SECTION 11.-Withdrawing from membership.

Membership in the union can not be given up as long as the obligations of the agreement entered into between the union and the "Centrale" for the Sale of Spirits, society with limited liability, hold good. Membership does not cease without further proceedings even at the expiration of the agreement. Beginning at this time, however, a member has the right to declare his withdrawal from the union by a written announcement to the chief board of directors. The member who withdraws loses all claim to the property of the union.

SECTION 12.

At the expiration of the agreement added in the appendix the chief board has the task of adopting other measures for the accomplishment of the purpose decided upon in section 2. As such the following are provided for:

(a) Either preparation for the conclusion of new agreements with the same or another association; or

(b) Changing the form of the existing agreement so that the members can themselves sell the spirit; or

(c) Uniting the existing associations for the sale of spirits into a central association, giving over the property to the latter.

In case none of these measures proves adequate to the accomplishment of the purpose, the dissolution of the union follows. The property of the union is divided among the separate divisions according to the amount of raw spirits shipped by each of them for sale in common during the last business year, and in those divisions in which an association or union for the sale of spirits exists it falls to this association or union; but in all the other divisions it falls to the union of spirit manufacturers. (b) AGREEMENT OF ASSOCIATION OF THE CENTRAL ASSOCIATION FOR THE SALE OF SPIRITS, MARCH 29, 1899.

[Altered in sections 3, 5, and 8 by the decision of the general meetings of August 22 and September 30, 1899.] SECTION 1.

There is hereby established, under the firm name Central Association for the Sale of Spirits (Centrale für Spiritus Verwerthung), a limited liability company, which has its seat at Berlin. The association is authorized to found branch establishments.

SECTION 2.

The purpose of the society is to carry on business transactions in alcohol (refined spirits), spirits, and related products.

SECTION 3.

The original capital of the company consists of 7,300,000 marks. Twenty-five per cent of the shares are to be paid in at once in cash; the remainder is to be paid in at the decision of the council of supervision. The original shares of each of the associates appear in the list found at the close of this agreement.

SECTION 4.

Associates who do not pay punctually the amounts of the original shares demanded have to pay, beginning with the day when said amounts are due (interesse morae), an interest for delay, of 6 per cent. Further, paragraphs 21 to 24 of the law of the 20th of April, 1892, apply.

SECTION 5.

The original shares or parts of original shares can be sold only with the consent of the council of supervision of the association, which requires a written form. In the permission the person purchasing and the amount to be purchased must be

1In the company's agreement of the 29th of March, 1899, the original capital was fixed at 6,000,000 marks. In consequence of the entrance of new associates the original capital was raised 500,000 marks by the decision of the general meeting of August 22, to 6,500,000 marks; in the meeting of September 30 it was raised 800,000 marks, to 7,300,000 marks.

exactly designated. The part purchased and the part of original shares remaining must be divisible by 1,000.1 The demand for additional payments upon the original shares is not permitted.

SECTION 6.

The duration of the association shall not be limited to a definite time. The dissolution of the association can not take place before the 1st of October, 1908.

SECTION 7.

The association is controlled by

(1) The business managers (Geschäftsführer).

(2) The council of supervision (Aufsichtsrath—corresponding somewhat to a board of directors). (3) The general meeting of the associates.

SECTION 8.

The association is directed by two or more business managers, who are appointed by a majority vote of the general meeting, their appointment being certified to by notary.

Together with these, substitute business managers and managing clerks (Procuristen-holding power of attorney) can be appointed. These are to be appointed by the council of supervision.

SECTION 9.

The company is pledged by the signature either of two business managers or of one business manager and one substitute business manager, or of two substitute business managers or of one business manager and one managing clerk (attorney), or of one substitute business manager and of one managing clerk.

SECTION 10.

The council of supervision consists of at least 7 members, elected by the general meeting, who are elected in succession for the term of 3 years each, and must be proprietors, coproprietors, members of the board of directors or of the council of supervision of the transactions mutually entered into as associates or former business managers of the company.

For every member of the council of supervision there is elected at the same time and for the same term of office a certain substitute from the number of persons described in the preceding paragraph, who in the case of the inability of that member of the council of supervision, serves in his place during the period of his inability, and at the conclusion of his term of office withdraws with him.

Of the members of the first council of supervision, 3 members withdraw at the end of 3 years, 2 more members at the end of 4 years, the rest at the end of 5 years. The lot which the chairman casts in the general meeting, which takes place at the expiration of 3 years, decides the order of withdrawal. The term of office of each member of the council of supervision and of his substitute lasts until the election of his

successor.

In case that a member withdraws before the close of his term of office, his substitute serves until the next general meeting. In the next general meeting an election is held to fill the place of the member who has withdrawn until the close of his term of office.

The council of supervision elects annually its own chairman and his representative (in connection with the regular general meeting, paragraph 12).

If the chairman and his representative withdraw from the council of supervision in the course of the business year, the oldest member of the council of supervision becomes chairman until the next general meeting.

1The agreement of the association in the form adopted the 29th of March contained the following statement: "Raising the original capital through the admission of new associates requires the consent of all the associates," which was annulled by the decision of the general meeting of the 22d of August, 1899.

2 The reading of the agreement of the association in the form adopted March 29, 1899, on this point was as follows: "by one or more," and was altered to "by two or more," etc., by the decision of the general meeting of August 22.

The council of supervision is regarded as a quorum when at least 5 members are present. In case of a tie the chairman has the casting vote.

A remuneration for their services can be granted to the members of the council of supervision by a decision of the general meeting.

SECTION 11.

The general meetings of the company are held in Berlin. They are called whenever the chairman of the council of supervision or the business managers consider it necessary. A meeting must be called within 2 weeks when associates whose share in the business amounts to at least a tenth part of the original capital request that a meeting be called, giving a statement of the purpose and reasons therefor.

The chairman of the council of supervision or the business managers send the invitations to the general meetings in registered letters, which must be posted at least 5 days before the day of the meeting and must contain the order of business. Amplifications of the order of business are allowable, but such must be posted at least 48 hours before the meeting.

The chairman of the council of supervision conducts the general meeting, which is regarded as a quorum regardless of the number of associates present, so far as no contrary decision is made in this agreement.

Minutes of the meetings are kept, which contain only the motions proposed and the decisions arrived at, and not notes of discussion by members. After the minutes are read and accepted, they are signed by the chairman and 2 associates. A copy of the minutes is furnished to every associate by the business management and is sent in registered letter.

SECTION 12.

The business year of the association extends from the 1st of October of one year to the 30th of September of the following year. The first business year ends on the 30th of September, 1899.

The balance sheet is made up annually for the 1st of October by the end of November and is laid before the general meeting to be called in the course of the month of December for acceptance. A copy of the balance sheet is inclosed in the invitation to the general meeting sent to the associates.

SECTION 13.

Liquidation takes place according to legal regulations; the liquidators are chosen by simple majority of the general meeting, which decides upon the dissolution of the

company.

SECTION 14.

Public announcements of the company are made in the Reichsanzeiger.

SECTION 15.

Immediately after the execution of the agreement of the association and in the same place where this is consummated the first meeting of the associates is held. It decides upon the number of members in the council of supervision and elects the same, also the business managers. It can, if all the associates are present and agree, also make decisions regarding all other matters which are appropriate to the meeting of associates. Minutes certified to by a notary are to be drawn up regarding the decisions of this meeting, which is to elect its own chairman. Elections and ballotings, if need be, are made on answer to oral questions directed to the minutes by the chairman.

The extent of the voting right of each associate appears from the list of associates contained in the following paragraph:

The same agreements are to apply to the possible further meetings of the associates, which are held before the recording of the company in the official register of commercial firms for the purpose of obviating the memoranda taken by the judge of the register of commercial firms.

SECTION 16.

The associates contract for the following original shares of the original capital of the company.

Here follows list referred to above.

Ninety-six firms and corporations, with the amount subscribed by each; total, 7,300,000 marks.

(c) AGREEMENT,

Between the distillers admitted to the Selling Union of German Spirit Manufacturers, represented by Messrs. [5 representatives] on the one side, and

(a) the Central Spirits Association, corporation with limited liability, represented by its business managers, Messrs. Max Bourzutchky, Isidor Stern, and Richard Untucht,

(b) the associates of the above-mentioned Central Association, namely: [List of 66 firms and corporations follow] collectively represented by Messrs. Director Zwiklitz, etc., on the other side,

The following agreement has been concluded.

SECTION 1.-Duties of members.

The members of the Selling Union of German Spirit Manufacturers, whose names are entered in the list bound with the original copy (Hauptexemplar) of this agreement, obligate themselves to have all the raw spirit which will be produced during the time from September 15, 1899, to September 30, 1908, in the distilleries owned or leased by them, sold exclusively by the Central Association for the Selling of Spirits (society with limited liability) according to the conditions agreed upon in this treaty.

In case a member of the Selling Union of German Spirit Manufacturers gives up permanently the lease of a distillery, his rights and duties from (according to) this agreement cease at the expiration of the time of his lease for this distillery.

In case a member sells or leases his distillery, he must enjoin upon the purchaser or lessee the acceptance of the obligations of this agreement. The member can be freed from this obligation for sufficient reasons by the committee of distillers. (Sec. 25.)

In case of a violation of one of the above-stated agreements, the member in question has to pay a fine of 20 marks ($5) to the association for every hectoliter of pure alcohol which was withdrawn from the association's business, without the association having to prove that it sustained any damage. The members renounce the right to engage in business on their own account, or on the account of others in raw spirit or alcohol (sprit) during the duration of this agreement, and thus avoid a penalty of 10 marks ($2.50) for every hectoliter of pure alcohol sold in violation of this agreement. Members are not permitted to take part either mediately or immediately in distilleries, which have not entered the union, without the consent of the collective committee (Gesammtausschuss), and thus avoid a penalty of 30,000 marks ($7,500) for every violation. The purchase of properties which are shared with a distilling company not belonging to the union is not affected by the above-stated regulation, nor is an interest already existing, at the adoption of this agreement, of a member in a distillery not belonging to the union. However, such a member is under obligations to exert all his influence in effecting the entrance of the distillery in question into the union.

All penalties under the agreement are to be added to the account of the company (Gemeinschaft).

Whenever a member has up to this time needed spirits for domestic or local purposes, the association is under obligation to let the member have free from shipment obligations an amount of spirits which corresponds to what he must show to be the average amount needed for these purposes during the last 3 years before the conclusion of this agreement. What is to be considered as the local need in individual cases is to be settled in case of doubt by the collective committee (Gesammtausschuss). (Sec. 24.)

SECTION 2.-Denaturalization (Denaturirung) in the distilleries.

Every rural distiller who, with the consent of the association, denaturalizes (i. e. renders unfit for beverage purposes) in his own distillery either wholly or in part the raw spirit which he is to furnish to the association, receives the means for this purpose from the association free of freight and other charges, and further, he receives a remuneration for his work, all at the expense of the company.

SECTION 3.-Prolongation of the agreement.

By the 1st of January, 1908, a conclusion must be reached between the committee of distillers and the council of supervision of the association as to whether and under what conditions the continuation of the agreement for 5 more years is to be rendered

possible. Upon the basis of this conclusion the association must come to an agreement by the 1st of February, 1908, whether and under what conditions it will consent to the continuance of the agreement for 5 more years. The committee of distillers has to communicate the decision of the association to the members of the union with the demand that they will declare by the 1st of May, 1908, whether they for their part will renounce membership in the union and the agreement upon the 1st of October, 1908. By the 15th of May, 1908, at the latest, the collective committee must reach a definite conclusion regarding the duration of the agreement. Those members of the union who have not given notice are bound to the union for 5 more years in case the continuation of the agreement is decided upon, the duration of which, consequently, is extended until October 1, 1913, for the members who have not withdrawn. The same proceeding will be gone through with in suitable manner at intervals of 5 years.

SECTION 4.-Parity places.

The distiller has the right to select one of the parity places enumerated in Appendix C in order to reckon the price to be paid to him for spirits. The amounts designated which are added to or deducted from [the Berlin price] at these places are at the reckoning to be counted in favor or to the disadvantage of the distiller.

An alteration of the amounts above and below [the Berlin price], as well as an increase of the number of places, is made by the collective committee. An intended alteration must not be made when the boards of 2 divisions of the union, of which at least 1 is immediately concerned by the intended change, oppose it.

The freight from the distillery to the place chosen must be paid by the distiller whether the association receives the spirits here or in another place to be designated by it. When transportation is made in tank cars the distiller bears only the net freight of the goods. Shipments are never prepaid.

SECTION 5.-Decrease during storage in cellars.

For the reckoning [of amount of decrease], the quantities of brandy ascertained by the excise commissioners before the shipment are authoritative.

SECTION 6.-Manner of shipment.

Spirits are to be shipped in casks or tank cars, according to the choice of the distiller, with the following limitations:

(a) Every distillery which makes more than 15,000 liters of pure alcohol per month must, at the request of the association, ship in tank cars.

(b) If the association designates a place for receiving the spirits of a distiller, which is not farther than 40 kilometers from the railroad station of the distiller, then the association can prescribe shipment in casks.

Before the beginning of every campaign the association and the distiller are to agree, with as much regard for the latter's wishes as is possible, in what manner shipment is to be made. As a rule the manner of transportation once fixed upon shall be used during the whole campaign.

The distiller bears the cost of transferring the spirit into the tank cars, and bears any charges for examination by the excise authorities. If the distiller renounces this examination, he is answerable for the consumption tax arising from a shortage exceeding one-half per cent.

For shipments upon waterways especial arrangements are made.

The casks needed for transportation, together with 20 per cent of reserve casks and the necessary tank cars, are to be sent free of freight charges to the distiller at his shipping station; the same must be in good condition.

Shipments must be provided with the certificate of shipment I.

SECTION 7.-Business relations of the distiller with the association.

The business dealings of the distiller with the association take place according to the former's choice, either immediately or through the mediation of an alcohol factory, of an association or union for the sale of spirits, or of a dealer in spirits. The necessary casks are in every case to be furnished free of charge to the distiller. Whenever shipment is made through an agent the agent has to fulfill the obligation to the distiller incumbent upon him (the agent), such as sale of spirits, furnishing advances, having casks on hand, filling tank cars, etc., in the same way that these obligations were up to this time fulfilled to the individual distillers.

For this mediation the company furnishes corresponding remuneration according to the terms agreed upon in Appendix A.