Exhibit 10.64.2


 


AMENDMENT NO. 1 TO


AMENDED AND RESTATED


SHARE PURCHASE
AGREEMENT


 


THIS AMENDMENT NO. 1 dated as of July 28,
2008 (the “Amendment”), to the Amended and Restated Share Purchase Agreement
dated as of April 29, 2008 (as amended, the “Agreement”), relating to
Costafilm Limited Local Corporation, a limited liability company incorporated
under the laws of the Russian Federation, registered by Interdistrict Tax
Inspection No. 46, Moscow on August 28, 2007, registration number
1077759492304, having its registered office at Radio str., 14 – 1, 105005,
Moscow, Russia (the “Company”). is made by and between:


 


Mr. Evgeniy Borisovich Melentiev, a citizen of
the Russian Federation, bearing passport number 50 03 No. 226887 issued by OVD of
Sovetskiy district, Novosibirsk on July 12, 2002, code of subdivision 542-009, with
his registered address at Zhemchuzhnaya str., 12 – 15, 630090, Novosibirsk, Russia,
and Mr. Konstantin Tagirovich Kikichev, a citizen of the Russian Federation, bearing
passport number 45 09 No. 411695 issued by Subdivision of Yuzhnoportovyi district, Moscow
on December 11, 2007,  code of subdivision
770-113, with his registered address at Melnikova str., 25 – 34, 109044, Moscow,
Russia, and Mr. Sergei Vladimirovich Arlanov, a citizen of the Russian Federation,
bearing passport number 45 08 No. 500590 issued by Passports and visas issuing department
of the Supreme Department of Internal Affairs, Moscow on December 18, 2006, code
of subdivision 771-001, with his registered address at Mira av., 110/2 – 72, 129626,
Moscow, Russia, and Mr. Dmitri Aleksandrovich Tabarchuk, a citizen of the Russian
Federation, bearing passport number 75 00 No. 514698 issued by Traktorozavodskim
RUVD, Chelyabinsk on June 4, 2001, code of subdivision 742-047, with his registered
address at Artilleriyskiy per., 2 – 5, 454000, Chelyabinsk, Russia (each,  a  “Seller” and collectively, the  “Sellers”), from one side,  and CJSC
“CTC NETWORK”, a company organised and existing under the laws of the Russian Federation,
having its registered office at 3rd Khoroshevskaya str., 12, 123298, Moscow, Russia (“CTC Network”), and CTC Media, Inc., a Delaware corporation with its
registered office at 2711 Centerville Road, Suite 400, Wilmington, Delaware (“CTC
Media”), on the other side.  CTC Network and CTC Media are
hereinafter collectively referred to as the “Purchaser”.


 


WITNESSETH:


 


WHEREAS, the Purchaser and the Sellers
entered into the original Share Purchase Agreement on December 18, 2007 and
the Amended and Restated Share Purchase Agreement as of Apirl 29, 2008;


 


WHEREAS, the Purchase and Sellers wish to further
amend the Amended and Restated Share Purchase Agreement as set forth herein;


 


NOW, THEREFORE, the party hereto agrees as
follows:


 

















 


1.             AMENDMENTS


 


1.1           The
following sections of Article I (Definitions)
are hereby deleted in their entirety:


 


“1.12       Disability”;


 


“1.17       Multiple Defaulting Sellers”;


 


“1.27       Reserve Amount for 2008”;


 


“1.28       Reserve Amount for 2009”;


 


“1.36       Single Defaulting Seller”; and


 


“1.38       Termination Without Cause”.


 


1.2           Clauses
(a)(i) and (a)(ii) of Section 3.5 of the Agreement are hereby
deleted in their entirety and replaced with “[Deliberately Omitted]”.


 


1.3           Paragraph
(b) of Section 3.5 of the Agreement is hereby deleted and replaced
with the following:


 


(a)           The
Earn Out Payments shall be calculated as follows:


 


(i)            Calculation
of 2008 Earn Out Payment


 


The “2008 Earn Out Payment” shall be equal to
the Ruble Equivalent of US$ 13,000,000 (thirteen million) less the sum
of (1) the amount, if any, of the 2008 Deduction 1, (2) the amount,
if any, of the 2008 Deduction 2, (3) any uncollectible accounts receivable
or loans as provided in Article 7.6 and (4) any unpaid Damages as
provided in Article 9; provided, however, that the 2008 Earn
Out Payment can never be adjusted below 0.


 


Calculation of 2008
Deduction 1


 


If in the 2008 Financial Year, either (x) production
hours sold by the Company is less than 350 FTA hours of TV Product in cases
where CTC Network ordered or caused other TV channels to order 350 or more hours
and/or (y) the Relevant Audience Share for such Financial Year was below
that set forth in Article 3.5(a)(iii)e, 2008 Deduction 1 shall be
calculated in accordance with the formula set out immediately below. Otherwise,
2008 Deduction 1 shall be 0.


 


2008 Deduction 1 = P x (1 - X/Z), where


 


P = US$ 13 million;


 


X = the lesser of (i) the number of FTA
hours of TV Product actually produced and sold by the Company in the 2008
Financial Year less the aggregate number of FTA hours of TV Product
produced and sold in the 2008 Financial Year for any TV Product where the
Relevant Audience Share for such TV Product during the course of such 


 


2

















 


Financial Year was less than that stipulated
by Article 3.5(a)(iii)e and (ii) 350 FTA hours; and


 


Z = the lesser of (i) the number of FTA
hours of TV Product actually ordered for production by CTC Network or other TV
channels in the 2008 Financial Year and (ii) 350 FTA hours. If Z is less
than X then Z equals X.


 


Calculation of 2008
Deduction 2


 


If in the 2008 Financial Year, the Company’s EBIT
margin is less than 14%, 2008 Deduction 2 shall be calculated in accordance with
the formula set out immediately below. Otherwise, 2008 Deduction 2 shall be 0.


 


2008 Deduction 2 = (S x 14% - Y) x 6.3 x
32.5%, where


 


S = net sales revenue (without VAT) in 2008


 


Y = actual EBIT in 2008


 


(ii)           Calculation
of 2009 Earn Out Payment


 


The “2009 Earn Out Payment” shall be equal to
the Ruble Equivalent of US$ 13,000,000 (thirteen million) less the sum
of (1) the amount, if any, of the 2009 Deduction 1, (2) the amount,
if any, of the 2009 Deduction 2, (3) any uncollectible accounts receivable
or loans as provided in Article 7.6, (4) any unpaid Damages as
provided in Article 9 and (5) the amount of any deductions that would
have been made to the 2008 Earn Out Payment but for the fact that the amount of
such deduction would have put the 2008 Earn Out Payment below 0; provided,
however, that the 2009 Earn Out Payment can never be adjusted below 0.


 


Calculation of 2009
Deduction 1


 


If in the 2009 Financial Year, any of (x) the
number of FTA hours of TV Product produced by the Company and sold to CTC
Network is less than the number of FTA hours of TV Product ordered by CTC
Network during such Financial Year 
(provided such number of FTA hours ordered by CTC Network does not
exceed 250 FTA hours), (y) the Other Channel Revenue Objective is not
achieved in such Financial Year and/or (z) the Relevant Audience Share for
such Financial Year was below that set forth in Article 3.5(a)(iii)e, 2009
Deduction 1 shall be calculated in accordance with the formula set out
immediately below. Otherwise, 2009 Deduction 1 shall be 0.


 


2009 Deduction 1 = P x (1 - X/Z), where


 


3

















 


P = US$ 13 million;


 


X = the sum of (1) number of FTA hours
of TV Product actually produced by the Company and sold to CTC Network in the
2009 Financial Year and (2) if the Other Channel Revenue Objective was
achieved in the 2009 Financial Year, 100 FTA hours, or, otherwise, Y (as
calculated below) less (3) the aggregate number of FTA hours
produced and sold in the 2009 Financial Year for any TV Product where the
Relevant Audience Share for such TV Product during the course of such Financial
Year was less than that stipulated by Article 3.5(a)(iii)e;


 


Z = the sum of (1) the lesser of (i) the number of
FTA hours of TV Product actually ordered by CTC Network for production by the
Company in the 2009 Financial Year and (ii) 250 FTA hours and (2) 100 FTA
hours. If Z is less than X then Z equals X; and


 


Y = 100 x (A / 0.40), where A = the Company’s
revenues from the production and sale of TV Product to TV channels other than
CTC Network / the Company’s revenues from the production and sale of TV Product
to CTC Network, each for such Financial Year.


 


Calculation of 2009
Deduction 2


 


If in the 2009 Financial Year, the Company’s
EBIT margin is less than 14%, 2009 Deduction 2 shall be calculated in
accordance with the formula set out immediately below. Otherwise, 2009
Deduction 2 shall be 0.


 


2009 Deduction 2 = (S x 14% - Y) x 5.4 x
32.5%, where


 


S = net sales revenue (without VAT) in 2009


 


Y = actual EBIT in 2009


 


(iii)          Calculation
of 2010 Earn Out Payment


 


The “2010 Earn Out Payment” shall be equal to
the Ruble Equivalent of US$ 13,000,000 (thirteen million) less the sum
of (1) the amount, if any, of the 2010 Deduction 1, (2) the amount,
if any, of the 2010 Deduction 2, (3) any uncollectible accounts receivable
or loans as provided in Article 7.6, (4) any unpaid Damages as
provided in Article 9 and (5) the amount of any deductions that would
have been made to the 2009 Earn Out Payment 
but for the fact that the amount of such deduction would have put the
2009 Earn Out Payment below 0; provided, however, that the 2010 Earn
Out Payment can never be adjusted below 0.


 


4

















 


Calculation of 2010
Deduction 1


 


If in the 2010 Financial Year, any of (x) the
number of FTA hours of TV Product produced by the Company and sold to CTC Network
is less than the number of FTA hours of TV Product ordered by CTC Network
during such Financial Year  (provided
such number of FTA hours ordered by CTC Network does not exceed 250 FTA hours),
(y) the Other Channel Revenue Objective is not achieved for such Financial
Year and/or (z) the Relevant Audience Share for such Financial Year was
below that set forth in Article 3.5.(a)(iii)e, 2010 Deduction 1 shall be
calculated in accordance with the formula set out immediately below. Otherwise,
2010 Deduction 1 shall be 0.


 


2010 Deduction 1 = P x (1 - X/Z), where


 


P = US$ 13 million;


 


X = the sum of (1) number of FTA hours
of TV Product actually produced by the Company and sold to CTC Network in the
2010 Financial Year and (2) if the Other Channel Revenue Objective was
achieved in the 2010 Financial Year, 100 FTA hours, or, otherwise, Y (as
calculated below) less (3) the aggregate number of FTA hours
produced and sold in the 2010 Financial Year for any TV Product where the
Relevant Audience Share for such TV Product during the course of such Financial
Year was less than that stipulated by Article 3.5(a)(iii)e;


 


Z = the sum of (1) the lesser of (i) the number of
FTA hours of TV Product actually ordered by CTC Network for production by the
Company in the 2010 Financial Year and (ii) 250 FTA, and (2) 100 FTA hours.
If Z is less than X then Z equals X; and.


 


Y = 100 x (A / 0.40), where A = the Company’s
revenues from the production and sale of TV Product to TV channels other than
CTC Network / the Company’s revenues from the production and sale of TV Product
to CTC Network, each for such Financial Year.


 


Calculation of 2010
Deduction 2


 


If in the 2010 Financial Year,  the Company’s EBIT margin is less than 14%,
2010 Deduction 2 shall be calculated in accordance with the formula set out
immediately below. Otherwise, 2010 Deduction 2 shall be 0.


 


2010 Deduction 2 = (S x 14% - Y) x 4.9 x
32.5%, where


 


S = net sales revenue (without VAT) in 2010


 


5

















 


Y = actual EBIT in 2010


 


1.4           Paragraph
(g) of Section 6.2 is hereby deleted in its entirety and replaced
with the following:


 


“(g)         Employment
Agreements


 


Each of the Sellers may enter into an
employment agreement with the Company. 
Any such agreements shall be in form and substance acceptable to the
Purchaser and shall provide for a monthly salary of RUR 248,000 payable in RUR,
which monthly salary shall be subject to annual adjustment based on the
official inflation rate in the Russian Federation. In addition, each of the
Sellers shall be entitled to performance bonuses based on the results of the
Company in the 2009 and 2010 Financial Years, the amounts and conditions of
such performance bonuses shall be established no later that March 31 of
such Financial Year.


 


In the 2008 Financial Year the performance bonuses shall be based on the following principles:


 


(x)            Each
Seller’s performance bonus shall be equal to 6 monthly salaries if EBIT margin
for the Company in the 2008 Financial Year is over 17% but less than 20%.


 


(y)           Each
Seller’s performance bonus shall be equal to 12 monthly salaries if EBIT margin
for the Company in the 2008 Financial Year is 20% or greater.”


 


2.             MISCELLANEOUS


 


2.1           Capitalized
terms used, but not defined, herein have the respective meanings ascribed to
them in the Agreement.


 


2.2           This
Amendment together with the Agreement (including the exhibits and Schedules
thereto) constitutes the entire agreement among the parties and supersedes any
prior understandings, agreements or representations by or among the parties,
written or oral, with respect to the subject matter hereof and thereof.


 


2.3           The
Agreement remains in full force and effect, except as specifically modified by
this Amendment, and the terms and conditions thereof, as specifically modified
by this Amendment, are hereby ratified and confirmed.


 


6

















 


IN
WITNESS WHEREOF, the Parties hereto have duly executed this Amendment as of the day and
year first above written.


 


	
  EXECUTED  by

  	
   

  	
   

  
	
  Evgeniy Borisovich
  Melentiev

  	
   

  	
  /s/ Evgeniy Borisovich
  Melentiev

  
	
   

  	
   

  	
   

  
	
  EXECUTED  by

  	
   

  	
   

  
	
  Konstantin Tagirovich
  Kikichev

  	
   

  	
  /s/ Konstantin Tagirovich
  Kikichev

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED  by

  	
   

  	
   

  
	
  Sergei Vladimirovich
  Arlanov

  	
   

  	
  /s/ Sergei Vladimirovich
  Arlanov

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED  by

  	
   

  	
   

  
	
  Dmitri Aleksandrovich
  Tabarchuk

  	
   

  	
  /s/ Dmitri Aleksandrovich
  Tabarchuk

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED by

  	
   

  	
   

  
	
  CJSC “CTC Networks”

  	
   

  	
   

  
	
  acting by
  its General Director

  	
   

  	
   

  
	
  Alexander
  Efimovich Rodnyansky

  	
   

  	
  /s/ Alexander Efimovich
  Rodnyansky

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED by

  	
   

  	
   

  
	
  CTC Media, Inc.

  	
   

  	
   

  
	
  acting by
  its President and

  	
   

  	
   

  
	
  Chief Executive Officer

  	
   

  	
   

  
	
  Alexander
  Efimovich Rodnyansky

  	
   

  	
  /s/ Alexander Efimovich
  Rodnyansky

  



 


7

















 


ACKNOWLEDGED BY THE SPOUSE


OF EACH SELLER:


 


	
  ACKNOWLEDGED BY THE SPOUSE OF

  	
   

  
	
  Evgeniy Borisovich Melentiev

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED BY THE SPOUSE OF

  	
   

  
	
  Konstantin Tagirovich Kikichev

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED BY THE SPOUSE OF

  	
   

  
	
  Sergei Vladimirovich Arlanov

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED BY THE SPOUSE OF

  	
   

  
	
  Dmitri Aleksandrovich Tabarchuk

  	
   

  



 


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