Document:

Exhibit 10.1

BINDING TERMSHEET TO ACQUIRE
INTEREST IN  

TELERADIOKOMPANIYA 31ST KANAL LLP

This Termsheet sets forth
the terms and conditions upon which (1) CTC Media, Inc., a Delaware corporation
(“CTCM”), directly or through one or more
subsidiaries (collectively, the ”Purchaser”),
will acquire from Kazkommerts Securities JSC acting on behalf of an investment
fund managed by it (the “Seller”), and
the Seller will sell to the Purchaser, units representing a 20% participation
interest in Teleradiokompaniya 31st Kanal LLP, a limited liability partnership
organized under the laws of the Republic of Kazakhstan (the “Target”); (2) the Replacing Holder, as defined below, will
grant to the Purchaser an option to acquire additional units representing up to
an additional 30% participation interest in the Target, under certain
circumstances; and (3) the Target and the Service Companies (or Sole Service
Company), each as defined below, will enter into certain exclusive agreements
with respect to the provision of programming content to, and the sales of
advertising time of, the Target (together, the ”Transaction”).

In order to consummate
the transactions contemplated herein, Mediaholding 31st Kanal LLP, a limited liability partnership
organized under the laws of the Republic of Kazakhstan (the “Existing Holder”), undertakes to fulfill the following
transactions:

(a)                                  transfer
of 20% participation interest in the Target by the Existing Holder to the
Seller; and

(b)                                 transfer
of 80% participation interest in the Target by the Existing Holder to “Vernye
Investitsyi” Closed Unit Investment Fund
of Risk Investments under the management of Verny Capital JSC (the “Replacing Holder”).

1.                                       Interest
Acquired; Agreements.  At the closing
of the Transaction (the “Closing”):

(a)                                  The
Purchaser shall purchase, and the Seller shall sell, units constituting a 20%
participation interest (the “Acquired
Interest”) in the Target. 
Immediately following the Closing, units representing the remaining 80%
participation interest in the Target will continue to be owned by the Replacing
Holder.

(b)                                 The
Replacing Holder shall hold a 30% interest in CTCM 31 Production, a company to
be newly formed under Kazakhstan laws for the purposes of production and/or
supply of programming content to the Target (“CTCM
31 Production”), and the Purchaser shall hold a 70% interest in CTCM
31 Production. The Replacing Holder shall hold a 40% interest in CTCM 31
Advertising, a company to be newly formed under Kazakhstan laws for the
purposes of sale of advertising time of the Target (the “CTCM 31 Advertising”), and the Purchaser
shall hold a 60% interest in CTCM 31 Advertising.  CTCM 31 Production and CTCM 31 Advertising
together shall be referred to as the “Service
Companies”. In the event that the functions of the Service Companies
are consolidated in one legal entity (“Sole
Service Company”), such entity shall be owned by the Replacing
Holder and the Purchaser at the proportion of 20% to 80%, respectively.  Further, in the event that the parties
mutually agree that it is no longer necessary or 

advisable to
conduct such operations through the Service Companies (or Sole Service
Company), the parties will take such action as may be required to dissolve such
company or companies and to conclude corresponding agreements for the production
and/or supply of programming content directly between the Target Group and CTCM
or its affiliates.

(c)                                  The
Replacing Holder shall enter into an option agreement that gives the Purchaser
the right to acquire, at no additional cost, additional units representing up
to an additional 30% participation interest in the Target, exercisable by the
Purchaser, on one or more occasions, at any time following a change in the laws
of Kazakhstan to permit a non-Kazakh entity to own more than 20% of a Kazakhstan
television broadcaster (the “Purchase Option”).
In the event that the Purchaser exercises its right is to acquire any or all of
such additional 30% participation interest in the Target, the Replacing Holder
shall have the right to acquire, at no additional cost, additional
participation interests in the Service Companies in proportion to such increase
in the ownership interest of the Purchase in the Target, as follows:

·                  up
to a 20% participation interest in CTCM 31 Production, and

·                  up
to a 10% participation interest in CTCM 31 Advertising;

or

·                  up
to 30% participation interest in the Sole Service Company;

with an objective of both the Replacing Holder and the Purchaser to own
a 50% participation interest in each of the Service Companies or the Sole
Service Company as a result of exercising the respective options. Such options
should be exercised provided that they allow the Purchaser to consolidate the
balance sheets and results of operations of the Target and the Service
Companies or the Sole Service Company in accordance with US GAAP.  Neither the exercise or non-exercise of the
Purchase Option shall alter CTCMs 60% economic interest in the financial
results of the Target Group and the Service Companies (or Sole Service Company,
as the case may be), taken as a whole; and the parties agree to execute any
additional agreements as may be needed for such purpose.

(d)                                 The
Target shall enter into agreements (the “Service
Agreements”) with the Service Companies or the Sole Service Company,
providing that (i) CTCM 31 Production or the Sole Service Company shall have
the exclusive right to provide all programming content to the Target for
broadcast by the Target and its subsidiaries; and (ii) CTCM 31 Advertising or
the Sole Service Company shall have the exclusive right to sell all advertising
time (national and local) of the Target and its subsidiaries.

(e)                                  The
parties shall implement such other corporate restructuring measures and execute
such other agreements, in addition to those specifically described herein, as
the Purchaser may reasonably determine are necessary to ensure the CTCM has a
60% economic interest in the financial results of the Target Group and the
Service Companies (or Sole Service Company, as the case may be), taken as a
whole, and to enable the Purchaser to consolidate the balance sheets and
results of operations of the Target Group 

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and the
Service Companies (or the Sole Service Company, as the case may be) in
accordance with US GAAP.

2.                                       Consideration.  The aggregate consideration (the “Consideration”) in respect of the Transaction shall be US$65
million, less (i) 50% of the net outstanding debt (sum of short term and long
term interest bearing liabilities as well as any repayable financial facility
or borrowings, less cash and cash equivalents) that of the Target Group as of
the Closing and (ii) 50% of the Tax Adjustment (as defined in paragraph 3
below), if any, payable in cash.

3.                                       Tax
Liabilities; Escrow.

(a)                                  The
Seller and the Target shall use their best efforts to obtain, prior to Closing,
final and binding tax audits by the competent taxation authorities of the
Republic of Kazakhstan of the Target and each Subsidiary (as defined below) for
all open periods through December 31, 2006. 
The Seller shall provide copies of all documentation in respect of each
such audit to the Purchaser prior to Closing. 
The aggregate amount of any additional tax determined to be due as a
result of such audits less any such tax amounts paid by the Target Group prior
to the Closing is referred to as the “Tax
Adjustment.”

(b)                                 In
the event that the tax audits referred to above have not been completed prior
to Closing, an amount of the Consideration (the “Escrow Amount”) equal to 50% of the accruals to be made for
tax liabilities of the Target Group through the date of Closing, as reasonably
determined by CTCM and the Seller (the “Accrual”),
but not exceeding US$6 million, shall be held in escrow for a period of at
least five years following the Closing to satisfy any liabilities resulting
from breaches of the representations, warranties, covenants and indemnities
provided for herein and in the Purchase Agreement in respect of taxation
matters. In the event that a later final and binding tax audit(s) carried out by
the competent taxation authorities determines that the amount of such
liabilities is less than the Escrow Amount, the parties agree that the amount
of such excess shall be released to the Seller.

(c)                                  In
addition to indemnifying the Purchaser in respect of any breaches of the
representations, warranties, covenants and indemnities provided for herein and
in the Purchase Agreement in respect of taxation matters, the Warrantors (as
defined on Schedule 1-A) shall specifically indemnify the Purchaser
against any and all tax liabilities in respect of the period from January 1,
2007 through Closing, including, without limitation, any such liabilities
identified in any tax audit conducted after Closing.  Notwithstanding any other indemnification
provisions contained herein or in the Purchase Agreement, the Seller and/or the
Replacing Holder shall provide payment in full in immediately available funds
of any amount equal to any such additional tax liabilities no later than 15
days following receipt by the Target of such audit determination.

4.                                       Approvals.  Each of the Purchaser, the Existing Holder,
the Seller, the Guarantor, the Replacing Holder and the Target hereby warrants
and confirms that it has received all necessary corporate approvals, including
approvals of shareholders, members, directors and supervisory board members, as
applicable, authorizing the execution and delivery of this Termsheet and the
Transaction Agreements (as defined below) and the consummation of the
transactions contemplated hereby and thereby.

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5.                                       Conditions
to Closing.  The Closing is subject
to the following conditions:

(a)                                  Purchase Agreement.  A definitive purchase agreement among
the Seller, the Replacing Holder, Verny Capital JSC (the ”Guarantor”),
the Target and the Purchaser (the “Purchase
Agreement”), memorializing the terms of this Termsheet and
containing standard representations and warranties (including those set forth
on Schedule 1 hereto), covenants, indemnification provisions, closing
conditions (including the delivery of opinions of counsel) and other
provisions, shall have been executed. 
The Seller, the Replacing Holder, the Guarantor and the Target (the “31st Kanal Parties”) agree to work with the
Purchaser expeditiously and in good faith to complete the Purchase Agreement
and all other legal documents required to consummate the Transaction, including
the Service Agreements (together, the ”Transaction
Agreements”), as soon as possible following the execution of this
Termsheet.  The Seller’s and the
Replacing Holder’s obligations to the Purchaser with respect to the
representations, warranties, covenants and indemnities contained in the
Purchase Agreement shall be guaranteed by the Guarantor.

(b)                                 Service
Companies or the Sole Service Company. Following the legal and finance and
tax study by the Purchaser and the Replacing Holder and the Purchaser
shall  have established the Service
Companies or the Sole Service Company.

(c)                                  Representations
and Warranties.  The representations
and warranties contained in the Purchase Agreement shall remain true and
correct as of the date of Closing as though made as of such date.

(d)                                 Operating
Agreement.  The Replacing Holder and
the Purchaser shall have entered into an Operating Agreement / Shareholders’
Agreement in respect of the Target and the Service Companies (or Sole Service
Company), to be governed by Kazakhstan law, the material terms of which shall
be substantially as set forth on Schedule 2 hereto.

(e)                                  Service
Agreements.  The Service Companies
(or the Sole Service Company) and the Target shall have entered into the
Service Agreements, the material terms of which shall be agreed by the Target,
the Replacing Holder and the Purchaser in good faith and in accordance with the
agreed objective set forth in Section 1(e) hereof.

(f)                                    Subsidiaries.  The following shall each be a wholly owned
subsidiary of the Target (each, a “Subsidiary”):

31st Kanal – Aktobe

31st Kanal – Atyrau

31st Kanal – Aktau

31st Kanal – Kostanay

31st Kanal –
Ust-Kamenogorsk

31st Kanal – Shymkent

(g)                                 Licenses.  The Target and each Subsidiary shall have
obtained and shall hold all required licenses, permits and authorizations to
broadcast in their respective regions and 

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otherwise
required to conduct their businesses (including, without limitation, the
licenses indicated on Schedule 3 hereto); and all such licenses, permits
and authorizations shall be in full force and effect.

(h)                                 Restructuring.  Any corporate restructuring of the Target
that may be required to cause the Subsidiaries to be wholly owned by the
Target  shall have been completed.

(i)                                     Consolidation.  The parties shall have implemented the
measures and executed the agreements, if any, described at paragraph 1(e)
above, and the Purchaser shall be reasonably satisfied that CTCM shall have a
60% economic interest in the results of the Target Group and the Service
Companies (or Sole Service Company, as the case may be), taken as a whole,
without adverse tax or accounting consequences to the Target Group or CTCM.

(j)                                     Due
Diligence.  The Purchaser and its
attorneys, accountants and other representatives and agents shall have satisfactorily
completed their due diligence investigation of the Target and its subsidiaries
(the “Target Group”).  Between the date of this Termsheet and the
Closing, these representatives shall be given full access to the accounting
books and other business and financial records, reports and documents of the
Target Group, including company records and tax returns.  Such due diligence investigation will also
include the inspection and examination of the Target Group’s facilities.  In addition, the Purchaser and its
representatives shall be given access to the constitutional documents and
financial statements for the year 2006, prepared in accordance with the
applicable legislation of the Republic of Kazakhstan, of the each of the
Replacing Holder, the Seller, the Existing Holder and the Guarantor (for the
avoidance of doubt, such “constitutional documents” shall not include the
minute books or stock records of such parties). 
None of such information shall be used by such persons other than for
evaluation of such parties for purposes of the Transaction.  The officers and management of the 31st Kanal
Parties agree to cooperate fully with Purchaser’s representatives and agents
and to make themselves available to the extent necessary to complete the due
diligence process and the Closing.

(k)                                  Access
to Advertisers and Employees.  The
31st Kanal Parties shall, at the request of the Purchaser, introduce the
Purchaser to the Target Group’s principal advertisers and employees to
facilitate discussions between such persons and the Purchaser in regard to the
Purchaser’s conduct of the business of the Target following the Closing.

(l)                                     Conduct
of the Target Group’s Business.  From
the date of this Termsheet until the Closing: 
(i) the 31st Kanal Parties will continue to operate the Target
Group as it has been operated in the past and shall not engage in any
transactions outside the ordinary course of business (other than the
restructuring measures described in paragraph (h) above); and (ii) the
Target Group will continue to make regularly scheduled payments on its existing
debt, and shall not incur any additional indebtedness except in the ordinary
course of business.

(m)                               Absence
of Adverse Change.  There shall have
been no material adverse change in the business, properties, operations,
condition (financial or otherwise), prospects, 

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assets or
liabilities of the Target Group since March 31, 2007. For purposes of this
provision a material adverse change is any event or circumstance which (i) has
or is reasonably expected to have a negative impact on the net income of the
Target Group as a whole for the four financial reporting quarters immediately
following the date of the Purchase Agreement, as reflected in the management
accounts of the members of the Target Group, in an amount greater than 25% of
the net income of the Target Group as a whole for the four financial reporting
quarters immediately preceding the date of the Purchase Agreement, as reflected
in the Financial Statements (as defined in Schedule 1-A); or (ii) leads to a reduction
in the net asset value on the management accounts of the members of the Target
Group by more than 10%, or (iii) leads to harm to the reputation of the Target.

(n)                                 Governmental
and Economic Change; Taxation.  There
shall not have occurred a material adverse change in the governmental or
economic conditions in Kazakhstan, including but not limited to a downgrade in
Kazakhstan’s sovereign debt to a rating that is at or below B1 or B+ by Moody’s
or Standard & Poor’s, respectively; and there shall not have occurred an
increase in the overall statutory tax rate in Kazakhstan to a rate greater than
50% of income before taxes.

(o)                                 Repayment
of Debt.  All loans between any
member of the Target Group and any affiliate thereof shall have been repaid.

(p)                                 Lease.  The Target and the Service Companies or the
Sole Service Company shall have entered into a new or amended lease in respect
of its principal premises in Almaty, for a term of not less than five years and
at a rent not greater than current market rates.

(q)                                 Related-Party
Matters.  All contracts, agreements
and arrangements for the payment of fees or provision of services between any
member of the Target Group and any related party of the Seller or the Replacing
Holder shall have been terminated, unless specifically approved in writing by
the Purchaser.  The Seller and the
Replacing Holder shall indemnify the Target and the Purchaser against any
liability, including in respect of tax, that may arise as a result of any
related-party transactions, other than those specifically approved in writing
by the Purchaser.

(r)                                    Government
and Third Party Approvals.  The
Transaction shall have been approved by all government agencies and third
parties from whom such approval is required, including, without limitation, any
Kazakhstan broadcast or media licensing authorities and any applicable
competition or anti-monopoly authorities. 
The Purchaser shall use its commercially reasonable efforts to obtain
any required approvals or consents from applicable anti-monopoly authorities,
including those of the Republic of Kazakhstan, prior to Closing.

(s)                                  Registration
of Purchaser Subsidiaries.  The
Service Companies or the Sole Service Company and/or any new Kazakhstan
subsidiary or subsidiaries of the Purchaser to be formed for purposes of
acquiring a portion of the Acquired Interest shall have been duly registered
with the applicable governmental authorities in Kazakhstan.

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(t)                                    Closing
Date.  The Closing shall take place
no later than November 30, 2007; provided, however, that the Closing date may
be extended to a later date as agreed by the Parties (the “Drop Dead Date”).

6.                                       Indemnification.

(a)                                  The 31st Kanal
Parties shall indemnify the Purchaser in respect of, and hold it harmless
against, any and all damages incurred or suffered by the Target Group or the
Purchaser or any affiliate thereof resulting from, relating to or constituting:

(i)                                     any
breach, as of the date of this Termsheet or the Purchase Agreement or as of the
Closing, of any representation or warranty of the Warrantors (as defined on Schedule
1) contained herein or in the Purchase Agreement or any other agreement or
instrument furnished by the 31st Kanal Parties to the Purchaser pursuant hereto
or to the Purchase Agreement; or

(ii)                                  any
failure to perform any covenant or agreement of the 31st Kanal Parties
contained herein or in any Transaction Agreement, including, without
limitation, the Service Agreements.

(b)                                 The
Purchaser shall indemnify the 31st Kanal Parties in respect of, and hold them
harmless against, any and all damages incurred or suffered by any of them or
any affiliate thereof resulting from, relating to or constituting:

(i)                                     any
breach, as of the date of this Termsheet or the Purchase Agreement or as of the
Closing, of any representation or warranty of the Purchaser contained in any
Transaction Agreement; or

(ii)                                  any
failure to perform any covenant or agreement of the Purchaser contained herein
or in any Transaction Agreement.

(c)                                  All
representations, warranties, covenants and indemnities contained herein and in
the Purchase Agreement or any other Transaction Agreement shall survive for
three years following Closing; provided, however, that claims in respect of
taxation matters shall survive until the expiration of the applicable statute
of limitations.  No claims shall be
brought unless the aggregate damages are at least the equivalent of US$200,000;
provided, however, that in the event that the damages exceed such amount a
claim may be made in respect of the entire amount of such damages and not only
the excess.

7.                                       Designated
CTC Representative.  Promptly
following the execution of this Termsheet, the Purchaser shall appoint one or
more individuals, each reasonably acceptable to the Seller and the Target
(collectively, the “CTC Representative”).  Such designated representatives will have
rights to approve any contracts and/or payments made by the Target Group in
excess of US$50 thousand net of applicable taxes.  The 31st Kanal Parties shall permit the CTC
Representative to work closely with the 31st Kanal Parties during the period
through Closing to prepare the Target Group for Closing, including matters
related to any required corporate restructuring, the establishment of Service
Arrangements, and preparation of quarterly financial statements and a budget for
the forthcoming financial year.

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8.                                       Exclusivity.  This Termsheet constitutes the agreement
of the 31st Kanal Parties to work exclusively with the Purchaser towards
Closing.  From the date of this Termsheet
until the earlier of (a) the Drop Dead Date or (b) the termination of
this Termsheet by the Purchaser upon a material breach of the terms hereof by
the 31st Kanal Parties, none of the 31st Kanal Parties shall (i) directly
or indirectly through any other party engage in any negotiations with or
provide any information to any other person, firm or corporation with respect
to an acquisition transaction involving the Target or any Subsidiary,
(ii) directly or indirectly through any other party solicit any proposal
relating to the acquisition of, or other major transaction involving, the
Target or any Subsidiary and will notify the Purchaser promptly of the receipt
of any unsolicited offer therefor, or (iii) dispose of any assets that
would constitute a part of the business of the Target Group other than in the ordinary
course of business.

In the event of any
breach of the provisions of this paragraph 8, unless the Transaction is
consummated upon the terms described in this Termsheet, the Seller will pay to
the Purchaser a cancellation fee in the amount of US$10 million, plus all
reasonable out-of-pocket expenses of the Purchaser incurred in connection with
the Transaction including, without limitation, attorneys’ fees, accountants’
fees, appraiser’s fees and other similar expenses.  Such cancellation fee shall be in addition to
and not exclusive of any other remedy the Purchaser may have at law or in
equity, including specific performance. 
The Purchase Agreement shall contain a comparable provision.

9.                                       Broker.    Each party agrees to indemnify, defend and
hold harmless the other party from any claim from any finder, broker,
investment banker or the like arising on their respective accounts with respect
to the transactions contemplated by this Termsheet.

10.                                 Disclosure.  The Purchaser and 31st Kanal Parties agree that
no disclosure of the Transaction or the proposal therefor contained in
this Termsheet shall be made to any third party without the consent of
the 31st Kanal Parties and the Purchaser, except as may be required by law
(in which event the non-disclosing parties shall be given an opportunity
to review in advance the proposed disclosure). 
Notwithstanding the foregoing, the parties hereby agree the CTCM may
publicly disclose the fact that the parties have agreed to the transaction
described herein, including the Consideration, as and when required by the
rules of the U.S. Securities and Exchange Commission, and may make any filing
with the U.S. Securities and Exchange Commission required to be made in
connection therewith.

11.                                 Expenses.  Except as otherwise expressly provided
herein, all parties will be responsible for their own costs and expenses,
including counsel fees, incurred in connection with the transactions
contemplated by this Termsheet and the Transaction Agreements.

12.                                 Governing
Law; Arbitration.  This Termsheet and
the Purchase Agreement shall be governed by the laws of the State of New York,
without regard to the conflict of interests provisions thereof.  Any dispute arising out of or in connection
with this Termsheet or the Purchase Agreement, including any question regarding
its existence, validity or termination, shall be referred to and finally
resolved by arbitration under the Rules of the London Court of International
Arbitration.  The number of arbitrators
shall be three.  One arbitrator shall be
selected by the party/s bringing the claim, one shall be selected by the
party/s defending the claim, and the third shall be selected by the other two
arbitrators  The seat of arbitration
shall be 

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London, England; the language to be used in the arbitral
proceedings shall be English; and the governing law shall be the substantive
law of the State of New York.

13.                                 Effective
Date.  This Termsheet will become
effective upon execution hereof by all of the parties set forth on the
signature pages hereto.

14.                                 Binding
Termsheet.  This Termsheet is
intended to constitute the binding agreement of each party hereto; provided,
however, that Purchaser’s obligation to complete the Transaction shall be
subject to the conditions set forth in paragraph 5 above and in the definitive
Purchase Agreement.  Each of the parties
to this Termsheet agrees to negotiate and proceed in good faith to the
consummation of the transactions contemplated herein.  Each party hereby warrants and confirms that
it has received all necessary corporate approvals required for the execution of
this Termsheet by such party, and that the person signing on its behalf below
is duly authorized to do so.

*****

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EXECUTED by the
following parties on the date specified at the beginning of this Termsheet.

PURCHASER:  CTC MEDIA, INC.

	
  By:

  	
  /s/ Alexander Rodnyansky

  	
   

  	
   

  	
   

  
	
  Alexander
  Rodnyansky

  	
   

  	
   

  
	
  Chief Executive
  Officer

  	
   

  	
   

  

 

Dated: September 3, 2007

SELLER:    KAZKOMMERTS SECURITIES JSC

	
  By:

  	
  /s/ Talgat
  Kamarov

  	
   

  	
   

  	
   

  
	
  Name:  Talgat Kamarov

  	
   

  	
   

  
	
  Title:    Managing Director

  	
   

  	
   

  

 

Dated: September 3, 2007

REPLACING HOLDER:   “VERNYE
INVESTITSYI” CLOSED UNIT INVESTMENT FUND OF
RISK INVESTMENTS UNDER THE MANAGEMENT OF VERNY CAPITAL JSC

	
  By:

  	
  /s/ Talgat Abdukhalikov

  	
   

  	
   

  	
   

  
	
  Talgat
  Abdukhalikov

  	
   

  	
   

  
	
  Chairman of the
  Board

  	
   

  	
   

  

 

Dated: September 3, 2007

EXISTING HOLDER:
MEDIAHOLDING 31ST KANAL LLP

	
  By:

  	
  /s/ Sergey
  Koshmukhanov

  	
   

  	
   

  	
   

  
	
  Sergey
  Koshmukhanov

  	
   

  	
   

  
	
  Chairman of the
  Board

  	
   

  	
   

  

 

Dated: September 3, 2007

 10
  
 

GUARANTOR:   VERNY CAPITAL JSC

	
  By:

  	
  /s/ Talgat
  Abdukhalikov

  	
   

  	
   

  	
   

  
	
  Talgat
  Abdukhalikov

  	
   

  	
   

  
	
  Chairman of the
  Board

  	
   

  	
   

  

 

Dated: September 3, 2007

TARGET:  TELERADIOKOMPANIYA 31ST KANAL LLP

	
  By:

  	
  /s/ Nurzan Mukhamejanova

  	
   

  	
   

  	
   

  
	
  Name:  Nurzan Mukhamejanova

  	
   

  	
   

  
	
  Title:    Executive Director

  	
   

  	
   

  

 

Dated: September 3, 2007

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SCHEDULE
1-A

Representations
and Warranties of the Warrantors

In the definitive
Purchase Agreement, the Target, the Seller, the Existing Holder, the Replacing
Holder and the Guarantor (collectively, the “Warrantors”,
and individually, a “Warrantor”)
shall, subject to a disclosure schedule that is acceptable to the Purchaser
(the “Disclosure Schedule”), jointly and
severally represent and warranty substantially as follows:

1.1                                 Organization,
Qualification and Corporate Power. 
The Target is a limited liability company  duly organized, validly existing and in good
standing under the laws of Kazakhstan. 
The Target has all requisite corporate power and authority to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it.  The Target has furnished
to the Purchaser complete and accurate copies of its all necessary foundation documents
(the “Charter”).  The Target is not in default under or in
violation of any provision of its Charter.

1.2                                 Participation
Interests.

(a)                                  The
Seller owns 20% of the outstanding participation interests in the Target, free
of any encumbrances, liens and restrictions on transfer.  The Replacing Holder owns the remaining 80%
of the outstanding participation interests in the Target, free of any
encumbrances, liens and restrictions on transfer.  All of the outstanding participation
interests in the Target have been duly authorized and validly issued and the
charter capital has been fully paid.

(b)                                 
The participation interest in the Target to be sold to the Purchaser by the
Seller pursuant to the Purchase Agreement (the “Acquired
Interest”) constitutes 20% of the participation interests in the Target.    The Seller has the right, power and
authority to sell, transfer and convey the Acquired Interest to the Purchaser
pursuant to the terms of the Purchase Agreement.

(c)                                  The
participation interest in the Target that is subject to the Purchase Option (the
“Option Interest”) constitutes 30% of
the participation interests in the Target. The Replacing Holder has the right,
power and authority to sell, transfer and convey the Option Interest to the
Purchaser pursuant to the terms of the Purchase Agreement.

(d)                                 Other
than preemptive rights provided for by Kazakhstan law and other than the
Purchase Option, (i) no subscription, warrant, option, convertible security or
other right (contingent or otherwise) to purchase or acquire any participation
interest in the Target is authorized or outstanding, (ii) the Target has no
obligation (contingent or otherwise) to issue any subscription, warrant,
option, convertible security or other such right, or to issue or distribute to
holders of any participation interest any evidences of indebtedness or assets
of the Target, and (iii) the Target has no obligation (contingent or otherwise)
to purchase, redeem or otherwise acquire any participation interests or any
interest therein or to pay any dividend or to make any other distribution in
respect thereof.

(e)                                  Other
than the Purchase Option, there is no agreement, written or oral, between the
Target and any holder of its participation interests relating to the sale or
transfer 

 12
  
 

(including agreements relating to rights of first refusal, co-sale
rights or ‘drag along’ rights), or voting, of the participation interests in
the Target.

1.3                                 Authorization
of Transaction.  Each Warrantor has
all requisite power and authority to execute and deliver the Purchase Agreement
and each other Transaction Agreement to which it is a party and to perform its
respective obligations thereunder.  The
execution and delivery by each Warrantor of the Purchase Agreement and each
other Transaction Agreement to which it is a party and the consummation by each
Warrantor of the transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action on the part of such
Warrantor.  The Purchase Agreement and
each other Transaction Agreement to which it is a party will have been duly and
validly executed and delivered by each Warrantor and constitutes a valid and
binding obligation of such Warrantor, enforceable against it in accordance with
its terms.

1.4                                 Noncontravention.  Subject to receipt of the consents set forth
at Section 1.4 of the Disclosure Schedule, each of which each Warrantor
reasonably expects to receive prior to the Closing, and receipt by the
Purchaser of applicable anti-monopoly approvals, neither the execution and
delivery by the Warrantors of the Purchase Agreement and the other Transaction
Agreements, nor the consummation by the Warrantors of the transactions
contemplated thereby, will (a) conflict with or violate any provision of  any organizational documents of any Warrantor
or the organizational documents of any Subsidiary (as defined below), (b)
require on the part of any Warrantor or any Subsidiary any notice to or filing
with, or any permit, authorization, consent or approval of, any court,
arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (“Governmental
Entity”), including any Kazakhstan broadcasting, licensing or other
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 any Warrantor or any Subsidiary is a party or by which
any Warrantor or any Subsidiary is bound or to which any of their respective
assets is subject, (d) result in the imposition of any security interest upon
any assets of the Target or any Subsidiary or (e) violate any treaty, order,
writ, injunction, decree, statute, rule or regulation applicable to any
Warrantor, any Subsidiary or any of their respective properties or assets.

1.5                                 Subsidiaries.

(a)                                  As
of the Closing, the Subsidiaries of the Target will be 31st Kanal – Akobe; 31st
Kanal – Atyrau; 31st Kanal – Aktau; 31st Kanal – Kostanay; 31st Kanal –
Ust-Kamenogorsk; and 31st Kanal – Shymkent (each, a “Subsidiary”
and together, the “Subsidiaries”).

(b)                                 Section
1.5 of the Disclosure Schedule shall set forth: (i) the number and type of
outstanding securities/participation interest of each Subsidiary; (ii) the form
of organization of each Subsidiary; and (iii) the names of the officers and
directors of each Subsidiary.

 13
  
 

(c)                                  Each
Subsidiary is a limited liability partnership or a joint stock company duly
organized, validly existing and in good standing under the laws of
Kazakhstan.  Each Subsidiary has all
requisite power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it.  The Seller has delivered to the Purchaser
complete and accurate copies of the organizational documents of each
Subsidiary.  No Subsidiary is in default
under or in violation of any provision of its organizational documents.  All of the issued and outstanding shares or
participation interests of each Subsidiary are duly authorized and validly
issued and free of preemptive rights (other than as provided by Kazakhstan
law), and the charter capital of each Subsidiary has been fully paid.  All shares or participation interests of each
Subsidiary are held or owned directly by the Target free and clear of any
restrictions on transfer, claims, security interests, options, warrants,
rights, contracts, calls, commitments, equities and demands.  There are no outstanding or authorized options,
warrants, rights, agreements or commitments to which the Target or any
Subsidiary is a party or which are binding on any of them providing for the
issuance, disposition or acquisition of any shares or participation interests
of any Subsidiary.  There are no voting
trusts, proxies or other agreements or understandings with respect to the
voting of any shares or participation interests of any Subsidiary.

(d)                                 The
Target does not control directly or indirectly or have any direct or indirect
equity participation or similar interest in any corporation, partnership,
limited liability company, joint venture, trust or other business association
or entity other than the Subsidiaries.

1.6                                 Financial
Statements.  The Seller has provided
to the Purchaser the Financial Statements (as defined below).  The Financial Statements (i) comply as to
form in all material respects with applicable accounting requirements, (ii)
were prepared in accordance with Kazakhstan accounting principles and practices
applied on a consistent basis throughout the periods covered thereby (except as
may be indicated in the notes to such Financial Statements) and (iii) fairly
present the financial position of the Target or the applicable Subsidiary, as
the case may be, as of the dates thereof and the results of its operations and
cash flows for the periods indicated, consistent with the books and records of
the Target or such Subsidiary, as the case may be, except that the Management
Accounts (as defined below) are subject to normal and recurring year-end
adjustments which will not be material in amount or effect and do not include
footnotes.  “Financial
Statements” means, in respect of each of the Target and each
Subsidiary, (x) the statutory accounts of such company for each of the five
fiscal years ended December 31, 2006 (the “Statutory Accounts”);
and (y) the unaudited managements accounts of such company as of and for the
six months ended June 30, 2007 (the “Management Accounts”).

1.7                                 Absence
of Certain Changes.  Since December
31, 2006, there has occurred no event or development which, individually or in
the aggregate, has had, or could reasonably be expected to have in the future,
a Target Material Adverse Effect.  For
the purposes hereof “Target Material Adverse
Effect” shall mean any material adverse change, event, circumstance
or development with respect to, or material adverse effect on, (i) the
business, assets, liabilities, capitalization, prospects, condition (financial
or other), or results of operations of the Target and the Subsidiaries, taken
as a whole, or (ii) the ability of the Purchaser to operate the business of the
Target and each of the Subsidiaries immediately after the Closing.

 14
  

1.8                                 Undisclosed
Liabilities.  None of the Target or
its Subsidiaries has any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated and whether due or to become
due), except for (a) liabilities shown on the balance sheets of each such
company dated June 30, 2007 (the “Balance Sheets”),
(b) liabilities which have arisen since June 30, 2007 in the ordinary course of
business and (c) contractual and other liabilities incurred in the ordinary
course of business which are not required by Kazakhstan accounting principles
and practices to be reflected on a balance sheet.

1.9                                 Tax
Matters.

(a)                                  Each
of the Target and the Subsidiaries has properly filed on a timely basis all tax
returns that it was required to file, and all such tax returns were true,
correct and complete.  Each of the Target
and the Subsidiaries has paid on a timely basis all taxes that were due and
payable.  The unpaid taxes of the Target
and each Subsidiary for tax periods through June 30, 2007 do not exceed the
accruals and reserves for taxes set forth on such company’s Balance Sheet and
all unpaid taxes of the Target and each Subsidiary for all tax periods
commencing after June 30, 2007 arose in the ordinary course of business and are
of a type and amount commensurate with taxes attributable to prior similar
periods.  Neither the Target nor any
Subsidiary (i) has any actual or potential liability as a transferee or
successor, pursuant to any contractual obligation, or otherwise for any taxes
of any person other than the Target or any Subsidiary or (ii) is a party to or
bound by any tax indemnity, tax sharing, tax allocation or similar
agreement.  All taxes that the Target or
any Subsidiary was required by law to withhold or collect have been duly withheld
or collected and, to the extent required, have been properly paid to the
appropriate Governmental Entity.  The
Target and each Subsidiary has maintained in proper form all records and
documents in respect of periods prior to Closing that would reasonably be
expected to be required in connection with any future tax audit.

(b)                                 The
Seller has delivered or made available to the Purchaser (i) complete and
correct copies of all tax returns of the Target and any Subsidiary relating to
taxes for all taxable periods for which the applicable statute of limitations
has not yet expired and (ii) complete and correct copies of all notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents submitted by, received by, or agreed to by or on behalf of the Target
or any Subsidiary relating to taxes for all taxable periods for which the
statute of limitations has not yet expired. 
No examination or audit of any tax return of the Target or any
Subsidiary by any Governmental Entity is currently in progress or, to the
knowledge of the Seller, threatened or contemplated.  Neither the Target nor any Subsidiary has
been informed by any jurisdiction that the jurisdiction believes that the
Target or any Subsidiary was required to file any tax return that was not
filed.  Neither the Target nor any
Subsidiary has (x) waived any statute of limitations with respect to taxes or
agreed to extend the period for assessment or collection of any taxes, (y)
requested any extension of time within which to file any tax return, which tax
return has not yet been filed, or (z) executed or filed any power of attorney
with any taxing authority.

(c)                                  There
is no limitation on the utilization by either the Target or any Subsidiary of
its net operating losses or similar items.

 15
 

(d)                                 Neither
the Target nor any Subsidiary is or has been a passive foreign investment
company within the meaning of Sections 1291 through 1297 of the U.S. Internal
Revenue Code of 1986, as amended.

(e)                                  There
are no liens or other encumbrances with respect to taxes upon any of the assets
or properties of the Target or any Subsidiary, other than with respect to taxes
not yet due and payable.

1.10                           Assets.

(a)                                  The
Target or the applicable Subsidiary is the true and lawful owner, and has good
title to, all of the assets (tangible or intangible) purported to be owned by
the Target or the Subsidiaries, free and clear of all security interests.  Each of the Target and the Subsidiaries owns
or leases all tangible assets, including technical broadcasting equipment,
sufficient for the conduct of its business as presently conducted and as
presently proposed to be conducted.  Each
such tangible asset is free from material defects, has been maintained in
accordance with normal industry practice, is in good operating condition and
repair (subject to normal wear and tear) and is suitable for the purposes for
which it presently is used.

(b)                                 Section
1.10(b) of the Disclosure Schedule shall list individually (i) all fixed assets
of the Target or the Subsidiaries, indicating the cost, accumulated book
depreciation (if any) and the net book value of each such fixed asset as of
June 30, 2007, and (ii) all other assets of a tangible nature of the Target or the
Subsidiaries the book value of which exceeds the equivalent of US$50,000.

(c)                                  Each
item of equipment and other asset of which the Target or a Subsidiary has
possession pursuant to a lease agreement or other contractual arrangement is in
such condition that, upon its return to its lessor or owner under the
applicable lease or contract, the obligations of the Target or such Subsidiary
to such lessor or owner will have been discharged in full.

1.11                           Owned
Real Property.  Neither the Target
nor any Subsidiary owns any real property.

1.12                           Real
Property Leases.  Section 1.12 of the
Disclosure Schedule shall list all leases in respect of real property and the
term of such lease, any extension and expansion options, and the rent payable
thereunder.  The Seller has delivered to
the Purchaser complete and accurate copies of such leases.  With respect to each such lease:

(a)                                  such
lease is legal, valid, binding, enforceable and in full force and effect;

(b)                                 such
lease will continue to be legal, valid, binding, enforceable and in full force
and effect immediately following the Closing in accordance with the terms
thereof as in effect immediately prior to the Closing;

(c)                                  neither
the Target nor any Subsidiary nor, to the knowledge of any Warrantor, any other
party, is in breach or violation of, or default under, any such lease, and no
event has occurred, is pending or, to the knowledge of any Warrantor, is
threatened, which, after 

 16
 

the giving of notice, with lapse of time, or otherwise, would
constitute a breach or default by the Target or any Subsidiary or, to the
knowledge of any Warrantor, any other party under such lease;

(d)                                 there
are no disputes or oral agreements in effect as to such lease;

(e)                                  neither
the Target nor any Subsidiary has assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold or subleasehold;
and

(f)                                    the
Target is not aware of any security interest, easement, covenant or other
restriction applicable to the real property subject to such lease which would reasonably
be expected to materially impair the current uses or the occupancy by the
Target or a Subsidiary of the property subject thereto.

1.13                           Intellectual
Property; Programming.

(a)                                  The
Target and the Subsidiaries have the right to operate in Kazakhstan under the
name 31st Kanal (or ‘Channel 31’).

(b)                                 The
Target and the Subsidiaries have or have had the right to broadcast all
third-party programming that has been broadcast by them to date without
infringement of the rights of any third parties.  Following the Closing, the Target and the
Subsidiaries will continue to have the right to broadcast the third-party
programming in their current programming library in accordance with the terms
of the applicable programming agreements, copies of which have been provided to
the Purchaser.

(c)                                  The
Target or a Subsidiary is the sole and exclusive owner of all programming
produced by the Target or any Subsidiary to date (the “In-House
Programming”), free and clear of any security interests.  No licenses have been granted to any third
party in respect of such In-House Programming, and no payments remain due to
any party (other than compensation to employees of the Target or the
Subsidiaries in the ordinary course) in respect of the production of any such
In-House Programming.  All such In-House
Programming will be available for unlimited future broadcasts by the Target and
the Subsidiaries following Closing without any further payment to any
party.  All employees and other persons
involved in the creation of all such In-House Programming have duly and validly
assigned their rights thereto to the Target or a Subsidiary, and all such
assignments have been duly registered with the appropriate Governmental
Entities.

1.14                           Licenses
and Permits.  Section 1.14 of the
Disclosure Schedule shall set forth a list of all licenses, permits,
authorizations and certificates of the applicable ministries and agencies of
the Kazakhstan government and local authorities, including, without limitation,
those of the Ministry of Culture and Information of the Republic of Kazakhstan,
and all other state authorities to conduct television and radio broadcasting
and otherwise to conduct the business of the Target and each Subsidiary as
currently conducted and proposed to be conducted (the “Permits”).
 All Permits have been obtained pursuant
to current legislation.  Each Permit is
in full force and effect and has not been suspended, cancelled, terminated or
withdrawn; and, to the knowledge of the Warrantors, no suspension,
cancellation, termination or withdrawal of such Permit is threatened and there
is no basis for believing that such Permit will not be renewable 

 17
 

upon expiration. 
The Target or the applicable Subsidiary is in compliance with the terms
of each such Permit, including all affirmative obligations imposed by each such
Permit.  Each such Permit will continue
in full force and effect immediately following the Closing.

1.15                           Contracts.

(a)                                  Section
1.15 of the Disclosure Schedule shall list the following agreements (written or
oral) to which the Target or any Subsidiary is a party as of the date of the
Purchase Agreement:

(i)                                     any
agreement for the licensing or production of programming, including promotional
materials;

(ii)                                  any
agreement with respect to the future broadcasting, sale, placement or
reservation of advertising, including agreements with respect to the placement
of advertising by agencies and other third parties;

(iii)                               any
agreement (or group of related agreements) for the lease of personal property
from or to third parties providing for lease payments in excess of the
equivalent of US$50,000 per annum or having a remaining term longer than six
months;

(iv)                              any
agreement (or group of related agreements) for the purchase or sale of products
or for the furnishing or receipt of services (A) which calls for performance
over a period of more than one year, (B) which involves more than the sum of
the equivalent of US$50,000, or (C) in which the Target or any Subsidiary has
agreed to purchase goods or services exclusively from a certain party;

(v)                                 any
agreement concerning the establishment or operation of a partnership, joint
venture or limited liability company;

(vi)                              any
agreement (or group of related agreements) under which the Target or any
Subsidiary has created, incurred, assumed or guaranteed (or may create, incur,
assume or guarantee) indebtedness (including capitalized lease obligations)
involving more than the equivalent of US$50,000 or under which the Target or
any Subsidiary has imposed (or may impose) a security interest on any of its
assets, tangible or intangible;

(vii)                           any
agreement for the disposition of any portion of the assets or business of the
Target or any Subsidiary or any agreement for the acquisition of the assets or
business of any other entity;

(viii)                        any
material agreement concerning confidentiality;

(ix)                                any
employment or consulting agreement with any employee of the Target or any
Subsidiary with any annual gross compensation (including commissions) of at
least the equivalent of US$40,000 or a termination or notice period longer than
one month;

(x)                                   any
material agreement involving any current or former officer, director or
shareholder of the Target or any Subsidiary or any affiliate thereof;

 18
 

(xi)                                any
agreement under which the consequences of a default or termination would
reasonably be expected to have a Target Material Adverse Effect;

(xii)                             any
agreement which contains any provisions requiring the Target or any Subsidiary
to indemnify any other party;

(xiii)                          any
agreement that could reasonably be expected to have the effect of prohibiting
or impairing the conduct of the business of the Target or any of the
Subsidiaries or of the Purchaser or any of its subsidiaries as currently
conducted and as currently proposed to be conducted, including following the
Closing;

(xiv)                         any
agreement under which the Target or any Subsidiary is restricted from
conducting its business in any geographic area of Kazakhstan;

(xv)                            any
other agreement (or group of related agreements) either involving more than the
equivalent of US$50,000 or not entered into in the ordinary course of the
business of the Target and the Subsidiaries.

(b)                                 The
Target shall have delivered to the Purchaser a complete and accurate copy of
each agreement listed in Section 1.15 of the Disclosure Schedule.  With respect to each agreement so
listed:  (i) the agreement is legal,
valid, binding and enforceable and in full force and effect; (ii) the agreement
will continue to be legal, valid, binding and enforceable and in full force and
effect immediately following the Closing in accordance with the terms thereof
as in effect immediately prior to the Closing; (iii) each agreement has, if
required by applicable law, been duly registered with the relevant Governmental
Entities; and (iv) neither the Target nor any Subsidiary nor, to the knowledge
of any Warrantor, any other party, is in breach or violation of, or default
under, any such agreement, and no event has occurred, is pending or, to the
knowledge of any Warrantor, is threatened, which, after the giving of notice,
with lapse of time, or otherwise, would constitute a breach or default by the
Target or any Subsidiary or, to the knowledge of any Warrantor, any other party
under such agreement.

1.16                           Accounts
Receivable.  All accounts receivable
of the Target and the Subsidiaries reflected on each company’s Balance Sheet
(other than those paid since the date thereof) are valid receivables subject to
no setoffs or counterclaims and are current and collectible (within 90 days
after the date on which it first became due and payable), net of the applicable
reserve for bad debts on the applicable Balance Sheet.  A complete and accurate list of all accounts
receivable greater than the equivalent of US$50,000 reflected on the Balance
Sheets of the Target and the Subsidiaries, showing the aging thereof, shall be
included in Section 1.16 of the Disclosure Schedule.  All accounts receivable of the Target and the
Subsidiaries that have arisen since the date of the Balance Sheets are valid
receivables subject to no setoffs or counterclaims and are collectible (within
90 days after the date on which it first became due and payable), net of a
reserve for bad debts in an amount proportionate to the reserve shown on the
applicable Balance Sheet.  Neither the
Target nor any Subsidiary has received any written notice from an account
debtor stating that any account receivable in an amount in excess of the
equivalent of US$50,000 is subject to any contest, claim or setoff by such
account debtor.

 19
 

1.17                           Powers
of Attorney.  Section 1.17 of the
Disclosure Schedule shall list all outstanding powers of attorney executed on
behalf of the Target or any Subsidiary.

1.18                           Insurance.  Section 1.18 of the Disclosure Schedule shall
list each insurance policy to which the Target or any Subsidiary is a party,
all of which are in full force and effect. 
The Target and each Subsidiary has all compulsory insurance required by
the laws of the Republic of Kazakhstan.

1.19                           Litigation.  There is no action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity which is pending or
has been threatened against the Target or any Subsidiary which (a) seeks either
damages in excess of the equivalent of US$50,000 or equitable relief or (b) in
any manner challenges or seeks to prevent, enjoin, alter or delay the
transactions contemplated by the Purchase Agreement. There are no judgments,
orders or decrees outstanding against the Target or any Subsidiary.

1.20                           Employees.  Section 1.20 of the Disclosure Schedule shall
contain a list of all employees of the Target and each Subsidiary whose annual
rate of gross (i.e., before deduction of taxes, etc.) compensation (including
commissions) exceeds the equivalent of US$40,000 per year, along with the
position and the annual rate of compensation of each such person.  The Target and each Subsidiary are in
compliance with all applicable laws relating to the hiring and employment of
employees.  All employment agreements
with employees of the Target and each subsidiary comply with all requirements
of the Labor Code of the Republic of Kazakhstan that came into force as of June
1, 2007.  Neither the Target nor any
Subsidiary has experienced any strikes, grievances, claims of unfair labor
practices or other collective bargaining disputes.

1.21                           Employee
Benefits.  Section 1.21 of the
Disclosure Schedule shall contain a list of all pension or retirement benefit
plans or private health care benefits provided for its employees.

1.22                           Advertisers.  Section 1.22 of the Disclosure Schedule shall
set forth a list of each advertiser or advertising agency or placement service
that accounted for more than 5% of the revenues of the Target or any Subsidiary
(on an unconsolidated basis) during the last full fiscal year or the interim
period through the date of the Balance Sheets, and the amount of revenues
accounted for by each such party during each such period.  No such advertiser, advertising agency or
placement service has indicated that as a result of the transactions
contemplated by this Termsheet it will stop, or decrease the rate of, buying
advertising from the Target or any Subsidiary; and no Warrantor has any reason
to believe (i) that the level of advertising revenues of the Target and the
Subsidiaries in the 12-month period following Closing will be lower than such
revenues in the 12-month period preceding Closing or (ii) that the sales
efforts of the advertising sales staff of the Target and the Subsidiaries or
those of any third-party advertising agency or placement service currently used
by the Target or any Subsidiary will be lower in the 12-month period following
Closing than in the 12-month period preceding Closing.

1.23                           Legal
Compliance.  Each of the Target and
each Subsidiary is currently conducting, and has at all times conducted, its
business in compliance with each applicable law (including rules and
regulations thereunder) of any Governmental Entity, except for any violations
or defaults that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Target Material Adverse Effect.  Neither the Target nor any 

 20
 

Subsidiary has received any notice or communication
from any Governmental Entity alleging noncompliance with any applicable law,
rule or regulation.

1.24                           No
Unlawful Payments. Neither the Target nor any of the Subsidiaries nor, to
the knowledge of any Warrantor, any director, officer, agent, employee or other
person acting on behalf of the Target or any of the Subsidiaries has (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity, (ii) made any direct or
indirect unlawful payment to any government official or employee from corporate
funds, (iii) violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977 or any applicable law or regulation implementing
the OECD convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

1.25                           Money
Laundering.  The operations of the
Target and the Subsidiaries are and have been conducted at all times in
compliance with applicable financial record keeping and reporting requirements
of Kazakhstan and any related or similar statutes, rules, regulations or
guidelines, issued, administered or enforced by any applicable governmental
agency (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Target or any of
Subsidiary with respect to the Money Laundering Laws is pending or, to the
knowledge of the Warrantors, threatened.

1.26                           Stamp
Duty.  No stamp, issuance, transfer
or other similar taxes or duties are payable by or on behalf of the Purchaser
in Kazakhstan or any political subdivision or taxing authority thereof on (i)
the execution and delivery of the Purchase Agreement and the consummation of
the transactions contemplated hereby, or (ii) the transfer of the Acquired
Interest to the Purchaser pursuant to the terms thereof.

1.27                           No
Restrictions on Subsidiaries. Except as would not be reasonably expected to
have a Target Material Adverse Effect, no Subsidiary is currently prohibited,
directly or indirectly, under any agreement or other instrument to which it is
a party or is subject, from paying any dividends, from making any other
distribution on such Subsidiary’s share capital or participation interests,
from repaying any intercompany loans or advances or from transferring any of
such Subsidiary’s properties or assets to the Target or any other subsidiary of
the Target.

1.28                           Certain
Business Relationships With Related Parties.  As at the time of the Closing, no related
party of the Target or of any Subsidiary (a) owns any property or right,
tangible or intangible, which is used in the business of the Target or any
Subsidiary, (b) has any claim or cause of action against the Target or any
Subsidiary, or (c) owes any money to, or is owed any money by, the Target or
any Subsidiary.  Section 1.28 of the
Disclosure Schedule shall describe any commercial transactions or relationships
between the Target or a Subsidiary and any related party thereof which occurred
or have existed since January 1, 2005.

1.29                           Brokers’
Fees.  Neither Target nor any
Subsidiary has any liability or obligation to pay any fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
the Purchase Agreement.

 21
 

1.30                           Books
and Records.  The minute books and
other similar records of the Target and each Subsidiary contain complete and
accurate records of all actions taken at any meetings of the Target’s or such
Subsidiary’s shareholders, members, supervisory board, management board or
other governing body or any committee thereof and of all written consents
executed in lieu of the holding of any such meeting, in compliance with the
applicable legislation of the Republic of Kazakhstan.  The books and records of the Target and each
Subsidiary accurately reflect in all material respects the assets, liabilities,
business, financial condition and results of operations of the Target or such
Subsidiary and have been maintained in accordance with good business and
bookkeeping practices.  Section 1.30 of
the Disclosure Schedule shall contains a list of all bank accounts and safe
deposit boxes of the Target and the Subsidiaries and the names of persons
having signature authority with respect thereto or access thereto.

1.31                           Disclosure.  No representation or warranty by any
Warrantor contained in the Purchase Agreement, and no statement contained in
the Disclosure Schedule or any other document, certificate or other instrument
delivered or to be delivered by or on behalf of the Seller, the Target or any
Subsidiary pursuant to the Purchase Agreement, contains or will contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in light of the circumstances under which it was or will be
made, in order to make the statements herein or therein not misleading.  The Seller has disclosed to the Purchaser all
material information relating to the business of the Target or any Subsidiary
or the transactions contemplated by the Purchase Agreement.

*****

 22
 

SCHEDULE
1-B

Representations and Warranties of the Purchaser

In the definitive Purchase Agreement, the Purchaser
shall represent and warranty to the Replacing Holder substantially as follows:

1.1.                              Organization and
Corporate Power.  The Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation. 
The Purchaser has all requisite corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties
owned and used by it.

1.2                                 Authorization of
Transaction.  The Purchaser has all requisite
power and authority to execute and deliver the Purchaser Agreement and each
other Transaction Agreement to which it is a party and to perform its
obligations thereunder.  The execution
and delivery by the Purchaser of the Purchase Agreement and each other
Transaction Agreement to which it is a party and the consummation by the
Purchaser of the transactions contemplated thereby will have been duly and
validly authorized by all necessary corporate action on the part of the
Purchaser, including approval of the Board of Directors of the Purchaser.  The Purchase Agreement and each other
Transaction Agreement to which it is a party will have been duly and validly
executed and delivered by the Purchaser and constitute a valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms.  The Purchaser shall provide the
Warrantors with true and correct evidence of the corporate authority of the
person signing the Purchase Agreement on behalf of the Purchaser.

1.3                                 Noncontravention.  Subject to the receipt of applicable Kazakh
or other anti-monopoly approvals, neither the execution and delivery by the
Purchaser of the Purchaser Agreement or any other Transaction Agreement to
which it is a party, nor the consummation by the Purchaser of the transactions
contemplated thereby, will (a) conflict with or violate any provision of
the charter or by-laws of the Purchaser, (b) require on the part of the
Purchaser any filing with, or permit, authorization, consent or approval of,
any Governmental Entity (other than any disclosure that may be required to be
made or filed (including copies of any Transaction Agreement) pursuant to the
rules of the U.S. Securities and Exchange Commission or The Nasdaq Stock
Market), (c) conflict with, result in 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 any right to terminate,
modify or cancel, or require any notice, consent or waiver under, any material
contract or instrument to which the Purchaser is a party or by which it is
bound or to which any of its assets are subject, except for (i) any
conflict, breach, default, acceleration, termination, modification or
cancellation which would not adversely affect the consummation of the
transactions contemplated hereby or thereby or (ii) any notice, consent or
waiver the absence of which would not adversely affect the consummation of the
transactions contemplated hereby, or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Purchaser or
any of its properties or assets.

1.4                                 Litigation.  There is no action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity which is pending or
has been threatened against the Purchaser which in any manner challenges or
seeks to prevent, enjoin, alter or delay the transactions 

 23
 

contemplated by the Purchase Agreement. There are no judgments, orders
or decrees outstanding against the Purchaser.

1.5                                 Financing.  The Purchaser has sufficient funds available
to it to enable it to perform its obligations under Purchase Agreement,
including the payment of the Consideration.

1.6                                 Acquisition
For Own Account. The Purchaser
is acquiring the Acquired Interest for its own account.

 24
 

SCHEDULE
2

Principal
Terms of Operating or Shareholders’ Agreement

·                  The Replacing
Holder and the Purchaser shall agree to manage the Target Group and the Service
Companies (or the Sole Service Company) in a manner which will procure the
representation of both parties in the management of activities of the Target
Group and the Service Companies (or the Sole Service Company); provided that
the Purchaser will be able to consolidate the balance sheets and results of
operations of the Target Group and the Service Companies (or the Sole Service
Company) in accordance with US GAAP.

·                  CTCM shall be
entitled to appoint the General Director, Finance Director and Programming
Director of each member of the Target Group and of the Service Companies (or
Sole Service Company); and to establish the compensation of the top management
of each member of the Target Group and of the Service Companies (or sole
Service Company).

·                  The Replacing
Holder shall be entitled to appoint the Chief Accountant of each member of the
Target Group; provided that such Chief Accountant will be subordinate to the
respective Finance Director of such entity. The compensation of the Chief
Accountant of each member of the Target Group shall be established by the Board
of Directors of the Target.  The General
Director shall have the right to terminate the Chief Accountant of such entity;
however, the Replacing Holder shall be entitled to appoint such Chief
Accountant’s successor.

·                  CTCM (or its
designated General Director) shall have the sole right to establish the
internal policies and procedures of the Target Group and the Service Companies
(or Sole Service Company), including, without limitation, programming
schedules, advertising sales and prices, audit and reporting procedures and
internal controls, as applicable.

·                  The Target Group
shall be obligated to obtain all programming (other than In-House Programming
(as defined in Schedule 1-A)) from the Service Companies (or the Sole Service
Company).  The Service Companies (or the
Sole Service Company) shall be obligated to obtain substantially all such
programming through CTCM, either in the form of an affiliation agreement,
through sublicensing, from related parties of CTCM or from third-parties on
terms established by CTCM.

·                  For the
avoidance of doubt, other than as required by Kazakhstan law, the Replacing
Holder (and its successors and assigns) shall have no right to dictate or veto
decisions with respect to the operations or financing of the Target, the
Subsidiaries or the Service Companies (or Sole Service Company) in the ordinary
course; and in particular, without the prior written consent of CTCM, shall not
exercise its rights as a shareholder in the Target or the Service Companies (or
sole Service Company) to cause any amendment, modification or termination of
the Service Agreements.

·                  The Purchaser,
on the one hand, and the Replacing Holder, on the other hand, shall have rights
of first offer and co-sale with respect to any proposed third-party transfer of
their respective interests in the Target and the Service Companies (or Sole
Service Company).

 25
 

·                  If the Purchaser
elects to sell its interest in the Target to a third-party, the Replacing
Holder shall have the right, if such third party so desires, to sell its
interest in the Target to such third party on the same terms and conditions as
offered to the Purchaser.

·                  Any deadlock in
the management of the Target or the Service Companies (or Sole Service Company)
shall be resolved as follows:  The
Replacing Holder and the Purchaser shall undertake good faith negotiations for
a period of 30 days.  Thereafter, the
matter shall be referred to the CEO/Managing Director of each of CTCM and the
Replacing Holder.  If after two in-person
consultations between such executives the matter remains unresolved, the matter
shall be submitted to binding mediation.

 26
 

SCHEDULE
3

Licenses

The Target and each
Subsidiary shall have obtained and shall hold all required licenses, permits
and authorizations to broadcast in their respective regions and otherwise
required to conduct their businesses, including, without limitation, the
following:

·                  a
license for the organization of television broadcasting;

·                  a
permit for the use of the radiofrequency spectrum;

·                  a
permit for the use of radioelectronic equipment and high-cycle devices; and

·                  mass
media registration with the competent authority (currently the Ministry of
Culture and Information of the Republic of Kazakhstan).

The geographic regions
covered by the foregoing licenses and permits held by the Target:

·                  Almaty

·                  Astana

·                  Karaganda

·                  Petropavlovsk

·                  Semei

·                  Taraz

The geographic regions
covered by the foregoing licenses and permits held by the Subsidiaries:

·                  Aktau

·                  Aktobe

·                  Atyrau

·                  Kostanai

·                  Shymkent

·                  Ust-Kammenogorsk

 27Exhibit 10.1

	
  Lehman Brothers Holdings Inc.

  	
   

  	
  Merrill
  Lynch Capital Corporation

  
	
  Lehman
  Brothers Commercial Bank

  	
   

  	
  Merrill
  Lynch, Pierce, Fenner & Smith Incorporated

  
	
  Lehman
  Commercial Paper Inc.

  	
   

  	
  4 World
  Financial Center

  
	
  Lehman
  Brothers Inc.

  	
   

  	
  North
  Tower

  
	
  745
  Seventh Avenue

  	
   

  	
  250
  Vesey Street

  
	
  New
  York, New York 10019

  	
   

  	
  New
  York, New York 10080

  

 

July 9, 2007

COMMITMENT
LETTER

PERSONAL AND
CONFIDENTIAL

The Home Depot, Inc.

2455 Paces Ferry Road N.W.

Atlanta, Georgia 30339

	
  Attention:

  	
   

  	
  Carol B. Tomé

  
	
   

  	
   

  	
  Chief Financial Officer and

  
	
   

  	
   

  	
    Executive Vice President-Corporate
  Services

  

 

Ladies and
Gentlemen:

This commitment
letter agreement (together with all exhibits and schedules hereto, the “Commitment Letter”) will confirm
the understanding and agreement among Lehman Brothers Commercial Bank (together
with its designated affiliates, “LBCB”),
Lehman Brothers Holdings Inc. (together with its designated affiliates, “LBHI”), Lehman Commercial Paper Inc.
(“LCPI” and together with LBCB and
LBHI, the “Lehman Lenders”), Lehman
Brothers Inc. (“Lehman Brothers”
and together with the Lehman Lenders, “Lehman”),
Merrill Lynch Capital Corporation (“MLCC”) and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”
and together with MLCC, “Merrill Lynch”),
The Home Depot, Inc., a Delaware corporation (the “Company”), in connection with the proposed
financing for the acquisition of up to 250 million shares of its common
stock pursuant to the offer to purchase (the “Offer
to Purchase”) (as such amount may be increased as provided
therein) dated on or about the date hereof (the “Share Repurchase”) and to provide support for the
issuance by the Company of commercial paper in connection with such Share
Repurchase.  For purposes of this
Commitment Letter, the Lehman Lenders, Lehman Brothers, MLCC and MLPF&S are
collectively referred to as “we”, “us” or the “Agents”.  The entering into and borrowings under the
Credit Facility (as defined below) by the parties herein described, the Share Repurchase
and the payment of any related fees and expenses are herein collectively
referred to as the “Transactions”.  The date on which the parties enter into
definitive documentation governing the Credit Facility (as defined below) is
referred to as the “Closing Date.”

You have advised us that
the total funds needed to finance the Transactions (including fees and
expenses) will be provided from up to $10.0 billion from (i) the
issuance of commercial paper by the Company and/or (ii) direct borrowings
by the Company under a Revolving Facility (the “Credit Facility”) among the Company, the Lehman
Lenders, MLCC and the financial institutions party thereto.

1.             The
Commitments.

(a)           You have requested that
each of (i) the Lehman Lenders and (ii) MLCC, severally and not
jointly, (collectively with each other entity that becomes a lender under the
Credit Facility, the “Lenders”) commit to provide 50%
each of the entire amount of the Credit Facility upon the terms

and subject to the conditions
set forth or referred to in this Commitment Letter and in the Summary of Terms
of Credit Facility attached hereto as Exhibit A (the “Term Sheet”).

(b)           Based on the foregoing,
each of (i) the Lehman Lenders and (ii) MLCC is pleased to confirm by
this Commitment Letter its several commitment to you (the “Commitment”),
to provide or cause one or more of its affiliates to each provide 50% of the
entire amount of the Credit Facility.

(c)           It is agreed that
Lehman Brothers and MLPF&S (each an “Arranger” and together the “Arrangers”) will act
as the sole book-runners and sole arrangers for the Credit Facility, that LCPI
(or its designated affiliate) will act as the sole and exclusive Administrative
Agent (acting in such role, the “Administrative Agent”) for the
Credit Facility, and MLCC will act as the sole and exclusive Syndication Agent
(acting in such role, the “Syndication Agent”) for the
Credit Facility.  Each of the Arrangers,
the Administrative Agent, and the Syndication Agent will have the rights and
authority customarily given to financial institutions in such roles, but will
have no duties other than those expressly set forth herein.  You agree that no other agents, co-agents,
arrangers or book-runners will be appointed, no other titles will be awarded,
and no compensation (other than that expressly contemplated by the Term Sheet
or the Fee Letter referred to below) will be paid, in connection with the
Credit Facility unless you and we so agree.

(d)           The commitments and
agreements of each of the Lehman Lenders, MLCC and the Arrangers described
herein are subject to (i) there not having occurred any event, development or
circumstance since January 28, 2007 that has caused or would
reasonably be expected to cause a material adverse condition or material
adverse change in or affecting (A) the financial condition, operations, business
or properties of the Company and its subsidiaries, taken as a whole, except as
previously disclosed in the Company’s public filings with the Securities and
Exchange Commission or (B) the validity or enforceability of any of the Credit
Documentation (as defined in the Term Sheet) or the rights and remedies of the
Administrative Agent and the Lenders thereunder, (ii) any information or other
matter disclosed to the Arrangers prior to the date hereof in connection with
the Transactions not proving to have been false or misleading in any material
respect at the time such information or other matter was disclosed to the Arrangers,
(iii) there not having occurred a material disruption or material adverse
change in the financial, banking (including the bank loan syndication market)
or capital markets that is reasonably expected to materially impair the
syndication of the Credit Facility or the sale or placement of investment
grade, senior unsecured corporate debt securities and (iv) the other conditions
set forth below or referred to in the Funding Conditions attached hereto as Exhibit
B.

2.             Fees
and Expenses.  In consideration of
the execution and delivery of this Commitment Letter by each of the Lehman
Lenders and MLCC as a Lender, you agree to pay the fees and expenses set forth
in Annex A-I to the Term Sheet and in the Fee Letter dated the date hereof (the
“Fee Letter”)
as and when payable in accordance with the terms thereof.

3.             Indemnification.

(a)           The Company hereby
agrees to indemnify and hold harmless each of the Lehman Lenders, Lehman
Brothers, MLCC, MLPF&S, the other Lenders and each of their respective
affiliates and all their respective officers, directors, partners, trustees,
employees, controlling persons and agents (each, an “Indemnified Person”)
from and against any and all losses, claims, damages and liabilities to which
any Indemnified Person may become subject arising out of or in connection with
this Commitment Letter, the Credit Facility, the use of the proceeds therefrom,
any of the other transactions contemplated by this Commitment Letter or any
other transaction related thereto or any claim, litigation, investigation or
proceeding relating to any of the foregoing (each a “Claim” and
collectively the “Claims”),
regardless

 2
 

of whether any Indemnified
Person is a party thereto, and to reimburse each Indemnified Person promptly
upon demand for all reasonable legal and other expenses reasonably incurred by
it in connection with investigating, preparing to defend or defending, or
providing evidence in or preparing to serve or serving as a witness with
respect to, any lawsuit, investigation, claim or other proceeding relating to
any of the foregoing (including, without limitation, in connection with the enforcement
of the indemnification obligations set forth herein); provided, however,
that no Indemnified Person will be entitled to indemnity hereunder in respect
of any loss, claim, damage, liability or expense to the extent such loss,
claim, damage, liability or expense results from (i) the willful misconduct or
gross negligence of such Indemnified Person, (ii) any material breach by such
Indemnified Person of its representations or obligations under this Commitment
Letter or (iii) the violation by such Indemnified Person of any law, rule or
regulation binding upon such Indemnified Person (the matters set forth in the
foregoing clauses (i) through (iii) being collectively referred to as the “Indemnity Exclusions”).  In no event will any Indemnified Person be liable
on any theory of liability for indirect, special or consequential damages, lost
profits or punitive damages as a result of any failure to fund the Credit
Facility or otherwise in connection with the Credit Facility.  No Indemnified Person will be liable for any
damages arising from the use by unauthorized persons of information,
projections or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by unauthorized
persons, except to the extent such use resulted from the gross negligence or
willful misconduct of such Indemnified Person.

(b)           The Company further
agrees that, without the prior written consent of each of Lehman and Merrill
Lynch, which consent will not be unreasonably withheld, it will not enter into
any settlement of a lawsuit, claim or other proceeding against any Indemnified
Person arising out of this Commitment Letter or the Transactions unless such
settlement includes an explicit and unconditional release from the party
bringing such lawsuit, claim or other proceeding of such Indemnified Person.

(c)           In case any action or
proceeding is instituted involving any Indemnified Person for which
indemnification is to be sought hereunder by such Indemnified Person, then such
Indemnified Person will promptly notify the Company of the commencement of any
action or proceeding; provided, however, that the failure so to notify the
Company will not relieve the Company from any liability that they may have to
such Indemnified Person pursuant to this Section 3 or from any liability that
they may have to such Indemnified Person other than pursuant to this Section
3.  Notwithstanding the above, following
such notification, the Company may elect in writing to assume the defense of
such action or proceeding, and, upon such election, they will not be liable for
any legal costs subsequently incurred by such Indemnified Person (other than
reasonable costs of investigation and providing evidence) in connection
therewith, unless (i) they have failed to provide counsel reasonably
satisfactory to such Indemnified Person in a timely manner, (ii) counsel
provided by the Company reasonably determines that its representation of such
Indemnified Person would present it with a conflict of interest or (iii) the
Indemnified Person reasonably determines that there may be legal defenses
available to it which are different from or in addition to those available to
the Company.  In connection with any one
action or proceeding, the Company will not be responsible for the fees and
expenses of more than one separate law firm (in addition to local counsel) for
all Indemnified Persons.

(d)           The Company, the Lehman
Lenders, Lehman Brothers, MLCC and MLPF&S agree that if any indemnification
or reimbursement sought pursuant to this Section 3 is judicially determined to
be unavailable for a reason other than those as provided in the Indemnity
Exclusions, then the Company will contribute to the amount paid or payable by
the Lehman Lenders, Lehman Brothers, MLCC or MLPF&S as the case may be, as
a result of such losses, claims, damages, liabilities and expenses for which
such indemnification or reimbursement is held unavailable (i) in such
proportion as is appropriate to reflect the relative benefits to the Company,
on the one hand, and the Lehman Lenders, Lehman Brothers, MLCC or MLPF&S,
as the case may be, on the other hand, in connection with the transactions to
which such indemnification or reimbursement relates, or (ii) if the allocation
provided by

 3
 

clause (i) above is judicially
determined not to be permitted, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
faults of the Company, on the one hand, and the Lehman Lenders, Lehman
Brothers, MLCC or MLPF&S, on the other hand, as well as any other equitable
considerations.

4.             Expiration
of Commitment.  The Commitments will
expire at 5:00 p.m., New York City time, on July 9, 2007 unless on or
prior to such time you have executed and returned to Lehman Brothers a copy of
this Commitment Letter, the Fee Letter and the Engagement Letter.  If you do so execute and deliver to Lehman
Brothers this Commitment Letter, the Fee Letter and the Engagement Letter, the
Lehman Lenders and MLCC agree to hold their respective Commitments available
for you until 5:00 p.m., New York City time, on
September 30, 2007.  The
Commitments will terminate on the Closing Date, and you agree to rely
exclusively on your rights and the commitments set forth in the Credit Documentation
in respect of all loans and extensions of credit to be made after the Closing
Date.

5.             Confidentiality.

(a)           This Commitment Letter,
the Fee Letter, and the Engagement Letter dated as of the date hereof among you
and the Arrangers (the “Engagement
Letter”) and the terms and conditions contained herein and
therein may not be disclosed by the Company to any person or entity (other than
(i) such of your agents and advisors as need to know and agree to be bound
by the provisions of this paragraph, (ii) other than with respect to the
Fee Letter, disclosures made as part of the Offer to Purchase and related
Schedule TO or (iii) as otherwise may be required by law or in response to
comments from the Securities and Exchange Commission or other regulatory
authority in connection with the Offer to Purchase (including with respect to
the Fee Letter)) without the prior written consent of the Lehman Lenders, MLCC
and the Arrangers.

(b)           You acknowledge that
each of Lehman Brothers and its affiliates (the term “Lehman Brothers,” when used in this paragraph, includes all
such affiliates, including the Lehman Lenders) and Merrill Lynch and its
affiliates may be providing debt financing, equity capital or other services (including
financial advisory services) to other companies in respect of which you may
have conflicting interests regarding the transactions described herein and
otherwise.  Neither Lehman Brothers nor
Merrill Lynch will use confidential information obtained from you by virtue of
the transactions contemplated by this Commitment Letter or their other
relationships with you in connection with the performance by Lehman Brothers or
Merrill Lynch of services for other companies, and neither Lehman Brothers nor
Merrill Lynch will furnish any such information to other companies.  You also acknowledge that neither of Lehman
Brothers or Merrill Lynch has any obligation to use in connection with the
transactions contemplated by this Commitment Letter, or to furnish to you,
confidential information obtained from other companies.

6.             Assignment
and Syndication.

(a)           The parties hereto
agree that Lehman and Merrill Lynch will have the right to syndicate the Credit
Facility and the Commitment to one or more groups of financial institutions or
other investors, identified by us after consultation with you, provided
that any such financial institutions and other investors that are not currently
participating as lenders under the Company’s existing revolving credit facility
shall be subject to approval by the Company (such approval not to be
unreasonably withheld or delayed). 
Lehman and Merrill Lynch will have the right to manage all aspects of
any such syndication in consultation with you, including decisions as to the
selection of institutions to be approached and when they will be approached,
the acceptance of commitments, the amounts offered, the amounts allocated and
the compensation provided.  The
Commitments are subject to the Company using all commercially reasonable
efforts to assist Lehman Brothers and Merrill Lynch in such syndication process
for the Credit Facility and any issuance of commercial paper made to finance
the Share Repurchase, including,

 4
 

without limitation: (i)
ensuring that the syndication efforts benefit from the existing lending relationships
of the Company; (ii) arranging for direct contact between senior management and
other representatives and advisors of the Company and the proposed Lenders or
purchasers; (iii) assisting in the preparation of marketing materials to be
used in connection with any syndication; and (iv) hosting, with us, one or more
meetings of prospective Lenders or purchasers, and, in connection with any such
Lender meeting, consulting with us with respect to the presentations to be made
at such meeting, and making available appropriate officers and representatives
to rehearse such presentations prior to such meetings, as reasonably requested
by us.  You also agree that, at your
expense, you will work with Lehman Brothers and MLPF&S to procure a rating
for the Credit Facility by Moody’s Investors Service, Inc. and Standard &
Poor’s Ratings Group prior to the commencement of the general syndication of
the Credit Facility.

(b)           To assist the Arrangers
in its syndication efforts, you agree promptly to prepare and provide to Lehman
Brothers such information with respect to the Company and the other
transactions contemplated hereby as it may reasonably request, including all
financial information as it may reasonably request.  You hereby represent and covenant that all
information (the “Information”) that has been or will be made
available to us by you or any of your representatives is or will be, when
furnished, complete and correct in all material respects and does not or will
not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such
statements are made.  You understand that
in arranging and syndicating the Credit Facility and the Commitment we may use
and rely on the Information without independent verification thereof.

(c)           To ensure an orderly
and effective syndication of the Credit Facility and the Commitment, you agree
that, from the date hereof until the earlier of the termination of the syndication
as determined by the Arrangers and 45 days following the Closing Date, you will
not, and will not permit any of your affiliates to, syndicate or issue, attempt
to syndicate or issue, announce or authorize the announcement of the
syndication or issuance of, or engage in discussions concerning the syndication
or issuance of, any debt facility, or debt or preferred equity security of the
Company or any of its subsidiaries (other than (i) debt issued pursuant to your
commercial paper program to fund the Share Repurchase or for working capital
purposes and other operations in the ordinary course of business and in
consultation with the Arrangers, (ii) the syndication of the Credit Facility as
contemplated hereby and (iii) any offering of Securities as contemplated by the
Engagement Letter), including any renewals or refinancings of any existing debt
facility, in each case, if such actions could, in the reasonable judgment of
the Arrangers, be expected to interfere in any material respect with the syndication
of the Credit Facility, unless the Arrangers have given their prior written
consent thereto.

7.             Survival.  The provisions of this Commitment Letter
relating to the payment of fees and expenses, indemnification and contribution
and confidentiality and the provisions of Sections 6 and 8 hereof will survive
the expiration or termination of the Commitment or this Commitment Letter
(including any extensions) and the execution and delivery of definitive
financing documentation.

8.             Choice
of Law; Jurisdiction; Waivers.

(a)           This Commitment Letter
will be governed by and construed in accordance with the laws of the State of
New York.  The Company hereby irrevocably
submits to the non-exclusive jurisdiction of any New York State court or
Federal court sitting in the County of New York in respect of any suit, action
or proceeding arising out of or relating to the provisions of this Commitment
Letter or the Fee Letter and irrevocably agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in any such
court.  The parties hereto hereby waive
any objection that they may now or hereafter have to the laying of venue of any
such suit, action or proceeding brought in any such court, and any claim that
any such suit, action or proceeding brought in any such court has been brought

 5
 

in an inconvenient forum.  The parties
hereto hereby waive, to the fullest extent permitted by applicable law, any
right to trial by jury with respect to any action or proceeding arising out of
or relating to this Commitment Letter or the Fee Letter.

(b)           No Lender will be
liable in any respect for any of the obligations or liabilities of any other
Lender under this letter or arising from or relating to the transactions
contemplated hereby.

9.             Miscellaneous.

(a)           This Commitment Letter
may be executed in one or more counterparts, each of which will be deemed an
original, but all of which taken together will constitute one and the same
instrument.  Delivery of an executed
signature page of this Commitment Letter by facsimile transmission will be
effective as delivery of a manually executed counterpart hereof.  This Commitment Letter may not be amended or
waived except by an instrument in writing signed by Lehman Brothers, the Lehman
Lenders, MLCC, MLPF&S and you.

(b)           The Company may not
assign any of its rights, or be relieved of any of its obligations, under this
Commitment Letter, without the prior written consent of each of the Lehman
Lenders and MLCC (and any purported assignment without such consent will be
null and void).  In connection with any
syndication of all or a portion of the Commitment, the rights and obligations
of each of the Lehman Lenders and MLCC hereunder may be assigned, in whole or
in part, and upon such assignment and assumption by the assignee of all such
obligations in respect of the portion of the Commitment so assigned on the
terms set forth in this Commitment Letter or on the terms set forth in the
definitive financing documents, the Lehman Lenders or MLCC, as the case may be,
will be relieved and novated hereunder from its obligations with respect to
such portion of the Commitment.

(c)           This Commitment Letter
and the attached Exhibits set forth the entire understanding of the parties
hereto as to the scope of the Commitment and the obligations of the Lenders and
the Arrangers hereunder.  This Commitment
Letter supersedes all prior understandings and proposals, whether written or
oral, between any of the Lenders and you relating to any financing or the transactions
contemplated hereby.  This Commitment
Letter is in addition to the agreements of the parties contained in the
Engagement Letter and the Fee Letter.

(d)           This Commitment Letter
has been and is made solely for the benefit of the parties signatory hereto,
the Indemnified Persons, and their respective heirs, successors and assigns,
and nothing in this Commitment Letter, expressed or implied, is intended to
confer or does confer on any other person or entity any rights or remedies
under or by reason of this Commitment Letter or the agreements of the parties
contained herein.

(e)           You acknowledge that
the Lenders and the Arrangers may be (or may be affiliated with) full service
financial firms and as such from time to time may effect transactions for their
own account or the account of customers, and hold long or short positions in
debt or equity securities or loans of companies that may be the subject of the
transactions contemplated by this Commitment Letter.  You hereby waive and release, to the fullest
extent permitted by law, any claims you have with respect to such conflicts of
interest arising from such transactions, activities, investments or holdings,
or arising from the failure of the Lehman Lenders, Lehman Brothers, MLCC,
MLPF&S or one or more Lenders or any of their respective affiliates to
bring such transactions, activities, investments or holdings to your attention.

(f)            You agree to provide
us, prior to the Closing Date, with all documentation and other information
required by bank regulatory authorities under applicable “know your customer”
and

 6
 

anti-money laundering rules and
regulations, including, without limitation, the U.S.A. Patriot Act., as we may
have requested.

 7

If you are in agreement with the foregoing, kindly
sign and return to us the enclosed copy of this Commitment Letter.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ A. Tucker Hackett

  	
   

  
	
   

  	
   

  	
  Name: A. Tucker Hackett

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS COMMERCIAL BANK

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George James

  	
   

  
	
   

  	
   

  	
  Name: George James

  
	
   

  	
   

  	
  Title:   Chief Credit Officer

  
	
   

  	
   

  
	
   

  	
  LEHMAN COMMERCIAL PAPER INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clair O’Conner

  	
   

  
	
   

  	
   

  	
  Name: Clair O’Conner

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clair O’Conner

  	
   

  
	
   

  	
   

  	
  Name: Clair O’Conner

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL CORPORATION.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephanie Vallillo

  	
   

  
	
   

  	
   

  	
  Name: Stephanie Vallillo

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRILL LYNCH, PIERCE, FENNER & SMITH

  
	
   

  	
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephanie Vallillo

  	
   

  
	
   

  	
   

  	
  Name: Stephanie Vallillo

  
	
   

  	
   

  	
  Title:   Vice President

  
					

 

[Signature Page to Commitment Letter]

 

	
  Accepted and agreed to as of the

  
	
  date first above written:

  
	
   

  
	
  THE HOME DEPOT, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Carol B. Tomé

  	
   

  
	
   

  	
  Name:

  	
  Carol B. Tomé

  
	
   

  	
  Title:

  	
  Chief Financial Officer and

  
	
   

  	
   

  	
  Executive Vice President-Corporate Services

  
				

 

[Signature Page to Commitment Letter]

EXHIBIT
A TO COMMITMENT LETTER

SUMMARY
OF TERMS OF CREDIT FACILITY

Set forth below is a summary of certain of the
terms of the Credit Facility and the documentation related thereto.  Capitalized terms used and not otherwise
defined herein have the meanings set forth in the Commitment Letter to which
this Summary of Terms is attached and of which it forms a part.

	
  I.

  	
   

  	
  Parties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Borrower

  	
   

  	
  The Home Depot, Inc. (the “Company”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Guarantors and Security

  	
   

  	
  None.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sole Arrangers and Sole Book-Runners

  	
   

  	
  Lehman Brothers Inc. and Merrill Lynch, Pierce,
  Fenner & Smith Incorporated (in such capacity, the “Arrangers”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Administrative Agent

  	
   

  	
  Lehman Commercial Paper Inc. (or its designated
  affiliate and in such capacity, the “Administrative Agent”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Syndication Agent

  	
   

  	
  Merrill Lynch Capital Corporation (in such capacity,
  the “Syndication Agent”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lenders

  	
   

  	
  Banks, financial institutions and other entities
  that become lenders pursuant to the Credit Documentation (as defined below)
  (collectively, the “Lenders”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Type and Amount of Credit Facility

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Revolving Credit Facility

  	
   

  	
  A revolving credit facility (the “Revolving Facility” or the “Credit
  Facility”; the commitments thereunder, the “Revolving
  Credit Commitments”) in the amount of up to $10.0 billion
  (the loans thereunder, the “Loans”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Availability

  	
   

  	
  The Revolving Credit Facility shall be available on
  a revolving basis during the period commencing on the Closing Date and ending
  on November 21, 2007 (the “Revolving Credit Termination
  Date”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maturity

  	
   

  	
  The Revolving Credit Termination Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Purpose

  	
   

  	
  The proceeds of the Loans will be used to finance
  the Share Repurchase, to provide support for the issuance by the Borrower of
  commercial paper in connection with such Share Repurchase and to pay 

  

 

 A-1
 

 

	
  

  	
   

  	
   

  	
   

  	
  related fees and expenses.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Certain Payment Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fees and Interest Rates

  	
   

  	
  Interest rates to be consistent with those provided
  in the Company’s Credit Agreement dated as of December 16, 2005, as amended
  (the “Existing Credit Agreement”)
  and fees as set forth on Annex I.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optional Prepayments 

  and Commitment Reductions

  	
   

  	
  Loans may be prepaid and Revolving Credit Commitments
  may be reduced without premium or penalty (other than LIBOR breakage costs)
  in minimum amounts to be agreed upon and substantially consistent with the
  Existing Credit Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mandatory Prepayments 

  and Commitment Reductions

  	
   

  	
  100% of the net cash proceeds of any sale or issuance
  or incurrence of any debt or equity (including preferred equity) securities
  (other than issuances pursuant to employee stock plans, issuances of commercial
  paper, and other exceptions and thresholds to be agreed) after the Closing
  Date by the Company or any of its subsidiaries will be applied to prepay the
  Loans and permanently reduce the Revolving Credit Commitments.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  100% of the net cash
  proceeds of any asset sales (subject to exceptions for store sales in the
  ordinary course of business and other exceptions and thresholds to be agreed)
  after the Closing Date by the Company or any of its subsidiaries will be applied
  to prepay the Loans and permanently reduce the Revolving Credit Commitments. 

  To the extent the Share Repurchase is consummated
  and the sum of (x) the amounts borrowed under the Credit Facility on the
  Closing Date and (y) the amounts of the Revolving Credit Commitments
  needed after the Closing Date to support commercial paper issued to finance
  the Share Repurchase (such amounts under this clause (y) the “Support Commitments”)
  are less than $10.0 billion in the aggregate, any Revolving Credit
  Commitments in excess of all such amounts shall be permanently terminated.
  The Support Commitments shall terminate on the earlier of (x) the
  Revolving Credit Termination Date and (y) the date on which such
  commercial paper issued to finance the Share Repurchase is refinanced 

  

 

 A-2
 

 

	
  

  	
   

  	
   

  	
   

  	
  with securities issued in the capital markets.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  Conditions

  	
   

  	
  The availability of the Credit Facility is subject
  to the conditions set forth on Exhibit B to the Commitment Letter.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  The making of each extension of credit will be conditioned
  upon (i) the accuracy of all representations and warranties in all material
  respects in the definitive financing documentation with respect to the Credit
  Facility (the “Credit Documentation”) (other than (A) the material
  adverse change, (B) litigation representations and
  (C) representations that relate solely to an earlier date), and (ii)
  there being no default or event of default in existence at the time of, or
  after giving effect to the making of, the Loans.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Certain Documentation Matters

  	
   

  	
  The Credit Documentation will contain representations,
  warranties, affirmative covenants, negative covenants and events of default
  consistent with those contained in the Existing Credit Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Representations and Warranties

  	
   

  	
  Substantially consistent with the Existing Credit
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Affirmative Covenants

  	
   

  	
  Substantially consistent with the Existing Credit
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Financial Covenants

  	
   

  	
  None.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Negative Covenants

  	
   

  	
  Substantially consistent with the Existing Credit
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Events of Default

  	
   

  	
  Substantially consistent with the Existing Credit
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Voting

  	
   

  	
  Amendments and waivers with respect to the Credit
  Documentation will require the approval of Lenders holding not less than a
  majority of the aggregate amount of the Loans, except that (i) the consent of
  each Lender directly and adversely affected thereby will be required with
  respect to (a) reductions in the amount or extensions of the scheduled date
  of final maturity of any Loan, (b) reductions in the rate of interest or
  extensions of any due date thereof, (c) increases in the amount or extensions
  of the expiry date of any Lender’s commitment or (d) modifications to the pro
  rata provisions of the Credit Documentation and (ii) the consent of 100% of
  the Lenders will be required with respect to modifications to 

  

 

 A-3
 

 

	
  

  	
   

  	
   

  	
   

  	
  any of the voting percentages.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assignments and Participations

  	
   

  	
  Each Lender may assign any or all of its loans and
  commitments to its affiliates or to one or more banks, financial institutions
  or other entities. Except for assignments to another Lender or to an
  affiliate of a Lender or assignments of funded Loans, assignments will
  require the consent of the Administrative Agent and, so long as no event of default
  has occurred and is continuing, the Company (which consent in each case will
  not be unreasonably withheld or delayed). No consent shall be required in
  connection with an assignment to a Federal Reserve Bank. Partial assignments
  (other than to another Lender or to an affiliate of a Lender), must be at
  least $15.0 million unless otherwise agreed by the Company and the
  Administrative Agent. Upon assignment, the assignee will become a Lender for
  all purposes under the Credit Documentation under documentation reasonably
  acceptable to the Administrative Agent. Promissory notes will be issued under
  the Credit Facility only upon request.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yield Protection

  	
   

  	
  The Credit Documentation will contain customary
  provisions relating to increased costs, loss of yield and “breakage costs”
  and substantially as set forth in the Existing Credit Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Expenses and Indemnification

  	
   

  	
  The Company will pay (i) all reasonable
  out-of-pocket expenses of the Administrative Agent and the Arrangers
  associated with the syndication of the Credit Facility and the preparation,
  negotiation, execution, delivery and, if the Credit Facility is syndicated to
  Lenders other than affiliates of the Arrangers, administration (limited to an
  amount to be agreed upon following the Closing Date) of the Credit
  Documentation and any amendment or waiver with respect thereto (including the
  reasonable fees, disbursements and other charges of counsel (as separately
  agreed by the Company, the Administrative Agent and the Lenders) and the
  charges of IntraLinks) and (ii) all reasonable out-of-pocket expenses of the
  Administrative Agent and the Lenders (including the reasonable fees, disbursements
  and other charges of counsel) in connection with the enforcement of the
  Credit Documentation or in any bankruptcy case or insolvency proceeding.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  The Administrative Agent, the Arrangers and the
  Lenders (and their affiliates and each of their respective officers,
  directors, partners, trustees, employees, 

  

 

 A-4
 

 

	
  

  	
   

  	
   

  	
   

  	
  controlling persons and agents) will be indemnified
  against any loss, liability, cost or expense incurred in respect of the
  financing contemplated hereby or the use or the proposed use of proceeds
  thereof on terms consistent with those set forth in the Existing Credit
  Agreement.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Governing Law and Forum

  	
   

  	
  State of New York.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Counsel to the Administrative 

  Agent and the Arrangers

  	
   

  	
  Cahill Gordon & Reindel LLP.

  

 

 A-5

Annex I

Interest
and Certain Fees

	
  

  	
   

  	
  Interest Rate Options

  	
   

  	
  Consistent with
  Existing Credit Agreement.

  The Company may elect
  that the loans comprising each borrowing bear interest at a rate per annum
  equal to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (i) the Base Rate plus
  the Applicable Margin (“Base Rate Loans”);
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (ii) the LIBOR Rate
  plus the Applicable Margin (“LIBOR Loans”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  As used herein:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “Base
  Rate” means the higher of (i) the prime lending rate as
  established by JPMorgan Chase Bank, N.A. and in effect from time to time (the
  “Prime Rate”), and (ii) the federal funds effective rate from time to time
  plus 0.5%.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “Applicable
  Margin” means the applicable margin per annum based upon the
  applicable ratios of Consolidated Funded Debt to Consolidated Total Tangible
  Capital (each as defined in the Existing Credit Agreement) on the pricing
  grid attached hereto as Annex I-A (the “Pricing Grid”).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  “LIBOR
  Rate” means the rate (adjusted for statutory reserve requirements
  for eurocurrency liabilities) at which eurodollar deposits for one, two or
  three months (as selected by the Company) are offered in the interbank eurodollar
  market.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  No new LIBOR interest
  period may be selected when any event of default is continuing.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Interest Payment Dates

  	
   

  	
  For Base Rate Loans,
  quarterly in arrears.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  For LIBOR Loans, on the
  last day of each relevant interest period.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facility Fee

  	
   

  	
  The Borrower shall pay
  a facility fee calculated at a rate per annum determined in accordance with
  the Pricing Grid on the aggregate amount of the Revolving Facility (whether
  drawn or undrawn), payable on the Closing Date and thereafter quarterly in arrears
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 I-1
 

 

	
  

  	
   

  	
   

  	
   

  	
  and at maturity.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Default Rate

  	
   

  	
  Overdue amounts
  (including overdue interest) will bear interest at a rate equal to 2% per annum above the applicable rate.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rate and Fee Basis

  	
   

  	
  All per annum rates will be calculated on the basis of a year of
  360 days (or 365 days, in the case of Base Rate Loans the interest rate
  payable on which is then based on the Prime Rate) and the actual number of
  days elapsed.

  

 

 I-2

Annex I-A

Applicable
Margin (in basis points per annum)

	
  Pricing

  Level

  	
   

  	
  Total Funded

  Debt/Total Tangible 

  Capital

  	
   

  	
  Facility 

  Fee (bps)

  	
   

  	
  LIBOR

  Loan

  Margin (bps)

  	
   

  	
  LIBOR First

  Drawn (bps)

  	
   

  
	
  1

  	
   

  	
  <25.00%

  	
   

  	
  4.0

  	
   

  	
  11

  	
   

  	
  15.0

  	
   

  
	
  2

  	
   

  	
  >25.00%
  and <35.00%

  	
   

  	
  4.5

  	
   

  	
  10.5

  	
   

  	
  15.0

  	
   

  
	
  3

  	
   

  	
  >35.00%
  and <45.00%

  	
   

  	
  5.5

  	
   

  	
  17.0

  	
   

  	
  22.5

  	
   

  
	
  4

  	
   

  	
  >45.00%

  	
   

  	
  7.0

  	
   

  	
  28.0

  	
   

  	
  35.0

  	
   

  

 I-1

EXHIBIT
B TO COMMITMENT LETTER

FUNDING
CONDITIONS

Capitalized terms used but not defined herein have
the meanings assigned to them in the Commitment Letter to which this Exhibit B
is attached and of which it forms a part. 
The availability of the Credit Facility is conditioned upon satisfaction
of, among other things, the conditions precedent summarized below.

(a)                                  The
Company shall have executed and delivered definitive financing documentation
with respect to the Credit Facility consistent with the Term Sheet and
otherwise reasonably satisfactory to the Administrative Agent, the Arrangers
and the Company.

(b)                                 There
shall not exist any default or event of default under the Credit Facility.

(c)                                  The
Share Repurchase shall have been consummated pursuant to the Offer to Purchase
on terms and conditions acceptable to the Arrangers (it being understood that
the terms and conditions set forth in the draft Offer to Purchase delivered to
the Arrangers on July 6, 2007 are acceptable), and no provision
thereof shall have been waived, amended, supplemented or otherwise modified in
a manner materially adverse to the interests of the Company or the Lenders
without the written consent of the Arrangers.

(d)                                 The
Company shall have complied with all of its obligations under and agreements in
the Commitment Letter, the Engagement Letter and the Fee Letter.

(e)                                  All
governmental, regulatory and third party approvals necessary in connection with
the Transactions and the financing contemplated hereby shall have been obtained
and be in full force and effect, without any action being taken or threatened
by any competent authority that could reasonably be expected to restrain,
prevent or otherwise impose material adverse conditions on the Share Repurchase
or the financing thereof.

(f)                                    The
Company’s corporate credit ratings shall on the Closing Date be BBB+ (with a
stable outlook) or better by S&P and Baa1 (with a stable outlook) or better
by Moody’s, and in each case neither ratings organization shall have announced
that it has such rating under surveillance or review, with possible negative
implications, for a reduction to a rating below BBB+ or Baa1, as the case may
be.

(g)                                 If
the closing date occurs after September 12, 2007, the Company shall have
delivered to the Arrangers its unaudited interim consolidated financial
statements for the quarterly period ended July 29, 2007.

(h)                                 The
Administrative Agent shall have received such legal opinions, documents and
other instruments as are customary for transactions of this type and
substantially consistent with those delivered pursuant to the Existing Credit
Agreement.

(i)                                     The
Company will use commercially reasonable efforts to place commercial paper as
available to the Company in the market up to the amount of the Revolving
Commitments.

 C-1

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