus Guarantors; and (ii) deliver pledge agreements, and evidence of the filing thereof for registration with the appropriate authority, over the Intellectual Property Rights.

The Parent will use its reasonable efforts to, within two months after the Issue Date or as soon as is reasonably practicable thereafter or: (i) deliver registered pledges of participatory interests of or shares in, as appropriate, the Russian Guarantors; (ii) deliver a registered business quota pledge of the Hungarian Guarantor; (iii) deliver assignment of rights under each non-Russian Specified Bank Account and withdrawal rights agreements for each Russian Specified Bank Account of the Russian Guarantors; and (iv) deliver mortgage agreements and evidence of filing motions with the appropriate Polish registry to register mortgages over the real property and fixtures of CEDC International production plants.

The Parent will use its reasonable efforts to deliver within six months after the Issue Date or as soon as is reasonably practicable thereafter, mortgage agreements and evidence of filing motions with the appropriate registry to register the mortgages over real property, land rights and fixtures (to the extent qualified as real property under Russian law) of the Russian Alcohol Group’s Siberian Distillery and First Kupazhniy Factory.

At any time that the Issuer or any Guarantor creates, acquires or otherwise owns or holds a Specified Bank Account after the Issue Date, the Parent shall use its reasonable best efforts to deliver pledges or, in the applicable jurisdictions, assignments of rights under each Specified Bank Account (or withdrawal rights agreements in the case of any Russian Specified Bank Account of a Russian Guarantor) as promptly as reasonably practicable.

With respect to any security that may be required to be given in respect of Specified Bank Accounts that is not currently permitted by Existing Indebtedness, the Parent will use reasonable efforts to obtain relevant consents or amendments to allow such security to be given upon or prior to the requirement so arising. In obtaining any consent or amendment required in respect of any such security agreed to be provided, no covenant herein shall require that the Parent or any of its subsidiaries pay any fee or other payment that is unduly burdensome, as determined in the good faith judgment of the senior officers or Board of Directors of the Parent.

The Parent will use its reasonable efforts to list and maintain the listing of the Notes on the Irish Stock Exchange; provided, however, that if the Parent is unable to list the Notes on the Global Exchange Market of the Irish Stock Exchange or if maintenance of such listing becomes unduly onerous, it will use its reasonable efforts to maintain a listing of such Notes on another recognized stock exchange.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement, other than any Holder who waives the right to receive all or any part of such consideration.

Without the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, the Issuer and the Parent will not, and will not permit any Restricted Subsidiary to, (i) prepay or otherwise reduce or permit the prepayment or reduction of any Intercompany Loan; or (ii) amend, modify or alter the Intercompany Loans in any manner adverse to the Holders of the Notes; provided, that, without the consent of each Holder affected thereby, the Issuer and the Parent will not, and will not permit any Restricted Subsidiary to, amend, modify or alter any Intercompany Loan to:

Notwithstanding the foregoing, (i) the Intercompany Loans may be amended to provide for the issuance of Additional Notes, or additional New Convertible Secured Notes to cure any ambiguity, mistake, omission, defect or inconsistency and to provide for the assumption by a successor Person, and may be prepaid or reduced to facilitate or otherwise accommodate or reflect a repayment, redemption or repurchase of Notes or the New Convertible Secured Notes and (ii) the Intercompany Loans may be novated or assigned to any Guarantor.

Whether or not the Parent is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise is required to report on an annual basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Indenture requires the Parent to file with, or furnish to, the SEC and to provide the Trustee with annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (or any successor form), in each case containing the information required to be contained therein, in accordance with the requirements for filing such reports prescribed by the SEC applicable to the Parent and as such requirements may be modified by the SEC from time to time. The requirement to provide any such report to the Trustee shall be deemed satisfied if such report has been filed with the SEC through the Electronic Data Gathering Analysis and Retrieval (EDGAR) system (or any successor method of filing).

In addition to the foregoing, the Parent shall provide the Trustee, within 10 days after it files with, or furnishes to, the SEC, copies of any other information, documents and reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which it is required to file with the SEC pursuant to Section 13 of 15(d) of the Exchange Act or is required to furnish to the SEC pursuant to the Indenture.

If the Parent has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the Notes and footnotes thereto, and in the “Operating Review and Financial Prospects”, of the financial condition and results of operations of the Parent and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Parent.

The Parent, the Issuer and the Guarantors agree that, for so long as any Notes remain outstanding, at any time they are not required to file the reports required by the preceding paragraphs with the SEC, they will furnish to the Trustee and to the Holders of Notes and bona fide prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. In addition, for so long as the Notes are listed on the Global Exchange Market of the Irish Stock Exchange and the rules of the exchange so require, all such reports will be available at the office of the Irish Paying Agent. The rules of the Irish Stock Exchange do not currently require an Irish Paying Agent.

In the case of an Event of Default described in clause (12) above, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest or premium, if any.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any Holders of Notes unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest, when due, no Holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless:

The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes.

The Issuer and the Parent are required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, the Issuer and the Parent are required to deliver to the Trustee within thirty days a statement specifying such Default or Event of Default.

No director, officer, employee, incorporator or stockholder of the Issuer, the Parent or any other Guarantor, as such, will have any liability for any obligations of the Issuer, the Parent or any other Guarantors under the Notes, the Indenture, the Guarantees, the Security Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the U.S. federal securities laws.

The Issuer may, at its option at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Guarantees (“Legal Defeasance”) except for:

In addition, the Issuer may, at its option and at any time, elect to have the obligations of the Issuer and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers) that are described in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under “—Events of Default and Remedies” will no longer constitute an Event of Default with respect to the Notes. If the Issuer exercises its Legal Defeasance option, the Guarantor (other than the Parent) will be released from its Guarantee and the Security Documents to which it is a party. The Issuer may exercise its Legal Defeasance option notwithstanding its earlier exercise of its Covenant Defeasance option.

Except as provided in the next two succeeding paragraphs, the Indenture, the Notes, any of the Security Documents or the Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and, subject to certain exceptions, any existing Default or Event of Default or compliance with any provision of the Indenture, the Notes, any of the Security Documents or the Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).

Without the consent of each Holder affected, an amendment, supplement or waiver may not, with respect to any Notes issued thereunder and held by a non-consenting holder:

Notwithstanding the preceding two paragraphs, without the consent of any Holder of Notes, the Issuer, the Guarantors, the Trustee and/or the Security Agents may amend or supplement (or take any other action or enter into any other document contemplated by “—Impairment of Security Interest”), the Indenture, the Notes, the Guarantees or the Security Documents:

At the request of the Parent, the Issuer or any Subsidiary Guarantor, the Trustee and Security Agents are authorized to enter into one or more intercreditor agreements, and one or more amendments, extensions, renewals, restatements, supplements, modifications or replacements to any intercreditor agreement; provided that the terms thereof are not prohibited by any term of the Indenture.

Each Holder of the Notes agrees to and accepts the terms and conditions of any intercreditor agreement and the entry by the Trustee into any intercreditor agreement and the performance by the Trustee of its obligations and the exercise of its rights thereunder and in connection therewith.

The Trustee will be entitled to request, and rely absolutely on without further inquiry an opinion of counsel and an Officers’ Certificate.

In determining whether the Holders of the required principal amount of the Notes have concurred in any direction, waiver or consent, the Notes owned by the Issuer, any Guarantor or by any Subsidiary of the Parent will be disregarded and deemed not to be outstanding.

The Indenture (and all Liens on Collateral created pursuant to the Security Documents) and the Guarantees will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the Notes as expressly provided for in the Indenture) as to all Notes issued thereunder, when:

In addition, the Issuer and the Parent must deliver an Officers’ Certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

U.S. dollars is the sole currency of account and payment for all sums payable by the Issuer or any Guarantor under the Notes, any Guarantee thereof and the Indenture. Any amount received or recovered in currency other than U.S. dollars in respect of the Notes, whether as a result of any judgment or order or the enforcement thereof or the liquidation of the Issuer or any Guarantor, shall constitute a discharge of the Issuer’s or the Guarantor’s obligation under the Indenture or the Notes, as the case may be, only to the extent of the U.S. dollar amount which the recipient is able to purchase with the amount so received or recovered in other currency in accordance with normal banking procedures on the first Business Day following that receipt or recovery (or, if it is not possible to make that purchase on that date, on the first date on which it is possible to do so). If that U.S. dollar amount is less than the U.S. dollar amount expressed to be due to the recipient under any Note, the Issuer and each Guarantor, jointly and severally, shall indemnify and hold harmless the recipient from and against all loss or damage arising out of, or as a result of, such deficiency. This indemnity shall constitute an obligation separate

and independent from the other obligations contained in the Indenture, the Notes or the Guarantees, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder or the Trustee from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under any judgment or order.

The Issuer and the Guarantors will irrevocably submit to the jurisdiction of any New York state or U.S. federal court located in The Borough of Manhattan, city of New York, State of New York in relation to any legal action or proceeding arising out of, related to or in connection with the Indenture, the Notes, the Guarantees and any related documents. Each of the Issuer and each of the Guarantors will appoint CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York, 10011, USA, as its agent for service of process in any such action or proceeding.

If the Trustee becomes a creditor of the Issuer or any Guarantor, the Indenture limits the right of the Trustee to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, or resign.

The Holders of a majority in aggregate principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default occurs and is continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his/her own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Anyone who receives this offering memorandum may obtain a copy of the Indenture, the form of Notes and Guarantees and the Security Documents (when available) without charge by writing to Central European Distribution Corporation, Two Bala Plaza, Suite 300, Bala Cynwyd, PA 19004, Attention: Company Secretary.

The Indenture, the Notes and the Guarantees will be governed by and construed in accordance with the laws of the State of New York. The Security Documents will be governed by and construed in accordance with the laws of the relevant jurisdictions of organization of the Issuer and the various Guarantors or the location or governing law of the Collateral or otherwise, as required under applicable law.

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all defined terms used therein, as well as any other capitalized terms used herein for which no definition is provided.

provided that Indebtedness which is redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of such asset acquisition or the transactions by which such Person is merged or consolidated with or into the Parent or any Restricted Subsidiary transferring assets to, or becomes a Restricted Subsidiary shall not constitute Acquired Debt.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control”, as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition: (i) the terms “controlling,” “controlled by” and “under common control with” have correlative meanings; and (ii) “Affiliate” shall include funds advised by the specified Person.

Notwithstanding the foregoing, none of the following items will be deemed to be an Asset Sale:

“Attributable Debt” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however, that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

“Bankruptcy Law” means Title 11, United States Code or any similar federal, state, foreign law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

Unless otherwise stated herein, all references to the “Board of Directors” shall be to the Board of Directors of the Parent.

“Borrowing Base” means an amount equal to 50% of the sum of: (a) the net book value of the accounts receivable of the Parent and its Restricted Subsidiaries; and (b) the Inventory of the Parent and its Restricted Subsidiaries (determined as of the end of the most recently ended fiscal quarter for which consolidated financial statements of the Parent are publicly available, it being understood that the accounts receivable and inventory of an acquired business may be included if such acquisition has been completed on or prior to the date of determination).

“Business Day” means any day that is not a Saturday or Sunday or other day on which banks and financial institutions in London, New York, or the jurisdiction of the exchange on which the Notes will be listed are authorized or required by law to close.

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP (as in effect on the Issue Date for purposes of determining whether a lease is a Capital Lease Obligation), and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

“Capital Markets Debt” means debt securities substantially similar to the Notes, other than with respect to interest, maturity and redemption provisions.

but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“CEDC FinCo Exchange Offer” means the offer of Notes and New Convertible Secured Notes in exchange for Existing Notes pursuant to this Offering Memorandum and Disclosure Statement.

“Collateral” means the property and assets securing the Notes and/or the Guarantees as such may be amended, modified, restated, supplemented or replaced from time to time.

“Consolidated EBITDA” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary of the Parent will be added to Consolidated Net Income to compute Consolidated EBITDA of the Parent only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to the Parent by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders (but only to the extent that the foregoing restricts the ability of the Parent to procure that an amount of cash equal to the amount of such Net Income for such period is transferable to the Parent or any Restricted Subsidiary of the Parent).

“Consolidated Leverage Ratio” as of any date of determination means the ratio of (a) the aggregate amount of Indebtedness of the Parent and its Restricted Subsidiaries on a consolidated basis as of such date of determination to (b) Consolidated EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to such date of determination (the “Reference Period”); provided, however, that:

For purposes of this definition, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Parent. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period. The amount of Indebtedness of any Person at any date shall be determined after giving effect to any Currency Agreement then in effect that effectively converts the amount of such Indebtedness from one currency to another currency.

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

“Consolidated Senior Secured Leverage” means, as of any date of determination, the sum of the total amount of Senior Secured Indebtedness of the Parent and its Restricted Subsidiaries on a consolidated basis.

“Consolidated Senior Secured Leverage Ratio” means, with respect to any Person as of any date of determination, the ratio of (i) the Consolidated Senior Secured Leverage of such Person and its consolidated subsidiaries (or, in the case of the Parent, its Restricted Subsidiaries) as of such date, to (ii) the aggregate amount of Consolidated EBITDA of such Person for the period as of the most recent four fiscal quarters ending prior to such date.

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Parent who:

“Credit Facilities” means one or more debt facilities or commercial paper facilities or credit facility documentation, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale or factoring of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), bank guarantees or letters of credit or overdrafts, in each case, as amended, restated, modified, supplemented, renewed, refunded, replaced (whether upon or after termination or otherwise), refinanced, increased or extended in whole or in part from time to time, and whether or not with the original arranging agent, administrative agent and lenders or another arranging or administrative agent or agents or other banks or other institutional lenders and whether provided under any existing credit facility or one or more other credit agreements or financing agreements (without limitation as to amount outstanding or committed, or the maturity, terms, conditions, covenants, or other provisions thereof or parties thereto) and in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing (including any letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents), save that the RTL Credit Facility shall not be deemed a Credit Facility.

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement with respect to currency values.

“Cyprus Guarantors” means, collectively, Jelegat Holdings Limited and Pasalba Ltd.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Disqualified Stock” means any Equity Interests that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interests), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interests, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Equity Interests that would constitute Disqualified Stock solely because the holders of the Equity Interests have the right to require the Parent to repurchase such Equity Interests upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Equity Interests provided that the Parent may not repurchase or redeem any such Equity Interests pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption “—Certain Covenants—Restricted Payments.” The amount of Disqualified Stock deemed to be outstanding at any time for purposes of the Indenture will be the maximum amount that the Parent and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

“dollar”, “U.S. dollar” or “$” means the currency of the United States of America.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any primary public or private offering of Equity Interests (other than Disqualified Stock) of the Parent.

“euro” or “€” means the single currency of the participating European Union Member States.

“European Union Member State” means any country that is a member state of the European Union as of the Issue Date, but not including any country which becomes a member of the European Union after the Issue Date.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Existing Indebtedness” means Indebtedness of the Parent and its Restricted Subsidiaries (other than Indebtedness under any Credit Facilities or under the Notes or the New Convertible Secured Notes) in existence on the Issue Date and until such amounts are repaid.

“Existing Notes” means the euro denominated senior secured notes and the U.S. dollar denominated senior secured notes issued under the indenture, dated December 2, 2009, among, inter alios, the Issuer, the Parent, the guarantors named therein, Deutsche Trustee Company Limited, as such indenture has been amended and supplemented.

“Exchange Offers” means the CEDC Exchange Offer and the CEDC FinCo Exchange Offer as defined in this Offering Memorandum and Disclosure Statement.

“Fair Market Value” means, with respect to any asset or property, the value that would be paid by a willing buyer to a willing seller in an arm’s-length transaction not involving distress or necessity of either party. Unless otherwise provided in the Indenture, a determination in good faith by the Board of Directors of the Parent as to Fair Market Value shall be conclusive.

“Fixed Charge Coverage Ratio” means, with respect to any specified Person for any period, the ratio of the Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.

For purposes of this definition, whenever pro forma effect is to be given to an acquisition or other Investment and the amount of income or earnings relating thereto, the pro forma calculations shall be made in compliance with Article 11 of Regulation S-X under the Securities Act, and will be as determined in good faith by a responsible financial or accounting Officer of the Parent, provided that such adjustments are set forth in an Officers’ Certificate signed by such Officer which states: (i) the amount of such adjustment or adjustments; (ii) that such adjustment or adjustments is based on the reasonable good faith beliefs of such Officer at the time of such execution; and (iii) that any related incurrence of Indebtedness is permitted pursuant to the Indenture. In

addition, for purposes of this definition, in determining the amount of Indebtedness outstanding on any date of determination, pro forma effect shall be given to any incurrence, repayment, repurchase, defeasance or other acquisition, retirement or discharge of Indebtedness on such date.

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

“GAAP” means generally accepted accounting principles applicable in the United States as in effect from time to time.

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

and their respective successors and assigns, in each case, until the Guarantee of such Person has been released in accordance with the provisions of the Indenture.

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

“Holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Registrar under the Indenture.

“Indebtedness” means, with respect to any specified Person (in each case, excluding accrued expenses and trade payables and without double-counting):

if and to the extent any of the preceding items (other than Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. Indebtedness shall not include Subordinated Shareholder Funding.

“Intellectual Property Rights” means: the trademarks related to the Soplica brand owned by CEDC International Sp. z o.o. and registered in Poland as of the Issue Date and registered in the European Union under trademark numbers 004575304 and 003801362.

“Intercompany Borrowers” means CEDC International sp. z o.o and Telepat Holdings Limited.

“Intercompany Loans” means one or more loans between the Intercompany Borrowers, as borrowers, and the Issuer, as lender, of the proceeds received by the Issuer from the issuance of the Existing Notes. After the consummation of the CEDC FinCo Exchange Offer, it is expected that a portion of the existing intercompany loans will be cancelled and/or exchanged for equity of the applicable Intercompany Borrower, such that the aggregate principal amount of the Intercompany Loans will reflect the aggregate principal amount of the Notes, the New Convertible Secured Notes. It is expected that the terms of the Intercompany Loans (e.g., interest rate and maturity) will reflect those of the Notes and the New Convertible Secured Notes.

“Intercreditor Agreement” means the intercreditor agreement, dated the Issue Date, among the Trustee, the Security Agent, the Issuer, the guarantors, the trustee and security agent under the New Convertible Secured Notes Indenture and the New Secured Notes Indenture.

“Inventory” means inventory, as determined in accordance with GAAP and any stock on consignment with customers classified as other receivables under GAAP.

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the form of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, payroll, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Parent or any Restricted Subsidiary of the Parent sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Parent such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Parent, the Parent will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Parent’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.” The acquisition by the Parent or any Restricted Subsidiary of the Parent of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Parent or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption “—Certain Covenants—Restricted Payments.” Except as otherwise provided in the Indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

“Issue Date” means the date upon which the Notes will be issued in the CEDC FinCo Exchange Offer.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Luxembourg Guarantors” means, collectively, Lion/Rally Lux 1 S.A., Lion/Rally Lux 2 S.à r.l. and Lion/Rally Lux 3 S.à r.l.

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

“Net Proceeds” means (i) the aggregate cash proceeds and (ii) the Fair Market Value of any Non-Cash Consideration, in each case received by the Parent or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale, as and when the same is received), net of the direct costs relating to such Asset Sale and disposition of non-cash consideration, including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale and disposition of non-cash consideration, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, and amounts required to be applied to the repayment of Indebtedness, other than amounts applied to repayment of Indebtedness pursuant to the second paragraph of the covenant described under “—Repurchase at the Option of Holders Change of Control—Asset Sales,” and any reserve for adjustment in respect of the sale of such asset or assets established in accordance with GAAP.

“New Convertible Secured Notes” means the $200 million aggregate principal amount of 10% Convertible PIK Toggle Notes due 2018 issued by the Issuer on the Issue Date and any New Convertible Secured Notes issued as pay-in-kind interest on the New Convertible Secured Notes.

“New Convertible Secured Notes Guarantees” means the guarantees of the New Convertible Secured Notes by the Guarantors.

“New Convertible Secured Notes Indenture” means the indenture, dated the Issue Date, among the Issuer, the Guarantors, US Bank as trustee, conversion agent and calculation and Deutsche Bank as security agent, relating to the New Convertible Secured Notes.

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

“Officer” means a supervisory board member, chief executive officer, chief financial officer, chief operating officer, chief accounting officer, any vice president, the treasurer or secretary or person in any equivalent position.

“Officers’ Certificate” means a certificate signed by two Officers, one of whom must be a supervisory board member, the chief executive officer, the chief financial officer or the chief operating officer.

“Permitted Business” means (i) the production and bottling of vodka and other alcoholic beverages and sales thereof; (ii) the importing, exporting, transportation, distribution and sale of beverages (including alcoholic beverages), cigars and cigarettes and other consumer goods; (iii) any other business in which the Parent or any of its Restricted Subsidiaries or RAG Holdco or any of its Subsidiaries is engaged in on the Issue Date; and (iv) any activity or business that is a reasonable extension or expansion of, or reasonably related to, the businesses described in the preceding clauses (i), (ii) and (iii).

“Permitted Refinancing Indebtedness” means any Indebtedness of the Parent or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge (“refinance”) other Indebtedness of the Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

“Person” means any individual, corporation, company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“Plan of Reorganization” means the Plan of Reorganization defined in the Offering Memorandum and Disclosure Statement.

“Proceeds Loan” means the loan between Jelegat Holdings Limited, as borrower, and the Issuer, as lender, made out of the proceeds of the issuance of the Existing Notes, as such loan will be amended on the Issue Date to reflect the issuance of the Notes and the New Convertible Secured Notes and the cancellation of Existing Notes tendered in the CEDC FinCo Exchange Offer.

“RAG On-Loans” means the loans between the Russian Alcohol Guarantors, as borrowers, and Russian Alcohol Finance Limited, as lender, made out of the proceeds of an Intercompany Loan.

“RAG Security Documents” means each of the documents entered into by the RAG Intercompany Borrowers creating or evidencing a Lien on property or assets of each of the RAG Intercompany Borrowers for the benefit of Russian Alcohol Finance Limited and any related intercreditor agreement, in each case as amended, modified, restated, supplemented or replaced from time to time.

“RAG Transaction Documents” means the RAG On-Loans and the RAG Security Documents.

“RAG Vendor Loan Notes” means the series A Unsecured Subordinated Loan Notes issued by Lion/Rally Lux 2 prior to the Issue Date (and related payment in-kind notes).

“Rating Agencies” means (1) each of Moody’s and S&P and (2) if any of Moody’s or S&P ceases to rate the notes or fails to make a rating of the New Convertible Secured Notes publicly available for reasons outside of the Issuer’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer as a replacement agency for Moody’s or S&P, or both of them, as the case may be.

“Rating Event” means the rating on the Notes is lowered by both of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by either of the Rating Agencies) after the earlier of (1) the occurrence of an event under clauses (3)(i) or (4)(i) of the definition of Change of Control and (2) public disclosure by the Issuer of the occurrence of such event or the Issuer’s intention to effect a Change of Control; provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of the occurrence of a particular event (and thus will not be deemed a Rating Event for purposes of clauses (3)(i) and (4)(i) of the definition of Change of Control) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the trustee in writing at the Issuer’s or the trustee’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the occurrence of the applicable event (whether or not the occurrence of the applicable event has occurred at the time of the Rating Event).

“Related Party” means (i) the spouse or immediate family member of Roustim Tariko, or any direct descendent of Roustim Tariko, his spouse or any of their immediate family members; (ii) the estate, executors, administrators or similar Persons for any Person specified in clause (i) of this definition; or (iii) any Person controlled by or any trust for the benefit of, any Person specified in clauses (i) or (ii), including Roust Trading Ltd.

“Restricted Investment” means an Investment other than a Permitted Investment.

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

“Restructuring Transactions” means the Restructuring Transactions defined in this Offering Memorandum and Disclosure Statement.

“Russian Alcohol Finance Limited” means a Cyprus corporation currently named Jelegat Holdings Limited.

“Russian Alcohol Guarantors” means Bravo Premium LLC, JSC Distillery Topaz, JSC “Russian Alcohol Group”, Limited Liability Company “The Trading House Russian Alcohol”, Sibirsky LVZ, OOO First Tula Distillery and Mid-Russian Distilleries.

“Russian Guarantors” means, collectively, OOO Glavspirttirest and the Russian Alcohol Guarantors.

“Security Documents” means each of the documents entered into by the Parent or any of its Restricted Subsidiaries creating or evidencing a Lien on property or assets of the Parent or any Restricted Subsidiary for the benefit of the Holders and any intercreditor agreement, in each case as amended, modified, restated, supplemented or replaced from time to time, including the later Creditor Agreement.

“Senior Secured Indebtedness” means, as of any date of determination, the principal amount of any Indebtedness for borrowed money that is secured by a Lien.

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.

“Specified Bank Account” means any bank account of the relevant Guarantor or the Issuer having at least $10.0 million (or, if in a currency other than U.S. dollars, the U.S. dollar equivalent thereof) in deposits, measured as of the Issue Date, and thereafter as of the last day of each fiscal quarter after the Issue Date.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled and required to be paid in the documentation governing such Indebtedness as of the Issue Date, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subordinated Shareholder Funding” means collectively, any funds provided to the Parent by (or any other debt obligations of the Issuer for borrowed money owed to), any Affiliate of the Parent, in exchange for or pursuant to any security, instrument or agreement other than Capital Stock, together with any such security, instrument or agreement and any other security or instrument other than Capital Stock issued in payment of any obligation under any Subordinated Shareholder Funding; provided that such Subordinated Shareholder Funding:

(a) does not (including upon the happening of any event) mature or require any amortization or other payment of principal prior to the first anniversary of the maturity of the Notes (other than through conversion or exchange of any such security or instrument for Capital Stock (other than Disqualified Stock) of the Parent or for any other security or instrument meeting the requirements of the definition);

(b) does not (including upon the happening of any event) require the payment of cash interest prior to the first anniversary of the maturity of the Notes;

(c) does not (including upon the happening of any event) provide for the acceleration of its maturity nor confers on its shareholders any right (including upon the happening of any event) to declare a default or event of default or take any enforcement action, in each case prior to the first anniversary of the maturity of the Notes;

(d) is not secured by a Lien on any assets of the Parent or a Restricted Subsidiary and is not guaranteed by any Subsidiary of the Parent;

(e) is subordinated in right of payment to the prior payment in full of the Notes in the event of any Default, bankruptcy, reorganization, liquidation, winding up or other disposition of assets of the issuer and other restrictions, on payment and enforcement;

(f) does not (including upon the happening of any event) restrict the payment of amounts due in respect of the Notes or compliance by the Issuer with its obligations under the Notes and the Indenture;

(g) does not (including upon the happening of an event) constitute Voting Stock; and

(h) is not (including upon the happening of any event) mandatorily convertible or exchangeable, or convertible or exchangeable at this option of the holder thereof); in whole or in part, prior to the date on which the Notes mature, other than into or for Capital Stock (other than Disqualified Stock) of the Parent.

“Tax” or “Taxes” means any tax, contribution, impost, withholding, levy or charge in the nature of tax in any jurisdiction together with any interest, penalty, or addition thereto, whether disputed or not.

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as complied and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to December 1, 2013; provided, however, that if the period from the redemption date to December 1, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

“Unrestricted Subsidiary” means any Subsidiary of the Parent that is designated by the Board of Directors of the Parent as an Unrestricted Subsidiary in accordance with the provisions summarized under “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries” pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

“Whitehall Subsidiaries” means, collectively WHL Holdings Limited, OOO Whitehall-Center, OOO WH Import Company, OOO Whitehall Severo-Zapad, OOO Whitehall-Saint-Petersburg, OOO WH Rostov-on-Don, Tisifoni Wines & Spirits Limited, Global Wines & Spirits Holdings Limited and Dancraig Wines & Spirits Trading Limited.

“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Parent or a Restricted Subsidiary) will at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person.

The Issuer will issue U.S. dollar-denominated convertible senior secured PIK toggle notes (the “Notes”) under an indenture (the “Indenture”) among, inter alios, itself, Central European Distribution Corporation, a Delaware corporation, as guarantor (the “Parent”),, the other Guarantors, U.S. Bank National Association as trustee (the “Trustee”), TMF Trustee Limited, as security agent (the “Security Agent”), Deutsche Bank AG, London Branch, as Polish Security Agent (as defined below), and Deutsche Bank Trust Company Americas, as principal paying agent, transfer agent, registrar and conversion agent, in a private transaction that is not subject to the registration requirements of the Securities Act. See “Notice to Investors.”

The following description is a summary of the material provisions of the Notes, the Guarantees, the Indenture and the Security Documents. It does not restate those agreements in their entirety. The terms of the Notes include those expressly set forth in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (the “Trust Indenture Act”). We urge you to read the Indenture (including the form of Notes and the form of Guarantees attached to the Indenture) and the Security Documents because they, and not this description, define your rights as Holders (as defined below) of the Notes. Copies are available as set forth below under “—Additional Information.” Certain defined terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the Indenture.

The registered Holder of a Note will be treated as the owner of it for all purposes. Only registered Holders will have rights under the Indenture.

We intend to apply to admit the Notes to the Official List and to trading on the Global Exchange Market of the Irish Stock Exchange.

As of September 30, 2012, after giving pro forma effect to the settlement of the Exchange Offer and assuming that all holders of Existing Notes tender their notes in the Exchange Offers:

As of the Issue Date, all of the Parent’s Subsidiaries, including the Issuer, will be “Restricted Subsidiaries.” However, under the circumstances described below under the subheading “—Certain Definitions—Unrestricted Subsidiaries”, the Parent will be permitted to designate certain of its Subsidiaries, other than the Issuer, as “Unrestricted Subsidiaries.” Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture.

After the consummation of the CEDC FinCo Exchange Offer, it is expected that a portion of the existing intercompany loans that secure the Existing Notes will be cancelled and/or exchanged for equity of the applicable intercompany borrower, such that the aggregate principal amount of the Intercompany Loans will reflect the aggregate principal amount of the Notes and the New Secured Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer. It is expected that the terms of the Intercompany Loans (e.g., interest rate and maturity) will reflect those of the Notes and the New Secured Notes and any Existing Notes that remain outstanding following the CEDC FinCo Exchange Offer.

The Issuer will issue $200 million in aggregate principal amount of Notes in this offering. In addition, in connection with the payment of PIK Interest (as defined below) in respect of the Notes, the Issuer is entitled to, without the consent of the holders of Notes (and without regard to any restrictions or limitations set forth under “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preference Stock” and “—Liens”), increase the outstanding principal amount of the Notes or issue additional Notes (the “PIK Notes”) under the Indenture on the same terms and conditions as the Notes offered hereby (in each case, a “PIK Payment”). The Issuer may issue additional Notes (“Additional Notes”) from time to time after this offering. Any issuance of Additional Notes (other than PIK Notes) is subject to all of the covenants in the Indenture, including the covenant described below under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Preference Stock.” The Notes, the PIK Notes and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture. Unless otherwise stated or the context otherwise requires, for all purposes of the Indenture and this “Description of New Convertible Secured Notes,” (1) references to the Notes include any PIK Notes and Additional Notes actually issued and (2) references to “principal amount” of Notes includes any increase in the principal amount of outstanding Notes (including PIK Notes) as a result of a PIK Payment. The Issuer will issue New Convertible Secured Notes in denominations of $2,000 principal amount and integral multiples of $1,000 above $2,000; provided that PIK Payments will be made in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof. The Notes will mature on April 30, 2018.

Interest on the Notes will accrue from (and including) the earlier of (x) the Issue Date and (y) June 1, 2013. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Interest on the Notes will accrue at the rate of 10% per annum and will be payable semi-annually in arrears on April 30 and October 31 of each year, commencing on October 31, 2013. Interest will be payable, at the election of the Issuer (made by delivering a notice to the Trustee prior to the beginning of each interest period), (1) entirely in cash (“Cash Interest”), (2) by increasing the principal amount of the outstanding New Convertible Secured Notes or by issuing additional PIK Notes (“PIK Interest”) or (3) with a 25%/75%, 50%/50% or 75%/25% combination of Cash Interest and PIK Interest. The Issuer will make each interest payment to the Holders of record on the immediately preceding April 15 and October 15.

In the absence of an interest payment election made by the Issuer as set forth above, interest on the Notes shall be payable in the manner described in clause (2) of the preceding paragraph. The Issuer will pay the first interest payment in PIK Interest. Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption or purchase of Notes, as described under “—Optional Redemption,” “—Repurchase at the Option of Holders in connection with a Change of Control” or “—Repurchase at the Option of Holders in connection with a Change of Control—Asset Sales” shall be made solely in cash.

PIK Interest on the Notes will be payable (x) with respect to notes represented by one or more global Notes registered in the name of, or held by, The Depository Trust Company (“DTC”) or its nominee on the relevant record date, by increasing the principal amount of the outstanding global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Issuer to the Trustee and (y) with respect to Notes represented by certificated Notes, by issuing PIK Notes in certificated form in an aggregate principal amount equal to the amount of PIK Interest for the

applicable interest period (rounded down to the nearest whole dollar), and the Trustee will, at the written request of the Issuer, authenticate and deliver such PIK Notes in certificated form for original issuance to the holders on the relevant record date, as shown by the records of the register of Holders. Following an increase in the principal amount of any outstanding global Notes as a result of a PIK Payment, such global Note will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. All Notes issued pursuant to a PIK Payment will mature on April 30, 2018 and will be governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the Notes issued on the Issue Date. Any certificated PIK Notes will be issued with the description “PIK” on the face of such PIK Note.

Subject to fulfillment of certain conditions, the Notes may be converted into shares of Parent’s common stock (the “Common Stock”) as described below. Upon conversion of a Note, we will satisfy our conversion obligation by delivering shares of Common Stock on the third business day following such conversion. You will not receive any separate cash payment for interest, if any, accrued and unpaid to the conversion date, except under the limited circumstances described below.

On or after the date (the “Initial Conversion Date”) which is 18 months from the Issue Date, holders may convert their Notes into the number of shares of Common Stock equal to the product of (A) the Share Amount times (B) a fraction, the numerator of which is the aggregate principal amount of the Notes to be converted by such holder and the denominator of which is (x) the aggregate principal amount of the Notes issued on the Issue Date plus (y) the aggregate principal amount of any additional Notes issued plus (z) the aggregate principal amount of PIK Interest which has been paid and/or would have been paid if no Notes had been redeemed or converted prior to such conversion date. The “Share Amount” shall be the number of Common Shares equal to (1) the Conversion Percentage (as set forth below) times (2) the total number of shares of Common Stock outstanding immediately prior to such conversion divided by (3) 1 minus the Conversion Percentage (set forth below):

Notwithstanding anything herein to the contrary, Notes may be converted only during business hours on a day that is a business day and any conversion must be with respect to Notes with a minimum aggregate principal amount of $100,000 and in integral denominations of $1,000. Upon conversion of a note, we will satisfy our conversion obligation by delivering shares of Common Stock on the third business day following such conversion.

If a holder of Notes has tendered Notes as described under “—Repurchase at the Option of Holders in connection with a Change of Control”, the holder may convert those Notes only if that holder first withdraws such tender in accordance with the indenture. In addition, Notes called for redemption by the Issuer may not be converted.

Upon conversion, you will not receive any separate cash payment for accrued and unpaid interest, if any, except as described below. We will not issue fractional shares of Common Stock upon conversion of Notes. Instead, we will round down the number of shares of Common Stock to be received to the nearest whole number. Our delivery to you of shares of Common Stock will be deemed to satisfy in full our obligation to pay the principal amount of the note and any accrued and unpaid interest through the conversion date. As a result, accrued and unpaid interest to, but not including, the conversion date will be deemed to be paid in full rather than cancelled, extinguished or forfeited.

Notwithstanding the preceding paragraph, if Notes are converted after 5:00 p.m., New York City time, on a regular record date for the payment of interest, holders of such Notes at 5:00 p.m., New York City time, on such record date will receive the interest payable on such Notes on the corresponding interest payment date notwithstanding the conversion. Notes, upon surrender for conversion during the period from 5:00 p.m., New York City time, on any regular record date to 9:00 a.m., New York City time, on the immediately following interest payment date, must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment need be made:

If a holder converts Notes, we will pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon the conversion, unless the tax is due because the holder requests any shares to be issued in a name other than the holder’s name, in which case the holder will pay that tax.

If you hold a beneficial interest in a global Note, to convert you must comply with DTC’s procedures for converting a beneficial interest in a global Note and, if required, pay funds equal to interest payable on the next interest payment date and, if required, pay all taxes or duties, if any.

The date you comply with the relevant procedures described above is deemed to be the conversion date under the indenture.

Any Additional Guarantee shall be issued on substantially the same terms as the Guarantees. For purposes of the Indenture and this “Description of New Convertible Secured Notes”, references to the Guarantees include references to any Additional Guarantees and references to the Guarantors include references to any Additional Guarantors.

The Indenture will provide that a Guarantee shall be released automatically and without further action on the part of any Holder of the Notes or the Trustee:

Deutsche Bank AG, London Branch and TMF Trustee Limited are expected to act as security agents (the “Security Agents”) under the Security Documents and the Indenture until such time, if any, that a new Security Agent is appointed under the provisions of the Security Documents. Deutsche Bank AG, London Branch (the “Polish Security Agent”) shall only act as Security Agent in respect of the collateral identified under “— Security—Poland” below.

The Notes and the Guarantees will be secured by first-priority Liens as follows:

The RAG On-Loans which secure the Notes and the Guarantees will, in turn, be secured by:

The Collateral that will secure the Notes will also secure the New Senior Secured Notes. See “—Intercreditor Agreement and Additional Intercreditor Agreements.”

In addition, certain of the Russian, Polish, Hungarian, Cypriot, Isle of Man and Luxembourg security is subject to the completion of corporate and registration proceedings. Such security will be delivered on the Issue Date or within the set timeframes set out in the covenant under the caption “—Delivery of Security and Guarantees”, subject to perfection requirements under applicable law, including filing requirements. See “Risk Factors—The enforcement of the security is subject to certain risks under local law” and, if the Collateral is stock of a Guarantor, in connection with any merger, consolidation, amalgamation or other combination in which such Guarantor is not the surviving corporation if the transaction does not violate the covenant described under the caption “—Certain Covenants—Merger, Consolidation and Sale of Assets.”

The enforceability of the security and Guarantees will be subject to significant limitations under relevant local laws. See “Risk Factors—Risks Relating to Indebtedness and Notes.”

The Collateral will also secure any Additional Notes and may also secure significant additional Indebtedness incurred as permitted by the Indenture. The Collateral will also secure the New Secured Notes, subject to the provisions of the Intercreditor Agreement. See “—Intercreditor Argeement and Additional Intercreditor Agreements.”

Liens on Collateral securing the Notes and the Guarantees (other than the Intercompany Loans) will be automatically and unconditionally released:

The Security Documents provide that the Security Agents are authorized to release and each Holder, by accepting a Note, is deemed to authorize the relevant Security Agent to release (and the relevant Security Agent will, at the request of the Parent or Issuer, release) the security interest in all or any portion of the Collateral in connection with the granting of any Permitted Collateral Lien as contemplated by the covenant described under “—Certain Covenants—Liens.” The Indenture will require that the Issuer or the relevant Guarantor will regrant to the relevant Security Agent or the Trustee and the relevant Security Agent, immediately after such Permitted Collateral Lien is granted, a security interest in such released Collateral; provided that: (i) the release and retaking of any security interest in the Collateral in accordance with the terms of this paragraph shall only be undertaken to the extent necessary, as determined in good faith by the Issuer or the relevant Guarantor (which determination shall be conclusive) to be required to grant the Permitted Collateral Lien, and (ii) the Issuer or the relevant Guarantor shall provide the relevant Security Agent or the Trustee with an opinion of counsel regarding the validity and enforceability of any security interest securing the Notes that is re-taken, which opinion may be subject to exceptions, limitations and exclusions reasonably determined by such counsel to be necessary or appropriate, including in light of applicable law. The release and re-taking of the security interests in the Collateral could restart preference or hardening periods which could be of significant duration. See “Risk Factors—A refinancing or replacement of certain indebtedness could result in a release of the liens on the Collateral. Although the security may be reinstated on substantially similar terms, the security could be subject to avoidance by an insolvency administrator or third-party creditors.”

The Indenture will provide that the Issuer, each Guarantor, the Security Agent and the Trustee will be authorized (without any further consent of the Holders) to enter into the Intercreditor Agreement in favor of the holders of the New Secured Notes and holders of Notes and any Additional Intercreditor Agreement. The Indenture will provide that it will be subject to the terms of such Intercreditor Agreement and Additional Intercreditor Agreement. For a description of the Intercreditor Agreement, see “Description of Other Indebtedness—Intercreditor Agreement.”

Pursuant to the terms of the Intercreditor Agreement, any liability in respect of obligations under the New Secured Notes Indenture and the New Secured Notes will have priority (over the obligations under the Notes) to any proceeds received upon any enforcement action over any Collateral. Any proceeds received upon any enforcement over any Collateral, after all obligations will be applied (i) first, pro rata in repayment of all obligations under the New Secured Notes Indenture and the New Secured Notes; and (ii) when all obligations

under the New Secured Notes Indenture and the New Secured Notes have been repaid or discharged, any remaining proceeds will be applied pro rata in repayment of all obligations under the Indenture and the Notes.

The Indenture will also provide that, at the written direction of the Issuer and without the consent of the Holders, the Trustee and the Security Agent shall from time to time enter into one or more amendments to the Intercreditor Agreement or any Additional Intercreditor Agreement to: (1) cure any ambiguity, omission, defect or inconsistency of any such agreement, (2) increase the amount or types of Debt covered by the Intercreditor Agreement or any such Additional Intercreditor Agreement that may be Incurred by the Issuer or its Restricted Subsidiaries that is subject to the Intercreditor Agreement or any such Additional Intercreditor Agreement, respectively; provided that such Debt is Incurred in compliance with the Indenture, (3) add Guarantors or other Restricted Subsidiaries to the Intercreditor Agreement or any Additional Intercreditor Agreement, (4) further secure the Notes (including Additional Notes), (5) make provision for equal and ratable pledges of the Collateral to secure PIK Notes or Additional Notes or to implement any Permitted Collateral Liens or (6) make any other change that does not adversely affect the Holders of Notes in any material respect. The Issuer shall not otherwise direct the Trustee or Security Agent to enter into any amendment to the Intercreditor Agreement or any Additional Intercreditor Agreement without the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding, except as otherwise permitted below under “—Amendments and Waivers” or as permitted by the terms of the Intercreditor Agreement or such Additional Intercreditor Agreement, as applicable, and the Issuer may only direct the Trustee or Security Trustee to enter into any amendment to the extent such amendment does not impose any personal obligations on the Trustee or Security Agent or, in the opinion of the Trustee or Security Agent, adversely affect their respective rights, duties, liabilities or immunities under the Indenture, the Intercreditor Agreement or any Additional Intercreditor Agreement.

The Indenture will also provide that each Holder, by accepting such Note, will be deemed to have:

Neither the Trustee nor the Security Agent shall not be required to seek the consent of any Holders to perform its obligations under and in accordance with this covenant.

The Issuer may redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption price of 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest on the Notes redeemed to the applicable redemption date; provided that any redemption pursuant to this

paragraph must be in minimum increments of at least $20 million in principal amount (or, if there is less than $150 million aggregate principal amount of Notes outstanding, the difference between such amount outstanding and $130 million), and provided further that any redemption pursuant to this paragraph that would result in there being less than $130 million aggregate principal amount of Notes outstanding, must be of all remaining Notes. Any payment of accrued interest pursuant an Optional Redemption shall be made in cash only.

Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the New Secured Notes or portions thereof called for redemption on the applicable redemption date.

Except as set forth in the following paragraph, the Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

Within 30 days of the receipt of Net Proceeds from any Asset Sale, and subject to the application of any Net Proceeds from any Asset Sale to redeem New Secured Notes pursuant to the New Secured Notes Indenture and the Intercreditor Agreement, the Issuer shall give notice of redemption of a principal amount of the Notes equal to the Net Proceeds from the Asset Sale at a price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest on the Notes redeemed to the applicable redemption date. The redemption notice shall provide for redemption upon not less than 30 and note more than 60 days from the date the redemption notice is given.

The Issuer’s ability to redeem Notes with Net Proceeds of an Asset Sale may be limited by a number of factors. Certain existing and future Indebtedness of the Parent or its Subsidiaries contain or may contain prohibitions on the occurrence of certain events that would constitute an Asset Sale or require such Indebtedness to be repurchased or repaid upon an Asset Sale. The terms of other Indebtedness of the Parent or its Subsidiaries may prohibit the Issuer’s prepayment of the Notes or any payment by the Issuer or restrict the ability of the Parent or its Subsidiaries to fund any such payments Consequently, if the Parent or its Subsidiaries is not able to prepay or cause to be prepaid the Indebtedness outstanding under any such Indebtedness (to the extent containing such restrictions) or obtain requisite waivers or consents, the Issuer may be unable to fulfill its mandatory redemption obligations, resulting in a default under the Indenture.

Definitive Notes, if any, in a principal amount of $2,000 or less cannot be redeemed in part. Notices of redemption will be transmitted at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Any such redemption or notice may be subject to the satisfaction of one or more conditions precedent at the Issuer’s discretion.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

The issuer shall apply the Net Proceeds of an Asset Sale to redeem New Secured Notes and Notes as described under the caption “—Mandatory Redemption”. Any consideration for an Asset Sale other than Cash or Cash Equivalents shall be considered “Non-Cash Consideration”.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), save that, the Parent may make the payment of a dividend on common stock of the Parent and execute any Share buybacks if at the time of and after giving effect to such dividend or Share buyback.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur”), with respect to any Indebtedness (including Acquired Debt), and the Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that, any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) that is expressly subordinated to both the Notes and the Convertible PIK Toggle Notes, Stock if (i) the Fixed Charge Coverage Ratio for the Parent’s most recently ended four full fiscal quarters for which publicly available financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-fiscal quarter period and (ii) if the Consolidated Leverage Ratio for the Parent’s most recently ended four full fiscal quarters for which publicly available financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued, as the case may be, would have been equal to or less than 4.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred or the preferred stock had been issued, as the case may be, at the beginning of such four-fiscal quarter period.

The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

As of February 13, 2013 we had approximately $112.2 million outstanding under Credit Facilities.

to the Notes or the applicable Guarantee; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Parent solely by virtue of being unsecured or by virtue of being secured on a junior or second Lien basis or by virtue of not being Guaranteed.

For purposes of determining compliance with this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant, in the event that an item or portion of an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuer, the Parent and any Restricted Subsidiary of the Parent will be permitted to classify such item or portion of an item of Indebtedness on the date of its incurrence, and later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant, except that all Indebtedness outstanding on the Issue Date under any Credit Facilities shall be deemed initially incurred under clause (1) of the second paragraph of this covenant. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms (including any PIK Payment), the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. For the avoidance of doubt, any Indebtedness permitted to be incurred pursuant to the covenant described under this “Incurrence of Indebtedness and Issuance of Preferred Stock” covenant may also include (without double-counting) any “parallel debt” or similar obligations created in respect thereto.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a non-U.S. dollar currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced; provided further, that if and for so long as any such Indebtedness is subject to an agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates with respect to the currency in which such Indebtedness is denominated covering principal and interest on such indebtedness, the amount of such Indebtedness, will be deemed to be the amount of the principal payment required to be made under such agreement or arrangement determined in U.S. dollars in accordance with the first clause of this sentence. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Parent and its Restricted Subsidiaries may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

In each case above, Indebtedness permitted to be incurred also is permitted to include any “parallel debt” or similar obligations created in respect thereof.

The Parent will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind against or upon any property or assets of the Parent or any of its Restricted Subsidiaries constituting Collateral, whether owned on the Issue Date or acquired after the Issue Date other than Permitted Collateral Liens.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

Notwithstanding anything contained in the Indenture to the contrary, the Issuer will not engage in any business activity or undertake any other activity, except any activity (a) relating to the offering, sale or issuance of the Notes, the PIK Notes, the Additional Notes, if any, the New Secured Notes and any Capital Markets Debt (including the Existing Notes) the incurrence of Indebtedness represented by the Notes, the PIK Notes, the Additional Notes, if any, the New Secured Notes , and any Capital Markets Debt, lending or otherwise advancing the proceeds thereof to any Guarantor and any other activities in connection therewith, (b) undertaken with the purpose of fulfilling any obligations under the Notes, the PIK Notes, the Additional Notes, the Indenture the New Secured Notes Indenture, the New Secured Notes or any Capital Markets Debt or any security documents or other agreements relating to any of the foregoing, (c) directly related to the establishment and/or maintenance of the Issuer’s corporate existence, or (d) performing any act incidental to or necessary in connection with any of the above or (e) other activities that are not specified in (a) through (d) above that are de minimis in nature.

The Issuer shall not (a) incur any Indebtedness other than the Indebtedness represented by the Notes and, subject to compliance with the covenant described under the caption “—Incurrence of Indebtedness and Issuance of Preferred Stock”, Additional Notes, the New Secured Notes and any Capital Markets Debt, (b) issue any Capital Stock other than the issuance of its ordinary shares to the Parent, any Wholly Owned Restricted Subsidiary of the Parent or otherwise in a de minimis amount to local residents to the extent required by applicable law or (c) make any Restricted Payment or Permitted Investment, other than cash, Cash Equivalents and Intercompany Loans.

The Issuer shall not create, incur, assume or suffer to exist any Lien of any kind (other than Issuer Permitted Liens) against or upon any of its property or assets, or any proceeds therefrom.

The Issuer shall at all times remain a Wholly-Owned Restricted Subsidiary of the Parent.

For so long as any Notes are outstanding, none of the Issuer, the Parent or any other Guarantor will commence or take any action to cause a winding-up or liquidation of the Issuer.

Except as provided in the Indenture, the Issuer shall not, and the Parent shall procure that the Issuer does not, assign or novate its rights under the Intercompany Loans.

The Parent and the Issuer will procure that Jelegat Holdings Limited will not, without the prior written consent of the Trustee: (a) sell, factor, discount, transfer, assign, lend or otherwise dispose of any of its right, title or interest in or to the RAG On-Loans, nor will it create or permit to be outstanding any mortgage, pledge, Lien, charge, encumbrance or other security interest over the RAG On-Loans, other than in accordance with the Indenture; (b) engage in any business other than: (i) making and performing its obligations under the RAG On-Loans; (ii) issuing and performing its obligations under the Proceeds Loan; (iii) entering into, exercising rights under, performing obligations under or enforcing the RAG Transaction Documents; (iv) activities directly related to the establishment and/or maintenance of the Jelegat Holdings Limited’s corporate existence; (v) performing any act incidental to or necessary in connection with any of the above or (vi) other activities that are not specified in (a) through (d) above that are de minimis in nature; (c) amend its constitutional documents (other than as is reasonably appropriate to implement the provisions of this Description of New Convertible Secured Notes); (d) have any subsidiaries; (e) have any employees (for the avoidance of doubt, the Directors of Jelegat Holdings Limited do not constitute employees); (f) issue any shares (other than such shares as are in issue as at the Issue Date) and other Equity Interests (other than Disqualified Stock) issued to CEDC International sp z.o.o.) nor redeem or purchase any of its issued share capital; (g) amend any term or condition of any of the Proceeds Loan or the RAG On-Loans (save in accordance with the terms of the Indenture including amendments permitted under the covenant entitled “Amendments to or Prepayments of the Intercompany Loans”); (h) incur any Indebtedness for borrowed money or any guarantees other than in respect of the Proceeds Loan or any document entered into in connection with the Proceeds Loan or the sale thereof or pursuant to the terms of the Indenture; (i) enter into any reconstruction, amalgamation, merger or consolidation; (j) enter into any lease in respect of, or own premises; (k) agree to any amendment to any provision of or grant any waiver or consent under the RAG Transaction Documents to which it is a party or execute any agreement (save in accordance with the terms of the Indenture); or (l) otherwise than as contemplated in the RAG Transaction Documents, release from or terminate the appointment of a collateral manager under a collateral management agreement or a collateral administrator under a collateral administration agreement (including in each case any transactions entered into thereunder) or release any of them from any executory obligation thereunder.

Jelegat Holdings Limited will pay its debts as they fall due. Jelegat Holdings Limited will do all such things as are necessary to maintain its corporate existence.

After the Issue Date, the Parent will cause one or more additional Restricted Subsidiaries: (x) to become a Guarantor; and (y) to execute a supplemental indenture, so that Guarantees are provided by such Restricted Subsidiaries of the Parent whose aggregate unconsolidated EBITDA and assets, taken together with the unconsolidated EBITDA and assets of the Parent, comprise at least 85% of the Consolidated EBITDA and consolidated assets of the Parent, respectively, determined as of each date (the “Guarantor Testing Date”) on which the Parent is required to provide to the Trustee and the Holders of the Notes: (i) an annual report; or (ii) a quarterly report in accordance with the provisions set out in the covenant “Reports”, in each case after giving pro forma effect to any sales or other distributions of assets not reflected therein, and in each case except to the extent that the incurrence of such Guarantees: (i) would be reasonably likely to result in any violation of applicable law that cannot be avoided or otherwise prevented through measures reasonably available to Parent or such Significant Subsidiary, any liability for the officers, directors or shareholders of such Significant Subsidiary or any current or future cost, expense, liability or obligation (including any tax) or than de minimis costs and expenses; (ii) would be prohibited by the terms of any agreement with holders of a minority equity interest in such Restricted Subsidiary, provided that the Parent or the relevant Restricted Subsidiary has used commercially reasonable efforts to obtain consent from the holders of the minority equity interest in such Restricted Subsidiary; or (iii) would be prohibited by any Acquired Debt in respect of such new Restricted Subsidiary and such Acquired Debt is otherwise permitted to be incurred under the Indenture and provided such Acquired Debt has not been incurred in contemplation of, or in connection with, the transaction or series of transactions pursuant to which such Person becomes a Restricted Subsidiary.

Restricted Subsidiary will be required to become a Guarantor to the extent and for so long as a consequence of the incurrence of such Guarantee would be reasonably likely to result in any violation of applicable law that cannot be avoided or otherwise prevented through measures reasonably available to the Parent or such Significant Subsidiary, any liability for the officers, directors or shareholders of such Significant Subsidiary or any current or future cost, expense, liability or obligation (including any tax) other than de minimis costs and expenses.

The Parent will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that any Guarantor may enter into a sale and leaseback transaction if:

The Parent shall not and shall not permit any Restricted Subsidiary to take or knowingly or negligently omit to take any action which action or omission would have the result of materially impairing the security interest with respect to the Collateral (it being understood that the incurrence of Liens on the Collateral permitted by the definition of Permitted Collateral Liens (including the release and re-taking of one or more Liens in connection with the incurrence of Permitted Collateral Liens) shall under no circumstances be deemed to materially impair the security interest with respect to the Collateral) for the benefit of the Trustee and the Holders of the Notes (including any Additional Notes),, and the Parent shall not, and shall not permit any Restricted Subsidiary to, grant to any Person other than the Security Agents, for the benefit of the Trustee and the Holders of the Notes (including any Additional Notes) and the other beneficiaries described in the Security Documents, any interest in any of the Collateral; provided that the Parent and its Restricted Subsidiaries may incur Liens on the Collateral permitted by the definition of Permitted Collateral Liens; provided further, however, that (a) nothing in this provision shall restrict the release or replacement of any Collateral in compliance with the terms of the Indenture, the Security Documents and any intercreditor agreements; and (b) any Collateral or any Security Document relating to any Collateral may be amended, extended, renewed, restated, supplemented or otherwise modified or replaced (i) if contemporaneously with any such action, the Parent delivers to the Trustee an Officers’ Certificate confirming that the Parent is solvent or an opinion of counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such amendment, extension, renewal, restatement, supplement, modification or replacement (an “Amendment”), the Lien or Liens (other than in respect of Liens on assets that have been added to the Collateral as a result of such Amendment) created under any Security Document relating to any Collateral so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens enforceable in accordance with their terms against the grantor of the Liens and not otherwise subject to any limitation, imperfection or new hardening period, in equity or at law, that such Lien or Liens were not otherwise subject to immediately prior to such Amendment; or (ii) to allow for the conversion of an entity the shares of which constitute Collateral to another form of Person (or to allow for conversion, recapitalization or similar transactions involving the shares or other Equity Interests of any such entity) if contemporaneously with any such action, the Parent delivers to the Trustee an opinion of counsel, in form and substance reasonably satisfactory to the Trustee, confirming that, after giving effect to any transactions related to such an Amendment, the Lien or Liens created in respect of such Collateral so amended, extended, renewed, restated, supplemented, modified or replaced are valid Liens enforceable in accordance with their terms against the grantor of the Liens. In the event that the Parent complies with the requirements of this covenant, the Trustee and the Security Agents shall consent to any such Amendment without the need for instructions from Holders of the Notes.

The Parent will use its reasonable efforts to deliver on the Issue Date or as soon as practicable thereafter: (i) pledges (or charges) of shares in the Issuer and the U.S. Guarantors (other than the Parent), and, subject to filing, registration and similar requirements Dancraig Wine & Spirits Trading, the Whitehall Subsidiaries and the Luxembourg Guarantors, and evidence of the deposit for filing, application for registration thereof or compliance with other similar requirements; (ii) financial pledges and executed registered pledge agreements, subject to registration, of the Polish Guarantor shall be required to be so pledged on the Issue Date; (iii) pledges of, or in the applicable jurisdictions, assignments of rights under, each Specified Bank Account of the Issuer and each Guarantor (other than the Russian Guarantors) as of the Issue Date; and (iv) a pledge (or assignment) of the Intercompany Loan made by the Issuer to CEDC International and, upon funding, pledges (or assignments) of the Intercompany Loan made by the Issuer to Jelegat Holdings Limited and the RAG On-Loans.

the Intercompany Loans in any manner adverse to the Holders of the Notes; provided, that, without the consent of each Holder affected thereby, the Issuer and the Parent will not, and will not permit any Restricted Subsidiary to, amend, modify or alter any Intercompany Loan to:

Notwithstanding the foregoing, (i) the Intercompany Loans may be amended to provide for the issuance of Additional Notes, or additional New Secured Notes to cure any ambiguity, mistake, omission, defect or inconsistency and to provide for the assumption by a successor Person, and may be prepaid or reduced to facilitate or otherwise accommodate or reflect a repayment, redemption or repurchase of New Convertible Notes or the New Secured Notes and (ii) the Intercompany Loans may be novated or assigned to any Guarantor.

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness or the maturity of which has been so accelerated, aggregates $25.0 million or more;

Without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes issued thereunder and held by a non-consenting holder):

The Trustee will be entitled to request, and rely absolutely on without further inquiry an opinion of counsel and an Officers’ Certificate.

Except as otherwise provided above, the Issuer will be responsible for making all calculations called for under the Notes. These calculations include, but are not limited to, accrued interest payable on the Notes and the amount of share to be converted as described in “—Conversion Rights”. The Issuer will make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders of Notes. The Issuer will provide a schedule of its calculations to the Trustee, and the Trustee is entitled to rely conclusively upon the accuracy of its calculations without independent verification. The Trustee will forward the Issuer’s calculations to any Holder of Notes upon the request of that holder.

Notwithstanding the foregoing, none of the following items will be deemed to be an Asset Sale:

“Bankruptcy Law” means Title 11, United States Code or any similar federal, state, foreign law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors.

Unless otherwise stated herein, all references to the “Board of Directors” shall be to the Board of Directors of the Parent.

“Capital Markets Debt” means debt securities substantially similar to the Notes, other than with respect to interest, maturity and redemption provisions.

but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

“CEDC FinCo Exchange Offer” means the offer of Notes and New Convertible Secured Notes in exchange for Existing Notes pursuant to this Offering Memorandum and Disclosure Statement.

“Collateral” means the property and assets securing the Notes and/or the Guarantees as such may be amended, modified, restated, supplemented or replaced from time to time.

“Consolidated EBITDA” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Parent who:

loans, receivables financing (including through the sale or factoring of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), bank guarantees or letters of credit or overdrafts, in each case, as amended, restated, modified, supplemented, renewed, refunded, replaced (whether upon or after termination or otherwise), refinanced, increased or extended in whole or in part from time to time, and whether or not with the original arranging agent, administrative agent and lenders or another arranging or administrative agent or agents or other banks or other institutional lenders and whether provided under any existing credit facility or one or more other credit agreements or financing agreements (without limitation as to amount outstanding or committed, or the maturity, terms, conditions, covenants, or other provisions thereof or parties thereto) and in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing (including any letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents) save that the RTL Credit Facility shall not be deemed a Credit Facility.

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement with respect to currency values.

“Cyprus Guarantors” means, collectively, Latchey Limited, Jelegat Holdings Limited and Pasalba Ltd.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“dollar”, “U.S. dollar” or “$” means the currency of the United States of America.

“Equity Offering” means any primary public or private offering of Equity Interests (other than Disqualified Stock) of the Parent.

“euro” or “€” means the single currency of the participating European Union Member States.

“European Union Member State” means any country that is a member state of the European Union as of the Issue Date, but not including any country which becomes a member of the European Union after the Issue Date.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Existing Indebtedness” means Indebtedness of the Parent and its Restricted Subsidiaries (other than Indebtedness under any Credit Facilities or under the Notes or the New Secured Notes) in existence on the Issue Date and until such amounts are repaid.

“Existing Notes” means the euro denominated senior secured notes and the U.S. dollar denominated senior secured notes issued under the indenture, dated December 2, 2009, among, inter alios, the Issuer, the Parent, the guarantors named therein, Deutsche Trustee Company Limited, as such indenture has been amended and supplemented.