Document:

Exhibit 10.61

 

(Agreement in respect

of placement of advertising

on the CTC Network)

 

AGENCY AGREEMENT No KT-4/1207

 

	
  Moscow

  	
  December 14, 2007

  

 

Closed Joint Stock Company “New Channel” (OGRN 1047796750880), 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 Deputy General Director V.L. Vshivkin, acting pursuant to
the Power of Attorney without number dated December 3, 2007, on the other
side, hereinafter referred to as the “Parties”, entered into this Agency
Agreement (hereinafter the “Agreement”) as follows:

 

1. Definitions.

1.1. For the purpose of
interpretation of the terms and conditions of this Agreement the terms defined
below shall 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 Domashny 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
Domashny 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 Domashny 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 advertising 
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 Domashny
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).

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;

 

1

 

·                   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.

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 Domashny 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, week-ends and holidays of up to 10.5% (ten point 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 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 (“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,
including means of distinguishing the goods, manufacturers and sellers of the
goods, 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 

 

 

2

 

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.

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 year  (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 DOMASHNY 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 

 

 

3

 

advertisement during the same time (during an
equivalent television program) or the price of the advertisement not run or
placed with deviations.

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/omission to act 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 making contracts 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 1 (one)
calendar day 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 and the
disputed Advertising.

 

4

 

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
the first paragraph 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.

·                   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 unsatisfactory  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 12% (Twelve
percent) of the Principal’s Actual Gross Revenue in each Reporting Period.

 

 

5

 

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.

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 sections  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 

 

6

 

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.

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 12% (Twelve percent) of the funds received
(if the funds are received in US Dollars 12% 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.

 

 

7

 

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 12% (Twelve
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 was 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 section  2.4. of this Agreement and
the respective plans for Advertising sales. The Parties agree that the coming
into effect of the legislative changes 

 

8

 

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.

 

7. Notices under the Agreement

7.1. The Parties shall deliver
all applications, notices and requests to each other to the agreed addresses 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, 2010.

9.2. This Agreement may be
terminated before expiry of its term by either Party subject to a notice at
least 180 (one hundred eighty) 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 12% (Twelve percent) of the amount of the Principal’s
Actual Gross Revenues for the 6 (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,
2009 and subject to terminating Party’s notice being received by the other
Party at least 180 (one hundred eighty) 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.

 

9

 

10. Miscellaneous

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

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
extent  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 “New Channel”

  
	
  Place
  of Business: 25 Akademeka Pavlova Street, 

  Moscow 121359  

  Mailing Address: 25 Akademeka Pavlova Street, 

  Moscow 121359  

  INN 7731568585  

  KPP 773101001  

  OGRN 5077746859757  

  Current account 4070 2810 3382 6011 0108  

  With the Kievskoe Branch of the Savings
  Bank of 

  Russia No 5278  

  Correspondent account 3010 1810 4000 0000 0225  

  BIK 044525225

  	
   

  	
  Place
  of Business: 12, 3 Khoroshevskaya Street, 

  Moscow  

  Mailing Address: 12, 3 Khoroshevskaya Street, 

  Moscow, 123298.  

  INN 7734517148, KPP 773401001 OGRN 

  1047796750880  

  Current account 4070281031600000353 with
  OAO 

  Alfa Bank, correspondent account 

  30101810200000000593  

  With OPERU of Moscow GTU of Bank of Russia  

  BIK 044525593  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hard Currency Account Details:  

  Beneficiary:
  Closed Joint Stock Company “New Channel”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Beneficiary account: 40702.840.1.01603000083  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Beneficiary bank: ALFA-Bank,
  Moscow, Russia (107078, Kalanchevskaya st., 27)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  On
  behalf of the Agent

  	
   

  	
  On
  behalf of the Principal

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  V.L. Vshivkin

  	
   

  	
   

  	
   

  	
  /s/
  A.E. Rodnyansky

  	
   

  
	
  V.L. Vshivkin seal here

  	
   

  	
  A.E.
  Rodnyansky seal here

  
							

 

 

10

 

APPENDIX 1

to Agency Agreement No KT-4/1207 dated December 14, 2007
(hereinafter the “Agency Agreement”)

 

	
  Moscow

  	
   

  	
  December 14,
  2007

  

 

Closed Joint Stock Company “New Channel” (OGRN 1047796750880), 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 Deputy General
Director V.L. Vshivkin, acting pursuant to the Power of Attorney without number
dated December 3, 2007, on the other side, hereinafter referred to as the “Parties”,
executed this Appendix No 1 (“Appendix”) to the Agency Agreement as follows.

 

The
Parties agree on the principal factors to be considered in determining the
price in connection with the placement of Advertising within the Network
Program Blocks when contracting by the Agent with the Clients.

 

1.             Whenever the Agent contracts the
placement of Advertising it shall be guided by the combination of technical,
sociological and economic factors that define the conditions required for the
provision of advertising services in that particular transaction.  The initial reference basis for pricing the
services to be provided in that particular transaction shall be determined by
the Agent in consultations with the Client at the time of developing the media
strategy and shall comprise the data on timing and geographical region for a
particular advertising campaign, the Client’s overall advertising budget,
target audience of advertising or publicity materials, information on the
Client competitors’ market and any other details required for structuring a
particular advertising campaign.

 

2.             The Parties agree that the pricing
of services in a particular transaction shall be based on a
multi-factor/multi-functional approach and shall take into account the lack of
a universal unit measure, by applying which the quantitative assessment of the
services would be possible.

 

The
price (amount) of the agreement shall be such that the willing Parties agree
based on the market prices for the services that exist at the time of the
transaction in a particular region as a result of the interplay of supply and
demand as well as other conditions and considerations that have relevance for
the transaction.

 

3.             When entering into an agreement
with a Client and pricing the services, the Agent shall take into consideration
the following factors:

 

3.1.          Demand
for media advertising services in the market.

3.1.1             Macroeconomic factors:

·                  Purchasing
power

·                  Per
capita income growth

·                  Consumer
basket/consumer price index for target groups.

a)             expert
assessments of the market maturity for certain industries/manufacturing sectors
(monopoly, polypoly sectors, etc.) and the need for marketing and advertising
support of sales;

b)            expert
assessments of the advertiser’s expenditures (budgets) for marketing and medial
advertising services, including on television, in the past, current and future
periods;

c)             number
of market (market sector) players and their media activity.

 

3.2           Broadcast
advertising offering

3.2.1        The
Principal’s programming policy.

3.2.2        Alternative
programming broadcasted simultaneously with the Network Program Blocks on other
TV channels;

3.2.3        Changes
in the technical capabilities of the Principal;

·                  Extended
reach with better signal;

·                  Extended
reach with more powerful transmitters;

·                  Potential
new station additions to Domashny Network;

·                  Licenses
obtained for new frequencies.

 

 

11

3.2.4        Best
advertising length based on TV viewership patterns;

3.2.5        The
actual and projected rating (by hour-long time slots, by each city and by
each target audience) of the programs and advertising blocks within the Network
Program Blocks as well as estimated total TV viewing audience.

 

Target Audience means all of the potential
television viewers with identical sociographic and psychographic
characteristics:

·                  sex;

·                  region or area of residence;

·                  income level;

·                  educational level;

·                  occupation;

·                  number of members in the household;

·                  children;

·                  religion;

·                  consumer habits and behavior patterns.

 

The projected rating shall be determined based on
historic data available for the previous periods that are projected onto the
advertising placement period based on the planned line-up of the Network
Program Blocks as adjusted for seasonal fluctuations and other factors.

The data for the rating calculation shall be sourced
from the independent market research company.

The frequency with which such data is made available
shall be determined by the independent market research company.

 

3.3           Specific
conditions for a particular contract — the extent of the planned advertising
campaign.

 

3.4           Target
group for the advertising campaign — standard groups commonly used by the
Clients for assessing the anticipated efficiency:

 

·                  6   - 54  All

·                  11 - 25 All

·                  11 - 34 All

·                  11 - 34 All Moscow

·                  14 - 24  All

·                  18 - 35 Females

·                  18 - 35 All

·                  18 - 54 Females

·                  18 - 54
Males

·                  18 + All

·                  18 + All
Moscow

·                  18 - 44 Females

·                  18 - 44 All

·                  20 - 39 All

·                  25 + Females

·                  6   + All

 

The figures designate age limits.

 

3.5           Planned
Reach of Advertising Campaign

Reach means a number of people within a target
group, who viewed the broadcast for at least one minute (thousand people).

 

3.6           Planned
Frequency

Frequency means average number of viewings of the
monitored broadcasts by each TV viewer within the selected target audience.

 

12

 

3.7           Positioning

 

Positioning
means that certain advertising and publicity materials should be placed in the
opening, closing or other particular position within an advertising block.

 

3.8.
         Fixed placement

 

Fixed
placement means that certain advertising and publicity materials are to be
placed in particular programs or advertising blocks or on dates as are
designated by the Client.

 

3.9           Floating placement

 

Floating
placement means that certain advertising and publicity materials are to be
placed in programs and on dates selected independently of the Client based on
certain general requirements of the Advertising Order.

 

3.10         Seasonal
considerations for advertising campaign.

 

Seasonal variations in demand from the Clients
for placement of advertising and publicity materials within the Network Program
Blocks.

 

3.11
        Competitive requirements for
advertising campaign:

 

·                  Advertising and publicity materials placed by
the Client with the requirement not to have advertising of competing products
or producers within the same programs or advertising blocks.

 

·                  Advertising and publicity materials placed by
the Client with the requirement to have the Client’s advertising placed in
certain programs or advertising blocks together with the advertisements for
certain products or services.

 

3.12         Advertising
in the same commercial of the goods and/or services of several advertisers or
several advertised items.

 

3.13         Placement
of advertising inside the programs and in the inter-program advertising blocks.

 

3.14.        Placement
of advertising within certain time intervals (including prime time).  Prime-time means an interrupted time
intervals having the largest viewership.

 

3.15.        The
terms of payment for the advertising campaign.

 

3.16.        Number
of business days to the first showing of advertising in the Network Program
Blocks.

 

3.17         Social
significance of the advertising — The significance of each particular
advertising campaign and its charity or other purposes of public value or
promotion of the national interests.

 

4.             The Agent shall be required to
follow the Principal’s pricing policy as currently approved or in place and the
Principal’s instruction to price each particular contract (transaction) for
advertising placement in the broadcast of the TV channels based on the above
factors, which have a substantial impact on the form of delivering the
advertising and on contractual price of the respective contract (transaction).

 

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

 

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

 

Signatures of the Parties:

 

	
  Agent:

  	
  Principal:

  
	
   

  	
  /s/ V.L. Vshivkin

  	
   

  	
   

  	
  /s/ A.E. Rodnyansky

  	
   

  
	
  (V.L. Vshivkin) seal here

  	
  (A.E. Rodnyansky) seal here

  
						

 

13

 

Appendix No 2

(Procedures for Acceptance and Insertion of
Network Advertising)

To Agency Agreement No KT-4/1207 dated December 14, 2007

(hereinafter the “Agency Agreement”)

 

	
  Moscow

  	
  December 14,
  2007

  

 

Closed Joint Stock Company “New Channel” (OGRN 1047796750880), 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 Deputy General
Director V.L. Vshivkin, acting pursuant to the Power of Attorney without number
dated December 3, 2007, on the other side, hereinafter referred to as the “Parties”,
executed this Appendix No 2 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, 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.  If it is
impossible for the Agent to replace the video 

 

14

 

recording of Advertising in timely manner, the
Principal has the right not to broadcast such Advertising in accordance with
section 3.5 of the Agency Agreement.

 

2.  Principal’s Manager Terminal:

2.1. The Agent shall make available to the
Principal a technical service allowing the 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 maintains it in proper
manner for the duration of the Agency Agreement.

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 the 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

  
	
  /s/ V.L. Vshivkin

  	
   

  	
  /s/ A.E. Rodnyansky

  
	
  (V.L. Vshivkin) seal here

  	
   

  	
  (A.E. Rodnyansky) seal here

  

 

 

15

 

Appendix 3

(Procedures for Acceptance and Insertion of
Sponsorship Advertising

into Network Program Blocks)

to Agency Agreement No KT-4/1207 dated December 14, 2007

(hereinafter the “Agency Agreement”)

 

December 14, 2007

 

Closed Joint Stock Company “New Channel” (OGRN 1047796750880), 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 Deputy General
Director V.L. Vshivkin, acting pursuant to the Power of Attorney without number
dated December 3, 2007, on the other side, hereinafter referred to as the “Parties”,
executed this Appendix 3 to the Agency Agreement as follows.

 

Capitalized terms used, but not otherwise defined
herein shall 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 granted resources for 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 granted resources for 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. 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 

 

 

16

 

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
displayed  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, and also the cost of advertising
placement.

3.2.
Based on the preliminary agreement, the Agent shall deliver to the Principal
(responsible account manager in the sales department) a written 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;

 

 

17

 

·                  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 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 

 

 

18

 

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.
For the purpose of proper performance of the Agency Agreement and to enable the
Agent to fully report 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:

  
	
  /s/ V.L.
  Vshivkin

  	
   

  	
  /s/ A.E. Rodnyansky

  
	
  (V.L. Vshivkin) seal here

  	
   

  	
  (A.E. Rodnyansky) seal here

  

 

19Exhibit 10.61.1

 

Supplementary Agreement No 1

to Agency Agreement No KT-4/1207 dated December 14, 2007,

hereinafter referred to as the “Agency Agreement”

 

	
  Moscow

  	
  December 14, 2007

  

 

Closed Joint Stock Company “New Channel” (OGRN 1047796750880), 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 Deputy General Director V.L. Vshivkin, acting pursuant to
the Power of Attorney without number dated December 3, 2007, on the other
side, hereinafter referred to as the “Parties”, executed this Supplementary
Agreement No 1 to the Agency Agreement as follows.

 

Capitalized terms used, but not otherwise defined
herein shall have the meanings ascribed to such terms in the Agency Agreement.

 

1. The Agent guarantees the payment to the Principal
at its expense of the amounts overdue for the advertising services under Client
Agreements directly by the Agent during the term of the Agency Agreement
subject to existence of each of the following conditions:

1.2.
The Client has not paid in full or in part for the advertising services. In
such case the Agent guarantees solely the payment of the principal amount of
debt (i.e. the amounts due for the advertising services and not the penalties,
termination fee, etc.);

1.3.
The amounts have remained outstanding for 180 (One Hundred Eighty) calendar
days or longer, counting from the first day, following the date the services
acceptance statement was executed under the respective agreement;

1.4.
The total amount of indebtedness of all Clients outstanding for longer than 180
(One Hundred Eighty) calendar days exceeds the doubtful debt threshold set
forth in section 2 of this Supplementary Agreement.

1.5.
The Client has not objected against the claims for payment of the outstanding
amounts on the basis of improper performance or non-performance of the
agreement for advertising services of the Principal and/or existence of the
counterclaims against the Principal.

1.6.
The systemic risk as defined in section 5 hereof has not materialized.

 

2. The doubtful debt threshold shall be defined by the
Parties as the amount equal to 0.05% of the Principal’s Gross Target Sales
Revenues (including VAT) for the respective calendar year of the term of the
Agency Agreement. The Principal’s Gross Target Sales Revenues are further
defined by the Parties as the Principal’s projected gross advertising revenues
based on the Principal’s forecasts for the respective calendar year.

The
Parties shall annually not later than March 31 of each calendar year
during the term of this Agreement determine the doubtful debt threshold
expressed as an exact amount, by executing a protocol to this Supplementary
Agreement. The above doubtful debt threshold shall be updated no later than January 20
of each calendar year that follows and shall be equal to 0.05% of the Principal’s
Actual Gross Sales Revenues for the respective calendar year.

 

3. The terms and conditions for the performance by the
Agent of its obligations set forth in section 1 of this Supplementary
Agreement:

3.1.
The amount of the Agent’s guarantee (hereunder “guarantee obligation amount”)
shall be determined using the formula below:

 

 

P
i  =  n=i  bD i  -  L

where

P
i - guarantee obligation
amount as determined for i-quarter of the respective calendar year

bD
i - amounts overdue from the Clients as at the end of i-quarter of the
respective calendar year, based on the provisions of section 1 of this
Supplementary Agreement, net of any debt settled by the Clients and/or paid by
the Agent.

L
-  doubtful debt threshold set for the
respective calendar year according to the provisions of section 2 of this
Supplementary Agreement.

i
-  sequential number for the quarter of
the respective calendar year (1 to 4).

 

The
base for the calculation shall be one calendar year and there shall be no carry
over to the following year.

 

3.2.
The Agent’s guarantee obligation amount to be paid to the Principal shall be
determined by the Parties no later than within 10 (Ten) business days after the
end of the respective quarter and set forth in the respective Statement. The
Agent shall perform its obligation to pay the guarantee obligation amount
within 10 (Ten) banking days from receipt of the respective claims from the
Principal issued pursuant to the respective Statement.

 

4. As soon as the Agent has paid its guarantee
obligation amount to the Principal with respect to the amounts overdue from the
Clients the Agent’s obligation to transfer the funds under the Agency Agreement
in respect of the agreement with the non-paying Client shall terminate to the
extent of the Client’s indebtness has been paid by the Agent, and the Agent
shall become the creditor of such non-paying Client in its own right rather
than to the benefit of the Principal with respect to the amount of the Client’s
indebtedness paid by the Agent to the Principal as shown by the respective
calculation.  If the Client, which
overdue payment obligation has been settled to the Principal by the Agency
(paid at its own expense) pursuant to the procedure described above, pays to
the Agent or the Principal the debt earlier paid by the Agent, the Principal
agrees that the indebtedness amount so paid by the Client shall be retained by
the Agent.

 

5. The Parties define the systemic risk as the
occurrence of the events that result in the significantly decreased ability of
the Clients generally to pay their accounts payable and/or the inability of
Principal to perform its obligations, such as:

 

·                  sovereign
default -  the refusal of the Russian
government to repay government debt and debt issued under  government guarantees or agreement on  significant deferral due to inability of the Russian
government to meet its repayment obligations in respect of the above debt;

 

·                  sovereign
credit rating of the Russian Federation downgraded to D by Standard &
Poor’s (S&P);

 

·                  foreign
exchange trading in the US dollar or the Euro ceases for longer than 90
consecutive calendar days.

 

6. The Parties agree that the obligations assumed by
the Agent (as set forth in sections 1 to 5 hereof) shall constitute material
conditions of the Agency Agreement and 

 

 

this Supplementary Agreement and, notwithstanding any provision of this
Supplementary Agreement or the Agency Agreement to the contrary, that their
unilateral modification by the Agent (including through court proceedings)
shall entitle the Principal to terminate the Agency Agreement without payment of
any termination fee (provided by section 9.2. of the Agency Agreement).

 

7. The Parties agree that the Agency Fee payable to the
Agent by the Principal in accordance with the terms and conditions of the
Agency Agreement in the amount equal to 12% (Twelve percent) of the Principal’s
Actual Gross Revenues shall include the compensation for the actions/activities
set forth in section 1 of this Supplementary Agreement.

 

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

 

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

 

Signatures of the Parties:

 

	
  Agent:

  	
  Principal:

  
	
   

  	
  /s/
  V.L. Vshivkin

  	
   

  	
   

  	
  /s/ A.E. Rodnyansky

  	
   

  
	
  (V.L. Vshivkin) seal here

  	
  (A.E. Rodnyansky) seal
  here

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]