Exhibit 10.58


(Agreement in respect

of placement of advertising

on the CTC Network)


	
  AGENCY AGREEMENT N C-25-400/07 

  	
   

  
	
   

  	
   

  
	
  Moscow

  	
  July
  11, 2007

  	
   

  
			



 


Closed
Joint Stock Company “Network of Television Stations” (OGRN 1027700151852), hereinafter
referred to as the “Principal”, represented by its General Director A.E.
Rodnyansky, acting pursuant to the Charter on one side, and Closed Joint Stock
Company “Kompaniya TSV” (OGRN 5077746859757), hereinafter referred to as the “Agent”,
represented by the General Director V.L. Vshivkin, acting pursuant to the
Charter, on other side, hereinafter referred to as the “Parties”, entered into
this Agreement as follows:


1. Definitions.


1.1.    For
the purpose of interpretation of the terms and conditions of this Agreement the
terms defined below have the following meanings:


1.1.1. “Network
Program Block” means a combined audiovisual production (a product of
intellectual activity), developed by the Principal for use by the broadcasters
affiliated with the CTC TV network as a program of a broadcast company and a
program of a cable company (art.1330 of the Civil Code of RF) and having the
same content for all stations of the CTC TV network across Russia.


1.1.2.  “Regional
Broadcast Window” means a length of time within a Network Program Block, during
which a broadcaster affiliated with the CTC TV network is allowed to substitute
at its discretion the audiovisual productions of the Network Program Block for
any other productions.


1.1.3.  “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, to build or maintain
interest in it and promoting it in the market.


1.1.4.  “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
government’s 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.


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


1.1.6.  “Commercial”
means an audiovisual production containing advertising.


1.1.7.  “Network
Advertising” means advertising material (including sponsorship advertisin and
social advertising agreed with the Principal that is placed on a charge basis) that the Principal places in the Network
Program Blocks in the time intervals as agreed between the Agent and Principal
and broadcast throughout the entire CTC TV Network. Network Advertising may be
broadcast as commercials and/or in other forms.


1.1.8.  “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 sponsorship or social advertising.


1.1.9. “Advertising Services”
means the acceptance by the Principal for broadcasting within the Network
Program Blocks of the Network Advertising (including sponsorship advertising and social advertising placed on a
charge basis) pursuant to the agreements, entered into by the Agent in its
name, but on the account of the Principal.


1.1.10. “Reporting
Period” means one calendar month.


1.1.11. “Principal’s
Actual Advertising Revenue for Reporting Period (the “Principal’s Actual Gross
Revenue”) shall consist of:


·  revenues generated
by advertising agreements by the Agent
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/Principal in transactions entered into with Clients by the Agent pursuant
to this Agreement.


	
   

  	
  Agent

  	
   

  	
  Principal

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  V.L. Vshyvkin

  	
   

  	
  A.E.
  Rodnyansky

  	
   

  




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1.1.12.
“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).


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 the Principal’s advertising
services commencing from January 1, 2008.


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
Network Advertising placed by the Agent under the agreements made with the
Clients pursuant to this Agreement throughout the CTC TV Network. The
procedures for sponsorship advertising shall be agreed by the Parties in
Appendix 3.


2.4. 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 Commercials in the Network Program
Blocks between 7 a.m. of the day and 1 a.m. of the following day, excluding a
Regional Broadcast Window with a length of 2 (two) hours on week days and 1
(One) hour on week-ends and holidays:


·               up
to 11.25% (eleven point twenty five percent) of the length of the Network
Program Block during any hour excluding the Regional Broadcast Window.


The Principal shall have
discretion in allocating time spots for Commercials to the Agent in the Network
Programming Blocks broadcast between 1 a.m. and 7 a.m.


2.5. The performance by the Agent of sections
4.4., 4.7., 5.2., 5.6., 9.2. of this Agreement and section 1 of Supplementary
Agreement No 1 (guarantee) shall be secured by a surety of CJSC ““Video
International” Group of Companies” with the surety being jointly liable. A
Surety Deed shall be executed with the said surety.


2.6. This Agreement
shall not cover any relations between the Parties, Clients and other third
parties arising in connection with political advertising and Social advertising
broadcast on no-charge basis.


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
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 condition relating to the pricing of advertising in agreements
with the Clients, which shall be contained in Appendix 1 hereto to be executed
by the Parties no later than November 30, 2007, 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 (“Client Agreements”). The Agent may, subject to the Principal’s
consent, enter into Client 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 shall have an obligation to include in Client Agreements the
following provisions:


1. The Client shall be fully responsible for the
content and design of the advertisements placed under the Client Agreement, for
any violations of copyrights and neighboring rights in respect of the works and
objects of neighboring rights being part of the advertisement.  Any financial claims, including from the
authors and owners of the neighboring rights in respect of the advertisement
shall be settled by the Client itself and at its cost.


If as a result of the placement of the advertisement
delivered by the Client the Agent and/or the Principal become subject to third
party claims, as well as if the Agent and/or the Principal suffer any negative
consequences in the form of financial penalties, the Client shall indemnify the
Agent and/or the Principal against all and any damages incurred as a result of
such violation and shall pay a fine in the amount equal to the financial
penalties incurred by the Agent and/or the Principal.


 



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2. The Client shall be required to present to the
Agent properly certified copies of licenses, if the advertised activity is
subject to licensing; of certificates of conformance, if the advertised
products are subject to mandatory certification; and of the registration certificates,
if the advertised products are subject to state registration. Upon the Agent’s
request, the Client shall be required to present within two days the proof of
accuracy of the statements made in the advertisement.


3. If during any calendar year during the term of the
Client Agreement the officially published US Dollar exchange rate fluctuates by
more than ± 15% (hereinafter referred to as “allowed exchange rate corridor” or
“corridor”) against the exchange rate as of January 1 of the respective yea (hereinafter
referred to as the “reference exchange rate”), i.e. if in any day during the
term of the Client Agreement (hereinafter referred to as the “exchange rate
deviation date”) the US Dollar exchange rate deviates by more than 15% against
the reference rate,


and


if during 30 (Thirty) calendar days following the
exchange rate deviation date the average weighted US Dollar exchange rate
remains outside the said corridor,


the parties (the Agent and the Client) shall regard
such exchange rate deviation as a condition of force majeure in accordance with
the provisions of the Client Agreement.


Note:  For the purpose of this section:


“US Dollar exchange rate” shall mean
the official exchange rate of US Dollar to Russian Ruble, published by the
Central Bank of the Russian Federation on a particular date.


“Average weighted exchange rate” shall mean average
weighted exchange rate of US Dollar to Russian Ruble calculated according to
the following formula:


AW = ∑ Rd · d


Tdp


where:


AW – average rate;


Rd – exchange rate of US Dollar to Russian Ruble,
published by the Central Bank of the Russian Federation on a respective date;


d – number of days during which the above US Dollar
exchange rate remains effective,


Tdp – total number of days in the respective period
for which the average weighted rate is calculated.


Upon occurrence and confirmation of the force majeure
conditions set forth in this section, the parties (the Agent and the Client)
shall act as follows:


Upon confirmation of the existence of the force
majeure condition any party may initiate amendments to the existing Client
Agreement by executing a respective addendum.


If the parties (the Agent and the Client) fail to come
to agreement on amending the terms of the existing Client Agreement and to
execute a respective addendum, the Client Agreement shall terminate as from the
date agreed between the parties (the Agent and the Client), which shall result
in application of the following provisions to the parties (given the specific
nature of the force majeure conditions set forth above), in particular:


·  the
Client shall to pay to the Agent within 30 (thirty) days from the termination
of the Client Agreement for advertising services actually provided, but not paid
for as of the termination date (at earlier agreed prices), and to pay penalties
accrued against the Client prior to the termination of the Client Agreement;


·  the
Agent shall be required within 30 (thirty) days from the termination date of
the Client Agreement to return to the Client all advanced amounts paid by the
latter to the Agent towards the payment for advertising services not provided
as of the termination date of the Client Agreement”.


4.
The Agent (the Principal) may not accept for placement any advertising during
the national mourning days declared in the Russian Federation and may reject or
refuse to accept for placement any advertisement in the event it is not
consistent with ethical, political or theme principles of the CTC TV Network or
the applicable law of the Russian Federation.


5.  The liability of the Agent (and, as a
consequence, of the Principal) for non-compliance with the placement and/or
dissemination of Advertising may not exceed one-time placement of the
respective advertisement during the same time (during an equivalent television
program) or the price of the advertisement not run or placed with deviations.


 



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The
Agent may deviate from the Principal’s instructions, contemplated by this
section, only if as a result of such deviation the liability of the Agent (and, as a consequence, of the Principal) to the Client
shall be less than provided under this Agreement.


3.1.4. The Agent shall carry all rights and obligations under agreements with
Clients made pursuant to this Agreement, even if the Principal was named in
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, and the cost of such third party
services shall be paid by the Agent from the agency fees due to it under this
Agreement.


3.1.6. The Principal agrees that for the duration
of this Agreement it shall not grant to
third parties a right to enter on its behalf and account into any transactions
for which the Agent is retained hereunder and shall not sell advertising
directly to the Clients without prior written consent of the Agent
except where the Principal entered into arrangements for free social
advertising, political advertising or advertising of media outlets.  The Principal
shall, on a quarterly basis, inform the Agent on any arrangements entered into
to advertise media outlets.


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 4.13. hereof.


3.1.8 The Principal shall be entitled to inspect
accounting books and records of the Agent relating to the Agent’s compliance
with the terms and conditions of this Agreement.  For such inspection, the Agent, upon the
Principal’s request, shall provide certified copies of supporting documents and
financial statements.


3.2  Obligation of the Principal to inform on the Network Program
Block programming schedule.


3.2.1. The Principal shall provide to the Agent the
information necessary for entering into transactions with Clients, including
the following:


·  No later than three days after
the date of this Agreement a forecast
schedule of the Network Program Block programming (hereinafter referred to as
the “Schedule”) for the first quarter of 2008 shall be delivered to the Agent
and the forecast Schedules shall thereafter be delivered to the Agent as they
become available.


Subsequently,
the Agent shall be provided with a preliminary draft Schedule for the
respective month no later than two months before it becomes effective.


The
approved Schedule for each week shall be delivered by the Principal to the
Agent no later than 8 (eight) calendar days before the beginning of the
respective calendar week.


3.2.2. The Principal may modify the Schedule and, in
such case, it shall inform the Agent on the changes to the preliminary line-up
of the Network Program Blocks for the current month within two days from the
date such changes were made and inform the Agent on the changes in the Schedule
for the upcoming calendar week no later than 2 (Two) calendar days before such
changes become effective.


The Agent shall not be
entitled to such prior notice in cases where such changes are made in an urgent
manner in connection with the events of national significance, or as a result
of cancellation or changed timing of sporting events, which were to be
broadcast on air within the Network Program Blocks, etc. so long as the Agent
is informed of such changes in writing on the same day as the changes are made.


3.3.  Obligations and rights of
the Parties with respect to acceptance, insertion or placement of
advertisements in the Network Program Block.


3.3.1. The procedures for delivery of the Network
Advertising shall be as agreed by the Parties in Appendix 2.


3.4. The Agent shall have discretion to reject
without any consultation with the Principal any Advertising of the Clients that
is non-compliant with Russian law and the Principal’s technical requirements.
If there is doubt as to the placement of advertisements in dispute (those
advertisements that the Client insists on being compliant with Russian
advertising law), the Agent may deliver a written request to the Principal for
the latter to decide (the advertisements in dispute may be delivered to the
Principal on the tape (including VHS tapes) 
or as an electronic file), and the Principal should promptly review the
request and respond in writing with reasonable explanations within five business
days from the receipt of the written request from the Agent.


The Agent’s requests and the
Principal’s responses shall be made in writing and signed by authorized
officers.  If no response is received
from the Principal within the period of time set forth in paragraph 1 of this
section the Agent shall be free to act as follows:


·              If the question in the request was
such that the Agent requested a straightforward “yes” or “no” answer, the Agent
shall regard the Principal’s silence as a “yes” answer.


 



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·              If the request was for Principal’s
opinion with regard to a controversial issue, the Agent shall regard the
Principal’s silence as the latter’s consent for the Agent to act at its own
discretion.


3.5. When accepting advertising matter from the
Agent, the Principal may reject the Advertising 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 three business days from the date on which such advertisement
was delivered.


In the event that the Agent
did not receive the Principal’s notice of rejection and the advertisement
delivered to the Principal was not placed within the Network Program Block, and
as a consequence the Agent receives a claim from the respective Client, the
Principal agrees to take responsibility for resolving such claim or to
compensate to the Agent any costs incurred in connection with such claim.


3.6. The Principal shall insert the Commercials
into Advertising blocks and shall place Advertising in strict compliance with the
procedures for acceptance and broadcast of the Advertising in the Network
Program Blocks and in accordance with the Advertising placement schedules
delivered by the Agent.


3.7. The Principal shall not broadcast
Advertising on the national mourning days declared in the Russian Federation.
The Principal shall then have an obligation to place the advertisement not run
during the same time interval and in similar programs during the following days
or at such other time as may be agreed between the Agent and the Client.  The Principal shall not be held liable in
accordance with section 5.4. of
this Agreement in those cases where the advertising was not run on the national
mourning days.  If the Client  refuses
to place its Advertising at the other time, the  Principal shall have an obligation to return the price
of Advertising services, if such amount has been already paid.


3.8. The Principal shall insert the Advertising
in the Network Program Block in accordance with the procedures for acceptance
and insertion of the Advertising in the Network Program Block contained in
Appendix 2 hereto.


3.9. Obligations and rights of
the Parties with respect to tracking the placement of Advertising in the
Network Program Block and performance of the obligations.


3.9.1. The Parties shall put in place necessary
procedures to track the placement to ensure that the advertisements 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.


3.9.2. If unexpected or other circumstances arise
that prevent the performance of this Agreement, Agent shall immediately inform
the Principal about this.


3.9.3. If the Advertising
services  were provided by the  Principal improperly with deviations from the Client Agreement (i.e.
the Principal failed to broadcast the Advertising in the Network Program Blocks
or changed the time and/or sequence of
the Commercials within the Network Program Blocks or broadcast the
advertisements with improper quality or technical parameters (without voiceover, with interferences,
deviation in the timing, content or version of the commercial, etc.),
and also where services were not provided (including the Principal’s refusal to
provide services, including in part), the Principal shall be required in a way
of specific performance upon the Client’s demand and in accordance with a
Client-approved schedule to place the Advertising not broadcast and/or
broadcast in unsatisfactor manner in the same volume without any additional
charge or, if demanded by the Client, to reduce the charges for the services
pro rata or return the respective amount, if the payment was earlier advanced
by the respective Client on such terms and within such period of time as set
forth in this Agreement.


In addition to the
performance of is contracted obligations, the Principal shall also be held
liable for non-performance/improper performance of its obligations to broadcast
Advertising to the extent such liability is provided for in the Client
Agreement under section 5.4. of this Agreement.


4.
Financial Arrangements


Agent’s Fee:


4.1. The agency fee (the “Agency Fee”) to which
the Agent shall be entitled for the performance of legal and other actions
(section 2.1. of the Agreement) shall be equal to 13% (Thirteen percent) of the
Principal’s Actual Gross Revenue in each 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 Period.


 



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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 Period) in a statement for the respective Reporting
Period, as set forth in section 4.13 of this Agreement.


The payment of the Agency
Fee to the Agent shall be made in the manner provided respectively in section 4.4.
to 4.11. hereof.


Settlement Procedures:


4.3. The price of Advertising in the Client
Agreements shall be fixed:


·  in Client Agreements with Russian
resident Clients and non-resident Clients paying in Rubles – in Russian Rubles
or US Dollar equivalent calculated at the exchange rate published by the
Central Bank of the Russian Federation as of the day the payment order
submitted to the Client’s bank;


·  in Client Agreements with non-resident Clients paying
in US Dollars – in Russian Rubles or US Dollars.  The payment for the Advertising in the
transaction entered into by the Agent in US Dollars with non-resident Clients can only be made in US Dollars in
accordance with the conditions of this Agreement;


·  in Client Agreements with non-resident Clients paying
in freely convertible currencies other than US Dollars – in Russian Rubles, US
Dollars or freely convertible currency subject to prior approval of the
Principal;


·  in agreements for Sponsorship
Advertising with Russian resident Clients and non-resident Clients paying in
Rubles – in US Dollar equivalent payable in Russian Rubles at the exchange rate
published by the Central Bank of the Russian Federation as of the day the
payment order is submitted to the Client’s bank, or in Russian Rubles (subject to prior approval of the Principal);
and


·  in agreements for Sponsorship
Advertising with non-resident Clients paying in US Dollars - in US Dollars;


Advertising
services 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 paid to the Agent’s current account.


Subject to sections 4.6. and
4.9. 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 funds are credited to the
Agent’s account.


4.5. The Agent may (subject to notification of
the Principal) instruct the Client to make the payment in Russian Rubles under
the 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 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 under such Client Agreements to the Principal’s
transit currency account within three banking days. The said three-day period
shall be counted from the moment the funds are credited to the Agent’s transit
currency 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 it, 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 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


 



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·  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.


4.9. The Principal shall
be required within 3 (Three) banking days from the receipt of the funds to the
respective account to pay to the Agent the amount equal to 13% of the funds
received (if the funds are received in US Dollars 13% shall be calculated from
the Ruble equivalent of the US Dollar amount calculated at the exchange rate of
the Central Bank of the Russian Federation published on the day the funds paid
by a non-resident Client were credited to the Agent’s transit currency account) in payment of the Agency Fee due to it under
section 4.1. hereof.


In
the event that the Principal fails to make payments due to the Agent hereunder
delaying them by more than 5 calendar days, the Agent shall be entitled to
withhold the amount due to it from the Principal out of the amounts of the new
payments received from the Clients to the Agent’s current account of the benefit
of the Principal.


4.10. The settlements between the Parties shall be
made on a daily basis as long as payments are received from the Clients.  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 received from
the Principal is larger than the amount of the Agency Fee due to the Agent for
the respective Reporting Period, the surplus shall be regarded as an advance
towards the Agency Fee for the purpose the settlements in subsequent Reporting
Periods.


Reporting:


4.12. Upon transferring the funds, the Agent shall
deliver to the Principal an accompanying letter with a detailed break-down of
the amount paid.


4.13. After the end of each month, but no later
than 10 (Ten) calendar days thereafter, the Agent shall deliver to the
Principal the Agent’s report (section 3.1.7. of this Agreement).  To the extent the Principal has any
objections with respect to the submitted report it shall within 10 (Ten)
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 and the engagement
completed.


After the end of each Reporting
Period, but by tenth day of the month after the Reporting Period, 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 accounts during the Reporting Period under
the Client Agreements, including in payment for the Advertising services in the
current, past and future Reporting Periods;


·              the
amount of funds which the Agent shall be required to transfer to the Clients in
accordance with the terms of the Client Agreements, including VAT;


·              the
amount of receipts to the Principal’s accounts, as stated for the Reporting
Period under the Client Agreements, including in payment for the Advertising
services in the current, past and future Reporting Periods;


·              the
amount of funds which the Principal paid to the Clients, including VAT;


·              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 as payments in
respect of the Reporting Period and as advances towards payments for any future
Reporting Period or as payments for past Reporting Periods, including VAT;


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


The Principal shall within ten business days either
approve the submitted Statement or deliver objections to it stating the
reasons. If the Principal’s objections are valid, the Parties shall execute a
statement setting forth the steps to be taken to resolve the claims.


If
no response is received from the Principal with respect to the submitted
Statement, such Statement shall be deemed approved.


4.14.       The Statement shall be submitted by the
Agent together with the invoice for the Agency Fee.


 



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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 damaged 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 0.05%
(five hundredth of percent) on the amount of the delayed payment for each day
of delay.


5.3. In the event of breach by the Principal of
the provision of section 3.1.6. hereof, the Principal shall be liable to pay to
the Agent a penalty equal to 13% (Thirteen percent) of the Principal’s revenue
under the contracted transaction.


5.4. In the event of non-performance or improper
performance by the Principal of the obligations to broadcast Advertising (see
section 3.9.3. of this Agreement), the Principal shall unconditionally satisfy
any claims of the Clients to the Agent
under existing Client Agreements. If as a result of non-performance, the Agent incurs
expenses arising out of the Clients’ claims, the Principal shall indemnify the
Agent against all such justified expenses supported by the documents.


5.5. The Principal shall not be liable for the
occurrences where the advertising was not broadcast in the Network Program
Blocks through the fault of the Agent and the Agent shall be solely responsible
for settling any Client claims with respect to such services.


5.6. In the event that the Agent enters
into Client Agreements that do not contain provisions set forth in sub-section
3 of section 3.1.3. hereof and circumstances arise that are described in the
said subsection, the Agent shall compensate to the Principal the said lost
profits in the amount equal to the revenue that the Principal did not receive
due to the non-performance by the Client (Clients) of the provisions set forth
in subsection 3.


The amount of proved lost profit calculated in the US
Dollar equivalent shall be set forth by the Parties in the Statement, which
should be agreed between the Parties no later than within 30 days after the
circumstances set forth in sub-section 3 of section 3.1.3. hereof arise.


Within 30 days after the execution of the Statement,
the Agent shall have an obligation to pay the amount of lost profit to the Principal.


5.7. All payments hereunder in respect of
penalties and damages shall be made in Rubles against the creditor’s written
demand for penalties, which
shall be delivered by registered mail with acknowledgement of receipt within 30 (Thirty) days from the date of the
respective invoice.


5.8. 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 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 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.


5.9. 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. 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.


5.10. 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.


5.11. In the event that the Advertising materials
were not broadcast due to the occurrence of the above circumstances, the
Principal shall, subject to the Agent’s consent, broadcast such advertising
during the same time interval and in the similar programs and where such
placement is not possible, shall return to the Agent amounts previously paid
for the Advertising not broadcast.


6.  Special Provisions


6.1. In the event that the legislative changes
affect the amount and/or terms of the Advertising to be placed with the
Principal, the Parties shall renegotiate the provisions of sectio 2.4. of this
Agreement and the respective plans for Advertising sales. The Parties agree
that the coming into effect of the legislative changes as contemplated by this
section shall not constitute the ground for a unilateral termination of this
Agreement without the payment of the termination fee by the terminating Party
as provided in section 9.2. hereof.


 



 8
 








7. Notices under the
Agreement


7.1. 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.


7.2. All requests of the Agent to the Principal
or of the Principal to the Agent (except as provided in section 3.4. hereof)
shall be reviewed by the respective Party within three 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 (silence of either Party to this Agreement) the
requesting Party (the “second 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
consent for the second Party to act at its own discretion.


7.3. The actions of the Party taken in compliance
with section 7.2. 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.


8. Dispute Resolution


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


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


9. Agreement Validity


9.1. This Agreement shall come into effect upon execution
and shall be valid through 6 a.m. local time on January 1, 2013.


9.2. This Agreement may be terminated before
expiry of its term by either Party subject to a notice at least 180 days from
the proposed termination date.  Such termination notice shall be given by a
registered mail with acknowledgement of receipt.


The terminating Party shall
then be required to pay to the other Party a termination fee equal to 13% of
the amount of the Principal’s Actual Gross Revenues for the six full months preceding the termination date.


The Parties agree that if
the termination occurs after December 31, 2008 and the termination date shall
be effective as of January 1 of the respective year and subject to terminating
Party’s notice being received by the other Party at least 180 days before the
proposed date of termination, the termination fee provision shall not apply.


The payment of the
termination fee shall be made within 30 (Thirty) days from the Agreement
termination date.


9.3. 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.


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


9.5. In the event that, as of the date this
Agreement is terminated, any advertising under any agreement made by the Agent
in accordance with this Agreement is not completed and/or any commenced service
has not been provided in full, the obligation of the Parties shall be deemed
terminated as from the date on which such Advertising has been broadcast and
all settlements and penalty payments in accordance with the terms of this
Agreement have been completed.


10. Miscellaneous


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


 



 9
 








10.2. 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.


10.3. All and any amendments and supplements to
this Agreement shall be its integral part.


10.4. The Parties agreed
not to disclose or otherwise make known to third parties any terms and
conditions of this Agreement or any other confidential information, which
either of the Parties may have made known to the other Party in connection with
the performance of this Agreement (except for any disclosures made to their
agents, consultants and legal counsel) without a prior written consent to such
disclosure of the other Party, save to the exten expressly required under
applicable law, regulations and rules, as approved by the governmental
authorities (including, without limitation, the securities regulators outside
the jurisdiction of the Parties) or ordinary disclosure to auditors,
shareholders or legal counsel of the Parties.


10.5. 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.


10.6. The Parties shall have an obligation to
promptly notify each other of any changes in the legal form, address, banking
or other details, which have occurred.


11. Addresses, Banking Details
and Signatures of the Parties:


	
  Agent:

  	
   

  	
  Principal:

  
	
  CJSC
  “Kompaniya TSV”

  	
   

  	
  CJSC “Network
  of Television Stations”

  
	
  Place
  of Business: 25 Akademeka Pavlova Street, Moscow 121359

  	
   

  	
  Place
  of Business: 12, 3 Khoroshevskaya Street, 

  
	
   

  	
  Moscow

  
	
  Mailing
  Address: 25 Akademeka Pavlova Street, Moscow 121359

  	
   

  	
  Mailing
  Address: 12, 3 Khoroshevskaya Street,

  
	
   

  	
  Moscow

  
	
  INN 7731568585

  	
   

  	
  INN07115217, ОГРH 1027700151852

  
	
  KPP 773101001

  	
   

  	
  Current
  account 40702810100000006624 with OAO  Alfa
  Bank, correspondent account 

  
	
  OGRN
  5077746859757

  	
   

  
	
  Current account 4070 2810 3382 6011 0108

  	
   

  	
  30101810200000000593

  
	
  With the Kievskoe Branch of the Savings Bank of
  Russia No 5278

  	
   

  	
  BIK 044525593

  
	
   

  	
  tel. 797- 4100 fax 797 – 4101

  
	
  Correspondent account 3010 1810 4000 0000 0225

  	
   

  	
  Hard Currency Account Details:

  
	
  BIK 044525225

  	
   

  	
  Beneficiary: ZAO Set Televisionnyx Stanciy

  
	
  Tel.

  	
   

  	
   

  
	
  Fax

  	
   

  	
  Beneficiary account: 40702840400003003080

  
	
  Hard Currency Account Details:

  	
   

  	
  Beneficiary
  bank: ALFA-Bank, Moscow, Russia  (107078,
  Masha Poryvaeva st., 11)

  
	
  Beneficiary: Beneficiary account:

  	
   

  
	
   

  	
   

  	
   

  
	
  Beneficiary bank: 

  	
   

  	
   

  



 


 


	
   

  	
  On behalf of the Agent

  	
   

  	
  On
  behalf of the Principal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  V.L. Vshivkin seal here

  	
   

  	
  A.E.
  Rodnyansky seal here

  



 


 



 10














Appendix No 1


(to be completed by November 30, 2007)











Appendix No 2


(Procedures for Acceptance and Insertion of
Network Advertising)


To Agency Agreement No C-25-400/07 dated July 11, 2007


(hereinafter the “Agency
Agreement”)


Moscow                                                                                                                     July
11, 2007


Closed Joint Stock Company
“Network of Television Stations” (OGRN 1027700151852), hereinafter referred to
as the “Principal”, represented by its General Director A.E. Rodnyansky, acting
pursuant to the Charter on one side, and Closed Joint Stock Company “Kompaniya
TSV” (OGRN 5077746859757 ), hereinafter referred to as the “Agent”, represented
by the General Director V.L. Vshivkin, acting pursuant to the Charter, on other
side, hereinafter referred to as the “Parties”, executed this Appendix to the
Agency Agreement as follows:


This Appendix shall set forth the arrangements as
between the Agent and the Principal with respect to the preparation,
documenting and inserting into the Network Program Blocks of the Network
Advertising to be delivered by the Agent in accordance with the Agency
Agreement.  Capitalized terms used herein
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Agency Agreement.


1. 
Acceptance and Insertion of the Network Advertising into the Network
Program Blocks:


1.1.  The Agent
shall accept the advertisements from the Clients in PAL format with
synchronized voiceover and time code on Betacam SP or Digital Betacam tapes
(hereinafter referred to as the “Tapes”).


The Agent’s representatives shall deliver to the
Principal (at 12, 3 Khoroshevskaya Street, Moscow) no later than 4 (four) business days before the
scheduled time for the broadcast of the advertising in the Network Program
Blocks (by 5 p.m. on the delivery day) (on Mondays the deliveries shall be
accepted for Saturday and Sunday of the current week and the next Monday, on
Tuesday for the next Tuesday, on Wednesday for the next Wednesday, on Thursday
for the next Thursday and on Friday for the next Friday) the Tapes with the
video recordings of the Network Advertising and accompanying documents
(Advertising Spot Order Forms).


On pre-holiday days the Tapes with the video
recordings of the Network Advertising and accompanying documents shall be
delivered to the Principal within such time as shall be additionally agreed by
the Parties by means of telephone or fax communications.


An Advertising Spot Order Form shall be delivered
together with the Tape containing the video recording of the Network
Advertising (section 1.2. of this Appendix).


1.2.  In accordance with section 1.1. of
this Appendix, the Tape containing the video recording of the Network
Advertising shall be accompanied by an Advertising Spot Order Form.


The Advertising Spot Order Form shall contain the
following details:


·       tape number;


·       spot starting and ending time code (with
accuracy to a frame);


·       spot title and version;


·       each spot ID (identification number);


·       frame timing information (with accuracy
to a frame).


1.3.  The Network Advertising video
recording should conform to the technical specifications as contained in the
current Russian regulations, as well as the Principal’s requirements applicable
to the TV recording. The frame timing should be divisible by 5 exactly.


1.4.  The
Agent shall inform the Principal (traffic department) on any changes in
scheduling the broadcast of the Network Advertising no later than by 2 p.m. on
a day, which is 3 (Three) business days before the scheduled broadcast. This
shall also be a deadline for delivering the Tapes with video recordings of the
commercials for inserting them into advertising blocks.


If
an urgent need for the re-cutting of the completed advertising blocks arises,
the Agent shall deliver to the Principal (traffic department) of the Re-Cutting
Orders. Re-cutting shall only be done, if the Principal has a physical ability
to do so.


1.5.  If
the video recoding of the Network Advertising is not in conformance with the
requirements set forth in section 1.3. of this Appendix the Principal (traffic
department) shall promptly (within one day) notify Agent of each such
occurrence.


The
video recording may be replaced by the Agent for another one as long as the
time requirements set forth in paragraph 1.4 of this Appendix are complied
with.











2. Principal’s Manager Terminal:


2.1.  The Agent shall make available to the
Principal a technical service allowing for access (through Internet, dial-up or
dedicated line connection) to the localized version of the Television
Advertising Placement System, containing data on the Network Advertising
placements (hereinafter referred to as the TAPS) and maintain the same.


The number of terminals shall be as agreed between the
Agent and the Principal.


2.2.  The Principal’s manager remote
terminal shall allow for access by the Principal’s managers to the following
information, including for editing:


·       Network Program Block programming
schedule identifying available advertising spots;


·       total time allocated to and booked for
the Network Advertising within the Network Program Block programming schedule;


·       advertising block spots booked;


·       advertised product category;


·       client entity;


·       information on Russian/international
author works use in the commercials.


2.3.  The Agent shall deliver to the
Principal an electronic Placement Form for the Network Advertising (other then
Sponsorship Advertising) by means of a report, installed on the Principal’s
manager remote terminal.


2.4.  The Principal’s managers shall
download the electronic advertising Placement Form no later than at 2 p.m.
(final version) on a day, which is 3 (Three) business days before the placement
date.


2.5.  The electronic Placement Form shall
contain the following information:


·       placement date (day, month, week day,
year);


·       description of all (in-program and
between-programs) adverting blocks;


·       reference as to in what commercial break
the advertising block is scheduled to be broadcast within the Network Program
Block programming schedule and its number (within which program or prior to
which program the advertising block is scheduled);


·       title, version and timing information for
each advertising spot in the block;


·       positioning of the commercial, if any;


·       sequence of advertising spots within the
block;


·       timing information for the entire length
of the block;


·       timing information for all blocks of the
day.


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


Signatures of the Parties:


	
  

  	
  Agent:

  	
   

  	
  Principal:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (V.L. Vshivkin)
  seal here

  	
   

  	
  (A.E.
  Rodnyansky) seal here

  	
   

  



 











Appendix 3


(Procedures for Acceptance and Insertion of
Sponsorship Advertising


into Network Program Blocks)


to Agency Agreement No C-25-400/07 dated July 11, 2007


(hereinafter the “Agency
Agreement”)


Moscow                                                                                                                     July
11, 2007


Closed Joint Stock Company
“Network of Television Stations” (OGRN 1027700151852), hereinafter referred to
as the “Principal”, represented by its General Director A.E. Rodnyansky, acting
pursuant to the Charter on one side, and Closed Joint Stock Company “Kompaniya
TSV” (OGRN 5077746859757 ), hereinafter referred to as the “Agent”, represented
by the General Director V.L. Vshivkin, acting pursuant to the Charter, on other
side, hereinafter referred to as the “Parties”, executed this Appendix 3 (the “Appendix”)
to the Agency Agreement as follows. 
Capitalized terms used herein and not otherwise defined herein have the
meanings ascribed to such terms in the Agency Agreement.


Subject to the terms and conditions of the Agency
Agreement, the Parties agree on the arrangements for the placement of the
Sponsorship Advertising in the Network Program Blocks based on the conditions
set forth in this Appendix.


2.  For
the Purposes of this Appendix the below forms of placement of the Sponsorship
Advertising have the following meanings:


(a) “Opening
Sponsor Subtitles” means mandatory reference to an entity or individual
(Sponsor), which/who met the cost of the production and/or broadcast of the
television program, which is to contain a full legal name of the Sponsor. The
duration of appearance in the frame is to be 3 to 5 seconds with the size of up
to 5% of the frame.


(b) “Sponsor’s
Still/Dynamic Promotion” means the still image or dynamical sequence of images
with reference to a full legal name of the Sponsor or to its Product/Logo of 5
to 10 seconds in duration (length should be divisible to 5).


(c) “Sponsor
Subtitles at the First Product Showing” 
means a mandatory reference to an entity or individual (the Sponsor),
which/who met the cost of the production and/or broadcast of the television
program, which is to contain a full legal name of the Sponsor. The duration of
appearance in the frame shall be 3 to 5 seconds with the size of up to 5% of
the frame.


(d) “Frame
Corner Digital (Superimposed) Logo” means the Sponsor’s logo (trademark)
graphically generated by a computer and placed in the Program. It will be
possible only together with Opening Sponsor Subtitles or simultaneously with
them. It can be of up to 7% of the frame in size.


(e) “Subtitles
Credit” means a recognition of the Sponsor by the Program (with a mandatory
visual presentation of the Sponsor’s legal name) for the Products or services
provided.


(f) “Sponsor
Promotion” means a specially produced (to avoid association with a
direct/commercial advertisements) promotion of the Sponsor with required
reference to the full name of the Sponsor (at the beginning of the Program and
at the time of the first appearance of the Product).


(g) “Presenter’s
Verbal Credit (Announcement)/Reference to Sponsor/Program Break” means the
presenter’s verbal announcement about the Program Sponsor, in which reference
is made to the Sponsor’s brand and Products with description of the Products
features.


(h) “Presenter’s
Verbal Credit (Announcement/Reference to Sponsor/No Program Break” means the
presenter’s verbal announcement about the Program Sponsor without breaking the
running of the Program or reference to the Sponsor’s brand and Products with a
duration of up to 3 seconds.


(i) “Presenter’s
Verbal Announcement/No Reference to Sponsor/Reference to Brand and/or Display
of Product/Product Make” means the presenter’s verbal announcement about the
Sponsor’s product/brand with displaying the same, being part of the Program
plot limited to 3 seconds in duration.


(j) “Presenter
Giving Sponsor’s Gift/Reference to Sponsor/Program Break” means the handing by
the Program presenter of the gift provided by the Sponsor with a reference to
the trade mark and











product
description of the product specifications as well as a reference to the legal
name of the Sponsor.  Gift can be
presented by the Sponsor’s representative.


(k) “Presenter
Giving Sponsor’s Gift/Reference to Sponsor/No Program Break” means the handing
by the Program presenter of the gift provided by the Sponsor with a reference
made only to the Sponsor and no reference made to the Product make/brand or
comments as to its specifications or properties.  The display of the gift (Product) and handing
it over should not interrupt the running of the Program and a participant of
the Program should at all times appear on camera.  No close-ups of the gift packaging/Product or
logos are allowed.


(l) “Presenter Giving Sponsor’s Gift/No Reference to Sponsor/ Reference
to Brand and/or Display of the Product/Product Make” as the Presenter hands
over the gift, reference is made to the make/brand and/or Product or Product
make is displaye comments as to its specifications, properties or distinctive
features.  No close-ups of the gift
packaging or logos are allowed.


(m) “Displaying
Sponsor’s Sign” means the sign with the entity’s name (including the one that
is not the same as the Sponsor’s name) in the building, where it conducts its
business, to be shown at long distance with the Program participants present.
The length is limited to 3 seconds.


(n) “Displaying
Sponsor Packaging (Bags)” means the packaging with the Sponsor’s logo or trademark
on it to be shown at long/middle distances with the Program participants
present. The length is limited to 3 seconds.


(o) “Use
of Sponsor-Provided Decorations” means the use of the Sponsor’s Products, brand
elements, its colors and styling for decorating the Program shooting set.


(p) “Sponsor
Providing Clothing to Program Characters/Presenters” means the clothing of the
Program presenters or characters without the Sponsor’s logo.


(q) “Decoration
of Program Studio/Interiors with Sponsor-Provided Materials” means the use of
brand elements, its colors and styling for decorating the Program shooting set.


(r) “Use
of Sponsor Promotion Materials in Program Studio/Interiors (Microphones,
Tables) means the use of brand elements, its colors and styling as well as the
products for decorating the Program shooting set.


(s) “Displaying
Sponsor Products” means the Sponsor-manufactured or marketed product appearing
in the frame at long or middle distance for 2 to 3 seconds.


(t) “Use
of Sponsor Products” means the Sponsor-manufactured or marketed product
appearing as they are being consumed/used by the Program participants. Middle
shots are to be used with duration of 2 to 3 seconds.


(u) “Presence
of Sponsor in Studio (Studio Guest)” means the interview of or address by the
Sponsor in the Program without a reference to any make/brand, appearance of the
Product or any comments as to the consumer properties, qualities or features of
the Product.


(v) “Appearance
of/Reference to Sponsor’s Product in Special Scene” means displaying or making
reference to the Sponsor-manufactured or marketed product, which appears or is referred to on camera
in a specially set-up and scripted scene, being incorporated into such scene as
a “recurring character”, not as the scene’s “main character” with appearances
(references) made at long or middle distances together with other products.


3. The Sponsorship advertising shall be placed in
the Network Program Blocks as follows:


3.1. Before any agreements are made for the
placement of the Sponsorship Advertising, the Agent should first agree on the
placement arrangements with the Client and the Principal (Sponsorship Package:
name of the program sponsor, advertised item (program sponsor, its product or
service), a form of the placement of the Sponsorship Advertising (out of the
list above in section 2 of this Appendix), title of the program to be
sponsored, date of the placement and the number of appearances of the
Sponsorship Advertising.


3.2. Based on the preliminary agreement, the Agent
shall deliver in writing to the Principal (responsible account manager in the
sales department) an Order Form and letter of guarantee for the placement of
the Sponsorship Package no later than 10 (Ten) business days before:


·          the
scheduled day for the placement of the Sponsorship Advertising in the Network
Program Blocks in the event that the Sponsorship Advertising is to be placed
using the form described in item (b) of section 2 of this Appendix;











·          prior
to the start of production work on (shooting of) the television program/show in
the event that the Sponsorship Advertising is to be placed using any forms
other than described in paragraph (b) of section 2 of this Appendix.


If after 2 (Two) business days from the receipt by
the Principal from the Agent of the Form Order (Letter of Guarantee) no
reasonable objections or rejection to accept the Sponsorship Package are raised
by the Principal, the Sponsorship Advertising shall be deemed accepted by the
Principal for placement and the Agent shall be deemed authorized to enter into
an agreement with the Client on the terms set forth in the Order Form (Letter
of Guarantee).


The Order for placement of the Sponsorship Advertising
(description of the Sponsorship package) shall contain the name of the program
sponsor, advertised item (program sponsor, its product or service), form of
placement of the Sponsorship Advertising (out of the list above in section 2 of
this Appendix), title of the program to be sponsored, date of placement and the
number of appearances of the Sponsorship Advertising in each program (release
of the program), timing information for each form of placement of the
Sponsorship Advertising, as well as the placement price of the Sponsorship
Advertising.


3.3. The Sponsorship Advertising shall be placed by
the Principal in the Network Program Blocks pursuant to the Order Form of the
Agent as follows:


3.3.1. The Sponsorship Advertising, placed in the
form described in item (b) of section 2 of this Appendix shall be accepted by
the Agent from the Client in PAL format with synchronized voiceover and time
code on Betacam SP or Digital Betacam tapes (hereinafter referred to as the “Tapes”).  The tapes with the video recordings shall be
delivered to the Principal’s Sales Department 7 (Seven) business days before
the commencement of the period during which the Sponsorship Advertising is to
run. The Principal’s person, responsible for the acceptance of the Tapes: an
account manager of the sales department responsible for this Sponsorship
placement.


The placement by the Principal of the Sponsorship
Advertising in the Network Program Blocks in accordance with the first
paragraph of this subsection shall be in accordance with the procedures set
forth in Appendix 2 to the Agency Agreement.


3.3.2. The Sponsorship Advertising placed in the
forms described in items (a), (c) and (d) of section 2 of this Appendix shall
be accepted by the Agent from the Client as a write-up on the Sponsorship
Client as well as electronically in the format to be agreed with the production
company (jpg, mpeg, etc.). The write-ups on the Sponsorship Client and the
Tapes with the video recordings shall be delivered to the Principal’s Sales
Department. The Principal’s person, responsible for the acceptance of the
Tapes: an account manager of the sales department responsible for this
Sponsorship placement.


3.3.3. The Sponsorship Advertising placed in the
forms described in items (a), (c) through (v) in accordance with section 2 of
this Appendix shall be produced and inserted into the program (release of the program)
by the program production company pursuant to the respective agreements between
the production company and the Principal. The placement of the Sponsorship
Advertising in the Network Program Blocks in the forms listed in this
subsection shall be in accordance with the following procedure:


3.3.3.1. The Principal shall deliver to the
production company a respective Placement Order (as defined in Appendix 2 to
the Agency Agreement) in respect of the Sponsorship Advertising attaching
respective information on the Sponsorship Client, materials necessary for the
production of the program together with the electronic files in the agreed
format.


3.3.3.2. Once the program has been produced, the
Principal shall accept the respective program (release of the program) with the
Sponsorship Advertising inserted into it and as long as the program is
consistent with the Order Form, the respective program (release of the program)
shall be included into the Network Program Blocks in accordance with the
Network Program Block Programming Schedule.


3.3.3.3. In the event that the Sponsorship
Advertising has been produced and inserted into the program with deviations
from the form agreed for the placement or its amount is lesser in scope than
requested in the Order Form (Letter of Guarantee) of the Agent, the Principal shall deliver to
the Agent a copy of the program produced in a pre-view format (DVD, VHS).  Such pre-view copy shall be delivered to the
Agent by courier within 2 (Two) business days after the receipt of the program
(release of the program) by the Principal from the production company.


3.3.3.4. Based on the video recoding of the program
delivered by the Principal the Agent shall obtain the approval of the
Sponsorship Client for the deviations from the Sponsorship











package within 3
(Three) business days from the receipt of the material from the Principal as
provided under section 3.3.3.3 of this Appendix and shall immediately inform
the Principal about such approval.


If
the Sponsorship Client does not approve the deviations from the Sponsorship
package the Agent shall advise the Principal about this. In such cases the
Principal agrees to satisfy the Client’s claims that arise from the deviations
from the Sponsorship Package to the extent the services were provided improperly.


If
no approval or disapproval with respect to the deviations from the Sponsorship
package is received by the Agent from the Sponsorship Client within the time
period set forth in the first paragraph of this subsection, the Parties
acknowledge that the Sponsorship Client shall be deemed to have agreed to the
deviations from the Sponsorship package.


3.3.4. With the
purpose of proper performance of the Agency Agreement and reporting by the
Agent to the Client on the services actually provided with regard to the
placement of the Sponsorship
Advertising the Principal shall deliver to the Agent no later than 15th day of the month following the
month of placement an ad run report as a proof of broadcasting the program
containing the respective Sponsorship
Advertising placed in the
form described in item (b) of section 2 of this Appendix. To the extent the
video recording of the program containing the Sponsorship Advertising has been requested the  Agent shall deliver to the Principal a written request
for the production of the above video recording.


4.
This Appendix shall come into effect simultaneously with the Agency Agreement
and shall be an integral part of the Agency Agreement.


5.
This Appendix is made and executed in two equally binding counterparts with one
for each Party.


Signatures of the Parties:


	
   

  	
  Agent:

  	
   

  	
   

  	
  Principal:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (V.L. Vshivkin) seal
  here

  	
   

  	
   

  	
  (A.E. Rodnyansky) seal here