Exhibit 10.72


 


AGENCY AGREEMENT No. VT-940/1207


 


	
  Moscow

  	
  25 December  2007

  



 


Closed Joint Stock Company “TV DARIAL” (OGRN 1027739313205),
hereinafter referred to as the “Principal”,
represented by its General Director Ms. Vilma Martsulevichyute, acting
pursuant to the Charter on one side, and Closed
Joint Stock Company Video International “Trend” (OGRN 1027700294071),
hereinafter referred to as the “Agent”,
represented by Ms. T.A. Vavilova, Deputy General Director for Sales and
Regional Network Development, acting pursuant to the power of attorney of April 5,
2007, on other side, hereinafter referred to as the “Parties”, entered into
this Agreement as follows:


 


1. Definitions.


 


1.1.  For the purposes of this Agreement the terms
defined below have the following meanings:


 


1.1.1.  “TV Channel
(TV Channel Airtime)” means television broadcasting channel DARIAL
TV, which broadcasting has been carried out under television broadcasting
license TV No. 7284 dated May 14, 2003, issued to the Principal by the
Ministry of the Russian Federation for Print, Television, Radio  and Mass Communication Media and television
broadcasting license TV No. 11184 dated January 31, 2007, issued to the
Principal by the Federal Authority for Supervision over Legal Compliance in
Mass Communications and Cultural Heritage Protection.


 


1.1.2.  “Advertising” means the
information disseminated by any method, in any form and using any media,
addressed to an unlimited audience and aimed at attracting attention to the
advertised item, building and maintaining awareness in it and promoting it in
the market.


 


1.1.3.  “Social Advertising” means the information disseminated by
any method, in any form and using any media, addressed to an unlimited audience
and aimed at accomplishing charity or other objectives of value to public as
well as at promoting the national interests.


 


Social
advertising may not mention any specific makes (models, articles) of products,
trademarks, service marks or other means of their identification, any
individuals and corporate entities except for mentioning governmental
authorities, other instruments of the government, local or municipal
authorities, municipal bodies that are not part of local administration and
sponsors.


 


1.1.4.  “Sponsorship Advertising” means the advertising disseminated
under the condition that a certain person is to be mentioned as a sponsor.


 


Forms of Sponsorship Advertising: Sponsorship
Advertising placed with interruption of a TV program/film; and Sponsorship
Advertising placed as overlay ads in TV program\film, including by
superimposing on the frame (line ads, logo, etc.) or otherwise integrating the
sponsor’s marks into the television program content;


 


As part of this Agreement the Agent is engaged by
the Principal to take legal and other actions for selling to the Clients the
Sponsorship Advertising placed by interruption method.


 


1.1.5.  “Commercial”
means an audiovisual production containing advertising usually with duration of
up to 120 (one hundred twenty) seconds;


 


1.1.6.  “Advertising
program” means an audiovisual production containing advertising
usually with duration of over 120 (one hundred twenty) seconds;


 


1.1.7  “Logo” means a unique design
of the advertiser’s name used as a symbol to identify a product and often being
its trademark.


 


This design is placed either in a static or dynamic
form in any corner of the frame, but should not occupy more than 7% (seven
percent) of the frame space and in no event should it lap over the broadcasting
TV channel logo.


 


1.1.8  “Line ad” means a
non-advertising type message broadcast by overlaying a static or dynamic text
at the bottom of TV screen. Line ad should not occupy more than 7% (seven
percent) of the frame space.


 


1.1.9  “Break Bumper” means the
presentation of the advertised object or advertiser/sponsor in the beginning,
in the middle or in the end of a program/film;


 


1.1.10.  “TV Shop”
means an advertising program (advertising material), containing advertising of
one or more of advertised items (several products, etc.) and providing a
contact phone number or other method of communication, by which consumers may
order any of the products advertised in the program for home delivery.


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


1

















 


1.1.11.  “Advertising
Services” means the acceptance by the Principal for broadcasting
inside the TV Channel broadcasts, Slots, Regional Advertising (including the
Sponsorship Advertising, placed by interrupting a TV program/film and the
Social Advertising, placed on charge basis) as well as acceptance by the Principal for broadcasting on the TV
Channel of Line Ads within such Russian cities and regions as agreed between
the Parties in Appendix 3 hereto.


 


1.1.12.  “Centrally Originated Advertising”
means the advertising broadcast on the TV Channel in all regions covered by TV
Channel programming distribution network within the Russian Federation and not
to be excluded from the broadcasts or replaced with other audio/video
productions.


 


1.1.13.  “Regional Advertising” means
advertising placed in the TV Channel broadcasts and subject to broadcasting
solely within the territory of certain cities and regions of the Russian
Federation.


 


1.1.14.  “Principal’s own promotion”
means announcers of television programs of the TV Channel, TV Channel
Advertising, the Principal’s announcements of marketing and other events
organized and conducted by it;


 


1.1.15.  “Unauthorized Advertising”
means the advertising broadcast by the Principal on the TV Channel on its own
without participation and obtaining a prior written consent of the Agent.


 


The Unauthorized Advertising shall be deemed to
include:


 


a)             TV
Channel break bumpers, opening and closing the advertising blocks, which do not
contain third party advertising;


 


b)            the
Principal’s own announcements;


 


c)             advertising
placed by the Principal consistent with the requirements of this Agreement;


 


d)            Centrally
Originated Advertising;


 


e)             Regional
advertising broadcast within Russian cities/regions other than listed in
Appendix 4 hereto;


 


1.1.16.  “Clients” means the advertisers (including sponsors), other
third parties representing the advertisers (or sponsors) under respective
agreements, as well as third parties ordering the placement of line ads,
sponsorship or social advertising.


 


1.1.17.    “Brokers” means agents, sub-agents, brokers,
sub-brokers and proxies of the Agent or, agents, sub-agents, brokers and
sub-brokers of the proxies for the Agent;


 


1.1.18.  “Principal’s Actual Advertising Revenue”
shall consist of:


 


·  revenues generated by advertising agreements made by the Clients both
through the Agent/Brokers and directly
with the Principal (or persons authorized by the Principal) upon the Agent’s
consent (as set forth in section 3.1.6 hereof) 
net of the value added tax;


 


·  revenues generated by advertising agreements made by the Clients with the Principal (or persons authorized by
the Principal other than the Agent), under which advertising services are to be
provided after the date of this Agreement, net of the value added tax;


 


·  other revenues (fines,
penalty interests and other income including the termination fee), due to the Principal and actually received by the
Agent/Brokers/Principal in transactions entered into with Clients by the Agent
or Brokers;


 


1.1.19.  “Entering
into transactions” means taking such actions as to create, vary or
terminate private rights and obligations (concluding, amending (agreeing on
amendments), including agreement extensions or terminations, as well as taking physical
actions that result in legally binding consequences);


 


1.1.20.  “reporting period” means one calendar month;


 


1.1.21. “Intra-Day
Program Substitution” means change in broadcasting time (within the
same broadcasting day) of programs broadcast on the TV Channel.


 


1.1.22.  “Cross-promotion” means advertising
information on any third parties (hereinafter referred to as “Counterparties”),
if the Counterparty(-s) places (place) in turn the advertising information on
the Principal pursuant to provisions of the agreements concluded by the Principal
with a Counterparty(-s).  Counterparties
for the purposes of this paragraph of the Agreement can be only a mass media
outlet (mass media offices, publishers), and the advertising information
presented by them for placement can only be about the Counterparty or a respective mass-media outlet
(a mass-media group of the respective Counterparty).


 


1.1.23.  “Scheduling Sheet” means a schedule of all
of the TV Channel transmissions second-by-second covering one day’s airtime
(from commencement through the end of broadcasting);


 


1.1.24.  “Spot”
means an interval agreed by the parties in accordance with the procedure set
forth in section 2.3 hereof allocated within the TV Channel airtime for
inserting the Regional Advertising. The Spot Schedule will be provided by the
Principal in electronic form. Spots are indicated on the Scheduling Sheet and
are identified within the TV Channel broadcasts in a special manner that will
be advised by the Principal to the Agent.


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


2

















 


1.1.25.  “Interactive
Element” means an element of programming that enables viewers to
participate by making phone calls or sending sms or e-mail messages or
otherwise.


 


2. Scope of Agreement


 


2.1.  In
accordance with this Agreement the Agent agrees to take in its own name for a
fee certain legal and other actions on behalf and on the account of the
Principal to sell to the Client the advertising services and line ads offered
by the Principal commencing from January 1, 2008 and ending on December 31,
2009 (including all television programs on the New Year night up to 6 a.m.,
Moscow time on January 1, 2010).


 


2.2.  The
Principal shall pay to the Agent a fee for taking legal and other actions set
forth in section 2.1. hereof in such amounts and according to such procedure as
provided hereunder.


 


2.3.  The Principal agrees to
broadcast the advertising and line ads placed by the Agent under the agreements
made with the Clients pursuant to this Agreement. For the purpose of
performance of the obligations to the Clients under agreements entered into by
the Agent, the Principal shall allocate time intervals (advertising blocks or
other time intervals) for the placement of advertising that are to be agreed between
the Parties for the respective period. 
The advertising volumes shall be agreed in accordance with this
Agreement.


 


2.4  The
Agent shall act on exclusive basis; the Principal agrees not to enter with
third parties without the Agent’s prior written consent into any similar agency
agreements, or commission or engagement agreements intended to sell advertising
and line ads. The provisions of this section are not applicable to the
placement of the Sponsorship advertising within a TV program/film, placed by
overlay method, the Principal’s own promotion, as well as to the Cross
Promotion.


 


2.5.  This Agreement shall not apply to pre-election
advertising, social advertising broadcast on no-charge basis and broadcasting
on the TV Channel of the Interactive Elements.


 


3. Obligations of the Parties


 


3.1.  Obligations and rights  in connection with
entering into transactions and approving their terms


 


3.1.1.  The
Principal shall grant to the Agent a power to take legal and other actions in
connection with selling advertising and line ads without any further approval
on the part of the Principal, and the Agent  shall contract
the sale of such services to the Clients being first and foremost guided by the
best interests of the Principal, the terms and conditions of this Agreement,
the instructions of the Principal as to the terms and conditions  relating to the pricing of advertising in
agreements with the Clients, which shall be contained in Appendix 1 hereto as
well as by all other appendices and addenda to this Agreement.


 


3.1.2.  The Agent shall
seek to secure the best possible conditions for the Principal in the agreements
between the Agent and the Clients. The Agent may, subject to the Principal’s
consent, enter into advertising placement agreements on terms different from
those set forth in Appendix 1, if it was impossible to obtain better
contractual conditions, and, where by contracting on such terms that are
different from those set forth in Appendix 1, the Agent has averted even more
negative consequences for the Principal.


 


3.1.3.  The Agent’s Client Agreements shall contain the
following provisions:


 


· the Client shall strictly comply with legal
requirements as to the content and design of the advertising materials;


 


· provision allowing for unilateral termination of the agreements by the
Agent by notice to the Clients no earlier than 30 (thirty) days prior to the
termination date;


 


· provision allowing the Principal to refuse to broadcast the Regional
advertising in case the Principal reasonably believes that these advertising
materials are not in compliance with the law of the Russian Federation or that
the content or design of the advertising is not consistent with the TV Channel
programming policy or its styling;


 


· provision allowing the Principal to refuse to broadcast a certain line
ad in case the Principal reasonably believes that such line ad is not in
compliance with the law of the Russian Federation or that it is abusive or
inappropriate for broadcasting on television;


 


· the Client shall be fully responsible for the content and design of the
Regional advertising and Line Ads placed under this Agreement, for any
violations of copyrights and neighboring rights in respect of the works being
part of the Regional Advertising.  Any
financial claims, including from the authors and owners of the neighboring
rights in respect of the Regional advertising, shall be settled by the Client
itself and at its cost.


 


· the Agent shall take every effort to ensure that minimal penalties be
provided for breach of arrangements relating to placement of advertisements.


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


3

















 


3.1.4.  The Agent shall carry all rights and
obligations under agreements with Clients made pursuant to this agency
arrangement, even if the Principal was named in any such agreement and entered
into direct arrangements with the Clients.


 


3.1.5.  The
Agent may engage third parties for the performance of this Agreement, always
remaining responsible to the Principal for the actions of such third parties,
provided that the cost of such third party services is paid by the Agent from
the agency fees due to it under this Agreement.


 


3.1.6.  The
Principal shall enter into direct
arrangements for sale of its advertising services as the same are defined in
section 1.1.11 hereof and shall grant to third parties a right to enter into
such arrangements only subject to a prior written consent of the Agent
and upon such conditions as shall be agreed with the Agent, for which purpose a
written form is provided in Appendix 2 hereto.


 


3.1.7.  The
Agent shall deliver to the Principal reports on the performance of the
Principal’s engagement pursuant to the procedure set forth in section 4.15.
hereof.


 


3.1.8  The Agent shall within five days from receipt of the Principal’s
request in writing provide to the Principal any information (copies of
agreement, invoices, letters, etc.), relating to the Agent’s transactions with
the Clients entered into pursuant to this Agreement.


 


3.2  Obligation of the Principal
to inform on programming schedule and placement of advertising in the TV
Channel airtime .


 


3.2.1.  The Principal shall provide to the Agent the
Programming schedule (including
approximate schedule for advertising blocks) of the TV Channel in effect as of
the date of this Agreement.


 


The principal shall notify the Agent on changes in
the TV Channel’s Programming Schedule at least 30 days before such changes take
effect.


 


The Principal shall deliver to the Agent by an
electronic communication a Scheduling Sheet at least two days before the
Regional advertising is scheduled to go on air.


 


The broadcasting time for various components of the
TV Channel broadcasts as set forth in the Scheduling Sheet may deviate from the
times indicated in the Programming schedule by no more than ten minutes. The
actual timing of transmission of the elements of the TV Channel broadcasts may
not deviate from that set forth in the Scheduling Sheet by more than two
minutes.


 


The Principal may not modify the
broadcasting schedule or advertising volumes except as provided in this section
and in cases of changes made in connection with the intra-day program substitution, the events of national
significance, declaration of days of national mourning where such changes in
the broadcasting schedule could not be reasonably agreed with the Agent and
provided the Agent was informed of such changes in the broadcasting schedule in
writing within 2 days after the changes were made.


 


The Programming Schedule and Spot Schedule as
well as information on any changes therein shall be delivered in electronic
form as well as in a hard copy signed by the Authorized representative of the
Principal with the Principal’s original seal affixed.


 


3.2.2 
The Principal shall ensure
that the technical conditions of the TV Channel broadcasting are strictly
maintained and proper coverage for the TV Channel is ensured.


 


3.2.3 
The Principal shall allocate
within the TV Channel programming schedule the Spots with the total length of
at least 30% allocated for the placement of the Advertising Materials in the TV
Channel daily airtime, except for the days of maintenance on the TV Channel.


 


3.3.  Obligations and rights of the Parties with respect to acceptance,
insertion or broadcasting of advertisements.


 


3.3.1.  Video recordings of the Regional Advertising
shall be provided to the Principal or persons designated by it (entities
providing to the Principal the services relating to the broadcasting of the TV
Channel programming in the respective region) at the place of the respective
advertising campaign (respective Russian region). The Principal shall in a
timely manner provide to the Agent a list of entities accepting the Regional
Advertising for placement in the TV Channel broadcasts within the respective
region of the Russian Federation (branches and/or subsidiaries of FSUE RTRS,
VGTRK, others).


 


The
advertisements shall be delivered together with the accompanying documents
required to develop programming schedule sheets for placing the advertising
within the TV Channel broadcasts.


 


Such
video recoding shall be provided on any media or through any means of
information transmission.


 


3.4  The Agent shall
have discretion to reject without any consultations with the Principal any
advertising of the Clients that is non-compliant with Russian law or Technical
requirements of the Principal. If there are doubts as to the placement of
advertisements in dispute (those advertisements that the Client insists on
being  compliant with the Advertising
Law) the Agent may deliver a written request to the Principal for the 


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


4

















 


latter
to decide (the advertisements in dispute may be delivered to the Principal on
the tape (including VHS tapes)  or as an
electronic file), which should promptly review the request and respond in
writing with reasonable explanations within two business days from the receipt
of the written request from the Agent (form of notices – refer to Section 6
hereof). If such response is given in electronic form the original of the
response in hard copy shall be delivered to the Agent within 14 calendar days
after the date, on which the electronic response was given.


 


3.5.   When accepting advertising matter from the
Agent, the Principal may reject the advertising or line ads accepted and
delivered by the Agent if the Principal determines that it is not compliant
with Russian law, Technical requirements or is inconsistent with the creative,
artistic or ethical concepts underlying the Principal’s programming
policy.  The Principal shall deliver to
the Agent a written notice of rejection with reasonable explanations for such
rejection no later than within two business days from the date on which such
advertisement was delivered.


 


In
the event that the Agent did not receive in a timely manner the Principal’s
notice of rejection and the advertisement delivered to the Principal was not
broadcast on the TV Channel, the Agent shall consider this as non-performance
by the Principal and shall be entitled to claim penalties from the latter as
set forth in section 5.4 hereof.


 


3.6.  The
Principal shall be allowed not to broadcast advertising on days that were
declared advertisement-free by the order issued by the TV Channel management.
In such case the Principal shall by way of specific performance have an
obligation, upon the Client’s demand and in accordance with the Client-approved
schedule, to broadcast the advertisement not run on the TV Channel of the same
duration without additional payment or, if it is provided by the Client  Agreement,
to reduce the cost of its services and return a respective amount within such
period of time and on such conditions, as provided hereunder.


 


3.7.  Obligations and rights of the Parties with respect to monitoring the
broadcasting of advertising and performance of obligations.


 


3.7.1.  The
Parties shall put in place necessary monitoring procedures to ensure that the
advertisements and lines ads were broadcast in full and correctly.


 


The
Principal shall deliver to the Agent in a timely manner (within five days from
receiving a request) ad run reports, confirming the broadcast of the
advertisements prepared on the basis of the data, provided by the Agent.


 


3.7.2.  If
unexpected or other circumstances arise that prevent the performance of an
advertising placement agreement, the Agent shall immediately inform the
Principal about this.


 


3.7.3.  In the event a Client fails to perform obligations in a transaction the
Agent shall take appropriate steps to collect such outstanding amounts and
then, if requested, shall assign to the Principal the claims relating to such
transaction in compliance with the rules applicable to claim assignments.


 


3.7.4  In the event that the advertising services have been performed by the
Principal improperly through the fault of the Agent the Agent shall itself and
at its own cost settle such matters with the Clients.


 


3.8  Obligations and rights of
the Parties with respect to placement of Cross-promotion


 


3.8.1  The Parties
agree that if needed and provided that the placement of such advertising does
not result in breach of the Client Agreements entered into by the Agent the
Principal may upon the Agent’s consent, which should not be unreasonably
withheld, to place in the TV Channel airtime in the cities listed in Appendix 4
Cross-promotion, the Principal’s own promotion as well as advertising of
entities (or other advertised items owned or promoted by them), of which the
Principal is a manager, participant or shareholder or of the Principal’s
affiliate (persons being part of the same group with the Principal) within time
intervals allocated and designated for the Regional Advertising with the total
duration of up to 50 (fifty) minutes a month.


 


The
Principal shall request the Agent’s consent for the placement of such materials
at least ten days before the same are to be broadcast and if the Agent failed
to provide a substantiated refusal for such placement at least five days before
the scheduled date of broadcast of such materials, the Agent’s consent shall be
deemed to have been given.


 


In
any case such advertising may not occupy more than 5% of such time intervals
allocated by the Principal for advertising contracted by the Agent and the
Principal during a month and may not be to the detriment of the Agent’s
proposed commercial placements.


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


5

















 


The
said materials may be placed solely if the advertising time in the intervals,
in which such materials are expected to be placed, have not been sold to other
Clients. Such materials can be removed from the TV Channel airtime, if the
advertising time in the respective intervals have been sold by the Agent to the
Clients subject to at least two calendar days’ notice to the Principal.


 


4. Financial Arrangements


 


Agent’s Fee:


 


4.1.  The agency fee of the Agent for the
performance of legal and other actions shall be equal to 15% (fifteen percent)
of the Principal’s Actual Gross Revenue in a given reporting period.


 


The
Agent’s entitlement to the agency fee shall arise from the moment the
Advertising services were actually performed by the Principal in the relevant
reporting month.


 


4.2.  The accrued agency fee due to the Agent
(section 4.1. of this Agreement) shall be increased by the amount of value
added tax in accordance with the applicable law of the Russian Federation.


 


The
agency fee shall be calculated from the Principal’s Actual Gross Revenue,
determined by the Parties in Rubles (if the advertising rates are set in US
Dollar equivalent – at the exchange rate published by the Central Bank of the
Russian Federation as of the last day of the reporting month) in a statement
for the respective reporting period.


 


The
payment of the agency fee to the Agent shall be made in the manner provided
respectively in sections  4.4. to 4.11.
hereof.


 


Settlement Procedures:


 


4.3.  The price
for the placement of Advertising and Line Ads in the Client Agreements shall be
fixed:


 


· in Client Agreements with Russian resident Clients
and non-resident Clients paying in Rubles – in Russian Rubles;


 


· in Client Agreements with non-resident Clients
paying in currencies other than Russian Rubles - in US Dollars.


 


The
advertising services and line ads contracted by the Clients shall be subject to
value added tax in accordance with the applicable law of the Russian
Federation.


 


4.4.  The payments
in Russian Rubles under Client Agreements shall be made to the Agent’s current
account.


 


Subject
to sections 4.6., 4.8., 4.9 and 4.10. hereof, the Agent shall be required to
transfer the amounts received  under such
Client Agreements to the Principal within three banking days. The said three
day period shall be counted from the moment the Agent receives an attachment to
the bank statement showing that the funds have been credited to the Agent’s
account.


 


To
the extent a particular transaction was entered into with the involvement of
the brokers, all funds received under the Client Agreements should be transferred
to the Principal (subject to sections 4.9. and 4.11. hereof) within ten bank
days from the date of receipt of the funds from the Client.


 


4.5.  The Agent may upon approval of the Principal
instruct the Client to make the payment in Russian Rubles under the Agent’s
Client Agreement directly to the Principal’s current account.


 


4.6.  The Agent may transfer to the Clients in
Russian Rubles those amounts that are to be returned to the latter under the
Client Agreements made with them, including from the funds received from other
Clients to the Agent’s account for the benefit of the Principal, but not yet
paid to the Principal.


 


4.7.  The payments
in US Dollars under the Client Agreements with the non-resident Clients shall
be paid to the Agent’s transit currency account.


 


The
Agent shall be required to transfer the amounts received to the Principal’s
transit currency account within three banking days. The said three-day period
shall be counted from the moment of receipt by the Agent of the attachment to
the bank statement showing that the funds have been credited to the Agent’s
account.


 


4.8.  In
those cases when any hard currency amounts received should be returned to the
Client in accordance with the respective Client Agreement with the same, then:


 


· if such amount has already been transferred by the
Agent to the Principal, the Principal shall transfer to the Agent’s transit
currency account within ten days the amount to be returned to a non-resident
Client in 


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


6

















 


US
Dollars and the Agent shall then return the amount so received to the
respective Client. The said ten-day period shall be counted from the receipt by
the Principal of the Agent’s letter demanding the return accompanied by the
respective documents relating to the non-resident Client; and


 


· if such amount
has not been transferred to the Principal and is still held in the Agent’s
transit currency account, the latter shall transfer to the Client in US Dollars
the respective amount to be returned.


 


In
the event that the Principal fails to transfer to the Agent’s transit currency
account the amount to be returned to the non-resident Client in US Dollars
within ten-day period, the Agent shall be entitled to withhold such amount out
of the amounts of the receipts from the Clients in Russian rubles, to purchase
hard currency (in US Dollars) in such amounts as will be sufficient for the
return of the funds to the non-resident Client and to transfer such amount to
be returned to the non-resident Client’s account.


 


4.9.  Out of the amounts in Rubles received to the current accounts of the
Agent/broker for the benefit of the Principal under the Client Agreements the
Agent/broker (under agreement with the Agent) shall be entitled to retain the
following amounts:


 


· 15% of the difference between the funds received in Russian rubles to
the current accounts of the Agent/brokers and/or the Principal and the funds
returned by the Agent/brokers and/or the Principal to the Clients under the terms of the
agreements with the latter;


 


· 15% of the difference
between the Ruble equivalent of US Dollar funds received to the transit
currency accounts of the Agent/brokers for the benefit of the Principal under
agreements with non-resident Clients and the Ruble equivalent of US Dollar
funds returned by the Principal and/or the Agent/brokers to the non-resident
Clients under the terms of the agreements with the latter. The Ruble equivalent
of US Dollar funds shall be calculated at the exchange rate, published by the
Russian Central Bank as of the date the funds were received in the transit
account of the Agent/broker from a non-resident Client.


 


4.10.  The settlements between the Parties shall be
made on a daily basis as long as payments are received from the Clients. The
Agent shall be entitled to withhold the Agent’s fee on a daily basis. The date
of payment as between the Parties hereunder shall be the date, on which the
funds are withdrawn from the payer’s account as evidenced by a bank statement.


 


4.11.  In the event that the amount
retained on the Agent’s current account is in excess of the amount due to the
Agent as the agency fee for the reporting period, the surplus shall be counted
as an advance towards the agency fee in the future period settlements.


 


4.12  The Parties
agree that the Agent/brokers shall contract with the Clients on such terms and
conditions that the advertising services provided by the Principal be paid for
in full no later than within 45 (forty five) days from the end of the
respective reporting period.


 


4.13  No expenses
(costs) of the Agent incurred by it in the performance of this Agreement shall
be subject to separate reimbursement to it by the Principal (section 2 of art.
975 of the Russian Civil Code).


 


Reporting:


 


4.14.  Upon
transferring the funds, the Agent shall deliver to the Principal a notification
report in the form approved by the Parties.


 


To the extent the Principal has any objections with
respect to the submitted notification report it shall within 5 (Five) calendar
days from receipt thereof deliver to the Agent its objections in writing.  If no objections are raised within such
period, the report shall be deemed accepted.


 


4.15  After the end of each reporting month (by
fifteenth day of the month after the reporting one, the Parties shall execute a
two-way statement (the “Statement”), which shall set forth:


 


·              the Principal’s Actual Gross Revenue for the reporting period;


 


·              the amount of receipts to the Agent’s/broker’
accounts during the reporting period under the agreements, entered into by the
Agent/brokers, including in payment for the Advertising services in the
current, past and future periods;


 


·              the amount of
funds which the Agent has transferred to the Clients in accordance with the
terms of the Client Agreements;


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


7

















 


·              the amount of
receipts to the Principal’s accounts, as stated for the reporting period under
the agreements, entered into by the Agent/brokers, including in payment for the
Advertising services in the current, past and future periods;


 


·              the amount of
funds which the Principal paid to the Clients;


 


·              the amount of
the agency fee due to the Agent for the reporting period;


 


·              the amount of
funds paid to the Agent as the agency fee (including amounts retained by the
Agent), including as payments in respect of the reporting period and as
advances towards payments in respect of a future period or as payments for past
periods;


 


·      other details, which the
parties shall deem appropriate to reflect in the Statement.


 


The
Agent shall deliver together with the Statement a report on the services
provided (the “Agent’s Report”) in the form approved by the Parties.


 


To
the extent the Principal has any objections with respect to the submitted
Statement and /or the Agent’s Report it shall within 4 (Four) calendar days
from receipt thereof deliver to the Agent its objections in writing.  If no objections are raised within such
period, the Statement and /or the Agent’s Report shall be deemed accepted and
the engagement completed.


 


4.16.  The Statement shall be submitted by the Agent
together with the invoice for the agency fee.


 


5.  Liability of the Parties and
Releases


 


5.1.  If
obligations under this Agreement have not been performed or have been performed
improperly, a Party shall be liable to compensate to the other Party damages
caused by such non-performance or improper performance.


 


5.2.  In respect
of delayed payments under this Agreement the delaying Party shall pay a penalty
interest at the rate of 0.01% (one hundredth of percent) on the amount of the
delayed payment for each day of delay.


 


5.3.  In the event
of any Unauthorized Advertising has been run in the TV Channel broadcasts the
Principal shall pay to the Agent a penalty equal to 50,000 (Fifty Thousand)
Rubles net of VAT for each 30 seconds of airtime occupied by such Unauthorized Advertising.


 


5.4.  In the event
the Principal’s obligation to broadcast advertising was performed improperly
and inconsistently with the terms of the agreement entered into with the Client
by the Agent/broker (i.e. the Principal failed to broadcast advertising or
broadcast it at a time or on a date, other than agreed for such advertising to
go on air, failed to observe the sequence of advertisement broadcasting,
broadcast a wrong version of the commercial, failed to ensure that the same is
broadcast with proper quality, etc.) as well as where services were not
provided without proper notification of the Agent, the Principal shall by way
of specific performance have an obligation, upon the Client’s demand and in
accordance with the Client-approved schedule, to broadcast the advertisement
not run on the TV Channel with the same duration without additional payment or
if it is provided by the Client Agreement to reduce the cost of its services
and return a respective amount within such period of time and on such conditions
as provided hereunder.


 


Furthermore,
to the extent provided under the agreement entered into with the Client by the
Agent/broker the Principal in accordance with the terms of the Agreement
between the Agent/broker and the Client shall have an obligation to compensate
for damages to the extent of non-performed obligations, i.e. shall place
additional Client’s advertising in the volume, which in any case may not be
greater than the volume of advertising not broadcast and/or improperly
broadcast.


 


5.5  If either
Party fails to comply with section 8.1 of this Agreement by rescinding this
Agreement unilaterally, the defaulting Party shall pay to the other Party a
penalty:


 


·      If the period of validity of this Agreement to
expiry is less than 12 months – an average monthly amount (Agent’s fee) due
under this Agreement, calculated for the duration of this Agreement multiplied
by 4 (Four).


 


·      If the period of validity of this Agreement to
expiry 12 months or more – an average monthly amount (Agent’s fee) due under
this Agreement, calculated for the twelve full calendar months preceding the
month in which rescission takes place multiplied by 4 (Four).


 


In
any event the rescission shall be subject to at least ninety days’ notice.


 


5.6  The penalties
due under this section shall be payable by the defaulting Party unconditionally
and always subject to receipt by the latter of the other Party’s demand.  The payment shall be made within 30 (Thirty)
days from the issuance of the respective invoice.


 


5.7.  The Parties
shall be relieved of the liability for non-performance or improper performance
of the obligations under this Agreement, if such non-performance or improper
performance was caused by the 


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


8

















 


conditions
of force-majeure, i.e. circumstances of extraordinary nature unavoidable in a
particular situation, such as natural calamities, fires, military hostilities,
revolutions, strikes, legislative changes, enactment of mandatory regulations,
unscheduled broadcast addresses of the government officials (President of the
Russian Federation, Chairman of the Government of the Russian Federation, State
Duma Speaker) and other circumstances beyond the control of the Parties.


 


5.8.  A Party that
is unable to perform its obligations under this Agreement shall promptly, but
no later than within five days, notify the other Party of the occurrence and
cessation of such circumstances. In such case, the Parties’ representatives
should as soon as possible consult with each other and agree on the steps to be
taken by the Parties.


 


The
occurrence and duration of such circumstances shall be confirmed by documents
issued by respective competent authorities or entities.


 


5.9.  A failure to
notify or to notify in a timely manner on the occurrence of such circumstances
shall result in the Party that failed to notify or to give a timely
notification losing its right to claim any such circumstances as relieving it
from the liability for the failure to perform its obligations in a timely
manner.


 


6. Notices under the Agreement


 


6.1.  The Parties shall deliver all applications,
notices and requests to each other to the agreed addresses, fax and telephone
numbers by courier services with a copy by fax or electronic mail. Any such
application, notice or request shall be deemed delivered:


 


· in case of delivery by courier – on the day of
delivery;


 


· in case of delivery
by fax - on the day of delivery, if delivered during normal business hours.


 


· in case of
delivery by electronic mail - on the day of delivery, if delivered during
normal business hours.


 


6.2.  All requests of the Agent to the Principal or
of the Principal to the Agent shall be reviewed by the respective Party within
two business days after the receipt of the request and replied to in writing
within the same period of time (by fax, electronic mail or courier service). In
the event the response is not received within the said period (failure of
either party to this Agreement to respond) the other contracting party shall be
entitled to proceed as follows:


 


·              If the question
in the request was such that one Party requested a straightforward “yes” or “no”
answer, the second Party shall regard the silence of the other Party (the “first
Party”) as a “yes” answer.


 


·              If the request
was for the first Party’s opinion with regard to a certain issue, the second
Party shall regard the silence of the first Party as the latter’s consent for
the second Party to act at its own discretion.


 


6.3.  The
actions of the Party taken in compliance with section 6.2. of the Agreement
shall be deemed to have been taken in accordance with the terms of this
Agreement without exceeding the authority and in the event  any negative consequences arise such Party
may not be held liable in any way.


 


7. Dispute Resolution


 


7.1.  All disputes
and controversies that may arise out of or in connection with this Agreement
shall to the extent possible be resolved through negotiations.


 


7.2.  In the event
the Parties fail to reach agreement, the dispute is to be resolved by the
Moscow Arbitration Court.


 


8. Agreement Validity


 


8.1.  This Agreement shall come into effect upon
execution and shall be valid through December 31, 2009 (including all TV
programs of the New Year night up to 6 a.m. Moscow time on January 1,
2010).


 


8.2.  The Agent shall
have the right to contract with the Clients for the placement of advertising,
where the services are to be provided beyond the term of this Agreement only
subject to prior consent of the Principal.


 


If at the time of termination and/or rescission of
this Agreement the placement of the advertising under any agreement made by the
Agent in accordance with this Agreement has not been completed, the obligations
of the Parties shall terminate upon completion of broadcasting of the
advertising in transactions entered into before 6 a.m. on January 1,
2010 and after completion of all settlements and payments of penalties in
accordance with this Agreement. That is the parties shall continue to honor
agreements made by the Agent with the Clients for the placement of advertising
that are outstanding as of the date of termination of this 


 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


9

















 


Agreement (the Agent shall continue to issue
invoices and to receive its fees as well as to complete settlements with the
Principal as provided by the terms of this Agreement).


 


8.3.  The Principal shall have the right to
terminate the relationship with the Agent subject to 90 days’ notice without
any penalties on the part of the Agent, if during three consecutive calendar
months the Principal’s Actual Gross Revenues are less than 70% of the Principal’s
Projected Gross revenues as set forth in section 1.1 of Appendix 1 hereto
subject to adjustment provided under section 1.3.5 of the said Appendix.


 


8.4  Unilateral
refusal by either Party to perform this Agreement (rescission of the agency
agreement) shall not be allowed except as provided in this Agreement and other
documents to this Agreement (in which case such actions by the Parties shall
not be regarded as breach of the terms of this Agreement).


 


8.5  Any
reorganization, change of legal form, shareholders and/or management (whether
sole and/or collective) of the Parties shall not constitute a ground for the
termination and/or change of the provisions set forth in this Agreement.


 


8.6.  Upon expiry
of the term of this Agreement it can be renewed by agreement of the Parties.


 


9. Miscellaneous


 


9.1.  This Agreement is made and executed in two
equally binding counterparts with one for each Party.


 


9.2.  All and any
amendments and supplements to this Agreement shall only be valid if made in
writing and signed by the authorized representatives of the Parties.


 


9.3.  All and any amendments and supplements to this
Agreement shall constitute its integral part.


 


9.4.  All terms and conditions of this
Agreement shall be confidential.


 


Each of the Parties
shall take every effort in order to prevent third parties from reviewing this
Agreement without consent of the other Party.


 


If required by the
authorized government agencies (law enforcement, tax and others) as well as
auditors/consultants, either Party may allow them to review this Agreement
without obtaining prior consent of, but always subject to written notification
to the other Party. If either Party fails to comply with the requirement set forth
in this section, such Party shall be liable for damages suffered by the other
Party.


 


9.5.  The headings of the clauses in this Agreement
shall be used for convenience of reference only and shall not be construed as
either limiting or broadening the meaning of the provisions of this Agreement.


 


 


	
  On behalf of the Agent

  	
   

  	
  On
  behalf of the Principal

  
	
  General Director

  	
   

  	
  Deputy general
  Director for Sales and Regional 

  
	
   

  	
   

  	
  Network
  Development  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vilma
  Martsulevichyute /seal/

  	
   

  	
  T.A. Vavilova /seal/

  



 


	
  Agent

  	
   

  	
  Principal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  V.L. Vshyvkin

  	
   

  	
  A.E. Rodnyansky

  



 


10