Stock Purchase Agreement between StoryFirst Communications, Inc. and Alfa Capital Holdings (Cyprus) Limited (July 29, 2003)

  Exhibit 10.23 --------------------------------------------------------------- STOCK PURCHASE AGREEMENT By and Between STORYFIRST COMMUNICATIONS, INC., and ALFA CAPITAL HOLDINGS (CYPRUS) LIMITED Dated July 29, 2003 ------------------------------------------------------------  STOCK PURCHASE AGREEMENT This Agreement (the "Agreement") is made and entered into this 29th day of July, 2003 by and between: (1) StoryFirst Communications, Inc., a Delaware corporation (the "Company"); and (2) Alfa Capital Holdings (Cyprus) Limited, a private limited liability company incorporated under the laws of Cyprus (the "Purchaser"). The Company and the Purchaser are hereinafter sometimes referred to individually as a "Party" and collectively as the "Parties". PREAMBLE WHEREAS, the Purchaser desires to own a 25% interest in the Company; WHEREAS, the Purchaser currently owns, or will own prior to the closing of the transactions contemplated hereby, 819,602 shares, having a nominal value of Rubles 10 each (the "CTC Shares"), of ZAO "CTC", a closed joint stock company organized and existing under the laws of the Russian Federation ("CTC"); and WHEREAS, in exchange for, among other consideration, the CTC Shares and subject to the terms and conditions set forth herein, the Company desires to sell to the Purchaser a number of shares of the Company such that, together with the Purchaser's other shares of the Company, the Purchaser owns a 25% interest in the Company immediately following the Closing (as defined herein). NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Parties hereby agree as follows: ARTICLE 1 DEFINITIONS 1.1 Unless the context shall otherwise require, capitalized terms used herein shall have the following meanings (such definitions to be equally applicable to both the singular and plural forms of the terms used): 1.1.1 "Applicable Law" means, with respect to any Party, all laws, ordinances, regulations, judgments, decrees, decisions, and rules of any Governmental Authority or non-governmental regulatory body, and any international treaties and agreements, in force and governing such Party and/or its business activities, or the Transactions contemplated hereunder. 1.1.2 "Business Day" means any day on which banks are open for business in Moscow, Russian Federation and San Francisco, California, U.S.A. -1-  1.1.3 "Cash Consideration" means the sum of (i) $15,648,229 less the amount of the Loan Balance and (ii) the Top-Up Consideration, if any. 1.1.4 "Closing" shall have the meaning ascribed to such term in Section 3.1 hereof. 1.1.5 "Closing Date" shall have the meaning ascribed to such term in Section 3.1. 1.1.6 "Common Stock" means the common stock, par value $0.01 per share, of the Company. 1.1.7 "Consideration" shall have the meaning ascribed to such term in Section 2.2. 1.1.8 "Dollar" and "$" means the lawful currency of the United States of America. 1.1.9 "Financial Statements" shall have the meaning ascribed to such term in Section 4.2.7. 1.1.10 "Government Approvals" means authorizations, licenses, permits and consents from or registrations with or notifications of Governmental Authorities that may be required, necessary or desirable in order to give effect to this Agreement, the transactions contemplated hereby and the making, assignment and repayment of the Loan. 1.1.11 "Governmental Authority" means, with respect to the Company, any national, regional, local or other governmental authority or court of the U.S. or the Russian Federation and, with respect to the Purchaser, any national, regional, local or other governmental authority or court of Cyprus or the Russian Federation. 1.1.12 "Hart-Scott-Rodino Act" means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. 1.1.13 "Initial Shares" means that number of shares of Common Stock and/or Senior Stock (as determined in accordance with Section 2.4 hereof) equal to 23.47% of the issued and outstanding capital stock of the Company, determined on an as-if-converted to Common Stock basis immediately following the Closing before taking into account any shares of capital stock of the Company issued in connection with the exercise of the Pre-Emptive Rights, if any. 1.1.14 "Loan" shall have the meaning ascribed to such term in Section 5.2.7. -2-  1.1.15 "Loan Assignment" means the assignment in substantially the form initialled by the parties hereto on the date hereof relating to the assignment of the Loan from the Purchaser to the Company. 1.1.16 "Loan Balance" means the principal amount of the Loan plus any accrued and unpaid interest thereon as of the Closing Date. 1.1.17 "Loan Documents" shall have the meaning ascribed to such term in Section 5.2.7. 1.1.18 "Option Agreement" means the option agreement between the Company and the Purchaser substantially in the form initialled by the parties hereto on the date hereof. 1.1.19 "Person" means any individual, corporation, limited or general partnership, limited liability company, joint venture, association, trust, estate, unincorporated organization, entity or any Governmental Authority or political subdivision thereof or any other entity or organization. 1.1.20 "Pre-Emptive Rights" shall have the meaning ascribed to such term in Section 5.2.9. 1.1.21 "Register" means the official shareholders register of CTC. 1.1.22 "Rubles" means the lawful currency of the Russian Federation. 1.1.23 "Russian Competition Act" shall have the meaning ascribed to such term in Section 5.2.8. 1.1.24 "Securities Act" means the U.S. Securities Act of 1933, as amended. 1.1.25 "Senior Stock" means the Company's Super Senior Preferred Stock, $0.01 par value per share, with the rights and preferences set forth in the Company's Amended and Restated Certificate of Incorporation as on file with the Secretary of State of the State of Delaware on the date hereof. 1.1.26 "Shares" means collectively the Initial Shares and, if any, the Top-Up Shares. 1.1.27 "Stockholders' Agreement" means the stockholders' agreement among the Company, the Purchaser and certain stockholders of the Company substantially in the form initialled by the parties hereto on the date hereof. 1.1.28 "Top-Up Consideration" means zero if there are no Top-Up Shares to be purchased hereunder or, if otherwise, the Dollar amount equal to the number of Top-Up Shares (determined on an as-if-converted to Common Stock basis) multiplied by the Top-Up Price. 1.1.29 "Top-Up Election" shall have the meaning ascribed to such term in Section 2.3. -3-  1.1.30 "Top-Up Notice" shall have the meaning ascribed to such term in Section 2.3. 1.1.31 "Top-Up Price" means the price per share paid by the holders of the Pre-Emptive Rights upon exercise of such rights. 1.1.32 "Top-Up Shares" means, in the event of any exercise of the Pre-Emptive Rights, a number of shares of Common Stock and/or Senior Stock (as determined in accordance with Section 2.4 hereof) set forth in the Top-Up Election; provided, however, that such number of shares shall not exceed X (rounded down to the nearest whole share) where: X = A/(1-B) - A Where: A = the number of shares of capital stock of the Company (determined on an as-if-converted to Common Stock basis) purchased by the holders of Pre-Emptive Rights in connection with the exercise of the Pre-Emptive Rights; and B = the percentage of the issued and outstanding capital stock of the Company owned by the Purchaser (including any shares of the Company's capital stock purchased from existing shareholders of the Company) immediately following the Closing (excluding any shares of capital stock of the Company issued in connection with the exercise of the Pre-Emptive Rights and determined on an as-if-converted to Common Stock basis); provided, however, that such percentage shall not in any event exceed 25%. 1.1.33 "Transaction Documents" means this Agreement, the Loan Assignment, the Stockholders' Agreement, the Option Agreement and any other documents and instruments referred to herein or therein. 1.1.34 "Transactions" means all of the transactions contemplated by this Agreement, including, without limitation, (a) the issuance of Shares by the Company to the Purchaser in exchange for the Consideration and (b) the execution, delivery and performance of this Agreement and the other Transaction Documents. 1.1.35 "Transfer Notice" means the notice by the Purchaser to CTC and the CTC shareholders regarding its intention to consummate the sale of the CTC Shares contemplated hereunder, such notice setting forth the purchase price, payment terms and other material terms of such transaction. 1.1.36 "U.S." and "U.S.A." means the United States of America. -4-  ARTICLE 2 AUTHORIZATION; SALE OF SHARES 2.1 Authorization. The Company has, or before the Closing will have, duly authorized the sale and issuance, pursuant to the terms of this Agreement, of the Shares. 2.2 Sale of Shares. Subject to the terms and conditions of this Agreement, at the Closing, the Company will sell and issue to the Purchaser, and the Purchaser will purchase, the Shares in exchange for the following consideration (the "Consideration"): 2.2.1. the sale, transfer and assignment of the CTC Shares to the Company; 2.2.2. an assignment of all principal and accrued and unpaid interest on the Loan in accordance with the Loan Assignment; and 2.2.3. the Cash Consideration. 2.3 Top-Up Shares. If there is an exercise of any Pre-Emptive Rights, the Purchaser shall have the right to purchase, and the Company shall be obligated to issue to the Purchaser, the Top-Up Shares at a price per share equal to the Top-Up Price. Promptly following the lapse of the exercise periods for the Pre-Emptive Rights, the Company shall provide written notice (the "Top-Up Notice") to the Purchaser of the election by any holder of Pre-Emptive Rights to exercise such rights, including the number of shares to be so purchased, the price per share to be paid and the maximum number of Top-Up Shares purchasable hereunder by the Purchaser. If the Purchaser desires to purchase any Top-Up Shares, the Purchaser shall provide, no later than five (5) Business Days following the deemed receipt of the Top-Up Notice, an irrevocable written notice to the Purchaser (the "Top-Up Election") of its election to purchase Top-Up Shares and the number of shares it so elects to purchase. 2.4 Form of Shares. If, on the Closing Date, the Company has issued and outstanding Senior Stock, the Company shall sell and issue to the Purchaser the Shares in the form of a combination of shares of Senior Stock and Common Stock, where, with respect to the Initial Shares, the number of shares of Senior Stock shall be 36,432 and the number of shares of Common Stock shall be equal to the total number of Initial Shares to be issued and sold hereunder less the number of shares of Senior Stock so issued and where, with respect to the Top-Up Shares, the ratio of shares of Senior Stock to Common Stock shall be the same as with respect to the Initial Shares. If on the Closing Date, the Company's issued and outstanding capital stock comprises solely Common Stock, the Company shall sell and issue to the Purchaser the Shares solely in the form of Common Stock. 2.5 Taxes. The Parties acknowledge that as of the date of this Agreement, delivery of the Consideration by the Purchaser in the manner contemplated by this Agreement is not subject to any withholding tax or duty under Applicable Law. The Parties further acknowledge and agree that the Cash Consideration shall be net of all taxes and duties that may be imposed under Applicable Law. -5-  ARTICLE 3 CLOSING ARRANGEMENTS 3.1 Closing. The closing of the sale and purchase of the Shares (the "Closing") shall take place within 14 Business Days following the satisfaction of the conditions precedent set forth in Sections 5.1, 5.2 and 5.3 or their waiver by the relevant Party, but in no event later than August 31, 2003 or such other date as the Parties may agree in writing. Such date is referred to herein as the "Closing Date". The Closing shall take place at 10:00 a.m. on the Closing Date at the offices of CTC, 12, 3rd Khoroshevskaya Ul., 123298 Moscow, Russia or at such other time on the Closing Date or such other place as may be agreed by the Parties. 3.2 Actions at Closing. At the Closing, the Company and/or the Purchaser shall take the following actions: 3.2.1. the Purchaser shall deliver to the Company a certified extract from the Register evidencing the Company as the owner of the CTC Shares; 3.2.2. the Purchaser shall pay the Cash Consideration by wire transfer of immediately available funds in Dollars to the account of the Company, as designated by the Company in writing to the Purchaser; and 3.2.3. each of the Company and the Purchaser shall execute and deliver (i) the Loan Assignment, (ii) the Stockholders' Agreement and (iii) the Option Agreement. 3.3 Delivery of Share Certificates. Upon receipt of the documents set forth in Section 3.2.1 above and upon receipt of the Cash Consideration the Company shall deliver to the Purchaser a certificate(s) for the Shares, registered in the name of the Purchaser. 3.4 Company Further Assurances. The Company, from time to time after the Closing Date, at the Purchaser's request, shall take such other actions and execute and deliver such other documents, certificates, instruments of conveyance and further assurances as the Purchaser may reasonably request in order to vest more fully and effectively in the Purchaser all rights and ownership in, and title to, and to put the Purchaser more fully in possession of the Shares, or to carry out, evidence or confirm the intended purposes of this Agreement. 3.5 Purchaser Further Assurances. The Purchaser, from time to time after the Closing Date, at the Company's request, shall take such other actions and execute and deliver such other documents, certificates, instruments of conveyance and further assurances as the Company may reasonably request in order to vest more fully and effectively in the Company all rights and ownership in, and title to, and to put the Company more fully in possession of the CTC Shares and the Loan, or to carry out, evidence or confirm the intended purposes of this Agreement. If, notwithstanding the assignment of the Loan, the Purchaser or any of its affiliates (other than the Company) receives payment from CTC of any amount under or in respect of the Loan, at any time after the Closing Date, the Purchaser will promptly pay the amount so received to the Company. -6-  ARTICLE 4 REPRESENTATIONS AND WARRANTIES 4.1 Representations and Warranties of the Purchaser. As a material inducement to the Company's entry into this Agreement and the performance of the transactions contemplated hereby and acknowledging that the Company is entering into this Agreement in reliance on the representations and warranties in this Section 4.1, the Purchaser represents and warrants to the Company that as of the date of this Agreement and the Closing Date: 4.1.1 Due Registration and Corporate Power. The Purchaser is duly organized and registered and validly existing under the laws of Cyprus, has the full power and authority to own and dispose of the assets it owns and to perform its obligations under this Agreement and the other Transaction Documents, and its constituent documents are in full force and effect. The Purchaser has not been organized, reorganized or recapitalized specifically for the purpose of investing in the Company. 4.1.2 Authorization. The execution, delivery and performance of this Agreement and the other Transaction Documents have been duly authorized by all necessary action of its governing bodies. 4.1.3 Enforceability of Obligations. This Agreement has been, and, upon the Closing, the other Transaction Documents will be, duly executed and delivered by the Purchaser and, assuming the due authorization, execution and delivery of this Agreement by the Company and of the other Transaction Documents by the parties thereto other than the Purchaser, constitute or will constitute its legal, valid and binding obligations, enforceable against it in accordance with their respective terms, except to the extent that such enforcement may be subject to bankruptcy, insolvency, reorganization or other similar laws now or hereafter in effect relating to creditors' rights and remedies generally. 4.1.4 Ownership of the CTC Shares. As of the Closing, the Purchaser shall be the owner of the CTC Shares with good and valid title thereto, free and clear of any mortgages, liens, security interests, claims and other encumbrances (other than its obligations hereunder) and upon transfer to the Company hereunder the CTC Shares will be validly issued and outstanding in the name of the Company, fully paid and free and clear of any mortgages, liens, security interests, claims and other encumbrances. -7-  4.1.5 Ownership of the Loan. As of the Closing, the Purchaser shall be the owner of the Loan with good and valid title thereto, free and clear of any mortgages, liens, security interests, claims and other encumbrances and upon assignment to the Company hereunder the Loan will be free and clear of any mortgages, liens, security interests, claims and other encumbrances. The Loan will constitute a legal, valid and binding obligation of CTC enforceable against it in accordance with the terms thereof, and all Government Approvals in connection with the making, assignment and repayment of the Loan have been, or by the Closing will be, obtained and in full force and effect. The total outstanding principal amount of the Loan is not less than $9,838,281.08. No part of the Loan has been paid and the Purchaser has received no notice and is not otherwise aware of any defense to the Loan. 4.1.6 Noncontravention. Subject to compliance with the applicable requirements of the Hart-Scott-Rodino Act and the Russian Competition Act, neither the execution and delivery by the Purchaser of this Agreement or the other Transaction Documents, nor the consummation by the Purchaser of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the constituent documents of the Purchaser, (b) require on the part of the Purchaser any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Authority, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Purchaser is a party or by which the Purchaser is bound or to which any of its assets is subject, (d) result in the imposition of any security interest. lien, charge or encumbrance upon any assets of the Purchaser or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Purchaser or any of its properties or assets. 4.1.7 Litigation. The Purchaser is not a party to any action, suit, investigation or proceeding pending (or, to the knowledge of the Purchaser, threatened) against it or affecting its property before any judicial, arbitral or administrative body that, if determined adversely to its interests, would materially and adversely affect the ability of the Purchaser to perform its obligations under this Agreement or any other Transaction Document. -8-  4.1.8 No Claims. The Purchaser has no right to any claim or compensation from the Company in connection with its transfer of the CTC Shares or the Loan hereunder. Other than the Loan, CTC has no outstanding indebtedness to the Purchaser. 4.1.9 Investment. The Purchaser is acquiring the Shares, and the shares of Common Stock into which the Shares may be converted, for its own account for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling the same; and the Purchaser has no present or contemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the disposition thereof. The Purchaser is an "accredited investor" as defined in Rule 501(a) under the Securities Act. 4.1.10 Experience. The Purchaser has carefully reviewed the representations concerning the Company contained in this Agreement, and has made detailed inquiry concerning the Company, its business and its personnel; the officers of the Company have made available to the Purchaser any and all written information which it has requested and have answered to the Purchaser's satisfaction all inquiries made by the Purchaser; and the Purchaser has sufficient knowledge and experience in finance and business that it is capable of evaluating the risks and merits of its investment in the Company and the Purchaser is able financially to bear the risks thereof. 4.2 Representations and Warranties of the Company. As a material inducement to the entry into this Agreement by the Purchaser and the performance of the transactions contemplated hereby and acknowledging that the Purchaser is entering into this Agreement in reliance on the representations and warranties in this Section 4.2, the Company represents and warrants to the Purchaser that as of the date of this Agreement and the Closing Date: 4.2.1 Company's Due Registration and Corporate Power. The Company is duly organized and registered and validly existing under the laws of the jurisdiction of its creation, has the full power and authority to own and dispose of the assets it owns and to perform its obligations under this Agreement and the other Transaction Documents to which it is a party. 4.2.2 Authorization by the Company. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party have been duly authorized by all necessary action of the governing bodies of the Company. -9-  4.2.3 Enforceability of the Company's Obligations. This Agreement has been, and, upon the Closing, the other Transaction Documents to which it is a party will be, duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by the Purchaser and of the other Transaction Documents by the parties thereto other than the Company, constitutes or will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms, except to the extent that such enforcement may be subject to bankruptcy, insolvency, reorganization or other similar laws now or hereafter in effect relating to creditors' rights and remedies generally. 4.2.4 The Shares. The issuance, sale and delivery of the Shares in accordance with this Agreement have been, or will be on or prior to the Closing, duly authorized by all necessary corporate action on the part of the Company. The Shares when so issued, sold and delivered against payment therefor in accordance with the provisions of this Agreement will be duly and validly issued, fully paid and nonassessable. Immediately following the Closing but before taking into account any shares of capital stock of the Company issued in connection with the exercise of the Pre-Emptive Rights, if any, the Initial Shares will represent 23.47% of the issued and outstanding capital stock of the Company, determined on an as-if-converted to Common Stock basis. Except (i) as set forth on Exhibit C to the Stockholders' Agreement, (ii) for the rights of various stockholders of the Company to maintain their percentage ownership in the Company in connection with the issuance of certain securities by the Company and (iii) for the various classes and series of preferred stock set forth in the Company's amended and restated certificate of incorporation as on file with the Secretary of State of the State of Delaware as of the date hereof, there are no outstanding options, warrants or other convertible securities or other rights, agreements or arrangements under which the Company is or may be obligated to issue equity securities. 4.2.5 Noncontravention. Subject to compliance with the applicable requirements of the Hart-Scott-Rodino Act and the Russian Competition Act, neither the execution and delivery by the Company of this Agreement or the other Transaction Documents, nor the consummation by the Company of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the constituent documents of the Company, (b) require on the part of the Company any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Authority, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company is a party or by which the Company is bound or to which any of its assets is subject, (d) result in the imposition of any security interest. lien, charge or encumbrance upon any assets of the Company or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets. -10-  4.2.6 Litigation. The Company is not a party to any action, suit, investigation or proceeding pending (or, to the knowledge of the Company, threatened) against it or affecting its property before any judicial, arbitral or administrative body that, if determined adversely to its interests, would materially and adversely affect the ability of the Company to perform its obligations under this Agreement or any other Transaction Document. 4.2.7 Financial Statements. The Company's consolidated financial statements at and for the period ended December 31, 2002 (the "Financial Statements"), a copy of which has been provided to the Purchaser, were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations for the periods presented except, in each case, for the fact that the Financial Statements have been prepared on the basis that the results of operations of the Company's subsidiary, Radio Maximum, are not consolidated into the Company's consolidated results and the audit committee of the Company's Board of Directors and the Company's auditors have not formally decided if this approach is appropriate or if in fact such results should be consolidated within the Financial Statements, consistent with the Company's prior treatment of such results of operations. Since December 31, 2002, there has not been any change in the business, assets, financial condition or results of operations of the Company which in any case would have a material adverse effect on the business, assets, financial condition, or results of operation of the Company and its subsidiaries, taken as a whole, except for changes applicable to the Russian economy and international securities markets generally. 4.2.8 Compliance with Applicable Law. The Company's business has been conducted in accordance with all Applicable Law (including Applicable Law relating to licenses, and permits for ownership, occupancy and operation of the Company's properties), except to the extent that the failure to so conduct the business would not reasonably be expected to have a material adverse effect on the business, assets, financial condition or results of operations of the Company and its subsidiaries taken as a whole. As of the date of this Agreement, to the best of the Company's knowledge, no investigation or review by a Governmental Authority with respect to the Company, its directors, officers or any of its respective properties is pending or threatened in writing. -11-  4.2.9 Liabilities. To the Company's knowledge there are no liabilities of the Company of any kind whatsoever, whether or not accrued or whether or not contingent or absolute, determined or otherwise other than (i) liabilities reflected on the balance sheets of the Financial Statements and of the management accounts of the Company for the quarter ended March 31, 2003 and (ii) liabilities that in aggregate would not reasonably be expected to have a material adverse effect on the business, assets, financial condition or results of operation of the Company and its subsidiaries taken as a whole. 4.2.10 Information for Valuation Reports. All historical information regarding the Company and its subsidiaries given by the Company to Deutsche Bank AG to be used in connection with the preparation by Deutsche Bank AG of its valuation report on the Company dated September 4, 2002 and the update of such valuation report dated March 2003 is true and correct in all material respects and does not omit material information necessary to make the information provided, in light of the purpose for which it was so provided, not misleading. 4.3 Survival of Representations and Warranties. The representations and warranties of the Purchaser and the Company contained in Sections 4.1 and 4.2, respectively, shall survive the execution and delivery of this Agreement and the issuance of the Shares contemplated hereby, and all statements contained in any certificate or other instrument delivered by one Party hereunder shall be deemed to constitute representations and warranties made by such Party and no investigation by the other Party shall detract from, or diminish the scope of, any representation or warranty or such Party's reliance thereon. ARTICLE 5 CONDITIONS PRECEDENT 5.1. Conditions Precedent to Either Party's Obligations at Closing. The obligations of the Company and the Purchaser to be performed hereunder on the Closing Date shall be conditional upon all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act having expired or having otherwise been terminated. 5.2. Conditions Precedent to the Company's Obligations at Closing. Subject to the right of the Company to waive in writing any such conditions to its performance, the obligations of the Company to be performed hereunder on the Closing Date shall be conditioned upon satisfaction of the following conditions precedent: -12-  5.2.1 Compliance. The Purchaser shall have performed and complied with all terms and conditions of this Agreement at or before the Closing and the Purchaser shall have executed and delivered or caused to have been executed and delivered to the Company at the Closing all documents contemplated to be delivered at or before the Closing in accordance with Sections 3.2.1 and 3.2.3 hereof. 5.2.2 Accuracy of Representations and Warranties. All representations and warranties of the Purchaser contained in this Agreement shall remain true and correct in all material respects at and as of Closing. 5.2.3 No Litigation. No action or proceedings shall have been instituted or threatened before or by any Governmental Authority for the purpose of invalidating, nullifying, enjoining, preventing or restraining the Transactions contemplated by this Agreement. 5.2.4 Shareholder Approval. The Company shall have received the approval of the issuance of the Shares to the Purchaser in the manner contemplated by this Agreement by a majority of the votes represented by the outstanding shares of capital stock of the Company entitled to vote thereon. 5.2.5 Transfer Notice. The Purchaser shall have delivered a Transfer Notice to CTC with respect to the sale and purchase of the CTC Shares hereunder. 5.2.6 Registration of Transfer of CTC Shares. Ownership of the CTC Shares shall be registered in the Register in the name of the Company and the Purchaser shall have delivered to the Company a certified extract from the Register to such effect. 5.2.7 Conditions to the Assignment of the Loan. The Purchaser shall have extended an unsecured loan to CTC in a principal amount of at least $9,838,281.08 at an interest rate of 15% per annum, having a term of no less than two years from the date of issue (the "Loan"). OAO Alfa Bank shall have provided written confirmation of repayment by CTC of the following credit facilities in full (including all accrued and unpaid interest and penalties thereon: ------------------------- -------------------- --------------------------- Number/Date Principal Amount Original Maturity Date ------------------------- -------------------- --------------------------- ------------------------- -------------------- --------------------------- 57419/January 30, 2001 $1,500,000 March 28, 2003 ------------------------- -------------------- --------------------------- ------------------------- -------------------- --------------------------- 69615/December 25, 2001 $6,232,318.06 March 28, 2003 ------------------------- -------------------- --------------------------- ------------------------- -------------------- --------------------------- 82551/September 30, 2002 $475,000 March 28, 2003 ------------------------- -------------------- --------------------------- -13-  Prior to the Closing, the Purchaser shall have delivered to CTC written notice of the assignment of the Loan to the Company. The Purchaser shall have delivered to the Company true, correct, and complete copies of all documents, instruments and other writings evidencing the Loan, each as amended or otherwise modified to date, and all waivers, consents, releases, and correspondence related thereto, which constitute all documents evidencing the Loan and the Purchaser's ownership thereof (the "Loan Documents"). As of the Closing Date, the Loan Documents shall be in full force and effect and shall not have been modified, amended, terminated, rejected, disaffirmed, or repudiated by the Purchaser or CTC. All Government Approvals with respect to the making, assignment and repayment of the Loan shall have been obtained, and shall be in full force and effect as of the Closing Date. 5.2.8 Preliminary Consent of the Ministry of Antimonopoly Policy. The Ministry of Antimonopoly Policy and Support for Entrepreneurship of the Russian Federation under Article 18 of Law No. 948-I of the Russian Federative Soviet Socialist Republic "On competition and limitation of monopolist activities on commodities markets," dated March 22, 1991 (as amended, the "Russian Competition Act") shall have granted its preliminary written consent to the acquisition by the Company of the CTC Shares hereunder, and the terms and conditions of such consent shall be reasonably satisfactory to the Company. 5.2.9 No Exercise of Pre-Emptive Rights. The exercise period afforded any stockholder of the Company that has a right to maintain its percentage ownership in the Company in connection with the Transactions (the "Pre-Emptive Rights") shall have lapsed and no such stockholder shall have exercised its Pre-Emptive Rights. 5.2.10 Constituent Documents. The Purchaser shall have delivered to the Company a certified copy of the constituent documents of the Purchaser and certificates of formation issued by the appropriate Governmental Authorities. 5.2.11 Corporate Approvals. The Purchaser shall have delivered to the Company a certified copy of the decision of its authorized governing bodies authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents. 5.2.12 Other Company Shares. The Purchaser shall have delivered to the Company a certificate, signed by an authorized officer of the Purchaser, certifying that the Purchaser together with all of its affiliates (including, without limitation, OAO Alfa Bank and Merrow Ventures Limited) has, as of the Closing Date, a beneficial interest in, and/or option or right to purchase, no more than 2% of the issued and outstanding capital stock of the Company after giving effect to the Recapitalization or Modified Recapitalization (each term as defined in the Company's Information Statement dated as of April 25, 2003) but immediately prior to the Closing. -14-  5.2.13 Lapse of Top-Up Election Period. If there has been an exercise of any Pre-Emptive Rights, the period during which the Purchaser shall be entitled to deliver a Top-Up Election shall have lapsed. 5.3. Conditions Precedent to the Purchaser's Obligations at Closing. Subject to the right of the Purchaser to waive in writing any such conditions to its performance, the obligations of the Purchaser to be performed hereunder on the Closing Date shall be conditioned upon satisfaction of the following conditions precedent: 5.3.1 Compliance. The Company shall have performed and complied with all terms and conditions of this Agreement at or before the Closing and the Company shall have executed and delivered or caused to have been executed and delivered to the Purchaser at the Closing all documents contemplated to be delivered at or before the Closing in accordance with Section 3.2.3 hereof. 5.3.2 Accuracy of Representations and Warranties. All representations and warranties of the Company contained in this Agreement shall remain true and correct in all material respects at and as of Closing. 5.3.3 No Litigation. No action or proceedings shall have been instituted or threatened before or by any Governmental Authority for the purpose of invalidating, nullifying, enjoining, preventing or restraining the Transactions contemplated by this Agreement. 5.3.4 Corporate Approvals. The Company shall have delivered to the Purchaser of a certified copy of the decision of its Board of Directors authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents. 5.3.5 Waiver of First Refusal Rights. CTC and OOO CTC-Communications shall have waived their first refusal rights with respect to each of the acquisition of the CTC Shares by the Purchaser prior to the Closing, and the transfer of the CTC Shares by the Purchaser to the Company hereunder. 5.4 Company's Rights if Condition Precedent Not Fulfilled. If any of the conditions precedent set forth in Section 5.1 or 5.2 have not been fulfilled on or before August 31, 2003, then the Company may, without limiting any rights or remedies available at law or equity: 5.4.1 defer the Closing by written notice to the Purchaser for a reasonable period not to exceed thirty calendar days unless otherwise agreed by the Parties to permit the condition precedent to be fulfilled; 5.4.2 terminate this Agreement by written notice to the Purchaser in accordance with Section 9.1.2 hereof, in which event the Company and the Purchaser shall, subject to Section 9.2, be released from all obligations under this Agreement; or -15-  5.4.3 waive compliance with any such condition by express written notice to the Purchaser without prejudice to its right of termination in the event of non-fulfillment of any other condition. 5.5 Purchaser's Rights if Condition Precedent Not Fulfilled. If any of the conditions precedent set forth in Section 5.1 or 5.3 have not been fulfilled on or before August 31, 2003, then the Purchaser may, without limiting any rights or remedies available at law or equity: 5.5.1 defer the Closing by written notice to the Company for a reasonable period not to exceed thirty calendar days unless otherwise agreed by the Parties to permit the condition precedent to be fulfilled; 5.5.2 terminate this Agreement by written notice to the Company in accordance with Section 9.1.3 hereof, in which event the Company and the Purchaser shall, subject to Section 9.2, be released from all obligations under this Agreement; or 5.5.3 waive compliance with any such condition by express written notice to the Company without prejudice to its right of termination in the event of non-fulfillment of any other condition. ARTICLE 6 CONDUCT OF BUSINESS; EXCLUSIVE DEALING 6.1 Certain Conduct by the Purchaser. At all times from the date of this Agreement to the Closing Date, the Purchaser shall conduct its business in such a manner that on the Closing Date the representations and warranties with respect to the Purchaser, the CTC Shares and the Loan contained in this Agreement shall be true, accurate and complete, as though such representations and warranties were made on and as of such date. 6.2 Certain Conduct by the Company. At all times from the date of this Agreement to the Closing Date, the Company shall conduct its business in such a manner that on the Closing Date the representations and warranties with respect to the Company and the Shares contained in this Agreement shall be true, accurate and complete, as though such representations and warranties were made on and as of such date. 6.3 Exclusive Dealing. During the period from the date of this Agreement to the Closing Date, the Purchaser shall not take any action to, directly or indirectly, encourage, initiate or engage in discussions or negotiations with, or provide any information to, any Person other than the Company or its representatives or attorneys, concerning any purchase of the CTC Shares or assignment of the Loan. -16-  ARTICLE 7 ADDITIONAL COVENANTS 7.1 Approvals. Each of the Parties shall (i) use its best efforts to obtain all corporate approvals, third party consents and Government Approvals that are necessary or appropriate for such Party's execution and delivery of this Agreement, or its performance of the Transactions and (ii) keep the other Party informed at reasonable intervals of all such approvals and consents and of the stage of completion of receipt thereof. Without limiting the generality of the foregoing, each of the Parties shall promptly file any Notification and Report Forms and related material that it may be required to file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Act, shall use its reasonable best efforts to obtain an early termination of the applicable waiting period, and shall make any further filings or information submission pursuant thereto that may be necessary, proper or advisable. 7.2 Waiver of First Refusal Rights. The Company shall cause CTC and OOO CTC-Communications to waive its first refusal rights with respect to the transfer of the CTC Shares from the Purchaser to the Company and agrees to cause CTC and OOO CTC-Communications to execute and deliver a written waiver to such effect. ARTICLE 8 INDEMNIFICATION The Parties hereby agree that, in the event of breach by any Party of any representation, warranty, obligation or covenant contained in this Agreement, the breaching Party shall indemnify and hold harmless the other Party and any of its shareholders, directors, officers, employees, representatives, agents and advisors against any losses, claims, actions, damages or liabilities (including, without limitation, legal, accounting and other fees and expenses) directly or indirectly arising or resulting from or in any way attributable to such breach by the breaching Party. ARTICLE 9 TERMINATION 9.1 Termination. This Agreement and the Transactions contemplated hereby may be terminated at any time before the Closing Date: 9.1.1 by the mutual written consent of the Parties; 9.1.2 by the Company, by giving written notice to the Purchaser, (i) if there has been a material misrepresentation in this Agreement by the Purchaser, or a material breach by the Purchaser of any of its warranties or covenants set forth herein, or (ii) if the Closing shall not have occurred on or before August 31, 2003, or such other date as the Parties may agree upon, by reason of the failure of any condition precedent under Section 5.1 or 5.2 hereof; or -17-  9.1.3 by the Purchaser, by giving written notice to the Company, (i) if there has been a material misrepresentation in this Agreement by the Company, or a material breach by the Company of any of the warranties or covenants of the Company set forth herein, which breach is not cured within 30 calendar days following written notice to the Company or which breach by its nature cannot be cured prior to the Closing, or (ii) if the Closing shall not have occurred on or before August 31, 2003 or such other date as the Parties may agree upon, by reason of the failure of any condition precedent under Section 5.1 or 5.3 hereof. 9.2 Effect of Termination. The termination of this Agreement shall not in any way operate to impair or destroy any of the rights or remedies of any Party that shall have accrued prior to the effective date of termination. The obligations, agreements, representations and warranties contained in Article 4 (Representations and Warranties), Article 8 (Indemnification), Article 10 (Securities Law Compliance), Article 11 (Dispute Resolution; Governing Law) and Section 13.2 (Publicity) shall survive termination. ARTICLE 10 SECURITIES LAW COMPLIANCE 10.1 Restricted Securities. The Shares have not been and will not be registered under the Securities Act and will be issued to the Purchaser in reliance upon an exemption from such registration. The Purchaser hereby confirms that it has been informed that the Shares are restricted securities under the Securities Act and may not be resold or transferred unless the Shares are first registered under the U.S. federal securities laws or unless an exemption from such registration is available. 10.2 Restrictions on Disposition of Shares. The Purchaser shall make no disposition of the Shares unless either (i) they first shall have been registered under the Securities Act, or (ii) the Company first shall have been furnished with an opinion of legal counsel, reasonably satisfactory to the Company, to the effect that such sale or transfer is exempt from the registration requirements of the Securities Act. Notwithstanding the foregoing, no registration or opinion of counsel shall be required for (i) a transfer by the Purchaser to a wholly owned subsidiary of the Purchaser provided that the transferee in each case agrees in writing to be subject to the terms of this Article 10 to the same extent as if it were the original Purchaser hereunder, or (ii) a transfer made in accordance with Rule 144 under the Securities Act. -18-  10.3 Restrictive Legends. The stock certificates for the Shares shall be endorsed with one or more of the following restrictive legends: "The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended. The shares may not be sold or offered for sale or otherwise transferred, pledged or hypothecated unless and until such shares are registered under such act or an opinion of counsel satisfactory to the company is obtained to the effect that such negotiation is not required." "The shares represented by this certificate are subject to an option granted to StoryFirst Communications, Inc. ("SFC") and accordingly may not be sold, assigned, transferred, encumbered, or in any manner disposed of except in conformity with the terms of the option agreement dated _________, 2003 between SFC and the registered holder of the shares (or the predecessor in interest to the shares). A copy of such agreement is maintained at SFC's principal corporate offices." ARTICLE 11 DISPUTE RESOLUTION; GOVERNING LAW 11.1 Dispute Resolution. Any controversy between the Parties, including the construction or application of any of the terms, covenants or conditions of this Agreement shall on written request of one Party served upon the other, be submitted to arbitration and be governed by the rules of the American Arbitration Association in effect on the date of referral to arbitration, except that in the event of any conflict between those rules and this Section 11.1, this Section 11.1 shall govern. The arbitration shall take place in New York, New York and shall be conducted in English. The arbitration shall be conducted by a single neutral arbitrator selected in accordance with the rules of the American Arbitration Association. The arbitrator (i) shall not have any power or authority to add to, alter, amend or modify the terms of this Agreement and (ii) shall interpret and construe this Agreement in accordance with the laws of the State of New York and the United States of America. The cost of such arbitration, including reasonable attorney's fees, shall be borne by the losing Party or in such proportion as the arbitrator shall decide. 11.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York and the United States of America, without giving effect to the conflict of laws rules thereof. ARTICLE 12 NOTICE 12.1 Notice. Except as otherwise provided in this Agreement, any and all notices, consents, waivers, instructions, requests, votes, and other documents or communications shall be in writing in English and signed by the person giving such notice or other communication. Notice and other documents and communications shall be deemed properly given only if they are (i) delivered personally; or (ii) transmitted by fax or by another instantaneous means of transmission (with confirmation of receipt in the case of transmission by fax or other instantaneous means of transmission) to the following addresses: -19-  (a) if to the Company, to: StoryFirst Communications, Inc. c/o Media Forte 12 3rd Khoroshevskaya ul. 123298 Moscow Russian Federation Tel.: +7 (095) 797-4105 Fax: +7 (095) 785-6349 Attention: President With a copy (which copy shall not be deemed notice hereunder) to: Hale and Dorr Alder Castle 10 Noble Street London England EC2V 7QJ Tel.: +44 (20) 7645-2400 Fax.: +44 (20) 7645-2424 Attention: Trisha Johnson (b) if to the Purchaser, to: Alfa Capital Holdings (Cyprus) Limited Presidium Building 3rd Floor 6 Demostenis Severis Avenue Nicosia, Cyprus Tel.: +357 22 681 988 Fax.: +357 22 681 505 Attn: Valery A. Zyukin or at such address that any Party, as the case may be, may designate by official notice to the other Parties for the receipt of such documents or communications. 12.2 Receipt. All such notices or other communications shall be deemed to have been given or received: (i) upon receipt, if personally delivered; and (ii) upon confirmation of receipt, if notice is given by electronic facsimile. -20-  ARTICLE 13 MISCELLANEOUS 13.1 Expenses. Each Party hereto shall be responsible for all costs incurred by it relating to negotiation, execution and delivery of this Agreement and the other Transaction Documents and performance of the transactions contemplated hereby and thereby. Without limiting the generality of foregoing, the Purchaser shall pay the filing fee in accordance with the Hart-Scott-Rodino Act. 13.2 Publicity. Except as otherwise required by Applicable Law, no Party shall issue any press release or make any other public statement, in each case relating to, connected with or arising out of this Agreement or the matters contained herein, without obtaining the prior written approval of the other Parties to the contents and the manner of presentation and publication thereof. 13.3 Survival. All covenants, agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and the issuance of the Shares contemplated hereby. 13.4 Captions. The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. 13.5 No Assignment. No Party to this Agreement may assign or otherwise transfer, in whole or in part, any of its rights or obligations arising hereunder or under any other Transaction Document to any third parties without the prior written approval of the other Parties hereto; provided, however, that the assignability of the rights and obligations under the Stockholders' Agreement shall be governed by such agreement. 13.6 Entire Agreement. This Agreement, the other Transaction Documents and the other agreements and instruments referred to herein and therein, shall represent the entire agreement and understanding of the Parties hereto on the subject matter hereof and supersedes all previous negotiations, agreements or understandings between or among some or all of them, whether written or oral. In the event of a conflict between this Agreement and any of the exhibits hereto and agreements and instruments referred to herein or therein (other than the Stockholders' Agreement), the terms of this Agreement shall govern. 13.7 Amendments. No amendment or modification of this Agreement will be effective unless it is in writing and duly executed by each Party hereto. 13.8 No Action on Behalf of Other Party. Except as otherwise provided in this Agreement, no Party shall, without the prior written consent of the other Party, in any manner use the name of, act or purport to act for or as a representative or agent of, or enter into any obligations or responsibilities on behalf of the other Party. -21-  13.9 Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof will not in any way be affected or impaired thereby, and the Parties shall negotiate in good faith concerning alternative means of achieving the goals and objectives underlying the invalid or unenforceable provision. 13.10 Third Party Beneficiaries. Each Party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties hereto. 13.11 No Presumption. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the Party drafting or causing this Agreement to be drafted. References to any document, instrument or agreement shall (i) include all addenda, exhibits and other attachments thereto; (ii) include all documents, instruments or agreements issued or executed in replacement thereof; and (iii) mean such document, instrument or agreement as amended, modified and supplemented. 13.12 Counterparts. This Agreement may be executed in two or more counterparts, and by the Parties hereto in separate counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one and the same instrument. -22-  IN WITNESS WHEREOF, each of the Parties hereto has duly executed this Agreement, all as of the day and year first above written. STORYFIRST COMMUNICATIONS, INC. By: /s/ Robert J. Clark ------------------------------- Name: Robert J. Clark Title: President ALFA CAPITAL HOLDINGS (CYPRUS) LIMITED By: /s/ Valery Zyukin ------------------------------- Name: Valery Zyukin Title: Director -23-