Document:

Exhibit
10.15

CONFORMED COPY

 

 

SENIOR CREDIT AGREEMENT

 

 

DATED 13 MARCH 2006

 

e1,350,000,000

CREDIT
FACILITIES

FOR

Subsidiaries
of

KABEL
DEUTSCHLAND GmbH

ARRANGED
BY

THE
ROYAL BANK OF SCOTLAND plc

With

THE
ROYAL BANK OF SCOTLAND plc

as Facility Agent and Security Agent

 

 

THIS
AGREEMENT IS ENTERED INTO SUBJECT TO THE TERMS OF A PRIORITY

AGREEMENT

 

 

Allen
& Overy LLP

 

CONTENTS

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Interpretation

  	
   

  	
  4

  
	
  2.

  	
   

  	
  Facilities

  	
   

  	
  29

  
	
  3.

  	
   

  	
  Purpose

  	
   

  	
  31

  
	
  4.

  	
   

  	
  Conditions Precedent

  	
   

  	
  31

  
	
  5.

  	
   

  	
  Utilisation - Loans

  	
   

  	
  32

  
	
  6.

  	
   

  	
  Ancillary Facilities

  	
   

  	
  33

  
	
  7.

  	
   

  	
  Repayment

  	
   

  	
  35

  
	
  8.

  	
   

  	
  Prepayment and cancellation

  	
   

  	
  36

  
	
  9.

  	
   

  	
  Interest

  	
   

  	
  41

  
	
  10.

  	
   

  	
  Terms

  	
   

  	
  43

  
	
  11.

  	
   

  	
  Market disruption

  	
   

  	
  44

  
	
  12.

  	
   

  	
  Taxes

  	
   

  	
  45

  
	
  13.

  	
   

  	
  Increased Costs

  	
   

  	
  49

  
	
  14.

  	
   

  	
  Mitigation and conduct of business

  	
   

  	
  50

  
	
  15.

  	
   

  	
  Payments

  	
   

  	
  51

  
	
  16.

  	
   

  	
  Representations and warranties

  	
   

  	
  53

  
	
  17.

  	
   

  	
  Information covenants

  	
   

  	
  60

  
	
  18.

  	
   

  	
  Financial covenants

  	
   

  	
  65

  
	
  19.

  	
   

  	
  General covenants

  	
   

  	
  69

  
	
  20.

  	
   

  	
  Default

  	
   

  	
  87

  
	
  21.

  	
   

  	
  The Administrative Parties

  	
   

  	
  92

  
	
  22.

  	
   

  	
  Evidence and calculations

  	
   

  	
  98

  
	
  23.

  	
   

  	
  Fees

  	
   

  	
  98

  
	
  24.

  	
   

  	
  Indemnities and Break Costs

  	
   

  	
  99

  
	
  25.

  	
   

  	
  Expenses

  	
   

  	
  100

  
	
  26.

  	
   

  	
  Amendments and waivers

  	
   

  	
  101

  
	
  27.

  	
   

  	
  Changes to the Parties

  	
   

  	
  103

  
	
  28.

  	
   

  	
  Disclosure of information

  	
   

  	
  108

  
	
  29.

  	
   

  	
  Set-off

  	
   

  	
  109

  
	
  30.

  	
   

  	
  Pro rata sharing

  	
   

  	
  109

  
	
  31.

  	
   

  	
  Severability

  	
   

  	
  110

  
	
  32.

  	
   

  	
  Counterparts

  	
   

  	
  111

  
	
  33.

  	
   

  	
  Notices

  	
   

  	
  111

  
	
  34.

  	
   

  	
  Language

  	
   

  	
  113

  
	
  35.

  	
   

  	
  Governing law

  	
   

  	
  113

  
	
  36.

  	
   

  	
  Enforcement

  	
   

  	
  113

  

 

 

 

	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Original Lender

  	
   

  	
  115

  
	
  2.

  	
   

  	
  Conditions Precedent Documents

  	
   

  	
  116

  
	
   

  	
   

  	
  Part 1

  	
  General Conditions Precedent

  	
   

  	
  116

  
	
   

  	
   

  	
  Part 2

  	
  To be Delivered in Respect of an Additional Borrower

  	
   

  	
  120

  
	
   

  	
   

  	
  Part 3

  	
  To be Delivered in Respect of Additional Security

  	
   

  	
  121

  
	
  3.

  	
   

  	
  Form of Request

  	
   

  	
  122

  
	
  4.

  	
   

  	
  Calculation of the Mandatory Cost

  	
   

  	
  123

  
	
  5.

  	
   

  	
  Form of Transfer Certificate

  	
   

  	
  125

  
	
   

  	
   

  	
  Part 1

  	
  Commitments

  	
   

  	
  129

  
	
   

  	
   

  	
  Part 2

  	
  Participations in Loans

  	
   

  	
  129

  
	
  6.

  	
   

  	
  Security Documents

  	
   

  	
  131

  
	
  7.

  	
   

  	
  Form of Compliance Certificate

  	
   

  	
  133

  
	
  8.

  	
   

  	
  Form of Obligor Accession Deed

  	
   

  	
  134

  
	
  9.

  	
   

  	
  Dormant Subsidiaries

  	
   

  	
  135

  
	
  10.

  	
   

  	
  Existing Service level agreements

  	
   

  	
  136

  
	
  11.

  	
   

  	
  Confidentiality undertaking

  	
   

  	
  143

  
	
  12.

  	
   

  	
  Security Principles

  	
   

  	
  147

  
	
  13.

  	
   

  	
  Financial Covenant Levels

  	
   

  	
  149

  
	
  14.

  	
   

  	
  Form of Add-On Facility Accession Agreement

  	
   

  	
  151

  
	
  15.

  	
   

  	
  Form of German Thin Capitalisation Letter

  	
   

  	
  156

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  	
  161

  

 

 

THIS AGREEMENT is dated 13 March
2006

BETWEEN:

(1)           KABEL
DEUTSCHLAND GMBH (registered in the commercial register (Handelsregister)
kept at the local court (Amtsgericht) of
Munich under number HRB 145837) (KDG);

(2)           KABEL
DEUTSCHLAND VERTRIEB UND SERVICE GMBH & CO. KG (registered in the commercial
register (Handelsregister) kept at the local court
(Amtsgericht) of Munich under
number HRA 83902) (KDVS);

(3)           THE ROYAL
BANK OF SCOTLAND plc as arranger (in this
capacity, the Mandated Lead Arranger);

(4)           THE ROYAL
BANK OF SCOTLAND plc, NIEDERLASSUNG FRANKFURT as
original lender (in this capacity, the Original Lender);

(5)           THE ROYAL
BANK OF SCOTLAND plc as facility agent (in
this capacity, the Facility Agent);
and

(6)           THE ROYAL
BANK OF SCOTLAND plc as security agent and
trustee and acting as agent in the name and on behalf of the Finance Parties
(in this capacity, the Security Agent).

IT IS AGREED as follows:

1.             INTERPRETATION

1.1          Definitions

In this Agreement:

2004 Security Transfer Agreement means the security transfer agreement dated 28 March 2004 between KDVS
and Deutsche Bank AG, London Branch as security agent.

2006 Security Transfer Agreement has the meaning given to it in Clause 19.32 (Security transfer
agreement).

A Facility means the term loan facility referred to in Clause 2.1 (A
Facility).

A Facility Loan means a Loan under the A Facility.

Acceptable Bank means:

(a)           a
bank or financial institution which has a rating for its long-term debt
obligations of AA or higher by S&P or Fitch Ratings Ltd or Aa2 or higher by
Moody’s or a comparable rating from an internationally recognised credit rating
agency; or

(b)           Commerzbank
AG, Deutsche Bank AG, Deutsche Postbank AG, DZ Bank AG, Dresdner Bank AG or any
other bank or financial institution approved by the Facility Agent.

Accounting Date means each 31st March, 30th June, 30th September and 31st December.

 4
 

 

Accounting Period means a period of approximately one year or three months ending, in the
case of each three month and one year period, on an Accounting Date for which
Accounts are required to be prepared under this Agreement.

Accounting Principles means accounting principles, policies, standards, bases and practices
which, as at the date of this Agreement, are in accordance with IFRS accounting
standards.

Accounts means each set of financial statements required to be prepared by a
member of the Group and delivered to the Facility Agent pursuant to this
Agreement.

Acquisition Consideration means, in connection with any acquisition of a company, partnership or
existing business made by a member of the Group, the aggregate of:

(a)           the
consideration payable by such member of the Group in respect of such
acquisition (including associated costs and expenses); and

(b)           any
net Financial Indebtedness remaining in the acquired company or partnership (or
any of its Subsidiaries) or in the acquired business as at the date of the
acquisition.

Additional Borrower means a member of the Group which becomes a Borrower in accordance with
Clause 27.7 (Additional
Borrowers).

Additional Facility means either an Add-On Facility or an External Facility and Additional Facilities means all or any such facilities.

Additional Facility Loan means an Add-On Facility Loan or an External Facility Loan.

Add-On Facility means an additional loan facility referred to in Clause 2.4 (Additional
Facilities) which has Eligible Terms and Add-On Facilities
means all or any such Facilities.

Add-On Facility Accession
Agreement means a deed substantially
in the form of Schedule 14 (Form of Add-On Facility Accession Agreement), with
such amendments requested by KDG as the Facility Agent (acting reasonably) may
approve.

Add-On Facility Availability
Period means the period specified as such in the
Add-On Facility Accession Agreement.

Add-On Facility Commitment means in relation to an Add-On Facility:

(a)           for
an Original Add-On Facility Lender the amount in euros set out as the Add-On
Facility Commitment of an Add-On Facility Lender in the relevant Add-On
Facility Accession Agreement and the amount of any other Add-On Facility
Commitment transferred to it under this Agreement; and

(b)           for
any other Add-On Facility Lender, the amount in euros transferred to it in
accordance with this Agreement,

to the extent not cancelled, reduced or
transferred by it in accordance with this Agreement.

Add-On Facility Lender means:

(a)           an
Original Add-On Facility Lender; or

(b)           any
person which has become a Lender under an Add-On Facility in accordance with
the terms of this Agreement.

 5
 

 

Add-On Facility Loan means a loan made to a Borrower under an Add-On Facility.

Administrative Party means the Mandated Lead Arranger or an Agent.

Affiliate means, in relation to any person, a Subsidiary or a Holding Company of
that person or any other Subsidiary of that Holding Company.

Agent means the Facility Agent or the Security Agent, as the case may be or
as the context requires.

Agreed Priority Agreement
Principles means the principles
initialled for identification by Allen & Overy LLP and Freshfields
Bruckhaus Deringer.

Agreed Target means any entity agreed in writing by the Mandated Lead Arranger and
KDVS.

Ancillary Commitment means, with respect to any Ancillary Lender and an Ancillary Facility,
the maximum amount which that Ancillary Lender has agreed (whether or not
subject to satisfaction of conditions precedent) to make available from time to
time under an Ancillary Facility and which has been authorised as such under
Clause 6 (Ancillary Facilities), to the extent not cancelled, transferred or
reduced under this Agreement.

Ancillary Facility means any facility or financial accommodation (including any overdraft,
foreign exchange, guarantee, bonding, documentary or standby letter of credit,
credit card or automated payments facility) established by a Lender under
Clause 6 (Ancillary Facilities) in place of all or part of its B Facility
Commitment.

Ancillary Facility Document means any document evidencing any Ancillary Facility.

Ancillary Lender means a Lender which is making available an Ancillary Facility.

Ancillary Outstandings means, at any time and with respect to the Ancillary Facility of any
Ancillary Lender, the aggregate of all of the following amounts (as calculated
by that Ancillary Lender) outstanding at that time under that Ancillary
Facility:

(a)           all
amounts of principal then outstanding under any overdraft, cheque drawing or
other account facilities determined on a gross basis unless such facilities are
made available on the basis of netting arrangements satisfactory to the
Ancillary Lender in which case, such outstanding principal amounts shall be
determined on the net debt basis used by that Ancillary Lender;

(b)           the
maximum potential liability (excluding amounts stated to be in respect of
interest and fees) under all guarantees, bonds and letters of credit then
outstanding under that Ancillary Facility; and

(c)           in
respect of any other facility or financial accommodation, such other amount
(excluding interest and similar charges) as fairly represents the aggregate
exposure of that Ancillary Lender under that facility or accommodation, as reasonably
determined by that Ancillary Lender from time to time in accordance with its
usual banking practice for facilities or accommodation of the relevant type.

Approved Bank means any Acceptable Bank which has been given and has acknowledged all
notices (if any) given to it pursuant to the Security Documents, provided that
any

 6
 

 

Acceptable Bank which is a Lender or an
Administrative Party is deemed to have received and to have acknowledged all
those notices.

Auditors means PricewaterhouseCoopers, Ernst & Young, KPMG or Deloitte &
Touche or such other firm of independent public accountants of international
standing which may be appointed by KDG as its auditors in compliance with Clause 17.6 (Auditors).

Availability Period means:

(a)           for
the A Facility, the period from and including the date of this Agreement to the
date falling 60 days after the date of this Agreement;

(b)           for
the B Facility, the period from and including the date of this Agreement to and
including the date falling one month prior to the Final Maturity Date; and

(c)           for
an Add-On Facility, the period described as such in the relevant Add-On
Facility Accession Agreement.

B Facility means the revolving credit facility referred to in Clause 2.2 (B
Facility).

B Facility Loan means a Loan under the B Facility.

Bank Affiliate means:

(a)           with
respect to any person (other than a Fund), any other person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, that first person, where a person shall be deemed to have control
of another person if that person possesses directly or indirectly, the power:

(i)            to
vote twenty-five per cent. or more of the shares or securities having ordinary
voting power for the election of directors of such other person; or

(ii)           to
direct or cause the direction of the management and policies of such other
person, whether through the ownership of voting shares or securities, by
contract or otherwise; or

(b)           with
respect to any person that is a Fund, any other Fund which is advised or
managed by the same investment adviser or an Affiliate of that investment
adviser.

Base Case Model means the base case model dated February 2006 named “KDG Internal
Financing Case -to RBS - box carve out > until 03-08”, attached in Excel
format to the email sent to the Mandated Lead Arranger by KDG on 1 March 2006.

Base Financial Statements means the audited consolidated financial statements of the Group for
the 12-month accounting period ended 31 March 2005.

Borrower means KDVS or an Additional Borrower.

Break Costs means the amount (if any) which a Lender is entitled to receive under Clause 24.3 (Break Costs).

Business Day means a day (other than a Saturday or a Sunday) on which banks are open
for general business in London and Frankfurt am Main and which is also a TARGET
Day.

 7
 

 

Capital Expenditure means any expenditure which is treated as capital expenditure in
accordance with the Accounting Principles.

Cash means cash in hand or credit balances or amounts on deposit which are
accessible by a member of the Group within 30 days with any Acceptable Bank and
which is not subject to any Security Interest (other than one existing under
the Security Documents or pursuant to netting, set-off or consolidation or
combination of accounts in accordance with banking arrangements in the ordinary
course of business).

Cash Equivalent means at any time:

(a)           certificates
of deposit maturing within one year after the relevant date of calculation,
issued by an Acceptable Bank;

(b)           any
investment in marketable obligations issued or guaranteed by the government of
the United States of America, the U.K., any member state of the European
Economic Area or any Participating Member State or by an instrumentality or
agency of any of them having an equivalent credit rating, maturing within one
year after the relevant date of calculation and not convertible to any other
security;

(c)           open
market commercial paper not convertible to any other security:

(i)            for
which a recognised trading market exists;

(ii)           issued
in the United States of America, the U.K., any member state of the European
Economic Area or any Participating Member State;

(iii)          which
matures within one year after the relevant date of calculation; and

(iv)          which
has a credit rating of either A-1 or higher by S&P or Fitch Ratings Ltd or
P-1 or higher by Moody’s, or, if no rating is available in respect of the
commercial paper, the issuer of which has, in respect of its long-term debt
obligations, an equivalent rating;

(d)           investments
accessible within 30 days in:

(i)            AAA
money market funds; or

(ii)           enhanced
yield funds with a minimum rating of AA;

(e)           any
other debt security approved by the Majority Lenders,

in each case, to which any member of the Group
is beneficially entitled at that time and which is not issued or guaranteed by
any member of the Group or subject to any Security Interest (other than one
arising under the Security Documents or pursuant to netting, set-off or
consolidation or combination of accounts in accordance with banking
arrangements in the ordinary course of business).

Chief Executive Officer means the speaker of the board (Sprecher der
Geschäftsführung) of KDG or any such person’s replacement (or any
director of KDG acting as such officer’s deputy in that capacity or performing
those functions).

 8
 

 

Chief Financial Officer means the finance director of KDG or any such person’s replacement (or
any director of KDG acting as such officer’s deputy in that capacity or
performing those functions).

Commitment means:

(a)           for
the Original Lender, the amount set opposite its name in Schedule 1 (Original
Parties) under the heading Commitments and
designated A Facility or B
Facility and the amount of any other Commitment, as so designated it acquires;
and

(b)           for
any other Lender, the amount of any Commitment as so designated it acquires,

to the extent not cancelled, transferred or
reduced under this Agreement (and, where the context will permit, includes an
Add-On Facility Commitment).

Commitment Letter means the commitment letter dated on or about the date of this
Agreement between the Arranger, the Original Lender, KDG and KDVS.

Compliance Certificate means a certificate, substantially in the form of Schedule 7 (Form of
Compliance Certificate).

Compliant KDG Debt means bank debt, notes or securities (Other KDG Debt)
that comply with the Notes Major Terms (as defined in the Priority Agreement)
as if references to “Notes” in the definition of Notes Major Terms were
references to “Other KDG Debt”, or which comply with the Notes Major Terms
except that:

(a)           such
Other KDG Debt may benefit from no or less financial support or no or less
security than is specified in paragraph (f) or (g) (as the case may be) of the
definition of Notes Major Terms; and/or

(b)           payments
of interest in respect of such Other KDG Debt may occur on a basis customary
for euromarket mezzanine financings; and/or

(c)           covenants
or events of default of such Other KDG Debt may be on a basis customary for
euromarket mezzanine financings (but will be no more onerous than under this
Agreement); and/or

(d)           the
facility agent, trustee or applicable administrative party for such Other KDG
Debt will accede to the Priority Agreement (rather than the Notes Trustee);
and/or

(e)           references
to “Notes Debt” in paragraphs (f) and (g) shall be construed as references to
Other KDG Debt; and/or

(f)            references
to “Notes Guarantees” in paragraph (f) and (g) of the definition of “Notes
Major Terms” shall be construed as references to new guarantees that may be
issued in respect of Other KDG Debt by KDVS (subject always to the remaining
provisions of those paragraphs as to the ranking and subordination of such
guarantees); and/or

(g)           references
to “Notes Pledge Agreement” in paragraph (g) of the definition of “Notes Major
Terms” shall be construed as references to new pledges over the shares of KDVS
(subject always to the remaining provisions of those paragraphs as to the
ranking and subordination of such pledges),

 9
 

 

and so that all Other KDG Debt will have no
greater ranking, Security Interests or guarantees than Compliant Notes.

Compliant Notes means notes or securities that comply with the Notes Major Terms (as
defined in the Priority Agreement) or which comply with the Notes Major Terms
except to the extent that such notes or securities benefit from no or less
financial support or no or less security than is specified in paragraph (f) or
(g) (as the case may be) of the definition of Notes Major Terms.

Confidentiality Undertaking means a confidentiality undertaking substantially in the form as set
out in Schedule 11 (Form of Confidentiality Undertaking) or in any other form
agreed between KDG and the Facility Agent.

Consolidated EBITDA, Consolidated Total Interest Payable, Consolidated Total Net Interest Payable,
Consolidated Senior Borrowings and Consolidated
Senior Net Borrowings each has the meaning given to it in
Subclause 18.3 (Financial covenants definitions).

Core Business means:

(a)           the
provision of cable-related services in Germany over the cable network of the
Group and services ancillary thereto (for the avoidance of doubt including
analogue television, digital television, telephony and internet access);

(b)           any
other business carried on by the Group as at the date of this Agreement; and

(c)           the
provision of administrative and information technology services incidental to
the businesses identified in paragraphs (a) and (b) above.

Credit Rating means a long term debt rating given by S&P, Moody’s or Fitch
Ratings Ltd.

Default means:

(a)           an
Event of Default; or

(b)           an
event or circumstance which would be (with the expiry of a grace period, the
giving of notice, the making of any determination or the satisfaction of any
other applicable condition in each case as specified in Clause 20 (Default) or
any combination of them) an Event of Default, provided that any such event
which by reason of the express provisions in any Finance Document requires the
satisfaction of a condition of materiality before it may become an Event of
Default shall not be a Default unless that condition of materiality is
satisfied.

Dormant Subsidiary means a company which does not trade (for itself or as agent for any
person) and does not own, legally or beneficially, assets which in aggregate
equal or exceed e100,000.

Eligible Cost Savings means, in relation to an entity or business the subject of a Permitted
Acquisition, the cost savings and synergies estimated in good faith by the
Chief Executive Officer and the Chief Financial Officer to be achievable as a
result of that Permitted Acquisition, to the extent accompanied by a report of
a reputable third-party consultant to the effect that such estimates are not
unreasonable.

Eligible Terms means, in respect of any Additional Facility:

 10
 

 

(a)           the
final maturity date of that Additional Facility must be a date falling at least
six months after the Facility A Final Maturity Date;

(b)           there
must be no amortisation required in respect of that Additional Facility;

(c)           that
Additional Facility must be a term facility (which, in the case of an External
Facility, may include notes, bonds or any other term credit arrangement which
is not capable, by its terms, of being repaid or prepaid and redrawn before the
date falling at least six months after the Facility A Final Maturity Date (it
being acknowledged that such arrangement may have customary change of control,
voluntary prepayment, asset sale and similar prepayment provisions));

(d)           the
purpose must be to fund a Permitted Acquisition;

(e)           the
principal amount of that Additional Facility (together with the principal
amount of all other Additional Facilities) may not exceed the lower of:

(i)            e650,000,000; and

(ii)           the
amount which, if fully utilised on the date of completion of the relevant
Permitted Acquisition, would not result in any breach of the financial covenant
set out in Clause 18.2 (Consolidated Senior Net Borrowings to Consolidated
EBITDA) (assuming that the covenant were tested on the most recent testing date
taking into account the sum of Consolidated EBITDA and the consolidated EBITDA
of the entity the subject of the Permitted Acquisition (annualised over the
relevant Test Period and taking into account any Eligible Cost Savings arising
as a result of that Permitted Acquisition)); and

(f)            the
liabilities of the obligors thereunder are to be treated and rank as if they
were “Senior Debt” (as defined in the Existing Priority Agreement and as to be
defined in the Priority Agreement) and to have the benefit of all relevant
Security Documents (whether through execution of new documents or amendment to
existing documents) or (in each case) to have such lower ranking as is agreed
by all the lenders of that Additional Facility. 
For these purposes relevant Security
Documents means Security Documents comprising not less than the same
assets and shares comprised in Security Documents executed prior to the
establishment of that Additional Facility, it being acknowledged that
prior-ranking Security Documents will remain in place (with the proceeds of
enforcement of all Security Documents subject to the sharing provisions of the
Priority Agreement).

Environmental Approval means any authorisation required by Environmental Law.

Environmental Claim means any claim by any person in connection with:

(a)           a
breach, or alleged breach, of Environmental Law;

(b)           any
accident, fire, explosion or other event of any type involving an emission or
substance which is capable of causing harm to any living organism or the
environment; or

(c)           any
other environmental contamination.

Environmental Law means any law or regulation concerning:

 11
 

 

(a)           the
protection of health;

(b)           the
environment;

(c)           the
conditions of the workplace; or

(d)           any
emission or substance which is capable of causing harm to any living organism
or the environment.

EURIBOR relative to a Loan or overdue amount denominated in euro for its Term
means:

(a)           the
applicable Screen Rate; or

(b)           if no
Screen Rate is available for that Term of that Loan or overdue amount, the
arithmetic mean (rounded upward to four decimal places) of the rates, as
supplied to the Facility Agent at its request, quoted by the Reference Banks to
leading banks in the European interbank market,

as of 11.00 a.m. (Brussels time) on the
Rate Fixing Day for the offering of deposits in euro for a period comparable to
that Term.

euro or e
means the single currency of the Participating Member States.

Event of Default means an event specified as such in Clause 20 (Default).

Executive Officers means the Chief Executive Officer and the Chief Financial Officer.

Existing Facility means the e2,600,000,000 facilities made available under an amended and restated
credit agreement originally dated 29th March, 2004 between, amongst others,
KDVS and Deutsche Bank AG as Facility Agent.

Existing Priority Agreement means the priority agreement in force on the date of this Agreement to
which KDG and KDVS are parties (disregarding the amendments implemented to
create the Priority Agreement).

External Facility means a term credit agreement which has Eligible Terms.

External Facility Loan means a loan made to a Borrower under an External Facility.

Facility means the A Facility or the B Facility made available under, or an
Ancillary Facility or Add-On Facility established pursuant to, this Agreement.

Facility A Final Maturity Date means 31 March 2012.

Facility B Final Maturity Date means 31 March 2012.

Facility Office means the office(s) notified by a Lender to the Facility Agent:

(a)           on
or before the date it becomes a Lender; or

(b)           by
not less than five Business Days’ notice,

as the office(s) through which it will perform
its obligations, and to which payments for its account should be made, under
this Agreement.

 12
 

 

Fee Letter means any letter entered into by reference to this Agreement between
one or more Administrative Parties and an Obligor setting out the amount of
certain fees which are payable, inter alia, in
relation to this Agreement.

Final Maturity Date means:

(a)           in
respect of the A Facility and the B Facility, 31 March 2012; and

(b)           in
respect of an Add-On Facility, the Final Maturity Date set out in the relevant
Add-On Facility Accession Agreement.

Finance Document means:

(a)           this
Agreement;

(b)           the
Commitment Letter;

(c)           a
Fee Letter;

(d)           an
Obligor Accession Deed;

(e)           a
Transfer Certificate;

(f)            an
Ancillary Facility Document;

(g)           the
Hedging Letter;

(h)           an
Add-On Facility Accession Agreement;

(i)            a
Hedging Document;

(j)            a
Security Document;

(k)           the
Priority Agreement;

(l)            a
Compliance Certificate;

(m)          a
Request; and

(n)           any
other document designated as such by the Facility Agent and KDG.

Finance Party means an Administrative Party, a Lender or a Hedging Bank.

Financial Indebtedness means any indebtedness for or in respect of the following (without
double counting):

(a)           moneys
borrowed and debit balances at financial institutions;

(b)           any
acceptance credit or bill discounting facility;

(c)           any
bond (other than a performance bond), note, debenture, loan stock or other
similar instrument;

(d)           any share in KDG or any
other member of the Group which is not held by another member of the Group or a
participant in the Group’s management equity programme

 13

 

and which by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable, in each
case at the option of the holder of that security) or upon the happening of any
event matures or is mandatorily redeemable or is redeemable at the option of
its holder (in each case other than on a liquidation or winding up or similar
event, or any other event within KDG’s control or at KDG’s option) in whole or
in part on or prior to the Senior Discharge Date (as defined in the Priority
Agreement);

(e)           any
agreement treated as a finance or capital lease in accordance with the
Accounting Principles but excluding any leases of transponders that are so
treated under IFRS and/or US GAAP;

(f)            receivables
sold or discounted (except to the extent that there is no recourse);

(g)           the
acquisition cost of any asset or service to the extent payable after its
acquisition or possession by the party liable where the deferred payment (as
the case may be):

(i)            is
arranged primarily as a method of raising finance or financing the acquisition
or construction of that asset or the acquisition of that service (but excluding
trade credit on customary commercial terms); and

(ii)           involves
a period of more than six months after the date of acquisition or supply;

(h)           (except
for the purposes of Clause 18 (Financial covenants)) any Treasury Transaction
(and, except for non-payment of an amount, the then mark to market value of
such Treasury Transaction will be used to calculate its amount);

(i)            any
other transaction (including any forward sale or purchase agreement and any
sale and sale back, sale and lease back or deferred purchase arrangement) which
has the commercial effect of a borrowing;

(j)            except
for the purposes of Clause 18 (Financial covenants), any counter-indemnity
obligation in respect of any guarantee, indemnity, bond, letter of credit or
other instrument issued by a bank or financial institution (except that any
such instrument shall be included for the purposes of Clause 18 (Financial
covenants) to the extent the underlying obligation itself constitutes Financial
Indebtedness under any other paragraph of this definition); or

(k)           any
guarantee in respect of an underlying liability of any person which is of the
nature referred to in the above paragraphs (other than a liability of a nature
referred to in paragraphs (h) or (j) except to the extent such liability is
included for the purposes of Clause 18 (Financial covenants) in paragraph (j)).

and, for the avoidance of doubt, indebtedness
under the Service Level Agreements or under the Group management equity
programme shall not constitute Financial Indebtedness.

Fund means a fund that invests in loans and has A Facility Commitments
and/or B Facility Commitments only.

Germany means the Federal Republic of Germany.

Group means KDG and its Subsidiaries (but excluding any Unrestricted
Subsidiaries).

 14
 

 

Hedging Bank has the meaning given to it in the Priority Agreement.

Hedging Documents has the meaning given to it in the Priority Agreement.

Hedging Letter means a letter dated on or about the date of this Agreement between
KDVS, the Mandated Lead Arranger and the Facility Agent relating to the
interest and currency hedging to be effected by the Group and any other letter
designated as such by KDVS and the Facility Agent which amends or supplements
the terms of that letter.

High Yield Indenture means any indenture pursuant to which High Yield Notes are issued by
KDG or an Issuer among KDG or such Issuer, as the case may be, as the issuer,
the trustee for such High Yield Notes, the security agent for such High Yield
Notes and any other entities that act as a guarantor of such High Yield Notes.

High Yield Issue means an issue of High Yield Notes.

High Yield Notes means Compliant Notes issued by KDG or any Issuer pursuant to a High
Yield Indenture.

High Yield Notes Payments means the repayment, prepayment or redemption of any High Yield Notes
(including the payment of all accrued and unpaid interest to the date of
repayment, prepayment or redemption, together with any required premium), the
purchase (whether in the open market or otherwise) of High Yield Notes, any
payment of any additional amounts payable under the terms of the High Yield
Notes and any payment of a waiver or consent fee to holders of High Yield
Notes.

Holding Company of any other person, means a person in respect of which that other
person is a Subsidiary.

Increased Cost means:

(a)           an
additional or increased cost;

(b)           a
reduction in the rate of return from a Facility or on its overall capital; or

(c)           a
reduction of an amount due and payable under any Finance Document,

which is incurred or suffered by a Finance
Party or any of its Bank Affiliates but only to the extent attributable to that
Finance Party having entered into any Finance Document or funding, maintaining
or performing its obligations under any Finance Document.

Indenture Documents means:

(a)           the
High Yield Indentures (including any High Yield Notes issued thereunder);

(b)           security
documents relating to High Yield Notes;

(c)           registration
rights agreements relating to High Yield Notes; and

(d)           any
other documentation required to implement any High Yield Issue.

Information Package means:

(a)           the
Base Case Model;

 15
 

 

(b)           a
management presentation made to banks dated September 2005;

(c)           the
Group’s presentation to Rating Agencies dated March 2006; and

(d)           (when
agreed between KDG and the Original Lender) an information memorandum relating
to the Group for use in connection with the syndication of the Facilities
(including, for the avoidance of doubt, any appendices and/or attachments
thereto) and any update of such information memorandum.

Insurance in relation to any member of the Group means any contract of insurance
taken out by or on behalf of that member of the Group or under which it has a
right to claim.

Intellectual Property Rights means:

(a)           any
know-how, patent, trade mark, service mark, design, business name, domain name,
topographical or similar right;

(b)           any
copyright, data base or other intellectual property right; or

(c)           any
interest (including by way of licence) in the above,

in each case whether registered or not, and
includes any related application.

Interest means:

(a)           interest and amounts in the nature of interest accrued
(other than any non-cash element in the form of capitalised, deferred or
payment-in-kind interest);

(b)           prepayment penalties or premiums incurred in repaying
or prepaying any Financial Indebtedness (excluding, for the purposes of Clause
18.1 (Consolidated EBITDA to Consolidated Total Net Interest Payable) only, any
prepayment penalty in respect of any redemption of High Yield Notes (including
the amount of any prepayment penalty), using the proceeds of a Market Issue
which are not required to be applied in prepayment of the Loans in accordance
with Clause 8.4 (Mandatory prepayment - market issue);

(c)           discount fees and acceptance fees payable or deducted
in respect of any Financial Indebtedness, including fees payable in respect of
letters of credit and guarantees; and

(d)           any other payments and deductions of like effect (including
the interest element of finance leases) and any net payment (or, if appropriate
in the context, receipt) under any interest rate hedging agreement or
instrument (including under the Hedging Documents), taking into account any
premiums payable for the same,

and Interest
includes commitment and non-utilisation fees (including those payable under the
Finance Documents), but excludes agent’s and front-end, management,
arrangement, extension and participation fees with respect to any Financial
Indebtedness (including those payable under the Finance Documents).  For the avoidance of doubt, liabilities under
the Service Level Agreements shall not constitute Interest.

Investor Documents means:

(a)           the articles of association
of KDG;

 16
 

 

(b)           any
agreement pursuant to which any Holding Company of KDG or any Investor
contributes any amounts to the equity of KDG; and

(c)           any agreement evidencing any
Shareholder Loan from any Holding Company of KDG or any Investor to KDG.

Investors means Providence Equity Partners Limited (including its Affiliates,
limited partnerships or other vehicles or funds managed or advised by any of
the foregoing).

Issuer means KDG, any Holding Company of KDG or any special purpose financing
Subsidiary of any such Holding Company (other than KDVS or any of its
Subsidiaries).

Joint Venture means any joint venture entity, partnership or similar person, the
ownership of or other interest in which does not require any member of the
Group to consolidate the results of such person with their own as a Subsidiary.

Junior Debt Payment means a High Yield Notes Payment or a KDHoldco Payment.

KDBS means Kabel Deutschland Breitband Services GmbH, Munich registered in
the Commercial Register (Handelsregister) kept at the local court (Amtsgericht) of
Munich under HRB 122932.

KDG Administration Distribution means a Permitted Distribution specified in paragraph (a)(iii)(C) of
the definition of that term.

KDG Operating Distribution means a Permitted Distribution specified in paragraph (a)(iii)(A) or
(a)(iii)(B) of the definition of that term.

KDHoldco means Kabel Deutschland Holding GmbH registered in the commercial
register (Handelsregister)
kept at the local court of Munich (Amtsgericht) under HRB 155690.

KDHoldco Notes means the notes issued by KDHoldco pursuant to an indenture dated on or
around 10 December 2004 in an aggregate amount of e400,000,000.

KDHoldco Notes Payments means the repayment, prepayment or redemption of any KDHoldco Notes
(including the payment of all accrued and unpaid interest to the date of
repayment, prepayment or redemption, together with any required premium), the
purchase (whether in an open market or otherwise) of KDHoldco Notes, any
payment of additional amounts payable under the terms of the KDHoldco Notes and
any payment of a waiver or consent fee to holders of KDHoldco Notes.

Lender means:

(a)           the
Original Lender;

(b)           an
Original Add-On Facility Lender; or

(c)           any
person which becomes a Lender after the date of, and in accordance with the
terms of, this Agreement,

but only for so long as it has any outstanding
Commitment or participation in any Loan or Ancillary Outstanding or any amount
is owed to it (whether actually or contingently) in its capacity as Lender.

 17
 

 

Loan means the principal amount of each borrowing under a Facility or the
principal amount outstanding of that borrowing and excludes in each case any
Ancillary Outstandings.

Luxco means Cable Holding S.àr.l. registered at 31, boulevard Prince Henri,
L-1724 Luxembourg under number R.C. Luxembourg B 91.941.

Majority Lenders means, at any time, Lenders:

(a)           the
aggregate of whose shares in the outstanding Loans, Ancillary Outstandings and
undrawn Commitments then represent 662/3 per cent. or more of the
aggregate of all the outstanding Loans, Ancillary Outstandings and undrawn Commitments
of all the Lenders;

(b)           if
there is no Loan or Ancillary Outstanding then outstanding, whose undrawn
Commitments then aggregate 662/3 per cent. or more of the Total
Commitments; or

(c)           if
there is no Loan or Ancillary Outstanding then outstanding and the Total
Commitments have been reduced to zero, whose Commitments aggregated 662/3 per cent. or more of the Total
Commitments immediately before the reduction.

A Lender may by notice to the Facility Agent
divide its Loans, Ancillary Outstandings or Commitments into separate amounts
to reflect participation or similar arrangements and require such separate
amounts to be counted separately.

Mandatory Cost means for any Lender the cost of complying with any reserve asset,
liquidity, special deposit or other monetary or regulatory requirements
affecting it, expressed as a percentage rate per annum, and, for a Lender
participating through a Facility Office in the United Kingdom or a
Participating Member State, those calculated by the Facility Agent in accordance
with Schedule 4 (Calculation of the Mandatory Cost).

Margin means:

(a)           in
respect of A Facility and B Facility subject to Clause 9.3 (Margin
adjustments), for any amount (including an overdue amount) outstanding
at any time 2.00 per cent. per annum; and

(b)           in
respect of an Add-On Facility, the rate specified in (and if applicable
adjusted in accordance with) the relevant Add-On Facility Accession Agreement.

Material Adverse Effect means any effect which, in the opinion of the Majority Lenders (acting
reasonably):

(a)           is
materially adverse to the ability of any Obligor to meet its payment
obligations under the Finance Documents (taking into account resources
available to it without breaching the terms of this Agreement including from
other members of the Group);

(b)           is
materially adverse to the business, assets, or financial condition of the
Obligors taken as a whole; or

(c)           results
in any of the Transaction Documents becoming ineffective or any of the Security
Documents not creating the Security Interests they purport to create (in each
case) to any material extent.

 18
 

 

Material Group Member means an Obligor, the general partner of KDVS, any limited partner of
KDVS or a Material Subsidiary;

Material Subsidiary means:

(a)           KDBS;

(b)           TKS;
and

(c)           any
other Subsidiary of KDG (other than an Unrestricted Subsidiary) whose gross
assets, pre-tax profits or turnover equal or exceed 3 per cent. of the
gross assets, Consolidated EBITDA or turnover of the Group.

For this purpose:

(a)           the
gross assets, pre-tax profits and turnover of a Subsidiary of KDG will be
determined from its financial statements (consolidated if it has Subsidiaries)
upon which the latest audited Accounts of the Group have been based;

(b)           if a
Subsidiary of KDG becomes a member of the Group after the date on which the
latest quarterly Accounts of the Group have been prepared, the gross assets,
pre-tax profits and turnover of that Subsidiary will be determined from its
latest financial statements (consolidated if it has Subsidiaries);

(c)           the
gross assets, Consolidated EBITDA and turnover of the Group will be determined
from its latest audited Accounts adjusted (where appropriate) to reflect the
gross assets, pre-tax profits or turnover of any company or business
subsequently acquired or disposed of; and

(d)           the
pre-tax profits of a Subsidiary (or a company or business subsequently acquired
or disposed of) will be determined on the same basis as Consolidated EBITDA
except that references to KDG will be construed as references to that
Subsidiary, company or business,

provided that certification by the Auditors
that a Subsidiary is a Material Subsidiary will, in the absence of manifest
error, be conclusive.

Maturity Date means, for a B Facility Loan, the last day of its Term.

Moody’s means Moody’s Investor Services, Inc., or any successor thereto.

Net Proceeds has the meaning given to it in Clause 8.3
(Mandatory prepayment - third party receipts).

New Limited Partnership means a limited partnership (Kommanditgesellschaft)
which is a direct or indirect wholly-owned Subsidiary of KDG and which complies
with the terms of Clause 19.20(c) (Holding Companies).

New Regco means Kabel Deutschland Vermögen GmbH & Co. KG, registered in the
commercial register (Handelsregister)
kept at the local court (Amtsgericht) of
Munich under registration number HRA 84511.

Obligor means KDG or a Borrower.

 19
 

 

Obligor Accession Deed means a deed substantially in the form of Schedule 8 (Form of Obligor
Accession Deed), with such amendments as the Facility Agent and KDG may agree.

Original Add-On Facility Lender means a person which becomes a Lender under an Add-On Facility pursuant
to Clause 2.4 (Additional Facilities).

Original Obligor means KDG or KDVS.

Participating Member State means a member state of the European Communities that adopts or has
adopted the euro as its lawful currency under the legislation of the European
Community for Economic Monetary Union.

Party means a party to this Agreement.

Permitted Acquisition means any acquisition by KDVS or any of its wholly-owned Subsidiaries
(which is a newly incorporated or established special purpose company or
partnership whose only business is to act as a holding company) other than an
Unrestricted Subsidiary for cash of any issued voting share capital or other
ownership interests in a limited liability company or limited liability
partnership or of any existing business carried on as a going concern where the
acquired company or partnership and each of its material Subsidiaries carries
on its business, or the acquired business is carried on, principally in the
Core Business in Germany provided that:

(a)           no
Event of Default is outstanding immediately prior to making, or legally
committing to make, such acquisition or will result from making the
acquisition;

(b)           to
the extent lawful, security is given over the shares of the acquired company or
the interest in the partnership (in each case, to the extent directly owned by
KDVS and to the extent the acquired entity is a member of the Group) and (if
merged into KDVS) its assets or the assets of that business upon or immediately
following the acquisition in favour of (and in form and substance satisfactory
to) the Security Agent acting reasonably having regard to the Security
Principles (or as otherwise provided in this Agreement) for the Finance Parties
by the relevant member of the Group;

(c)           the
Acquisition Consideration for such acquisition does not exceed, when aggregated
with the Acquisition Consideration for each other such acquisition since the
date of this Agreement, €800,000,000; and

(d)           prior
to making any Permitted Acquisition where the Acquisition Consideration for
such acquisition exceeds e50,000,000, KDG delivers to the Facility Agent not later than ten
Business Days before legally committing to make such acquisition a certificate signed
by two directors of KDG (one of whom must be the Chief Financial Officer):

(i)            attaching
a copy of the forecasted consolidated financial statements for the Group for
the next 12 months on a pro forma basis taking into account the proposed
acquisition;

(ii)           attaching
a copy of the latest audited accounts (or if not available management accounts)
of the target entity or business (or if not available, such accounts as are
available (whether or not audited) relating to the target business or the
legacy business as it existed prior to the prospective sale of the target
entity or business);

 20
 

 

(iii)          setting
out pro forma calculations of the financial covenants in Clause 18 (Financial
covenants) for the four quarterly Accounting Periods following the date of the
intended acquisition showing that KDG will be in compliance with those
covenants for those periods (taking into account any Eligible Cost Savings and
adjusting for the acquired entity’s or business’s EBITDA);

(iv)          setting
out pro forma calculations for the four quarterly Accounting Periods following
the date of the intended acquisition showing that the target entity or business
will be cashflow positive (defined as the acquired entity’s or business’
Consolidated EBITDA less Capital Expenditure incurred by the target entity or
business, calculated on a pro forma basis by adjusting for the acquisition of
that entity or business by KDVS and taking account of Eligible Cost Savings)
for such periods; and

(v)           attaching
copies of legal and accounting due diligence reports in respect of the
acquisition.

Permitted Distribution means:

(a)           the
payment of any dividend or other distribution, the making of any loan or the
repayment or prepayment of any amount outstanding under any Shareholder Loan (a
distribution), in each case, where such
payment is made in cash, by:

(i)            KDG
to any of its Holding Companies in a maximum aggregate amount of up to e60,000,000 from cash that would otherwise be available to finance
Unrestricted Subsidiary Funding;

(ii)           KDVS
or any Subsidiary of KDVS to KDG to enable KDG:

(A)          to
make payments as they fall due in respect of liabilities incurred in connection
with the activities permitted by Clause 19.20(a)(vi) (Holding Companies) in an
aggregate amount of up to e45,000,000 in any annual Accounting Period;

(B)           to
make any other payments as they fall due in respect of liabilities incurred in
connection with the activities permitted by Clause 19.20(a)(vii) (Holding
Companies), provided that the aggregate amount of such expenditure together
with any expenditure falling within sub-paragraph (A) above in any annual
Accounting Period, shall not exceed e45,000,000;

(C)           to
make any other payments permitted by the Priority Agreement; and

(D)          to
make Junior Debt Payments permitted by Clause 8.5(c) (Voluntary prepayment),

provided that, in each case, such amounts may
not be used by KDG for any other purpose;

(iii)          KDG
to any of its Holding Companies (using the proceeds of any payment received by
KDG under sub-paragraph (ii)(A) above) to enable such Holding Companies to fund
administrative, legal and related expenses, in an aggregate amount not
exceeding €2,000,000 in any annual Accounting Period;

 21
 

 

(b)           any
reasonable payment to a director of a member of the Group in his capacity as a
director in the ordinary course of his employment and the payment of monitoring
fees payable to the Investors, provided that the aggregate of all such payments
in any annual Accounting Period must not exceed e5,000,000;

(c)           any
reasonable fee paid by KDG for corporate advisory work (other than any
transaction which may be financed under this Agreement using A Facility Loans)
provided on arm’s length terms in the ordinary course of business;

(d)           the
repayment by KDG of any Shareholder Loan from any Holding Company of KDG,
provided such Holding Company simultaneously contributes the amount of such
repayment to the equity of KDG;

(e)           in
case a profit and loss pooling agreement has been entered into between KDG and
KDHG in order to establish a fiscal unity (Organschaft)
for tax purposes between KDG and KDHoldco (a Profit and
Loss Pooling Agreement), a distribution by withdrawal (Entnahme) by KDVS to KDG and/or KDHoldco of an amount equal
to the expected accounting loss of KDG provided that the cash payment related
to such distribution by withdrawal shall not exceed the amount required by KDG
or KDHoldco to settle its tax payment obligation or, in the case of KDG only,
its payment obligations towards third parties. 
The remainder of such distribution by withdrawal shall be settled by the
requisite book entries on intercompany accounts;

(f)            the
payment of any dividend by KDG following a Permitted Exit, provided that:

(i)            (A)          the
ratio of Consolidated Total Net Borrowings to Consolidated EBITDA for the most
recent Test Period (the Relevant Test Period)
in respect of which a Compliance Certificate has been delivered is, immediately
before such dividend is declared, and will be, immediately after such dividend
is paid, less than 3:1; or

(B)           the
ratio of Consolidated Total Net Borrowings to Consolidated EBITDA for the
Relevant Test Period is, immediately before such dividend is declared, and will
be, immediately after such dividend is paid, less than 3.75:1 and the
ratio of Consolidated Senior Borrowings to Consolidated EBITDA for the Relevant
Test Period is, immediately before such dividend is declared, and will be,
immediately after such dividend is paid, less than 1.75:1 and at least e500,000,000 of the proceeds of the Permitted Exit have been applied in
prepayment of the Term Loans (with the A Facility Loans being prepaid in a
proportion no less than pro rata to the
Additional Facility Loans); or

(C)           immediately
before such dividend is declared, KDG has a credit rating in respect of its
long term unsecured debt obligations of at least BBB- and Baa3 from S&P and
Moody’s respectively provided that if such credit rating is BBB- and Baa3, KDG
also has a stable outlook and provided further that such dividend is consistent
(including the amount to be paid) with the stated dividend policy of KDG
supplied to S&P and Moody’s for the purpose of determining the credit
rating of KDG; and

(ii)           prior
to declaring such dividend, KDG delivers to the Facility Agent a certificate
signed by two directors of KDG (one of whom must be the Chief

 22
 

 

Financial Officer)
setting out pro forma calculations of the financial covenants in Clause 18
(Financial covenants) for the four quarterly Accounting Periods to end
following the payment of the proposed dividend showing that KDG will be in
compliance with the covenants for those periods.

Permitted Exit means the sale, issue or listing of at least 20 per cent. of the total
issued share capital of KDG or any of its Holding Companies, in each case by
way of flotation, public rights issue, public placing, listing or other public
offering on a recognised exchange in the European Union or in the United States
of America.

Permitted Investment Basket has the meaning given to it in Clause 19.31 (Unrestricted Subsidiaries).

Permitted KDG Debt means Compliant KDG Debt issued by KDG or any Issuer.

Permitted Reorganisation means:

(a)           the
merger of any member of the Group (other than KDG) (directly or indirectly)
into KDVS where KDVS is the surviving entity and, if the liabilities of the
acquired company exceed its assets by more than e10,000,000 or if such merger would result in a negative impact on the
cashflow of KDVS during the life of the Facilities in an amount of e10,000,000 or more, the Majority Lenders have agreed to such merger;

(b)           any
other reorganisation of one or more members of the Group approved by the
Facility Agent acting on the instructions of the Majority Lenders;

(c)           any
solvent liquidation of a member of the Group (other than an Obligor); and

(d)           any
merger of any member of the Group (other than KDG or KDVS) with any other
member of the Group (other than KDG or KDVS).

Priority Agreement means the Existing Priority Agreement amended on a basis consistent with
the Agreed Priority Agreement Principles after the date of this Agreement.

Rate Fixing Day means the second TARGET Day before the first day of a Term or such
other day as the Facility Agent determines is generally treated as the rate
fixing day in the relevant currency by market practice in the relevant
interbank market.

Reconciliation Statement has the meaning given to it in Clause 17.2
(Form and scope of financial statements).

Recovery Event has the meaning given to it in Clause 8.3
(Mandatory prepayment - third party receipts).

Reference Banks means, in relation to EURIBOR and Mandatory Cost, the principal office
in London of the Facility Agent and such other Lenders as the Mandated Lead Arranger
(in consultation with KDG) may appoint on or before the Syndication Date or
such other banks as may be appointed by the Facility Agent in consultation with
KDG under this Agreement.

Relevant
Entity means, if the relevant
entity:

(a)           is incorporated as a GmbH, such GmbH; or

 23

(b)           is incorporated as a GmbH & Co. KG, such GmbH &
Co. KG’s general partner (Komplementär).

Repeating Representations
means at any time the representations and warranties which are made or deemed
to be repeated at that time under Clause 16.25
(Times for making representations and warranties).

Request means a request for a Loan,
substantially in the form of Schedule 3 (Form of Request).

Reservations means:

(a)                                  the principle that equitable remedies are remedies which may be granted
or refused at the discretion of the court;

(b)                                 the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes, moratoria,
administration and other laws generally affecting the rights of creditors;

(c)                                  the time barring of claims under applicable limitation laws (including
the Limitation Acts), the possibility that an undertaking to assume liability
for or to indemnify a person against non-payment of stamp duty may be void,
defences of set-off or counterclaim;

(d)                                 in respect of the validity and enforceability of German law governed
contractual obligations the German principle of good faith (Treu und Glauben), and any equivalent defences available to
any Obligor under the law of any other applicable jurisdiction in relation to
contractual obligations governed by such law;

(e)                                  the principle that where a party to an agreement is vested with a
discretion or may determine a matter in its opinion, the exercise of such
discretion or determination of opinion may be subject to challenge before the
courts if it can be shown that such discretion should have been exercised
reasonably or such opinion based on reasonable grounds;

(f)                                    that where any provision of the agreement provides that certain
certifications or determinations will be conclusive and binding, this will not
necessarily prevent judicial enquiry into the merits of any claim by an
aggrieved party;

(g)                                 that any provision of the agreement stating that a notice or other
expression of an intention or instruction or power of attorney is irrevocable
may be open to challenge in circumstances where there have been material
changes in the underlying situation;

(h)                                 the limitation on enforcement of any contractual provision conferring or
imposing a remedy, an obligation or penalty upon default if such remedy,
obligation or penalty were construed by a court as constituting an excessive
pecuniary remedy;

(i)                                     in respect of German law security granted in favour of future pledgees,
that such security may not be validly created and therefore may not be enforceable,
but any such invalidity would, however, not affect the validity of the security
created in favour of the original pledgees including in respect of the pledges
created in favour of the Security Agent as joint and several creditor under the
Finance Documents; and

 24
 

(j)                                     any other general principles which are set out as qualifications as to
matters of law in the legal opinions delivered to the Facility Agent under Schedule
2 (Conditions precedent documents).

RKS means RKS Niedersächsische
Kabel-Servicegesellschaft mbH & Co. KG.

Rollover Loan means one or more
Loans under the B Facility:

(a)                                  to be made on the same day that a maturing Loan under that Facility is
due to be repaid;

(b)                                 the aggregate amount of which is equal to or less than the maturing Loan;
and

(c)                                  to be made to the same Borrower for the purpose of refinancing the
maturing Loan.

S&P means Standard & Poor’s
Ratings Group, a division of The McGraw-Hill Companies, or any successor
thereto.

Screen Rate means the percentage rate
per annum, determined by the Banking Federation of the European Union, for
euros for the Term displayed on the appropriate page of the Telerate screen
selected by the Facility Agent. If the relevant page is replaced or the service
ceases to be available, the Facility Agent (after consultation with KDG and the
Lenders) may specify another page or service displaying the appropriate rate.

Second Limited Partnership means
Kabel Deutschland Vertrieb und Service Beteiligungs GmbH & Co. KG
registered in the commercial register (Handelsregister)
kept at the local court (Amtsgericht) of
Munich under HRA 84369.

Security Document means:

(a)                                  each document referred to in Schedule 6 (Security Documents) or entered
or required to be entered into pursuant to Clause 19.28
(Security); and

(b)                                 any other document evidencing or creating any guarantee or security over
any asset of any Obligor to secure any obligation of any Obligor to a Finance
Party under the Finance Documents.

Security Interest means any mortgage,
pledge, lien, charge (fixed or floating), assignment by way of security,
hypothecation, reservation of title or other security interest or any other
agreement or arrangement having a similar effect.

Security Principles has
the meaning given to that term in Schedule 12 (Security Principles).

Senior Discharge Date has
the meaning given to it in the Priority Agreement.

Service Level Agreements
means, the service level agreements set forth in the documents listed in Schedule
10 (Service Level Agreements) in each case any amended, supplemented or
replacement agreement.

Shareholder Loan means, any loan made
by KDHG or any other Holding Company of KDG, to KDG which is made on terms
permitted by, and subordinated in accordance with the terms of, the Priority
Agreement.

Subsidiary means:

 25
 

(a)                                  an entity of which a person has direct or indirect control or owns
directly or indirectly more than 50% of the voting capital or similar right of
ownership and control for this purpose means the
power to direct the management and the policies of the entity whether through
the ownership of voting capital, by contract or otherwise; or

(b)                                 an entity consolidated for the purpose of the financial statements of
any person pursuant to the Accounting Principles.

Syndication Date means up to two dates
specified by the Facility Agent as the date any syndication agreement is to be signed
in respect of general syndication of the Facilities.

TARGET Day means a day on which the
Trans-European Automated Real-time Gross Settlement Express Transfer payment
system is open for the settlement of payments in euro.

Tax means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
related penalty or interest).

Tax Credit means a credit against any
Tax or any relief or remission for or rebate of Tax (or its repayment).

Tax Deduction means a deduction or
withholding for or on account of Tax from a payment under any Finance Document.

Tax Payment means a payment made by an
Obligor to a Finance Party in any way relating to a Tax Deduction or under any
indemnity given by that Obligor in respect of Tax under any Finance Document.

Telecoms and Broadcasting Laws
means any regulation applicable to telecommunications, broadcasting or cable
business operating in the European Community or Germany.

Term means each period
determined under this Agreement by reference to which interest on a Loan or an
overdue amount is calculated.

Term Loans means A Facility Loans and
Additional Facility Loans.

Test Period has the meaning given to
such term in Clause 18 (Financial covenants).

TKS means TKS Telepost
Kabel-Service Kaiserslautern GmbH & Co. KG registered in the commercial
register (Handelsregister)
kept at the local court (Amtsgericht) of
Kaiserslautern under HRA 2278.

Total Commitments means the aggregate
of the Commitments of all the Lenders.

Total A Facility Commitments
means the aggregate of the A Facility Commitments of
all the Lenders.

Total Add-On Facility Commitments
means in relation to the Add-On Facility, the aggregate for the time being of
the Add-On Commitments for the Add-On Facility.

Total B Facility Commitments
means the aggregate of the B Facility Commitments of all the Lenders.

Transaction Documents means:

(a)                                  the Finance Documents; and

 26
 

(b)                                 the Investor Documents.

Transfer Certificate
means a certificate, substantially in the form of Schedule 5 (Form of Transfer
Certificate), with such amendments as the Facility Agent may approve or
reasonably require or any other form agreed between the Facility Agent and KDG.

Transfer Date means, in respect of
a Transfer Certificate, the later of:

(a)                                  the proposed Transfer Date specified in that Transfer Certificate; and

(b)                                 the date on which the Facility Agent executes that Transfer Certificate.

Treasury Transaction
means any derivative transaction entered into in connection with protection
against or to benefit from fluctuations in any rate, price, index or credit
rating.

U.K. means the United Kingdom of
Great Britain and Northern Ireland.

Unrestricted Subsidiary means
any Subsidiary of KDVS or KDG (which is not an Obligor) nominated by KDVS to
the Facility Agent at any time when no Event of Default is outstanding.

Unrestricted Subsidiary Funding has
the meaning given to it in Clause 19.31 (Unrestricted Subsidiaries).

Utilisation Date means each date on
which a Facility is utilised by the drawing of a Loan.

1.2                               Construction

(a)                                  In this
Agreement, unless the contrary intention appears, a reference to:

(i)            a document being in the agreed form
means that such document is in a form previously agreed in writing by or on
behalf of KDG and the Facility Agent or if not so agreed is in the form
specified by the Facility Agent;

(ii)           an amendment includes an amendment,
supplement, novation, re-enactment, replacement, restatement or variation and amended will be construed accordingly;

(iii)          assets includes businesses, undertakings, securities, properties, revenues or
rights of every description and whether present or future, actual or
contingent;

(iv)          an authorisation includes an
authorisation, consent, approval, resolution, permit, licence, exemption,
filing, registration or notarisation;

(v)           disposal means a sale, transfer,
assignment, grant, lease, licence or other disposal, whether voluntary or
involuntary and whether pursuant to a single transaction or a series of
transactions, and dispose will be
construed accordingly;

(vi)          guarantee means any guarantee, bond,
letter of credit, indemnity or similar assurance against financial loss, or any
other legally binding obligation, direct or indirect, actual or contingent, to
purchase or assume any indebtedness of any person or to make an investment in
or loan to any person or to purchase assets of any person, where, in each case,
that obligation is assumed in order to maintain or assist the ability of that
person to meet all or any of its indebtedness;

 27
 

(vii)         incorporation includes the formation or establishment of a partnership or any other
person and incorporate and incorporated will be construed accordingly;

(viii)        indebtedness includes any obligation (whether incurred as principal or as surety and
whether present or future, actual or contingent) for the payment or repayment
of money;

(ix)           jurisdiction of incorporation
includes any jurisdiction under the laws of which a person is incorporated;

(x)            know your customer requirements are
the checks that a Finance Party requests in order to meet its obligations under
applicable money laundering regulations to identify a person who is (or is to
become) its customer;

(xi)           a person includes any individual,
company, corporation, unincorporated association or body (including a
partnership, trust, fund, joint venture or consortium), government, state,
agency, organisation or other entity whether or not having separate legal
personality;

(xii)          a regulation
includes any regulation, rule, order, official directive, request or guideline
(in each case, whether or not having the force of law but, if not having the
force of law, being of a type with which any person to which it applies is
accustomed to comply) of any governmental, intergovernmental or supranational
body, agency, department or regulatory, self-regulatory or other authority or
organisation;

(xiii)         a currency is a reference to
the lawful currency for the time being of the relevant country;

(xiv)        a Default or an Event of
Default being outstanding means that it has not
been remedied or expressly waived in writing in accordance with Clause 26.4 (Waivers and remedies
cumulative);

(xv)         a provision of law is a reference to that provision as extended,
applied, amended or re-enacted and includes any subordinate legislation;

(xvi)        a Clause or a Schedule is a
reference to a clause or schedule to this Agreement;

(xvii)       a Party or any other person
includes its successors in title, permitted assigns and permitted transferees;

(xviii)      words importing the singular
include the plural and vice versa;

(xix)         a Transaction Document or
another document includes (but without prejudice to any prohibition on amending
that Transaction Document) all amendments however fundamental to that
Transaction Document or other document, including any amendment providing for
an increase in the amount of a facility or any additional facility;

(xx)          if it is stated that the Majority Lenders are required to act “reasonably”,
that shall mean that each Lender is required to act reasonably; and

(xxi)         a time of day is a reference
to London time.

 28
 

(b)                                 Unless the
contrary intention appears, a reference to a month
or months is a reference to a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month or the calendar month in which it
is to end, except that:

(i)            if the numerically corresponding day is not a Business Day, the period
will end on the next Business Day in that month (if there is one) or the
preceding Business Day (if there is not);

(ii)           if there is no numerically corresponding day in that month, that period
will end on the last Business Day in that month; and

(iii)          notwithstanding
sub-paragraph (i) above, a period which commences on the last Business Day
of a month will end on the last Business Day in the next month or the calendar
month in which it is to end, as appropriate.

(c)                                  Unless expressly
provided to the contrary in a Finance Document, a person who is not a party to
a Finance Document may not enforce any of its terms under the Contracts (Rights
of Third Parties) Act 1999 and, notwithstanding any term of any Finance
Document, no consent of any third party is required for any amendment
(including any release or compromise of any liability) or termination of that
Finance Document.

(d)                                 Unless the
contrary intention appears:

(i)            a reference to a Party will not include that party if it has ceased to
be a party under this Agreement;

(ii)           a word or expression used in any other Finance Document or in any notice
given in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement;

(iii)          if there is an inconsistency
between this Agreement and another Finance Document, this Agreement will
prevail unless that other Finance Document is the Priority Agreement, in which
case the Priority Agreement will prevail;

(iv)          any obligation of an Obligor under the Finance Documents which is not a
payment obligation remains in force for so long as any payment obligation of an
Obligor is or may be or is capable of becoming outstanding under the Finance
Documents; and

(v)           any obligation of an Obligor under the Finance Documents not to do
something includes an obligation on that Obligor not to contract or agree to do
that thing unless such contract or agreement is conditional on the Senior
Discharge Date or on the approval of the Lenders or the Majority Lenders (as
required under this Agreement).

(e)                                  No part of this
Agreement is intended to or shall create a registrable Security Interest.

(f)                                    The index to and
headings in this Agreement do not affect its interpretation.

2.                                      FACILITIES

2.1                               A Facility

Subject to the terms of this Agreement, the Lenders
make available to the Borrowers a term loan facility in an aggregate amount
equal to the Total A Facility Commitments.

 29
 

2.2                               B Facility

Subject to the other terms of this Agreement, the
Lenders make available a revolving credit facility in an aggregate amount equal
to the Total B Facility Commitments.

2.3                               Ancillary Facilities

Subject to the terms of this Agreement, provision may
be made for the establishment of Ancillary Facilities in place of all or any
part of one or more Lenders’ B Facility Commitments.

2.4                               Additional Facilities

(a)                                  KDG and KDVS may
at any time establish or enter into an Additional Facility.

(b)                                 Subject to
paragraph (c) any person will, subject to the terms of this Agreement, become
an Add-On Facility Lender by delivering to the Facility Agent an Add-On Facility
Accession Agreement duly completed and executed by that person, KDG and the
relevant Borrower.  Once the Facility
Agent signs the Add-On Facility Accession Agreement, that person shall become
an Add-On Facility Lender on the date specified in the Add-On Facility
Accession Agreement.

(c)                                  Subject to
paragraph (d), the Facility Agent must sign any Add-On Facility Accession
Agreement delivered to it by KDG or an Add-On Facility Lender.

(d)                                 The Facility
Agent is not obliged to sign an Add-On Facility Accession Agreement until it
has completed all know your customer requirements to its satisfaction in
respect of the proposed Add-On Lender.

(e)                                  Upon the relevant
person becoming an Add-On Facility Lender, the Total Commitments shall be
increased by the amount set out in the relevant Add-On Facility Accession
Agreement as that Add-On Facility Lender’s Commitment.

(f)                                    Each Add-On Facility
Lender will grant to the relevant Borrower a loan facility in the amount
specified in the relevant Add-On Facility Accession Agreement in euros during
the Add-On Facility Availability Period specified in the Add-On Facility
Accession Agreement, subject to the terms of this Agreement.

(g)                                 KDG must ensure
that the Finance Parties and any arranger, underwriter, agent, trustee
(including in respect of notes, bonds or other securities) or similar person
acting or lending in connection with an Additional Facility are granted a
Security Interest over the assets acquired with the proceeds of the Additional
Facility, having regard to the Security Principles, under which their
outstanding liabilities rank pari passu (except to the extent any lower ranking
or subordination for an Additional Facility is agreed between KDG and all the
creditors of that Additional Facility).

2.5                               Nature of a Finance Party’s rights and obligations

Unless otherwise agreed by all the Finance Parties:

(a)                                  the obligations of a Finance Party under the Finance Documents are
several;

(b)                                 failure by a Finance Party to perform its obligations does not affect
the obligations of any other Party under the Finance Documents;

 30
 

(c)                                  no Finance Party is responsible for the obligations of any other Finance
Party under the Finance Documents;

(d)                                 the rights of a Finance Party under the Finance Documents are separate
and independent rights; and

(e)                                  a Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce those rights.

3.                                      PURPOSE

3.1                               A Facility Loans

The A Facility Loans may only be used by KDVS
for the purpose of repaying the Existing Facility.

3.2                               B Facility Loans

Each
B Facility Loan may only be used for the purpose of repaying the Existing
Facility and thereafter, for general corporate purposes of the Group.

3.3                               Additional Facilities

An Additional Facility may only be used for the
purpose of funding a Permitted Acquisition.

3.4                               No obligation to monitor

No Finance Party is bound to monitor or verify the
utilisation of a Facility and no Finance Party will be responsible for, or for
the consequences of, such utilisation.

4.                                      CONDITIONS PRECEDENT

4.1                               Initial conditions precedent

Neither an A Facility Loan nor a B Facility Loan may
be made until the Facility Agent has notified KDG and the Lenders that it has
received in form and substance satisfactory to the Facility Agent (acting
reasonably) all of the documents and evidence set out in Part 1 of Schedule 2
(Conditions Precedent Documents).

4.2                               Further conditions precedent

The obligations of each Lender to participate in any
Loan are subject to the further conditions precedent that on both the date of
the Request and the Utilisation Date for that Loan:

(a)                                  other than in the case of a Rollover Loan, the Repeating Representations
are correct in all material respects;

(b)                                 other than in the case of a Rollover Loan, no Default has occurred;

(c)                                  in the case of a Rollover Loan, no notice under Clause 20.20(b), (c) (in
respect of B Facility) or (d)(i) (Acceleration) has been given to KDG; and

(d)                                 in the case of an A Facility Loan, the Facility Agent has received, in
form and substance satisfactory to it (acting reasonably), a certificate from
the Geschäftsführer of the proposed Borrower of the relevant Loan confirming
that that Borrower is not

 31
 

overindebted (Überschuldung)
for the purposes of German insolvency law and attaching an insolvency balance
sheet prepared by the relevant Borrower on a going concern basis evidencing
that there is no such overindebtedness.

4.3                               Maximum number

Unless the Facility Agent agrees, a Request may not be
given if, as a result of making the utilisation requested, there would be more
than seven A Facility Loans, or seven B Facility Loans outstanding.

5.                                      UTILISATION - LOANS

5.1                               Giving of Requests

(a)                                  A Borrower may
borrow a Loan by giving to the Facility Agent a duly completed Request.

(b)                                 Unless the
Facility Agent otherwise agrees, the latest time for receipt by the Facility
Agent of a duly completed Request is 11.00 a.m. one Business Day before
the Rate Fixing Day for the proposed borrowing or, by such time as the Original
Lender and the Facility Agent may agree with KDG.

(c)                                  Each Request is
irrevocable.

5.2                               Completion of Requests

A Request for a Loan will not be duly made unless:

(a)                                  it identifies the Borrower and the purpose for which the Loan is to be
utilised;

(b)                                 it identifies the Facility (or Facilities) under which the Loan is to be
made;

(c)                                  the Utilisation Date is a Business Day falling within the relevant
Availability Period;

(d)                                 the amount of each Loan requested is a minimum of e5,000,000 or such other lower amount as the Facility Agent may agree;
and

(e)                                  the proposed Term complies with this Agreement.

No more than one Request may be delivered on any one
day by any one Borrower, but that Request may specify any number of Loans under
the Facilities.

5.3                               Advance of Loan

(a)                                  The Facility
Agent must promptly notify each Lender of the details of the requested Loan and
the amount of its share in that Loan.

(b)                                 The amount of each
Lender’s share of each Loan will be equal to the proportion of that Loan which
that Lender’s undrawn Commitment under the relevant Facility bears to the
aggregate undrawn Commitments under that Facility on the proposed Utilisation
Date.

(c)                                  No Lender is obliged
to participate in a Loan if as a result:

(i)                                     its share in the outstanding Loans under the relevant Facility would
exceed its Commitment for that Facility; or

 32
 

(ii)                                  the outstanding Loans under the relevant Facility would exceed the Total
Commitments for that Facility.

(d)                                 If the conditions
set out in this Agreement have been met, each Lender must make its share in the
Loan available to the Facility Agent for the relevant Borrower through its
Facility Office on the Utilisation Date.

6.                                      ANCILLARY FACILITIES

6.1                               Availability

(a)                                  If KDG and a
Lender agree and subject as provided below, that Lender may provide an
Ancillary Facility on a bilateral basis to KDVS in place of all or part of that
Lender’s B Facility Commitment. The aggregate Ancillary Commitments of the Lenders
shall not at any time exceed e150,000,000.

(b)                                 An Ancillary
Facility may not be made available unless the Facility Agent has received from
KDG not less than 10 Business Days (or such lesser period as the Facility
Agent may agree) prior to the proposed start date for that Ancillary Facility:

(i)                                     a notice in writing requesting the establishment of an Ancillary
Facility by the conversion of any Lender’s undrawn B Facility Commitment (or
part of that Commitment) into an Ancillary Commitment and specifying:

(A)                              the start date and expiry date of the Ancillary Facility;

(B)                                the type of Ancillary Facility being provided;

(C)                                the identity of the Ancillary Lender; and

(D)                               the applicable Ancillary Commitment (which must be in euros) and the net
limit of the Ancillary Outstandings and the gross limit applicable thereto;

(ii)                                  a copy of any relevant Ancillary Facility Documents; and

(iii)                               any other information which the Facility Agent may reasonably require in
connection with the Ancillary Facility.

(c)                                  Unless the
Facility Agent (acting reasonably) objects to the establishment of the
Ancillary Facility because it does not comply with the provisions of Clause 6.2
(Terms of Ancillary Facilities), then:

(i)                                     the Lender concerned will become an Ancillary Lender; and

(ii)                                  the Ancillary Facility will be available,

with effect from the date agreed by KDG and the
Ancillary Lender.

(d)                                 The Facility
Agent must promptly notify the other Lenders of the matters referred to in
paragraph (b) above.

(e)                                  No amendment or
waiver of a term of an Ancillary Facility shall require the consent of any
Finance Party other than the relevant Ancillary Lender unless such amendment or
waiver itself relates to or gives rise to a matter which would require an
amendment or waiver of or

 33

 

under
this Agreement (including, for the avoidance of doubt, under this Clause) in
which case the provisions of this Agreement with regard to amendments and
waivers will apply.

6.2          Terms
of Ancillary Facilities

(a)           Except as provided below, the
terms of any Ancillary Facility will be those agreed by the Ancillary Lender
and KDG.

(b)           However, those terms:

(i)            must be based upon normal commercial terms at that time;

(ii)           must only allow KDVS to use the Ancillary Facility;

(iii)          must not allow the Ancillary
Outstandings to exceed the Ancillary Commitment (and if Ancillary Outstandings
are calculated on a net basis must not allow the aggregate gross outstandings
under the Ancillary Facility to exceed the amount approved by the Facility
Agent);

(iv)          must not allow the Ancillary Commitment of a Lender to exceed the
undrawn B Facility Commitment of that Lender (before reduction on account of
the Ancillary Commitment); and

(v)           must ensure that the Ancillary Commitment is cancelled, and that all
Ancillary Outstandings are repaid or cash-collateralised in full, not later
than the Facility B Final Maturity Date.

(c)           In the event of any conflict
between the terms of an Ancillary Facility Document and any of the other
Finance Documents, the terms of the relevant other Finance Document shall
prevail.

6.3          Revolving
Credit Commitment

An Ancillary Lender’s B Facility Commitment at any
time shall be reduced by the amount of its Ancillary Commitment in force at
that time and increased by the amount of its Ancillary Commitment cancelled
from time to time.

6.4          Refinancing
of Ancillary Facility

(a)           No Ancillary Lender may cancel
any of its Ancillary Commitment or demand repayment or prepayment of any
amounts or demand cash cover for any liabilities made available or incurred by
it under its Ancillary Facility (except where the Ancillary Facility is
provided on a net limit basis to the extent required to bring any gross
outstandings down to the net limit), unless:

(i)            the B Facility Commitments have been cancelled in full, or the Facility
Agent has declared all outstanding Loans under the B Facility immediately due
and payable; or

(ii)           the Ancillary Outstandings (if any) under that Ancillary Facility can be
refinanced by a B Facility Loan and the Ancillary Lender gives sufficient
notice to enable a B Facility Loan to be made to refinance those Ancillary
Outstandings.

(b)           For the purposes of
determining whether or not the Ancillary Outstandings under that Ancillary
Facility can be refinanced by a B Facility Loan:

 34
 

 

(i)            the B Facility Commitment of the Ancillary Lender will be increased by
the amount of its Ancillary Commitment; and

(ii)           the B Facility Loan may (provided that sub-paragraph (a)(i) above
does not apply) be made irrespective of whether a Default is outstanding or any
other applicable condition precedent is not satisfied (but only to the extent
that the proceeds are applied in refinancing those Ancillary Outstandings) and
irrespective of whether Clause 4.3 (Maximum number), Clause 5.2(d) (Completion
of Requests) or Clause 5.2(e) (Completion of Requests) applies.

(c)           On the making of a B Facility
Loan made to refinance Ancillary Outstandings:

(i)            each Lender will participate in that B Facility Loan in such amount (as
determined by the Facility Agent) as will result as nearly as possible in the
aggregate amount of its participation in the B Facility Loans then outstanding
bearing the same proportion to the aggregate amount of the B Facility Loans
then outstanding as its B Facility Commitment bears to the aggregate of the B
Facility Commitments; and

(ii)           the refinanced Ancillary Facility shall be cancelled.

6.5          Information

Each Obligor and each Ancillary Lender must, promptly
upon request by the Facility Agent, supply the Facility Agent with any
information relating to the operation of an Ancillary Facility (including the
Ancillary Outstandings) as the Facility Agent may reasonably request.

7.             REPAYMENT

7.1          Repayment
of A Facility Loans

(a)           The Borrowers must repay each A
Facility Loan in full on the Facility A Final Maturity Date.

(b)           Any amount repaid under
paragraph (a) above may not be re-borrowed.

7.2          Repayment
of B Facility Loans

(a)           Each Borrower must repay each
Facility B Loan made to it in full on its Maturity Date.

(b)           Subject to the other terms of
this Agreement, any amounts repaid under paragraph (a) above may be
re-borrowed.

(c)           Without prejudice to any
Borrower’s obligation to repay the full amount of each B Facility Loan on its
Maturity Date, on the date of any Rollover Loan drawn by any Borrower, the
amount of the B Facility Loan to be repaid and the amount to be drawn down by
such Borrower on such date shall be netted off against each other so that the
amount of cash which such Borrower is actually required to repay or, as the
case may be, the amount of cash which the Lenders are actually required to pay
to such Borrower, shall be the net amount.

(d)           Any amount of any B Facility
Loan outstanding on the Facility B Final Maturity Date shall be repaid on the Facility
B Final Maturity Date.

 35
 

 

7.3          Repayment
of Add-On Facility Loans

(a)           Each Borrower must repay each Add-On
Facility Loan made to it in full on its Final Maturity Date (as set out in the relevant
Add-On Facility Accession Agreement).

(b)           Any amount repaid under
paragraph (a) above may not be re-borrowed.

8.             PREPAYMENT AND CANCELLATION

8.1          Mandatory
prepayment - illegality

(a)           A Lender must promptly notify
KDG (with a copy to the Facility Agent) if it becomes aware that it is or has
become unlawful in any applicable jurisdiction for that Lender to perform any
of its obligations under a Finance Document or to fund or maintain its share in
any Loan.

(b)           After notification under
paragraph (a) above:

(i)            each Borrower must repay or prepay the share of that Lender in each Loan
utilised by it on the date specified in paragraph (c) below; and

(ii)           the Commitments of that Lender will be immediately cancelled.

(c)           The date for repayment or
prepayment of a Lender’s share in a Loan will be:

(i)            the last day of the current Term of that Loan; or

(ii)           if earlier, the date specified by the Lender in the notification under
paragraph (a) above and which must not be earlier than the last day of any
applicable grace period allowed by law.

8.2          Mandatory
prepayment - change of control, flotation or sale of business

(a)           For the purposes of this Clause:

a change of control occurs
if:

(i)            during
the period prior to a Permitted Exit, the Investor does not or ceases to hold
legally and beneficially, directly or indirectly, and have the right to vote as
they see fit at least fifty point one per cent. (50.1%) in aggregate of the
issued voting share capital (or equivalent) of KDG; or

(ii)           after
a Permitted Exit, any person or a group of persons acting in concert (other
than any Original Investor or combination of them) gains control of more than
30 per cent. of the issued voting share capital (or equivalent) of KDG;

acting in concert means acting
together pursuant to an agreement or understanding (whether formal or
informal).

(b)           If:

(i)            there is a sale of all or substantially all of the assets or business of
the Group; or

(ii)           a change of control occurs,

then:

 36
 

 

(A)          the Total Commitments shall
be immediately cancelled; and

(B)           all outstanding Loans,
together with accrued and unpaid interest and all other amounts accrued and
outstanding under the Finance Documents, shall become immediately due and
payable.

8.3          Mandatory
prepayment - third party receipts

(a)           In this Clause:

(i)            Net Proceeds in relation to any disposal
of an asset or any claim under any contract of insurance,  by a member of the Group, means the amount
received in Cash or Cash Equivalents (or other instruments which upon receipt
are readily convertible into Cash on reasonable commercial terms) by a member
of the Group in respect of such disposal or claim:

(A)          including the amount of any
intercompany loan repaid to continuing members of the Group;

(B)           treating any amount owing to
and set off by any purchaser of assets as consideration received in Cash;

(C)           treating consideration
initially received in a form other than Cash, Cash Equivalents or such other
instruments as being received when and if that consideration is converted into
Cash or Cash Equivalents or becomes readily so convertible on reasonable
commercial terms;

(D)          after deducting Taxes (and
amounts reasonably reserved in respect of Taxes) payable by members of the
Group in respect of that disposal; and

(E)           after deducting proper costs
and reasonable expenses (including any redundancy costs) incurred by members of
the Group directly in connection with that disposal.

(ii)           Recovery Event means:

(A)           the disposal of an asset or
business to a person who is not a member of the Group, other than:

I.             where the Net Proceeds of
the disposal of such asset are, or are committed within 12 months to be,
reinvested for use in the Group’s business within 12 months (and if committed
to be reinvested, are actually reinvested within 18 months) of receipt of such
Net Proceeds;

II.            any disposal referred to in
sub-paragraphs (i) to (iii) and (v) to (xvi) (inclusive) of Clause 19.7(b)
(Disposals); or

III.           any disposal or series of
related disposals in respect of which the Net Proceeds are less than €25,000,000;
or

(B)           a claim by a member of the
Group under any contract of insurance arising in respect of damage or
destruction of assets, other than where the Net Proceeds:

 37
 

 

I.              are, in aggregate, less than
€10,000,000 in any financial year; or

II.            are to be, or are committed
to be, applied within 12 months of the occurrence of the event giving rise to
such claim in reinstating or replacing (on a like for like basis) any asset, or
applied in defraying the loss or liability, to which the claim relates.

(b)           KDG shall ensure the immediate
application in or towards prepaying Loans of an amount equal to the Net
Proceeds from a Recovery Event (in accordance with Clause 8.9 (Application
between Facilities)). KDG must notify the Facility Agent, promptly upon
becoming obliged to procure the prepayment of Loans pursuant to this paragraph
(b), of the identity of the Borrowers which will make the prepayment, and which
Loans will be prepaid.

(c)           Any prepayment under this
Clause must be made on or before the last day of the Term(s) of the Loan(s) to
be prepaid current at the time the relevant Net Proceeds were received or
recovered.

8.4          Mandatory
prepayment - market issue

(a)           Upon any initial public
offering, listing, public offering or flotation of any share or equity
securities by KDG or any Holding Company of KDG (a Market Issue),
KDG shall (if immediately prior to receiving the Net Consideration from the
Market Issue the ratio of Consolidated Senior Net Borrowings to Consolidated
EBITDA for the most recent Test Period in respect of which a Compliance
Certificate has been delivered (the relevant test period)
is greater than or equal to 2:1), subject to paragraph (e) and (f) below ensure
that an amount equal to:

(i)            fifty per cent. of such Net
Consideration; or

(ii)           such lower percentage of the
Net Consideration which, after application in accordance with this paragraph
(a), would have resulted in the ratio of Consolidated Senior Net Borrowings to
Consolidated EBITDA for
the relevant test period (calculated as if Consolidated Senior Net Borrowings
for that relevant test period were not undertaken by the amount of the Net
Consideration to be applied) to be 2:1,

shall
be applied in or towards repayment or prepayment of the Loans (in accordance
with Clause 8.9 (Application between Facilities)).

(b)           KDG must notify the Facility
Agent, promptly upon becoming obliged to procure the prepayment of Loans
pursuant to this Clause 8.4, of the identity of the Borrower(s) which will make
the prepayment, and which Loans will be prepaid.

(c)           For the purposes of this
Clause, Net Consideration means the Cash or
Cash Equivalents (or other instruments which upon receipt are readily
convertible into Cash on reasonable commercial terms) received by KDG or the
Holding Company of KDG (in each case) that issued the shares or equity
securities constituting the Market Issue after deducting fees, expenses and
Taxes (and amounts reasonably reserved in respect of Taxes) payable by members
of the Group in respect of the Market Issue.

(d)           Any prepayment under this
Clause must be made on or before the last day of the then current Term(s) of
the Loans in which the Net Consideration is received.

(e)           KDG will not be required to
apply such Net Consideration in repayment or prepayment of the Loans to the
extent that it is applied to make Junior Debt Payments or is, or is committed
to

 38
 

 

be,
reinvested for use in the Group’s business within 12 months (and if committed
to be reinvested, is actually reinvested within 18 months) of receipt of such
Net Consideration.

(f)            This Clause 8.4 will
apply only in respect of the first Market Issue after the date of the first
Utilisation under this Agreement.

8.5          Voluntary
prepayment

(a)           Subject as provided in this
Clause, any Borrower may, by giving not less than five Business Days’
prior notice to the Facility Agent, prepay (or procure prepayment of) any Loan
at any time in whole or in part.

(b)           A prepayment of part of a Loan
must be in a minimum amount of e10,000,000 and an integral
multiple of e5,000,000 or such
lesser amount as may be outstanding or such other amount as may be agreed by
the Facility Agent (acting on the instructions of the Majority Lenders).

(c)           KDG may at any time make any
Junior Debt Payment so long as (after giving effect to such payment) the ratio
of the aggregate amount of Junior Debt Payments made since the date of this
Agreement to the aggregate amount of Relevant Senior Debt Payments made since
the date of this Agreement does not exceed the Permitted Ratio (calculated at
the time of such payment).  The Junior
Debt Payments permitted under this Clause 8.5 must not exceed e200,000,000 over
the life of the Facilities.

(d)           For the purpose of Clause 8.5(c):

(i)            Permitted Ratio means:

	
  

  	
  (A)

  	
  when the aggregate amount of Qualifying Senior Debt is less than or
  equal to €1,350,000,000, 1:1;

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
  (B)

  	
  at any other time, 1:

  	
  A

  	
  where A is the aggregate of the then outstanding Term Loans 

  
	
   

  	
   

  	
   

  	
  1,350,000,000

  	
   

  
	
   

  	
   

  	
  and the Total B Facility Commitments;

  

(ii)           Qualifying Senior Debt means the aggregate amount of all outstanding
Term Loans and the uncancelled Total B Facility Commitments (whether or not
drawn); and

(iii)          Relevant Senior Debt Payments means voluntary prepayments of Term Loans
and voluntary cancellations of the Total B Facility Commitments.

8.6          Automatic
cancellation

The Commitments of each Lender under each Facility
will be automatically cancelled at the close of business in London on the last
day of the Availability Period for that Facility to the extent undrawn at that
date.

8.7          Voluntary
cancellation

(a)           KDG may, by giving not less
than two Business Days’ prior notice to the Facility Agent, cancel the
unutilised amount of the Total Commitments in whole or in part.

(b)           Partial cancellation of the
Commitments under any Facility pursuant to this Clause must be in a minimum
amount of e10,000,000 and an
integral multiple of e5,000,000 or such lesser

 39
 

 

 

amount as may be undrawn
and uncancelled or such other amount as may be agreed by the Facility Agent
(acting on the instructions of the Majority Lenders).

(c)           Any cancellation in part of
the Commitments under any Facility pursuant to this Clause will be applied
against the Commitment of each Lender in that Facility pro rata.

8.8          Involuntary
prepayment and cancellation

(a)           If an Obligor is, or will be,
required to pay to a Lender a Tax Payment or an Increased Cost, KDG may, whilst
the requirement continues, give notice to the Facility Agent requesting
prepayment by the relevant Borrower of that Lender’s share of the affected
Loans utilised by that Borrower and cancellation of the corresponding
Commitments of that Lender.

(b)           After notification under
paragraph (a) above:

(i)            that Borrower must repay or prepay that Lender’s share in each affected
Loan utilised by it on the date specified in paragraph (c) below; and

(ii)           those Commitments of that Lender will be immediately cancelled.

(c)           The date for repayment or
prepayment of a Lender’s share in a Loan will be the last day of the current
Term for that Loan or, if earlier, the date specified by KDG in its
notification.

8.9          Application
between Facilities

(a)           Any amount to be applied in
prepayment of Loans (other than under Clause 8.1 (Mandatory prepayment -
illegality) or 8.8 (Involuntary prepayment and cancellation)) and any amount
applied in prepayment or early redemption of any External Facility Loan (other
than under provisions equivalent to Clause 8.1 (Mandatory prepayment -
illegality) or 8.8 (Involuntary prepayment and cancellation)) must be applied:

(i)            first, in prepayment of the Term Loans
(with the A Facility Loans being prepaid in a proportion no less than pro rata to the Additional Facility Loans);

(ii)           secondly, (if the Term Loans have
been discharged in full) in prepayment of the B Facility Loans.

(b)           Any partial prepayment of the
Loans comprised in a Facility will be applied pro rata against those Loans.

(c)           Where there is a repayment or
prepayment of an A Facility Loan or an Additional Facility Loan or a mandatory
or involuntary prepayment of a B Facility Loan, the relevant Commitments will
at the same time, be permanently reduced by the amount repaid or prepaid.

(d)           Where a mandatory or
involuntary prepayment of a Loan is required but there is no Loan under the
relevant Facility to be prepaid, the relevant undrawn Commitments under that
Facility will be reduced by the amount which would have been required to be
applied in prepayment of the relevant Loans had they been outstanding at that
time.

8.10        Prepayment
of Loans

No amount of an A Facility Loan prepaid under this
Agreement may subsequently be re-borrowed.

 40
 

 

8.11        Re-borrowing
of B Facility Loans

Any voluntary prepayment of a B Facility Loan may be
re-borrowed on the terms of this Agreement. Any mandatory or involuntary
prepayment of a B Facility Loan may not be re-borrowed.

8.12        Miscellaneous
provisions

(a)           Any notice of prepayment
and/or cancellation under this Agreement is irrevocable and must specify the
relevant date(s) and the affected Loans and Commitments. The Facility Agent
must notify the Lenders promptly of receipt of any such notice.

(b)           All prepayments under this
Agreement must be made with accrued interest on the amount prepaid. No premium
or penalty is payable in respect of any prepayment except for Break Costs which
shall be paid on the date of prepayment.

(c)           The Majority Lenders may agree
a shorter notice period for a voluntary prepayment or a voluntary cancellation.

(d)           No prepayment or cancellation
is allowed except in accordance with the express terms of this Agreement.

(e)           No amount of the Total
Commitments cancelled under this Agreement may subsequently be reinstated.

9.             INTEREST

9.1          Calculation
of interest

The rate of interest on each Loan for each Term is the
percentage rate per annum equal to the aggregate of the applicable:

(a)           Margin;

(b)           EURIBOR; and

(c)           Mandatory Cost.

9.2          Payment
of interest

Except where it is provided to the contrary in this
Agreement, each Borrower must pay accrued interest on each Loan made to it on
the last day of each Term and also, if the Term is longer than six months, on
the dates falling at six-monthly intervals after the first day of that Term.

9.3          Margin
adjustments

(a)           Subject as set out below, the
Margin for Facilities A and B will be calculated by reference to the table
below and the information set out in each Compliance Certificate delivered
after the first anniversary of the date of this Agreement:

 41
 

 

 

	
  Column 1

  	
   

  	
  Column 2

  	
   

  
	
  Ratio of Consolidated Senior Net Borrowings to

  Consolidated EBITDA

  	
   

  	
  Margin

  (per cent. per annum)

  	
   

  
	
  Greater than 4:1

  	
   

  	
   

  	
  2.00

  	
   

  
	
  Less than or equal to 4:1, but greater than 3.5:1

  	
   

  	
   

  	
  1.875

  	
   

  
	
  Less than or
  equal to 3.5:1

  	
   

  	
   

  	
  1.75

  	
   

  

(b)           Any adjustment to
the Margin pursuant to paragraph (a) above shall be effective from the date
falling 5 Business Days after the date of delivery of the relevant Compliance
Certificate and applicable accounts.

(c)           For so long as:

(i)            KDG is in default of its
obligation under this agreement to provide a Compliance Certificate; or

(ii)           an Event of Default is
outstanding,

the Margin for Facilities A and B will be 2.00 per
cent. per annum, provided that once KDG has provided the outstanding Compliance
Certificate or the Event of Default is no longer outstanding (as the case may
be), that Margin shall revert to the applicable Margin calculated in accordance
with paragraph (a) above.

(d)           If the Margin has
been reduced under this Clause in reliance on a Compliance Certificate, but the
subsequent audited financial statements of KDG do not confirm the reduction,
the reduction will be reversed with retrospective effect. The Margin will
instead be that calculated by reference to the relevant audited financial
statements of KDG. If, in this event, any amount of interest has been paid by a
Borrower on the basis of the Compliance Certificate, that Borrower must pay to
the Facility Agent, within three Business Days of demand, any shortfall in the
amount which would have been paid to the Lenders if the Margin had been
calculated by reference to the relevant audited financial statements.

9.4          Interest
on overdue amounts

(a)           If an Obligor fails to pay any
amount payable by it under the Finance Documents, it must immediately on demand
by the Facility Agent pay interest on the overdue amount from its due date up
to the date of actual payment, both before, on and after judgment.

(b)           Interest on an overdue amount
is payable at a rate determined by the Facility Agent to be one per cent. per
annum above the rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted a Loan having the same
designation as the Loan or Facility to which the overdue amount is in the
reasonable opinion of the Facility Agent referable. For this purpose, the
Facility Agent (acting reasonably) may:

(i)            select successive Terms of any duration up to three months; and

(ii)           determine the appropriate Rate Fixing Day for that Term.

(c)           Notwithstanding
paragraph (b) above, if the overdue amount is a principal amount of a Loan
and becomes due and payable prior to the last day of its current Term, then:

 42
 

 

(i)            the first Term for that overdue amount will be the unexpired portion of
that Term; and

(ii)           the rate of interest on the overdue amount for that first Term will be
one per cent. per annum above the rate then payable on that Loan.

After the expiry of the first Term for that overdue
amount, the rate on the overdue amount will be calculated in accordance with
paragraph (b) above.

(d)           Interest (if unpaid) on an
overdue amount will be compounded with that overdue amount at the end of each
of its Terms but will remain immediately due and payable.

9.5          Notification
of rates of interest

The Facility Agent must promptly notify each relevant
Party of the determination of a rate of interest under this Agreement.

10.          TERMS

10.1        Selection
– A Facility Loans and Add-On Facility Loans

(a)           Each A Facility Loan and Add-On
Facility Loan has successive Terms.

(b)           Each Borrower must select the
first Term for an A Facility Loan in the relevant Request and each subsequent
Term in an irrevocable notice received by the Facility Agent not later than
11.00 a.m. one Business Day before the Rate Fixing Day for that Term. Each
Term for an A Facility Loan and Add-On Facility Loan will start on its
Utilisation Date or on the expiry of its preceding Term.

(c)           If a Borrower fails to select
a Term for an outstanding A Facility Loan or Add-On Facility Loan under
paragraph (b) above, that Term will, subject to the other provisions of
this Clause, be three months.

(d)           Subject to the following
provisions of this Clause each Term for an A Facility Loan and Add-On Facility
Loan will be one, two, three or six months or, any other period shorter than
six months agreed by KDG and the Facility Agent or (in respect of any Facility)
any other period agreed by KDG and the Lenders under that Facility.

10.2        Selection
- B Facility Loans

(a)           Each B Facility Loan has one
Term only.

(b)           A Borrower must select the
Term for a B Facility Loan in the relevant Request.

(c)           Subject to the following
provisions of this Clause, each Term for a B Facility Loan will be one, two,
three or six months or any other period shorter than six months agreed by KDG
and the Facility Agent or any other period agreed by KDG and the Lenders.

10.3        Consolidation

On the last day of the first Term for an A Facility
Loan to a Borrower, that Loan will be consolidated with each other Loan under
the same Facility made to that Borrower.

 43

 

10.4                        No overrunning the final maturity date

If a Term for any A Facility Loan, B Facility Loan or
Add-On Facility Loan would otherwise extend beyond its Final Maturity Date, it
will be shortened so that it ends on its Final Maturity Date.

10.5                        Other adjustments

(a)                                  KDG may, in a
selection notice for an outstanding A Facility Loan given pursuant to Clause 10.1(b)
(Selection – A Facility Loans), request the splitting of that A Facility Loan,
(as applicable) provided that:

(i)                                     no A Facility Loan may have a principal amount of less than e10,000,000;

(ii)                                  no more than seven A Facility Loans may be outstanding at any time; and

(iii)                               each A Facility Loan requested in the selection notice must have an
Interest Period complying with Clause 10.1(d) (Selection – A Facility Loans).

(b)                                 The Facility
Agent and KDG may enter into such other arrangements as they may agree for the
adjustment of Terms and the consolidation and/or splitting of Loans, provided
that no Term in excess of 6 months may be agreed by the Facility Agent without
the prior agreement of all the Lenders.

10.6                        Notification

The Facility Agent must notify the relevant Borrower
and the Lenders of the duration of each Term promptly after ascertaining its
duration.

10.7                        Terms during syndication

Notwithstanding any other provision of this Agreement,
until the date falling six months after the date of this Agreement and for the
purposes of syndication only, the Facility Agent may (acting reasonably)
require a Borrower to choose a Term of one month or less for each Loan borrowed
by it.

11.                               MARKET DISRUPTION

11.1                        Failure of a Reference Bank to supply a rate

If EURIBOR is to be calculated by reference to the
Reference Banks but a Reference Bank does not supply a rate by 12.00 noon
(local time) on a Rate Fixing Day, the applicable EURIBOR will, subject as
provided below, be calculated on the basis of the rates of the remaining
Reference Banks.

11.2                        Market disruption

(a)                                  In this Clause,
each of the following events is a market disruption event:

(i)                                     EURIBOR is to be calculated by reference to the Reference Banks but no,
or (where there is more than one Reference Bank) only one, Reference Bank
supplies a rate by 12.00 noon (local time) on the Rate Fixing Day; or

(ii)                                  the Facility Agent receives by close of business on the Rate Fixing Day
notification from Lenders whose shares in the relevant Loan exceed 50 per
cent. of that Loan that

 44
 

 

the cost to them of
obtaining matching deposits in the relevant interbank market is in excess of
EURIBOR for the relevant currency and Term.

(b)                                 The Facility
Agent must promptly notify KDG and the Lenders of a market disruption event.

(c)                                  After
notification under paragraph (b) above, the rate of interest on each
Lender’s share in the affected Loan for the relevant Term will be the aggregate
of the applicable:

(i)                                     Margin;

(ii)                                  rate notified to the Facility Agent by that Lender as soon as
practicable, and in any event before interest is due to be paid in respect of
that Term, to be that which expresses as a percentage rate per annum the cost
to that Lender of funding its share in that Loan from whatever source it may
reasonably select; and

(iii)                               Mandatory Cost.

11.3                        Alternative basis of interest or funding

(a)                                  If a market
disruption event occurs and the Facility Agent or KDG so requires, KDG and the
Facility Agent must enter into negotiations for a period of not more than 30
days with a view to agreeing an alternative basis for determining the rate of
interest and/or funding for the affected Loan and any future Loan.

(b)                                 Any alternative
basis agreed will be, with the prior consent of all the Lenders, binding on all
the Parties.

12.                               TAXES

12.1                        Tax gross-up

(a)                                  Each Obligor must
make all payments to be made by it under the Finance Documents without any Tax
Deduction, unless a Tax Deduction is required by law.

(b)                                 If an Obligor or
a Lender is aware that an Obligor must make a Tax Deduction (or that there is a
change in the rate or the basis of a Tax Deduction), it must promptly notify
the Facility Agent. The Facility Agent must then promptly notify the affected
Parties.

(c)                                  If a Tax
Deduction is required by law or by a decision of a taxing authority to be made
by an Obligor or the Facility Agent, the amount of the payment due from the
Obligor will be increased to an amount which (after making the Tax Deduction)
leaves an amount paid free and clear of Tax equal to the payment which would
have been due if no Tax Deduction had been required.

(d)                                 If an Obligor is
required to make a Tax Deduction, that Obligor must make the minimum Tax
Deduction allowed by law and must make any payment required in connection with
that Tax Deduction within the time allowed by law.

(e)                                  Within 30 days of
making a Tax Deduction or a payment required in connection with a Tax
Deduction, the Obligor making that Tax Deduction or payment must deliver to the
Facility Agent for the relevant Finance Party evidence satisfactory to that
Finance Party (acting reasonably) that the Tax Deduction has been made or (as
applicable) the appropriate payment has been paid to the relevant taxing
authority.

 45
 

 

12.2                        Tax indemnity

(a)                                  Except as
provided below, each Borrower must indemnify a Finance Party against any loss,
liability or cost which that Finance Party (in its absolute discretion)
determines will be or has been suffered (directly or indirectly) by that
Finance Party for or on account of Tax in relation to a payment received or
receivable (or any payment deemed to be received or receivable) from that
Borrower under a Finance Document.

(b)                                 Paragraph (a)
above does not apply to any Tax assessed on a Finance Party under the laws of
the jurisdiction in which:

(i)                                     that Finance Party is incorporated or, if different, in which that
Finance Party is treated as resident for tax purposes; or

(ii)                                  that Finance Party’s Facility Office is located in respect of amounts
received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference
to the net income received or receivable by that Finance Party (however, any
payment deemed to be received or receivable, including any amount treated as income
but not actually received by the Finance Party, such as a Tax Deduction, will
not be treated as net income received or receivable for this purpose).

(c)                                  A Finance Party
making, or intending to make, a claim under paragraph (a) above must
promptly notify KDVS of the event which will give, or has given, rise to the
claim.

12.3                        Tax Credit

If an Obligor makes a Tax Payment and the relevant
Finance Party (in its absolute discretion) determines that:

(a)                                  a Tax Credit is attributable to that Tax Payment; and

(b)                                 it has used and retained that Tax Credit,

the Finance Party must pay an amount to the Obligor
which that Finance Party determines (in its absolute discretion) will leave it
(after that payment) in the same after-tax position as it would have been in if
the Tax Payment had not been required to be made by the Obligor.

12.4                        Stamp taxes

KDVS must pay and indemnify each Finance Party against
any stamp duty, registration or other similar Tax payable in connection with
the entry into, performance or enforcement of any Finance Document (other than
in respect of a Transfer Certificate).

12.5                        Value added taxes

(a)                                  Any amount
payable under a Finance Document by a Party to any Finance Party is exclusive
of any value added tax or any other Tax of a similar nature which might be
chargeable in connection with that amount. If any such Tax is chargeable on any
supply by a Finance Party to any Party in connection with a Finance Document,
that Party must pay to the Finance Party (in addition to and at the same time
as paying that amount) an amount equal to the amount of that Tax.

 46
 

 

(b)                                 Where a Finance
Document requires any Party to reimburse a Finance Party for any costs or
expenses, that Party shall also at the same time pay and indemnify the Finance
Party against all value added tax or other Tax of a similar nature incurred by
the Finance Party in respect of those costs or expenses to the extent that the
Finance Party is not entitled to repayment of or a credit for the relevant Tax.

12.6                        German thin capitalisation confirmation
letter

(a)                                  For the purposes
of this Clause 12.6 (German thin capitalisation confirmation letter), Decrees means the decrees issued by the German Federal
Ministry of Finance (Bundesfinanzministerium)
on 15 July 2004 (IV A2-S27 42a-20/04) and on 22 July 2005 (IV B7 S – 2742a
31/05) in relation to Section 8a of the Corporation Tax Act (KStG).

(b)                                 For the purposes
of providing evidence to the German tax authorities of the absence of any
tax-detrimental recourse situation of the Lender against a major shareholder of
a Borrower or related party of such major shareholder, as set out in the
Decrees, each Lender agrees, subject to compliance by the Obligors with the
provisions of paragraphs (c) and (h) below, to deliver to the respective
Borrower being subject to German income tax (for the purposes of this Clause 12.6
(German thin capitalisation confirmation letter), each a German
Borrower) and KDG no later than 30 Business Days after:

(i)                                     the Utilisation Date;

(ii)                                  the date of each accession of a German
Borrower to this Agreement as Additional Borrower pursuant to Clause 27.7
(Additional Borrowers);

(iii)                               the date of each assignment or transfer by
any Lender of its rights and obligations under the Finance Documents pursuant
to Clause 27.2 (Assignments and transfers by Lenders) (in such case, to be
provided by the new Lender);

(iv)                              the date of an amendment to this Agreement or
any Security Document; and

(v)                                 the date of each Add-On Facility Accession Agreement
(in such case, to be provided by any new Add-On Lender),

a completed bank
certificate (the Bank Certificate) in the form set
out in Schedule 15 (Form of German thin capitalisation letter) (Bescheinigung im Sinne der Rdnr. 5 des BMF-Schreibens vom 22. Juli 2005
(BStBl. I 2005, S. 829) issued by the German Federal Ministry of
Finance (Bundesministerium für Finanzen) on 20
October 2005 (the Sample).

(c)                                  Each Obligor
undertakes to inform the respective Borrower without undue delay if it becomes
aware of any incorrectness or incompleteness of a Bank Certificate given or to
be given from time to time by each Lender pursuant to paragraph (b) above.

(d)                                 The delivery of a
Bank Certificate shall not prejudice the rights of the Security Agent or the
Lenders under this Agreement or any other Finance Document. In the event of any
inconsistencies between the terms of a Bank Certificate and the terms of an
individual Security Document, the terms of the relevant Security Document shall
prevail. A Bank Certificate shall under no circumstances constitute a waiver or
release of any Security Interest.

(e)                                  Each Obligor
confirms to each Lender that:

 47
 

 

(i)                                     each Bank Certificate is given by each Lender
solely for the purpose of delivery to the competent tax authorities of the
German Borrowers and KDG to assist the German Borrowers and KDG in the
administration of their tax affairs and not for any other purpose;

(ii)                                  the Lenders are not responsible for examining
the Obligors’ tax position and that the Bank Certificates do not guarantee the
achievement of a specific result or conclusion for tax purposes;

(iii)                               each Bank Certificate is addressed to and is
solely for the benefit of the German Borrowers and KDG in relation to this
Agreement; and

(iv)                              no Bank Certificate creates third party
rights of any kind.

(f)                                    Each Lender
confirms that at the Utilisation Date or, in case of assignments and transfers
by Lenders pursuant to Clause 27.2 (Assignments and transfers by Lenders), at
the date of such assignment and transfer, that the Facility made available by
that Lender is solely secured by the Security Interests under the Security
Documents as set forth in Schedule 6 (Security Documents).  If and to the extent a Lender uses general
terms and conditions of business (Allgemeine
Geschäftsbedingungen) pursuant to which additional Security is
granted by a Borrower or KDG for the benefit of that Lender, the relevant
Lender, the Borrower and KDG hereby expressly agree that the Facility made
available by that Lender shall not be secured by such security.

(g)                                 It is the common
understanding of the Parties that no Party is providing any legal and/or tax
advice to any other Party with respect to this Agreement, in particular with
respect to the application of section 8a of the KStG and the interpretation of
the Decrees, and that it is the responsibility of each Party, in particular
each Obligor, to consult its own legal and tax advisers.

(h)                                 No Lender shall
be liable as a result of the delivery of a Bank Certificate.  KDVS agrees to indemnify each Lender with
respect to any claims that might be made against any Lender with respect to any
Bank Certificate by any third party (including but not limited to reasonable costs
and legal fees), the Obligors being in this case jointly and severally liable
to the respective Lender for such indemnification.  Each Lender shall enable the Obligors to
cooperate with them in connection with the defence of such claim.  No Obligor will raise any indemnity or damage
claims based on, or in connection with an incorrect and / or incomplete Bank
Certificate against any Lender.

(i)                                     For the avoidance
of doubt:

(i)                                     No Lender shall be obliged to disclose to any
other person any confidential information regarding its business or any other
information relating to its tax affairs or tax computations (including, without
limitation, its tax returns or its calculations) as a result of the operation
of this Clause 12.6 (German thin capitalisation confirmation letter).

(ii)                                  No Lender shall be obliged to deliver any
information or make any statements pursuant to this Clause 12.6 (German thin capitalisation
confirmation letter) if by doing so it would contravene the terms of any
applicable law or any notice, direction or requirement of any governmental or
regulatory authority (whether or not having the force of law).

 48
 

 

(iii)                               Each German Borrower and KDG may disclose the
existence and contents of a Bank Certificate to its professional advisers, its
Affiliates, as required by applicable law or regulation and to any tax,
regulatory or other governmental authority asserting jurisdiction over it.

(j)                                     Each Obligor herewith
releases each Lender from the banking confidentiality (Bankgeheimnis)
for purposes of the Bank Certificates.

(k)                                  To the extent:

(i)                                     the German tax authorities require a Borrower or KDG to provide, in
addition to the Bank Certificate, further evidence or information; or

(ii)                                  if as a consequence of:

(A)                              a change in law;

(B)                                a published decision of a general nature (such as a revenue ruling or
decree) of a German tax authority; or

(C)                                a decision of a German fiscal court,

payments under the Facility are re-characterised as
constructive dividends under the German thin capitalisation rules,

each Lender shall consider in good faith to what
extent it can assist such Borrower and KDG to provide such evidence or
information or to avoid such re-characterisation.

13.                               INCREASED COSTS

13.1                        Increased Costs

Except as provided below in this Clause, KDVS must pay
to a Finance Party the amount of any Increased Cost incurred by that Finance
Party or any of its Bank Affiliates as a result of:

(a)                                  the introduction of, or any change in, or any change in the
interpretation, administration or application of, any law or regulation; or

(b)                                 compliance with any law or regulation,

made after the date of this Agreement.

13.2                        Exceptions

KDVS need not make any payment for an Increased Cost
to the extent that the Increased Cost is:

(a)                                  compensated for under another Clause or would have been but for an
exception to that Clause;

(b)                                 a Tax assessed on a Finance Party under the laws of the jurisdiction in
which:

(i)                                     that Finance Party is incorporated or, if different, in which that
Finance Party is treated as resident for tax purposes; or

 49
 

 

(ii)                                  that Finance Party’s Facility Office is located in respect of amounts
received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference
to the net income received or receivable by that Finance Party (however, any
payment deemed to be received or receivable, including any amount treated as
income but not actually received by the Finance Party, such as a Tax Deduction,
will not be treated as net income received or receivable for this purpose); or

(c)                                  attributable to a Finance Party or its Bank Affiliate wilfully failing
to comply with any law or regulation.

13.3                        Claims

A Finance Party intending to make a claim for an
Increased Cost must notify KDVS promptly of the circumstances giving rise to,
and the amount of, the claim.

14.                               MITIGATION AND CONDUCT OF BUSINESS

14.1                        Mitigation

(a)                                  Each Finance
Party shall, in consultation with and at the request of KDVS, take all
reasonable steps to mitigate any circumstances which arise and which result or
would result in:

(i)                                     any Tax Payment or Increased Cost being payable to that Finance Party;

(ii)                                  that Finance Party being able to exercise any right of prepayment and/or
cancellation under this Agreement by reason of any illegality; or

(iii)                               that Finance Party incurring any cost of complying with the minimum
reserve requirements of the European Central Bank,

including transferring its rights and obligations
under the Finance Documents to a Bank Affiliate or to another Lender or
changing its Facility Office.

(b)                                 Paragraph (a)
does not in any way limit the obligations of any Obligor under the Finance
Documents.

(c)                                  KDVS must
indemnify each Finance Party for all costs and expenses reasonably incurred by
that Finance Party as a result of any step taken by it under this Clause.

(d)                                 A Finance Party
is not obliged to take any step under this Clause if, in the opinion of that
Finance Party (acting reasonably), to do so might be prejudicial to it.

14.2                        Conduct of business by a Finance Party

No term of the Finance Documents will:

(a)                                  interfere with the right of any Finance Party to arrange its affairs
(Tax or otherwise) in whatever manner it thinks fit;

(b)                                 oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it in respect of Tax or the extent, order
and manner of any claim; or

 50
 

 

(c)                                  oblige any Finance Party to disclose any information relating to its
affairs (Tax or otherwise) or any computation in respect of Tax.

15.                               PAYMENTS

15.1                        Place

Unless a Finance Document specifies that payments
under it are to be made in another manner, all payments by a Party (other than
the Facility Agent) under the Finance Documents must be made to the Facility
Agent to its account at such office or bank in the principal financial centre
of a Participating Member State or London, as it may notify to that Party for
this purpose by not less than five Business Days’ prior notice.

15.2                        Funds

Payments under the Finance Documents must (unless
otherwise expressly provided) be made to the Facility Agent for value on the
due date at such times and in such funds as the Facility Agent may specify to
the Party concerned as being customary at the time for the settlement of
transactions in the relevant currency in the place for payment.

15.3                        Distribution

(a)                                  Each payment
received by the Facility Agent under the Finance Documents for another Party
must, except as provided below, be made available by the Facility Agent to that
Party by payment (as soon as practicable after receipt) to its account with
such office or bank in the principal financial centre of a Participating Member
State or London, as it may notify to the Facility Agent for this purpose by not
less than five Business Days’ prior notice.

(b)                                 The Facility
Agent may apply any amount received by it for an Obligor in or towards payment
(as soon as practicable after receipt) of any amount due from that Obligor
under the Finance Documents or in or towards the purchase of any amount of any
currency to be so applied.

(c)                                  Where a sum is
paid to the Facility Agent under this Agreement for another Party, the Facility
Agent is not obliged to pay that sum to that Party until it has established
that it has actually received it. However, the Facility Agent may assume that
the sum has been paid to it, and, in reliance on that assumption, make
available to that Party a corresponding amount. If it transpires that the sum
has not been received by the Facility Agent, that Party must immediately on
demand by the Facility Agent refund any corresponding amount made available to
it together with interest on that amount from the date of payment to the date
of receipt by the Facility Agent at a rate calculated by the Facility Agent to
reflect its cost of funds.

15.4                        No set-off or counterclaim

All payments made by an Obligor under the Finance
Documents must be made without set-off or counterclaim.

15.5                        Business Days

(a)                                  If a payment
under the Finance Documents is due on a day which is not a Business Day, the
due date for that payment will instead be the next Business Day in the same
calendar month (if there is one) or the preceding Business Day (if there is
not) or whatever day the Facility Agent determines is market practice.

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(b)                                 During any
extension of the due date for payment of any principal under this Agreement
interest is payable on that principal at the rate payable on the original due
date.

15.6                        Partial payments

(a)                                  If the Facility
Agent receives a payment insufficient to discharge all the amounts then due and
payable by the Obligors under this Agreement, the Facility Agent must apply
that payment towards the obligations of the Obligors under this Agreement in
the following order:

(i)                                     first, in or towards payment pro
rata of any unpaid fees, costs and expenses of the Administrative Parties;

(ii)                                  secondly, in or towards payment pro
rata of any accrued interest or fees due but unpaid under this Agreement;

(iii)                               thirdly, in or towards payment pro
rata of any principal amount due but unpaid under the Facilities;

(iv)                              fourthly, in or towards payment pro
rata of any other sum due but unpaid under the Finance Documents.

(b)                                 The Facility
Agent must, if so directed by the Majority Lenders, vary the order set out in
sub-paragraphs (ii) to (iv) of paragraph (a) above.

(c)                                  This Clause will
override any appropriation made by an Obligor.

15.7                        Timing of payments

If a Finance Document does not provide for when a
particular payment is due, that payment will be due within three Business Days
of demand by the relevant Finance Party.

15.8                        Security Agent as Joint Creditor

(a)                                  Each of the
Obligors and each of the Finance Parties agree that the Security Agent shall be
the joint creditor (together with the relevant Finance Party) of each and every
obligation of any Obligor towards each of the Finance Parties under this
Agreement, and that accordingly the Security Agent will have its own separate
and independent right to demand performance by the relevant Obligor of those
obligations. However, any discharge of any such obligation to one of the
Security Agent or the relevant Finance Party shall, to the same extent,
discharge the corresponding obligation owing to the other.

(b)                                 Without limiting
or affecting the Security Agent’s rights against any Obligor (whether under
this paragraph or under any other provision of the Finance Documents), the
Security Agent agrees with each other Finance Party (on a several and divided
basis) that, subject as set out in the next sentence, it will not exercise its
rights as a joint creditor with a Finance Party except with the consent of the
relevant Finance Party. However, for the avoidance of doubt, nothing in the
previous sentence shall in any way limit the Security Agent’s right to act in
the protection or preservation of rights under or to enforce any Security
Document as permitted by this Agreement, the Priority Agreement and/or the
relevant Security Document (or to do any act reasonably incidental to any of
the foregoing).

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16.                               REPRESENTATIONS AND WARRANTIES

16.1                        Representations and warranties

Save where otherwise provided, the representations and
warranties set out in this Clause are made to each Finance Party by each
Obligor on behalf of itself and on behalf of each Subsidiary of such Obligor
other than an Unrestricted Subsidiary. 
References in this Clause to it or its include, unless the context otherwise requires, each
Obligor and each Subsidiary (other than Dormant Subsidiaries or Unrestricted
Subsidiaries) of that Obligor.

16.2                        Status

(a)                                  It is a limited
partnership or a limited liability company, duly incorporated or established
and validly existing under the laws of its jurisdiction of incorporation or, as
the case may be, establishment.

(b)                                 It has the power
to own its assets and carry on its business as it is being and will be
conducted.

(c)                                  As at the date of
this Agreement only, no administrator, liquidator, administrative receiver or
similar officer has been appointed over it or any of its assets (and no
petition is pending or documents have been filed with a court or any registrar
for its winding-up, administration or dissolution or seeking relief under any
applicable bankruptcy, insolvency, company or similar law) save in each case in
respect of any solvent liquidation pursuant to a Permitted Reorganisation and
no other analogous step or procedure has been taken in any jurisdiction.

16.3                        Powers and authority

It has the power to enter into and perform, and has
taken all necessary action to authorise the entry into and performance of, the
respective Transaction Documents to which it is or will be a party and the
transactions contemplated by those Transaction Documents.

16.4                        Legal validity

(a)                                  Each Transaction
Document to which it is a party is, subject to the Reservations, its legally
binding, valid and enforceable obligation.

(b)                                 Subject to the Reservations,
each Security Document to which it is a party creates the Security Interests
which that Security Document purports to create and such Security Interests are
valid and effective.

16.5                        Non-conflict

The entry into and performance by it of, and the
transactions contemplated by, the Transaction Documents to which it is or will
be party do not:

(a)                                  conflict with any law or regulation applicable to it; or

(b)                                 conflict with its constitutional documents; or

(c)                                  conflict with any document which is binding upon it or any of its assets
or constitute a default or termination event (however described) under any such
document, in each case to an extent or in a manner which has a Material Adverse
Effect or is reasonably

 53

 

likely to result in any liability on the part of any
Finance Party to any third party or require the creation of any Security
Interest over any asset in favour of a third party.

16.6                        No default

(a)                                  As at the date of
this Agreement, no Default is outstanding or is reasonably likely to result
from the entry into, the performance of, or any transaction contemplated by,
any Transaction Document.

(b)                                 As at the date of
this Agreement, no other event or circumstance is outstanding which constitutes
(or with the expiry of a grace period, the giving of notice, the making of any
determination or the satisfaction of any other applicable condition will
constitute) a default or termination event (however described) or an event
resulting in an obligation to create security under any document which is
binding on it or any of its assets in each case to an extent or in a manner
which has a Material Adverse Effect.

(c)                                  No Event of
Default is outstanding.

16.7                        Authorisations

As at the date of this Agreement, except for registration
where required of each Security Document in any statutory register, all
authorisations required by it:

(a)                                  in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by, the Transaction
Documents have been obtained or effected (as appropriate) and are in full force
and effect; and

(b)                                 to carry on its business in the ordinary course as it is being conducted
have been obtained or effected (as appropriate) and are in full force and
effect where failure to do so has a Material Adverse Effect.

16.8                        Base Financial Statements

As at the date of this Agreement, the financial
statements referred to in paragraph (a) of the definition of Base Financial
Statements:

(a)                                  were prepared in accordance with the Accounting Principles;

(b)                                 as at the date such financial statements were prepared, accurately
reflect the actual net worth, financial position and earnings, as well as the
liabilities and profits of the Group; and

(c)                                  have been prepared in accordance with generally accepted accounting
principles, in conformity with all applicable accounting, valuation and
depreciation principles, and in compliance with the principles of accounting
and valuation consistency,

subject in each case to the restatement of the
accounts to reflect the treatment of the management equity participation
programme under the IFRS accounting rules, which will reflect distributions
under that plan as compensation expenses and record that programme as a future
liability of KDG.

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16.9                        Documents

As at the date of this Agreement, the documents
delivered to the Facility Agent by or on behalf of any Obligor on or before
that date pursuant to Clauses 4.1 (Conditions precedent) were genuine (or,
in the case of copy documents, were true, complete and accurate copies of
originals which were genuine), were up-to-date and in full force and effect (or
if a copy, the original was up-to-date and in full force and effect) in each
case as at the date of delivery and have not subsequently been amended other
than as permitted by the terms of this Agreement.

16.10                 Financial
statements

(a)                                  Its latest
Accounts supplied under this Agreement (taken together with any Reconciliation
Statement accompanying them):

(i)                                     have been prepared in accordance with the Accounting Principles used in
preparing the Base Case Model consistently applied (except as disclosed to the
contrary in those Accounts, and, to the extent required under Clause 17.2(f)
(Form and scope of financial statements), as reconciled to the Accounting
Principles in the Reconciliation Statement accompanying those Accounts); and

(ii)                                  give a true and fair view of (if audited) or fairly present (if
unaudited) its consolidated financial condition as at the Accounting Date to
which they were drawn up, and the consolidated results of operations for the
Accounting Period for which they were drawn up,

subject in each case to the restatement of the
accounts to reflect the treatment of the management equity participation
programme under the IFRS accounting rules, which will reflect distributions
under that plan as compensation expenses and record that programme as a future
liability of KDG.

(b)                                 As at the date of
delivery the budgets and forecasts delivered under this Agreement were arrived
at after careful consideration, have been prepared in good faith on the basis
of recent historical information and on the basis of assumptions which were
believed to be reasonable as at the date they were prepared and delivered and
were not misleading in any material respect.

16.11                 Information
Package

In the case of KDG and KDVS only:

(a)                                  as at the date of this Agreement and on the Syndication Date, the Base
Case Model has been prepared on a basis consistent with the Accounting
Principles as used in preparing the Base Financial Statements consistently
applied;

(b)                                 as at the date the Information Package (or part of it) is released to
the Mandated Lead Arranger for distribution in connection with syndication, and
as at each Syndication Date:

(i)                                     all expressions of opinion or intention made by a member of the Group
contained in the Information Package were made after careful consideration and
were believed to be reasonable as at the date at which they are stated to be
given;

 55
 

 

(ii)                                  all forecasts and projections made by a member of the Group contained in
the Information Package were prepared on the basis of recent historical
information and assumptions which were believed to be reasonable at that date
and were not misleading in any material respect at that date (it being
understood that such projections are subject to significant uncertainties and
contingencies many of which are beyond the control of KDG and/or KDVS);

(iii)                               all factual information contained in the Information Package (Relevant Information) was true and accurate in all material
respects as at its date or (if appropriate) as at the date (if any) at which it
is stated to be given;

(iv)                              the Relevant Information did not omit as at its date any information the
omission of which would make the Relevant Information untrue or misleading in
any material respect as at its date; and

(v)                                 as at the Syndication Date nothing has occurred since the date of the
Information Package which renders any of the Relevant Information, expressions
of opinion or intention by a member of the Group, projections or conclusions by
a member of the Group contained in the Information Package inaccurate or
misleading (or in the case of expressions of opinion, conclusions or
projections, other than believed to be fair and reasonable) in any material
respect in the context of the transactions contemplated by the Finance
Documents,

provided that each of the representations set out in
sub-paragraphs (iii) to (v) (inclusive) above in relation to Relevant
Information will be qualified by the awareness of KDG and/or KDVS after due enquiry;

(c)                                  KDG may make specific written disclosures in reasonable detail to the
Facility Agent to be received by the Facility Agent at least five Business Days
prior to the Syndication Date against paragraphs (a) and (b) above for the
purpose of their repetition as at the Syndication Date and paragraphs (a) and
(b) will be deemed to be qualified by those written disclosures.

16.12                 Litigation
etc.

(a)                                  As at the date of
this Agreement, no litigation, arbitration, expert determination, alternative
dispute resolution or administrative proceedings are current or, to its
knowledge, pending or threatened, which is reasonably likely to be adversely
determined and if adversely determined, would have a Material Adverse Effect or
result in a liability against members of the Group in an amount which exceeds e5,000,000.

(b)                                 As at the date of
this Agreement only, it has not breached any law or regulation which breach
would have a Material Adverse Effect.

(c)                                  As at the date of
this Agreement only, no labour disputes are current or, to its knowledge,
threatened which have or would have a Material Adverse Effect.

16.13                 Taxes

(a)                                  It is not overdue
in the filing of any Tax returns or filings relating to any material amount of
Tax where the consequences of such late filing are reasonably likely to have a
Material Adverse Effect.

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(b)                                 It is not overdue
in the payment of any amount of Tax except where:

(i)                                     payment of those Taxes is being contested in good faith;

(ii)                                  adequate reserves are being maintained for those Taxes and the costs
required to contest them; and

(iii)                               failure to pay those Taxes does not have a Material Adverse Effect.

(c)                                  Save for claims
being contested in good faith and in respect of which adequate provision has
been or will be disclosed in the latest accounts, no claims or investigations
by any tax authority are being or are reasonably likely to be made or conducted
against it which are reasonably likely to result in a liability of or claim
against any member of the Group which has a Material Adverse Effect.

(d)                                 As at the date of
this Agreement, under the law of its jurisdiction of incorporation, it is not
necessary that any of the Transaction Documents be filed, recorded or enrolled
with any court or other authority in that jurisdiction (except for registration
where required of a Security Document) or that any stamp, registration, or
similar Tax be paid on or in relation to the Transaction Documents or the
transactions contemplated by the Transaction Documents or as referred to in
Clause 16.21 (Stamp duties).

(e)                                  As at the date of
this Agreement only, all amounts payable by it under the Finance Documents may
be made without any Tax Deduction.

16.14                 Intellectual
Property Rights

As at the date of this Agreement:

(a)                                  so far as it is aware after due enquiry, it is the sole legal and
beneficial owner of or has licensed to it on normal commercial terms all the
Intellectual Property Rights which are material in the context of its business
and which are required by it in order to carry on its Core Business in all
material respects as it is being conducted as at the date of this Agreement;

(b)                                 so far as it is aware after due enquiry, it has taken all formal or
procedural actions (including payment of fees) required to maintain those
Intellectual Property Rights;

(c)                                  so far as it is aware after due enquiry, none of its Intellectual
Property Rights is being infringed, nor (to its knowledge) is there any
threatened infringement of any of those Intellectual Property Rights, in any
material respect; and

(d)                                 it does not, in carrying on its business, infringe any Intellectual
Property Rights of any third party in any respect which has a Material Adverse
Effect.

16.15                 Environment

(a)                                  At the date of
this Agreement, it has obtained all Environmental Approvals required for the
carrying on of its business as currently conducted and has at all times
complied with:

(i)                                     the terms and conditions of such Environmental Approvals; and

(ii)                                  all other applicable Environmental Laws,

 57
 

 

where, in each case, if not obtained or complied with
the failure or its consequences would have a Material Adverse Effect. There are
to its knowledge no circumstances that may prevent or interfere with such
compliance in the future.

(b)                                 As at the date of
this Agreement, there is no Environmental Claim pending or formally threatened
and there are no past or present acts, omissions, events or circumstances that
would form, or are reasonably likely to form, the basis of any Environmental
Claim (including any arising out of the generation, storage, transport,
disposal or release of any dangerous substance) against any member of the Group
which are reasonably likely to be adversely determined and which, if adversely
determined, would have a Material Adverse Effect.

16.16                 Assets

(a)                                  It is the sole
legal and beneficial owner of the shares, interest and other assets which it
charges or purports to charge under any Security Document.

(b)                                 It owns or has
leased or licensed to it all material assets necessary to conduct its business
as it is being or will be conducted.

16.17                 Dormant
Subsidiaries

As at the date of this Agreement each of the companies
listed in Schedule 9 is a Dormant Subsidiary.

16.18                 Financial
Indebtedness and Security Interests

As at the date of this Agreement:

(a)                                  no member of the Group has any Financial Indebtedness outstanding which
is not permitted by the terms of this Agreement;

(b)                                 no Security Interest exists over the whole or any part of the assets of
any member of the Group except for those permitted under Clause 19.5
(Negative pledge).

16.19                 Insurance

(a)                                  As at the date of
this Agreement only, insofar as any Obligor is aware (after due enquiry) there
is no outstanding insured loss or liability incurred by it in an amount which
is e500,000 or more
which is not expected to be covered to the full extent of that loss or
liability.

(b)                                 There has been no
non-disclosure, misrepresentation or breach of any term of any Insurance which
would entitle any insurer of that Insurance to repudiate, rescind or cancel it
or to treat it as avoided in whole or in part or otherwise decline any valid
claim under it by or on behalf of any member of the Group.

(c)                                  No insurer of any
Insurance is in run-off or has entered into any insolvency proceedings except
to the extent that KDG’s insurance broker has been instructed to put in place replacement
Insurance.

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16.20                 Pari
passu ranking

As at the date of this Agreement, its payment
obligations under the Finance Documents rank at least pari passu with all its other present and future unsecured payment
obligations, except for obligations mandatorily preferred by law applying to
companies generally.

16.21                 Stamp
duties

As at the date of this Agreement only, no stamp or
registration duty or similar Tax or charge is payable in its jurisdiction of
incorporation in respect of any Finance Document other than notarial fees
payable in Germany and/or Switzerland in respect of certain of the Security
Documents.

16.22                 No
other business

As at the date of this Agreement, KDG does not conduct
any business or own any assets other than the assets and activities referred to
in Clause 19.20 (Holding Companies).

16.23                 Service
Level Agreements

As at the date of this Agreement, there is no
subsisting breach of any Service Level Agreement to which a member of the Group
is a party which has a Material Adverse Effect.

16.24                 Material
Adverse Change

As at the date of this Agreement only, there has been
no material adverse change in the assets or the consolidated financial
condition of the Group since 31 March, 2005.

16.25                 Security
Transfer Agreement

The cable network of the Group will still be
operational even if a third party were to obtain control of and remove or
switch off any part of the cable network which is not subject to a Security
Interest under the 2004 Security Transfer Agreement or the 2006 Security
Transfer Agreement (whether through a Security Interest, judgment action or
otherwise).  For these purposes operational means capable of being operated without material
cost to replace any such removed or switched-off assets or material disruption
during such replacement of removed or switched-off assets.  This representation is made on the date of
the 2006 Security Transfer Agreement in respect of the cable network in
existence at that date.

16.26                 Times
for making representations and warranties

(a)                                  Save where
otherwise specified, the representations and warranties set out in this Clause
are made by each Original Obligor on the date of this Agreement.

(b)                                 Unless a
representation and warranty is expressed to be given at or as of a specific
date or dates only, each representation and warranty is deemed to be repeated
by:

(i)                                     each Additional Borrower and KDG on the date on which that Additional
Borrower becomes a Borrower; and

(ii)                                  each Obligor on the date of each Request, on each Utilisation Date and
on the last day of each Term.

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(c)                                  When a
representation and warranty is deemed to be repeated, it is deemed to be made
by reference to the circumstances pertaining at the time of repetition.

17.                               INFORMATION COVENANTS

17.1                        Financial statements

(a)                                  KDG must supply
to the Facility Agent in sufficient copies for all the Lenders:

(i)                                     its audited consolidated financial statements for each annual Accounting
Period;

(ii)                                  only if requested by the Facility Agent on behalf of the Lenders (which
request must be given no later than 30 days before the end of the relevant
annual Accounting Period), the audited consolidated financial statements of
each Obligor for each annual Accounting Period (but, in relation to KDVS only,
this provision will only apply from and including the annual Accounting Period
ending 31 March 2008); and

(iii)                               its unaudited consolidated financial statements for each quarterly
Accounting Period.

(b)                                 All Accounts must
be supplied as soon as they are available and:

(i)                                     in the case of KDG’s annual audited consolidated Accounts, within
120 days;

(ii)                                  in the case of any other Obligor’s annual audited consolidated Accounts
if requested, within 120 days; and

(iii)                               in the case of KDG’s unaudited consolidated quarterly Accounts, within
60 days,

of the end of the relevant Accounting Period.

17.2                        Form and scope of financial statements

(a)                                  KDG must ensure
that all Accounts supplied under this Agreement:

(i)                                     give (if audited) a true and fair view of, or (if unaudited) fairly
present, the financial condition (consolidated if it has Subsidiaries) of the
relevant person as at the date to which those Accounts were drawn up and the
results of operations for the Accounting Period then ended; and

(ii)                                  comprise at least a consolidated balance sheet, profit and loss account
and cashflow statement for the Accounting Period then ended and the last four
consecutive quarterly Accounting Periods.

(b)                                 KDG must ensure
that all annual audited consolidated Accounts are prepared in accordance with
the Accounting Principles used in the preparation of the Base Case Model,
consistently applied save for changes arising directly as a result of
amendments to the Accounting Principles or as contemplated by paragraph (e)
below.

(c)                                  KDG must ensure
that all unaudited Accounts are prepared in accordance with or on a basis
consistent in all material respects with the Accounting Principles used in the
preparation of the Base Case Model, consistently applied, save for changes
arising directly as a result of amendments to the Accounting Principles or, if
there has been a change in Accounting Principles as contemplated by paragraph
(e) below, generally accepted accounting principles

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of
the United States of America or international accounting standards, and show at
least the information provided for in the Base Case Model.

(d)                                 KDG must ensure
that each set of Accounts for an annual or quarterly Accounting Period is
accompanied by:

(i)                                     a report of the Chief Financial Officer:

(A)                              explaining the main financial issues arising during that period;

(B)                                explaining any material changes against the Base Case Model or, if a
budget for that Accounting Period has been supplied under Clause 17.4
(Budget), that budget; and

(C)                                comparing the financial performance for such period against the
equivalent period in the previous financial year; and

(ii)                                  in the case of each set of Accounts for an annual Accounting Period, any
opinion letter addressed to the management of KDG by the Auditors and
accompanying those Accounts and relating to qualification to those Accounts.

(e)                                  KDG must notify
the Facility Agent of:

(i)                                     any intended change to the Accounting Principles pursuant to which the
Accounts of the Group are to be prepared in accordance with the generally
accepted accounting principles of the United States of America or international
accounting standards; and

(ii)                                  any other intended change to the manner in which any Accounts are
prepared.

Any notification under this paragraph (e) must be
given no later than 60 days prior to the delivery date of any Accounts to which
the intended change in manner of preparation is to apply.

(f)                                    KDG must promptly
supply to the Facility Agent:

(i)                                     a full description of any change notified under paragraph (e)(i)
and, if requested by the Facility Agent, (e)(ii) above; and

(ii)                                  upon notification under paragraph (e)(i) above, and if requested by the
Facility Agent, upon notification under paragraph (e)(ii) above, a statement
(the Reconciliation Statement) signed by the
Chief Financial Officer showing sufficient information, in such detail and
format as may be reasonably required by the Facility Agent, to enable the
Finance Parties:

(A)                              to make a proper comparison between the financial position shown by the
set of Accounts prepared on the changed basis and its most recent audited
consolidated Accounts (or if none, the Base Case Model) delivered to the
Facility Agent under this Agreement and prepared according to the Accounting
Principles used in the preparation of Base Case Model; and

(B)                                to test the financial covenants in Clause 18 (Financial covenants)
as if the set of Accounts prepared on the changed basis had been prepared
according to the Accounting Principles used in the preparation of the Base Case
Model.

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(g)                                 If requested by
the Facility Agent, KDG must enter into discussions for a period of not more
than 30 days with a view to agreeing any amendments required to be made to
this Agreement to place the Finance Parties in the same position as they would
have been in if the change notified under paragraph (e) above had not happened.
Any agreement between KDG and the Facility Agent, with the prior consent of the
Majority Lenders, will be binding on all the Parties.

(h)                                 If no agreement
is reached under paragraph (g) above on the required amendments to this
Agreement, KDG must ensure that each set of Accounts is accompanied by a
Reconciliation Statement.

(i)                                     KDG will procure
that, if requested by the Facility Agent, the Auditors confirm to the Finance
Parties the accuracy of the basis of preparation of any Reconciliation
Statement.

17.3                        Compliance Certificate

(a)                                  KDG must supply
to the Facility Agent:

(i)                                     with each set of its annual and quarterly Accounts, a Compliance
Certificate; and

(ii)                                  with each set of its annual Accounts, a report of the Auditors addressed
to the Finance Parties confirming compliance by KDG with the financial
covenants set out in the Compliance Certificate and otherwise in the form
agreed between the Auditors and the Facility Agent having regard to the then
current practice of the Auditors.

(b)                                 A Compliance
Certificate must be signed by the Chief Financial Officer and another
authorised signatory of KDG.

17.4                        Budget

(a)                                  KDG must supply
to the Facility Agent as soon as it is available and in any event not later
than 60 days after the beginning of each annual Accounting Period a budget for
the Group for that Accounting Period.

(b)                                 The budget must
be:

(i)                                     Prepared in the same manner as and show the information provided for in
the Base Case Model;

(ii)                                  Prepared on a basis consistent with the Accounting Principles as used in
preparing the Base Case Model; and

(iii)                               Approved by the board of directors of KDG.

(c)                                  If KDG updates or
changes the budget referred to above, it shall promptly deliver to the Facility
Agent, in sufficient copies for each of the Lenders, such updated or changed
budget together with a written explanation of the main changes in that budget.

17.5                        Presentations

Once in every annual Accounting Period, the Chief
Financial Officer and at least one other member of senior management of KDG
must, if requested to do so on reasonable notice by the Facility Agent, give a
presentation (on a date and at a venue agreed between the Chief Financial
Officer and the Facility Agent) to the Finance Parties as to:

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(a)                                  the on-going business and financial performance of the Group; and

(b)                                 any other matter which a Finance Party through the Facility Agent may
reasonably request.

17.6                        Auditors

(a)                                  KDG must promptly
appoint one of the firms named in the definition of Auditors to audit its
consolidated annual financial statements.

(b)                                 KDG may only
replace its Auditors with a firm not named in the definition of Auditors with
the prior approval of the Facility Agent (acting on the instructions of the
Majority Lenders), such approval not to be unreasonably withheld or delayed.

(c)                                  If an Event of
Default has occurred and is continuing and the Facility Agent (acting on the
instructions of the Majority Lenders) wishes to discuss the financial position
of any member of the Group with the Auditors, the Facility Agent may notify
KDG, stating the questions or issues which the Facility Agent wishes to discuss
with the Auditors. In this event, KDG must ensure that the Auditors are
authorised (at the expense of KDG, except where no Default is shown to exist):

(i)                                     to discuss the financial position of each member of the Group with the
Facility Agent and in the presence of KDG (or copying KDG on any information
provided) on request from the Facility Agent; and

(ii)                                  to disclose to the Facility Agent for the Finance Parties any
information which the Facility Agent may reasonably request.

17.7                        Information – miscellaneous

KDG must supply to the Facility Agent, in sufficient
copies for all the Lenders if the Facility Agent so requests:

(a)                                  at the same time as they are despatched, copies of all documents
despatched by KDG to its shareholders generally in their capacity as such (or
any class of them) or despatched by any member of the Group to its creditors
generally (or any class of them);

(b)                                 promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current, threatened or
pending and which are reasonably likely to be adversely determined and if so
adversely determined, could reasonably be expected to have a Material Adverse
Effect or involve liability in excess of e10,000,000;

(c)                                  promptly on request, copies of any authorisation required:

(i)                                     to enable an Obligor to perform its obligations under, or for the
validity or enforceability of, any Transaction Document and the transactions
contemplated by it; or

(ii)                                  to carry on its business in the ordinary course where failure to obtain,
maintain or comply with such authorisation is reasonably likely to have a
Material Adverse Effect;

 63

 

(d)           promptly on request, an up
to date copy of its shareholders’ register (or the equivalent under the law of
its jurisdiction of incorporation);

(e)           copies of any notice of
termination, material dispute or material claim made against any of the
Obligors under a Service Level Agreement together with details of any action
the relevant Obligor proposes to take in relation to the same;

(f)            promptly on request a list
of the then current Material Subsidiaries; and

(g)           promptly on request, such
further information regarding the financial condition of the Group and/or any
member of the Group (including any requested amplification or explanation of
any item in the Accounts, budgets or other material provided by any Obligor
under this Agreement) as any Finance Party through the Facility Agent may
reasonably request.

17.8        Notification
of Default

(a)           Unless the Facility Agent has
already been so notified by another Obligor, each Obligor must notify the
Facility Agent of any Default which is continuing (and the steps, if any, being
or proposed to be taken to remedy it) promptly upon becoming aware of its
occurrence.

(b)           Promptly on request by the
Facility Agent, KDG must supply to the Facility Agent a certificate, signed by
two of its authorised signatories on its behalf, certifying that no Default is
outstanding or, if a Default is outstanding, specifying the Default and the
steps, if any, being or proposed to be taken to remedy it.

17.9        Year
end

KDG
must:

(a)           procure that each of its
annual Accounting Periods falls on the Accounting Date falling on or nearest to
31 March in each year;

(b)           procure that each quarterly
Accounting Period and each financial quarter of each member of the Group ends
on an Accounting Date; and

(c)           use reasonable endeavours to
change the financial year-end of each member of the Group (other than KDG) to
31 March.

17.10      Use
of websites

(a)           Except as provided below, KDG
may deliver any information under this Agreement to a Lender by posting it on
to an electronic website if:

(i)            the Facility Agent and the Majority Lenders agree;

(ii)           KDG and the Facility Agent designate an electronic website for this
purpose;

(iii)          KDG notifies the Facility
Agent of the address of and password for the website; and

(iv)          the information posted is in a format agreed between KDG and the
Facility Agent.

The
Facility Agent must supply each Lender with the address of and password for the
website.

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(b)           Notwithstanding the above, KDG
must supply to the Facility Agent in paper form a copy of any information
posted on the website together with sufficient copies for:

(i)            any Lender not agreeing to receive information via the website; and

(ii)           within five Business Days of request, any other Lender, if that Lender
so requests.

(c)           KDG must promptly upon
becoming aware of its occurrence, notify the Facility Agent if:

(i)            the website cannot be accessed;

(ii)           the website or any information on the website is infected by any
electronic virus or similar software;

(iii)          the password for the website
is changed; or

(iv)          any information to be supplied under this Agreement is posted on the
website or amended after being posted.

If
the circumstances in sub-paragraphs (i) or (ii) above occur, KDG must
supply any information required under this Agreement in paper form.

17.11      Know
your customer requirements

(a)           Each Obligor must promptly on
the request of any Finance Party supply to that Finance Party any documentation
or other evidence which is reasonably requested by that Finance Party (whether
for itself, on behalf of any Finance Party or any prospective new Lender) to
enable a Finance Party or prospective new Lender to carry out and be satisfied
with the results of all know your customer requirements.

(b)           Each Lender must promptly on
the request of the Facility Agent supply to the Facility Agent any
documentation or other evidence which is reasonably required by the Facility
Agent to carry out and be satisfied with the results of all know your customer
requirements.

18.          FINANCIAL COVENANTS

18.1        Consolidated
EBITDA to Consolidated Total Net Interest Payable

KDG
shall ensure that the ratio of Consolidated EBITDA to Consolidated Total Net
Interest Payable for any Test Period ending on an Accounting Date falling after
31 March 2006, shall not be less than the relevant multiple set opposite the
relevant Accounting Date in the row entitled EBITDA: Net
Interest in:

(a)           if the Arena football rights
have been acquired by the Group before the end of the relevant Test Period,
Part 1 of Schedule 13 (Financial Covenant Levels); and

(b)           if the Arena football rights
have not been acquired by the Group before the end of the relevant Test Period,
Part 2 of Schedule 13 (Financial Covenant Levels).

For
the purposes of this Clause 18 the Arena football rights will have been
acquired by the Group upon the entry by a member of the Group into a feed-in,
distribution, reseller, licensing, acquisition or joint venture agreement with
Arena or any of its affiliates permitting the Group to broadcast pay-television
or free-television offerings for “Bundesliga” league

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soccer
to its cable television subscribers or to new subscribers on other
infrastructures (including, without limitation, satellite) on an exclusive or
non-exclusive basis.

18.2        Consolidated
Senior Net Borrowings to Consolidated EBITDA

KDG
shall ensure that the ratio of Consolidated Senior Net Borrowings as at any
Accounting Date falling after 31 March 2006 to Consolidated EBITDA for the Test
Period ending on that Accounting Date shall not be more than the multiple set
opposite the relevant Accounting Date in the row entitled Senior Net
Debt: EBITDA in:

(a)           if the Arena football rights
have been acquired by the Group before the end of the relevant Test Period,
Part 1 of Schedule 13 (Financial Covenant Levels); and

(b)           if the Arena football rights
have not been acquired by the Group before the end of the relevant Test Period,
Part 2 of Schedule 13 (Financial Covenant Levels).

18.3        Financial
Covenant Definitions

In
this Agreement the following terms have the meanings set out below:

Consolidated
EBITDA for any Test Period means the consolidated
profit from ordinary activities (where a German term is used in this
definition, such term refers to the item as disclosed in the relevant profit
and loss account in accordance with § 275 (1) of the German Commercial Code and
such German term, and not the English term to which it relates, shall be
authoritative for the construction of that term) of the Group for such period:

(a)           as adjusted to exclude the operating result of any non-wholly-owned member of the Group that
is not able to lend its cash to a wholly-owned member of the Group in
accordance with Clause 19.29 (Surplus Cash) (in each case, as certified by KDG
to the Facility Agent) but adjusted to include (to
the extent not already taken into account) the amount of any dividend or other
distribution received in cash by a wholly-owned member of the Group from such
non-wholly-owned member of the Group;

(b)           before taking into account Taxes taken into account in calculating profit from ordinary
activities;

(c)           before deducting any depreciation or amortisation (Abschreibungen)
whatsoever;

(d)           before taking into account all extraordinary items (whether positive or negative) and all
exceptional items but after deducting any aperiodic income and adding back
aperiodic expenses;

(e)           before taking into account interest and similar expenses (Zinsen und ähnliche
Aufwendungen) and interest income (sonstige
Zinsen und ähnliche Erträge);

(f)            before deducting amortisation of any goodwill;

(g)           before deducting costs associated with any acquisition and costs incurred in connection
with the financing or refinancing of any acquisition (regardless of whether any
such financing or refinancing was completed). 
Such costs shall include, without limitation, upfront fees, arrangement
fees or indemnity fees or any extension or renewal fees and similar costs of a
non-recurring nature, including costs incurred in

 66
 

 

connection with due diligence, transitional
arrangements and all fees paid to professional advisers;

(h)           after adding back (to the extent otherwise deducted) any loss against book value incurred
by the Group on the de-recognition (Abgang) of any
asset (other than the sale of trading stock) during such period including any
loss or write-down from fair value adjustments or step-up depreciation;

(i)            after deducting (to the extent otherwise included) any gain over book value arising in
favour of the Group on the de-recognition (Abgang) of any
asset (other than the sale of trading stock) during such period and any gain
arising on any revaluation of any asset (Wertaufholung/Zuschreibung
in accordance with § 280 of the German Commercial Code) during such period;

(j)            after deducting (to the extent otherwise included) the amount of profit (or adding back
the loss) of any member of the Group which is attributable to the interests of
any shareholder of or, as the case may be, partner in such member of the Group
to the extent such profit is distributed in cash to such shareholder or partner
who is not a member of the Group;

(k)           before taking into account any adjustment required
under IAS 39;

(l)            after deducting (to the extent otherwise included) the amount of profit of any entity
that is not a member of the Group in which a member of the Group has an
ownership interest to the extent that the amount of such profit otherwise
included exceeds the amount received in cash by the Group through distributions
by such entity (and for this purpose distributions
shall include any fees, payments or interest in respect of loans made to that
entity by a Group member);

(m)          after adding the amount of any insurance proceeds receivable in relation to business
interruption insurance;

(n)           after adding, on a pro forma basis, the amount of Consolidated EBITDA (calculated
with respect to the relevant member of the Group) of any member of the Group
acquired during the relevant Test Period for any part of such period when it
was not a member of the Group (except to the extent this provision is covered
in Clause 18.4(d));

(o)           after deducting the amount of Consolidated EBITDA (calculated with respect to the
relevant member of the Group) of any member of the Group disposed of during the
relevant Test Period for the part of such period when it was a member of the
Group;

(p)           after adding back, in respect of each Test Period ending on or before 31 March 2008, the
one-off costs associated with the roll-out of television set-top boxes up to a
cumulative maximum of €130,000,000; and

(q)           after adding back any non-cash costs incurred in connection with the management equity
participation plan.

Consolidated
Senior Borrowings in respect of the Group at
any time, means the aggregate at that time of the Financial Indebtedness of
members of the Group (other than KDG) (other than under High Yield Notes,
Permitted KDG Debt and any guarantee or indemnity provided to a creditor of an
Unrestricted Subsidiary limited in recourse to (i) the net proceeds of the
shares, partnership interests or other ownership interests held in that
Unrestricted Subsidiary

 67
 

 

by
members of the Group or (ii) the net proceeds of any debt owed by that
Unrestricted Subsidiary to any member of the Group).

Consolidated
Senior Net Borrowings in respect of the Group
at any time means Consolidated Senior Borrowings at that time less the
aggregate amount at that time of all Cash and Cash Equivalents held by any
member of the Group (other than KDG).

Consolidated
Total Interest Payable for the Group for
any Test Period means the Interest accrued during such period as an obligation
of any member of the Group (other than in respect of Financial Indebtedness
owing by one member of the Group to another) taking into
account any net payment or net receipt under any of the Hedging
Documents.

Consolidated
Total Net Borrowings in respect of the Group at
any time means the aggregate at that time of the Financial Indebtedness of the
members of the Group from sources external to the Group (excluding Financial
Indebtedness under any Shareholder Loans), less the
aggregate amount at that time of all Cash and Cash Equivalents held by any
member of the Group.

Consolidated
Total Net Interest Payable for
the Group in any Test Period means Consolidated Total Interest Payable less any
Interest received or receivable by any member of the Group (other than from
another member of the Group) in such period.

Pro
Forma Adjustment means:

(a)           for any Test Period that
includes any of the four quarterly Accounting Periods first following the
closing date of a Permitted Acquisition, the pro forma increase in Consolidated
EBITDA of the acquired entity, property, business, material fixed asset or the
Group (without double counting) projected to be realisable as a result of
Eligible Cost Savings, provided that so long as such Eligible Cost Savings are
projected to be realisable at any time during such period, it may be assumed
for the purpose of projecting such pro forma increase that such Eligible Costs
will be realisable during the whole of such period; and

(b)           for any Test Period (other
than one to which paragraph (a) applies) that includes any of the fifth and
sixth quarterly Accounting Periods following the closing date of a Permitted
Acquisition, the pro forma increase in Consolidated EBITDA of the acquired
entity, property, business, material fixed asset or the Group (without double
counting) projected to be realisable as a result of Eligible Cost Savings,
provided that (i) so long as such Eligible Cost Savings are projected to be
realisable at any time during such period, it may be assumed for the purpose of
projecting such pro forma increase that such Eligible Costs will be realisable
during the whole of such period; and (ii) such increase in Consolidated EBITDA
of the Group may not exceed 5 per cent. of the Consolidated EBITDA of the Group
(after giving effect to such increase).

Test
Period means each period comprising an annual
Accounting Period of the Group and each period comprising four consecutive
quarterly Accounting Periods of the Group (taken together as one period) ending
on an Accounting Date specified in Schedule 13 (Financial Covenant Limits).

18.4        Basis
of Calculations

(a)           All the terms defined in
Clause 18.3 (Financial covenant definitions) are to be determined on a
consolidated basis and (except as expressly included or excluded in the
relevant definition) in accordance with the Accounting Principles. The
financial covenants in this Clause 18 shall

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apply as of the Accounting
Date at the end of each Test Period and compliance (or otherwise) shall be
tested by reference to the consolidated Accounts of the Group delivered
pursuant to Clause 17.1 (Financial statements) and any applicable
Reconciliation Statement delivered pursuant to Clause 17.2(f) (Financial
statements) and verified by reference to the Compliance Certificate delivered
pursuant to Clause 17.3 (Compliance Certificate) for the relevant Test Periods.

(b)           No item shall be deducted or
credited more than once in any calculation.

(c)           Where an amount in the
Accounts is not denominated in euro, it shall be converted into euro at the
rates specified in the Accounts (and notwithstanding paragraph (h) of the
definition of Financial Indebtedness, any rate specified in the Accounts as a
result of any currency hedging entered into by a member of the Group may be
used for this purpose).

(d)           For the purposes of
calculating the financial covenants in Clauses 18.1 to 18.4 (inclusive):

(i)            the results of an acquired entity, property, business or material fixed
asset acquired in a Permitted Acquisition and the Financial Indebtedness
borrowed by the Group to fund that acquisition (and associated interest costs)
shall be ignored for the quarterly Accounting Period in which that acquisition
occurs and for all prior Accounting Periods;

(ii)           for each of the three full quarterly Accounting Periods to occur after
the closing date of that acquisition, the results of the relevant acquired
entity, property, business or material fixed asset so acquired (beginning with
the first full quarterly Accounting Period to occur after the closing date of
the acquisition for that entity) will be included on an annualised basis,
taking into account the increase by the Pro Forma Adjustment; and

(iii)          Consolidated EBITDA of the
Group shall be increased by the Pro Forma Adjustment.

18.5        Cure
rights

(a)           If KDG is in breach of a
financial covenant in this Clause 18, it may cure that breach by procuring
that it receives an amount (the Cure Amount) of
an equity contribution, Shareholder Loan or other subordinated debt
(subordinated on terms satisfactory to the Facility Agent) within 30 days
following the last day of the Test Period in respect of which the breach
occurred.  The Cure Amount will be as
added to Consolidated EBITDA in respect of the last 3 month period in the Test
Period in which the breach occurred, and will be treated for future Test
Periods as having been invested during that 3 month period.

(b)           No more than two cures under
paragraph (a) will be permitted from the date of the Agreement until the Final
Maturity Date.

19.          GENERAL COVENANTS

19.1        General

Each
Obligor agrees to be bound by the covenants set out in this Clause relating to
it and, where the covenant is expressed to apply to a member or members of the
Group, each Obligor must ensure that any member of the Group which is its
Subsidiary also performs that covenant.

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19.2        Authorisations

(a)           Each member of the Group must
promptly obtain, maintain and comply with the terms of any authorisation
required to enable it to perform its obligations under, or for the validity or
enforceability of, any Transaction Document and the transactions contemplated
by it.

(b)           Each member of the Group must
obtain, maintain and comply with the terms of any authorisation required to
enable it to carry on its business in the ordinary course where failure to do
so has a Material Adverse Effect.

19.3        Compliance
with laws

Each
member of the Group must comply in all respects with all laws and regulations
to which it is subject where failure to do so has a Material Adverse Effect.

19.4        Pari
passu ranking

Each
Obligor must ensure that its payment obligations under the Finance Documents at
all times rank at least pari passu with all its present and future unsecured
unsubordinated payment obligations, except for obligations mandatorily
preferred by law applying to companies generally.

19.5        Negative
pledge

(a)           Except as provided in
paragraph (b) below, no member of the Group may create or allow to exist any
Security Interest on any of its assets.

(b)           Paragraph (a) does not
apply to:

(i)            any Security Interest created or evidenced by the Security Documents or
permitted under the Priority Agreement to secure Financial Indebtedness owing
under the Indenture Documents or to secure Permitted KDG Debt;

(ii)           any Security Interest or other arrangement (including a netting or
set-off arrangement) arising in the ordinary course of its banking arrangements
with an Approved Bank for the purpose of netting debit and credit balances
provided that:

(A)          such arrangement does not permit credit balances of Obligors to be
netted with debit balances of non-Obligors; and

(B)           such arrangement does not give rise to other Security Interests over the
assets of Obligors in support of the liabilities of non-Obligors.

(iii)          any lien arising by
operation of law or by agreement to substantially the same effect and arising
in the ordinary course of trading and not as a result of any default by any
member of the Group;

(iv)          any hire purchase contract, conditional sale arrangement or retention of
title arrangement entered into by a member of the Group in the ordinary course
of trading on a supplier’s standard terms;

(v)           any Security Interest on an asset acquired by a member of the Group
after the date of this Agreement or on an asset (as at the date of a person’s
acquisition by a member of

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the
Group) of that person, but only for the period of three months from the
date of acquisition and to the extent that:

(A)          that Security Interest was not created in contemplation of that
acquisition; and

(B)           the principal amount secured by that Security Interest is permitted by
Clause 19.8(b)(ii) (Financial Indebtedness) and has not been incurred or
increased or its maturity date extended in contemplation of, or since, that
acquisition;

(vi)          any Security Interest over goods and documents of title to such goods
arising under documentary credit transactions entered into in the ordinary
course of trade and on terms customary in that trade;

(vii)         any netting of payments
under permitted Treasury Transactions;

(viii)        cash cover relating to an
Ancillary Facility;

(ix)           until the first Utilisation Date, any Security Interest securing amounts
under the Existing Facility;

(x)            any Security Interest expressly permitted in writing by the Majority
Lenders (provided that the amount secured by that Security Interest is not
increased above the permitted amount);

(xi)           any Security Interest over cash paid into an escrow account pursuant to
any purchase price retention arrangement as part of any disposal or acquisition
by a member of the Group which is not prohibited by this Agreement;

(xii)          any Security Interest
arising on any rental deposits in connection with the occupation of leasehold
premises by any member of the Group in the ordinary course of business;

(xiii)         any Security Interest
arising by operation of law in favour of any government, state or local
authority in respect of Taxes, assessments or government charges which are
being contested by the relevant member of the Group;

(xiv)        any Security Interest
arising in connection with any pre-judgment legal process or in respect of a
judgment which is being contested in good faith by the relevant member of the
Group;

(xv)         any Security Interest created over Cash Equivalents held in any clearing
system or listed on any exchange which arise as a result of such shares and/or
securities being so held in such clearing system or listed on such exchange as
a result of the rules and regulations of such clearing system or exchange;

(xvi)        any Security Interest
arising under the general business conditions of an Approved Bank (or any other
bank at which an account maintained in accordance with Clause 23 (Bank
Accounts) is held) provided that each member of the Group shall comply with its
obligations to use its best endeavours to procure the subordination of the
relevant Security Interest in accordance with the terms of the Security
Documents;

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(xvii)       any Security Interest over
shares, partnership interests or other ownership interests held by a member of
the Group in an Unrestricted Subsidiary or over debt owed by an Unrestricted
Subsidiary to a member of the Group to the extent it secures only indebtedness
of the relevant Unrestricted Subsidiary and provided it is limited in recourse
to the net proceeds of those shares, partnership interests, other ownership
assets or rights in respect of that debt;

(xviii)      any Security Interest (not
being over any asset subject to any Security Interest under the Security
Documents) securing that member of the Group’s own indebtedness which (when
taken together with any other indebtedness which has the benefit of a Security
Interest not permitted under the preceding sub-paragraphs and the aggregate
amount of all outstanding indebtedness under Clause 19.6(b) (Transaction
similar to security)) does not exceed e80,000,000 at any time; or

(xix)         any Security Interest
securing indebtedness under any Additional Facility.

19.6        Transactions
similar to security

(a)           No member of the Group may:

(i)            dispose of any of its assets on terms where it is or may be or may be
required to be leased to or re-acquired or acquired by a member of the Group or
any of its related entities;

(ii)           dispose of any of its receivables on recourse terms; or

(iii)          purchase any asset on
retention of title terms,

in
circumstances where the transaction is entered into primarily as a method of
raising Financial Indebtedness or of financing the acquisition of an asset.

(b)           Any
member of the Group may enter into transactions otherwise prohibited by
sub-paragraphs (a)(i) and (iii) above so long as the aggregate amount of
outstanding indebtedness of the Group in respect of all such transactions at
any time, together with the aggregate amount of all outstanding secured
indebtedness permitted under Clause 19.5(b)(xviii) (Negative pledge) at that
time, does not exceed e80,000,000.

19.7        Disposals

(a)           Except as provided in
paragraphs (b), (d) and (e) below, no member of the Group may, either in a
single transaction or in a series of transactions and whether related or not
and whether voluntarily or involuntarily, dispose of all or any part of its
assets.

(b)           Paragraph (a) does not apply
to any disposal:

(i)            of trading stock made on arm’s length terms in the ordinary course of
trading;

(ii)           of any asset (not being rights under any Transaction Document) on arm’s
length terms in exchange for any other asset comparable or superior as to type,
value and quality (provided that, if the asset disposed of was previously
subject to a Security Interest under a Security Document, that Obligor grants
security (similar in nature and secured to the same extent as the Security Interest
previously granted in respect of the asset disposed of and otherwise in form
and substance satisfactory to the Security

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Agent,
acting reasonably) over the replacement asset in favour of the Finance
Parties);

(iii)          of any business, shares or
securities on arm’s length terms in exchange for any other business, shares or
securities comparable or superior as to type, value and quality where the
market value of the business, shares or securities to be acquired (when taken
together with the market value of any other acquisition made under this
sub-paragraph) does not exceed e25,000,000 in any annual Accounting Period (or to the extent the
aggregate market value of all acquisitions under this sub-paragraph exceeds e25,000,000 in that annual Accounting Period, such excess is included as
Acquisition Consideration for an acquisition in paragraph (c) of the definition
of Permitted Acquisition) and provided that, if the business, shares or
securities disposed of were previously subject to a Security Interest under a
Security Document, that Obligor grants security (similar in nature and secured
to the same extent as the Security Interest previously granted in respect of
the business, shares or securities disposed of and otherwise in form and
substance satisfactory to the Security Agent) over the replacement business,
shares or securities in favour of the Finance Parties;

(iv)          of obsolete or redundant vehicles, plant and equipment, for cash on arm’s
length terms;

(v)           of Cash Equivalents:

(A)          for cash; or

(B)           in exchange for other Cash Equivalents;

(vi)          of cash where such disposal does not breach the other terms of the
Finance Documents;

(vii)         constituted by a licence in
respect of Intellectual Property Rights which is permitted pursuant to
paragraph (b) of Clause 19.18
(Intellectual property rights);

(viii)        arising from the sharing,
leasing, licensing or granting of any other right by one Obligor to another
Obligor in relation to a network asset in the ordinary course of business on
arm’s length terms;

(ix)           constituted by the granting of a lease or sub-lease over real property
in the ordinary course of business;

(x)            of receivables on arm’s length terms and on a non-recourse basis;

(xi)           pursuant to any transaction permitted under sub-paragraph (b)(iii)
of Clause 19.8 (Financial
Indebtedness);

(xii)          constituted by the creation
of a Security Interest permitted pursuant to paragraph (b) of Clause 19.5 (Negative pledge);

(xiii)         by KDVS of its shareholding
in Primacom Osnabrück, KABELCOM Braunschweig and KABELCOM Wolfsburg;

(xiv)        expressly permitted in
writing by the Majority Lenders;

(xv)         pursuant to a
Permitted Reorganisation; and

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(xvi)                         for cash on arm’s length terms where the higher of the market value and
consideration receivable (when taken together with the higher of the market
value and consideration receivable for any other disposal not allowed under the
other sub-paragraphs of this paragraph (b)) does not exceed e50,000,000 in any annual Accounting Period of KDG (provided that  any part of the €50,000,000 not used in
annual Accounting Period may be carried forward (once only) to the next annual
Accounting Period),

provided
that neither KDVS nor any of its Subsidiaries (other than any Unrestricted
Subsidiary) may dispose of any asset to KDG (other than pursuant to any
Permitted Distribution).

(c)                                  The disposals
referred to in sub-paragraphs (b)(iv), (b)( v)(A), (b)( x) and (b)(xvi) above
shall be for cash payable in full at or before the time of disposal.

19.8                        Financial Indebtedness

(a)                                  Except as provided
in paragraph (b) below, no member of the Group may incur or permit to be
outstanding any Financial Indebtedness.

(b)                                 Paragraph (a)
does not apply to:

(i)                                     Financial Indebtedness incurred under the Finance Documents or any Additional
Facility or any Shareholder Loans owing by KDG to Luxco (or any other Holding
Company of KDG);

(ii)                                  any Financial Indebtedness of any person acquired by a member of the
Group which is incurred under arrangements in existence at the date of
acquisition, but not incurred or increased or its maturity date extended in
contemplation of, or since, that acquisition, and outstanding only for a period
of three months following the date of acquisition;

(iii)                               any Financial Indebtedness under any vendor financing programmes, sale
and lease back arrangements, finance or capital leases of vehicles, plant,
equipment or computers, provided that the aggregate amount of such Financial
Indebtedness by members of the Group (when taken together with any other
outstanding Financial Indebtedness permitted under sub-paragraph (b)(x)
below) does not exceed e80,000,000 at any time;

(iv)                              any Treasury Transaction permitted under Clause 19.14 (Treasury Transactions);

(v)                                 any Financial Indebtedness permitted under Clauses 19.13 (Third party guarantees) or 19.15 (Loans out);

(vi)                              any Financial Indebtedness to the extent covered by a letter of credit
or guarantee issued under an Ancillary Facility;

(vii)                           any Financial Indebtedness falling within paragraph (j) of the
definition thereof (except to the extent the underlying obligation in respect
of which an instrument contemplated by paragraph (j) has been issued itself
constitutes Financial Indebtedness under any other paragraph of the definition
of Financial Indebtedness);

(viii)                        any Financial Indebtedness expressly permitted in writing by the
Majority Lenders;

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(ix)                                any Financial Indebtedness owed by KDG or an Issuer incurred under the
Indenture Documents or as Permitted KDG Debt (provided that the aggregate
amount permitted to be incurred under this paragraph (ix) shall not exceed the
indebtedness permitted to be incurred under the indenture governing the
issuance of the €250,000,000 10.750 per cent. senior notes and the €610,000,000
10.625 per cent. senior notes (each due 2014 and issued by KDG) under the terms
of that indenture as at the date of this Agreement);

(x)                                   until the first Utilisation Date, any Financial Indebtedness under the
Existing Facility; and

(xi)                                any Financial Indebtedness of any member or members of the Group not
otherwise permitted by this paragraph (b) which in aggregate (when taken
together with the amount of any other outstanding Financial Indebtedness
permitted under sub-paragraph (b)(iii)) does not exceed e80,000,000 at any time.

19.9                        Change of business

KDG
must ensure that no substantial change is made to the general nature of the
business of the Group taken as a whole being the Core Business.

19.10                 Mergers

No
member of the Group may enter into any amalgamation, demerger, merger,
consolidation or reconstruction other than a Permitted Reorganisation.

19.11                 Acquisitions

(a)                                  Except as
provided in paragraph (b) below, no member of the Group may acquire or
subscribe for shares or other ownership interests in or securities of any
company or other person or acquire any business.

(b)                                 Paragraph (a)
does not apply to:

(i)                                     the acquisition of Cash Equivalents;

(ii)                                  any Permitted Reorganisation;

(iii)                               any acquisition permitted under Clause
19.7(b)(ii), (iii), (v), (vi), or (xi) or 19.7(d) (Disposals);

(iv)                              any acquisition of shares or other ownership interest permitted under Clause 19.16 (Share Capital);

(v)                                 any Permitted Acquisition made on arm’s length terms; or

(vi)                              any investment which constitutes Unrestricted Subsidiary Funding.

19.12                 Environmental matters

(a)                                  Each member of
the Group must ensure that:

(i)                                     it is, and has been, in compliance with all Environmental Laws and
Environmental Approvals applicable to it, where failure to do so has a Material
Adverse Effect or is reasonably likely to result in any liability for a Finance
Party;

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(ii)                                  it obtains all requisite Environmental Approvals where failure to obtain
would have a Material Adverse Effect or is reasonably likely to result in any
liability for a Finance Party; and

(iii)                               it implements procedures to monitor compliance with and to prevent
liability under any Environmental Law.

(b)                                 Each Obligor must
promptly upon becoming aware of the same notify the Facility Agent of:

(i)                                     any Environmental Claim current, or to its knowledge, pending or
threatened; or

(ii)                                  any circumstances reasonably likely to result in an Environmental Claim,

which
is likely to be substantiated and, if so substantiated, would have a Material
Adverse Effect or is reasonably likely to result in any liability for a Finance
Party.

(c)                                  KDVS agrees to
indemnify each Finance Party, each receiver appointed under any Security
Document and their respective officers, employees, agents and delegates (together
the Indemnified Parties) against any loss
or liability suffered or incurred by that Indemnified Party (except to the
extent caused by such Indemnified Party’s own negligence or wilful default)
which:

(i)                                     arises by virtue of any actual or alleged breach of any Environmental
Law (whether by any Obligor, an Indemnified Party or any other person); or

(ii)                                  arises in connection with an Environmental Claim,

which
relates to the Group, any assets of the Group or the operation of all or part
of the business of the Group (or in each case any member of the Group) and
which would not have arisen if the Finance Documents or any of them had not
been executed by that Finance Party.

19.13                 Third party guarantees

(a)                                  Except as
provided in paragraph (b) below, no member of the Group may incur or allow to
be outstanding any guarantee by such member of the Group or any of its
Subsidiaries (other than any Unrestricted Subsidiaries) in respect of any
person.

(b)                                 Paragraph (a)
does not apply to:

(i)                                     any guarantee arising under the Transaction Documents or arising
pursuant to an indemnity given by KDG or KDVS in favour of the provider of a report
prepared in respect of the Existing Facility in connection with that report;

(ii)                                  any guarantee comprising a netting or set-off arrangement entered into
by a member of the Group with an Approved Bank in the ordinary course of its
banking arrangements for the purposes of netting debit and credit balances of
that member of the Group or of other members of the Group with that Approved Bank,
provided that such arrangement does not permit credit balances of KDVS to be
netted with debit balances of other members of the Group;

(iii)                               the endorsement of negotiable instruments in the ordinary course of
trade;

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(iv)                              performance bonds guaranteeing performance by an Obligor (not being KDG)
under any contract (not being in respect of Financial Indebtedness) entered
into in the ordinary course of trade;

(v)                                 guarantees permitted under Clause 19.8 (Financial Indebtedness);

(vi)                              any guarantee (not being in respect of Financial Indebtedness) granted
in the ordinary course of trading by an Obligor;

(vii)                           any guarantee given by KDVS or New Regco and subject to the Priority
Agreement in respect of Financial Indebtedness under the Indenture Documents or
Permitted KDG Debt;

(viii)                        any guarantee given by KDVS or New Regco in respect of any Financial
Indebtedness of KDG incurred under the Hedging Documents;

(ix)                                any guarantee not otherwise permitted by this paragraph (b) provided
that the aggregate liability under all such guarantees outstanding under this
sub-paragraph (when aggregated with the amounts of all loans which are
permitted to be made by members of the Group under Clauses 19.15(b)(iv)
and (v)) shall not at any time exceed e20,000,000; or

(x)                                   any guarantee issued by any member of the Group in respect of the
obligations of an Unrestricted Subsidiary, so long as the recourse under that
guarantee is limited in recourse to the net proceeds of shares, partnerships or
other ownership interests held by a member of the Group in that Unrestricted
Subsidiary, or the net proceeds of any debt owed by that Unrestricted
Subsidiary to any member of the Group,

provided
that neither KDVS nor any of its Subsidiaries (other than any Unrestricted
Subsidiaries) may guarantee any obligations of KDG (other than the guarantees
referred to in sub-paragraph (vii) above).

19.14                 Treasury Transactions

(a)                                  No member of the
Group may enter into any Treasury Transaction, other than the hedging
transactions contemplated by the Hedging Letter and documented by the Hedging
Documents and any other interest rate or currency hedging transactions entered
into for non-speculative purposes.

(b)                                 KDVS must ensure
that all interest rate hedging arrangements contemplated by the Hedging Letter
are implemented in accordance with the terms of the Hedging Letter and that
such arrangements are not terminated, varied or cancelled without the consent
of the Facility Agent (acting on the instructions of the Majority Lenders),
save (in the case of arrangements documented by the Hedging Documents) as
permitted by the Priority Agreement.

19.15                 Loans out

(a)                                  Except as
provided in paragraph (b) below, no member of the Group may be the creditor in
respect of any Financial Indebtedness or of any trade credit extended to any of
its customers.

(b)                                 Paragraph (a)
does not apply to:

(i)                                     trade credit extended by any member of the Group to its customers on
normal commercial terms and in the ordinary course of its trading activities;

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(ii)                                  a loan by an Obligor to any employee or director of any Obligor which
when aggregated with all other loans made to employees or directors of all
Obligors does not exceed e7,500,000;

(iii)                               any loan by KDVS to a non-Obligor which when aggregated with the amount
of any loan permitted under sub-paragraph (v) below and any amount
guaranteed under Clause 19.13(b)(viii) (Third party guarantees) does not
exceed e20,000,000;

(iv)                              any loan by a member of the Group not otherwise permitted by this
paragraph (b) provided that the amount of all such loans outstanding under this
sub-paragraph (when aggregated with the amount of any loans permitted by
sub-paragraph (iii) above and any amounts which are permitted to be
guaranteed by Clause 19.13(b)(ix) (Third party guarantees)) shall not at
any time exceed e20,000,000;

(v)                                 any loan which constitutes Unrestricted Subsidiary Funding; and

(vi)                              any Permitted Distribution,

provided
that (A) neither KDVS nor any of its Subsidiaries (other than any Unrestricted
Subsidiary) may lend any amounts to KDG (other than pursuant to any Permitted
Distribution provided that, except in the case of a KDG Operating Distribution,
no Event of Default is outstanding, at the time of, or will be in existence
immediately after, the making of such Permitted Distribution) and (B) KDG may not
lend any amounts to KDVS or any of its Subsidiaries (other than an Unrestricted
Subsidiary).

19.16                 Share capital

(a)                                  Except as
provided in paragraph (b) below, no member of the Group may:

(i)                                     redeem, purchase, defease, retire or repay any of its shares or share
capital (or any instrument convertible into shares or share capital) or resolve
to do so except, in the case of any Subsidiary of KDVS only, to the extent that
those shares, share capital or instruments are held by its Holding Company;

(ii)                                  issue any shares (or any instrument convertible into shares) which by
their terms are redeemable at the option of the holder or carry any right to a
return prior to the Senior Discharge Date other than to its Holding Company;

(iii)                               issue any shares or share capital (or any instrument convertible into
shares or share capital) to any person other than its Holding Company; or

(iv)                              resolve an increase of the registered share capital of any Relevant
Entity out of retained earnings (Kapitalerhöhung aus
Gesellschaftsmitteln).

(b)                                 Paragraph (a)
does not apply to:

(i)                                     any transaction expressly allowed under the Finance Documents;

(ii)                                  the issue of any shares in connection with a Permitted Exit or any
Market Issue; or

(iii)                               any transaction which is a Permitted Reorganisation or Permitted
Distribution.

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19.17                 Dividends

(a)                                  Subject to
paragraph (c) below, neither KDVS nor KDG may:

(i)                                     declare, make or pay, or pay interest on any unpaid amount of, any
dividend, charge, fee or other distribution (whether in cash or in kind) on or in
respect of its shares or share capital (or any class of its share capital);

(ii)                                  repay, prepay or otherwise discharge (or allow any other member of the
Group to repay, prepay or otherwise discharge) any amount of principal or
interest (including capitalised interest) or any amount outstanding under or in
respect of any Shareholder Loan; or

(iii)                               repay or distribute any share premium account.

(b)                                 Subject
to paragraph (c) below, no member of the Group may pay or allow any member
of the Group to pay any management, advisory or other fee to or to the order of
the Original Investors or any direct or indirect shareholder of KDG (or any of
their respective Affiliates which is not a member of the Group).

(c)                                  Paragraphs (a)
and (b) above do not apply to any Permitted Distribution permitted to be paid
by (and in accordance with) the terms of the Priority Agreement.

19.18                 Intellectual property rights

(a)                                  Except as
provided below, each member of the Group must:

(i)                                     make any registration and pay any fee or other amount which is necessary
to retain and protect the Intellectual Property Rights which are material to
the Core Business;

(ii)                                  record its interest in those Intellectual Property Rights;

(iii)                               take such steps as are necessary and commercially reasonable (including
the institution of legal proceedings) to prevent third parties infringing those
Intellectual Property Rights;

(iv)                              not use or permit any such Intellectual Property Right to be used in a
way which may, or take or omit to take any action which may, affect the
existence or value of such Intellectual Property Right to an extent which could
reasonably be expected to have a Material Adverse Effect; and

(v)                                 not grant any licence in respect of those Intellectual Property Rights.

(b)                                 Sub-paragraph (v)
of paragraph (a) above does not apply to:

(i)                                     licence arrangements entered into between members of the Group for so
long as they remain members of the Group; or

(ii)                                  licence arrangements entered into on normal commercial terms and in the
ordinary course of its business.

19.19                 Insurances

(a)                                  In this Clause:

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prudent owner means an owner and
operator of any business, and of assets of a type and size, similar in all
cases to those owned and operated by the relevant member of the Group in a
similar location in each case in accordance with good industry practice.

(b)                                                                                 (i)            Each member of the Group must
maintain Insurances which insure it for its insurable interest in respect of
all risks and to the extent:

(A)                              which are required to be insured against under any applicable law or
regulation; or

(B)                                which a prudent owner would insure against including (except in the case
of KDG), without limitation, business interruption and directors and officers
liability cover.

(ii)                                  Each member of the Group must ensure that the Insurances are with a
reputable insurance company or underwriter of good standing and is not a
captive insurer which is a member of the Group.

(iii)                               KDG shall obtain on or before each anniversary of this Agreement a
letter of appropriateness from independent insurance brokers addressed to the
Facility Agent on behalf of the Finance Parties in form and substance similar
to that provided by KDG prior to the date of this Agreement, provided that
nothing in this subparagraph (iii) shall be read as requiring the Group to maintain
insurances in excess of those required under sub-paragraph (b)(i) above.

(c)                                  Each member of
the Group must ensure that its Insurances comply with the following
requirements:

(i)                                     each member of the Group must be insured for its own insurable interest,
and separately from any other insured party and it will use all reasonable
efforts to ensure that its insurers waive any right of subrogation against any
member of the Group or any Finance Party;

(ii)                                  each member of the Group must be entitled to claim directly for any
insured loss suffered by it;

(iii)                               KDG must, and shall use all reasonable endeavours to procure that the
insurers will agree to, give at least 30 days’ notice to the Facility Agent if
any insurer proposes to repudiate, rescind or cancel any Insurance or to treat
it as avoided in whole or in part or otherwise decline any valid claim under it
by or on behalf of that member of the Group;

(iv)                              the member of the Group must be free to assign all amounts payable to it
under each of its Insurances and all its rights in connection with those
amounts in favour of the Security Agent as agent and trustee for the Finance
Parties; and

(v)                                 no limits of cover purchased under any Insurance are to be capable of
being eroded below the limits which a prudent owner would maintain by reason of
claims from persons who are not members of the Group.

(d)                                 Each member of
the Group must:

 80
 

 

(i)                                     promptly notify the Facility Agent of any event or occurrence giving
rise to any aggregate loss or liability in excess of e5,000,000 in respect of which any member of the Group is entitled to
make one or more claim under any Insurance;

(ii)                                  keep the Facility Agent advised of the progress of the claim(s); and

(iii)                               not compromise or settle any claim for less than the amount claimed
without the prior consent of the Facility Agent where the aggregate loss or
liability in respect of the event or occurrence concerned is more than twice
the amount referred to in sub-paragraph (i) above.

(e)                                  If any member of
the Group fails to maintain any contract of insurance which it is required to
maintain under this Agreement, that member of the Group will allow the Facility
Agent to purchase the requisite insurance on its behalf if the Facility Agent
so elects. That member of the Group must immediately on request by the Facility
Agent pay the costs and expenses of the Facility Agent or any of its agents
incurred in the purchase of that insurance.

19.20                 Holding Companies

(a)                                  KDG must not
carry on any business or other activities or own any assets, other than:

(i)                                     the ownership of the shares in the general partners of each of KDVS, Kabel
Deutschland Vertrieb und Service Beteiligungs GmbH & Co. KG, New Regco or
any successor (as defined in paragraph (b) below) and Kabel Deutschland
Vermögen Beteiligungs GmbH & Co. KG, the partnership interest in KDVS, Kabel
Deutschland Vertrieb und Service Beteiligungs GmbH & Co. KG, New Regco or
any successor (as defined in paragraph (b) below) and Kabel Deutschland
Vermögen Beteiligungs GmbH & Co. KG and the ownership of the shares of or
partnership interests in the New Limited Partnership any other limited partner
of New Regco or any successor (as defined in paragraph (b) below) and where
such limited partner (including the New Limited Partnership) is itself a
partnership, ownership of the shares in the general partner in such
partnership;

(ii)                                  the granting of any guarantee or Security Interest permitted by the
terms of this Agreement;

(iii)                               incurring and making payments on Financial Indebtedness under the
Hedging Documents and the Indenture Documents including complying with legal
and regulatory reporting requirements and otherwise performing its obligations
under such documents;

(iv)                              the making or receipt of Permitted Distributions;

(v)                                 rights arising under the Transaction Documents;

(vi)                              the provision of administrative, managerial, legal, treasury and
accounting services to other members of the Group, the ownership of
administrative equipment and leasing of premises required to provide such
services and the employment of employees to provide such services;

(vii)                           general administration activities of KDG including, without limitation:

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(A)                              those relating to overhead costs and paying filing fees and other
ordinary course expenses required for KDG to continue to subsist (including, without
limitation, audit fees and Taxes);

(B)                                periodic reporting under the Indenture Documents, SEC rules and other
periodic reporting requirements and administering the High Yield Notes
(including, without limitation, trustee fees);

(C)                                those relating to any other fees, costs, expenses and Taxes incurred in
connection with the issue, offering, registration and periodic reporting in
connection with the Indenture Documents; and

(D)                               those arising in connection with or following a Market Issue;

(viii)                        the ownership of Kabel Service Berlin GmbH, Kabelfernsehen München
Servicenter Gesellschaft mit beschränkter Haftung — Beteiligungsgesellschaft,
Kabelfernsehen München Servicenter GmbH & Co. KG, RKS Niedersächsische
Kabel-Service- Beteiligungsgesellschaft mbH and RKS Niedersächsische
Kabel-Servicegesellschaft mbH & Co. KG; or

(ix)                                (pending its solvent liquidation) the ownership of Deutsche Kabel
Services Verwaltungs GmbH.

(b)                                 KDG shall ensure that Kabel Deutschland
Verwaltungs GmbH or any other general partner of KDVS shall not carry
on any business or other activities (other than the general administrative
activities required for it to subsist and the business of being the general
partner of KDVS and any other member of the Group in respect of which it was
the general partner as at the date of this Agreement or own any assets (other
than the ownership of the general partnership interest in KDVS and any other
member of the Group in respect of which it was the general partner as at the
date of this Agreement.

(c)                                  KDG shall ensure
that Kabel Deutschland Vertrieb und Service Beteiligungs GmbH & Co. KG and
Kabel Deutschland Vermögen Beteiligungs GmbH & Co. KG or any other limited
partner of KDVS, or New Regco respectively, shall not carry on any business or
other activities (other than the general administrative activities required for
it to subsist and the business of being a limited partner of KDVS, or New Regco
respectively, as at the date of this Agreement or own any assets (other than
the ownership of the limited partnership interest in KDVS or New Regco
respectively as at the date of this Agreement.

(d)                                 Subject to the following sentence, KDG shall
ensure that any other limited partner of New Regco or any successor shall not carry
on any business or other activities (other than the general administrative
activities required for it to subsist and the business of being a limited
partner of New Regco or any successor) or own any assets. This Clause does not apply to KDVS
in its capacity as limited partner in New Regco.

(e)                                  KDG shall ensure
that the general partner in the Second Limited Partnership shall not carry on
any business or other activities (other than the general administration
activities required for it to subsist and the business of being the general
partner in the Second Limited Partnership) or own any assets (other than the
general partnership interest in the Second Limited Partnership).

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19.21                 Arm’s-length terms

No
member of the Group may enter into any material transaction with any person
otherwise than on arm’s-length terms, save for:

(a)                                  loans
between members of the Group; or

(b)                                 other
transactions between members of the Group,

which
are permitted by other terms of this Agreement provided that the terms of those
loans or transactions do not result in an effective transfer of value from any
member of the Group (other than KDG) to KDG (other than any Permitted
Distribution).

19.22                 Amendments to documents

(a)                                  No member of the
Group may:

(i)                                     amend its memorandum or articles of association or other constitutional
documents;

(ii)                                  enter into any agreement with any Original Investor or any direct or
indirect shareholder in KDG or any of their respective Affiliates which is not
a member of the Group other than in relation to corporate advisory services
provided on arm’s length terms in the ordinary course of business; or

(iii)                               amend or waive any term of the Investor Documents or Acquisition
Documents,

in a
manner or to an extent which is reasonably likely in any way to affect
materially and adversely the interests of the Finance Parties under the Finance
Documents.

(b)                                 KDG must promptly
supply to the Facility Agent a copy of any amendment to or waiver of any of the
documents, or any agreement with any Original Investor or any direct or
indirect shareholder in KDG (or any of their respective Affiliates), referred
to in paragraphs (a)(i) (other than in relation to any Dormant Subsidiary) and
(iii) above.

19.23                 Bank Accounts

No
member of the Group may open or maintain any account or enter into any banking
relationship with any branch of any bank or other financial institution
providing similar services other than:

(i)                                     any account maintained with an Approved Bank; and

(ii)                                  any account not included in paragraph (a) and (b) above provided that
the aggregate amount standing to the credit of such accounts shall not at any
time exceed e500,000 and KDG shall, or will procure that the relevant member of the
Group shall, close such account as soon as reasonably practicable after it
becomes aware of the existence of such account.

19.24                 Access

If an
Event of Default has occurred and is continuing, upon reasonable notice being
given in writing by the Facility Agent, each member of the Group must allow any
one or more representatives of the Facility Agent and/or accountants or other
professional advisers appointed by the Facility Agent (at KDG’s risk and
expense unless no Default is shown to

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exist)
to have access during normal business hours to the premises, assets, books and
records of that member of the Group in the presence of KDG.

19.25      Pension
schemes

(a)           Each member of
the Group must:

(i)            be in compliance with all
laws and contracts relating to any of its pension schemes; and

(ii)           maintain and fund its
pension schemes to at least the extent required by local law and practice,

save
in each case where failure to do so would not have a Material Adverse Effect.

(b)           KDG must supply
the Facility Agent with a copy of any third party report in respect of any
pension scheme operated by a member of the Group which the Facility Agent may
reasonably request.

19.26      Taxes

Each
member of the Group must pay all Taxes due and payable (or, where payments of
Tax must be made by reference to estimated amounts, such estimated Tax
(calculated in good faith) as due and payable for the relevant period) by it
prior to the accrual of any fine or penalty for late payment, unless (and only
to the extent that):

(a)           payment of those Taxes is being contested in good faith;

(b)           adequate reserves are being maintained for those Taxes and the costs
required to contest them; and

(c)           failure to pay those Taxes does not have a Material Adverse Effect.

19.27      Executive
Officers

(a)           KDG must ensure
that there is in place in respect of each member of the Group qualified
management with appropriate skills.

(b)           If any of the
Executive Officers ceases (whether by reason of death, retirement at normal
retiring age or through ill health or otherwise) to perform his or her duties
(as required under their service contracts), KDG must promptly:

(i)            notify the Facility Agent;
and

(ii)           find and appoint an
adequately qualified replacement for him or her as promptly as practicable and
notify the Facility Agent prior to, or if not practicable, promptly following
such appointment.

19.28      Security

(a)           Each Obligor
shall ensure that the persons identified in Schedule 6 (Security
Documents) will execute and deliver to the Security Agent the intended Security
Documents identified against their name in that Schedule at or before the time
provided for in that Schedule.

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(b)           Each Obligor must
use its reasonable endeavours, and shall procure that each of its Subsidiaries (other
than any Unrestricted Subsidiary) uses its reasonable endeavours, on acquiring
any asset which:

(i)            would not be immediately and
effectively charged by the then existing Security Documents; and

(ii)           (A)          is
of a type which is charged by the then existing Security Documents; or

(A)          is otherwise material to the
business of that Subsidiary,

executes
and delivers to the Security Agent such further or additional Security
Documents in relation to such assets as the Majority Lenders may require (in
each case acting reasonably having regard to the Security Principles) and in
form and substance satisfactory to them.

(c)           Each Obligor
shall execute and deliver to the Security Agent such further or additional
Security Documents in such form as the Security Agent shall require (in each
case acting reasonably having regard to the Security Principles) creating an
effective first ranking fixed Security Interest over the ownership interest in
any entity which becomes a member of the Group after the date of this
Agreement.

(d)           The Obligors need
only perform their obligations under paragraphs (b) and (c) above if it is
not unlawful for the relevant person to execute and deliver such Security
Documents and that person executing and delivering such Security Documents
would not result in personal liability for that person’s directors or other
management and if KDVS (acting reasonably) does not consider that the granting
of such Security Interests would be materially disadvantageous to the tax
position of it or the acquired entity. Each Obligor must use, and must procure
that the relevant person uses, all reasonable endeavours lawfully to avoid any
such unlawfulness or personal or tax liability. This includes agreeing to a
limit on the amount secured. The Facility Agent may (but shall not be obliged
to) agree to such a limit if, in its opinion, to do so might avoid the relevant
unlawfulness or personal liability.

(e)           Each Obligor
shall, at its own expense, execute and do all such assurances, acts and things
as the Security Agent may reasonably require:

(i)            for registering any Security
Documents in any required register and for perfecting or protecting the
security intended to be afforded by the Security Documents; and

(ii)           if the Security Documents
have become enforceable, for facilitating the realisation of all or any part of
the assets which are subject to the Security Documents and the exercise of all
powers, authorities and discretions vested in the Security Agent or in any
receiver of all or any part of those assets,

and
in particular shall execute all transfers, conveyances, assignments and
releases of that property whether to the Security Agent or to its nominees and
give all notices, orders and directions which the Security Agent may reasonably
think expedient.

(f)            On each date that
a Security Document is entered into after the date of this Agreement, each
Obligor shall procure that the documents listed in Part 5 of
Schedule 2 (Conditions precedent documents) in respect of the Obligor
entering into such Security Document are delivered to the Facility Agent.

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19.29      Surplus
Cash

(a)           No member of the
Group may agree to any restriction on its ability to move cash to another
member of the Group, whether by way of dividend or other distribution,
inter-company loan, redemption of shares or otherwise.

(b)           Paragraph (a)
above does not apply to any restriction contained in a Finance Document.

(c)           With effect from
the date falling 30 days after the date of this Agreement, KDG may not hold any
Cash or Cash Equivalents (disregarding any amounts held by KDG which KDG is
permitted to distribute to its shareholders under the Finance Documents,
pending such distribution) other than to meet its scheduled debt service
falling due within five Business Days or to meet its other cashflow
requirements (in respect of activities permitted under Clause 19.20 (Holding
Companies)) for the next 30 days.

(d)           KDG will ensure
that none of its Subsidiaries (other than KDVS and any Unrestricted Subsidiary)
will, at any time, hold Cash or Cash Equivalents greater than required for its
projected cashflow requirements for the next 30 days (the amount of such excess
being the Cash Balance) and that any such Cash
Balance shall be lent by that Subsidiary to KDVS except that no Subsidiary
shall be required to lend any Cash Balance to KDVS:

(i)            at a time when to do so
would cause KDVS or the Subsidiary to incur a materially greater Tax liability
in respect of the Cash Balance than it would otherwise incur if the loan were
made at a later date; or

(ii)           if to do so would breach any
applicable law.

19.30      Telecoms
Laws/Licences

Each
member of the Group shall comply with all Telecom and Broadcasting Laws with
which compliance is necessary for it to carry on its business and shall obtain
and maintain all licences and authorisations necessary for it to carry on its business
in each case where failure to do so would have a Material Adverse Effect.

19.31      Unrestricted
Subsidiaries

(a)           Any transaction
between a member of the Group and an Unrestricted Subsidiary must be on arm’s
length terms.

(b)           No member of the
Group may:

(i)            provide debt or equity
funding or contributions to any Unrestricted Subsidiary;

(ii)           incur any actual or
contingent liability in respect of any Unrestricted Subsidiary or its
obligations (except to the extent limited in recourse to the net proceeds of shares,
partnerships or other ownership interests held by a member of the Group in an
Unrestricted Subsidiary, or of debt owed to a member of the Group by an
Unrestricted Subsidiary); or

(iii)          permit any creditor of any
Unrestricted Subsidiary to have any recourse to it or its assets, including on
an insolvency or winding-up of the Unrestricted Subsidiary (except to the
extent limited in recourse to the net proceeds of shares, partnerships or other
ownership interests held by a member of the Group in an Unrestricted
Subsidiary, or of indebtedness owed by an Unrestricted 

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Subsidiary to a member of the Group),

(together,
Unrestricted Subsidiary Funding) except
to the extent that the aggregate amount of all Unrestricted Subsidiary Funding
(including any Unrestricted Subsidiary Funding 
provided before the date of this Agreement which remains outstanding)
does not exceed the Permitted Investment Basket.

(c)           For the purposes
of this Clause 19.31 Permitted Investment
Basket means:

(i)            prior to the completion of the
acquisition of the Agreed Target, the aggregate of €160,000,000; and

(ii)           if the Agreed Target is
acquired by a member of the Group, after the completion of that acquisition, €60,000,000,

in
each case, plus the proceeds of any equity or
subordinated debt (subordinated on terms acceptable to the Facility Agent)
which is provided to KDVS after the date of this Agreement for the purpose of
investment in an Unrestricted Subsidiary and plus the proceeds of any dividends
or other distributions, loan repayments or interest payments in each case
received in cash by a member of the Group from an Unrestricted Subsidiary (but
only to the extent the same are not included in Consolidated EBITDA at any
time) but deducting any amount of the Permitted
Investment Basket used to fund the payment of distributions as contemplated in
sub-paragraph (a)(i) of the definition of Permitted Distribution in Clause 1.1
(Definitions).

19.32      Security
transfer agreement

Within
90 days of the date of this Agreement, each Original Obligor must enter into a
security transfer agreement (the 2006 Security Transfer
Agreement) in respect of any parts of the cable network which were
not subject to a Security Interest under the 2004 Security Transfer Agreement
(whether through a Security Interest, judgment action or otherwise).

19.33      New
Regco

New
Regco will, at least five Business Days prior to any Permitted Reorganisation
in which it is involved or prior to any contribution of assets to it, provide
evidence to the Facility Agent that it has appointed an agent for service of
process in England under the Finance Documents.

20.          DEFAULT

20.1        Events
of Default

Each
of the events set out in this Clause is an Event of Default.

20.2        Non-payment

An
Obligor does not pay on the due date any amount payable by it under the Finance
Documents in the manner required under the Finance Documents, unless the
non-payment:

(a)           is caused by technical or administrative error; and

(b)           is remedied within three Business Days of the due date.

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20.3        Breach
of other obligations

(a)           An Obligor does
not comply with any term of Clause 18 (Financial covenants); or

(b)           an Obligor does
not comply with any term of the Finance Documents (other than any term referred
to in Clause 20.2 (Non-payment) or
in paragraph (a) above), unless the non-compliance:

(i)            is capable of remedy; and

(ii)           is remedied within 21 days
of the earlier of the Facility Agent giving notice of the breach to KDG and any
Obligor becoming aware of the non-compliance.

20.4        Misrepresentation

A
representation or warranty made or deemed to be repeated by an Obligor in any
Finance Document or in any document delivered by or on behalf of any Obligor
under any Finance Document is incorrect or misleading in any material respect
when made or deemed to be repeated, unless the circumstances giving rise to the
misrepresentation or breach of warranty:

(a)           are capable of remedy; and

(b)           are remedied within 21 days of the earlier of the Facility Agent giving
notice of the breach to KDG and any Obligor becoming aware of the misrepresentation
or breach of warranty.

20.5        Cross-default

Any
of the following occurs in respect of a member of the Group:

(a)           any of its Financial Indebtedness is not paid when due (after the expiry
of any originally applicable grace period); or

(b)           any of its Financial Indebtedness:

(i)            becomes prematurely due and payable prior to its stated maturity; or

(ii)           is placed on demand; or

(iii)          is capable of being declared
by or on behalf of a creditor to be prematurely due and payable or of being
placed on demand; or

(iv)          is terminated or closed out or is capable of being terminated or closed
out,

in
each case, because an event of default (howsoever described) has occurred,

unless
the aggregate principal amount of Financial Indebtedness falling within all or
any of paragraphs (a) and (b) above is less than e20,000,000.

20.6        Insolvency

(a)           Any of the
following occurs in respect of a Material Group Member:

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(i)            it is, or is deemed for the
purposes of any applicable law to be, overindebted (Überschuldung)
or is unable to pay its debts as they fall due (Zahlungsunfähigkeit) or insolvent; or

(ii)           it admits its insolvency or
its inability to pay its debts as they fall due; or

(iii)          it suspends making payments
on any of its debts or announces an intention to do so; or

(iv)          by reason of actual or
anticipated financial difficulties, it begins negotiations with any creditor (other
than the Finance Parties) for the rescheduling or restructuring of any of its other
indebtedness; or

(v)           a moratorium is declared or
instituted in respect of any of its indebtedness.

If a
moratorium occurs in respect of a member of the Group, the ending of the
moratorium will not remedy any Event of Default caused by the moratorium.

20.7        Insolvency
proceedings

(a)           Except as
provided in paragraph (b) below, any of the following occurs in respect of a
Material Group Member:

(i)            any formal or legal step is
taken with a view to a moratorium or a composition, assignment or similar
arrangement with any of its creditors; or

(ii)           a meeting of its
shareholders, directors or other relevant officers is convened for the purpose
of considering any resolution for, to petition for or to file documents with a
court or any registrar for its winding-up, administration or dissolution or for
the seeking of relief under any applicable bankruptcy, insolvency, company or
similar law or any such resolution is passed; or

(iii)          any person presents a
petition or files documents with a court or any registrar for its winding-up,
administration or dissolution or seeking relief under any applicable
bankruptcy, insolvency, company or similar law; or

(iv)          an order for its winding-up,
administration or dissolution is made or other comparable relief is granted
under any applicable bankruptcy, insolvency, company or similar law; or

(v)           any liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, receiver, administrative
receiver, administrator or similar officer is appointed in respect of it or any
of its assets; or

(vi)          its shareholders, directors
or other relevant officers request the appointment of, or give notice of their
intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator or similar
officer in respect of it or any of its assets.

(b)           Paragraph (a)
does not apply to:

(i)            any step or procedure which
is part of a Permitted Reorganisation; or

 89
 

 

(ii)           a petition or document
referred to in paragraph (a)(i) or (a)(iii) above for winding-up or similar
action presented by a creditor which is being contested in good faith and with
due diligence and is discharged or struck out within twenty one days.

20.8        Creditors’
process

(a)           Except as
provided in paragraph (b) below, any attachment, sequestration, distress,
execution or analogous event affects any asset or assets of a Material Group
Member.

(b)           Paragraph (a)
does not apply if:

(i)            the aggregate value of that
asset or those assets is less than e10,000,000; or

(ii)           that attachment,
sequestration, distress, execution or analogous event is being contested in
good faith and with due diligence and is discharged or stayed within 21 days.

20.9        Analogous
proceedings

There
occurs, in relation to a Material Group Member, in any jurisdiction to which it
or any of its assets are subject, any event which, in the reasonable opinion of
the Majority Lenders, appears to correspond with any of those mentioned in Clauses 20.6 (Insolvency) to 20.8
(Creditors’ process) (inclusive).

20.10      Cessation
of business

A
Material Group Member suspends, ceases, or threatens to suspend or cease, to
carry on all or a substantial part of its business except:

(a)           as part of a Permitted Reorganisation; or

(b)           as a result of any disposal allowed under this Agreement.

20.11      Finance
Documents

(a)           It is or becomes
unlawful for any Obligor to perform any of its material obligations under the
Finance Documents.

(b)           Any Finance
Document is not effective in any material respect or is alleged by an Obligor
to be ineffective for any reason.

(c)           An Obligor
repudiates or rescinds a Finance Document or evidences an intention to
repudiate or rescind a Finance Document.

20.12      Ownership
of Obligors

An
Obligor (other than KDG) is not or ceases to be a wholly-owned Subsidiary of
KDG.

20.13      Priority
Agreement

(a)           (i)            Any Relevant Party does not
comply with the terms of the Priority Agreement; or

(ii)           a representation or warranty
given by any Relevant Party in the Priority Agreement is incorrect in any
material respect,

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and,
if the non-compliance or circumstances giving rise to the misrepresentation or
breach of warranty are capable of remedy, such non-compliance is or
circumstances are not remedied within 21 days of the earlier of the Facility
Agent giving notice to that Relevant Party of and that Relevant Party becoming
aware of the non-compliance or misrepresentation or breach of warranty.

(b)           The Priority
Agreement is not effective in any material respect or is alleged by a Relevant
Party to it to be ineffective.

(c)           Any Relevant
Party repudiates the Priority Agreement or evidences an intention to repudiate
it.

(d)           For the purpose
of this Clause, Relevant Party means any member of
the Group, KDHoldCo, any other Holding Company of KDG which has provided
Shareholder Loans to KDG and any Investor which is, in each case, party to the
Priority Agreement.

20.14      Material
adverse effect

Any
event or series of events (whether related or not) occurs which has a Material
Adverse Effect.

20.15      Audit
qualification

The
Auditors qualify their report on any audited consolidated Accounts of KDG:

(a)           by reference to not having access to adequate information or the
information supplied being unreliable;

(b)           on the grounds that they are unable to prepare such Accounts on a going
concern basis; or

(c)           otherwise in terms or as to issues which in the opinion of the Majority
Lenders (acting reasonably) are materially adverse to their interests in the
context of the Finance Documents and the transactions contemplated by them.

20.16      Proceedings

Any
one or more judgments or orders is made against any member of the Group
involving an aggregate liability (not paid or to the extent not covered by
Insurance) which is in excess of e10,000,000 unless all those judgments and orders are vacated,
discharged, paid or stayed pending appeal within fourteen days of their being
made.

20.17      Service
Level Agreements

(a)           (i)            Any Service Level Agreement is
terminated or becomes capable of being terminated; or

(ii)           Deutsche Telekom AG issues a
notice of termination or otherwise demonstrates an intention to terminate any
Service Level Agreement,

in
each case otherwise than by reason of full performance of the agreement or
expiry of its term, where such termination would have a Material Adverse
Effect.

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(b)           Any member of the Group shall agree to any amendment of or waiver of any
of its rights under any Service Level Agreement to which it is a party where
such amendment or waiver would have a Material Adverse Effect.

20.18      Regulatory
Interventions/Licences

Any
licence is revoked, cancelled or altered, the effect of which would have a
Material Adverse Effect or any regulatory authority intervenes with the
operation of the business of an Obligor and such intervention is reasonably
likely to have a Material Adverse Effect.

20.19      High
Yield Notes

Any
event of default (howsoever defined and giving effect to any applicable grace
period) is outstanding under the High Yield Notes.

20.20      Acceleration

If
an Event of Default is outstanding, the Facility Agent may, and must if so
instructed by the Majority Lenders, by notice to KDG:

(a)           declare that an Event of Default has occurred; and/or

(b)           declare that a Rollover Loan may not be made; and/or

(c)           cancel some or all of the Total Commitments; and/or

(d)           declare that all or part of any amounts outstanding under the Finance
Documents are:

(i)            immediately due and payable; and/or

(ii)           payable on demand by the Facility Agent acting on the instructions of
the Majority Lenders.

Any
notice given under this Clause will
take effect in accordance with its terms.

21.          THE ADMINISTRATIVE PARTIES

21.1        Appointment
and duties of the Agents

(a)           Each Finance
Party (other than such Agent) irrevocably appoints each Agent to act as its
agent (and, in the case of the Security Agent, trustee) under and in respect of
the Finance Documents.

(b)           Each Finance
Party irrevocably authorises each Agent to:

(i)            perform the duties and to
exercise the rights, powers and discretions that are specifically given to it
under the Finance Documents, together with any other incidental rights, powers
and discretions; and

(ii)           execute each Finance
Document expressed to be executed by the relevant Agent on its behalf.

(c)           Each Agent has
only those duties which are expressly specified in the Finance Documents. Those
duties are solely of a mechanical and administrative nature.

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21.2        Role
of the Mandated Lead Arranger

Except
as specifically provided in the Finance Documents, the Mandated Lead Arranger
has no obligation of any kind to any other Party in connection with any Finance
Document.

21.3        No
fiduciary duties

Except
as specifically provided in a Finance Document and except in the case of the
Security Agent, in relation to the Security Documents and monies recovered
pursuant thereto:

(a)           nothing in the Finance Documents makes an Administrative Party a trustee
or fiduciary for any other Party or any other person; and

(b)           no Administrative Party need hold in trust any moneys paid to or
recovered by it for a Party pursuant to the Finance Documents or be liable to
account for interest on those moneys.

21.4        Individual
position of an Administrative Party

(a)           If it is also a
Lender, each Administrative Party has the same rights and powers under the
Finance Documents as any other Lender and may exercise those rights and powers
as though it were not an Administrative Party.

(b)           Each
Administrative Party may:

(i)            carry on any business with
any Obligor or its related entities (including acting as an agent or a trustee
for any other financing); and

(ii)           retain any profits or
remuneration it receives under the Finance Documents or in relation to any
other business it carries on with any Obligor or its related entities.

21.5        Reliance

Each
Agent may:

(a)           rely on any notice or document believed by it to be genuine and correct
and to have been signed by, or with the authority of, the proper person;

(b)           rely on any statement made by any person regarding any matters which may
reasonably be assumed to be within his knowledge or within his power to verify;

(c)           engage, pay for and rely on professional advisers selected by it
(including those representing a Party other than that Agent); and

(d)           act under the Finance Documents through its personnel and agents.

21.6        Majority
Lenders’ instructions

(a)           Except in
relation to a decision or action which specifically requires the instructions
of all of the Lenders, each Agent is fully protected if it acts on the
instructions of the Majority Lenders in the exercise of any right, power or
discretion or any matter not expressly provided for in the Finance Documents.
Any such instructions given by the Majority Lenders will be binding on all the
Lenders. In the absence of instructions, each Agent may act or refrain from
acting as it considers to be in the best interests of all the Lenders.

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(b)           The Facility
Agent may assume that unless it has received notice to the contrary, any right,
power, authority or discretion vested in any Party or the Majority Lenders has
not been exercised.

(c)           Neither Agent is
authorised to act on behalf of a Lender (without first obtaining that Lender’s
consent) in any legal or arbitration proceedings in connection with any Finance
Document.

(d)           An Agent may
require the receipt of security satisfactory to it, whether by way of payment
in advance or otherwise, against any liability or loss which it may incur in
complying with the instructions of the Majority Lenders.

21.7        Responsibility

(a)           No Administrative
Party is responsible to any other Finance Party for the legality, validity,
effectiveness, enforceability, adequacy, accuracy, completeness or performance
of:

(i)            any Finance Document or any
other document;

(ii)           any statement or information
(whether written or oral) made in or supplied in connection with any Finance
Document; or

(iii)          any observance by any
Obligor of its obligations under any Finance Document or any other document.

(b)           Without affecting
the responsibility of any Obligor for information supplied by it or on its
behalf in connection with any Finance Document, each Lender confirms that it:

(i)            has made, and will continue
to make, its own independent appraisal of all risks arising under or in
connection with the Finance Documents (including the financial condition and
affairs of each Obligor and its related entities and the nature and extent of
any recourse against any Party or its assets); and

(ii)           has not relied exclusively
on any information provided to it by any Administrative Party in connection
with any Finance Document.

21.8        Exclusion
of liability

(a)           Neither Agent is
liable or responsible to any other Finance Party for any action taken or not
taken by it in connection with any Finance Document, unless directly caused by
its gross negligence or wilful misconduct.

(b)           No Party (other
than the Facility Agent) may take any proceedings against any officer, employee
or agent of an Agent in respect of any claim it might have against that Agent
or in respect of any act or omission of any kind by that officer, employee or
agent in connection with any Finance Document. Any officer, employee or agent
of an Agent may rely on this Clause
in accordance with the Contracts (Rights of Third Parties) Act 1999.

(c)           (i)            Nothing in this Agreement will
oblige any Administrative Party to satisfy any know your customer requirement
in relation to the identity of any person on behalf of any Finance Party.

(ii)           Each Finance Party confirms
to each Administrative Party that it is solely responsible for any know your
customer requirement it is required to carry out and that it may not rely on
any statement in relation to those requirements made by any other person.

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21.9        Default

(a)           Neither Agent is
obliged to monitor or enquire whether a Default has occurred. Neither Agent is
deemed to have knowledge of the occurrence of a Default unless it has received
notice from a Party describing such Default and specifying that the event or
circumstance concerned is a Default.

(b)           If an Agent:

(i)            receives notice from a Party
referring to this Agreement, describing a Default and stating that the event is
a Default; or

(ii)           is aware of the non-payment
of any principal, interest or fee payable to a Lender under any Finance
Document,

it
must promptly notify the Lenders.

21.10      Information

(a)           Each Agent must
promptly forward to the person concerned the original or a copy of any document
which is delivered to that Agent by a Party for that person.

(b)           Except where a
Finance Document specifically provides otherwise, neither Agent is obliged to
review or check the adequacy, accuracy or completeness of any document it
forwards to another Party.

(c)           Except as
provided above, neither Agent has any duty:

(i)            either initially or on a
continuing basis to provide any Lender with any credit or other information
concerning the risks arising under or in connection with the Finance Documents
(including any information relating to the financial condition or affairs of
any Obligor or its related entities or the nature or extent of recourse against
any Party or its assets) whether coming into its possession before, on or after
the date of this Agreement; or

(ii)           unless specifically
requested to do so by a Lender in accordance with a Finance Document, to
request any certificate or other document from any Obligor.

(d)           In acting as an
Agent, such Agent shall be treated as acting through its agency division which
shall be treated as a separate entity from its other divisions and departments.
Any information received or acquired by an Agent which, in its opinion, is
received or acquired by some other division or department or otherwise than in
its capacity as an Agent may be treated as confidential by that Agent and will
not be treated as information possessed by that Agent in its capacity as such.

(e)           No Agent is
obliged to disclose to any person any confidential information supplied to it
by or on behalf of a member of the Group solely for the purpose of evaluating
whether any waiver or amendment is required in respect of any term of the
Finance Documents.

(f)            Each Obligor
irrevocably authorises each Agent to disclose to the other Finance Parties any
information which, in such Agent’s opinion, is received by it in its capacity
as an Agent.

(g)           Upon request by a
Lender or KDG the Facility Agent shall supply that Lender with a list of all of
the current Lenders (and their participation in each of the Facilities) at that
time.

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21.11      Indemnities

(a)           Without limiting
the liability of any Obligor under the Finance Documents, each Lender must
indemnify each Agent for that Lender’s proportion of any loss or liability
incurred by that Agent in acting as an Agent, except to the extent that the
loss or liability is caused by that Agent’s gross negligence or wilful
misconduct.

(b)           A Lender’s
proportion of the liability or loss set out in paragraph (a) above is the
proportion which its participation in the Loans and Ancillary Outstandings (if
any) bear to all the Loans and Ancillary Outstandings (if any) on the date of
the demand. If, however, there are no Loans or Ancillary Outstandings
outstanding on the date of demand, then the proportion will be the proportion
which its aggregate Commitments bear to the Total Commitments at the date of
demand or, if the Total Commitments have been cancelled, bore to the Total
Commitments immediately before being cancelled.

(c)           Each Agent may
deduct from any amount received by it for a Lender any amount due to that Agent
from that Lender under a Finance Document but unpaid.

21.12      Compliance

Each
Administrative Party may refrain from doing anything (including disclosing any
information) which might, in its opinion, constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person, and may do
anything which, in its opinion, is necessary or desirable to comply with any
law or regulation.

21.13      Resignation

(a)           Each Agent may
resign and appoint any of its Bank Affiliates as successor Agent to it by
giving notice to the Lenders and KDG.

(b)           Alternatively,
each Agent may resign by giving notice to the Lenders and KDG, in which case
the Majority Lenders may appoint a successor Agent to it.

(c)           If no successor
Agent has been appointed under paragraph (b) above within 30 days after
notice of resignation was given, the relevant Agent may appoint a successor
Agent to it.

(d)           The person(s)
appointing a successor Agent must, if practicable, consult with KDG prior to
the appointment.

(e)           The resignation
of an Agent and the appointment of any successor Agent will both become
effective only when:

(i)            the successor Agent notifies
all the Parties that it accepts its appointment;

(ii)           on giving the notification,
the successor Agent will succeed to the position of the retiring Agent and the
term Facility Agent or Security Agent (as applicable) will mean the successor
Agent; and

(iii)          in the case of the Security
Agent, the Facility Agent confirms that it is satisfied that the Security
Documents (and any related documentation) have been transferred to or into (and
where required registered in) the name of the proposed successor Security
Agent.

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(f)            The retiring
Agent must, at its own cost, make available to the successor Agent such
documents and records and provide such assistance as the successor Agent may
reasonably request for the purposes of performing its functions as Agent under
the Finance Documents.

(g)           Upon its
resignation becoming effective, this Clause will continue to benefit a
retiring Agent in respect of any action taken or not taken by it in connection
with the Finance Documents while it was an Agent, and, subject to
paragraph (f) above, it will have no further obligations under any Finance
Document.

(h)           The Majority
Lenders may, by notice to any Agent, require it to resign under
paragraph (b) above.

(i)            The Obligors will
(at their own cost) take such action and execute such documents as is required
by the Security Agent so that the Security Documents provide for effective and
perfected security in favour of any successor Security Agent.

21.14      Relationship
with Lenders

(a)           Each Agent may
treat each Lender as a Lender, entitled to payments under this Agreement and as
acting through its Facility Office(s) until it has received not less than five
Business Days’ prior notice from that Lender to the contrary.

(b)           Each Agent may at
any time, and must if requested to do so by the Majority Lenders, convene a
meeting of the Lenders.

(c)           Each Agent must
keep a register of all the Parties and supply any other Party with a copy of
the register on request. The register will include each Lender’s Facility
Office(s) and contact details for the purposes of this Agreement.

21.15      Notice
period

Where
this Agreement specifies a minimum period of notice to be given to the Facility
Agent, the Facility Agent may, at its discretion, accept a shorter notice
period.

21.16      Security
Agent

(a)           The Security
Agent shall hold the security constituted by the Security Documents on trust or
to the extent required by any applicable local law as agent for the Finance
Parties in accordance with the Finance Documents.

(b)           The Security
Agent shall not be liable for any failure, omission, or defect in registering,
protecting or perfecting the security constituted by any Security Document or
any security created thereby.

(c)           The Security
Agent has no obligation to enquire into or check the title which any Obligor
may have to any property over which security is intended to be created by any
Security Documents or to insure any such property or the interests of the
Finance Parties in that property.

(d)           The Security
Agent is not under any obligation to hold any title deeds, Security Documents
or any other documents in connection with the property charged by any Security
Document or any other such security in its own possession or to take any steps
to protect or preserve the same. The Security Agent may permit the relevant
Obligor, any bank providing safe custody services or any professional adviser
of the Security Agent to retain all such title deeds, Security Documents and
other documents in its possession.

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(e)           All amounts
received by the Security Agent under the Finance Documents may be:

(i)            invested in any investment
for the time being authorised by English law for the investment by trustees of
trust money or in any other investments which may be selected by the Security
Agent with the consent of the Majority Lenders; or

(ii)           placed on deposit at such
bank or institution (including any Agent or Lender) and upon such terms as the
Security Agent may think fit. Any and all such monies and all interest thereon
shall be paid over to the Facility Agent forthwith upon demand by the Facility
Agent.

(f)            Each Finance
Party confirms its approval of the Security Documents and authorises and
directs the Security Agent (by itself or by such person(s) as it may nominate)
to execute and enforce the same as trustee (or agent) or as otherwise provided
(and whether or not expressly in the Lenders’ names) on its behalf.

22.          EVIDENCE AND CALCULATIONS

22.1        Accounts

Accounts
maintained by a Finance Party in connection with this Agreement are prima facie
evidence of the matters to which they relate for the purpose of any litigation
or arbitration proceedings.

22.2        Certificates
and determinations

Any
certification or determination by a Finance Party of a rate or amount under the
Finance Documents will, in the absence of manifest error, be conclusive
evidence of the matters to which it relates.

22.3        Calculations

Any
interest or fee accruing under this Agreement accrues from day to day and is
calculated on the basis of the actual number of days elapsed and a year of 360
or 365 days or otherwise, depending on what the Facility Agent determines to be
market practice.

23.          FEES

23.1        Agents’
fees

KDVS
must pay (or procure that there is paid) to the relevant Agent for its own
account the agency fee in the amount and in the manner agreed in the Fee Letter
between the Agents and KDG.

23.2        Commitment
fee

(a)           KDVS must pay to
the Facility Agent for the account of each Lender a commitment fee computed at
the rate of 0.625 per cent. per annum on the undrawn, uncancelled amount of
each Lender’s B Facility Commitment. Such commitment fee shall accrue from the
date of this Agreement.

(b)           Accrued
commitment fee is payable on the date falling three months after the date of
this Agreement and subsequent payments of accrued commitment fee shall be paid
quarterly in arrear. Accrued commitment fee in respect of a Lender’s Commitment
under a Facility is also 

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payable
to the Facility Agent for that Lender on the date its Commitment under that
Facility is cancelled in full and on any Acquisition Termination Date.

23.3        Fees

KDVS
must pay each Finance Party the fees agreed to be paid in any Fee Letter, such
fees to be paid in accordance with the terms of that Fee Letter.

24.          INDEMNITIES AND BREAK COSTS

24.1        Currency
indemnity

(a)           KDVS must, as an
independent obligation, indemnify each Finance Party against any loss or
liability which that Finance Party incurs as a consequence of:

(i)            that Finance Party receiving
an amount in respect of an Obligor’s liability under the Finance Documents; or

(ii)           that liability being
converted into a claim, proof, judgment or order,

in a
currency other than the currency in which the amount is expressed to be payable
under the relevant Finance Document.

(b)           Unless otherwise
required by law, each Obligor waives any right it may have in any jurisdiction
to pay any amount under the Finance Documents in a currency other than that in
which it is expressed to be payable.

24.2        Other
indemnities

(a)           KDVS must
indemnify each Finance Party against any loss or liability which that Finance
Party incurs as a consequence of:

(i)            the occurrence of any Event
of Default;

(ii)           any failure by an Obligor to
pay any amount due under a Finance Document on its due date, including any
resulting from any distribution or redistribution of any amount among the
Lenders under this Agreement;

(iii)          (other than by reason of
gross negligence or wilful default by that Finance Party) a Loan not being made
after a Request has been delivered for that Loan; or

(iv)          a Loan (or part of a Loan)
not being prepaid in accordance with a notice of prepayment.

KDVS’s
liability in each case includes any loss or expense on account of funds
borrowed, contracted for or utilised to fund any amount payable under any
Finance Document, any amount repaid or prepaid or any Loan.

(b)           KDVS must
indemnify the Facility Agent against any loss or liability incurred by the
Facility Agent as a result of:

(i)            investigating any event
which the Facility Agent reasonably believes to be a Default except in relation
to Clause 19.24 (Access) and 18.6(c)
(Auditors) where following investigation no Default is shown to exist; or

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(ii)           acting or relying on any
notice which the Facility Agent reasonably believes to be genuine, correct and
appropriately authorised by an Obligor.

24.3        Break
Costs

(a)           Each Borrower
must pay to each Lender its Break Costs in relation to Loans or overdue amounts
repaid or prepaid to it otherwise than on the last day of a Term applicable
thereto.

(b)           Break Costs are
the amount (if any) determined by the relevant Lender by which:

(i)            the interest which that
Lender would have received (excluding the Margin and the Mandatory Cost) for
the period from the date of receipt of any part of its share in a Loan or an
overdue amount to the last day of the applicable Term for that Loan or overdue
amount if the principal or overdue amount received had been paid on the last
day of that Term;

exceeds

(ii)           the amount which that Lender
would be able to obtain by placing an amount equal to the amount received by it
on deposit with a leading bank in the appropriate interbank market for a period
starting on the second Business Day following receipt and ending on the last
day of the applicable Term.

(c)           Each Lender must
supply to the Facility Agent for the relevant Borrower details of the amount of
any Break Costs claimed by it under this Clause.

25.          EXPENSES

25.1        Initial
costs

On
the first Utilisation Date, KDVS must pay to each Administrative Party the
amount of all costs and expenses (including the costs and expenses of legal
advisers) reasonably incurred by it or any of its Bank Affiliates in connection
with due diligence visits, the negotiation, preparation, printing, execution
and perfection of the Finance Documents and other documents contemplated
thereby.

25.2        Subsequent
costs

KDVS
must pay to the Facility Agent the amount of all costs and expenses (including
the costs and expenses of legal advisers) reasonably incurred by it or any of
its Bank Affiliates in connection with:

(a)           the negotiation, preparation, printing, execution and perfection of any
Finance Document and other documents contemplated thereby executed after the
date of this Agreement;

(b)           syndication of the Facilities; and

(c)           any amendment, waiver or consent made or granted in connection with the
Finance Documents.

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25.3        Enforcement
costs

KDVS
must pay to each Finance Party the amount of all costs and expenses (including
the costs and expenses of legal advisers) incurred by it in connection with the
enforcement of, or the preservation of any rights under, any Finance Document.

26.          AMENDMENTS AND WAIVERS

26.1        Procedure

(a)           Except as
provided in this Clause, any term of the Finance Documents may be amended or
waived with the agreement of KDG and the Majority Lenders; this includes any
amendment or waiver of this Agreement. The Facility Agent may effect, on behalf
of any Finance Party, an amendment or waiver allowed under this Clause. Each
Obligor agrees to any such amendment or waiver agreed to by KDG.

(b)           If the Facility
Agent requests the consent of the Lenders to a proposed amendment or waiver to
a Finance Document, and a Lender does not notify the Facility Agent whether it
consents to the amendment or waiver within the later of:

(i)            the date indicated in the
Facility Agent’s request as being the last date on which Lenders should
indicate whether they consent to the amendment or waiver; and

(ii)           15 Business Days after the
date of the Facility Agent’s request,

such
Lender’s outstanding Loans, Ancillary Outstandings and Commitments (as
appropriate) shall not be taken into consideration in determining whether the
Lenders or Majority Lenders have consented to the proposed amendment or waiver.

(c)           The Facility
Agent must promptly notify the other Parties of any amendment or waiver
effected by it under paragraph (a) above. Any such amendment or waiver is
binding on all the Parties.

26.2        Exceptions

(a)           An amendment or
waiver which relates to:

(i)            the definition of Majority Lenders in Clause 1.1
(Definitions);

(ii)           an extension of the date of
payment of any amount of principal, interest, fees or commission to a Lender
(other than an Ancillary Lender in respect of an Ancillary Facility) under the
Finance Documents other than under Clause
8.3 (Mandatory prepayment — third party receipts) 8.4 (Mandatory prepayment -
market issue);

(iii)          a reduction in the Margin or
a reduction in the amount of or change in the currency of any payment of
principal, interest, fee or other amount payable to a Lender under the Finance
Documents other than under Clauses 8.3
(Mandatory prepayment — third party receipts), Mandatory prepayment - market
issue or 9.3 (Margin adjustments);

(iv)          a release of an Obligor,
save as expressly provided in Clause 27.8
(Release of Security);

(v)           a term of a Finance Document
which expressly requires the consent of each Lender;

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(vi)          the right of a Lender to
assign or transfer its rights or obligations under the Finance Documents;

(vii)         unless provided for in this
Agreement, the Priority Agreement or as part of a Permitted Reorganisation, a
release of security over any shares or over any other assets granted under the
Security Documents;

(viii)        changing the ranking or
subordination provided for in the Priority Agreement in any material respect adverse to the Finance Parties (subject to
paragraph (f)); or

(ix)           this Clause,

may
only be made with the consent of all the Lenders.

(b)           An amendment or
waiver which relates to the rights or obligations of an Administrative Party
may only be made with the consent of that Administrative Party.

(c)           An amendment or
waiver which relates to the rights or obligations of any Ancillary Lender may
not be effected without the prior consent of that Ancillary Lender.

(d)           An amendment or
waiver which relates to Clause 8.9
(Application between Facilities) may only be made with the consent of all the
Lenders.

(e)           Any amendment or
waiver which relates to an increase in, or an extension of, a Commitment may
only be made if the Commitments the subject of the proposal increase or
extension are:

(i)            A Facility Commitments, with
the consent of all the Lenders under the A Facility and with the consent of the
Majority Lenders;

(ii)           B Facility Commitments, with
the consent of all the Lenders under the B Facility and with the consent of the
Majority Lenders; and

(iii)          Add-On Facility Commitments,
with the consent of all the Lenders under that Add-On Facility (and, to the
extent the aggregate principal amount of the Additional Facilities would exceed
e650,000,000 after giving effect to such increase, the consent of the
Majority Lenders),

provided
that an Add-On Facility and Add-On Facility Commitments which does not result
in the aggregate principal amount of all Additional Facilities exceeding €650,000,000
may be initially established under this Agreement with the consent only of the
prospective Lenders under that Add-On Facility.

(f)            An amendment
which provides for subordination or ranking of any Add-On Facility or External
Facility (in each case) behind all the other Loans or External Facilities (or
behind any already subordinated Loan or External Facility) may be implemented
with the consent only of all the lenders of that Add-On Facility or External
Facility.

26.3        Change
of currency

If a
change in any currency of a country occurs (including where there is more than
one currency or currency unit recognised at the same time as the lawful
currency of a country), the Finance Documents will be amended to the extent the
Facility Agent (acting reasonably and after consultation with KDG) determines
is necessary to reflect the change.

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26.4        Waivers
and remedies cumulative

(a)           The rights of
each Finance Party under the Finance Documents:

(i)            may be exercised as often as
necessary;

(ii)           are cumulative and not
exclusive of its rights under the general law; and

(iii)          may be waived only in
writing and specifically.

Delay
in exercising or non-exercise of any right is not a waiver of that right.

(b)           Each Finance
Party irrevocably:

(i)            instructs the Facility Agent
and the Security Agent to amend any Finance Document to the extent required to
implement the terms of any Additional Facility provided that no such amendment
prejudices or is reasonably likely to prejudice the interests of that Finance
Party under the Finance Documents. For these purposes, if the terms of an
Additional Facility comply with the terms of this Agreement, the Lenders
confirm that such terms will not prejudice their interests under the Finance
Documents; and

(ii)           instructs and authorises the
Security Agent to:

(A)          act as its representative (Stellvertreter) with regard to the acceptance or, as the
case may be, amendment of any (x) security assigned or transferred or (y) any
pledge or other accessory security right; and

(B)           execute any amendment agreement
and any Security Document acting on its own behalf and as attorney-in-fact for
the relevant Finance Party. The Security Agent shall be exempt from the
restrictions imposed by section 181 of the German Civil Code and shall have the
authority to delegate the power granted hereunder and to grant exemption from
the restrictions imposed by section 181 of the German Civil Code to any
delegate,

provided
that the Security Agent is not authorised to amend any Security Document until the
Facility Agent has received (or has received confirmation from legal counsel
that it will deliver), in form and substance satisfactory to it, a legal
opinion from counsel to it, in respect of the amended Security Documents (the
Facility Agent confirms that it will accept a legal opinion from Allen &
Overy LLP in substantially the form received under Part 1 of Schedule 2
(Conditions Precedent Documents)).

27.          CHANGES TO THE PARTIES

27.1        Assignments
and transfers by Obligors

No
Obligor may assign or transfer any of its rights and obligations under the
Finance Documents without the prior consent of all the Lenders.

27.2        Assignments
and transfers by Lenders

(a)           A Lender (the Existing Lender) may, subject to the following provisions of
this Clause, at any time assign or
transfer (including by way of novation) any of its rights and obligations under
this Agreement to any other bank or financial institution or to a Fund or other
entity which is regularly engaged in or established for the purpose of making,
purchasing or 

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investing
in loans, securities or other financial assets (the New Lender),
provided that, in the case of a partial assignment or transfer (including by
way of novation) of any of its rights and obligations, a minimum amount of e5,000,000 (unless
to a Bank Affiliate of a Lender) must be assigned or transferred.

(b)           Without
limitation to the generality of paragraph (a), a New Lender may be a bank or
financial institution or a trust or fund or other person which is regularly
engaged in or established for the purpose of making, purchasing or investing in
loans, securities or other financial assets.

(c)           Notwithstanding
paragraph (a) above, a transfer by one or more Existing Lenders to a Fund must
be in an amount such that the Fund and its Related Funds taken together will
have a Commitment in a minimum amount of e1,000,000. For
the purposes of this Clause, Funds are Related Funds
if they are managed or advised by the same investment manager or advisor or, if
managed by different investment managers or advisors, the investment advisors
or managers are Affiliates.

(d)           No assignment or
transfer under this Clause will be effective until the Facility Agent has
completed all know your customer requirements relating to any person that it is
required to carry out in relation to such assignment or transfer. The Facility
Agent is not obliged to execute a Transfer Certificate until it has completed
all know your customer requirements to its satisfaction.

(e)           A transfer of
obligations will be effective only if either:

(i)            the obligations are novated
in accordance with the provisions of Clause 27.3
(Procedure for transfer by way of novation); or

(ii)           the New Lender confirms to
the Facility Agent and KDG in form and substance satisfactory to the Facility
Agent and KDG that it is bound by the terms of this Agreement as a Lender and
by the terms of the Priority Agreement as a Senior Creditor (as defined in the
Priority Agreement).

On
the transfer becoming effective in this manner the Existing Lender will be
released from its obligations under this Agreement to the extent that they are
transferred to the New Lender.

(f)            Unless the
Facility Agent otherwise agrees, the New Lender must pay to the Facility Agent
for its own account, on or before the date any assignment or transfer occurs, a
fee of e1,500.

(g)           Any reference in
this Agreement to a Lender includes a New Lender but excludes a Lender if no
amount is or may be owed to or by it under this Agreement.

(h)           A Lender may
sub-participate its obligations and/or rights under this Agreement.

27.3        Procedure
for transfer by way of novation

(a)           A novation is
effected if:

(i)            the Existing Lender and the
New Lender deliver to the Facility Agent a duly completed Transfer Certificate;
and

(ii)           the Facility Agent executes
it.

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The
Facility Agent must execute as soon as reasonably practicable a Transfer
Certificate delivered to it and which appears on its face to be in order.

(b)           Each Party (other
than the Existing Lender and the New Lender) irrevocably authorises the
Facility Agent to execute any duly completed Transfer Certificate on its
behalf.

(c)           On the Transfer
Date:

(i)            the New Lender will assume
the rights and/or obligations of the Existing Lender expressed to be the
subject of the novation in the Transfer Certificate in substitution for the Existing
Lender;

(ii)           the Existing Lender will be
released from those obligations (and any corresponding obligations assumed by
it in the Priority Agreement) and cease to have those rights (and any
corresponding rights conferred on it by the Priority Agreement); and

(iii)          the New Lender will become a
party to this Agreement as a Lender and to the Priority Agreement as a Senior
Creditor (as defined in the Priority Agreement).

27.4        Limitation
of responsibility of Existing Lender

(a)           Unless expressly
agreed to the contrary, an Existing Lender makes no representation or warranty
and assumes no responsibility to a New Lender for:

(i)            the financial condition of
any Obligor;

(ii)           the legality, validity,
effectiveness, enforceability, adequacy, accuracy, completeness or performance
of:

(A)          any Finance Document or any
other document;

(B)           any statement or information
(whether written or oral) made in or supplied in connection with any Finance
Document; or

(C)           any observance by any
Obligor of its obligations under any Finance Document or any other document,

and
any representations or warranties implied by law are excluded.

(b)           Each New Lender
confirms to the Existing Lender and the other Finance Parties that it:

(i)            has made, and will continue
to make, its own independent appraisal of all risks arising under or in
connection with the Finance Documents (including the financial condition and
affairs of each Obligor and its related entities and the nature and extent of
any recourse against any Party or its assets) in connection with its
participation in this Agreement;

(ii)           has not relied exclusively
on any information supplied to it by the Existing Lender in connection with any
Finance Document; and

(iii)          is a person whose ordinary
business includes participation in syndicated facilities of this type.

(c)           Nothing in any
Finance Document requires an Existing Lender to:

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(i)            accept a re-transfer from a
New Lender of any of the rights and obligations assigned or transferred under
this Clause; or

(ii)           support any losses incurred
by the New Lender by reason of the non-performance by any Obligor of its
obligations under any Finance Document or otherwise.

27.5        Costs
resulting from change of Lender or Facility Office

If:

(a)           a Lender assigns or transfers any of its rights and/or obligations under
the Finance Documents or changes its Facility Office; and

(b)           as a result of circumstances existing at the date the assignment,
transfer or change occurs and as a result of the assignment, transfer or
change, an Obligor would be or become obliged to pay a Tax Payment or an
Increased Cost,

then,
unless the assignment, transfer or change is made by a Lender in order to
mitigate any circumstances giving rise to the Tax Payment, Increased Cost or a
right to be prepaid and/or cancelled by reason of illegality, the Obligor need
only pay that Tax Payment or Increased Cost to the same extent that it would
have been obliged to if no assignment, transfer or change had occurred.

27.6        Replacement
of Lender at option of KDG

(a)           If at any time
any Lender becomes a Non-Consenting Lender (as defined in paragraph (c) below),
then KDG may, on 10 Business Days’ prior written notice to the Facility Agent
and such Lender, replace such Lender by requiring such Lender to (and such
Lender shall) transfer pursuant to this Clause 27 (Changes to the Parties) all
(and not part only) of its rights and obligations under this Agreement to a
Lender or other bank or financial institution or to a Fund or other entity
which is regularly engaged in or established for the purposes of making,
purchasing or investing in loans, securities or other financial assets (a Replacement Lender) selected by KDG, and which is acceptable
to the Facility Agent acting reasonably, which confirms its willingness to
assume and does assume all the obligations of the transferring Lender
(including the assumption of the transferring Lender’s participations on the
same basis as the transferring Lender) for a purchase price in cash payable at
the time of transfer equal to the outstanding principal amount of such Lender’s
participation in the outstanding Loans, any Ancillary Outstandings and all
accrued interest (and any Break Costs) and fees and other amounts payable
hereunder.

(b)           The replacement
of a Lender pursuant to this Clause
shall be subject to the following conditions:

(i)            KDG shall have no right to
replace the Facility Agent or Security Agent;

(ii)           neither the Facility Agent
nor any Lender shall have any obligation to KDG to find a Replacement Lender;

(iii)          such replacement of a
Non-Consenting Lender must take place no later than 30 days after the date the
Non-Consenting Lender notified KDG and the Facility Agent of its failure or
refusal to agree to any consent, waiver or amendment to the Finance Documents
requested by KDG; and

 106
 

 

(iv)          in no event shall the Lender
replaced under this Clause be
required to pay or surrender to such Replacement Lender any of the fees
received by such Lender pursuant to the Finance Documents.

(c)           In the event
that:

(i)            KDG or the Facility Agent
(at the request of KDG) has requested the Lenders to consent to a waiver or
amendment of any provisions of the Finance Documents;

(ii)           the waiver or amendment in
question requires the consent of all of the Lenders or the Majority Lenders;
and

(iii)          the Majority Lenders have
consented to such waiver or amendment,

then any Lender
who refuses to agree to such waiver or amendment shall be deemed a Non-Consenting Lender.

27.7        Additional
Borrowers

(a)           Any Subsidiary of
KDG (other than an Unrestricted Subsidiary) may become an Additional Borrower by
executing an Obligor Accession Deed.

(b)           The Facility
Agent (acting on the instructions of the Majority Lenders) may impose such
limitations on the ability of an Additional Borrower to borrow under any
Facility (other than, in respect of an Add-On Facility, the original borrowers
named in the relevant Add-On Facility Accession Agreement) as it deems
reasonably necessary (acting reasonably).

(c)           The prior consent
of all the Lenders is required if the Additional Borrower is not incorporated
or established in Germany.

(d)           Until the
Facility Agent notifies the other Finance Parties and KDG that the documents
and evidence listed in Part 2 of Schedule 2 supplied by an Additional Borrower
are in form and substance satisfactory to the Facility Agent (acting reasonably),
that Additional Borrower may not use any Facility (other than, in respect of an
Add-On Facility, the original borrowers named in the relevant Add-On Facility
Accession Agreement). The Facility Agent must give this notification as soon as
reasonably practicable after receipt of such documents and evidence in form and
substance satisfactory to it (acting reasonably).

(e)           Delivery of an
Obligor Accession Deed, executed by the relevant Subsidiary and KDG, to the
Facility Agent constitutes confirmation by that Subsidiary and KDG that the
Repeating Representations are then correct.

(f)            KDG shall, and
shall procure that each member of the Group shall, promptly give the Facility
Agent all assistance it requires in relation to the security to be granted pursuant
to this Agreement including promptly answering all reasonable questions of the
Facility Agent and its advisors in relation to the assets of the Group.

27.8        Release
of Security

If a
transaction is:

(a)           permitted by the terms of Clause 19.7
(Disposals); or

 107
 

 

(b)           being effected at the request of the Majority Lenders in circumstances
where any of the security created by the Security Documents has become
enforceable; or

(c)           being effected by enforcement of the Security Documents; or

(d)           being done to give effect to the reorganisation contemplated by
paragraph (c) of the definition of Permitted Reorganisation,

the
Security Agent is irrevocably authorised to execute on behalf of each Finance
Party and each Obligor (and at the cost of the relevant Obligor):

(i)            any release of the security
created by the Security Documents over that asset; and

(ii)           if that asset comprises all
of the shares or other ownership interest in the capital of any Obligor (or any
Holding Company of an Obligor) held by members of the Group and the disposal is
being effected in the circumstances referred to in paragraph (b) above, a
release of that Obligor and its Subsidiaries from all present and future
liabilities (both actual and contingent and including any liability to any
other Obligor under the Finance Documents by way of contribution or indemnity)
in its capacity as a Borrower under the Finance Documents and a release of any
Security Interests granted by that Obligor and its Subsidiaries over any of
their respective assets under the Security Documents.

The
Security Agent shall be obliged to consent to any release referred to in (i)
above in relation to any disposal permitted in (a) above. Each Finance Party
will execute such releases as the Security Agent may reasonably require to give
effect to this Clause. No such
release will affect the obligations of any other Obligor under the Finance
Documents. The Security Agent is authorised by the Finance Parties to, and
shall on request of KDG release any Security Interests granted over any rights
under any Transaction Document to allow any member of the Group to take any
action permitted under Clause 19.22 (Amendments to documents). The Security
Agent shall be entitled to rely conclusively on any statement of KDG as to the
manner or extent of any affect of such exercise of such member’s rights and
otherwise as to compliance with Clauses 19.22 (Amendments to documents).

28.          DISCLOSURE OF INFORMATION

(a)           Each Finance
Party must keep confidential any information supplied to it by or on behalf of any
Obligor in connection with the Finance Documents. However, a Finance Party is
entitled to disclose information:

(i)            which is publicly available,
other than information which is publicly available as a result of a breach by
that Finance Party of this Clause;

(ii)           in connection with any legal
or arbitration proceedings;

(iii)          if required to do so under
any law or regulation;

(iv)          to a governmental, banking,
taxation or other regulatory authority;

(v)           to its professional
advisers;

(vi)          to any Original Investor,
any member of the Group or any Affiliate of KDG;

(vii)         to the extent allowed under
paragraph (b) below; or

 108
 

 

(viii)        with the agreement of the
relevant Obligor.

(b)           A Finance Party
may disclose to a Bank Affiliate or any person with whom it may enter, or has
entered into, any kind of transfer, assignment, participation or other
agreement in relation to this Agreement (a participant):

(i)            a copy of any Finance
Document; and

(ii)           any information which that
Finance Party has acquired under or in connection with any Finance Document.

However,
before a participant may receive any confidential information, it must enter
into a Confidentiality Undertaking.

29.          SET-OFF

If
an Event of Default has occurred and is continuing a Finance Party may set off
any matured obligation owed to it by an Obligor under the Finance Documents (to
the extent beneficially owned by that Finance Party) against any obligation
(whether or not matured) owed by that Finance Party to that Obligor, regardless
of the place of payment, booking branch or currency of either obligation. If
the obligations are in different currencies, the Finance Party may convert
either obligation at a market rate of exchange in its usual course of business
for the purpose of the set-off.

30.          PRO RATA SHARING

30.1        Redistribution

If
any amount owing by an Obligor under any of the Finance Documents to a Lender
(the recovering Lender) is discharged by
payment, set-off or any other manner other than through the Facility Agent
under this Agreement (a recovery),
then:

(a)           the recovering Lender must, within three Business Days, supply details
of the recovery to the Facility Agent;

(b)           the Facility Agent must calculate whether the recovery is in excess of
the amount which the recovering Lender would have received if the recovery had
been received by the Facility Agent under this Agreement; and

(c)           the recovering Lender must pay to the Facility Agent an amount equal to
any such excess (the redistribution)
within five Business Days of demand by the Facility Agent.

30.2        Effect
of redistribution

(a)           The Facility
Agent must treat a redistribution as if it were a payment by the relevant
Obligor under this Agreement and distribute it among the Lenders, other than
the recovering Lender, accordingly.

(b)           When the Facility
Agent makes a distribution under paragraph (a) above, the recovering
Lender will be subrogated to the rights of the Finance Parties which have
shared in that redistribution.

 109
 

 

(c)           If and to the
extent that the recovering Lender is not able to rely on any rights of subrogation
under paragraph (b) above, the relevant Obligor will owe the recovering
Lender a debt which is equal to the redistribution, immediately payable and of
the type originally discharged.

(d)           If:

(i)            a recovering Lender must
subsequently return a recovery, or an amount measured by reference to a
recovery, to an Obligor; and

(ii)           the recovering Lender has
paid a redistribution in relation to that recovery,

each
Finance Party must reimburse the recovering Lender all or the appropriate
portion of the redistribution paid to that Finance Party, together with
interest for the period while it held the redistribution. In this event, the
subrogation in paragraph (b) above will operate in reverse to the extent
of the reimbursement.

30.3        Exceptions

Notwithstanding
any other term of this Clause, a recovering Lender need not pay a
redistribution to the extent that:

(a)           it would not, after the payment, have a valid claim against the relevant
Obligor in the amount of the redistribution;

(b)           it would be sharing with another Finance Party any amount which the
recovering Lender has received or recovered as a result of legal or arbitration
proceedings, where:

(i)            the recovering Lender notified the Facility Agent of those proceedings;
and

(ii)           the other Finance Party had an opportunity to participate in those
proceedings but did not do so or did not take separate legal or arbitration
proceedings as soon as reasonably practicable after receiving notice of them;
or

(c)           in the case of an Ancillary Lender, to the extent that the recovery
represents a reduction in the gross amount of Ancillary Outstandings to any net
limit imposed under the original terms of the relevant Ancillary Facility.

31.          SEVERABILITY

If a
term of a Finance Document is or becomes illegal, invalid or unenforceable in
any jurisdiction in relation to any party to such Finance Document, that will
not affect:

(a)           in respect of such party the legality, validity or enforceability in
that jurisdiction of any other term of the Finance Documents;

(b)           in respect of any other party to such Finance Document the legality,
validity or enforceability in that jurisdiction of that or any other term of
the Finance Documents; or

(c)           in respect of any party to such Finance Document the legality, validity
or enforceability in other jurisdictions of that or any other term of the
Finance Documents.

 110
 

 

32.          COUNTERPARTS

Each
Finance Document may be executed in any number of counterparts. This has the
same effect as if the signatures on the counterparts were on a single copy of
the Finance Document.

33.          NOTICES

33.1        In
writing

(a)           Any communication
in connection with a Finance Document must be in writing and, unless otherwise
stated, may be given:

(i)            in person, by post, fax,
e-mail or any other electronic communication(1) approved by the Facility Agent;
or

(ii)           if between the Facility
Agent and a Lender and the Facility Agent and the Lender agree, by e-mail or
other electronic communication.

(b)           For the purpose
of the Finance Documents, an electronic communication will be treated as being
in writing and a document.

(c)           Unless it is
agreed to the contrary, any consent or agreement required under a Finance
Document must be given in writing.

33.2        Contact
details

(a)           Except as
provided below, the contact details of each Party for all communications in
connection with the Finance Documents are those notified by that Party for this
purpose to the Facility Agent on or before the date it becomes a Party.

(b)           The contact
details of KDG for this purpose are:

	
  Address:

  	
  Kabel Deutschland GmbH

  
	
   

  	
  Betastr. 6-8,

  
	
   

  	
  85774, Unterföhring

  
	
   

  	
  Germany

  
	
  Fax number:

  	
  +49 89 96010 198

  
	
  E-mail:

  	
  paul.thomason@kabeldeutschland.de

  
	
  Attention:

  	
  Paul Thomason

  

(c)           The contact
details of the Facility Agent for this purpose are:

	
  Address:

  	
  The Royal Bank of Scotland plc

  
	
   

  	
  Level 3

  
	
   

  	
  21⁄2 Devonshire
  Square

  
	
   

  	
  London EC2M 4XJ

  
	
  Fax number:

  	
  +44 20 7615 7673

  
	
  Attention:

  	
  Loans Administration/LAU

  

and

 111
 

 

 

	
  Address:

  	
  The Royal Bank of Scotland plc

  
	
   

  	
  Level 7

  
	
   

  	
  135 Bishopsgate

  
	
   

  	
  London EC2M 3UR

  
	
  Fax number:

  	
  +44 20 7085 4564

  
	
  Attention:

  	
  Mark Harrison, Director, Syndicated Loans Agency

  

(d)           The contact
details of the Security Agent for this purpose are:

	
  Address:

  	
  The Royal Bank of Scotland plc

  
	
   

  	
  Level 7

  
	
   

  	
  135 Bishopsgate

  
	
   

  	
  London EC2M 3UR

  
	
  Fax number:

  	
  +44 20 7085 4564

  
	
  Attention:

  	
  Mark Harrison, Director, Syndicated Loans Agency

  

(e)           Any Party may
change its contact details by giving five Business Days’ notice to the Facility
Agent or (in the case of the Facility Agent) to the other Parties.

(f)            Where a Party
nominates a particular department or officer to receive a communication, a
communication will not be effective if it fails to specify that department or
officer.

33.3        Effectiveness

(a)           Except as
provided below, any communication in connection with a Finance Document will be
deemed to be given as follows:

(i)            if delivered in person, at
the time of delivery;

(ii)           if posted, five days after
being deposited in the post, postage prepaid, in a correctly addressed
envelope;

(iii)          if by fax, when received in
legible form;

(iv)          if by e-mail or any other
electronic communication, when received in legible form; and

(v)           if by posting to an
electronic website, at the time of posting or (if the relevant recipient did
not at such time have access to such website) the time at which such recipient
is given access.

(b)           A communication
given under paragraph (a) above but received on a non-working day or after
business hours in the place of receipt will only be deemed to be given on the
next working day in that place.

(c)           A communication
to the Facility Agent will only be effective on actual receipt by it.

33.4        Obligors

(a)           All communications
under the Finance Documents to or from an Obligor (other than KDG) must be sent
through KDG.

 112
 

 

(b)           Each Obligor
(other than KDG) irrevocably appoints KDG to act as its agent:

(i)            to give and receive all
communications under the Finance Documents;

(ii)           to supply all information
concerning itself to any Finance Party; and

(iii)          to agree and sign all
documents under or in connection with the Finance Documents without further
reference to the other Obligors.

(c)           Any communication
given to KDG in connection with a Finance Document will be deemed to have been
given also to the other Obligors.

(d)           The Facility
Agent and each of the other Finance Parties may assume that any communication
made by KDG is made with the consent of each other Obligor.

33.5        Personal
Liability

If
an individual signs a certificate on behalf of any Party and the certificate
proves to be incorrect in any material respect, the individual will incur no
personal liability as a result, unless the individual acted fraudulently in
giving the certificate. In this case any liability of the individual will be
determined in accordance with applicable law.

34.          LANGUAGE

(a)           Any notice given
in connection with a Finance Document must be in English.

(b)           Any other
document provided in connection with a Finance Document must be:

(i)            in English; or

(ii)           (unless the Facility Agent
otherwise agrees) accompanied by a certified English translation. In this case,
the English translation prevails unless the document is a statutory or other
official document.

35.          GOVERNING LAW

This
Agreement is governed by English law.

36.          ENFORCEMENT

36.1        Jurisdiction

(a)           With the
exception of the Security Documents, the English courts have exclusive
jurisdiction to settle any dispute in connection with any Finance Document.

(b)           The English
courts are the most appropriate and convenient courts to settle any such
dispute and each Obligor waives objection to those courts on the grounds of
inconvenient forum or otherwise in relation to proceedings in connection with
any Finance Document.

(c)           This Clause is
for the benefit of the Finance Parties only. To the extent allowed by law, a
Finance Party may take:

(i)            proceedings in any other
court; and

(ii)           concurrent proceedings in
any number of jurisdictions.

 113
 

 

36.2        Service
of process

(a)           Each Obligor not
incorporated in England and Wales irrevocably appoints Jordan Company
Secretaries Limited of 20-22 Bedford Row, London WC1R 4JS as its agent under
the Finance Documents for service of process in any proceedings before the
English courts.

(b)           If any person
appointed as process agent is unable for any reason to act as agent for service
of process, KDG (on behalf of all the Obligors) must immediately appoint
another agent on terms acceptable to the Facility Agent. Failing this, the
Facility Agent may appoint another agent for this purpose and each Obligor
waives objection to those courts on the grounds of inconvenient forum or
otherwise in relation to proceedings in connection with any Finance Document.

(c)           Each Obligor
agrees that failure by a process agent to notify it of any process will not
invalidate the relevant proceedings.

(d)           This Clause does not affect any other method of
service allowed by law.

36.3        Waiver
of immunity

Each
Obligor irrevocably and unconditionally:

(a)           agrees not to claim any immunity from proceedings brought by a Finance
Party against it in relation to a Finance Document;

(b)           consents generally to the giving of any relief or the issue of any
process in connection with those proceedings; and

(c)           waives all rights of immunity in respect of it or its assets.

THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.

 114

 

SCHEDULE
1

ORIGINAL LENDER

	
  Name of Lender

  	
   

  	
  Facility A

  	
   

  	
  Facility B

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  (e)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Royal Bank of
  Scotland plc, Niederlassung Frankfurt

  	
   

  	
  1,150,000,000

  	
   

  	
  200,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Commitments

  	
   

  	
  1,150,000,000

  	
   

  	
  200,000,000

  	
   

  

 

 

SCHEDULE
2

CONDITIONS PRECEDENT DOCUMENTS

PART 1

GENERAL CONDITIONS PRECEDENT

Original
Obligors

1.             In relation to each Original Obligor incorporated or
organised in Germany:

(a)           a copy (certified by the relevant court and in
accordance with paragraph 3 below) of an extract from the Commercial Register (beglaubigter Handelsregisterauszug) dated not earlier than
15 days prior to the date of this Agreement, together with a written
confirmation of each Original Obligor (duly signed by persons which are
registered in the commercial register as authorised representatives of such
Original Obligor) dated the date of this Agreement that the extract accurately
reflects all current matters which require registration in the Commercial
Register and that no further applications for registration in relation to such
Original Obligor are outstanding;

(b)           a copy (certified by the relevant court and in
accordance with paragraph 3 below) of the partnership agreement / articles of
association (Gesellschaftsvertrag) dated not
earlier than 15 days prior to the date of this Agreement, together with a
written confirmation of each Original Obligor (duly signed by persons which are
registered in the commercial register as authorised representatives of such
Original Obligor) dated the date of this Agreement that the shareholder
agreement / articles of association accurately reflect(s) the current status of
such Original Obligor.

(c)           if the Original Obligor is incorporated as a limited
liability company (Gesellschaft mit
beschränkter Haftung/GmbH), a copy (certified by the relevant court
or in accordance with paragraph 3 below) of the list of shareholders of such
Original Obligor dated not earlier than 15 days prior to the date of this
Agreement, together with a written confirmation of such Original Obligor (duly
signed by persons which are registered in the commercial register as authorised
representatives of such Original Obligor) dated the date of this Agreement that
the list of shareholders accurately reflects the current shareholdings in such
Original Obligor.

2.             A resolution of the shareholders / interest holders of
each Original Obligor approving the terms of, the transactions contemplated by,
and the execution, delivery and performance of the Finance Documents, together
with a written confirmation of such Original Obligor (duly signed by persons
which are registered in the commercial register as authorised representatives
of such Original Obligor) dated the date of this Agreement that such resolution
has not been rescinded, supplemented, amended or otherwise modified.

3.             A certificate of an authorised signatory of:

(a)           KDVS:

(i)            confirming that the borrowing by KDVS of the Total
Commitments in full will not breach any limit binding on it;

 116
 

 

(ii)           certifying that each copy
document specified in paragraphs 1 to 6 and 18 to 24 of this Part 1 of
this Schedule is correct, complete and in full force and effect and has not
been amended or superseded as at a date no earlier than the date of this
Agreement; and

(iii)          confirming the identity of the
Chief Executive Officer and the Chief Financial Officer of KDVS as at the date
of the relevant Request; and

(b)           KDG:

(i)            certifying that each copy document specified in
paragraphs 1 to 6 and 18 to 24 of this Part 1 of this Schedule is correct,
complete and in full force and effect and has not been amended or superseded as
at a date no earlier than the date of this Agreement; and

(ii)           confirming the identity of the
Chief Executive Officer and the Chief Financial Officer of KDG as at the date
of the relevant Request.

4.             Evidence that the agent(s) of each of the Original
Obligors under the Finance Documents for service of process in England has/have
accepted appointment.

5.             If applicable, any other resolution of each Original
Obligor which may be necessary due to the Original Obligor’s articles of
association approving the terms of, the transactions contemplated by, and the
execution, delivery and performance of the Finance Documents, together with a
written confirmation of the respective Original Obligor (duly signed by persons
which are registered in the commercial register as authorised representatives
of such Original Obligor) dated the date of this Agreement that such resolution
has not been rescinded, supplemented, amended or otherwise modified.

6.             If applicable, a notarised (together with a notarial
certification of the power of representation of the person(s) executing the
power of attorney) and, in case of a non-German notary, apostilled power of
attorney of each Original Obligor duly authorising the execution and delivery
of the Finance Documents to which such Original Obligor is a party, together
with a written confirmation of such Original Obligor (duly signed by persons
which are registered in the commercial register as authorised representatives
of such Original Obligor) dated the date of this Agreement that such power of
attorney has not been rescinded, supplemented, amended or otherwise modified.

Legal
opinions

7.             A legal opinion of Allen & Overy, legal advisers
as to matters of English law to the Mandated Lead Arranger and the Facility
Agent, addressed to the Finance Parties.

8.             A legal opinion of Allen & Overy, legal advisers
as to matters of German law to the Mandated Lead Arranger and the Facility
Agent, addressed to the Finance Parties.

Finance
Documents

9.             A duly executed original of this Agreement.

10.           A duly executed original of each Fee Letter.

11.           A duly executed original of the Hedging Letter.

 117
 

 

12.           Releases of security in respect of the existing
Hedging Documents (to be retaken at the same time as the security for this
Agreement).

13.           A duly executed original of the Priority Agreement.

Other
Transaction Documents

14.           At least 2 originals (or, in the case of a Security
Document which is required to be notarised, at least 2 notarised copies) of the
Security Documents identified in Schedule 6 (Security Documents) as being
executed prior to the making of the KDG Refinancing Loans, each duly executed
by the Original Obligors and the Security Agent.

15.           A copy of all of the documents specified in Part 1,
paragraphs 1 and 2, if applicable, of this Schedule 2, relating to the
following companies:

(a)           Kabel Deutschland Verwaltungs GmbH;

(b)           TKS Telepost-Kabel-Service Kaiserslautern
Beteiligungs-GmbH;

(c)           RKS Niedersächsische Kabel-Service-Beteiligungsgesellschaft
mbH;

(d)           RKS Niedersächsische Kabel-Servicegesellschaft mbH
& Co. KG

(e)           TKS Telepost Kabel-Service Kaiserslautern GmbH &
Co. KG;

(f)            Kabel Deutschland Vermögen GmbH & Co. KG;

(g)           Kabel Deutschland Vermögen Beteiligungs GmbH & Co.
KG;

(h)           Kabel Deutschland Vermögen Beteiligungs-Verwaltungs
GmbH;

(i)            Kabel Deutschland Breitband Services GmbH (formerly
known as MSG Media Services GmbH);

(j)            Kabel Deutschland Vertrieb und Service Beteiligungs
GmbH & Co. KG; and

(k)           Kabel Deutschland Vertrieb und Service
Beteiligungs-Verwaltungs GmbH.

16.           A copy of all notices required to be sent and other
documents required to be executed under the Security Agreements.

Financial
Information

17.           A copy of the Base Financial Statements.

18.           A copy of the Base Case Model.

Other
documents and evidence

19.           Evidence that all fees and expenses (including legal
fees of the Administrative Parties) then due and payable by the Obligors under
this Agreement have been or will be paid on or before the first Utilisation
Date.

20.           Evidence that all required Insurances of KDVS are on
risk and a letter of appropriateness from independent insurance brokers
addressed to the Finance Parties.

 118
 

 

21.           A copy of each Existing Service Level Agreement duly
executed by the parties to it.

22.           Accession to each Existing Service Level Agreement by
the Security Agent, which shall be evidenced by notification to Deutsche
Telekom AG by way of registered mail (return receipt (Rückschein))
only.

23.           Evidence that all amounts outstanding under the
Existing Facility will, on the proposed Utilisation Date, be repaid or prepaid
in full using the proceeds of the Loans and all available commitments under the
Existing Facility will be cancelled.

24.           Evidence that all Security Interests granted in
connection with the Existing Facility have been or will, on the proposed
Utilisation Date, be unconditionally and irrevocably released.

 119
 

 

PART 2

TO BE DELIVERED IN RESPECT OF AN
ADDITIONAL BORROWER

Additional
Borrowers

1.             An Obligor Accession Deed, duly executed by KDG and the
Additional Borrower.

2.             Security Document(s) (in form and substance
satisfactory to the Security Agent, acting reasonably having regard to the
Security Principles) over its assets (securing the Additional Borrower’s
borrowings only), duly executed by the Additional Borrower.

3.             A certified copy of all of the documents of, and
evidence relating to, the Additional Borrower under the heading Original
Obligors set out in Part 1 of this Schedule 2.

4.             A copy of the board resolution of the Additional
Borrower if applicable, approving the terms of, the transactions contemplated
by, and the execution, delivery and performance of the Obligor Accession Deed
and the Finance Documents to which it is acceding.

5.             A certificate of an authorised signatory of the
Additional Borrower:

(a)           confirming that borrowing the Loans to be borrowed by
it would not breach any limit binding on it; and

(b)           certifying that each copy document specified in
Part 4 of this Schedule is correct, complete and in full force and effect
and has not been amended or superseded as at a date no earlier than the date of
the Obligor Accession Deed; and

(c)           setting out a specimen of the signature of each person
authorised to sign and execute the Obligor Accession Agreement and to sign and
send any document or notice in connection with any Finance Document on behalf
of the Additional Borrower.

6.             If available, a copy of the latest audited accounts of
the Additional Borrower.

7.             Evidence that the agent of the Additional Borrower
under the Finance Documents for service of process in England has accepted its
appointment.

Legal
opinions

1.             A legal opinion of Allen & Overy, legal advisers
as to matters of English law to the Facility Agent, addressed to the Finance
Parties.

2.             A legal opinion of Allen & Overy, legal advisers
as to matters of German law to the Facility Agent addressed to the Finance
Parties.

Other
documents and evidence

1.             Evidence that all expenses due and payable from KDG
under this Agreement in respect of the Obligor Accession Deed have been paid.

2.             A copy of any other authorisation or other document,
opinion or assurance which the Facility Agent, acting reasonably having regard
to the Security Principles, notifies KDG is necessary in connection with the
entry into and performance of, and the transactions contemplated by, the
Obligor Accession Deed or for the validity and enforceability of any Finance
Document.

 120
 

 

PART 3

TO BE DELIVERED IN RESPECT OF
ADDITIONAL SECURITY

1.             A copy of the constitutional documents of the relevant
Obligor including where relevant an excerpt of the commercial register.

2.             A copy of a resolution of the shareholders/interest
holders of the relevant Obligor approving the terms of, the transactions
contemplated by, and the execution, delivery and performance of the Security Document.

3.             A copy of a resolution of the board of directors of
each corporate shareholder in such Obligor, if applicable, approving the
resolution referred to in paragraph 2 above.

4.             A certificate of an authorised signatory of the
relevant Obligor certifying that each copy document specified in Part 5 of
this Schedule is correct, complete and in full force and effect and has not
been amended or superseded as at a date no earlier than the date of the
additional Security Document.

5.             A legal opinion of counsel approved by the Facility
Agent in respect of the laws of the jurisdiction in which the relevant Obligor
is incorporated, and, if different, in respect of the laws governing the
additional Security Document, addressed to the Finance Parties.

6.             A copy of all notices required to be sent or other
documents required to be executed under the Security Document.

7.             If applicable, Title Certificates (addressed inter
alios to the Finance Parties) and corresponding title deeds (or in the latter
case a letter from solicitors satisfactory to the Security Agent holding the
same undertaking to hold them to the order of the Security Agent) or the
equivalent in the jurisdiction of location of the relevant assets.

8.             A copy of any other authorisation or other document, opinion
or assurance which the Facility Agent, acting reasonably having regard to the
Security Principles, notifies KDG is necessary in connection with the entry
into and performance of, and the transactions contemplated by, the Security
Document or for the validity and enforceability of any Finance Document.

 121

 

SCHEDULE
3

FORM OF REQUEST

	
  To:

  	
  [     ]
  as Facility Agent

  	
   

  
	
  From:

  	
  [     ]

  	
   

  
	
  Date:

  	
  [  ]

  	
   

  

KabelDeutschland
GmbH €1,350,000,000 Credit Agreement

dated [         ] 2006 (the
Agreement)

1.             We refer to the Agreement. This is a Request. Terms
defined in the Agreement have the same meaning in this Request unless given a
different meaning in this Request.

2.             We wish to borrow an [ [A][B] [Additional Facility]
Loan on the following terms:

(a)           Borrower: [      ]

(b)           Utilisation Date: [    
 ]

(c)           Amount/currency: [    
 ]

(d)           Purpose: [          ]

(e)           Term: [     ].

3.             Our [payment/delivery] instructions are: [     ].

4.             We confirm that each condition precedent under the
Agreement which must be satisfied on the date of this Request is so satisfied.

5.             This Request is irrevocable.

By:

 122

 

SCHEDULE
4

CALCULATION OF THE MANDATORY COST

1.             General

The
Mandatory Cost is the weighted average of the rates for each Lender calculated
below by the Facility Agent on the first day of a Term. The Facility Agent must
distribute each amount of Mandatory Cost among the Lenders on the basis of the
rate for each Lender.

2.             For
a Lender lending from a Facility Office in the U.K.

(a)           The
relevant rate for a Lender lending from a Facility Office in the U.K. is
calculated in accordance with the following formulae:

	
  E x 0.01

  	
   per cent per annum

  
	
  300

  

where
on the day of application of the formula:

E              is
calculated by the Facility Agent as being the average of the rates of charge
supplied by the Reference Banks to the Facility Agent under paragraph (d)
below and expressed in pounds per £1 million.

(b)           For
the purposes of this paragraph 2:

(i)            eligible
liabilities and special
deposit have the meanings given to them at the time of application
of the formula by the Bank of England;

(ii)           fees
rules means the then current rules on periodic fees
in the Supervision Manual of the FSA Handbook; and

(iii)          tariff
base has the meaning given to it in the fees rules.

(c)           Each
rate calculated in accordance with a formula is, if necessary, rounded upward
to four decimal places.

(d)           (i)             Each Reference Bank must supply to the Facility Agent the rate of charge
payable by that Reference Bank to the Financial Services Authority under the
fees rules (calculated by that Reference Bank as being the average of the rates
of charge within fee-block Category A1 (Deposit acceptors) applicable to that
Reference Bank but, for this purpose, applying any applicable discount and
ignoring any minimum fee required under the fees rules) and expressed in pounds
per £1 million of the tariff base of that Reference Bank.

(ii)            Each
Reference Bank must promptly notify the Facility Agent of any change to the
rate of charge.

(e)           (i)             Each Lender and each Reference Bank must supply to the Facility Agent
the information required by it to make a calculation of the rate for that
Lender or Reference Bank. The Facility Agent may assume that this information
is correct in all respects.

 123
 

 

(ii)           If a
Lender or a Reference Bank fails to do so, the Facility Agent may assume that
the Lender’s or that Reference Bank’s obligations in respect of cash ratio
deposits, special deposits and the fees rules are the same as those of a
typical bank from its jurisdiction of incorporation with a Facility Office in
the U.K.

(iii)          The
Facility Agent has no liability to any Party if its calculation over or under
compensates any Lender.

3.             For
a Lender lending from a Facility Office in a Participating Member State

(a)           The
relevant rate for a Lender lending from a Facility Office in a Participating
Member State is the percentage rate per annum notified by that Lender to the
Facility Agent as its cost of complying with the minimum reserve requirements
of the European Central Bank.

(b)           If a
Lender fails to specify a rate under paragraph (a) above, the Facility
Agent will assume that the Lender has not incurred any such cost.

4.             Changes

The
Facility Agent may, after consultation with KDG and the Lenders, notify all the
Parties of any amendment to this Schedule which is required to reflect:

(a)           any
change in law or regulation; or

(b)           any
requirement imposed by the Bank of England, the Financial Services Authority or
the European Central Bank (or, in any case, any successor authority).

Any
notification will be, in the absence of manifest error, conclusive and binding
on all the Parties.

 124

 

SCHEDULE 5

FORM OF TRANSFER
CERTIFICATE

(Single Transfers)

NB                               1.             The Lenders are
advised not to employ Transfer Certificates or otherwise to assign, novate or
transfer interests in the Agreement without first ensuring that the transaction
complies with all applicable laws and regulations, including the Financial
Services and Markets Act 2000 and regulations made thereunder.

2.                                      It is expected that the Lenders will enter into separate arrangements
dealing with the monies to be paid to the Existing Lender by the Substitute in
consideration of the novation (e.g. principal, accrued interest, fees and any
mismatched funding adjustment).  Unless
the Transfer Effective Date is a rollover date, mismatches of parties’ funding
may arise.  This Certificate does not
deal with these issues, nor does it deal with any interim risk participation
the Existing Lender may grant to the Substitute pending the Transfer Effective
Date.

To:                              THE ROYAL BANK OF SCOTLAND PLC on its own behalf, as agent for the
Lenders and on behalf of the Mandated Lead Arranger, the Underwriters, the
Security Agent, the Add-On Facilities Lenders, each Obligor and each other
party to the Documents mentioned below.

	
  Attention:[                 ]

  	
  [DATE]

  

 

Transfer Certificate

This Transfer Certificate relates to (a) a secured
credit facilities agreement (the Credit Agreement)
dated [             ]
2006 between, among others, the Obligors party thereto, The Royal Bank of
Scotland plc as Mandated Lead Arranger, Facility Agent and Security Agent, and
the banks and institutions whose respective names are set out in Schedule 1
(Original Lender) thereto as Lenders and (b) the Priority Agreement (as defined
in the Credit Agreement).  The Credit
Agreement and the Priority Agreement are together referred to in this Transfer
Certificate as the Documents.  Terms defined in the Agreement shall have the
same meaning in this Transfer Certificate.

1.                                       [Existing Lender] (the Existing Lender)
(a) confirms the accuracy of the summary of its participation in the Credit
Agreement set out in the schedule below; and (b) [requests [Substitute Lender] (the Substitute) to
accept by way of novation the portion of such participation specified in the
schedule hereto by counter signing and delivering](2) [assigns absolutely to
the [Substitute Lender] (the Substitute) all
the rights of the Existing Lender under the Credit Agreement which corresponds
to that portion of the Existing Lender’s Commitments and participations under
the Credit Agreement specified in the schedule hereto; and the Existing Lender
is hereby released from all the obligations of the Existing Lender which
correspond to that portion of the Existing Lender’s Commitments and
participations under the Credit Agreement specified in the schedule hereto and
the Substitute becomes a Lender under the Credit Agreement and is bound by
obligations equivalent to those from which the Existing Lender is released
above and further requests the Substitute to accept such assignment, assumption
and release by counter signing and delivering](3) this Transfer Certificate to
the Facility Agent at its address for the service of notices specified in the
Agreement.

(2) For
novation.

(3) For assignment, assumption and release.

 125
 

 

2.                                       The Substitute
hereby requests the Facility Agent (on behalf of itself, the other Finance
Parties, the Obligors and all other parties to the Documents) to accept this
Transfer Certificate as being delivered to the Facility Agent pursuant to and
for the purposes of the Documents so as to take effect in accordance with the
terms thereof on [date of transfer] (the Transfer Effective Date) or on such later date as may be
determined in accordance with the terms thereof.

3.                                       The Facility
Agent (on behalf of itself, the other Finance Parties, the Obligors and all
other parties to the Documents) confirms the [assignment, assumption and
release]/[novation](4) effected by this Transfer Certificate pursuant to and
for the purposes of the Documents so as to take effect in accordance with the
terms thereof.

4.                                       The Substitute
confirms:

(a)                                  that it has
received copies of the Finance Documents and all other documentation and
information required by it in connection with the transactions contemplated by
this Transfer Certificate;

(b)                                 that it has not
relied upon any statement, opinion, forecast or other representation or
warranty made by the Existing Lender, the Mandated Lead Arranger, the
Underwriters, the Security Agent or the Facility Agent to induce it to enter
into this Transfer Certificate;

(c)                                  that it has made
and will continue to make, without reliance on the Existing Lender or any other
Finance Party, and based on such documents as it considers appropriate, its own
appraisal of the creditworthiness of each Obligor and the Group and its own
independent investigation of the financial condition, prospects and affairs of
each Obligor and the Group in connection with the making and continuation of
the Facilities under the Credit Agreement and the other Finance Documents;

(d)                                 that neither the
Existing Lender nor any other Finance Party shall at any time be deemed to have
had or have a duty or responsibility, either historically, initially or on a
continuing basis, to provide the Substitute with any credit or other
information with respect to any Obligor or any other member of the Group,
whether coming into its possession before the making of any Loan or at any time
or times thereafter other than (in the case of the Facility Agent) as provided
in clauses 21.3 (No fiduciary duties) and 21.8 (Exclusion of liability) of the
Credit Agreement;

(e)                                  that it has made
and will continue to make its own assessment of the legality, validity,
enforceability and sufficiency of the Credit Agreement, the Security Documents,
each other Finance Document and this Transfer Certificate and has not relied
and will not rely on the Existing Lender, the Mandated Lead Arranger, the
Security Agent or the Facility Agent or any statements made by any of them in
that respect;

(f)                                    that,
accordingly, none of the Existing Lender, the Mandated Lead Arranger, the
Underwriters, the Security Agent and the Facility Agent shall make any
representations or warranties in respect of, or shall have any liability or
responsibility to the Substitute in respect of, any of the foregoing matters or
any other matter referred to in clause 21.7 (Responsibility) of the Credit
Agreement; and

(4) Delete as appropriate.

 126
 

 

(g)                                 that it has
signed an appropriate confidentiality undertaking issued by the Existing
Lender.

5.                                       Execution of this
Transfer Certificate by the Substitute constitutes its representation to the
Existing Lender and all other parties to the Documents that it has power to
become party to the Credit Agreement as a Lender and to the Priority Agreement
as a [Senior Lender] on the terms herein and therein set out and has taken all
necessary steps to authorise execution and delivery of this Transfer
Certificate.

6.                                       The Substitute
hereby undertakes to the Existing Lender, the Finance Parties, the Obligors and
each of the other parties to the Documents that it will perform in accordance
with their respective terms all those obligations which by the terms of the
Documents will be assumed by it after acceptance of this Transfer Certificate
by the Facility Agent.

7.                                       Without limiting
the above paragraphs, nothing in this Transfer Certificate obliges the Existing
Lender to:

(a)                                  accept any
re-transfer from the Substitute of any of the rights, benefits and/or
obligations hereby transferred; or

(b)                                 support any
losses incurred by the Substitute by reason of any non-performance by any Obligor
or any other party to the Documents or any of the Security Documents or any
document relating thereto of any of its obligations under the same.

8.                                       On the Transfer
Effective Date the Substitute becomes:

(a)                                  party to the
Credit Agreement as a Lender; and

(b)                                 party to the
Priority Agreement as a [Senior Creditor].

9.                                       This Transfer
Certificate and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with English law. Clauses 36.1
(Jurisdiction) and 36.2 (Service of process) of the Credit Agreement are
incorporated herein by reference.

10.                                 [The Parties
agree that this transfer shall constitute a novation within the meaning of
Article 1271 et seq. of the French Civil Code
and that all rights relating to Security against the Obligors shall be
transferred.]

11.                                 This Transfer
Certificate takes effect as a deed notwithstanding that a party may execute it
under hand.

12.                                 This Transfer
Certificate may be executed in any number of counterparts and by different
parties on separate counterparts, each of which when so executed and delivered
shall be an original, but all counterparts shall together constitute one and
the same instrument.

Note:                  This Transfer Certificate is not a security, bond, note, debenture,
investment or similar instrument.

IN WITNESS WHEREOF
this Transfer Certificate has been duly executed as a deed on the date first
above appearing.

THE SCHEDULE

 127
 

 

Rights and obligations to be
transferred by novation

[insert relevant details, including applicable
Commitment (or part) and participation in Loans]

 128
 

 

PART 1

COMMITMENTS

	
  Lender

  	
   

  	
  A Facility

  	
   

  	
  B Facility

  	
   

  	
  Additional
  Facility Loans

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PART 2

PARTICIPATIONS IN LOANS

	
  Lender

  	
   

  	
  A Facility
  Loans

  	
   

  	
  B Facility
  Loans

  	
   

  	
  Additional
  Facility Loans

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 129
 

 

Administrative details of the New
Lender

[insert details of Facility Office, address for
notices and payment details etc.]

[EXISTING LENDER]

[NEW LENDER]

The
Transfer Date is confirmed by the Facility Agent as [ ].

FACILITY
AGENT

By:

As Facility Agent 

and for and on behalf of the

Obligors, the Mandated Lead Arranger, the Lenders,

the Security Agent

and each of the parties to the 

Priority Agreement

 

[Note: a New
Lender should consult local counsel in order to ensure that the necessary
accession documents are executed to entitle it to benefit from the existing
security arrangements and for it to become party to the Priority Agreement.]

 

 130

 

SCHEDULE 6

SECURITY DOCUMENTS

	
   

  	
  Security Document

  	
   

  	
  Time limit to effect security

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Pledge of KDG’s partnership interest in KDVS and
  pledge of compensation claims in case of exit of the limited partnership
  interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Pledge of KDG’s partnership interest in Kabel
  Deutschland Vertrieb und Service Beteiligungs GmbH & Co. KG (KDVSB-KG) and pledge of compensation claims in case of
  exit of the limited partnership interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Pledge of KDVSB-KG’s partnership interest in KDVS
  and pledge of compensation claims in case of exit of the limited partnership
  interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Pledge of KDG’s shares in Kabel Deutschland Vertrieb
  und Service Beteiligungs Verwaltungs GmbH.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Pledge of KDG’s shares in Kabel Deutschland
  Verwaltungs GmbH.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Pledge of KDVS’s partnership interest in
  New Regco and pledge of compensation claims in case of exit of the
  limited partnership interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Pledge of KDVS’s partnership interest in Kabel
  Deutschland Vermögen Beteiligungs GmbH & Co. KG (KDVB-KG)
  and pledge of compensation claims in case of exit of the limited partnership
  interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Pledge of KDVB-KG’s partnership interest in
  New Regco and pledge of compensation claims in case of exit of the
  limited partnership interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Pledge of KDVS’s shares in Kabel Deutschland
  Vermögen Beteiligungs Verwaltungs GmbH.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Pledge of KDVS’s shares in Kabel Deutschland
  Breitband Services GmbH.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Pledge of KDVS’s partnership interest in TKS
  Telepost Kabel-Service Kaiserslautern GmbH & Co. KG and pledge of
  compensation claims in case of exit of the limited partnership interest.

  	
   

  	
  Prior to the KDG Refinancing Loans

  

 

 131
 

 

 

	
  12.

  	
  Pledge of KDVS’s shares in TKS Telepost
  Kabel-Service Kaiserslautern Beteiligungs-GmbH.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Pledges over each bank account of each Original
  Obligor.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Global Assignment granted by KDVS.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Security transfer agreement entered into by KDVS.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Security trust agreement entered into by each
  Original Obligor.

  	
   

  	
  Prior to the KDG Refinancing Loans

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Assignment of rights and claims under each of the
  Sale and Purchase Agreements granted by KDVS.

  	
   

  	
  Prior to the making of the Acquisition Loan in
  respect of the Acquisition to which the Sale and Purchase Agreement relates.

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  Share or Interest Pledge over the entire issued
  share capital of each Target.

  	
   

  	
  Immediately on making of the Acquisition Loan
  financing the acquisition of that Target.

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Share or Interest Pledge over all shareholdings held
  by an Additional Borrower, but if the approval of the other shareholders is
  required only if such shareholders given such approval.

  	
   

  	
  At the time of accession as an Additional Borrower.

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Pledge of interests held by an Additional Borrower,
  but if the approval of the other shareholders is required only if such
  shareholders give such approval.

  	
   

  	
  At the time of accession as an Additional Borrower

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Pledges over each bank account of an Additional
  Borrower.

  	
   

  	
  At the time of accession as an Additional Borrower
  or opening such bank accounts.

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  Global assignment granted by each Additional
  Borrower.

  	
   

  	
  At the time of accession as an Additional Borrower.

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  Security transfer agreement entered into by each
  Additional Borrower.

  	
   

  	
  At the time of accession as an Additional Borrower.

  

 

 132

 

SCHEDULE 7

FORM OF COMPLIANCE
CERTIFICATE

To:          [  ]
as Facility Agent

From:      [COMPANY]

Date:       [ ]

Kabel Deutschland GmbH €1,350,000,000
Credit Agreement

dated
[                  ],
2006 (the Agreement)

1.                                       We refer to the
Agreement. Terms defined in the Agreement shall have the same meaning when used
in this certificate. This is a Compliance Certificate.

2.                                       [We confirm that
as at [relevant testing date]:

(a)                                  Consolidated
EBITDA was [   ] and Consolidated
Total Net Interest Payable was [   ];
therefore, the ratio of Consolidated EBITDA to Consolidated Total Net Interest
Payable was [    ]; and

(b)                                 Consolidated
Senior Net Borrowings are [  ];
therefore, Consolidated Senior Net Borrowings was [ ] x Consolidated EBITDA;

3.                                       We set out below
calculations establishing the figures in paragraph 2 above:

[    ].

4.                                       For the purposes
of Clause 9.3 (Margin adjustments), the ratio of Consolidated Senior Net
Borrowings to Consolidated EBITDA was [            ]:1;
therefore, from the date falling five Business Days after the date of this
Compliance Certificate, the Margin for A Facility and B Facility will be [  ]
per cent. per annum.

5.                                       We confirm that
as at [relevant testing date] the aggregate amount of Net Proceeds from
Recovery Events during the annual Accounting Period of KDG ending [  ]
was [  ].

6.                                       We confirm that
no Default is outstanding as at [relevant testing date] or, if it is, the
details of the Default and the remedial action proposed or being taken is as
follows:(5)

7.                                       We confirm that
the following companies were Material Subsidiaries at [relevant testing date]:

[    ].

[COMPANY]

By:

 

(5)                                  If
this statement cannot be made, the certificate should identify any Default that
is outstanding and the steps, if any, being taken to remedy it.

 133

 

SCHEDULE 8

FORM OF OBLIGOR ACCESSION
DEED

To:          [  ] as Facility Agent

From:      Kabel Deutschland GmbH and [Proposed Borrower]

Date:       [ ]

Kabel Deutschland GmbH - €1,350,000,000
Credit Agreement

dated
[               ],
2006 (the Agreement)

We refer to the Agreement. Terms defined in the
Agreement shall have the same meaning when used in this deed. This is an
Obligor Accession Deed.

1.                                       [Name of company]
of [address/registered office] agrees to become:

(a)                                  an Additional
Borrower under the Agreement and to be bound by the terms of the Agreement as
an Additional Borrower; and

(b)                                 an Obligor under
the Priority Agreement and to be bound by the terms of the Priority Agreement
as an Obligor.

2.                                       The Repeating
Representations are correct on the date of this Obligor Accession Deed.

3.                                       It is intended
that this document takes effect as a deed notwithstanding the fact that a party
may only execute this document under hand.

4.                                       This Obligor
Accession Deed has been executed and delivered as a deed on the date stated at
the beginning of this Obligor Accession Deed and is governed by English law.

	
  Executed as a deed by

  	
   

  
	
  KABEL DEUTSCHELAND GmbH

  	
   

  
	
  acting by

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  
	
  Executed as a deed by

  	
   

  
	
  [PROPOSED ADDITIONAL BORROWER]

  
	
   

  
	
  acting by

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
  Director/Secretary

  

 

 134

 

SCHEDULE
9

DORMANT SUBSIDIARIES

Kabel Deutschland Vermögen GmbH & Co. KG

Kabel Deutschland Vermögen Beteiligungs GmbH
& Co. KG

Kabel Deutschland Vermögen Beteiligungs
Verwaltungs GmbH

Kabel Deutschland NRW Beteiligungs GmbH

Deutsche Kabel Services Verwaltungs GmbH

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SCHEDULE
10

EXISTING SERVICE LEVEL AGREEMENTS

The agreements referred to below to which:

(a)                                  Kabel
Hamburg/Schleswig Holstein/Mecklenburg-Vorpommern GmbH and Co KG;

(b)                                 Kabel
Niedersachsen/Bremen GmbH & Co. KG;

(c)                                  Kabel
Berlin/Brandenburg GmbH & Co. KG;

(d)                                 Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co KG;

(e)                                  Kabel Rheinland
Pfalz/Saarland GmbH & Co. KG; and

(f)                                    Kabel Banyern
GmbH & Co. KG,

are expressed to be a party which have been
transferred to KDVS by way of universal succession.

1.                                       Service Agreements
of Kabel Hamburg/Schleswig Holstein/Mecklenburg Vorpommern GmbH & Co. KG

1.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Hamburg/Schleswig
Holstein/Meeklenburg Vorpommern GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG dated
27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG Network
Infrastructure “Co use of cable ducts” dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG Network
Infrastructure “Offer of Co use of further cable ducts” dated 27th January,
2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG Network
Infrastructure “Fibre Optic Transmission Systems “ dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG Network
Infrastructure “Rental spaces for broadband cable technology “ dated 27th
January, 2003;

·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG Network 

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Infrastructure “Energy
supply for broadband cable technology” dated 27th January, 2003;

1.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Hamburg/Schleswig
Holstein/Meeklenburg Vorpommern GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG dated
27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG
Broadcasting “Supply Services” dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG
Broadcasting “Transmission Services “ dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG
Broadcasting “Signal Pick-ups RegCo” dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Hamburg/Schleswig Holstein/Meeklenburg Vorpommern GmbH & Co. KG
Broadcasting “Signal Pick-ups RegCo” dated 27th January, 2003;

2.                                       Service
Agreements of Kabel Niedersachsen/Bremen GmbH & Co. KG

2.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Niedersachsen/Bremen
GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Niedersachsen/Bremen GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Niedersachsen/Bremen GmbH & Co. KG Network Infrastructure “Co use of cable
ducts “ dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Niedersachsen/Bremen GmbH & Co. KG Network Infrastructure “Offer of Co use
of further cable ducts” dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Niedersachsen/Bremen GmbH & Co. KG Network Infrastructure “Fibre Optic
Transmission Systems “ dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Niedersachsen/Bremen GmbH & Co. KG Network Infrastructure “Rental spaces
for broadband cable technology “ dated 27th January, 2003;

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·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Niedersachsen/Bremen GmbH & Co. KG Network Infrastructure “Energy supply
for broadband cable technology “ dated 27th January, 2003;

2.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Niedersachsen/Bremen
GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Niedersachsen/Bremen GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Niedersachsen/Bremen GmbH & Co. KG Broadcasting “Supply Services” dated
27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Niedersachsen/Bremen GmbH & Co. KG Broadcasting “Transmission Services “
dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Niedersachsen/Bremen GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo”
dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Niedersachsen/Bremen GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo”
dated 27th January, 2003;

3.                                       Service
Agreements of Kabel Berlin/Brandenburg GmbH & Co. KG

3.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Berlin/Brandenburg
GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Berlin/Brandenburg GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Berlin/Brandenburg GmbH & Co. KG Network Infrastructure “Co use of cable
ducts “ dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Berlin/Brandenburg GmbH & Co. KG Network Infrastructure “Offer of Co use of
further cable ducts” dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Berlin/Brandenburg GmbH & Co. KG Network Infrastructure “Fibre Optic
Transmission Systems “ dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Berlin/Brandenburg GmbH & Co. KG Network Infrastructure “Rental spaces for
broadband cable technology “ dated 27th January, 2003;

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·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Berlin/Brandenburg GmbH & Co. KG Network Infrastructure “Energy supply for
broadband cable technology “ dated 27th January, 2003;

3.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Berlin/Brandenburg
GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Berlin/Brandenburg GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Berlin/Brandenburg GmbH & Co. KG Broadcasting “Supply Services” dated 27th
January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Berlin/Brandenburg GmbH & Co. KG Broadcasting “Transmission Services “
dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Berlin/Brandenburg GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo” dated
27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Berlin/Brandenburg GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo” dated
27th January, 2003;

4.                                       Service
Agreements of Kabel Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG

4.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Sachsen/Sachsen
Anhalt/Thüringen GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG dated 27th January,
2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Network Infrastructure “Co
use of cable ducts” dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Network Infrastructure “Offer
of Co use of further cable ducts” dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Network Infrastructure “Fibre
Optic Transmission Systems “ dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Network Infrastructure “Rental
spaces for broadband cable technology “ dated 27th January, 2003;

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·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Network Infrastructure “Energy
supply for broadband cable technology” dated 27th January, 2003;

4.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Sachsen/Sachsen
Anhalt/Thüringen GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG dated 27th January,
2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Broadcasting “Supply
Services” dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Broadcasting “Transmission
Services “ dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Broadcasting “Signal
Pick-ups RegCo” dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Sachsen/Sachsen Anhalt/Thüringen GmbH & Co. KG Broadcasting “Signal
Pick-ups RegCo” dated 27th January, 2003

5.                                       Service
Agreements of Kabel Rheinland Pfalz/Saarland GmbH & Co. KG

5.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Rheinland
Pfalz/Saarland GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Rheinland Pfalz/Saarland GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Network Infrastructure “Co use of
cable ducts” – dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Network Infrastructure “Offer of Co
use of further cable ducts” – dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Network Infrastructure “Fibre Optic
Transmission Systems” – dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Network Infrastructure “Rental
spaces for broadband cable technology” – dated 27th January, 2003;

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·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Network Infrastructure “Energy
supply for broadband cable technology” – dated 27th January, 2003;

5.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Rheinland Pfalz/Saarland
GmbH & Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Rheinland Pfalz/Saarland GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Broadcasting “Supply Services” -
dated 27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Broadcasting “Transmission Services”
- dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo”
- dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Rheinland Pfalz/Saarland GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo”
- dated 27th January, 2003;

6.                                       Service
Agreements of Kabel Bayern GmbH & Co. KG

6.1                                 Service
Agreements with Deutsche Telekom AG (DTAG)

·                                          Framework Services Agreement between DTAG and Kabel Bayern GmbH &
Co. KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between DTAG and
Kabel Bayern GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between DTAG and Kabel
Bayern GmbH & Co. KG Network Infrastructure “Co use of cable ducts” dated
27th January, 2003;

·                                          Term Sheet 2 to the Framework Services Agreement between DTAG and Kabel
Bayern GmbH & Co. KG Network Infrastructure “Offer of Co use of further
cable ducts” dated 27th January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between DTAG and Kabel
Bayern GmbH & Co. KG Network Infrastructure “Fibre Optic Transmission
Systems” dated 27th January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between DTAG and Kabel
Bayern GmbH & Co. KG Network Infrastructure “Rental spaces for broadband
cable technology” dated 27th January, 2003;

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·                                          Term Sheet 5 to the Framework Services Agreement between DTAG and Kabel
Bayern GmbH & Co. KG Network Infrastructure “Energy supply for broadband
cable technology” dated 27th January, 2003;

6.2                                 Service
Agreements with T Systems International GmbH (TSI)

·                                          Framework Services Agreement between TSI and Kabel Bayern GmbH & Co.
KG dated 27th January, 2003;

·                                          Amendment Agreement to the Framework Services Agreement between TSI and
Kabel Bayern GmbH & Co. KG dated 27th January, 2003;

·                                          Term Sheet 1 to the Framework Services Agreement between TSI and Kabel
Bayern GmbH & Co. KG Broadcasting “Supply Services” - dated 27th January,
2003;

·                                          Term Sheet 2 to the Framework Services Agreement between TSI and Kabel
Bayern GmbH & Co. KG Broadcasting “Transmission Services” - dated 27th
January, 2003;

·                                          Term Sheet 3 to the Framework Services Agreement between TSI and Kabel
Bayern GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo” - dated 27th
January, 2003;

·                                          Term Sheet 4 to the Framework Services Agreement between TSI and Kabel
Bayern GmbH & Co. KG Broadcasting “Signal Pick-ups RegCo” - dated 27th
January, 2003.

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SCHEDULE
11

CONFIDENTIALITY UNDERTAKING

To:          [Transferring
Lender]

Re:          €1,350,000,000 Credit Agreement dated [                ]
2006 (the Agreement)

Kabel Deutschland GmbH (KDG)

Amount:

Agent:

Dear Sirs

We are considering [acquiring](6)/[arranging
the acquisition of](7) an interest in the Agreement (the Acquisition).
In consideration of you agreeing to make available to us certain information,
by our signature of this letter we agree as follows (acknowledged and agreed by
you by your signature of a copy of this letter):

1.                                      Confidentiality Undertaking

We
undertake (a) to keep the Confidential Information confidential and not to
disclose it to anyone except as provided for by paragraph 2 below and to ensure
that the Confidential Information is protected with security measures and a
degree of care that would apply to our own confidential information, (b) to use
the Confidential Information only for the Permitted Purpose, (c) to use all
reasonable endeavours to ensure that any person to whom we pass any Confidential
Information (unless disclosed under paragraph 2[(c)/(d)](8) below) acknowledges
and complies with the provisions of this letter as if that person were also a
party to it, and (d) not to make enquiries of any member of the Group or any of
their officers, directors, employees or professional advisers relating directly
or indirectly to the Acquisition.

2.                                      Permitted Disclosure

You
agree that we may disclose Confidential Information:

(a)                                                          to members of the Purchaser Group and their officers, directors, employees
and professional advisers to the extent necessary for the Permitted Purpose and
to any auditors of members of the Purchaser Group;

subject
to the requirements of the Agreement, in accordance with the Permitted Purpose
so long as any prospective purchaser has delivered a letter to us in equivalent
form to this letter;](2)

[(b/c)](3)                         subject to the requirements of the Agreement, to any person to (or
through) whom we assign or transfer (or may potentially assign or transfer) all
or any of the rights, benefits and obligations which we may acquire under the
Agreement or with (or through) whom we enter into (or may potentially enter
into) any sub-participation in relation to, or any other transaction under
which payments are to be made by 

(6)           Delete if purchaser
is acting as broker or agent.

(7)           Delete if potential
purchaser is acting as principal.

(8)           Delete as
applicable.

 143
 

 

reference
to, the Agreement or the Borrower or any member of the Group in each case so
long as that person has delivered a letter to us in equivalent form to this
letter; and

[(c/d)](3)                         (i) where requested or required by any court of competent jurisdiction
or any competent judicial, governmental, supervisory or regulatory body, (ii)
where required by the rules of any stock exchange on which the shares or other
securities of any member of the Purchaser Group are listed or (iii) where
required by the laws or regulations of any country with jurisdiction over the
affairs of any member of the Purchaser Group.

3.                                      Notification of Required or Unauthorised Disclosure

We
agree (to the extent permitted by law) to inform you of the full circumstances
of any disclosure under paragraph 2[(c)/(d)](3) or upon becoming aware that
Confidential Information has been disclosed in breach of this letter.

4.                                      Return of Copies

If
you so request in writing, we shall return all Confidential Information
supplied by you to us and destroy or permanently erase all copies of
Confidential Information made by us and use all reasonable endeavours to ensure
that anyone to whom we have supplied any Confidential Information destroys or
permanently erases such Confidential Information and any copies made by them,
in each case save to the extent that we or the recipients are required to
retain any such Confidential Information by any applicable law, rule or
regulation or by any competent judicial, governmental, supervisory or
regulatory body or in accordance with internal policy, or where the
Confidential Information has been disclosed under paragraph 2[(c)/(d)](3)
above.

5.                                      Continuing Obligations

The
obligations in this letter are continuing and, in particular, shall survive the
termination of any discussions or negotiations between you and us.
Notwithstanding the previous sentence, the obligations in this letter shall
cease (a) if we become a party to or otherwise acquire (by assignment or
sub-participation) an interest, direct or indirect, in the Agreement or (b)
twelve months after we have returned all Confidential Information supplied to
us by you and destroyed or permanently erased all copies of Confidential
Information made by us (other than any such Confidential Information or copies
which have been disclosed under paragraph 2 above (other than sub-paragraph
2(a)) or which, pursuant to paragraph 4 above, are not required to be returned
or destroyed).

6.                                      No Representation; Consequences of Breach, etc

We
acknowledge and agree that:

(a)                                  neither you, [nor your principal](4) nor any member of the Group nor any
of your or their respective officers, employees or advisers (each a Relevant Person) (i) make any representation or warranty,
express or implied, as to, or assume any responsibility for, the accuracy,
reliability or completeness of any of the Confidential Information or any other
information supplied by you or the assumptions on which it is based or (ii)
shall be under any obligation to update or correct any inaccuracy in the
Confidential Information or any other information supplied by you or be
otherwise liable to us or any other person in respect to the Confidential
Information or any such information; and

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(b)                                 you [or your principal](4) or members of the Group may be irreparably
harmed by the breach of the terms hereof and damages may not be an adequate
remedy; each Relevant Person may be granted an injunction or specific performance
for any threatened or actual breach of the provisions of this letter by us.

7.                                      No Waiver; Amendments, etc

This
letter sets out the full extent of our obligations of confidentiality owed to
you in relation to the information the subject of this letter. No failure or
delay in exercising any right, power or privilege hereunder will operate as a
waiver thereof nor will any single or partial exercise of any right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privileges hereunder. The terms of this letter and our
obligations hereunder may only be amended or modified by written agreement
between us.

8.                                      Inside Information

We
acknowledge that some or all of the Confidential Information is or may be price-sensitive
information and that the use of such information may be regulated or prohibited
by applicable legislation relating to insider dealing and we undertake not to
use any Confidential Information for any unlawful purpose.

9.                                      Nature of Undertakings

The
undertakings given by us under this letter are given to you and (without
implying any fiduciary obligations on your part) are also given for the benefit
of [your principal,](9) the Borrower and each other member of the Group.

10.                               Third Party Rights

(a)                                  Subject to this paragraph 10 and to paragraphs 6 and 9, a person who is
not a party to this letter has no right under the Contracts (Rights of Third
Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of
any term of this letter.

(b)                                 The Relevant Persons may enjoy the benefit of the terms of paragraphs 6
and 9 subject to and in accordance with this paragraph 10 and the
provisions of the Third Parties Act.

(c)                                  The parties to this letter do not require the consent of the Relevant
Persons (other than parties to this letter) to rescind or vary this letter at
any time.

11.                               Governing Law and Jurisdiction

(a)                                  This letter (including the agreement constituted by your acknowledgement
of its terms) is governed by English Law.

(b)                                 The parties submit to the non-exclusive jurisdiction of the English
courts.

12.                               Definitions

In
this letter (including the acknowledgement set out below) terms defined in the
Agreement shall, unless the context otherwise requires, have the same meaning
and:

(9)           Delete if letter is
addressed to the Seller rather than the Seller’s broker or agent.

 

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Confidential Information
means any information relating to the Borrower, the Group, the Agreement and/or
the Acquisition provided to us by you or any of our affiliates or advisers, in
whatever form, and includes information given orally and any document,
electronic file or any other way of representing or recording information which
contains or is derived or copied from such information but excludes information
that (a) is or becomes public knowledge other than as a direct or indirect
result of any breach of this letter or (b) is known by us before the date the
information is disclosed to us by you or any of your affiliates or advisers or
is lawfully obtained by us thereafter, other than from a source which is
connected with the Group and which, in either case, as far as we are aware, has
not been obtained in violation of, and is not otherwise subject to, any
obligation of confidentiality;

Group means KDG and each of its
holding companies and subsidiaries and each subsidiary of each of its holding
companies (as each such term is defined in the Companies Act 1985);

Permitted Purpose means [subject to
the terms of this letter, passing on information to a prospective purchaser for
the purpose of](2) considering and evaluating whether to enter into the
Acquisition; and

Purchaser Group means us, each of
our holding companies and subsidiaries and each subsidiary of each of our
holding companies (as each such term is defined in the Companies Act 1985).

Please acknowledge your agreement to the above
by signing and returning the enclosed copy.

	
  Yours faithfully

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For and on
  behalf of

  	
   

  
	
  [Potential
  Purchaser/Purchaser’s agent/broker]

  	
   

  
	
   

  	
   

  
	
  To:

  	
  [Potential
  Purchaser/Purchaser’s agent/broker]

  	
   

  
	
   

  	
   

  	
   

  
	
  We acknowledge
  and agree to the above:

  	
   

  
	
   

  	
   

  	
   

  
	
  For and on
  behalf of

  	
   

  
	
  [Seller/Seller’s
  agent/broker]

  	
   

  
					

 

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SCHEDULE
12

SECURITY PRINCIPLES

1.                                      AGREED SECURITY PRINCIPLES

(a)                                  The security to be provided in connection with this Agreement will be
given in accordance with certain agreed security principles as set out herein
(the Security Principles).

(b)                                 All parties recognise that there may be certain legal and practical
difficulties in obtaining effective security from all members of the Group over
all assets. In particular:

(i)                                     general statutory limitations, financial assistance, corporate benefit,
fraudulent preference, “thin capitalisation” rules, retention of title claims
and similar principles may limit the ability of a member of the Group to enter
into a Security Document or to give a guarantee;

(ii)                                  a key factor in determining whether or not security shall be taken is
the applicable cost;

(iii)                               any assets subject to third party arrangements which may prevent those
assets from being charged will be excluded from any relevant Security Document
if the owner of those assets having used all reasonable endeavours to get the
third party’s consent to the charging of those assets, does not obtain such
consent;

(iv)                              members of the Group will be required to enter into Security Documents
if it is not unlawful for the relevant person to execute and deliver such
Security Documents and that person executing and delivering such Security
Documents would not result in personal liability for that person’s directors or
other management. Each Obligor must use, and must procure that the relevant
person uses, all reasonable endeavours lawfully to avoid any such unlawfulness
or personal liability. This includes agreeing to a limit on the amount secured.
The Facility Agent may (but shall not be obliged to) agree to such a limit if,
in its opinion, to do so might avoid the relevant unlawfulness or personal
liability;

(v)                                 the giving of a guarantee, granting of security or the perfection of the
security granted will not be required if it would have a material adverse
effect on the ability of the relevant Obligor to conduct its operations and business
in the ordinary course as otherwise permitted by the Finance Documents or would
otherwise be unduly onerous.

2.                                      SHARE SECURITY

Where
an Obligor pledges shares, the Security Document will (subject to agreed
exceptions) be governed by the law of the company whose shares are being
pledged and not by the law of the country of the pledgor.

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3.                                      TERMS OF SECURITY DOCUMENTS

The
following principles will be reflected in the terms of all security taken as
part of this transaction:

(a)                                  security will not be enforceable until an Event of Default has occurred
and notice of non-payment for five Business Days has been given by the Facility
Agent;

(b)                                 the Security Documents should only operate to create security rather
than to impose new commercial obligations. Accordingly, they should not contain
additional representations or undertakings (such as in respect of insurance,
information or the payment of costs) unless these are the same as those
contained in this Agreement or are covenants required for the creation or perfection
of the security;

(c)                                  in respect of any share or interest pledge, until an Event of Default
has occurred, the relevant Obligor shall permitted to retain and to exercise
voting rights to any shares or interests pledged by it in a manner which does
not adversely affect the validity or enforceability of the security or cause an
Event of Default to occur and that Obligor shall be permitted to pay dividends
upstream on pledged shares to the extent permitted under the Finance Documents;

(d)                                 the Finance Parties shall only be able to exercise any power of attorney
granted to them under the Security Documents if an Event of Default has
occurred and notice of acceleration has been given by the Facility Agent under
the Facility Agreement or a payment default has occurred; and

(e)                                  notarisation required in respect of any Security Document governed by
German law may, at the option of the relevant Obligor, be carried out in
Switzerland.

 148

 

SCHEDULE
13

FINANCIAL COVENANT LEVELS

PART 1 – WITH ARENA

	
  Accounting Date

  	
   

  	
  30 Jun 06

  	
   

  	
  30 Sept 06

  	
   

  	
  31 Dec 06

  	
   

  	
  31 Mar 07

  	
   

  	
  30 Jun 07

  	
   

  	
  30 Sept 07

  	
   

  	
  31 Dec 07

  	
   

  	
  31 Mar 08

  	
   

  	
  30 Jun 08

  	
   

  	
  30 Sept 08

  	
   

  	
  31 Dec 08

  	
   

  
	
  18.1
  (EBITDA : Net Interest)

  	
   

  	
  1.5

  	
  x

  	
  1.5

  	
  x

  	
  1.5

  	
  x

  	
  1.5

  	
  x

  	
  1.65

  	
  x

  	
  1.65

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  2.00

  	
  x

  
	
  18.2
  (Senior Net Debt : EBITDA)

  	
   

  	
  5.00

  	
  x

  	
  5.00

  	
  x

  	
  5.00

  	
  x

  	
  5.00

  	
  x

  	
  4.75

  	
  x

  	
  4.75

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  

 

	
  Accounting Date

  	
   

  	
  31 Mar

  09

  	
   

  	
  30 Jun

  09

  	
   

  	
  30 Sept

  09

  	
   

  	
  31 Dec

  09

  	
   

  	
  31 Mar

  10

  	
   

  	
  30 Jun

  10

  	
   

  	
  30 Sept

  10

  	
   

  	
  31 Dec

  10

  	
   

  	
  31 Mar

  11

  	
   

  	
  30 Jun

  11

  	
   

  	
  30 Sept

  11

  	
   

  	
  31 Dec

  11

  	
   

  	
  31 Mar

  12

  	
   

  
	
  18.1 (EBITDA : Net Interest)

  	
   

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  
	
  18.2
  (Senior Net Debt : EBITDA)

  	
   

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.50

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  

 149
 

 

PART 2 – WITHOUT ARENA

	
  Accounting Date

  	
   

  	
  30 Jun

  06

  	
   

  	
  30 Sep

  06

  	
   

  	
  31 Dec

  06

  	
   

  	
  31 Mar

  07

  	
   

  	
  30 Jun

  07

  	
   

  	
  30 Sep

  07

  	
   

  	
  31 Dec

  07

  	
   

  	
  31 Mar

  08

  	
   

  	
  30 Jun

  08

  	
   

  	
  30 Sep

  08

  	
   

  	
  31 Dec

  08

  	
   

  	
  31 Mar

  09

  	
   

  
	
  18.1
  (EBITDA : Net Interest)

  	
   

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  1.75

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  
	
  18.2
  (Senior Net Debt : EBITDA)

  	
   

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  4.00

  	
  x

  	
  3.75

  	
  x

  	
  3.75

  	
  x

  	
  3.50

  	
  x

  	
  3.50

  	
  x

  

 

	
  Accounting Date

  	
   

  	
  30 Jun

  09

  	
   

  	
  30 Sep

  09

  	
   

  	
  31 Dec

  09

  	
   

  	
  31 Mar

  10

  	
   

  	
  30 Jun

  09

  	
   

  	
  30 Sep

  09

  	
   

  	
  31 Dec

  09

  	
   

  	
  31 Mar

  10

  	
   

  	
  30 Jun

  11

  	
   

  	
  30 Sep

  11

  	
   

  	
  31

  Dec11

  	
   

  	
  31 Mar

  12

  	
   

  
	
  18.1
  (EBITDA : Net Interest)

  	
   

  	
  2.50

  	
  x

  	
  2.50

  	
  x

  	
  2.50

  	
  x

  	
  2.50

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  2.75

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  
	
  18.2
  (Senior Net Debt : EBITDA)

  	
   

  	
  3.50

  	
  x

  	
  3.50

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  3.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  	
  2.00

  	
  x

  

 

 150

 

SCHEDULE
14

FORM OF ADD-ON FACILITY ACCESSION AGREEMENT

To:          The
Royal Bank of Scotland plc as Facility Agent and Security Agent

From:                  The
banks and financial institutions listed in Schedule 1 to this Agreement (the Facility [C](10) Lenders)

And:                     Kabel
Deutschland GmbH and [RELEVANT BORROWER]

Date:
[    ]

Kabel Deutschland GmbH - €1,350,000,000
Credit Agreement dated
[                   ]
2006 (the Credit Agreement)

7.                                       In this
Agreement:

Facility
[C] means the €[          ]
term loan Facility set out in this Agreement.

Facility [C]
Commitment means, in relation to a
Facility [C] Lender, the amount in euro set opposite its name under the heading
“Facility [C] Commitment” in Schedule 1 to the counterpart to this Agreement
executed by that Facility [C] Lender.

Facility
[C] Loan means the euro denominated
Loan made to
[               ]
under Facility [C].

Majority
Facility [C] Lenders means the Facility [C]
Lenders the aggregate of whose Facility [C] Commitments exceeds 662¤3 per
cent. of the aggregate Facility [C] Commitments.

8.                                       Unless otherwise
defined in this Agreement, terms defined in the Credit Agreement shall have the
same meaning in this Agreement.

9.                                       We refer to
Clause 2.4 (Additional Facilities) of the Credit Agreement.

10.                                 This Agreement
will take effect on the date (the Effective Date)
when the Facility Agent (acting on the instructions of the Majority Facility
[C] Lenders) notifies KDG and the Facility [C] Lenders that it has received the
documents and evidence set out in Schedule 2 to this Agreement, in each case in
form and substance satisfactory to it (acting reasonably) or, as the case may
be, the requirement to provide any of such documents or evidence has been
waived by the Majority Facility [C] Lenders.

11.                                 We, the Facility
[C] Lenders, agree:

(a)                                  to become party
to and to be bound by the terms of the Credit Agreement as Add-On Facility
Lenders in accordance with Clause 2.4 (Additional Facilities); and

(b)                                 to become a party
to the Priority Agreement [and Security Trust Deed] as Lenders and to observe,
perform and be bound by the terms and provisions of the Priority

(10)         Letter designation of
the relevant Additional Facility

 151
 

 

Deed [and Security Trust Deed]
in the capacity of Lenders in accordance with clause [C] of the Priority Deed
[and Security Trust Deed].

12.                                 The Add-On Facility
Commitment in relation to a Facility [       ]
Lender (for the purpose of paragraph (a) of the definition of Add-On Facility
Commitment in Clause 1.1 of the Credit Agreement) is its Facility [C]
Commitment.

13.                                 Each Facility [C]
Advance will be applied
[                ].

14.                                 The Final Maturity
Date in respect of this Add-On Facility is
[                     ](11).

15.                                 (a)           The Availability Period in relation
to this Add-On Facility is the period from the Effective Date to the close of
business in London on
[                     ].

(b)                                 This Add-On Facility
shall be drawn by a [single/one or more] Advance[s].

16.                                The Margin for
Facility [C] Advances is [     ] per cent. per annum [if applicable set out any Margin adjustment].

17.                                 The Borrower in
relation to Facility[C] is
[                    ].

18.                                 The purpose of
this Add-On Facility is [    ].

19.                                 KDG represents
and warrants to each Finance Party that, the Repeating Representations are and
will be true and correct in all material respects on the date of this Agreement
and the Effective Date.

20.                                 We confirm to
each Finance Party that:

(i)                                     we have made our
own independent investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection with its
participation in the Credit Agreement and have not relied on any information
provided to us by a Finance Party in connection with any Finance Document; and

(ii)                                  we will continue
to make our own independent appraisal of the creditworthiness of each Obligor
and its related entities while any amount is or may be outstanding under the
Credit Agreement or any Commitment is in force.

21.                                 The Facility
Office and address for notices of each Facility [C] Lender for the purposes of
Clause 33.2 (Addresses for notices) will be that notified by each Facility
[C] Lender to the Facility Agent.

22.                                 This Agreement is
governed by English law.

23.                                 This Agreement
may be executed in any number of counterparts, and this has the same effect as
if the signatures on the counterparts were on a single copy of this Agreement.

(11)         To be at least 6
months after the Facility A Final Maturity Date.

 152
 

 

SCHEDULE
1

FACILITY [           ] LENDERS AND COMMITMENTS

	
  Facility [C] Lender

  	
  Facility
  [    ] Commitment

  
	
   

  	
   

  
	
  [                    ]

  	
  [                 ]

  
	
   

  	
   

  
	
  Total

  	
  [                 ]

  

 

 153
 

 

SCHEDULE
2

CONDITIONS
PRECEDENT DOCUMENTS

 [Details
to be inserted]

 154
 

 

SIGNATORIES

TO ADD-ON
FACILITY ACCESSION AGREEMENT

	
  [ADD-ON LENDER(S)]

  
	
   

  
	
  By:

  
	
   

  
	
   

  
	
  KABEL
  DEUTSCHLAND GmbH

  
	
   

  
	
  By:

  
	
   

  
	
   

  
	
  [RELEVANT
  LENDER]

  
	
   

  
	
  By:

  
	
   

  
	
   

  
	
  [FACILITY AGENT]

  
	
   

  
	
  By:

  
	
   

  
	
   

  
	
  [SECURITY AGENT]

  
	
   

  
	
  By:

  

 

 155

 

SCHEDULE
15

FORM OF GERMAN THIN CAPITALISATION LETTER

[Letterhead of the respective Lender]

[Name and address of the respective Borrower
and KDG]

Bescheinigung zur Vorlage beim
Finanzamt für Zwecke des § 8a KStG

Sie hatten [respective Lender] (“Bank”), gebeten,
zur Vorlage beim Finanzamt für Zwecke des § 8a KStG eine Bescheinigung
auszustellen (i). Hierzu erklären wir, dass uns bezüglich des Senior Credit
Agreement, arrangiert durch The Royal Bank of Sctoland plc vom [l] 2006 in Höhe von EUR 1.350.000.000 (“Finanzierung”)
an die [respective Borrower] (“Kreditnehmer”)

	
  o

  	
  keine Sicherheiten an Kapitalforderungen von anderen
  Personen als dem Kreditnehmer gewährt wurden (ii).

  
	
   

  	
   

  
	
  o

  	
  die nachfolgend aufgeführten Sicherheiten von
  anderen Personen als dem Kreditnehmer gewährt wurden:

  
	
   

  	
   

  
	
  1.

  	
  Dingliche Sicherheiten

  
	
   

  	
   

  
	
  o

  	
  Pfandrechte (z.B. an Einlagen)

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  Sicherungsabtretungen (z.B. Einzelabtretung von
  Forderungen)

  
	
   

  	
   

  
	
   

  	
   

  
	
  2.

  	
  Personalsicherheiten (z.B. Bürgschaft, Garantie,
  Schuldmitübernahme)

  
	
   

  	
   

  
	
   

  	
   

  
	
  verbunden mit folgenden/r:

  
	
   

  
	
  o

  	
  dinglichen Sicherheiten (z.B. an Einlagen)

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  Sicherungsabtretungen (z. B. Einzelabtretung von
  Forderungen; Global-/Mantelabtretung von Forderungen)

  
	
   

  	
   

  

 

 156
 

 

 

	
  o

  	
  Unterwerfung unter die sofortige Zwangsvollstreckung
  mit dem gesamten Vermögen oder hinsichtlich einzelner Vermögensgegenstände

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  vereinbarten Verfügungsbeschränkungen

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  sonstige Vereinbarungen (z. B. Pfandrechte nach den
  Allgemeinen Geschäftsbedingungen) (iii)

  
	
   

  	
   

  
	
   

  	
   

  
	
  3.

  	
  Sicherheiten der o.g. Art, auf die während des
  bestehenden Darlehensverhältnisses verzichtet wurde

  
	
   

  	
   

  
	
   

  	
   

  
	
  Sonstige Anmerkungen (iv)-

  
	
   

  	
   

  

 

Die Bescheinigung enthält
nur solche Angaben, die dem bei der Bank mit der vorgenannten Finanzierung
vertrauten Personenkreis bekannt sind.

 

Die Bank übernimmt mit
dieser Erklärung – bereits aus rechtlichen Gründen – keine Beratung in
steuerlichen Angelegenheiten. Insbesondere steht die Bank nicht für einen
steuerlichen Erfolg ein, der mit dieser Bescheinigung angestrebt wird.

 

Mit freundlichen Grüßen

 

 

[respective Lender]

 

 

Erläuterungen

 

(i)             Die Erklärung ist
grundsätzlich nur auf Anforderung des Kreditnehmers anlässlich des Abschlusses
einer der genannten Rechtsgeschäfte (Darlehen etc.) durch den Kreditgeber abzugeben;
sie ist vom Aussteller der ursprünglichen Bescheinigung ferner anlässlich jeder
Vertragsänderung oder Änderung der gewährten Sicherheiten ohne weitere
Anforderung des Kreditnehmers abzugeben.

(ii)          Die Aufzählung der
von Dritten gewährten Sicherheiten und die namentliche Auflistung der
Sicherheitengeber erfolgt unabhängig davon, ob es sich dabei um nicht nur
kurzfristige Einlagen oder nicht nur kurzfristige sonstige Kapitalforderungen
i.S.d. Rdnr. 20 des BMF-Schreibens vom 15. Juli 2004 zu § 8a KStG (BStBl. I
2004 S. 593) handelt. Sie erfolgt ferner unabhängig davon, ob die Sicherheit
vom Eintritt einer Bedingung (z.B. dem Sicherungsfall oder der Fälligkeit der
gesicherten Schuld) oder dem Ablauf einer Frist abhängig ist.

(iii)       Einzufügen sind
ferner sämtliche für das Darlehen/den Kredit bestellten Sicherheiten und
Treuhandverhältnisse (z.B. Grundschuld, Hypothek, Patronatserklärung,
Sicherungsübereignung).

 157
 

 

(iv)      Hier sind Angaben anzubringen, sofern und
soweit von (weiteren) Personen, die nicht Kreditnehmer sind, Sicherheiten
gewährt wurden, diese Personen das Kreditinstitut jedoch nicht von einem
bestehenden Bankgeheimnis hinsichtlich dieser Bescheinigung entbunden haben.

 158
 

 

Translation for convenience purposes only

[Letterhead of the respective Lender]

[Name and address of the respective Borrower
and KDG]

Confirmation letter to be
presented at the tax office for the purpose of Sec 8a CITA

You have asked [respective Lender] (“Bank”), to provide a confirmation letter to be submitted to
the tax office for the purpose of Sec. 8a Corporate Income Tax Act (“CITA”;
Körperschaftsteuergesetz) (i). We hereby
confirm that in relation to the Senior Credit Agreement, arranged by The Royal
Bank of Scotland plc dated [l] 2006 in the amount of EUR 1,350,000,000 (“Financing”)
for [respective Borrower] (“Borrower”)

	
  o

  	
  no security over receivables was provided to us by
  persons other than the Borrower. (ii)

  
	
   

  	
   

  
	
  o

  	
  the security listed below was provided to us by
  persons other than the Borrower:

  
	
   

  	
   

  
	
  1.

  	
  Rights
  in rem

  
	
   

  	
   

  
	
  o

  	
  Pledge (e.g. of deposits)

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  Assignment for security purposes (e.g. assignment of
  receivables)

  
	
   

  	
   

  
	
   

  	
   

  
	
  2.

  	
  Personal
  security (e.g. suretyship, guarantee, co-assumption of debt)

  
	
   

  	
   

  
	
   

  	
   

  
	
  connected with the following:

  
	
   

  
	
  o

  	
  rights in rem (e.g. over deposits)

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  assignment for security purposes (e.g. assignment of
  receivables; global/blanket assignment of receivables)

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  submission to immediate enforcement into all assets
  or particular assets

  
	
   

  	
   

  

 

 159
 

 

 

	
  o

  	
  agreed restrictions on disposal

  
	
   

  	
   

  
	
   

  	
   

  
	
  o

  	
  other arrangements (e.g. pledge under general terms
  and conditions) (iii)

  
	
   

  	
   

  
	
   

  	
   

  
	
  3.

  	
  Security
  in the form described above which was waived during the term of the loan

  
	
   

  	
   

  
	
   

  	
   

  
	
  Other comments-(iv)

  
	
   

  

The
confirmation letter contains only information known by the persons at the Bank
who are involved in the aforementioned Financing.

By issuing this confirmation letter for legal
reasons the Bank does not provide any tax advice. In particular, the Bank does
not guarantee that any tax consequence that is sought by means of this
confirmation letter is achieved.

	
  With kind regards,

  
	
   

  	
   

  
	
   

  
	
  [respective
  Lender]

  

 

Notes

(i)                In principle, the
confirmation has to be issued by the lender only upon request of the borrower
on the occasion of entering into one of the listed transactions (loan etc.);
moreover, the issuer of the original confirmation has to issue a confirmation
in case of each amendment of the agreement or a change of the security granted
without a further request of the borrower.

(ii)             To be included also all security provided
for the loan/credit and trust arrangements (e.g. land charge, mortgage, letter
of comfort, transfer by way of security).

(iii)          Information to be included if and inasmuch
any (other) persons, other than the borrower, granted security without
releasing the bank from banking confidentiality in relation to this
confirmation.

(iv)         Information to be included
if and inasmuch any (other) persons, other than the borrower, granted security
without releasing the bank from banking confidentiality in relation to this
confirmation.

 160

 

SIGNATORIES

	
  KDG

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KABEL DEUTSCHLAND GmbH

  
	
   

  	
   

  	
   

  
	
  By:

  	
  CHRISTOF WAHL

  	
  PAUL THOMASON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Original
  Borrower

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KABEL DEUTSCHLAND VERTRIEB UND SERVICE GmbH &
  Co. KG

  
	
   

  	
   

  	
   

  
	
  By:

  	
  CHRISTOF WAHL

  	
  PAUL THOMASON

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mandated Lead Arranger

  
	
   

  	
   

  	
   

  
	
  THE ROYAL BANK OF SCOTLAND plc

  
	
   

  	
   

  	
   

  
	
  By:

  	
  RANESH VERMA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Original
  Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE ROYAL BANK OF SCOTLAND plc, NIEDERLASSUNG
  FRANKFURT

  
	
   

  	
   

  	
   

  
	
  By:

  	
  MATTHEW ROWE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facility
  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE ROYAL BANK OF SCOTLAND plc

  
	
   

  	
   

  	
   

  
	
  By:

  	
  OLIVIER BOUTET

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Security
  Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE ROYAL BANK OF SCOTLAND plc

  
	
   

  	
   

  	
   

  
	
  By:

  	
  ROBERT NEWELL

  	
   

  

 

 161Exhibit
10.16

CONFORMED
COPY

 

 

PRIORITY AGREEMENT

 

 

DATED
 29TH MARCH, 2004

As
amended and restated pursuant to a supplemental

Agreement
dated 27th May, 2004

and as
further amended and restated pursuant to

a
supplemental agreement dated 1st July, 2004 and as further amended and restated

pursuant to a supplemental agreement dated 9 May, 2006

 

BETWEEN

 

 

KABEL DEUTSCHLAND GmbH

as KDG

 

CERTAIN SUBSIDIARIES OF KDG

as Obligors

 

THE SENIOR CREDITORS, HEDGING BANKS,

BRIDGE CREDITORS, NOTES TRUSTEE AND INVESTORS

 

DEUTSCHE BANK AG LONDON

as Bridge Agent

 

and

 

THE ROYAL BANK OF SCOTLAND plc

as Senior Agent and Security Agent

 

relating, inter alia, to
a Senior Facilities Agreement dated 13th March, 2006 and a

Bridge Facility Agreement dated 29th March, 2004

 

 

LONDON

CONTENTS

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Interpretation

  	
  1

  
	
  2.

  	
  Ranking and Notes Debt

  	
  12

  
	
  3.

  	
  Undertakings

  	
  14

  
	
  4.

  	
  Permitted Payments

  	
  16

  
	
  5.

  	
  Turnover

  	
  19

  
	
  6.

  	
  Subordination on Insolvency

  	
  20

  
	
  7.

  	
  Restrictions on Enforcement

  	
  22

  
	
  8.

  	
  Permitted Enforcement

  	
  24

  
	
  9.

  	
  Proceeds of Enforcement

  	
  25

  
	
  10.

  	
  Enforcement of Security

  	
  26

  
	
  11.

  	
  Loss Sharing

  	
  29

  
	
  12.

  	
  Designation of External Facility

  	
  30

  
	
  13.

  	
  Amendments

  	
  31

  
	
  14.

  	
  Hedging Debt

  	
  35

  
	
  15.

  	
  Consents and Limits

  	
  37

  
	
  16.

  	
  Warranties

  	
  38

  
	
  17.

  	
  Information

  	
  39

  
	
  18.

  	
  Subrogation

  	
  40

  
	
  19.

  	
  Protection of Subordination

  	
  40

  
	
  20.

  	
  Preservation of Debt

  	
  41

  
	
  21.

  	
  Expenses

  	
  41

  
	
  22.

  	
  Changes to the Parties

  	
  42

  
	
  23.

  	
  Status of Subordinated Creditors

  	
  45

  
	
  24.

  	
  Notices

  	
  45

  
	
  25.

  	
  The Security Agent

  	
  46

  
	
  26.

  	
  Notes Trustee

  	
  46

  
	
  27.

  	
  Amendments

  	
  47

  
	
  28.

  	
  Severability

  	
  47

  
	
  29.

  	
  Counterparts

  	
  48

  
	
  30.

  	
  Governing Law

  	
  48

  
	
  31.

  	
  Enforcement

  	
  48

  

 

	
  Schedule

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Senior Creditors

  	
  50

  
	
  2.

  	
  Bridge Creditors

  	
  51

  
	
  3.

  	
  Hedging Banks and Hedging Documents

  	
  52

  
	
  4.

  	
  Investors

  	
  54

  
	
  5.

  	
  Form of Deed of Accession

  	
  55

  
	
  6.

  	
  Security Agent

  	
  56

  
	
  7.

  	
  Agreed Mezzanine Principles

  	
  64

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
  65

  

 

 

THIS AGREEMENT is dated 29th March, 2004 and is amended and
restated pursuant to a supplemental agreement dated 27th May, 2004 and as
further amended and restated pursuant to a supplemental agreement dated 1st
July, 2004 and as further amended and restated pursuant to a supplemental
agreement dated 9 May, 2006.

BETWEEN:

(1)                                  KABEL
DEUTSCHLAND GmbH (registered in the commercial register (Handelsregister) kept at the local court (Amtsgericht) of Munich under number HRB 145837) (KDG);

(2)                                  KABEL
DEUTSCHLAND VERTRIEB & SERVICE GmbH
& Co. KG ( registered in the
commercial register (Handelsregister)
kept at the local court (Amtsgericht) of
Munich under number HRA 83902) (Regco);

(3)                                  THE
PERSONS named in Schedule 1 (Senior Creditors) as Senior
Creditors;

(4)                                  THE PERSONS
named in Schedule 2 (Bridge Creditors) as Bridge Creditors;

(5)                                  THE
PERSONS (if any) named in Schedule 3 (Hedging Banks and
Hedging Documents) as Hedging Banks;

(6)                                  THE
PERSONS named in Schedule 4 (Investors) as Investors;

(7)                                  ANY
TRUSTEE FOR NOTEHOLDERS in its capacity as Notes Trustee under a Note
Indenture, on its accession to this Agreement (the Notes
Trustee);

(8)                                  DEUTSCHE
BANK AG LONDON as Bridge Agent; and

(9)                                  THE ROYAL
BANK OF SCOTLAND plc as Senior Agent and Security Agent.

IT IS AGREED as follows:

1.                                      INTERPRETATION

1.1                               Definitions

In
this Agreement:

Agents means the Senior
Agent, the Bridge Agent and the Security Agent.

Agreed Mezzanine Principles means the agreed principles
relating to the provision of mezzanine debt as set out in Schedule 7.

Authorised Representative means any Representative of
Senior Debt acting on the instructions of a majority of the Senior Creditors
providing that Senior Debt and, in the case of the Senior Debt established
under the Senior Facilities Agreement, the Senior Agent.

Bank
Creditor means a Senior Creditor, a Hedging Bank or a Bridge
Creditor, as the context requires or any such person who accedes to this
Agreement in such capacity.

Bank Debt
Discharge Date means the later of (a) the Senior Discharge Date and
(b) the Bridge Discharge Date.

 1
 

 

Bank Debt
Finance Documents means the Senior Finance Documents, the Hedging
Documents and the Bridge Finance Documents.

Bank
Security means all Security other than the Notes Security.

Bridge
Agent means Deutsche Bank AG in its capacity as facility agent for the Bridge
Creditors under the Bridge Facility Agreement.

Bridge Creditor means each of:

(a)                                  the persons named
in Schedule 2 (Bridge Creditors) in their capacity as Lenders under and as
defined in the Bridge Facility Agreement;

(b)                                 the Mandated Lead
Arrangers under and as defined in the Bridge Facility Agreement, the Bridge
Agent and (after the Senior Discharge Date or to the extent of any claim by the
Security Agent as joint and several creditor with any other Bridge Creditor)
the Security Agent; and

(c)                                  any person which
becomes a Bridge Creditor after the date of, and in accordance with the terms
of, this Agreement.

Bridge
Debt means all Liabilities of any Obligor to any Bridge Creditor under or in
connection with any Bridge Finance Document (including Term Loans as defined in
the Bridge Facility Agreement).

Bridge
Default means an Event of Default as defined in the Bridge Facility Agreement.

Bridge
Discharge Date means the date on which the Bridge Agent is satisfied
that all of the Bridge Debt has been irrevocably paid and discharged and all
Commitments under (and as defined in) the Bridge Facility Agreement cancelled
(for the avoidance of doubt, it is acknowledged that the Bridge Discharge Date
occurred prior to the Restatement Date).

Bridge
Finance Documents means the Finance Documents as defined in the Bridge
Facility Agreement (in its form at the date of this Agreement or amended as
permitted by this Agreement).

Bridge
Restricted Group Debt means all Liabilities of a Restricted Group
Member to any Bridge Creditor under or in connection with any Bridge Finance
Document.

Bridge
Security means the Security Interests created, conferred or
evidenced by the Bridge Finance Documents.

Debt means any or all
of the Senior Debt, the Hedging Debt, the Bridge Debt, the Bridge Restricted
Group Debt, the Notes Debt, the Notes Guarantee Debt, the Permitted KDG Debt,
the Investor Debt and the Intercompany Debt, as the context requires.

Deed of
Accession means a deed of accession substantially in the form of
Schedule 5 (Form of Deed of Accession), with such amendments as the Security
Agent may approve or reasonably require.

Enforcement
Event means:

(a)                                  the Senior Agent
first exercising any of its rights under clause 20.20(c) (during the Availability
Period) or (d)(i) (Acceleration) of the Senior Facilities Agreement or, 

 2
 

 

having
exercised its rights under clause 20.20(d)(ii) (Acceleration) of the Senior
Facilities Agreement, first making demand with respect to all or part of any
amounts outstanding under the Senior Finance Documents;

(b)                                 or any
Representative of any other Senior Debt taking any analogous action.

Enforcement
Notice has the meaning given to it in Clause 8 (Permitted Enforcement).

Event of
Default means a Senior Default, a Bridge Default or Notes Default, as the
context requires.

Excess
Hedging Debt means any Hedging Debt incurred in breach of Clause
15.4 (Limit on Hedging Debt).

Excess
Senior Debt has the meaning given to it in Clause 15.3 (Limit on
Senior Debt).

External Facility Finance Document means any
document (other than a hedging document) executed as part of an External
Facility.

Finance
Documents means any or all of the Senior Finance Documents, the
Hedging Documents, the Bridge Finance Documents, the Notes Finance Documents,
Permitted KDG Debt Documents, the Intercompany Documents and the Investor Debt
Documents.

First
Issue Date means the first date on which any Notes (other than
Exchange Notes that are not Third Party Exchange Notes) are issued.

Hedging means any
interest rate or currency swap, derivative transaction or hedging facility.

Hedging
Bank means each person (if any) named in Schedule 3 (Hedging Banks and
Hedging Documents) and any other person which becomes a party to this Agreement
as a Hedging Bank under Clause 14.1 (Accession of Hedging Banks), in each
case in its capacity as provider of Hedging to any of the Obligors.

Hedging
Debt means all Liabilities of any Obligor to any Hedging Bank under or in
connection with the Hedging Documents.

Hedging
Document means each master agreement, confirmation or other
document evidencing any Hedging provided by a Hedging Bank to an Obligor, which
Hedging is contemplated by Clause 14.1 (Accession of Hedging Banks).

Insolvency
means any winding-up, bankruptcy, liquidation, dissolution,
administration, receivership, administrative receivership, re-organisation,
moratorium or judicial composition of or in respect of any Obligor or
overindebtedness (Überschuldung) or inability to
pay debts as they fall due (Zahlungsunfähigkeit)
or any analogous proceedings affecting any Obligor in any jurisdiction outside
Germany.

Insolvent
Obligor means an Obligor which is a Restricted Group Member in
respect of which any of the Events of Default referred to in Clause 6.1
(Subordination Events) occurs.

Instructing
Group means at any time:

(a)                                  on or prior to
the Senior Discharge Date, the Majority Senior Creditors;

(b)                                 after the Senior
Discharge Date but on or prior to the Bridge Discharge Date, the Majority
Bridge Creditors; and

 3
 

 

(c)                                  on or prior to the
Bridge Discharge Date in relation to any matter requiring an Instructing Group
consent or determination which relates to the Intercompany Debt owed by KDG,
the Majority Bridge Creditors.

Intercompany
Creditors means each member of the Group in its capacity as a
creditor in relation to any Intercompany Debt.

Intercompany
Debt means all Liabilities of Regco or KDG to another member of the Group:

(a)                                  under or in
connection with the Intercompany Documents; or

(b)                                 in respect of any
Financial Indebtedness,

but
excluding in each case any trading Liabilities arising on arm’s length terms
and in the ordinary course of business.

Intercompany
Debtor means Regco or KDG in its capacity as a debtor in relation to
Intercompany Debt.

Intercompany
Documents means all documents evidencing (or guaranteeing) any
Financial Indebtedness payable or owing by Regco or KDG to another member of
the Group.

Investor
Debt means all Liabilities of any Obligor to any Investor or any direct or
indirect shareholder in KDG (or any of their respective Affiliates which is not
a member of the Group) under or in connection with the Investor Debt Documents.

Investor
Debt Documents means each document evidencing Financial Indebtedness
owed by an Obligor to an Investor.

Investors
means the persons named in Schedule 4 (Investors) in their capacity as
creditors in respect of any Investor Debt and any new Investor which accedes to
this Agreement by executing a Deed of Accession in accordance with Clause 22.6
(New Investor).

Issuer has the meaning
given to that term in the Bridge Facility Agreement.

Junior
Creditors means at any time on or prior to the Senior Discharge
Date, the Bridge Creditors and the Notes Creditors and providers of Permitted
KDG Debt.

Junior Debt means at any time on or prior to the Senior Discharge
Date, the Bridge Debt, the Notes Debt and the Permitted KDG Debt.

Junior
Finance Document means at any time on or prior to the Senior Discharge
Date, the Bridge Finance Documents, the Notes Finance Documents and the
Permitted KDG Debt Documents.

Junior
Restricted Group Debt means at any time on or prior to the Senior
Discharge Date, the Bridge Restricted Group Debt, the Notes Guarantee Debt and
the Permitted KDG Debt.

KDG
Hedging Distribution means a distribution by Regco to KDG in an amount
equal to any scheduled payment required to be made by KDG to a Hedging Bank
under the original terms of any Hedging Document.

Liability means in
relation to any document or agreement, any present or future liability (actual
or contingent) payable or owing under or in connection with that document or
agreement whether or not matured and whether or not liquidated, together with:

 4
 

 

(a)           any refinancing, novation, deferral
or extension of that liability;

(b)                                 any claim for
breach of representation, warranty, undertaking or on an event of default or
under any indemnity in connection with that document or agreement;

(c)                                  any further
advance made under any document or agreement supplemental to that document or
agreement, together with all related interest, fees and costs;

(d)                                 any claim for
damages or restitution in the event of rescission of that liability or
otherwise in connection with that document or agreement;

(e)                                  any claim flowing
from any recovery of a payment or discharge in respect of that liability on the
grounds of preference or otherwise; and

(f)                                    any amount (such
as post-insolvency interest) which would be included in any of the above but
for its discharge, non-provability, unenforceability or non-allowability in any
Insolvency or other proceedings.

Majority
Bridge Creditors means the Majority Lenders as defined in the Bridge
Facility Agreement.

Majority Lenders
means a group of Senior Creditors whose Voting Entitlements at that time
represents 662/3 per cent. or more of the aggregate Voting
Entitlements of all Senior Creditors at such time.

Majority
Senior Creditors means the Majority Lenders, as adjusted under Clause
14.5 (Voting rights).

New
Obligor has the meaning given to it in Clause 22.3 (New
Obligors).

Noteholders means any
holders of the Notes from time to time.

Notes means any debt
securities issued and outstanding from time to time on terms which comply with
the Notes Major Terms.

Notes
Creditors means the Noteholders and the Notes Trustee and (after
the Senior Discharge Date or to the extent of any claim by the Security Agent
as joint and several creditor with any other Notes Creditor) the Security
Agent.

Notes
Debt means all Liabilities of any Obligor to any Notes Creditor under or in
connection with any Notes Finance Document.

Notes
Default means an Event of Default as defined in the Notes
Indenture.

Notes
Discharge Date means the date on which the Notes Trustee is satisfied
that all of the Notes Debt has been irrevocably and unconditionally paid and
discharged.

Notes
Finance Documents means the Notes, any Notes Indenture, any of the Notes
Guarantees, any Notes Pledge Agreements and any other security or guarantees
for the Notes and any registration rights agreement for the Notes.

Notes
Guarantee means:

(a)                                  the guarantee
granted by Regco; and

 5
 

 

(b)           the guarantee granted by New Regco in
connection with the Step-Up,

in
each case, in respect of the Notes Debt and the in the form set out in the
Notes Indenture.

Notes
Guarantee Debt means all Liabilities of Regco and New Regco to any
Notes Creditor under or in connection with the Notes Guarantees.

Notes
Indenture means any agreement governing the issuance of Notes
which shall comply with the Notes Major Terms.

Notes
Major Terms means:

(a)                                  the issuer is the
Issuer;

(b)                                 payment of
interest will be no more frequent than semi-annually, provided that this will
not restrict the capitalisation of non-cash interest or the accretion of
principal;

(c)                                  the scheduled
repayment date of the principal amount of the Notes is not (and will not be)
prior to the date six months after the scheduled maturity date of the longest
Term Loan under the Senior Facilities Agreement (as of the date thereof) (it
being acknowledged that such Notes may have customary optional redemption,
change of control and asset sale provisions and, in the case of the first High
Yield Issue only, may require Permitted Notes Redemptions);

(d)                                 the covenants and
events of default recorded in the Notes Finance Documents will be of a type
customary in all material respects for offerings of high yield notes in the
European market, provided that the Notes Finance Documents may include terms
and conditions relating to German legal and tax considerations;

(e)                                  the trustee in
relation to the Notes has acceded to this Agreement as the Notes Trustee and
each of the Indenture, the Notes, the Notes Guarantees and the Notes Pledge
Agreements states clearly that, subject to applicable legal requirements, it is
subject to the terms of this Agreement, that the rights and benefits of the
Notes Creditors are limited accordingly, and that the rights and benefits of
the Notes Creditors are subject to all relevant provisions of this Agreement;

(f)                                    the Notes Debt is
not given any financial support by any Restricted Group Member other than by
Regco or New Regco under the Notes Guarantees and the Notes Guarantees are
subordinated to the claims of the Senior Creditors and, accordingly, are
expressed to be subject to the ranking, subordination and other provisions of
this Agreement; and

(g)                                 the Notes and the
Notes Guarantees do not have the benefit of any Security over (i) any of the
assets or undertaking of any Restricted Group Member or (ii) any shares or
other securities (or options or warrants to acquire the same) from time to time
issued by any Restricted Group Member or (iii) any Financial Indebtedness from
time to time owing by any Restricted Group Member, provided that the Notes may
benefit from security under the Notes Pledge Agreements subject to the terms of
this Agreement.

Notes
Pledge Agreements means any agreements entered into or to be entered
into between, inter alios:

 6
 

 

(a)                                  KDG
and the Security Agent under which KDG grants a second ranking pledge in favour
of the Security Agent (as co-creditor with the Noteholders) over KDG’s limited
partnership interest in Regco and KDG’s shares in the general partner of Regco;

(b)                                 Regco and the
Security Agent under which Regco grants a second ranking pledge in favour of
the Security Agent (as co-creditor with the Noteholders) over Regco’s limited
partnership interest in New Regco; and

(c)                                  any other
agreement creating security for the Notes Debt agreed by the Majority Senior
Creditors and the Majority Bridge Creditors or otherwise permitted by the Bank
Debt Finance Documents (including any agreement evidencing the Security
Interests referred to in part 6 of schedule 2 (Conditions precedent to be
delivered in connection with the Step-up) of the Senior Facilities Agreement as
at the Restatement Date).

Notes
Security means the Security Interests created, conferred or
evidenced by the Notes Pledge Agreements.

Notes
Trustee Amounts means all amounts payable to any trustee in
relation to the Notes pursuant to any Notes Indenture and guarantees of amounts
payable thereunder in respect of its fees, expenses and any amount payable to
it personally by way of indemnity.
Notes Trustee Amounts shall also include amounts payable to the paying agents,
transfer agents and the registrars under the Notes Indenture and to any agent,
custodian or other person employed by a trustee in relation to the Notes to act under the Notes Indenture and
guarantee amounts payable thereunder in respect of the foregoing persons’ fees,
expenses and any amounts payable to it personally by way of indemnity.

Obligor means KDG, Regco
and each New Obligor.

Ownership
Interests means the ownership interests in Regco or the partners
in Regco referred to in paragraphs (w), (x) and (y) of Clause 10.5(b) (Sales by
Security Agent – Notes Creditors).

Party means an Obligor,
Senior Creditor, Bridge Creditor, Hedging Bank, Notes Creditor or Investor, as
the context requires.

Permitted
Bridge Payment means the payment of:

(a)                                  interest under
the Bridge Finance Documents (in each case whether paid in cash or in kind (but
interest which is specified in the Bridge Finance Documents as payable in kind
may only be paid in kind);

(b)                                 default interest
or liquidated damages payable under the Bridge Finance Documents;

(c)                                  any amount
payable under any tax indemnity or increased costs provision in the Bridge
Finance Documents;

(d)                                 the amount of the
fees, costs, expenses and taxes incurred in connection with the Bridge Finance
Documents including with respect to the periodic reporting of, and compliance
with, the terms thereof;

(e)                                  payment of the
principal amount of or in respect of the Bridge Debt upon or after its
originally scheduled maturity (but, for this purpose, all Bridge Loans shall be
deemed 

 7
 

 

to have an original
scheduled maturity of the Final Maturity Date (as defined in the Bridge
Facility Agreement) applicable to such Bridge Loan; and

(f)                                    any other amounts
consented to by an Instructing Group, provided that any payment under this
paragraph (f) is made concurrently (on a pro rata basis based on the principal
amount outstanding) with any payment under paragraph (f) of the definition of
Permitted Notes Payment.

Permitted KDG Debt Document means any agreement governing
the incurrence of Permitted KDG Debt that is in compliance with Clause 13.3(c)
(Other Amendments).

Permitted KDG Debt Payment means the payment of:

(a)                                  interest in
respect of Permitted KDG Debt (whether paid in cash or in kind (but interest
which is specified in the Permitted KDG Debt Document as payable in kind may
only be paid in kind));

(b)                                 default interest,
liquidated damages or penalty interest payable under the Permitted KDG Debt
Documents;

(c)                                  additional
amounts payable under applicable gross-up provisions, increased cost or
payments under currency indemnity provisions under the Permitted KDG Debt
Documents, provided such provisions are in customary form;

(d)                                 the amount of the
fees, costs, expenses and taxes incurred in compliance with the Permitted KDG
Debt Documents; and

(e)                                  payment of the
principal amount of or in respect of the Permitted KDG Debt Documents upon or
after their originally scheduled maturity or to the extent otherwise expressly
permitted under the Senior Finance Documents.

(f)                                    any other amounts
consented to by an Instructing Group.

Permitted
Notes Payment means the payment of:

(a)                                  interest under
the Notes Finance Documents (whether paid in cash or in kind (but interest which
is specified in the Notes Finance Documents as payable in kind may only be paid
in kind));

(b)                                 default interest,
liquidated damages or penalty interest payable under the Notes Finance
Documents;

(c)                                  additional
amounts payable under applicable gross up provisions or payments under currency
indemnity provisions under the Notes, provided such provisions are in customary
form;

(d)                                 the amount of the
fees, costs, expenses and taxes incurred in connection with the issue,
offering, registration and periodic reporting of, and compliance with, the
Notes and the Notes Guarantees;

(e)                                  payment of the
principal amount of or in respect of the Notes upon or after their originally
scheduled maturity or to the extent otherwise expressly permitted under the
Senior Finance Documents; and

 8
 

 

(f)                                    any
other amounts consented to by an Instructing Group provided that any payment
under this paragraph (f) is made concurrently (on a pro rata basis based on the
principal amount outstanding) with any payment under paragraph (f) of the definition
of Permitted Bridge Payment.

Purchase
Amount has the meaning given to it in Clause 22.9 (Option to Purchase).

Purchase
Date has the meaning given to it in Clause 22.9 (Option to Purchase).

Recovery means all amounts
received or recovered by any of the Secured Creditors on or after the
occurrence of an Enforcement Event in payment or on account of any Senior Debt,
Hedging Debt, Bridge Debt or Notes Debt, but after deducting:

(a)                                  the reasonable
costs and expenses incurred by such Secured Creditor in effecting such receipt
or recovery; and

(b)                                 any sums required
by law or court order to be paid to third parties on account of claims
preferred by law over the claims of the Secured Creditors.

Report
Provider has the meaning given to it in Clause 7.1(h) (Restrictions).

Representative means any agent, trustee,
security agent or similar representative in relation to any Senior Debt.

Restatement
Date means 9 May, 2006.

Restricted
Group Member means Regco or any of its Subsidiaries.

Responsible
Officer means any officer within the corporate trust and
agency department of the Notes Trustee, including any vice president, assistant
vice president, assistant treasurer, trust officer or any other officer of the
Notes Trustee who customarily performs functions similar to those performed by
such officers, or to whom any corporate trust matter is referred because of
such individual’s knowledge of and familiarity with the particular subject and
who shall have direct responsibility for the administration of this Agreement
and the Notes Indenture.

Secured
Creditor means a Senior Creditor, a Hedging Bank, a Bridge
Creditor or a Notes Creditor.

Secured
Debt means Debt owed to a Secured Creditor.

Security means any
Security Interest created, evidenced or conferred by or pursuant to any Finance
Document.

Security
Agent means The Royal Bank of Scotland plc in its capacity as agent and
trustee for the Secured Creditors of the security conferred under the Security
Documents, and any sub-agent, sub-trustee or custodian appointed by
it.

Security
Documents means the Security Documents as defined in the Senior
Facilities Agreement, the Security Documents as defined in the Bridge Facility
Agreement and the Notes Pledge Agreements and any other document creating,
evidencing or conferring a Security Interest securing Liabilities under or in
connection with any other Finance Document.

 9
 

 

Senior Agent means
The Royal Bank of Scotland plc in its capacity as facility agent for the Senior
Creditors under the Senior Facilities Agreement.

Senior Creditor means each of:

(a)                                  as at the
Restatement Date, the persons named in Schedule 1 (Senior Creditors) in their
capacity as Lenders under the Senior Facilities Agreement;

(b)                                 the Mandated Lead
Arrangers, the Senior Agent and (until the Senior Discharge Date) the Security
Agent; and

(c)                                  any person which
becomes a Senior Creditor after the date of, and in accordance with the terms
of, this Agreement.

Senior
Debt means all Liabilities of any Obligor to any Senior Creditor under or in
connection with the Senior Finance Documents.

Senior
Default means an Event of Default as defined in the Senior
Facilities Agreement or other event of default (howsoever described) under any
External Facility.

Senior
Discharge Date means the date on which the Senior Agent is satisfied
that all of the Senior Debt and Hedging Debt has been irrevocably paid and
discharged and all Commitments of the Senior Creditors have been cancelled and
all obligations of the Hedging Banks under the Hedging Documents have been
terminated.

Senior
Facilities Agreement means the senior facilities agreement dated
13th March 2006 between, amongst others, KDG, Regco, the Senior Creditors, the
Senior Agent and the Security Agent providing for credit facilities
aggregating  €1,350,000,000.

Senior
Finance Document means:

(a)                                  a Finance
Document as defined in the Senior Facilities Agreement, but for the purposes of
this Agreement excludes the Hedging Documents; and

(b)                                 an External
Facility Finance Document.

Senior
Headroom means
at any time before the Bridge Discharge Date, a principal amount which is the
Relevant Percentage Amount of €250,000,000 less:

(a)                                  an amount equal
to the aggregate amount which would have been required to be prepaid under
clauses 8.3 (Mandatory prepayment – third party
receipts), and (Mandatory prepayment – market issue) of
the Senior Facilities Agreement prior to that time but which has not been
prepaid because of waivers of that requirement by the Majority Lenders except
where the Majority Bridge Creditors have also agreed to such waiver; and

(b)                                 an amount equal
to the aggregate amount of Repayment Instalments which would have fallen due
prior to that time but for any deferral by more than six months of the due date
for any such Repayment Instalment by the Senior Creditors (except where the
Majority Bridge Creditors have agreed to that deferral) provided that each such
Repayment Instalment has not been repaid at that time; and

provided
that the final maturity date of loans made under the Senior Headroom may not be
later than the original latest scheduled final maturity date of the Senior
Debt.

 10

 

Standstill
Period has the meaning given to it in Clause 8 (Permitted Enforcement).

Stop
Notice has the meaning given to it in Clause 4.2 (Suspension of Permitted
Payments).

Subordinated
Creditors means the Investors and the Intercompany Creditors.

Subordinated
Finance Documents means the Intercompany Documents and the Investor
Debt Documents.

Subordinated
Debt means the Investor Debt and the Intercompany Debt.

Turnover
Receipt has the meaning given to it in Clause 5
(Turnover).

Voting Entitlement means:

(a)                                  in relation to a
Lender under the Senior Facility Agreement, the sum of its shares in the
outstanding Loans, Ancillary Outstandings and undrawn Commitments; and

(b)                                 in relation to a
Senior Creditor under an External Facility, the sum of its shares in the outstanding
principal amount of indebtedness and commitments to advance indebtedness under
that External Facility (as certified by the relevant Representative under the
External Facility to the Senior Agent and the Security Agent).

1.2                               Interpretation

(a)                                  References to any
of the Security Agent, the Senior Agent, the Senior Creditors, the Hedging
Banks, the Bridge Creditors, the Bridge Agent, the Notes Creditors, the
Obligors, the Representatives for Senior Debt or the Investors in whatever
capacity include their respective successors, assigns, replacements,
transferees and substitutes from time to time.

(b)                                 The provisions of
Clause 1.2 (Construction) of the Senior Facilities Agreement apply to this
Agreement (whether before or after the Senior Discharge Date) as though they
were set out in full in this Agreement, except that references to the Senior
Facilities Agreement are to be construed as references to this Agreement.

(c)                                  Save as otherwise
specified in this Agreement, a reference to the Senior Facilities Agreement, a
Senior Finance Document, a Hedging Document, the Bridge Facility Agreement, a
Bridge Finance Document, an External Facility Finance Document, a Notes Finance
Document, an Investor Document or an Intercompany Document is to that document
or agreement as amended from time to time in accordance with the terms of this
Agreement.

(d)                                 In this
Agreement, unless the context otherwise requires references to:

(i)                                  Clauses,
Subclauses and Schedules are to be construed as references to the clauses and
subclauses of, and schedules to, this Agreement;

(ii)                               an amendment includes an amendment, supplement, novation,
re-enactment, replacement, restatement, variation or waiver or the giving of
any waiver, release or consent having the same commercial effect (and amend shall be construed accordingly);

(iii)                            give any
financial support (or similar phrases) in connection with any Debt
include the taking of any participation in or in respect of such Debt, the
giving of any

 11
 

 

guarantee
or other assurance against loss in respect of such Debt, or the making of any
deposit or payment in respect of or on account of such Debt;

(iv)                              a notice includes any notice, request, instruction, demand or
other communication;

(v)                                 an Event of
Default, Senior Default, Bridge Default or Notes Default being outstanding, is to such Event of Default, Senior Default,
Bridge Default or Notes Default having occurred and continuing unremedied and
unwaived; and

(vi)                              a payment include a distribution, prepayment or repayment and
references to pay include distribute, repay or
prepay.

(e)                                  Terms defined in
or whose interpretation is provided for in the Senior Facilities Agreement
shall have the same meaning (without giving effect to any amendments other than
in compliance with the terms hereof) when used in this Agreement (whether
before or after the Senior Discharge Date) unless separately defined or
interpreted in this Agreement.

(f)                                    In determining
whether or not an amount of Senior Debt, Hedging Debt, Bridge Debt or Notes
Debt has been irrevocably paid and discharged the Senior Agent, Bridge Agent or
Notes Trustee, as the case may be, will disregard contingent liabilities (such
as the risk of clawback flowing from a preference) except to the extent that
such Agent or the Notes Trustee believes that there is a reasonable likelihood
that those contingent liabilities will become actual liabilities.

(g)                                 Unless expressly
provided to the contrary in this Agreement, a person who is not a Party may not
enforce or enjoy the benefit of any of the terms of this Agreement under the
Contracts (Rights of Third Parties) Act 1999 and, notwithstanding any term of
this Agreement, no consent of any third party is required for any amendment
(including any release or compromise of any liability) or termination of this
Agreement.  The Noteholders are entitled
to the benefit, and subject to the obligations, of Noteholders under this
Agreement.

(h)                                 No part of this
Agreement is intended to or shall create a registrable Security Interest.

(i)                                     If there is any
conflict between the terms of this Agreement and any other Finance Document,
the terms of this Agreement will prevail.

1.3                               Bridge Facility

The
Bridge Creditors agree that, on and after the First Issue Date:

(a)                                  no member of the
Group other than KDG may be the Borrower of any Bridge Loan;

(b)                                 the Bridge Debt
will cease to be secured by any Security other than Security over the Ownership
Interests (and any other assets secured in favour of the Notes Creditors),

and
each Party agrees to take such action as may be necessary to ensure that, on
and after the First Issue Date, all Bridge Loans (if any) are borrowed by KDG
and such Bridge Loans are only secured by the Security referred to in (b)
above.

2.                                      RANKING AND NOTES DEBT

2.1                               Ranking

Subject
to paragraph (c) below, unless expressly provided to the contrary in this
Agreement:

 12
 

 

(a)                                  the Senior Debt,
the Junior Restricted Group Debt, the Hedging Debt and the Subordinated Debt
shall rank in right and priority of payment in the following order:

First                                    the Senior Debt
and the Hedging Debt (pari passu,
without any preference between themselves);

Second                        the Bridge
Restricted Group Debt, the Notes Guarantee Debt and the Permitted KDG Debt (pari passu, without any preference between themselves);

Third                                the Intercompany
Debt; and

Fourth                          the Investor Debt;
and

(b)                                 the Security
shall rank and secure the Debt in the following order:

First                                    the Senior Debt
and the Hedging Debt (pari passu,
without any preference between themselves);

Second                        the Bridge Debt,
the Notes Debt and the Permitted KDG Debt (pari passu,
without any preference between themselves).

(c)                                  Nothing in this
Agreement shall prevent payment by any Obligor of Notes Trustee Amounts, as and
when the same are due and payable.

2.2                               Ranking
unaffected

The ranking and priority in Clause 2.1 applies regardless of:

(a)                                  the order of
registration, filing, notice or execution of any document;

(b)                                 the date upon
which the Debt was incurred or arose;

(c)                                  whether a person
is obliged to advance any such Debt; and

(d)                                 any fluctuations
in the outstanding amount, or any intermediate discharge in whole or in part of
any Debt.

2.3                               Subordinated Debt

This
Agreement does not purport to rank any elements of the Intercompany Debt or
Investor Debt, in each case, as between themselves.  The Intercompany Debt and the Investor Debt
are and will remain unguaranteed and unsecured. 
Prior to the Bridge Discharge Date, the Investor Debt shall (a) have a
maturity date at least 12 months after the latest scheduled maturity of the
Secured Debt, (b) have no cash interest, withholding or gross-up requirements,
(c) contain no covenants or events of default, (d) contain no scheduled
repayment of principal or sinking fund or amortisation redemption or other
payment of principal in each case in cash or securities of any Obligor or other
Restricted Group Member prior to the latest scheduled maturity date under the
Finance Documents relating to the Secured Debt, and (e) not be prepayable in
cash or securities of any Obligor or other Restricted Group Member (by
acceleration, pursuant to a change of control offer or otherwise) at any time
except as permitted under the Bank Debt Finance Documents and be otherwise
fully subordinated in right of payment to the Junior Creditors on customary
terms.

 13
 

 

2.4                               Notes Debt

(a)                                  No member of the
Group shall enter into the Notes Indenture, or incur or permit to subsist any
Notes Guarantee Debt unless the Notes comply with the Notes Major Terms or are
otherwise approved by an Instructing Group.

(b)                                 If the Issuer
elects to obtain the approval of an Instructing Group under paragraph (a)
above, KDG, the Security Agent and an Instructing Group may agree such
amendments to this Agreement as may be required to accommodate the changes to
the terms of the Notes Finance Documents and such amendments shall be binding
on all the parties.

(c)                                  KDG will supply
the Senior Agent with copies of the Notes Finance Documents relating to any
issue of Notes as soon as practicable after entering in such Documents.

2.5                               Refinancing

(a)                                  It is hereby
agreed that the Senior Debt may, subject to paragraph (b) below, be refinanced,
replaced, increased or otherwise restructured in whole or in part (a Senior Refinancing) on terms that do not result in a breach
of any term of any agreements in respect of Junior Debt and that any
obligations incurred by the Group on such Senior Refinancing in respect of the
Senior Debt will, to the extent designated by KDG or Regco, rank ahead of the
Junior Debt and the Subordinated Debt and otherwise benefit from the provisions
of this Agreement on, mutatis mutandis, the terms set out herein (and such
obligations will constitute Senior Debt).

(b)                                 Prior to the
Bridge Discharge Date, if any of the terms of any document evidencing a Senior
Refinancing would, if such terms were amendments to any of the Finance
Documents, have required the agreement of the Majority Bridge Creditors under
Clause 13 (Amendments), the Senior Refinancing may not occur until such terms
have been agreed by the Majority Bridge Creditors in accordance with the
provisions of Clause 13 (Amendments).

(c)                                  If a Senior
Refinancing occurs in accordance with paragraph (a) above (and to the extent
the Security securing that Senior Debt is released, whether by operation of law
or otherwise, in connection with the Senior Refinancing) and in order to secure
the new Senior Debt on a first ranking basis (where such Security Interests are
not prohibited by the Notes Indenture), on the date on which such Senior
Refinancing occurs, the Security Agent is authorised by the Notes Trustee,  the Bridge Creditors and the holders of
Permitted KDG Debt to release (and the Security Agent will release) the Notes
Security and, if prior to the Bridge Discharge Date, the Bridge Security and
will, immediately after such Security Interests are granted in respect of the
new Senior Debt, re-take the Notes Security and, if prior to the Bridge
Discharge Date, the Bridge Security (in each case, in the form of the existing
Notes Security and Bridge Security in existence immediately prior to the Senior
Refinancing on a second priority basis)
provided that following such release and retaking the Notes Security is not
subject to any new hardening period or limitation (excluding any such hardening
period or limitation that existed prior to such release and retaking) which is
not also applicable to the Security Interest granted in favour of the new
Senior Debt.  The Notes Trustee, holders
of Permitted KDG Debt and the Bridge Creditors herewith also release the
Security Agent from any restrictions under Sec. 181 German Civil Code (Bürgerliches Gesetzbuch).

3.                                      UNDERTAKINGS

Prior
to the Bank Debt Discharge Date and without prejudice to any restrictions in
the Notes Finance Documents, except as an Instructing Group has (and if prior
to the Bridge Discharge Date, the Majority Bridge Creditors, in the case of any
payment, discharge or other action set out below relating to the Subordinated
Debt, have) agreed in writing, or to the extent

 14
 

 

permitted
by Clause 4 (Permitted Payments), Clause 6.2 (Filing of Claims) or
Clause 8 (Permitted Enforcement):

(a)                                  no Obligor will
(and each Obligor will procure that none of its Subsidiaries will) make any
payment of or in respect of, or purchase, redeem or acquire, any of the Junior
Restricted Group Debt or Subordinated Debt in cash or in kind (except, in the
case of Subordinated Debt, by capitalisation of interest and except for any
Notes Guarantee Debt or Permitted KDG Debt in connection with any such payment,
purchase, redemption or acquisition of any Notes Debt or Permitted KDG Debt (as
relevant) by KDG or the Issuer);

(b)                                 no Junior
Creditor or Subordinated Creditor will demand or receive payment of or in
respect of any Junior Restricted Group Debt or Subordinated Debt in cash or
kind or apply any money or property in or towards the discharge of any Junior
Restricted Group Debt or Subordinated Debt (except in respect of any Notes
Guarantee Debt or Permitted KDG Debt in connection with any such payment or
application of any Notes Debt or Permitted KDG Debt (as relevant) by or from
KDG or the Issuer);

(c)                                  no Junior
Creditor, Subordinated Creditor or Obligor will discharge any Junior Restricted
Group Debt or Subordinated Debt by set-off, any right of combination of
accounts or otherwise (except for any Notes Guarantee Debt or Permitted KDG
Debt in connection with any such discharge of Notes Debt or Permitted KDG Debt
(as relevant) by KDG or the Issuer);

(d)                                 no Obligor will
(and each Obligor will procure that none of its Subsidiaries will) create or
permit to subsist, and no Junior Creditor or Subordinated Creditor will accept,
any Security Interest over any of its assets for any of the Junior Debt or
Subordinated Debt except:

(i)                                  (in the case of
the Bridge Debt) under the original terms of the Security Documents (as amended
to the extent permitted under Clause 12 (Amendments)); or

(ii)                               (in the case of
the Notes Debt or Permitted KDG Debt) as permitted by paragraph (g) of the
definition of Notes Major Terms (or in the case of Permitted KDG Debt, as
permitted by that definition as amended in accordance with the definition of “Compliant
KDG Debt”),

and,
in each case, in accordance with the priority and ranking specified in this
Agreement;

(e)                                  no Obligor will
(and each Obligor will procure that none of its Subsidiaries will) give, and no
Junior Creditor or Subordinated Creditor will accept, any financial support to
any person for or in connection with the Junior Debt or Subordinated Debt,
except:

(i)                                  (in the case of
the Bridge Debt) under the original terms of the Bridge Finance Documents (as
amended to the extent permitted under Clause 12 (Amendments));

(ii)                               (in the case of
the Notes Debt) the Notes Guarantees, or

(iii)                            (in the case of
Permitted KDG Debt) guarantees in similar form as the Notes Guarantees,

 15
 

 

and,
in each case, in accordance with the priority and ranking specified in this
Agreement;

(f)                                    no Obligor,
Junior Creditor or Subordinated Creditor will allow any Junior Debt or
Subordinated Debt to be evidenced by a negotiable instrument (other than a Note
or the Notes Guarantees or similar instrument in respect of Permitted KDG Debt);
or

(g)                                 no Obligor,
Senior Creditor, Junior Creditor or Subordinated Creditor will take or omit to
take any action whereby the ranking and/or subordination of the Debt provided
for in this Agreement may be impaired.

4.                                      PERMITTED PAYMENTS

4.1                               Permitted payments

Prior
to the Bank Debt Discharge Date and without prejudice to any restrictions in
the Notes Finance Documents, but subject to Clauses 4.2 and 4.3 and to
Clause 5 (Turnover), unless an Instructing Group (and, if prior to the
Bridge Discharge Date, the Majority Bridge Creditors in the case of (a)(ii)
below) otherwise agrees:

(a)                                  no Obligor may
(and KDG will ensure that no Restricted Group Member shall) pay, or receive and
retain payment, whether in cash or kind of, any amount of Subordinated Debt unless
the following conditions are satisfied:

(i)                                  (other than in
relation to Investor Debt) the amount is then due and payable under the terms
of the relevant Finance Documents (as in force on the Restatement Date or
amended or entered into to the extent permitted under Clause 12 (Amendments));

(ii)                                  the payment, if
of Investor Debt:

(A)                           is permitted to
be paid under the Bank Debt Finance Documents; and

(B)                                no Senior Default
or Bridge Default is outstanding; and

(iii)                               the payment, if
of Intercompany Debt:

(A)                           is of interest or
fees owed or paid to Regco or is otherwise permitted to be paid under the Bank
Debt Finance Documents; and

(B)                             (except in
relation to a payment being made to facilitate repayment or prepayment of
Senior Debt) no Senior Default or Bridge Default is outstanding.

(b)                                 until the Senior
Discharge Date and subject to paragraph (c) below, no Obligor which is a
Restricted Group Member may (and KDG will ensure that no Restricted Group
Member shall) pay (whether in cash or kind) any amount of Junior Debt, or make
any payment, lawful distribution, lawful dividend, return on capital or other
lawful distribution (in cash or in kind), loan or payment of interest or
repayment of any loan to KDG or the Issuer, if:

(A)                              except in the
case of a KDG Operating Distribution, KDG Administration Distribution, a KDG
Hedging Distribution or a Notes Trustee Amount, two

 16
 

 

Business
Days prior to the date of payment an event of default for non-payment under a
Senior Finance Document is outstanding;

(B)                                except in the
case of a KDG Operating Distribution, KDG Administration Distribution, a KDG
Hedging Distribution or a Notes Trustee Amount, two Business Days prior to the
date of payment, a Stop Notice has been served and is in force;

(C)                                in the case of a
KDG Operating Distribution, an Enforcement Event has occurred and is
outstanding; or

(D)                               in the case of a
KDG Administration Distribution, the Security Agent is authorised to execute a
release of any Notes Security pursuant to Clause 10.5 (Sales by Security Agent
- Notes Creditors).

(c)                                  If a payment is
not prohibited by paragraph (b) above, such payment may only be made if it is:

(i)                                     a Permitted Notes
Payment, Permitted Bridge Payment or a Permitted KDG Debt Payment due and
payable under the terms of the relevant Finance Documents (as in force on the
Restatement Date or as entered into pursuant to Clause 2.4 (Notes Debt) or
amended to the extent permitted under Clause 13 (Amendments)) applied by the
recipient thereof within five Business Days to make such a Permitted Notes Payment,
Permitted Bridge Payment or Permitted KDG Debt Payment (as the case may be);

(ii)                                  a Permitted
Distribution (other than a KDG Operating Distribution or a KDG Administration
Distribution) permitted to be paid under the Bank Finance Documents or applied
by the recipient thereof within five Business Days to fund such Permitted
Distribution;

(iii)                               a KDG Operating
Distribution from Regco to KDG made to finance liabilities of KDG or its
immediate Holding Company falling within the definition of KDG Operating Distribution
and expected to fall due for payment within 30 days of the making of that KDG
Operating Distribution (and only to the extent such amounts are actually used
to meet such liabilities);

(iv)                              a KDG
Administration Distribution made to finance liabilities falling within the
definition of that term expected to fall due for payment within 60 days of
making that KDG Administration Distribution (and only to the extent that such
amounts are actually used to meet such liabilities);

(v)                                 a Notes Trustee
Amount falling due for payment within five Business Days of the making of such
payment; or

(vi)                              a KDG Hedging
Distribution paid in respect of any scheduled payment falling due for payment
by KDG to a Hedging Bank under the original terms of any Hedging Document
within five Business Days of the making of such KDG Hedging Distribution.

 17
 

 

4.2                               Suspension of
Permitted Payments

A
Stop Notice is in force during the period from the date on which an Authorised
Representative serves a notice (a Stop Notice) on
KDG, the Bridge Agent and the Notes Trustee specifying that a Senior Default is
outstanding and suspending payment of the Junior Restricted Group Debt, until
the earlier of:

(a)                                  the date 179 days
after the giving of the Stop Notice;

(b)                                 if a Standstill
Period is in effect at the time of delivery of the Stop Notice, the date on
which that Standstill Period expires;

(c)                                  the date on which
the Senior Default concerned ceases to be outstanding;

(d)                                 the date on which
an Authorised Representative by notice to KDG, the Bridge Agent and the Notes
Trustee cancels the Stop Notice; or

(e)                                  the Senior
Discharge Date,

PROVIDED
THAT:

(i)                                     no Authorised
Representative may serve a Stop Notice unless:

(A)                              an Instructing
Group has instructed the relevant Authorised Representative to serve such Stop
Notice; or

(B)                                either;

I.                                         15 Business Days
have elapsed since a payment default or an event of default in respect of
insolvency or insolvency proceedings has arisen under the Senior Facilities
Agreement or External Facility (in each case) represented by that Authorised
Representative; or

II.                                     90 days have
elapsed since an event of default (other than a payment default or insolvency
or insolvency proceeding default referred to in (I) above) has arisen under the
Senior Facilities Agreement or External Facility (in each case) represented by
that Authorised Representative;

(ii)                                  no Stop Notice
may be served by an Authorised Representative in reliance on a particular
Senior Default more than 45 days after the Authorised Representative received
notice from any Obligor, Notes Trustee, Senior Creditor or Bridge Creditor
specifying the event or circumstances concerned and that it is a Senior
Default;

(iii)                               no more than one
Stop Notice may be served with respect to the same particular event or
circumstances (whether in relation to the same Senior Default or not);

(iv)                              a Stop Notice may
not be issued less than 365 days after the service of a prior Stop Notice (or
prior to all interest current on the Notes at the time the previous Stop Notice
expired having been paid in full);

(v)                                 no Senior Default
that existed at the date a Stop Notice was given may be the basis of a
subsequent Stop Notice, unless such Senior Default has been cured or complied
with for at least 180 consecutive days since the date of issue of the prior
Stop Notice

 18
 

 

(it
being acknowledged that any subsequent action or breach of any financial
covenant for a period ending after the date of delivery of such initial Stop
Notice that gives rise to a Senior Default under any provision under which a
Senior Default previously existed or was continuing shall constitute a new
Senior Default for this purpose); and

(vi)                              payment of any
Notes Trustee Amount, KDG Operating Distribution, KDG Hedging Distribution
or  KDG Administrative Distribution which
were due and payable may be made notwithstanding a service of the Stop Notice.

4.3                               Principal
Payments

Prior
to the Senior Discharge Date, no amount of principal of the Junior Debt may be
paid by (or on behalf of) an Obligor which is a Restricted Group Member prior
to the Senior Discharge Date except as permitted by the Senior Finance
Documents or otherwise with the prior consent of the Majority Senior Creditors.

After
the Senior Discharge Date, any amount of Bridge Debt and Notes Debt may be paid
when due under the Bridge Finance Documents or as the case may be Notes Finance
Documents.

5.                                      TURNOVER

(a)                                  If any Hedging
Bank, Junior Creditor or Subordinated Creditor receives or recovers a payment
in cash or in kind (including by way of set-off or combination of
accounts):

(i)                                     of any of the
Hedging Debt which is prohibited by Clause 14.2 (Undertakings relating to
Hedging Debt);

(ii)                                  of any of the
Junior Debt or Subordinated Debt which is prohibited by Clause 4
(Permitted Payments) or, in the case of Bridge Debt, Notes Debt or Permitted
KDG Debt, not made in accordance with Clause 9 (Proceeds of Enforcement);

(iii)                               from (or on
behalf of) any Restricted Group Member on account of the purchase, redemption
or acquisition of any Junior Debt or Subordinated Debt which is prohibited by
Clause 3 (Undertakings),

(each
such payment or distribution being a Turnover Receipt)
the receiving or recovering Hedging Bank, Junior Creditor or Subordinated
Creditor (as the case may be) will promptly notify the Security Agent.

(b)                                 Each Hedging
Bank, Junior Creditor and Subordinated Creditor shall:

(i)                                     hold any Turnover
Receipt received or recovered by it on trust for the Secured Creditors; and

(ii)                                  upon demand by
the Security Agent pay to the Security Agent for application as provided in
Clause 9 (Proceeds of Enforcement) an amount determined by the Security
Agent to be equal to the lesser of:

(A)                              if on or prior to
the Senior Discharge Date, the outstanding aggregate balance of the Senior Debt
and Hedging Debt, and otherwise the outstanding aggregate balance of the Bridge
Debt and Notes Debt; and

 19
 

 

(B)                                the amount of
such Turnover Receipt,

less
the third party costs and expenses (if any) reasonably incurred by the Hedging
Bank, Junior Creditor or Subordinated Creditor concerned in receiving or
recovering such Turnover Receipt.

(c)                                  The Notes Trustee
shall only have any obligation under paragraph (b) above in respect of amounts
received or recovered by it if (i) it has actual knowledge that the receipt or
recovery falls within paragraphs (a)(i) to (iii) above and (ii) prior to
receiving such knowledge it has not distributed to Noteholders in accordance
with the Notes Indenture any amount so received or recovered.  The Notes Trustee shall not be charged with
knowledge of the existence of facts that would prohibit it from making any
payments unless, not less than two Business Days prior to the date of such
payments, a Responsible Officer of the Note Trustee receives written notice
satisfactory to it that such payments are prohibited by this Agreement or the
Notes Indenture.

(d)                                 Each Obligor
shall indemnify each Hedging Bank, Junior Creditor and Subordinated Creditor
(to the extent of its liability for the Hedging Debt, Junior Debt or, as the
case may be, Subordinated Debt) for the amount of any Turnover Receipt paid by
that Hedging Bank, Junior Creditor or Subordinated Creditor to the Security
Agent and such third party costs and expenses incurred by it, and the Hedging
Debt, Junior Debt or Subordinated Debt (as appropriate) will not be deemed to
have been reduced or discharged in any way or to any extent by the receipt or
recovery of the relevant Turnover Receipt.

6.                                      SUBORDINATION ON INSOLVENCY

6.1                               Subordination
Events

Until the Bank Debt Discharge
Date, if any Event of Default specified in clauses 20.6 (Insolvency) to
20.9 (Analogous proceedings) (inclusive) of the Senior Facilities Agreement
occurs (or any analogous provision of any External Facility) (whether before or
after the Senior Discharge Date) to or in respect of any Obligor then:

(a)                                  the Junior
Restricted Group Debt owed by the Insolvent Obligor will be subordinate in
right of payment to the Senior Debt and Hedging Debt owed by such Insolvent
Obligor; and

(b)                                 the Investor Debt
and (unless otherwise required by an Instructing Group) the Intercompany Debt owed
by the Insolvent Obligor will be subordinate in right of payment to the Secured
Debt owed by such Insolvent Obligor.

6.2                               Filing of Claims

(a)                                  Until the Bank
Debt Discharge Date, the Security Agent acting on the instructions of an
Instructing Group may, and is irrevocably authorised on behalf of the Junior
Creditors (but only prior to the Senior Discharge Date) and the Subordinated
Creditors to:

(i)                                     claim, enforce
and prove for any Junior Restricted Group Debt or Subordinated Debt owed by the
Insolvent Obligor;

(ii)                                  exercise all
powers of convening meetings, voting and representation in respect of the
Junior Restricted Group Debt and Subordinated Debt owed by the Insolvent
Obligor (except with respect to any Noteholder or for meetings of the Bridge
Creditors under the Bridge Facility Agreement) and the Notes Trustee, each
Bridge Creditor and

 20

 

Subordinated
Creditor will provide all forms of proxy and of representation requested by the
Security Agent for that purpose;

(iii)                               file claims and
proofs, give receipts and take all such proceedings and do all such things as
the Security Agent considers reasonably necessary to recover any Junior
Restricted Group Debt or Subordinated Debt owed by the Insolvent Obligor; and

(iv)                              receive all
payments of or in respect of any Junior Restricted Group Debt or Subordinated
Debt owed by the Insolvent Obligor for application in accordance with
Clause 9 (Proceeds of Enforcement).

(b)                                 Subject to
paragraph (c) below, each of the Bridge Creditors, the Notes Trustee and the
Subordinated Creditors undertakes that it shall refrain from taking any of the
actions referred to in paragraph (a) above.

(c)                                  If the Security
Agent is not entitled or does not take any of the actions referred to in
paragraph (a) above, the Notes Trustee, the Bridge Creditors and the
Subordinated Creditors (i) will each do so promptly when requested by the
Security Agent acting on the instructions of an Instructing Group subject, in
the case of the Bridge Creditors and the Notes Creditors only, to the Senior
Creditors and Hedging Banks giving an appropriate indemnity for any costs and
expenses which may be reasonably incurred by the Bridge Creditors or the Notes
Trustee as applicable in doing or taking the actions so requested; and (ii) may
each do so to the extent permitted by Clause 8 (Permitted Enforcement).

(d)                                 Nothing in this
Subclause entitles any Party to exercise or require any other Party to exercise
such power of voting or representation in order to agree any Group
reorganisation or insolvency or similar scheme or waive or amend any of the
provisions of the Junior Restricted Group Debt, including without limitation to
waive, reduce, discharge, extend the due date for payment of or reschedule any
of the Junior Debt or the Subordinated Debt.

6.3                               Distributions

Until
the Bank Debt Discharge Date, each Junior Creditor (but only prior to the
Senior Discharge Date) and Subordinated Creditor will:

(a)                                  hold all payments
of or in respect of any Junior Restricted Group Debt or Subordinated Debt in
cash or in kind received by or on behalf of it from any Insolvent Obligor (or
any liquidator, administrator, receiver or similar official of such Insolvent
Obligor or its assets) on trust for the Senior Creditors and Hedging Banks or,
if after the Senior Discharge Date, the Junior Creditors;

(b)                                 upon demand by
the Security Agent, pay an amount equal to the amount of all those payments to
the Security Agent for application in accordance with Clause 9 (Proceeds
of Enforcement); and

(c)                                  direct the
trustee in bankruptcy, liquidator, administrator, receiver or other person
distributing the assets of an Insolvent Obligor or their proceeds to make
payments on the Junior Restricted Group Debt or the Subordinated Debt, direct
to the Security Agent until the Secured Debt has been paid in full.

Nothing
in this Clause shall prevent payment of Notes Trustee Amounts at any time as and
when the same are payable.

 21
 

 

7.                                      RESTRICTIONS ON ENFORCEMENT

7.1                               Restrictions

Subject
to Clauses 6 (Subordination on Insolvency) and 8 (Permitted Enforcement), until
the Bank Debt Discharge Date (in relation to Investor Debt and Intercompany
Debt) or the Senior Discharge Date (in relation to Junior Debt) unless the
Majority Lenders (and if prior to the Bridge Discharge Date the Majority Bridge
Creditors in the case of any action set forth below relating to Investor Debt)
have previously agreed in writing none of the Junior Creditors (but only prior
to the Senior Discharge Date) or Subordinated Creditors will:

(a)                                  demand payment of
any Junior Restricted Group Debt or Subordinated Debt;

(b)                                 accelerate any of
the Junior Restricted Group Debt or Subordinated Debt or otherwise declare any
of the Junior Restricted Group Debt or Subordinated Debt prematurely due or
payable on an Event of Default or otherwise;

(c)                                  enforce any of
the Junior Restricted Group Debt or Subordinated Debt by attachment, set-off,
execution or otherwise;

(d)                                 enforce (or give
instructions to the Security Agent to enforce) the Security;

(e)                                  petition for (or
vote in favour of any resolution for) or initiate, support or take any steps
with a view to any Insolvency or any voluntary arrangement or assignment for
the benefit of creditors or any similar proceedings involving an Obligor except
that nothing in this paragraph will restrict the taking of any such action by
the Bridge Creditors or the Notes Creditors against KDG or the Issuer;

(f)                                    sue or bring or
support any legal proceedings against any Obligor (or any of its Subsidiaries),
except that nothing in this paragraph will restrict:

(i)                                     the bringing of
proceedings by the Bridge Creditors or the Notes Creditors:

(A)                              against KDG or
the Issuer; or

(B)                                solely for
injunctive relief (or analogous proceedings in jurisdictions outside England
and Wales) to restrain any actual or putative breach of the Bridge Finance
Documents or, as the case may be, Notes Finance Documents, or for specific
performance not claiming damages; or

(ii)                                  the bringing of
proceedings by the Investors against KDG if permitted by Clause 7.2
(Junior Creditor and Subordinated Creditor Actions),

in
any such case where doing so would not conflict with any other provision of
this Agreement;

(g)                                 otherwise
exercise any remedy for the recovery of any Junior Restricted Group Debt or
Subordinated Debt; or

(h)                                 sue or bring or
support proceedings against or make demand on the provider of any of the
Reports (a Report Provider) in connection
with the Reports or receive payment from any of the Report Providers in
connection with any such suit, proceedings or demand if there is an aggregate
limit on the amount of claims which may be brought

 22
 

 

against
that Report Provider and the aggregate amount of all those claims might exceed
the amount of any limitation of liability on which that Report Provider is
entitled to rely, provided that in any case:

(i)                                     a Junior Creditor
or Subordinated Creditor must notify the Senior Agent if prior to the Senior
Discharge Date and thereafter the Bridge Agent before suing or bringing or
supporting proceedings against or making a demand on a Report Provider in
connection with the Reports, provided that the Noteholders have no right to
bring any claim in respect of the Reports; and

(ii)                                  the Senior
Creditors if prior to the Senior Discharge Date will be entitled to full
payment of their claims against that Report Provider in connection with any
Report in priority to the claims of the Junior Creditors and the Subordinated
Creditors against that Report Provider and each Junior Creditor or Subordinated
Creditor will on demand pay to the Security Agent for application as provided
in Clause 9 (Proceeds of Enforcement) an amount equal to any amount
received by it in breach of this Subclause.

7.2                               Junior Creditor
and Subordinated Creditor Actions

If
any restriction in this Clause preventing a Junior Creditor or Subordinated
Creditor from suing or bringing or supporting proceedings against any member of
the Group or Report Provider would result in such Junior Creditor or
Subordinated Creditor being prevented from suing or bringing or supporting
those proceedings by reason of the expiry of any statutory limitation period or
otherwise, that Junior Creditor or Subordinated Creditor shall be able to sue
or bring or support those proceedings against that member of the Group or
Report Provider, but only to the extent necessary to prevent loss of the right
to sue or bring or support those proceedings.

7.3                               Senior Creditor
Actions

No
Senior Creditor may:

(a)                                  demand payment of
any Senior Debt;

(b)                                 accelerate any of
the Senior Debt or otherwise declare any of the Senior Debt prematurely due or
payable on an Event of Default (or analogous event) or otherwise;

(c)                                  enforce any of
the Senior Debt by attachment, set-off, execution or otherwise;

(d)                                 enforce (or give
instructions to the Security Agent to enforce) the Security;

(e)                                  petition for (or
vote in favour of any resolution for) or initiate, support or take any steps
with a view to any Insolvency or any voluntary arrangement or assignment for
the benefit of creditors or any similar proceedings involving an Obligor;

(f)                                    sue or bring any
legal proceedings against any Obligor (or any of its subsidiaries);

(g)                                 otherwise
exercise any remedy for the recovery of any Senior Debt; or

(h)                                 sue or bring
support proceedings against or make demand on any Report Provider in connection
with the Reports or receive payment from any of the Report Providers in
connection with any such suit, proceedings or demand,

 23
 

 

unless
either (a) agreed by an Instructing Group; or (b) an Enforcement Event has
occurred in respect of the Senior Debt provided by that Senior Creditor and the
Authorised Representative of that Senior Debt is entitled to give instructions
to enforce the Bank Security pursuant to clause 10.1(a)(ii).

8.                                      PERMITTED ENFORCEMENT

8.1                               Enforcement

Until
the Senior Discharge Date, the Bridge Creditors and the Notes Creditors may,
subject to Clause 8.2 (Regco), take any of the actions otherwise prohibited by
Clause 7 (Restrictions on Enforcement) PROVIDED THAT:

(a)                                  payment of the
Senior Debt has been accelerated, or Liabilities under the Senior Debt have
been declared prematurely due and payable or payable on demand, in each case,
under the Senior Facilities Agreement or any applicable External Facility, or
the Senior Creditors have taken any enforcement action under the Senior Finance
Documents (in each case, in accordance with Clause 7.3 (Senior Creditor
Actions)); or

(b)                                 if any Event of
Default referred to in Clause 6.1 (Subordination Events) is outstanding in
respect of an Obligor that is a Restricted Group Member that owes Junior
Restricted Group Debt:

(i)                                     other than where such Event of Default has occurred as a result of any
action by the Bridge Creditors, the Bridge Creditors may, if
there is then a Bridge Default outstanding; and

(ii)                                  other than where such Event of Default has occurred as a result of any
action by any Notes Creditor, the Notes Creditors may, if
there is then a Notes Default outstanding,

take any such actions against
such Obligor in respect of such Junior Restricted Group Debt, but not against
or in relation to any other Obligor that is a Restricted Group Member; or

(c)                                  in the case of
the Junior Creditors:

(i)                                     the Bridge Agent
or Notes Trustee has given notice in writing (an Enforcement
Notice) to KDG, the Senior Agent and each Representative of any
other Senior Debt specifying that a Bridge Default or Notes Default is
outstanding;

(ii)                                  a period (a Standstill Period) of not less than 179 days has elapsed
from the date the Senior Agent and each Representative of any other Senior Debt
received such Enforcement Notice relating to such Bridge Default or Notes
Default; and

(iii)                               such Bridge
Default or, as the case may be, Notes Default is outstanding at the end of the
Standstill Period.

The
obligations under the Notes Guarantees will not become due unless and until the
conditions specified in one or more of paragraphs (a), (b) and (c) above have
been satisfied.

 24
 

 

8.2                               Regco

The
Security Agent will give prompt notice to the Bridge Agent and/or the Notes
Trustee if it is instructed by the Majority Senior Creditors to enforce the
Bank Security over any Ownership Interests (a Senior
Enforcement).  During the
period from the giving of any such notice until the Security Agent ceases to
use all reasonable commercial efforts to carry out the Senior Enforcement as
expeditiously as reasonably practicable having regard to the circumstances (and
the Security Agent will give prompt notice to the Bridge Agent and the Notes
Trustee of it ceasing so to carry out the Senior Enforcement):

(a)                                  the Security
Agent may not enforce the Bridge Security or the Notes Security over the
Ownership Interests in a manner that would adversely affect the Senior
Enforcement; and

(b)                                 no Bridge
Creditor or Notes Creditor may give any instruction to the Security Agent to
take any enforcement action prohibited by paragraph (a) above,

provided
that nothing in this Clause 8.2 shall prejudice any other rights of the Bridge
Creditors or the Notes Creditors to take any enforcement action against any
other Obligor and the exercise of such rights shall be deemed not to adversely
affect the Senior Enforcement.

9.                                      PROCEEDS OF ENFORCEMENT

9.1                               Order of
Application

(a)                                  Subject to the
rights of any creditor with prior security or preferential claims, the proceeds
of enforcement of the Security shall be paid to the Security Agent.  Those proceeds and all other amounts paid to
the Security Agent under this Agreement shall be applied in the following
order:

First                                             in payment of the
fees, costs, expenses and liabilities (and all interest thereon as provided in
the Finance Documents) of the Security Agent and any receiver, attorney or
agent appointed under the Security Documents or this Agreement;

Second                                 in payment pari passu and pro rata of the
balance of the costs and expenses of any Senior Creditor or Hedging Bank in
connection with such enforcement;

Third                                         in payment to the Senior Agent
for application towards the balance of the Senior Debt (but prior to the Bridge
Discharge Date, excluding any Excess Senior Debt) and the Hedging Debt (but
prior to the Bridge Discharge Date, excluding any Excess Hedging Debt) pari passu between themselves;

Fourth                                   in payment to the Notes
Trustee of the Notes Trustee Amounts;

Fifth                                              in payment of the
costs and expenses of any Junior Creditor in connection with such enforcement;

Sixth                                           in payment to the
Bridge Agent, Notes Trustee and representative in respect of Permitted KDG
Debtfor application towards the balance of the Bridge Debt, Notes Debt and Permitted
KDG Debt pari passu between themselves;

Seventh                             prior to the Bridge Discharge
Date, in payment to the Senior Agent for application towards any amounts of
Excess Senior Debt and Excess Hedging Debt pari passu
between themselves; and

 25
 

 

Eighth                                    the payment of the surplus (if
any) to the Obligor or other person entitled to it.

(b)                                 No such proceeds
or amounts shall be applied in payment of any amounts specified in any of the
subparagraphs in paragraph (a) above until all amounts specified in any
earlier subparagraph have been paid in full.

9.2                               Good Discharge

An
acknowledgement of receipt signed by the relevant person to whom payments are
to be made under this Clause shall be a good discharge, to the extent of that
payment, of the Security Agent or the Notes Trustee on behalf of itself or the
Noteholders.

9.3                               Non-cash
distributions

If
the Security Agent or any other Secured Creditor receives any distribution
otherwise than in cash in respect of any Debt, the Secured Debt will be reduced
by the amount of the due currency purchased with the sale proceeds of such
distribution, after deducting the reasonable costs and expenses incurred in
connection with the collection and conversion of such sale proceeds, when such
realisation proceeds are actually applied towards the Secured Debt.

9.4                               Currencies

(a)                                  All moneys
received or held by the Security Agent under this Agreement at any time on or
after an Enforcement Event in a currency other than a currency in which the
relevant Secured Debt is denominated may be sold at the applicable spot rate of
exchange for any one or more of the currencies in which the Secured Debt is
denominated as the Security Agent considers necessary or desirable.

(b)                                 The Secured Debt
will be reduced by the amount of the due currency purchased, after deducting
the reasonable costs of conversion.

(c)                                  The Security
Agent has no liability to any Party in respect of any loss resulting from any
fluctuation in exchange rates.

(d)                                 The Secured Debt
will be reduced by the amount of the due currency purchased after deducting the
reasonable costs and expenses incurred in connection with the conversion of
such proceeds, when such realisation proceeds are actually applied towards the
Secured Debt.

10.                               ENFORCEMENT OF SECURITY

10.1                        Enforcement
Instructions

(a)                                  The Security
Agent may refrain from enforcing the Bank Security unless instructed otherwise
by:

(i)                                     an Instructing
Group; or

(ii)                                  if either of the
following conditions is satisfied in respect of certain Senior Debt:

(A)                              15 Business Days
have elapsed since a payment default or an event of default in respect of
insolvency or insolvency proceedings giving rise to the entitlement to take
such action has arisen under the Senior Facilities Agreement or External
Facility (as relevant) in respect of that Senior Debt; or

 26
 

 

(B)                                90 days have
elapsed since the event (other than a payment default or insolvency or
insolvency proceeding default referred to in (A) above) giving rise to the
entitlement to take such action has arisen under the Senior Facilities
Agreement or External Facility (as relevant) in respect of that Senior Debt,

the
Authorised Representative of that Senior Debt.

(b)                                 Subject to the
Bank Security having become enforceable, an Instructing Group, an Authorised
Representative authorised pursuant to Clause 10.1(a)(ii) or, if permitted under
Clause 8 (Permitted Enforcement), the Majority Bridge Creditors may give
or refrain from giving instructions to the Security Agent to enforce or refrain
from enforcing the Bank Security as they see fit.

(c)                                  Subject to the
Notes Security having become enforceable, the Notes Trustee, if permitted under
Clause 8 (Permitted Enforcement), may give or refrain from giving instructions
to the Security Agent to enforce or refrain from enforcing the Notes Security
as it sees fit.  The Notes Trustee shall
have no obligation to take any action under this Clause unless it is
indemnified to its satisfaction in respect of all costs, expenses and
liabilities which it could in its opinion thereby incur.  The Security Agent shall have no obligation
to take any action following the giving of any instructions by the Notes
Trustee under this Clause, unless indemnified to its satisfaction in respect of
all costs, expenses and liabilities which it could in its opinion thereby
incur.

10.2                        Competing Instructions
to Security Agent

(a)                                  Subject to Clause
10.1(c) (Enforcement Instructions) and save as provided in paragraph (b)
below, any instructions given to the Security Agent by an Instructing Group
will override any conflicting instructions given by any other Parties.

(b)                                 Prior to the
Senior Discharge Date:

(i)                                     if the Majority
Senior Creditors have instructed the Security Agent not to enforce or to cease
enforcing the Bank Security; or

(ii)                                  in the absence of
instructions from the Majority Senior Creditors,

the
Security Agent shall give effect to any instructions to enforce the Bank
Security which the Majority Bridge Creditors are then entitled to give to the
Security Agent under Clause 8 (Permitted Enforcement).

(c)                                  The Security
Agent is entitled to rely on and comply with instructions given in accordance
with this Subclause.

10.3                        Manner of
Enforcement

(a)                                  The Security
Agent shall enforce the Bank Security (if then enforceable) in such manner as
an Instructing Group or, if required by Clause 10.2(b) (Competing Instructions
to Security Agent), the Majority Bridge Creditors shall instruct or, in the
absence of those instructions, as it sees fit and, subject as required by
applicable law, having regard first to the interests of the Senior Creditors
and the Hedging Banks.

(b)                                 The Security
Agent shall enforce the Notes Security (if then enforceable) in such manner as
the Notes Trustee directs.

 27
 

 

(c)                                  Subject to Clause
10.5 (Sales by Security Agent - Notes Creditors), none of the Security Agent,
the Senior Creditors and the Hedging Banks shall be responsible to any Junior
Creditor, Subordinated Creditor or Obligor, no Bridge Creditor shall be
responsible to any other Junior Creditor, Subordinated Creditor or Obligor, and
no Notes Creditor shall be responsible to any other Junior Creditor,
Subordinated Creditor or Obligor, for any enforcement or failure to enforce or
to maximise the proceeds of any enforcement of the Security, and any of the
Security Agent, the Senior Creditors, the Hedging Banks, the Bridge Creditors
and the Notes Creditors, as the case may be, may cease any such enforcement at
any time.

10.4                        Sales by Security
Agent - Bank Creditors

If
a transaction is:

(a)                                  permitted by
clause 19.7 (Disposals) of the Senior Facilities Agreement, clause 19.7
(Disposals) of the Bridge Facility Agreement and any analogous provision of any
External Facility;

(b)                                 being effected at
the request of an Instructing Group in circumstances where the Bank Security
has become enforceable; or

(c)                                  being effected by
enforcement of the Bank Security,

the
Security Agent is irrevocably authorised to execute on behalf of each Bank
Creditor and each Obligor (and at the cost of the relevant Obligor),

(i)                                     any release of
the Bank Security over that asset; and

(ii)                                  if that asset
comprises all of the shares or other ownership interests in the capital of any
Obligor held by members of the Group, a release of that Obligor and its
Subsidiaries from all present and future liabilities (both actual and
contingent and including any liability to any other Obligor under the Senior
Finance Documents or the Bridge Finance Documents by way of contribution or
indemnity) in its capacity as a guarantor under the Bridge Finance Documents or
under the Hedging Documents and a release of any Security granted by that Obligor
and its Subsidiaries over any of their respective assets,

PROVIDED
THAT:

(A)                              in the case of
paragraph (a) above the Net Proceeds of the disposal are to be applied as
provided for in the Senior Facilities Agreement, the Bridge Facility Agreement
and any External Facility; and

(B)                                otherwise the net
cash proceeds of the sale or disposal are applied in payment of Debt in the
order set out in Clause 9 (Proceeds of Enforcement).

10.5                        Sales by Security
Agent – Notes Creditors

The
Security Agent is irrevocably authorised to execute on behalf of each Notes
Creditor any release of any Notes Guarantee and any Notes Security if:

(a)                                  such release is
permitted by, is in accordance with, or has been approved under the Notes
Finance Documents; or

 28
 

 

(b)                                 (w) any of the
limited partnership interests in Regco, (x) the shares in the general partner
of Regco or (y) any of the partnership interests in Kabel Deutschland Vertrieb
und Service Beteiligungs GmbH & Co, KG or any other New Limited Partnership
and/or the shares in the general partner of Kabel Deutschland Vertrieb und
Service Beteiligungs GmbH & Co, KG or any other New Limited Partnership or
(z) any combination of the foregoing are sold, in each case, pursuant to
enforcement action taken by the Security Agent on behalf of the Bank Creditors,
and:

(i)                                     the proceeds of
such sale received by the Security Agent are, unless otherwise agreed by the
Notes Trustee, in the form of cash;

(ii)                                  the claims and
security interests of the Senior Finance Parties and the Bridge Creditors against
Regco are irrevocably and unconditionally released (and not assumed by the
relevant purchaser or any affiliate of such purchaser of Regco concurrently
with such sale unless such claims and security interests no longer have
recourse to any member of the Group); and

(iii)                               either (A) the
sale is made pursuant to a public auction or (B) in connection with the sale an
internationally recognised investment bank selected by the Security Agent has
delivered to the Notes Trustee an opinion that the consideration for the sale
is fair from a financial point of view after taking into account all relevant
circumstances.

10.6                        Ownership
Interest Releases

Each
Senior Creditor, Bridge Creditor and the Notes Trustee will execute such
releases as the Security Agent may reasonably require to give effect to Clauses
10.4 (Sales by Security Agent — Bank Creditors) and 10.5 (Sales by Security
Agent — Notes Creditors).  No such
release will affect the obligations and liabilities of any other Obligor under
the Finance Documents.

11.                               LOSS SHARING

11.1                        Equalisation
Payments

If
any Secured Creditor (a Recovering Creditor)
makes a Recovery other than by reason of a payment from the Security Agent
dealt with under Clause 9 (Proceeds of Enforcement), then, subject to
Clause 11.3 (Notes Trustee Amounts):

(a)                                  the Recovering
Creditor must within three Business Days, supply details of the Recovery to the
Security Agent;

(b)                                 the Security
Agent must calculate whether the Recovery is in excess of the amount (the
amount of the excess being the Recovery Excess)
which the Recovering Creditor would have received if the Recovery had been
applied as provided in Clause 9 (Proceeds of Enforcement);

(c)                                  the Recovering
Creditor must pay to the Security Agent an amount equal to the Recovery Excess
within five Business Days of demand by the Security Agent;

(d)                                 the Security
Agent must treat the Recovery Excess as if it were the proceeds of enforcement
of the Security Documents and shall deal with it in accordance with
Clause 9 (Proceeds of Enforcement); and

 29
 

 

(e)                                  (i)            the Recovering Creditor will be
subrogated to the rights of the Secured Creditors which have shared in that
Recovery Excess, or

(i)                                     if the Recovering
Creditor is not able to rely on any rights of subrogation under subparagraph
(i) above, the relevant Obligor will owe the Recovering Creditor a debt which
is equal to the Recovery Excess, immediately payable and of the type originally
discharged.

11.2                        Loss Sharing

(a)                                  If any of the
Senior Debt or Hedging Debt remains undischarged and any resulting losses are
not being borne by the Senior Creditors and the Hedging Banks pro rata to the amount which their respective Commitments
bore to the Total Commitments on the date of the Enforcement Event, the Senior
Creditors and the Hedging Banks shall make such payments between themselves as
the Senior Agent shall require to ensure that after taking into account such
payments such losses are borne by the Senior Creditors and the Hedging Banks pro rata to their Commitments.

(b)                                 For the purpose
of paragraph (a) above:

(i)                                     the Total
Commitments under the Senior Facilities Agreement will be notionally increased
by an aggregate amount equal to the sum of the total amount of the commitments
under all External Facilities and the aggregate of the amounts (if any) that
would be payable to any Hedging Bank as a result of terminating or closing out
each hedging transaction under the Hedging Documents on the date of the
Enforcement Event;

(ii)                                  each Hedging Bank
shall be deemed (if it is a Lender) to have the aggregate amount of its
Commitments increased by, or (if it is not a Lender) to have a Commitment in,
the amount equal to the aggregate of the amounts (if any) that would be payable
to that Hedging Bank as a result of terminating or closing out each hedging
transaction under the Hedging Documents on the date of the Enforcement Event;
and

(iii)                               each provider of
debt under an External Facility shall be deemed (if it is a Lender) to have the
aggregate amount of its Commitments increased by, or (if it is not a Lender) to
have a Commitment in the amount equal to, the sum of its commitments under all
External Facilities.

(c)                                  This Subclause is
without prejudice to paragraph 10 of Schedule 6 (Security Agent).

11.3                        Notes Trustee
Amounts

Nothing
in this Clause 11 shall restrict the right of the Notes Trustee to receive and
retain Notes Trustee Amounts.  The Notes
Trustee shall have no liability to pay any amount under this Clause 11 unless
and to the extent that amounts are held by it on trust for, or otherwise on
behalf of, the Noteholders.

12.                               DESIGNATION OF EXTERNAL FACILITY

A
person providing Senior Debt to any Obligor pursuant to an External Facility
will be entitled to share in the security in respect of Senior Debt or benefit
from this Agreement if and only if:

 30

 

(a)                                  each such person
and/or Representative in relation to that External Facility has acceded to this
Agreement as a Senior Creditor or a Representative by executing a Deed of
Accession and delivering such duly completed Deed of Accession to the Security
Agent;

(b)                                 the finance
documents relating to that External Facility have been or are provided to the
Security Agent;

(c)                                  the notifications
to the Security Agent and other administrative actions (if any) required under
this Agreement in relation to that External Facility have been performed; and

(d)                                 that External
Facility would not be prohibited by the Notes Finance Documents.

Upon
compliance with the foregoing, each such person and each Representative of the
relevant External Facility will become a Senior Creditor or Representative
under this Agreement and the relevant External Facility will become Senior Debt
under this Agreement.

13.                               AMENDMENTS

13.1                        Amendments

Subject
to Clause 13.2 (Permitted Amendments) and Clause 13.3 (Other Amendments) and
Clause 27 (Amendments), prior to the Bank Debt Discharge Date, no Party
may amend any term of any Finance Document (or, after the Senior Discharge
Date, Subordinated Finance Documents) in a manner or to an extent which would
result in:

(a)                                  any increase in
the amount of any payment under that Finance Document not contemplated by the
original terms of the Finance Documents;

(b)                                 any payment
becoming due or being required to be paid earlier or more frequently than
originally provided for under or contemplated by that Finance Document (but
this shall not restrict the operation of clause 20.20 (Acceleration) of the
Senior Facilities Agreement or clause 20.21 (Acceleration) of the Bridge
Facility Agreement or similar provisions of the Notes Finance Documents or any
analogous provision of any External Facility);

(c)                                  any deferral of
any scheduled repayment of any Senior Debt in an aggregate amount in excess of
the Senior Headroom to a date falling after the first anniversary of the latest
Final Maturity Date;

(d)                                 any deferral or
waiver of:

(i)                                     a mandatory
prepayment under clauses 8.2 (Mandatory prepayment - change of control or sale
of business), 8.3 (Mandatory prepayments - third party receipts), 8.4 8.5
(Mandatory prepayment - market issue) of the Senior Facilities Agreement or any
analogous provision of any External Facility; or

(ii)                                  any automatic
cancellation under clause 8.9(a) (Automatic cancellation) of the Senior
Facilities Agreement or any analogous provision of any External Facility,

the
sum of any such prepayments and cancellations would otherwise be in an
aggregate amount in excess of the Senior Headroom;

 31
 

 

(e)                                  any change to the
basis upon which an amount (including, without limitation, interest, fees and
commissions) accrues or a payment is calculated in accordance with, or any
change in the currency of any payment under, the original provisions of that
Finance Document excluding, for the avoidance of doubt but without prejudice to
paragraph (f) below, any changes to accounting principles, accounting
definitions, financial covenants and financial covenant definitions);

(f)                                    any
representation, warranty, undertaking or event of default under that Finance
Document imposing an additional material obligation on any Obligor or becoming
more onerous in any material respect for an Obligor;

(g)                                 any Obligor
becoming liable to make an additional payment or any change from non-cash
payment or capitalisation of any amount to cash payment, not contemplated by
the original terms of that Finance Document;

(h)                                 a change to the
priority, ranking or subordination achieved or intended to be achieved by this
Agreement (as to which a certificate of the Senior Agent if on or prior to the
Senior Discharge Date or thereafter the Bridge Agent and Notes Trustee if prior
to the Bridge Discharge Date and/or the Notes Discharge Date, acting reasonably
shall be conclusive);

(i)                                     a change to the
purpose for which the Commitments available to fund the Acquisition Loans may
be applied; or

(j)                                     any other change
in the Senior Finance Documents which would conflict with the provisions of
this Agreement or which would prohibit, or create a default hereunder with
respect to, any action that is expressly permitted hereunder.

13.2                        Permitted
Amendments

Notwithstanding
Clause 13.1 (Amendments), the terms of a Finance Document may be amended if the
amendment is in accordance with the terms of that Finance Document and:

(a)                                  is agreed to by
an Instructing Group (and if prior to the Bridge Discharge Date the Majority
Bridge Creditors in the case of any amendment relating to the Senior Finance
Documents or Investor Debt Documents);

(b)                                 constitutes a
procedural or administrative change arising in the ordinary course of
administration of the relevant Debt or is a minor or technical change or is
necessary to correct any manifest error, omission or default;

(c)                                  constitutes a
deferral of any scheduled repayment of any Senior Debt in an amount not
exceeding the Senior Headroom to a date falling not later than the first
anniversary of the last Final Maturity Date;

(d)                                 constitutes a
roll-up or capitalisation of interest, fees or expenses;

(e)                                  constitutes an
increase in the principal amount of the Senior Debt (and the payment of fees
and expenses in connection with such increase together with interest on the
additional principal amount) but only to the extent that such increased amount
is scheduled to be repaid on a date falling on or before the first anniversary
of the Final Maturity Date and it does not create any Excess Senior Debt prior
to the Bridge Discharge Date;

 32
 

 

(f)                                    in the case of the
Bridge Finance Documents, is permitted by the High Yield Letter Agreement; or

(g)                                 constitutes an
extension of the time periods or imposition of additional conditions on the
ability of an Authorised Representative under an External Facility becoming
entitled to take any action pursuant to clause 10(a)(ii) or to issue a Stop
Notice (and the Security Agent will implement any such amendment to this
Agreement if requested by KDG and consented to by all creditors under that
External Facility).

If
the Senior Creditors or Bridge Creditors, as the case may be, are requested to
consent to any amendments of any Bridge Finance Document or Senior Finance
Document under paragraph (a) above they shall use their reasonable endeavours
to consider and respond to such request in a timely manner.

13.3                        Other Amendments

(a)                                  The Notes Finance
Documents may be amended in accordance with their terms at any time unless that
amendment would cause any Notes Finance Document to fail to conform to the
Notes Major Terms.

(b)                                 If at any time a
member of the Group wishes to incur additional Financial Indebtedness which is
permitted, by the Bank Finance Documents and the Notes Finance Documents (to
the extent then in force) and any other documents in respect of Financial
Indebtedness of the Group then outstanding, to be incurred and to rank senior
to the Bridge Restricted Group Debt and the Notes Guarantee Debt and to have
the benefit of this Agreement, an Instructing Group, KDG and the Security Agent
may agree such changes (including, but not limited to, providing for the
accession of further creditors or their representatives under this Agreement)
to this Agreement as may be necessary or appropriate to accommodate the terms
of, and guarantees and security provided for, any such additional Financial
Indebtedness so as to ensure that the Junior Restricted Group Debt shall be
subordinated to such additional Financial Indebtedness and that the Bank
Security for the Bridge Restricted Group Debt and the Notes Security shall rank
after any Security granted over the same assets in respect of such Financial
Indebtedness in each case to the same extent as provided on the date of the
Senior Facilities Agreement.  Such
changes shall be binding on all parties (without requiring consent of the Notes
Trustee or the other Notes Creditors, provided that the Notes Trustee shall
receive notice of such changes reasonably in advance of such changes being
made) provided that no additional obligations, other than those set forth in
this Agreement (as in force at that time), may be imposed on the Notes Trustee
without its consent.

(c)                                  If at any time a
member of the Group wishes to incur Permitted KDG Debt which is permitted by
the Bank Debt Finance Documents and the Notes Finance Documents (to the extent
then in force) the Security Agent is hereby instructed to effect such changes
(including, but not limited to, providing for the accession of further
creditors or their representatives under this Agreement) to this Agreement as
may be necessary or appropriate to accommodate the terms of, and guarantees and
security provided for, any such Permitted KDG Debt having regard to the Agreed
Mezzanine Principles; provided, in each case, that any such changes would not
be prohibited by the terms of the Notes Finance Documents.  Such changes shall be binding on all parties
(without requiring consent of the Notes Trustee or the other Notes Creditors or
Senior Creditors, provided that the Notes Trustee shall receive notice of such
changes reasonably in advance of such changes being made) provided that no
additional obligations, other than those set forth in this Agreement (as in
force at that time), may be imposed on the Notes Trustee without its
consent.  To the extent changes required
to implement such permitted KDG Debt extend beyond the scope of this paragraph,
the Security Agent is authorised to implement those changes with the consent of
KDG and an Instructing Group

 33
 

 

(acting
reasonably ; provided always that any such changes would not be prohibited by
the terms of the Notes Finance Documents.

(d)                                 The Subordinated
Finance Documents may be entered into, and may be amended in accordance with
their terms, at any time unless the entering into of, or amendment of any such
document would have been prohibited by this Agreement.

(e)                                  Promptly on (and
within 10 Business Days of) request of KDG specifying that it wishes to
implement an additional Add-On Facility, the Security Agent and Senior Agent
(as relevant) will:

(i)                                     execute any
Security Document proposed by KDG which is in substantially the same form as a
Security Document provided as a condition precedent to the Facility A Loans but
under which the debt thereby secured comprises both subsisting outstandings and
commitments under the Senior Facilities Agreement and outstandings and commitments
under any additional Add-On Facility (and which for the avoidance of doubt may
extend to additional assets); and

(ii)                                  execute any
amendment proposed by KDG to any existing Security Document having the effect
of a security transfer agreement (Sicherungsübereignung)
to the effect that (but only to the extent that), after giving effect to the
amendment, the debt thereby secured comprises both subsisting outstandings and
commitments under the Senior Facilities Agreement and outstandings and
commitments under the additional Add-On Facility; and

(iii)                               amend clause 11.2
of this Agreement to provide for a lower ranking for Lenders under an Add-On
Facility (if and only if all of those Lenders agree a lower ranking),

so
long as the Senior Agent has, with effect on or about the day of executing the
documents described in paragraphs (i) and (ii), received legal opinions from
Allen & Overy LLP or any other counsel of recognised international standing
acceptable to the Senior Agent (acting reasonably) in similar form to the
opinions relating to security the Senior Agent received as part of the
conditions precedent delivered prior to utilisation of the Facility A Loans (or
with such other qualifications or statements which, taken together, do not
adversely affect the interests of the Finance Parties to any material
extent);  provided, in each case, that
any such actions would not be prohibited by the terms of the Notes Finance
Documents.

(f)                                    Promptly on (and
within 10 Business Days of) request of KDG specifying that it wishes to
implement an additional External Facility, the Security Agent and Senior Agent
(as relevant) will:

(i)                                     execute any
Security Document proposed by KDG which is in substantially the same form as a
Security Document provided as a condition precedent to the Facility A Loans but
under which the debt thereby secured comprises both subsisting outstandings and
commitments under the Senior Facilities Agreement and outstandings and
commitments under the additional External Facility (and which for the avoidance
of doubt may extend to additional assets); and

(ii)                                  execute any
amendment proposed by KDG to any existing Security Document having the effect
of a security transfer agreement (Sicherungsübereignung) to the effect that
(but only to the extent that) after giving effect to the amendment, the debt
thereby secured comprises both subsisting outstandings and commitments under
the Senior Facilities Agreement and outstandings and commitments under the
additional External Facility; and

 34
 

 

(iii)                               amend clause 11.2
of this Agreement to provide for lower ranking for Senior Creditors under an
External Facility (if and only if all of those Senior Creditors agree a lower
ranking),),

so
long as the Senior Agent has, with effect on or about the day of executing the
documents described in paragraphs (i) and (ii), received legal opinions from
Allen & Overy LLP or any other counsel of recognised international standing
acceptable to the Senior Agent (acting reasonably) in similar form to the
opinions relating to security the Senior Agent received as part of the
conditions precedent delivered prior to utilisation of the Facility A Loans (or
with such other qualifications or statements which, taken together, do not
adversely affect the interests of the Finance Parties to any material extent);
provided, in each case, that any such changes would not be prohibited by the
terms of the Notes Finance Documents.

13.4                        Remedies
Cumulative, Waivers

The
rights of each Secured Creditor under this Agreement:

(a)                                  are cumulative
and not exclusive of its rights under the general law;

(b)                                 may be waived
only in writing and specifically; and

(c)                                  may be exercised
as often as necessary.

Delay
in exercising or non-exercise of any such right is not a waiver of that
right.

14.                               HEDGING DEBT

14.1                        Accession of Hedging
Banks

A
person providing Hedging to any Obligor will only be entitled to share in the
Security in respect of that Hedging or benefit from this Agreement if:

(a)                                  that person and
that Hedging are specified in Schedule 3 (Hedging Banks and Hedging Documents);

(b)                                 such Hedging is
provided in accordance with the Hedging Letter; or

(c)                                  the Senior Agent
(acting on the instructions of the Majority Senior Creditors) has agreed in
writing that such person is entitled to share in the Security in respect of
that Hedging or benefit from this Agreement.

Upon
the execution by that person of a Deed of Accession and its delivery to the
Security Agent that person will become a Hedging Bank under this Agreement in
relation to that Hedging.

14.2                        Undertakings
relating to Hedging Debt

Unless
the Majority Lenders have agreed:

(a)                                  no Hedging Bank
will demand (except to terminate or close out any hedging transaction as
permitted under paragraph (b) below) or receive, and no Obligor will pay
any of the Hedging Debt in cash or in kind except for:

(i)                                     scheduled
payments arising under the original terms of the Hedging Documents; or

 35
 

 

(ii)                                  the proceeds of
enforcement of the Security in accordance with Clause 9 (Proceeds of
Enforcement);

(b)                                 except pursuant
to the Hedging Letter, no Hedging Bank will terminate or close out any hedging
transaction under the Hedging Documents prior to its originally stated maturity
or rely on any condition precedent to any hedging transaction so as not to make
a payment or delivery under the Hedging Documents unless:

(i)                                     any Hedging Debt
owed to it has not been paid when due and that default continues for more than
one month after that Hedging Bank has given notice to the Senior Agent of that
default and of its intention to terminate or close out that hedging transaction
or not to make that payment or delivery;

(ii)                                  an Enforcement
Event has occurred;

(iii)                               an Illegality
Event has occurred under (and as defined in) any Hedging Document; or

(iv)                              any liquidation,
winding-up, administration, dissolution or bankruptcy proceedings have
been formally commenced against the Obligor which is the counterparty under
that hedging transaction which proceedings have not been discharged within one
month from the date of commencement;

(c)                                  none of the
Hedging Debt may be discharged by set-off, any right of combination of
accounts or otherwise except to the extent such Hedging Debt is permitted to be
paid under paragraph (a) above; and

(d)                                 no Obligor will
(and each Obligor will procure that none of its Subsidiaries will) create or
permit to subsist any Security Interest over any of its assets or give any
financial support to any person for, or in connection with, any of the Hedging
Debt other than under the original terms of the Hedging Documents or the
Security Documents and in accordance with the priority and ranking specified in
this Agreement.

14.3                        Two Way Payments

Each
Obligor and each Hedging Bank agrees that:

(a)                                  in the event of a
termination of a hedging transaction whether upon a Termination Event or an
Event of Default (each as defined in the relevant Hedging Documents) the
Hedging Documents will provide for (in the case of 1992 ISDA Master Agreements)
payments under the “Second Method” or (otherwise) two way payments (however
described);

(b)                                 on or following
the occurrence of an Enforcement Event if an amount falls due from that Hedging
Bank to any Obligor, that amount shall be paid by that Hedging Bank to the
Security Agent and applied in accordance with Clause 9 (Proceeds of
Enforcement); and

(c)                                  promptly on the
occurrence of an Enforcement Event each Hedging Bank will exercise any rights
it may have to terminate or close out the hedging transactions under the
Hedging Documents.

 36
 

 

14.4                        Hedging Documents

(a)                                  All Hedging
Documents must be based on 1992 ISDA Master Agreements unless otherwise agreed
by the Senior Agent.

(b)                                 Each Hedging Bank
will provide to the Senior Agent copies of all Hedging Documents.  Such agreements and documents must be in form
and substance satisfactory to the Senior Agent, acting reasonably.

14.5                        Voting rights

(a)                                  To take into
account a Hedging Bank’s interest, the definition of Majority
Senior Creditors will be adjusted as follows:

(i)                                     a reference to
the Lenders will include that Hedging Bank;

(ii)                                  a reference to a
Loan will include the amount for that Hedging Bank calculated under paragraph
(b) below; and

(iii)                               a reference to a
Lender’s share in the Loans will be construed in relation to that Hedging Bank
as the amount calculated under paragraph (b) below for that Hedging Bank.

(b)                                 The amount
referred to in paragraphs (a)(ii) and (iii) above for any Hedging Bank
will be calculated as follows:

(i)                                     prior to an
Enforcement Event, the aggregate of the amounts (if any) that would be payable
to that Hedging Bank as a result of terminating or closing out each hedging
transaction under the Hedging Documents on the date on which the vote is taken;
and

(ii)                                  after the
occurrence of an Enforcement Event, the aggregate of the amounts (if any)
payable to that Hedging Bank as a result of terminating or closing out each
hedging transaction under the Hedging Documents under Clause 14.2(b)
(Undertakings relating to Hedging Debt) or in compliance with Clause 14.3(c)
(Two Way Payments).

15.                               CONSENTS AND LIMITS

15.1                        Waivers

If
any waiver, release or consent is granted by the Majority Lenders under the
Senior Finance Documents on or prior to the Senior Discharge Date, a
corresponding waiver, release or consent will, if necessary to avoid a breach
or default under any other Finance Document, be deemed to have been given by the
Hedging Banks, the Bridge Creditors and the Subordinated Creditors (on the same
terms and conditions, mutatis mutandis)
under the Hedging Documents, Bridge Finance Documents, Intercompany Documents
or Investor Debt Documents, as the case may be, PROVIDED THAT no such waiver,
release or consent may:

(a)                                  extend the due
date for or reduce the amount of or change the currency of any payment due to
any Hedging Bank or relevant Junior Creditor or change the terms by reference
to which any payment is to be calculated or made under the relevant Finance
Documents;

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(b)                                 be made of
clauses 18 (Financial covenants) or 20 (Default) of the Bridge Facility
Agreement or any provision of the Bridge Finance Documents which, under
clause 26.2 (Exceptions) of the Bridge Facility Agreement (as originally
in force), requires the consent of all the Bridge Creditors to waive, release
or amend; or

(c)                                  amend the terms
of this Agreement or a Security Document.

15.2                        Non-Objection

No
Senior Creditor, Junior Creditor, Subordinated Creditor or Obligor shall have
any claim or remedy against any of:

(a)                                  the Senior
Creditors by reason of any transaction entered into between any of the Senior
Creditors and any member of the Group or any requirement or condition imposed
by or on behalf of the Senior Creditors on any member of the Group;

(b)                                 the Bridge
Creditors by reason of any transaction entered into between any of the Bridge
Creditors and any member of the Group or any requirement or condition imposed
by or on behalf of the Bridge Creditors on any member of the Group; or

(c)                                  the Notes
Creditors by reason of any transaction entered into between any of the Notes
Creditors and any member of the Group or any requirement or condition imposed
by or on behalf of the Notes Creditors on any member of the Group,

which
breaches or is or causes a default under any of the Finance Documents, unless
entered into in breach of the terms of this Agreement.

15.3                        Limit on Senior
Debt

Prior
to the Bridge Discharge Date, if the principal amount of the outstanding Senior
Debt (excluding any roll-up or capitalisation of interest, fees or expenses)
exceeds the Total Commitments under the original terms of the Senior Facilities
Agreement (less repayments and prepayments of the Loans actually made where a
corresponding part of the Commitments is cancelled and not reinstated) plus the
Senior Headroom (the amount of the excess being Excess
Senior Debt) then, for the purposes only of determining rights and
priorities between the Secured Creditors, the Excess Senior Debt will rank
after the Junior Debt and for the purposes of this Agreement the Junior Debt
shall be deemed to be Senior Debt but only in respect of the Excess Senior
Debt.

15.4                        Limit on Hedging
Debt

Prior
to the Bridge Discharge Date, an obligation or liability owed by any Obligor to
a Hedging Bank under any Hedging which is not one of the transactions or
agreements specified in Schedule 3 (Hedging Banks and Hedging Documents) or
permitted by Clause 14.1 (Accession of Hedging Banks) will not constitute
Hedging Debt.

16.                               WARRANTIES

Each
Subordinated Creditor warrants to the other Parties (on the date of this
Agreement, or, if later, the date it executes a Deed of Accession), that:

(a)                                  it is duly
incorporated and validly existing under the laws of the jurisdiction of its
incorporation;

 38
 

 

(b)                                 this Agreement
and the other Finance Documents to which it is a party are within its powers
and have been duly authorised and executed by it;

(c)                                  the Finance
Documents to which it is a party copied to the Senior Agent and the Bridge Agent
at or before the date of this Agreement (or the date of its accession) contain
(when taken together with any amendments permitted under Clause 13
(Amendments)) all the terms and conditions of the Subordinated Debt owed to it;

(d)                                 it is the sole
legal and beneficial owner of the Subordinated Debt owed to it free from any
Security Interest or subordination in favour of any person except any existing
under this Agreement or the Security Documents; and

(e)                                  this Agreement
constitutes its legal, valid and binding obligations, enforceable (subject to
the Reservations) against it in accordance with its terms and the entry into
and performance of the transactions contemplated by this Agreement does not
conflict with any law or regulation applicable to it or with its constitutional
documents or any other agreement binding on it or its assets.

17.                               INFORMATION

17.1                        Defaults

The
Notes Trustee, the Bridge Agent and the Senior Agent will promptly notify each
other of the occurrence of any Notes Default, Bridge Default or Senior Default
as the case may be, on receipt by it of a notice specifying the event concerned
(and expressly identifying it as an Event of Default). The Notes Trustee is not
obliged to monitor or enquire whether a Default as aforesaid has occurred. The
Notes Trustee is not deemed to have knowledge of the occurrence of a Default.

17.2                        Amount of Debt

Each
of the Senior Agent, the Hedging Banks, the Bridge Agent and the Notes Trustee
will on written request by any of the others notify the others in writing of
details of the amount of the outstanding Senior Debt, Hedging Debt, Bridge Debt
or Notes Debt, as the case may be.

17.3                        Other Information

Each
Obligor authorises each of the Secured Creditors and the Investors to disclose
to each other and to shareholders or other investors in any Obligor all
information relating to that Obligor, its Subsidiaries or related entities, and
coming into the possession of any of them in connection with the Finance
Documents.

17.4                        Consultation

The
Agents shall, so far as practicable in the circumstances, consult each other
before taking any formal steps to exercise any remedy against any Obligor or to
take any enforcement action but nothing in this Subclause will invalidate or
otherwise affect any action or step taken without such consultation.

17.5                        Registration and
Notice

The
Agents will co-operate with each other with a view to reflecting the
priority of the security conferred by the Security Documents in:

 39
 

 

(a)                                  any required
registration of any Security Document; and

(b)                                 giving any notice
under the Security Documents.

18.                               SUBROGATION

18.1                        Subrogation of
Bridge Creditors

(a)                                  If any Senior
Debt or Hedging Debt is paid out of any proceeds received in respect of the
Bridge Debt owing to one or more Bridge Creditors or the Notes Debt owing to
one or more Notes Creditors, those Bridge Creditors or Notes Creditors, as the
case may be (pro rata to their respective
interests in such Bridge Debt or Notes Debt, as the case may be), will to that
extent be subrogated to the Senior Debt or Hedging Debt so paid (and all
securities and guarantees for that Senior Debt or Hedging Debt).

(b)                                 Any rights of
subrogation so arising cannot (and shall not) be exercised:

(i)                                     before the Senior
Discharge Date without the consent of an Instructing Group; or

(ii)                                  against any
Restricted Group Member if the Security over the Ownership Interests is
enforced in accordance with this Agreement.

18.2                        Non-Subrogation

Prior
to the latest of (a) the Senior Discharge Date, (b) the Bridge Discharge Date
and (c) the Notes Discharge Date, the Investors and the Obligors will not under
any circumstances be subrogated to or entitled to exercise any of the rights of
the Secured Creditors or exercise or enforce any security arising under any of
the Security Documents.

19.                               PROTECTION OF SUBORDINATION

19.1                        Continuing
Subordination

The
subordination provisions in this Agreement constitute a continuing
subordination and benefit to the ultimate balance of the Senior Debt, the
Hedging Debt, the Notes Debt and the Bridge Debt respectively regardless of any
intermediate payment or discharge of the Senior Debt, the Hedging Debt, the
Bridge Debt or the Notes Debt in whole or in part.

19.2                        Waiver of
Defences

The
subordination in this Agreement and the obligations of each Junior Creditor,
Subordinated Creditor and each Obligor under this Agreement will not be
affected by any act, omission, matter or thing which, but for this provision,
would reduce, release or prejudice the subordination or priorities or any of
those obligations, including:

(a)                                  any time or
waiver granted to, or composition with, any person;

(b)                                 any release of
any person under the terms of any composition or arrangement;

(c)                                  the taking,
variation, compromise, exchange, renewal or release of, or refusal or neglect
to perfect, take up or enforce, any rights against, or security over assets of,
any person;

(d)                                 any non-presentation
or non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

 40

 

(e)                                  any incapacity or
lack of power, authority or legal personality of or dissolution or change in
the members or status of any person;

(f)                                    any amendment
(however fundamental) or replacement of any Finance Document or any other
document or security; or

(g)                                 any
unenforceability, illegality, invalidity or non-provability of any obligation
of any person under any Finance Document or any other document or security or
the failure by any member of the Group to enter into or be bound by any Finance
Document.

19.3                        Appropriations

Until
the Bank Debt Discharge Date, each Bank Creditor (or any trustee or agent on
its behalf) may:

(a)                                  without affecting
the liability of any Junior Creditor, Subordinated Creditor or any Obligor
under the Finance Documents:

(i)                                     refrain from
applying or enforcing any moneys, security or rights (other than moneys,
security or rights held or received under the Bank Debt Finance Documents) held
or received by that Bank Creditor (or any trustee or agent on its behalf)
against the Bank Debt; or

(ii)                                  apply and enforce
such moneys, security or rights (other than such moneys, security or rights
received under the Bank Debt Finance Documents) in such manner and order as it
sees fit (whether against the Bank Debt or otherwise); and

(b)                                 after an Enforcement
Event, hold in an interest-bearing suspense account any moneys received
pursuant to this Agreement from any Junior Creditor, Subordinated Creditor or
Obligor or on account of that Junior Creditor’s or Obligor’s liability under
the Finance Documents.

20.                               PRESERVATION OF DEBT

(a)                                  In spite of any
term of this Agreement postponing, subordinating or preventing the payment of
any of the Junior Debt or Subordinated Debt (as the case may be), as between
the Obligors and the Junior Creditors or Subordinated Creditors the Junior Debt
or Subordinated Debt shall remain owing or payable (and interest or default
interest shall continue to accrue) in accordance with the terms of the Junior
Finance Documents or Subordinated Finance Documents.

(b)                                 No delay in
exercising rights and remedies under any of the Junior Finance Documents or
Subordinated Finance Documents by reason of any term of this Agreement shall
operate as a permanent waiver of any of those rights and remedies.

21.                               EXPENSES

21.1                        Enforcement Costs

Each
Obligor, Bridge Creditor and each Subordinated Creditor will within three
Business Days of demand pay to:

(a)                                  each Senior
Creditor or Hedging Bank;

 41
 

 

(b)                                 each Bridge
Creditor; and

(c)                                  the Notes
Trustee.

the
amount of all costs and expenses incurred by it in connection with the
enforcement against that Obligor, Junior Creditor, or Subordinated Creditor (as
the case may be) of such person’s rights against it under this Agreement.

21.2                        Legal Expenses
and Taxes

The
costs and expenses referred to above include the reasonable fees and expenses
of legal advisers and any value added tax or similar tax, and are payable in
the currency in which they are incurred.

22.                               CHANGES TO THE PARTIES

22.1                        Successors and
Assigns

This
Agreement is binding on the successors and assigns of the Parties.

22.2                        Obligors

No
Obligor may assign or transfer any of its rights (if any) or obligations under
this Agreement.

22.3                        New Obligors

KDG
will procure that each member of the Group which is not already an Obligor
which:

(a)                                  is the Issuer;

(b)                                 becomes liable
(whether actually or contingently) for any Secured Debt or Notes Debt; or

(c)                                  is a creditor or
debtor in respect of any Intercompany Debt,

(each
such person being a New Obligor)
becomes an Obligor by the execution and delivery to the Security Agent of a
duly completed Deed of Accession (together with such board resolutions and
other corporate documentation as the Security Agent may reasonably require).

22.4                        New Creditors

No
Bank Creditor or Investor will:

(a)                                  assign, transfer
or dispose of any of the Debt owing to it or its proceeds or any interest in
that Debt or its proceeds to or in favour of any person; or

(b)                                 assign, transfer,
novate or dispose of any of its rights or obligations under any of the Finance
Documents to any person;

unless
in each case that person agrees with the Parties that it is bound by all the
terms of this Agreement as a Senior Creditor, Hedging Bank, Bridge Creditor or
Investor, as the case may be, by executing and delivering to the Security Agent
a duly completed Deed of Accession or, in the case of a Senior Creditor under
the Senior Facility Agreement, by the execution and delivery to the Senior
Agent of a Transfer Certificate or, in the case of an Add-On Facility

 42
 

 

Lender
under the Senior Facility Agreement, by the execution and delivery to the
Senior Agent of an Add-On Facility Accession Agreement or, in the case of a
Bridge Creditor, by the execution and delivery to the Bridge Agent (with a copy
to the Senior Agent) of a Transfer Certificate (as defined in the Bridge Facility
Agreement).

22.5                        Notes Trustee

KDG
shall procure that, prior to the issue of any Notes, any entity which is
appointed or acting as trustee in relation to those Notes will become a party
to this Deed as the Notes Trustee by executing and delivering to the Security
Agent a duly completed Deed of Accession.

22.6                        New Investor

Prior
to any Investor Debt being outstanding, KDG shall ensure that the creditor in
respect of that Investor Debt accedes to this Agreement as an Investor by
executing and delivering to the Security Agent a duly completed Deed of
Accession (together with such board resolutions and other corporate
documentation as the Security Agent may reasonably require).

22.7                        Resignation of
Agents

(a)                                  No Agent may
resign or be removed except as specified in the Senior Finance Documents, in
the Bridge Finance Documents or in the Notes Finance Documents (as the case may
be) and only if a replacement Agent agrees with all the other Parties to become
party to and be bound by this Agreement as the replacement Agent by the
execution and delivery to the Security Agent of a duly completed Deed of
Accession.

(b)                                 Notwithstanding
anything to the contrary contained in any of the Bridge Finance Documents, the
Security Agent may not be removed (or have his authority terminated) by the
Junior Creditors or any of them prior to the Senior Discharge Date.

22.8                        Supplements

Each
of the other Parties appoints:

(a)                                  the Senior Agent
as its agent to sign on its behalf any Transfer Certificate or Obligor
Accession Deed entered into under the Senior Facilities Agreement; and

(b)                                 the Bridge Agent
as its agent to sign on its behalf any Transfer Certificate or Obligor
Accession Deed (both as defined in the Bridge Facility Agreement) entered into
pursuant to the Bridge Facility Agreement; and

(c)                                  the Security
Agent as its agent to sign on its behalf any Deed of Accession,

in
order that each such Transfer Certificate, Obligor Accession Deed or Deed of
Accession may be supplemental to this Agreement and be binding on and enure to
the benefit of all the Parties.

22.9                        Option to
Purchase

(a)                                  If:

(i)                                     the Senior Agent
has declared all of the Senior Debt prematurely due and payable under the
Senior Facilities Agreement;

 43
 

 

(ii)                                  the appropriate
Representative of other Senior Debt has declared all of such Senior Debt
prematurely due and payable under the applicable External Facility; or

(iii)                               the Majority
Senior Creditors have instructed the Security Agent to enforce any material
part of the Security,

the
Bridge Creditors or the Notes Trustee (or any combination thereof) may by
giving not less than 10 Business Days’ notice to the Senior Agent specifying
the purchase date (the Purchase Date)
which shall be a Business Day elect to purchase or procure the purchase of all
(and not part only) of the relevant outstanding Senior Debt.  Any such notice once given is irrevocable and
shall preclude the giving of any such notice by any other Party.

(b)                                 On the Purchase
Date:

(i)                                     the Bridge
Creditors or, as the case may be, the Notes Trustee (or its nominee) shall pay
to the Senior Agent or Representative of other Senior Debt, as the case may be,
in cash and in the currency in which the Relevant Debt is denominated an amount
(the Purchase Amount) determined by the
Senior Agent or Representative of other Senior Debt, as the case may be,
(acting reasonably) to be equal to the outstanding amount of the relevant
Senior Debt (including all accrued interest, fees and expenses together with
any Break Costs) on the Purchase Date;

(ii)                                  subject to
payment of the Purchase Amount, the Senior Creditors under the Senior
Facilities Agreement or Representative of other Senior Debt, as the case may
be, shall transfer the Senior Debt to the Bridge Creditors, or as the case may
be, the Notes Trustee (or to its order), by means of Transfer Certificates or
by such other means as the relevant Senior Creditors under the Senior
Facilities Agreement or Representative of other Senior Debt, the Bridge
Creditors or, as the case may be, the Notes Trustee may otherwise agree.  Each of the Obligors shall, if required by
the Bridge Agent or the Notes Trustee, execute any such Transfer Certificate;
and

(iii)                               each Senior
Creditor under the Senior Facilities Agreement or Representative of other
Senior Debt, as the case may be, shall be deemed to have warranted to the
Bridge Creditors, or, as the case may be, the Notes Trustee that:

“It
is the owner of the beneficial interest, free from all Security Interests and
third party interests other than any arising under the Finance Documents or by
operation of law, in all rights and interests under the Finance Documents
purporting to be assigned or transferred by it by such transfer.  It has the corporate power to effect, and has
taken all necessary corporate action to authorise, such assignment or transfer.”

(c)                                  Save as specified
in paragraph (b)(iii) above, any such transfer by the Senior Creditors
under the Senior Facilities Agreement or Representative of other Senior Debt,
as the case may be, shall be without recourse to, or representation or warranty
from, the Senior Creditors and the terms of clause 27.2 (Assignments and
transfers by Lenders) of the Senior Facilities Agreement (and/or any similar
terms of any External Facility) shall apply to any such transfer by the Senior
Creditors under the Senior Facilities Agreement or Representative of other
Senior Debt, as the case may be.

(d)                                 The Bridge
Creditors or, as the case may be, the Notes Trustee, provided the Notes Trustee shall have been indemnified pursuant to
Clause 25.3, shall provide an indemnity to each Senior Creditor under
the Senior Facilities Agreement or Representative of other Senior Debt, as the
case may be, from a person acceptable to all the Senior Creditors and in a form

 44
 

 

satisfactory
to the Majority Senior Creditors under the Senior Facilities Agreement or
Representative of other Senior Debt, as the case may be, for any and all costs,
losses and expenses which may be sustained or incurred by such Senior Creditor
in consequence of any Purchase Amount being required (or it being alleged that it
is required) to be paid back by or clawed back from any Senior Creditor for any
reason whatsoever.

23.                               STATUS OF SUBORDINATED CREDITORS

None
of the Subordinated Creditors has any rights under this Agreement against any
of the Secured Creditors and none of the undertakings given by the Secured
Creditors is given (or shall be deemed to have been given) to, or for the
benefit of, the Subordinated Creditors.

24.                               NOTICES

24.1                        In writing

(a)                                  Any communication
in connection with this Agreement must be in writing and, unless otherwise
stated, may be given:

(i)                                     in person, by
post, telex, fax, e-mail or any other electronic communication approved by the
Security Agent; or

(ii)                                  if between the
Security Agent and a Secured Creditor and the Security Agent and the Secured
Creditor agree, by e-mail or other electronic communication.

(b)                                 For the purpose
of this Agreement, an electronic communication will be treated as being in
writing.

(c)                                  Unless it is
agreed to the contrary, any consent or agreement required under this Agreement
must be given in writing.

24.2                        Contact details

(a)                                  Except as
provided below, the contact details of each Party for all communications in
connection with this Agreement are those notified by that Party for this
purpose to the Security Agent on or before the date it becomes a Party.

(b)                                 The contact
details of the Senior Creditors and Obligors for this purpose are those
originally provided for in the Senior Facilities Agreement.

(c)                                  The contact
details of the Bridge Creditors for this purpose are those originally provided
for in the Bridge Facility Agreement.

(d)                                 The contact
details of the Notes Trustee for this purpose are those specified in the Deed
of Accession executed by the Notes Trustee.

(e)                                  The contact
details of the Investors and the Hedging Banks which are Parties on the
Restatement Date are set out in Schedule 4 (Investors) and Schedule 3 (Hedging
Banks and Hedging Documents) respectively.

(f)                                    Any Party may
change its contact details by giving five Business Days’ notice to the Security
Agent or (in the case of the Security Agent) to the other Parties.

(g)                                 Where a Party
nominates a particular department or officer to receive a communication, a
communication will not be effective if it fails to specify that department or
officer.

 45
 

 

24.3                        Effectiveness

(a)                                  Except as
provided below, any communication in connection with this Agreement will be
deemed to be given as follows:

(i)                                     if delivered in
person, at the time of delivery;

(ii)                                  if posted, five
days after being deposited in the post, postage prepaid, in a correctly
addressed envelope;

(iii)                               if by telex, when
despatched, but only if, at the time of transmission, the correct answerback
appears at the start and at the end of the sender’s copy of the notice;

(iv)                              if by fax, when
received in legible form; and

(v)                                 if by e-mail or
any other electronic communication, when received in legible form.

(b)                                 A communication
given under paragraph (a) above but received on a non-working day or after
business hours in the place of receipt will only be deemed to be given on the
next working day in that place.

(c)                                  A communication
to the Security Agent, or as the case may be, the Notes Trustee will only be
effective on actual receipt by it.

24.4                        Obligors

Each
Obligor (other than KDG) irrevocably appoints KDG to act as its attorney:

(a)                                  to agree, execute
and deliver all documents under or in connection with the Senior Finance
Documents without further reference to the other Obligors; and

(b)                                 to agree, execute
and deliver all documents under or in connection with the Bridge Finance
Documents without further reference to the other Obligors under and as defined
in the Bridge Facility Agreement.

25.                               THE SECURITY AGENT

(a)                                  Each Hedging Bank
irrevocably appoints the Security Agent as its agent under this Agreement and
the Security Documents on the terms set out in Schedule 6 (Security Agent).

(b)                                 Each Obligor and
each Secured Creditor agrees to the terms set out in Schedule 6 (Security
Agent).

(c)                                  The perpetuity
period for the trusts in this Agreement is 80 years.

26.                               NOTES TRUSTEE

26.1                        Personal
Liability

The
Notes Trustee enters into this Agreement in its capacity as trustee under the
Notes Indenture and nothing in this Agreement shall impose on it any obligation
to pay any amount out of its personal assets. 
Its obligations hereunder (if any) to make any payment of any amount
shall be only to make payment of such amount to the extent that (i) it has
actual knowledge that such obligation has arisen and (ii) it has not
distributed to Noteholders in accordance with the Notes Indenture any such
amount.  The Notes Trustee shall not be

 46
 

 

charged
with knowledge of existence of facts that would impose an obligation on it to
make any payment or prohibit it from making any payment unless, not less than
two Business Days prior to the date of such payment, a Responsible Officer of
the Notes Trustee receives written notice satisfactory to it that such payments
are required or prohibited by this Agreement or the Notes Indenture.

26.2                        Payments

Nothing
in this Agreement shall prevent payment by any Obligor of Notes Trustee Amounts
as and when the same are due and payable.

26.3                        Indemnity

The
Notes Trustee shall not have any obligation to take any action under this
Agreement unless it is indemnified to its satisfaction in respect of all costs,
expenses and liabilities which it would in its opinion thereby incur.

27.                               AMENDMENTS

(a)                                  This Agreement
may be amended by the Obligors and the Security Agent without the consent of
the other Parties, to cure defects, resolve ambiguities or reflect changes, in
each case, of a minor, technical or administrative nature.

(b)                                 To the extent
that an amendment only affects the rights and obligations of one or more
Parties or class of Parties to this Agreement, and could not reasonably be
expected to be adverse to the interests of other Parties or a class of Parties,
only the Parties affected by such amendment need to agree to the
amendments.  The Parties agree to make
such amendments to this Agreement as are reasonably requested by an incoming
Notes Trustee to enter into this Agreement, provided that such amendments do
not adversely affect the rights and obligations of the Senior Finance Parties
and the Bridge Finance Parties under this Agreement in any material respect.

(c)                                  If any Notes are
to be subject to a registration with the U.S. Securities and Exchange
Commission (including pursuant to any registration rights agreement), KDG and
the Notes Trustee shall be entitled to amend the provisions of this Agreement
without the consent of any other Party to provide that the obligations of the
Notes Creditors under this Agreement in relation to any Notes Guarantee,
including without limitation, any restrictions on the payment or enforcement of
any Notes Guarantee set forth herein, shall no longer apply and shall instead
be included within the terms of any such Notes Guarantees.

28.                               SEVERABILITY

If
a term of this Agreement is or becomes illegal, invalid or unenforceable in any
jurisdiction in relation to any Party, that shall not affect:

(a)                                  in respect of
that Party the legality, validity or enforceability in that jurisdiction of any
other term of this Agreement;

(b)                                 in respect of any
other Party the legality, validity or enforceability in that jurisdiction of
that or any other term of this Agreement; or

(c)                                  in respect of any
Party the legality, validity or enforceability in other jurisdictions of that
or any other term of this Agreement.

 47
 

 

29.                               COUNTERPARTS

This
Agreement may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

30.                               GOVERNING LAW

This
Agreement is governed by English law.

31.                               ENFORCEMENT

31.1                        Jurisdiction

(a)                                  The English
courts have exclusive jurisdiction to settle any dispute in connection with
this Agreement.

(b)                                 The English
courts are the most appropriate and convenient courts to settle any such
dispute and each Junior Creditor waives objection to those courts on the
grounds of inconvenient forum or otherwise in relation to proceedings in
connection with this Agreement.

(c)                                  This Clause is
for the benefit of the Senior Creditors and Hedging Banks only.  To the extent allowed by law, a Senior
Creditor or Hedging Bank may take:

(i)                                     proceedings in
any other court; and

(ii)                                  concurrent
proceedings in any number of jurisdictions.

31.2                        Service of
process

(a)                                  Each Subordinated
Creditor irrevocably appoints Jordon Company Secretaries Limited of 20-22
Bedford Row, London WC1R 4JS as its agent under this Agreement for service of
process in any proceedings before the English courts.

(b)                                 If any person
appointed as process agent is unable for any reason to act as agent for service
of process, KDG (on behalf of all the Subordinated Creditors) must immediately
(and in any event within 14 days of such event taking place) appoint another
agent on terms acceptable to the Security Agent.  Failing this, the Security Agent may appoint
another agent for this purpose.

(c)                                  Each Junior
Creditor and Subordinated Creditor agrees that failure by a process agent to
notify it of any process will not invalidate the relevant proceedings.

(d)                                 This Subclause
does not affect any other method of service allowed by law.

31.3                        Waiver of
immunity

Each Junior Creditor and Subordinated Creditor irrevocably and
unconditionally:

(a)                                  agrees not to
claim any immunity from proceedings brought by a Senior Creditor or Hedging
Bank or Junior Creditor, as applicable against it in relation to this Agreement
and to ensure that no such claim is made on its behalf;

(b)                                 consents
generally to the giving of any relief or the issue of any process in connection
with those proceedings; and

 48
 

 

(c)                                  waives all rights
of immunity in respect of it or its assets.

31.4                        Waiver of trial
by jury

EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED ON OR ARISING FROM THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
BY THIS AGREEMENT.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

THIS AGREEMENT has been entered into on the date stated at
the beginning of this Agreement.

 49

 

SCHEDULE
1

SENIOR
CREDITORS

Lenders

The
Royal Bank of Scotland plc

Deutsche Bank AG London Branch

Goldman Sachs Credit Partners LP

JPMorgan Chase Bank, N.A.

Mandated Lead Arrangers

The
Royal Bank of Scotland plc

Deutsche Bank AG London Branch

Goldman Sachs International

J.P. Morgan plc

Senior Agent

The Royal Bank of Scotland plc

Security Agent

The
Royal Bank of Scotland plc

 50
 

 

SCHEDULE 2

BRIDGE
CREDITORS

Bridge Lenders

Citibank International plc

Deutsche Bank AG London

Goldman Sachs Credit Partners, L.P.

Morgan Stanley Senior Funding, Inc.

Mandated Lead Arrangers

Citigroup Global Markets Limited

Deutsche Bank AG London

Goldman Sachs International

Morgan Stanley Senior Funding, Inc.

Bridge Agent

Deutsche
Bank AG London

Security Agent

Deutsche
Bank AG London

 51
 

 

SCHEDULE 3

HEDGING
BANKS AND HEDGING DOCUMENTS

 

	
  Name of Hedging Bank

  	
   

  	
  Details of Hedging Document and

  initial trade (if known at the

  Restatement Date)

  	
   

  	
  Address for notices

  
	
  Goldman Sachs International

  	
   

  	
  ISDA Master Agreement dated as of 14th March, 2003
  and amended and restated as of 28th March, 2004 between Goldman Sachs International and Kabel
  Deutschland Vertreib und Service GmbH & Co. KG

  	
   

  	
  Goldman Sachs
  International

  Peterborough Court

  133 Fleet Street

  London EC4A 2BB

  Fixed Income/ Credit
  Derivatives:

  Facsimile No. 44-20-7774 5115

  Equity Derivatives: Facsimile No. 44-20-7774 1500

  Foreign Exchange: Facsimile No. 44-20-7774 1201

  Legal Department: Facsimile No. 44-20-7774 1313

  Telephone No. 44-20-7774-1000

  Telex No: 887902 GSLL G

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Morgan Stanley Capital Services Inc.

  	
   

  	
  ISDA Master Agreement dated as of 14th March, 2003
  and amended and restated as of 28th March, 2004 between Morgan Stanley
  Capital Services Inc. and Kabel Deutschland Vertreib und Service GmbH &
  Co. KG

  	
   

  	
  Morgan Stanley Capital Services Inc.

  1585 Broadway, New York, New York 10036 Attention:      Derivative
  Products

  Group - 3rd floor

  Telex No.:      620131      Answer

  back: MORSTAN

  Facsimile No.:(1) 212-761-0580

  Telephone No.:(1) 212-761-4000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Société Générale

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between Société Générale and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COÖPERATIEVE CENTRALERAIFFEISEN-BOERENLEENBANK B.A.

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between COÖPERATIEVE
  CENTRALERAIFFEISEN-BOERENLEENBANK B.A. and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Royal Bank of Scotland plc

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between The Royal Bank of
  Scotland plc and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABN AMRO Bank N.V.

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between ABN AMRO Bank N.V. and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  

 

 52
 

 

 

	
  Deutsche Bank AG, London

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between Deutsche Bank AG,
  London and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank plc

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between HSBC Bank plc and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calyon

  	
   

  	
  ISDA Master Agreement dated as
  of 28th June, 2004 between Calyon and Kabel Deutschland GmbH

  	
   

  	
  Please refer to ISDA Master
  Agreement

  

 

 53
 

 

SCHEDULE
4

INVESTORS

	
  Name of Investor

  	
   

  	
  Address for notices

  
	
   

  	
   

  	
   

  

 

 54
 

 

SCHEDULE 5

FORM OF
DEED OF ACCESSION

THIS
DEED dated
[                    ],
[     ] is supplemental to a priority agreement (the Priority Agreement) dated [     ]
March, 2004 (as amended and restated from time to time) between, amongst
others, Kabel Deutschland GmbH, certain of its Subsidiaries as Obligors, the
Investors, the Bridge Creditors, the Hedging Banks, the Senior Creditors, The
Royal Bank of Scotland plc as Security Agent, Senior Agent and Bridge Agent.

Words
and expressions defined in the Priority Agreement have the same meaning when
used in this Deed.

[Name
of new Obligor/Intercompany Creditor/Intercompany Debtor/Senior
Creditor/Hedging Bank/Bridge Creditor/Investor/Senior Agent/Bridge
Agent/Security Agent/Notes Trustee/Issuer] hereby agrees with each other person
who is or who becomes a party to the Priority Agreement that with effect on and
from the date hereof it will be bound by the Priority Agreement as a[n]
*[Obligor/Intercompany Creditor/Intercompany Debtor/Senior Creditor/Hedging
Bank/Bridge Creditor/Senior Agent/Security Agent/Investor/Bridge Agent/Notes
Trustee] as if it had been party originally to the Priority Agreement in that
capacity and that it shall perform all of the undertakings and agreements set
out in the Priority Agreement and given by a[n] *[Obligor/Intercompany
Creditor/Intercompany Debtor/Senior Creditor/Hedging Bank/Bridge
Creditor/Senior Agent/Security Agent/Investor/Bridge Agent/Notes Trustee].

[The
details of Hedging Documents and Hedging Debt covered by this Deed is as
follows
[                    ]].

The
address for notices of *[Obligor/Intercompany Creditor/Intercompany
Debtor/Senior Creditor/Hedging Bank/Bridge Creditor/Senior Agent/Security
Agent/Investor/Bridge Agent/Notes Trustee/Issuer] for the purposes of
Clause 24 (Notices) of the Priority Agreement is:

[                    ].

This
document takes effect as a deed notwithstanding that the Security Agent only
executes under hand.

This
Deed is governed by English law.

[Insert
appropriate execution language]

[*Delete
as applicable.  It is not necessary for
an Obligor to accede as an Intercompany Creditor or Intercompany Debtor as the
definition of Intercompany Creditors and Intercompany Debtors includes all
Obligors in those capacities.]

Acknowledged.

The
Royal Bank of Scotland plc

By:

 55
 

 

SCHEDULE 6

SECURITY
AGENT

1.                                      Appointment by
Hedging Banks, Senior Creditor and Notes Creditors

1.1                                 Each Hedging
Bank, each Senior Creditor and each Notes Creditor irrevocably appoints the
Security Agent to act as its agent under this Agreement and the Security
Documents.

1.2                                 Each Hedging
Bank, each Senior Creditor and each Notes Creditor irrevocably authorises the
Security Agent to:

(a)                                  perform the
duties and to exercise the rights, powers and discretions that are specifically
given to it under this Agreement or the Security Documents, together with any
other incidental rights, powers and discretions; and

(b)                                 execute each
Security Document expressed to be executed by the Security Agent on its behalf.

1.3                                 The Security
Agent has only those duties which are expressly specified in this Agreement or
the Security Documents.  Those duties are
solely of a mechanical and administrative nature.

1.4                                 Each Hedging
Bank, each Senior Creditor and each Notes Creditor confirms that:

(a)                                  the Security
Agent has authority to accept on its behalf the terms of any reliance letter or
engagement letter relating to the Reports or any other reports or letters
provided in connection with the Senior Finance Documents, the Bridge Finance
Documents, the Notes Finance Documents or the transactions contemplated by the
Senior Finance Documents, the Bridge Finance Documents or the Notes Finance
Documents, to bind it in respect of those Reports, reports or letters and to
sign that reliance letter or engagement letter on its behalf and to the extent
that reliance letter or engagement letter has already been entered into
ratifies those actions; and

(b)                                 it accepts the
terms and qualifications set out in that reliance letter or engagement letter.

2.                                      No fiduciary
duties

Except
as specifically provided in a Senior Finance Document, a Bridge Finance
Document or a Notes Finance Document:

(a)                                  nothing in the
Senior Finance Documents, the Bridge Finance Documents or the Notes Finance
Documents makes the Security Agent a trustee or fiduciary for any other Party
or any other person; and

(b)                                 the Security
Agent need not hold in trust any moneys paid to or recovered by it for a Party
pursuant to the Senior Finance Documents, the Bridge Finance Documents or the
Notes Finance Documents or be liable to account for interest on those moneys.

3.                                      Individual
position of the Security Agent

3.1                                 If it is also a
Secured Creditor in another capacity, the Security Agent has the same rights
and powers under the Senior Finance Documents, the Bridge Finance Documents and
the Notes

 56
 

 

Finance
Documents as any other Secured Creditor in that capacity and may exercise those
rights and powers as though it were not the Security Agent.

3.2                                 The Security
Agent may:

(a)                                  carry on any
business with any Obligor or its related entities (including acting as an agent
or a trustee for any other financing); and

(b)                                 retain any
profits or remuneration it receives under the Senior Finance Documents, the
Bridge Finance Documents or the Notes Finance Documents or in relation to any
other business it carries on with any Obligor or its related entities.

4.                                      Reliance

The
Security Agent may:

(a)                                  rely on any
notice or document believed by it to be genuine and correct and to have been
signed by, or with the authority of, the proper person;

(b)                                 rely on any
statement made by any person regarding any matters which may reasonably be
assumed to be within his knowledge or within his power to verify;

(c)                                  engage, pay for
and rely on professional advisers selected by it (including those representing
a Party other than the Security Agent); and

(d)                                 act under the
Senior Finance Documents, the Bridge Finance Documents and the Notes Finance
Documents through its personnel and agents.

5.                                      Instructions

5.1                                 The Security
Agent is fully protected if it acts on the instructions of an Instructing Group
in the exercise of any right, power or discretion or any matter not expressly
provided for in the Senior Finance Documents or the Bridge Finance Documents or
on the instructions of the Notes Trustee, in the case of any matter not
expressly provided for under the Notes Finance Documents.  Any such instructions given by an Instructing
Group or the Notes Trustee will be binding on all the Secured Creditors.

5.2                                 The Security
Agent may assume that unless it has received notice to the contrary, any right,
power, authority or discretion vested in any Party or an Instructing Group or
the Notes Trustee has not been exercised.

5.3                                 The Security
Agent is not authorised to act on behalf of a Secured Creditor (without first
obtaining that Secured Creditor’s consent) in any legal or arbitration
proceedings in connection with any Senior Finance Document, Bridge Finance
Document or Notes Finance Document.

5.4                                 The Security
Agent may require the receipt of security satisfactory to it, whether by way of
payment in advance or otherwise, against any liability or loss which it may
incur in complying with the instructions of an Instructing Group.

6.                                      Responsibility

6.1                                 The Security
Agent is not responsible to any other Secured Creditor for the legality,
validity, effectiveness, enforceability, adequacy, accuracy, completeness or
performance of:

 57
 

 

(a)                                  any Senior
Finance Document, Bridge Finance Document, Notes Finance Document or any other
document;

(b)                                 any statement or
information (whether written or oral) made in or supplied in connection with
any Senior Finance Document, Bridge Finance Document or Notes Finance Document;
or

(c)                                  any observance by
any Obligor of its obligations under any Finance Document or any other
document.

6.2                                 Without affecting
the responsibility of any Obligor for information supplied by it or on its
behalf in connection with any Senior Finance Document, Bridge Finance Document
or Notes Finance Document, each Secured Creditor (other than the Security
Agent) confirms that it:

(a)                                  has made, and
will continue to make, its own independent appraisal of all risks arising under
or in connection with the Senior Finance Documents, the Bridge Finance
Documents or Notes Finance Documents (as the case may be) (including the
financial condition and affairs of each Obligor and its related entities and
the nature and extent of any recourse against any Party or its assets); and

(b)                                 has not relied
exclusively on any information provided to it by the Security Agent in
connection with any Senior Finance Document, Bridge Finance Document or Notes
Finance Document.

7.                                      Exclusion of
liability

7.1                                 The Security
Agent is not liable or responsible to any other Secured Creditor for any action
taken or not taken by it in connection with any Senior Finance Document, Bridge
Finance Document or Notes Finance Document, unless directly caused by its gross
negligence or wilful misconduct.

7.2                                 No Party (other
than the Security Agent) may take any proceedings against any officer, employee
or agent of the Security Agent in respect of any claim it might have against
the Security Agent or in respect of any act or omission of any kind by that
officer, employee or agent in connection with any Senior Finance Document, Bridge
Finance Document or Notes Finance Document. 
Any officer, employee or agent of the Security Agent may rely on this
Subclause in accordance with the Contracts (Rights of Third Parties) Act 1999.

8.                                      Default

The
Security Agent is not obliged to monitor or enquire whether a Default has
occurred.  The Security Agent is not
deemed to have knowledge of the occurrence of a Default.

9.                                      Information

9.1                                 The Security
Agent must promptly forward to the person concerned the original or a copy of
any document which is delivered to the Security Agent by a Party for that
person.

9.2                                 Except where a
Senior Finance Document, a Bridge Finance Document or a Notes Finance Document
specifically provides otherwise, the Security Agent is not obliged to review or
check the adequacy, accuracy or completeness of any document it forwards to
another Party.

9.3                                 Except as
provided above, the Security Agent has no duty:

 58
 

 

(a)                                  either initially
or on a continuing basis to provide any other Secured Creditor with any credit
or other information concerning the risks arising under or in connection with
the Senior Finance Documents, the Bridge Finance Documents or the Notes Finance
Documents (including any information relating to the financial condition or
affairs of any Obligor or its related entities or the nature or extent of
recourse against any Party or its assets) whether coming into its possession
before, on or after the date of this Agreement; or

(b)                                 unless
specifically requested to do so by another Secured Creditor in accordance with
a Senior Finance Document, a Bridge Finance Document or a Notes Finance
Document, to request any certificate or other document from any Obligor.

9.4                                 In acting as the
Security Agent, the Security Agent shall be treated as acting through its
agency division which shall be treated as a separate entity from its other
divisions and departments.  Any
information received or acquired by the Security Agent which, in its opinion,
is received or acquired by some other division or department or otherwise than
in its capacity as the Security Agent may be treated as confidential by the
Security Agent and will not be treated as information possessed by the Security
Agent in its capacity as such.

9.5                                 The Security
Agent is not obliged to disclose to any person any confidential information
supplied to it by or on behalf of a member of the Group solely for the purpose
of evaluating whether any waiver or amendment is required in respect of any
term of the Senior Finance Documents, the Bridge Finance Documents or the Notes
Finance Documents.

9.6                                 Each Obligor
irrevocably authorises the Security Agent to disclose to the other Secured
Creditors any information which, in the Security Agent’s opinion, is received
by it in its capacity as the Security Agent.

10.                               Indemnities

10.1                           Without limiting
the liability of any Obligor under the Senior Finance Documents, the Bridge
Finance Documents or the Notes Finance Documents, each Bank Creditor must
indemnify the Security Agent for that Secured Creditor’s proportion of any loss
or liability incurred by the Security Agent in acting as the Security Agent in
connection with the Bank Security, except to the extent that the loss or
liability is caused by the Security Agent’s gross negligence or wilful
misconduct.

10.2                           A Secured
Creditor’s proportion of the loss or liability set out in paragraph 10.1 above
is the proportion which the aggregate of its Commitments or its Commitments
under and as defined in the Bridge Facility Agreement bear to the aggregate of
the Total Commitments and the Total Commitments under and as defined in the
Bridge Facility Agreement on the date the loss or liability was incurred by the
Security Agent.

10.3                           For the purpose
of paragraph 10.2 above:

(a)                                  the Total
Commitments under the Senior Facilities Agreement will be notionally increased
by an aggregate amount equal to the aggregate of the amounts (if any) that
would be payable to any Hedging Bank as a result of terminating or closing out
each hedging transaction under the Hedging Documents on that date; and

(b)                                 each Hedging Bank
shall be deemed (if it is a Lender) to have the aggregate amount of its
Commitments increased by, or (if it is not a Lender) to have a Commitment in,
the amount equal to the aggregate of the amounts (if any) that would be payable
to

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that
Hedging Bank as a result of terminating or closing out each hedging transaction
under the Hedging Documents on that date.

10.4                        The Security
Agent may deduct from any amount received by it for a Secured Creditor any
amount due to the Security Agent from that Secured Creditor under a Senior
Finance Document, a Bridge Finance Document or a Notes Finance Document but
unpaid.

11.                               Compliance

The
Security Agent may refrain from doing anything (including disclosing any
information) which might, in its opinion, constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person, and may do
anything which, in its opinion, is necessary or desirable to comply with any
law or regulation.

12.                               Resignation

12.1                        The Security
Agent may resign and appoint any of its Affiliates as successor Security Agent
to it by giving notice to the Senior Agent (prior to the Senior Discharge
Date), the Bridge Agent, the Notes Trustee and KDG.

12.2                        Alternatively,
the Security Agent may resign by giving notice to the Senior Agent (prior to
the Senior Discharge Date), the Bridge Agent, the Notes Trustee and KDG, in
which case the Majority Senior Creditors (or, after the Senior Discharge Date,
the Majority Bridge Creditors or, after the Bridge Discharge Date, the Notes
Trustee) may appoint a successor Agent to it.

12.3                        If no successor
Security Agent has been appointed under paragraph 12.2 above within 30 days
after notice of resignation was given, the retiring Security Agent may appoint
a successor Security Agent to it.

12.4                        The person(s)
appointing a successor Security Agent must, if applicable, consult with KDG and
(prior to the Senior Discharge Date) the Bridge Agent and the Notes Trustee
prior to the appointment.

12.5                           Subject as
otherwise provided in paragraph 12.6 below, the resignation of a Security Agent
and the appointment of a successor Security Agent will both become effective
only when:

(a)                                  the successor
Security Agent notifies the Senior Agent and the Bridge Agent that it accepts
its appointment and executes and delivers to the Senior Agent a duly completed
Deed of Accession; and

(b)                                 on giving the
notification, the successor Security Agent will succeed to the position of the
retiring Security Agent and the term Security Agent will mean the successor
Security Agent.

12.6                        The resignation
of a Security Agent and the appointment of a successor Security Agent shall not
become effective until the Senior Agent (or, after the Senior Discharge Date,
the Bridge Agent) confirms that it is satisfied that the Security Documents
(and any related documentation) have been transferred to or into (and where
required registered in) the name of the proposed successor Security Agent.

12.7                        The retiring
Security Agent must, at its own cost, make available to the successor Security
Agent such documents and records and provide such assistance as the successor
Security Agent may reasonably request for the purposes of performing its
functions as Security Agent

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under
the Senior Finance Documents, the Bridge Finance Documents and the Notes
Finance Documents.

12.8                        Upon its
resignation becoming effective, this Clause will continue to benefit a retiring
Security Agent in respect of any action taken or not taken by it in connection
with the Senior Finance Documents, the Bridge Finance Documents or the Notes
Finance Documents while it was a Security Agent, and, subject to paragraph 12.7
above, it will have no further obligations under any Senior Finance Document,
Bridge Finance Document or Notes Finance Document.

12.9                        The Majority
Senior Creditors (or, after the Senior Discharge Date, the Majority Bridge
Creditors or, after the Senior Discharge Date and Bridge Discharge Date, the
Notes Trustee) may, by notice to the Security Agent, require it to resign under
paragraph 12.2 above.

12.10                  The Obligors will (at their
own cost) take such action and execute such documents as is required by the
Security Agent so that the Security Documents provide for effective and
perfected security in favour of any successor Security Agent.

12.11                  The Bridge Creditors and the
Notes Trustee undertake that if, by not less than 30 days’ notice to the Bridge
Agent and the Notes Trustee, the Security Agent states that it wishes to resign
on or after the Senior Discharge Date, the Bridge Creditors will procure that a
replacement bank or financial institution shall become a successor Security
Agent in accordance with clause 21.13 (Resignation) of the Senior Facilities
Agreement and clause 21.13 (Resignation) of the Bridge Facility Agreement.

12.12                  If no such successor Security
Agent has been appointed by the Majority Bridge Creditors and the Notes Trustee
and accepted that appointment in writing by the later of the Senior Discharge
Date and the day falling 30 days after the date of that notice the Security
Agent may resign and the retiring Security Agent may appoint a successor
Security Agent to it..

13.                               Relationship

The
Security Agent may treat each Secured Creditor as such and as entitled to
payments under this Agreement and (in the case of a Lender) as acting through
its Facility Office(s) or (in the case of a Lender under and as defined in the
Bridge Facility Agreement) as acting through its Facility Office(s) (as so
defined) until it has received not less than five Business Days’ prior notice
from that Secured Creditor to the contrary.

14.                               Security Agent’s
management time

If
the Security Agent requires, any amount payable to the Security Agent by any
Party under any indemnity or otherwise in respect of any costs or expenses
incurred by the Security Agent under the Senior Finance Documents, the Bridge
Finance Documents or the Notes Finance Documents after the date of this
Agreement may include the cost of using its management time or other internal
resources and will be calculated on the basis of such reasonable daily or hourly
rates as the Security Agent may notify to the relevant Party.  This is in addition to any amount in respect
of fees, costs or expenses paid or payable to the Security Agent under any
other term of the Senior Finance Documents, the Bridge Finance Documents or the
Notes Finance Documents.

15.                               Notice period

Where
this Agreement specifies a minimum period of notice to be given to the Security
Agent, the Security Agent may, at its discretion, accept a shorter notice
period.

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16.                               Security Agent

16.1                        The Security
Agent shall hold the security constituted by the Security Documents on trust or
to the extent required by any applicable local law as agent for the Secured
Creditors in accordance with the Senior Finance Documents, the Bridge Finance
Documents and the Notes Finance Documents.

16.2                        The Security
Agent shall not be liable for any failure, omission, or defect in registering,
protecting or perfecting the security constituted by any Security Document or
any security created thereby.

16.3                        The Security
Agent has no obligation to enquire into or check the title which any Obligor
may have to any property over which security is intended to be created by any
Security Document or to insure any such property or the interests of the
Secured Creditors in that property.

16.4                        The Security
Agent is not under any obligation to hold any title deeds, Security Documents
or any other documents in connection with the property charged by any Security
Document or any other such security in its own possession or to take any steps
to protect or preserve the same.  The
Security Agent may permit the relevant Obligor, any bank providing safe custody
services or any professional adviser of the Security Agent to retain all such
title deeds, Security Documents and other documents in its possession.

16.5                        All amounts
received by the Security Agent under the Senior Finance Documents, the Bridge
Finance Documents or the Notes Finance Documents may be:

(a)                                  invested in any
investment for the time being authorised by English law for the investment by
trustees of trust money or in any other investments which may be selected by
the Security Agent with the consent of the Majority Senior Creditors (or, after
the Senior Discharge Date, the Majority Bridge Creditors or, after the Senior
Discharge Date and Bridge Discharge Date, the Notes Trustee); or

(b)                                 placed on deposit
at such bank or institution (including any other Secured Creditor) and upon
such terms as the Security Agent may think fit. 
Any and all such monies and all interest thereon shall be paid over to
the Senior Agent forthwith upon demand by the Senior Agent.

16.6                        Each Secured
Creditor confirms its approval of the Security Documents and authorises and
directs the Security Agent (by itself or by such person(s) as it may nominate)
to execute and enforce the same as trustee (or agent) or as otherwise provided
(and whether or not expressly in the names of the Secured Creditors) on its
behalf.

17.                               Conflict with
Security Documents

If
there is any conflict between the provisions of this Agreement and any Security
Document with regard to instructions to or other matters affecting the Security
Agent, this Agreement will prevail.

18.                               Security Agent as
joint and several creditor

(a)                                  Each of the
Obligors and each of the Secured Creditors agree that the Security Agent shall
be the joint and several creditor (together with the relevant Secured Creditor)
of each and every payment obligation of any Obligor towards each and any of the
Secured Creditors under the Senior Finance Documents, Bridge Finance Documents or
Notes Finance Documents and that accordingly the Security Agent will have its
own independent right to demand performance

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by
the relevant Obligor of those obligations when due.  However, any discharge of any such obligation
to either of the Security Agent or the relevant Finance Party shall, to the
same extent, discharge the corresponding obligation owing to the other.

(b)                                 Without limiting
or affecting the Security Agent’s rights against any Obligor (whether under
this paragraph or under any other provision of the Senior Finance Documents,
Bridge Finance Documents or Notes Finance Documents), the Security Agent agrees
with each other Secured Creditor (on a several and divided basis) that, subject
as set out in the next sentence, it will not exercise its rights as a joint and
several creditor with a Secured Creditor except with the consent of that
Secured Creditor, provided that the Security Agent may exercise its rights as a
joint and several creditor with the Notes Creditors with the consent of the
Note Trustee.  However, nothing in the
previous sentence shall limit to any extent the Security Agent’s right in
whatever capacity to take any action to protect or preserve any rights under
any Security Document or to enforce any Security Interest created thereby as
contemplated by this Agreement, (in the case of the Notes Pledge Agreement
only) the Notes Finance Documents and/or the relevant Security Document (or to
do any act reasonably incidental to any of the foregoing).

(c)                                  This Subclause
applies unless the Security Agent specifies that it shall not apply in relation
to a specific Obligor or all Obligors incorporated in a particular
jurisdiction.

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SCHEDULE 7

AGREED
MEZZANINE PRINCIPLES

(a)                                  Any
Permitted KDG Debt that is incurred by an Obligor in connection with this
Agreement will be secured and rank in accordance with certain agreed principles
as set out herein (the Agreed Mezzanine  Principles).

(b)                                 The
Permitted KDG Debt shall be subordinated to the Senior Debt and the Hedging
Debt and the Security given in respect of such Permitted KDG Debt shall rank
and secure the Permitted KDG Debt behind the Senior Debt and the Hedging Debt.

(c)                                  The
Permitted KDG Debt shall rank pari passu with
the Notes Guarantee Debt and the Security given in respect of such Permitted KDG
Debt shall rank and secure the Permitted KDG Debt pari passu
with the Notes Debt (save, in each case, to the extent that the creditors of
the Permitted KDG Debt have agreed to rank behind the Notes Guarantee Debt).

(d)                                 This
Agreement shall be amended to reflect the presence of the Permitted KDG Debt in
a manner that is customary for euromarket mezzanine financings and
shall include, without limitation, restrictions on the ability of the creditors
of the Permitted KDG Debt from taking any enforcement action against any
Obligor for a period of at least 90 days (in the case of a payment default),
120 days (in the case of a financial covenant default) and/or at least 150 days
(in the case of any other default); provided that any such amendments would not
be prohibited by the Notes Finance Documents. 
The Majority Lenders shall be entitled to issue Stop Notices in respect
of payments of interest in respect of the Permitted KDG Debt in a manner that is customary for euromarket mezzanine
financings.

(e)                                  For
the avoidance of doubt, any such Permitted KDG Debt shall be in accordance with
the definition of “Compliant KDG Debt” in the Senior Facilities Agreement and
shall be incurred in compliance with the Notes Finance Documents.

(f)                                    Any references to
rights or obligations of Noteholders in
this Agreement will be amended to provide for similar rights and obligations of
holders of Permitted KDG Debt (with corresponding changes where required);
provided that any such amendments would not be prohibited by the Notes Finance
Documents.

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SIGNATORIES

[This section
not restated]

 65

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