Exhibit 10.1

[EXECUTION COPY]

CREDIT AGREEMENT,

dated as of June 13, 2001,

among

USP DOMESTIC HOLDINGS, INC.,
as the Borrower,

VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,

 

CREDIT SUISSE FIRST BOSTON,
as the Administrative Agent for the Lenders,

LEHMAN COMMERCIAL PAPER INC.,
as the Syndication Agent for the Lenders,

and

SOCIÉTÉ GÉNÉRALE,
as the Documentation Agent for the Lenders.

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CREDIT SUISSE FIRST BOSTON,
as Lead Arranger and Sole Bookrunner.

TABLE OF CONTENTS

Section    

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    ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.1. Defined Terms
  1.2. Use of Defined Terms
  1.3. Cross-References
  1.4. Accounting and Financial Determinations
 

 

ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT

2.1. Commitments
  2.1.1. Revolving Loan Commitment
  2.1.2. Letter of Credit Commitment
  2.2. Reduction of the Commitment Amounts
  2.2.1. Optional
  2.2.2. Mandatory
  2.3. Borrowing Procedures
  2.4. Continuation and Conversion Elections
  2.5. Funding
  2.6. Issuance Procedures
  2.6.1. Other Lenders’ Participation
  2.6.2. Disbursements
  2.6.3. Reimbursement
  2.6.4. Deemed Disbursements
  2.6.5. Nature of Reimbursement Obligations
  2.7. Revolving Notes
 

 

ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

3.1. Repayments and Prepayments; Application
  3.1.1. Repayments and Prepayments
  3.1.2. Application
  3.2. Interest Provisions
  3.2.1. Rates
  3.2.2. Post-Maturity Rates
  3.2.3. Payment Dates
  3.3. Fees
  3.3.1. Commitment Fee
  3.3.2. Agent’s Fee
  3.3.3. Letter of Credit Fee
 

 

ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS

4.1. LIBO Rate Lending Unlawful
  4.2. Deposits Unavailable
  4.3. Increased LIBO Rate Loan Costs, etc.
  4.4. Funding Losses
  4.5. Increased Capital Costs
  4.6. Taxes
  4.7. Payments, Computations, etc.
  4.8. Sharing of Payments
  4.9. Setoff
 

 

ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS

5.1. Initial Credit Extension
  5.1.1. Resolutions, etc.
  5.1.2. Delivery of Revolving Notes
  5.1.3. Subsidiary Guaranty
  5.1.4. Parent Guaranty and Pledge Agreement
  5.1.5. Holdings Guaranty and Pledge Agreement
  5.1.6. Borrower Pledge and Security Agreement
  5.1.7. Subsidiary Pledge and Security Agreement
  5.1.8. Filing Agent, etc.
  5.1.9. Closing Date Certificate
  5.1.10. Solvency, etc.
  5.1.11. Insurance
  5.1.12. Financial Information, etc.
  5.1.13. Opinions of Counsel
  5.1.14. Consummation of Transaction
  5.1.15. Transaction Documents
  5.1.16. Payment of Outstanding Indebtedness, etc.
  5.1.17. Closing Fees, Expenses, etc.
  5.2. All Credit Extensions
  5.2.1. Compliance with Warranties, No Default, etc.
  5.2.2. Credit Extension Request, etc.
  5.2.3. Satisfactory Legal Form
 

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

6.1. Organization, etc.
  6.2. Due Authorization, Non-Contravention, etc.
  6.3. Government Approval, Regulation, etc.
  6.4. Validity, etc.
  6.5. Financial Information
  6.6. No Material Adverse Change
  6.7. Litigation, Labor Controversies, etc.
  6.8. Subsidiaries
  6.9. Ownership of Properties
  6.10. Taxes
  6.11. Pension and Welfare Plans
  6.12. Environmental Warranties
  6.13. Accuracy of Information
  6.14. Regulations T, U and X
  6.15. Absence of Any Undisclosed Liabilities
  6.16. Issuance of Subordinated Debt; Status of Obligations as Senior
Indebtedness, etc.
 

 

 

ARTICLE VII
COVENANTS

7.1. Affirmative Covenants
  7.1.1. Financial Information, Reports, Notices, etc.
  7.1.2. Maintenance of Existence; Compliance with Laws, etc.
  7.1.3. Maintenance of Properties
  7.1.4. Insurance
  7.1.5. Books and Records
  7.1.6. Environmental Law Covenant
  7.1.7. Use of Proceeds
  7.1.8. Future Guarantors, Security, etc.
  7.1.9. Rate Protection Agreements
  7.1.10. Dispositions of Real Property
  7.1.11. Restricted Entity Acknowledgments
  7.2. Negative Covenants
  7.2.1. Business Activities
  7.2.2. Indebtedness
  7.2.3. Liens
  7.2.4. Financial Condition and Operations
  7.2.5. Investments
  7.2.6. Restricted Payments
  7.2.7. Capital Expenditures
  7.2.8. No Prepayment of Subordinated Debt
  7.2.9. Issuance of Equity Interests
  7.2.10. Consolidation, Merger, etc.
  7.2.11. Permitted Dispositions
  7.2.12. Modification of Certain Agreements
  7.2.13. Transactions with Affiliates
  7.2.14. Restrictive Agreements, etc.
  7.2.15. Sale and Leaseback
  7.2.16. Foreign Subsidiaries
  7.2.17. Amendment of Organic Documents
  7.2.18. Fiscal Year
 

 

ARTICLE VIII
EVENTS OF DEFAULT

8.1. Listing of Events of Default
  8.1.1. Non-Payment of Obligations
  8.1.2. Breach of Warranty
  8.1.3. Non-Performance of Certain Covenants and Obligations
  8.1.4. Non-Performance of Other Covenants and Obligations
  8.1.5. Default on Other Indebtedness
  8.1.6. Judgments
  8.1.7. Pension Plans
  8.1.8. Change in Control
  8.1.9. Bankruptcy, Insolvency, etc.
  8.1.10. Impairment of Security, etc.
  8.1.11. Failure of Subordination.
  8.1.12. Parent Total Debt to Parent Total Capitalization Ratio.
  8.2. Action if Bankruptcy
  8.3. Action if Other Event of Default
 

 

ARTICLE IX
THE ADMINISTRATIVE AGENT

9.1. Actions
  9.2. Funding Reliance, etc.
  9.3. Exculpation
  9.4. Successor
  9.5. Credit Extensions by CSFB
  9.6. Credit Decisions
  9.7. Copies, etc.
  9.8. Reliance by Administrative Agent
  9.9. Defaults
  9.10. Syndication Agent and Documentation Agent
 

 

ARTICLE X
MISCELLANEOUS PROVISIONS

10.1. Waivers, Amendments, etc.
  10.2. Notices; Time
  10.3. Payment of Costs and Expenses
  10.4. Indemnification
  10.5. Survival
  10.6. Severability
  10.7. Headings
  10.8. Execution in Counterparts, Effectiveness, etc.
  10.9. Governing Law; Entire Agreement
  10.10. Successors and Assigns
  10.11. Other Transactions
  10.12. Forum Selection and Consent to Jurisdiction
  10.13. Waiver of Jury Trial
  10.14. Confidentiality
 

 

SCHEDULE I - Disclosure Schedule SCHEDULE II - Notice Information; Percentages;
LIBOR Office
EXHIBIT A - Form of Revolving Note EXHIBIT B - Form of Borrowing Request EXHIBIT
C - Form of Issuance Request EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Borrower Closing Date Certificate EXHIBIT F - Form of
Compliance Certificate EXHIBIT G - Form of Subsidiary Guaranty EXHIBIT H - Form
of Parent Guaranty and Pledge Agreement EXHIBIT I - Form of Holdings Guaranty
and Pledge Agreement EXHIBIT J - Form of Borrower Pledge and Security Agreement
EXHIBIT K - Form of Subsidiary Pledge and Security Agreement EXHIBIT L - Form of
Lender Assignment Agreement

 

CREDIT AGREEMENT

                THIS CREDIT AGREEMENT, dated as of June 13, 2001, is among USP
DOMESTIC HOLDINGS, INC., a Delaware corporation (the “Borrower”), the various
financial institutions and other Persons from time to time parties hereto (the
“Lenders”), CREDIT SUISSE FIRST BOSTON (“CSFB”), as administrative agent (in
such capacity, the “Administrative Agent”) for the Lenders, LEHMAN COMMERCIAL
PAPER INC. (“Lehman”), as syndication agent (in such capacity, the “Syndication
Agent”) for the Lenders, and SOCIÉTÉ GÉNÉRALE (“SG”), as documentation agent (in
such capacity, the “Documentation Agent”) for the Lenders.

W I T N E S S E T H:

                WHEREAS, the Borrower is a wholly-owned Subsidiary of United
Surgical Partners Holdings, Inc., a Delaware corporation (“Holdings”), and
Holdings is a wholly-owned Subsidiary of United Surgical Partners International,
Inc., a Delaware corporation (“Parent”);

                WHEREAS, Parent intends to issue shares of its common stock in a
public offering for gross cash proceeds of at least $115,000,000 (the “Parent
IPO”), the proceeds of which will be used in part to repay approximately
$35,000,000 of indebtedness of Parent (the “Parent Refinancing”), repay
approximately $44,100,000 of indebtedness of OrthoLink Physicians Corporation, a
Delaware corporation (“OrthoLink”) (the “OrthoLink Refinancing”) and redeem
approximately $33,400,000 of preferred stock of Parent (the “Parent Stock
Redemption”);

                WHEREAS, on or prior to the Closing Date, OrthoLink shall become
a direct, wholly owned Subsidiary of the Borrower;

                WHEREAS, (i) Parent will issue pay-in-kind preferred stock in an
amount equal to $20,000,000 and make a cash payment in an amount equal to
$120,000 in satisfaction of $20,120,000 of current subordinated Indebtedness of
Parent owed to Welsh, Carson, Anderson & Stowe VII, L.P. and certain other
holders (the “Parent Debt Conversion”), and (ii) the Borrower will issue a 10%
subordinated note (the “WCAS Note”) to WCAS Capital Partners III, L.P. in an
amount equal to $36,000,000 in satisfaction of certain intercompany indebtedness
owed by the Borrower to Parent (the “Borrower Debt Conversion”, and together
with the Parent IPO, the Parent Refinancing, the OrthoLink Refinancing, the
Parent Stock Redemption, the Parent Debt Conversion, the Borrower Debt
Conversion (including the issuance of the WCAS Note) and all transactions
related to the foregoing,
collectively referred to herein as the “Transaction”);

                WHEREAS, in connection with the Transaction and the ongoing
working capital and general corporate needs of the Borrower and its Consolidated
Entities, the Borrower desires to obtain a revolving loan commitment (to include
availability for revolving loans and letters of credit); and

                WHEREAS, the Lenders and the Issuer are willing, on the terms
and subject to the conditions hereinafter set forth, to extend the Commitments
and make Loans to the Borrower and issue (or participate in) Letters of Credit;

                NOW, THEREFORE, the parties hereto agree as follows.

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

                SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

                “Administrative Agent” is defined in the preamble and includes
each other Person appointed as the successor Administrative Agent pursuant to
Section 9.4.

                “Affiliate” of any Person means any other Person which, directly
or indirectly, controls, is controlled by or is under common control with such
Person. “Control” of a Person means the power, directly or indirectly, (a) to
vote 10% or more of the Equity Interests (on a fully diluted basis) of such
Person having ordinary voting power for the election of directors, managing
members or general partners (as applicable); or (b) to direct or cause the
direction of the management and policies of such Person (whether by contract or
otherwise).

                “Agents” means, collectively, the Administrative Agent, the
Syndication Agent and the Documentation Agent.

                “Agreement” means, on any date, this Credit Agreement as
originally in effect on the Effective Date and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified from time to
time and in effect on such date.

                “Alternate Base Rate” means, on any date and with respect to all
Base Rate Loans, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/16 of 1%) equal to the higher of

                (a) the Base Rate in effect on such day; and

                (b) the Federal Funds Rate in effect on such day plus ½ of 1%.

Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrower
and the Lenders of changes in the Alternate Base Rate; provided that the failure
to give such notice shall not affect the Alternate Base Rate in effect after
such change.

                “Annualized” means, (a) with respect to the end of the first
Fiscal Quarter of the 2001 Fiscal Year, the applicable amount for such Fiscal
Quarter multiplied by four, (b) with respect to the second Fiscal Quarter of the
2001 Fiscal Year, the applicable amount for such Fiscal Quarter and the
immediately preceding Fiscal Quarter multiplied by two, and (c) with respect to
the third Fiscal Quarter of the 2001 Fiscal Year, the applicable amount for such
Fiscal Quarter and the two immediately preceding Fiscal Quarters multiplied by
one and one-third.

                Applicable Margin” means the applicable percentage set forth
below corresponding to the relevant Total Debt to EBITDA Ratio:

Total Debt to
EBTIDA Ratio   Applicable
Margin For
Base Rate Loans   Applicable
Margin For
LIBO Rate Loans  

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  ³3.00:1   2.25%   3.25%   ³2.25:1 and < 3.00:1   2.00%   3.00%   ³1.75:1 and <
2.25:1   1.75%   2.75%   < 1.75:1   1.50%   2.50%  

Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Total Debt to EBITDA Ratio), the Applicable Margin for all
Loans from the Effective Date through (and including) the date upon which the
Compliance Certificate for the second full Fiscal Quarter ending after the
Closing Date is delivered by the Borrower to the Administrative Agent pursuant
to clause (c) of Section 7.1.1 shall be 2.00% for Base Rate Loans and 3.00% for
LIBO Rate Loans. The Total Debt to EBITDA Ratio used to compute the Applicable
Margin shall be the Total Debt to EBITDA Ratio set forth in the Compliance
Certificate most recently delivered by the Borrower to the AdministrativeAgent.
Changes in the Applicable Margin resulting from a change in the Total Debt to
EBITDA Ratio. hall become effective upon delivery by the Borrower to the
Administrative Agent of a new Compliance Certificate pursuant to clause (c) of
Section 7.1.1. If the Borrower shall fail to deliver a Compliance Certificate
within 45 days after the end of any Fiscal Quarter (or within 90 days, in the
case of the last Fiscal Quarter of the Fiscal Year), the Applicable Margin from
and including the 46th (or 91st, as the case may be) day after the end of such
Fiscal Quarter to but not including the date the Borrower delivers to the
Administrative Agent a Compliance Certificate shall conclusively equal the
highest Applicable Margin set forth above.

                “Approved Fund” means any Person (other than a natural Person)
that (a) is or will be engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the ordinary
course of its business, and (b) is administered or managed by a Lender, an
Affiliate of a Lender or an entity or an Affiliate of an entity that administers
or manages a Lender.

                “Authorized Officer” means, relative to any Obligor, those of
its officers, general partners or managing members (as applicable) whose
signatures and incumbency shall have been certified to the Administrative Agent,
the Lenders and the Issuer pursuant to Section 5.1.1.

                “Base Rate” means, at any time, the rate of interest then most
recently established by the Administrative Agent in New York as its base rate
for Dollars loaned in the United States. The Base Rate is not necessarily
intended to be the lowest rate of interest determined by the Administrative
Agent in connection with extensions of credit.

                “Base Rate Loan” means a Loan bearing interest at a fluctuating
rate determined by reference to the Alternate Base Rate.

                “Borrower” is defined in the preamble.

                “Borrower Closing Date Certificate” means the closing date
certificate executed and delivered by an Authorized Officer of the Borrower
pursuant to the terms of this Agreement, substantially in the form of Exhibit E
hereto.

                Borrower Debt Conversion” is defined in the fourth recital.

                Borrower Pledge and Security Agreement” means the pledge and
security agreement executed and delivered by an Authorized Officer of the
Borrower pursuant to the terms of this Agreement, substantially in the form of
Exhibit J hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.

                “Borrowing” means the Loans of the same type and, in the case of
LIBO Rate Loans, having the same Interest Period made by all Lenders required to
make such Loans on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.1.

                “Borrowing Request” means a Loan request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit B hereto.

                “Business Day” means

                (a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New York, New
York; and

                (b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day which is a Business Day described in clause (a)
above and which is also a day on which dealings in Dollars are carried on in the
London interbank eurodollar market.

                “Capital Expenditures” means, for any period, the aggregate
amount of (a) all expenditures of the Borrower and its Consolidated Entities for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures and (b) Capitalized Lease
Liabilities incurred by the Borrower and its Consolidated Entities during such
period.

                “Capitalized Lease Liabilities” means, with respect to any
Person, all monetary obligations of such Person under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.

                “Cash Collateralize” means, with respect to a Letter of Credit,
the deposit of immediately available funds into a cash collateral account
maintained with (or on behalf of) the Administrative Agent on terms satisfactory
to the Administrative Agent in an amount equal to the Stated Amount of such
Letter of Credit.

                “Cash Equivalent Investment” means, at any time:

                (a) any direct obligation of (or unconditionally guaranteed by)
the United States or a State thereof (or any agency or political subdivision
thereof, to the extent such obligations are supported by the full faith and
credit of the United States or a State thereof) maturing not more than one year
after such time;

                (b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by

                (i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the District of
Columbia and rated A-1 or higher by S&P or P-1 or higher by Moody’s, or

                (ii) any Lender (or its holding company);

                (c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance, which is
issued by either

                (i) any bank organized under the laws of the United States (or
any State thereof) and which has (x) a credit rating of A2 or higher from
Moody’s or A or higher from S&P and (y) a combined capital and surplus greater
than $500,000,000, or

                (ii) any Lender; or

                (d) any repurchase agreement having a term of 30 days or less
entered into with any Lender or any commercial banking institution satisfying
the criteria set forth in clause (c)(i) which

   (i) is secured by a fully perfected security interest in any obligation of
the type described in clause (a), and

   (ii) has a market value at the time such repurchase agreement is entered into
of not less than 100% of the repurchase obligation of such commercial banking
institution thereunder.

                “Casualty Event” means the damage, destruction or condemnation,
as the case may be, of property of any Person or any of its Subsidiaries.

                CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.

                CERCLIS” means the Comprehensive Environmental Response
Compensation Liability Information System List.

                Change in Control” means.

                (a) the failure of Parent at any time to directly own
beneficially and of record on a fully diluted basis 100% of the outstanding
Equity Interests of Holdings, such Equity Interests to be held free and clear of
all Liens (other than Liens granted under a Loan Document); or

                (b) the failure of Holdings at any time to directly own
beneficially and of record on a fully diluted basis 100% of the outstanding
Equity Interests of the Borrower, such Equity Interests to be held free and
clear of all Liens (other than Liens granted under a Loan Document); or

                (c) any person or group (within the meaning of Sections 13(d)
and 14(d) under the Exchange Act), other than Welsh, Carson, Anderson & Stowe
VII, L.P. or its Affiliates, shall become the ultimate “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of Equity Interests representing more than 40% of the Equity
Interests of Parent on a fully diluted basis; or

                (d) during any period of 24 consecutive months, individuals who
at the beginning of such period constituted the Board of Directors of Parent
(together with any new directors whose election to such Board or whose
nomination for election by the stockholders of Parent was approved by a vote of
a majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Parent then in office; or

                (e) the occurrence of any “Change of Control” (or similar term)
under (and as defined in) any Sub Debt Document.

                “Closing Date” means June 13, 2001.

                “Code” means the Internal Revenue Code of 1986, and the
regulations thereunder, in each case as amended, reformed or otherwise modified
from time to time.

                “Commitment” means, as the context may require, the Revolving
Loan Commitment or the Letter of Credit Commitment.

                “Commitment Amount” means, as the context may require, the
Revolving Loan Commitment Amount or the Letter of Credit Commitment Amount.

                “Commitment Termination Date” means the earliest of

                (a) July 15, 2001 (if the initial Credit Extension has not
occurred on or prior to such date);

                (b) June 13, 2004;

                (c) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to the terms of this Agreement;
and

                (d) the date on which any Commitment Termination Event occurs.

Upon the occurrence of any event described in the preceding clauses (c) or (d),
the Commitments shall terminate automatically and without any further action.

                “Commitment Termination Event” means

                (a) the occurrence of any Event of Default with respect to the
Borrower described in clauses (a) through (d) of Section 8.1.9; or

                (b) the occurrence and continuance of any other Event of Default
and either

                (i) the declaration of all or any portion of the Loans to be due
and payable pursuant to Section 8.3, or

                (ii) the giving of notice by the Administrative Agent, acting at
the direction of the Required Lenders, to the Borrower that the Commitments have
been terminated.

                “Compliance Certificate” means a certificate duly completed and
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit F hereto, together with such changes thereto as the Administrative Agent
may from time to time request for the purpose of monitoring the Borrower’s
compliance with the financial covenants contained herein.

                “Confidential Information” means information relating to the
Borrower, any of its Subsidiaries or any other Obligor obtained by any Secured
Party pursuant to or in connection with this Agreement, or otherwise from or on
behalf of the Borrower or any of its Subsidiaries or Affiliates (to the extent
identified as Affiliates to the Administrative Agent and the Lenders) (including
any such information obtained by either the Administrative Agent or any Lender
in the course of any review of the books or records of the Borrower or any
Subsidiary thereof as contemplated herein), but excluding information (i) that
was previously known to any Secured Party (other than through a previous lending
or other business relationship with the Borrower or any of its Subsidiaries),
(ii) that is or subsequently becomes generally publicly known through no act or
omission by any Secured Party or any Person acting therefor or (iii) that has
been disclosed to any Secured Party from a third party without contravening the
terms of this Agreement.

                “Consolidated Entities” means each of the Borrower’s
Subsidiaries and each of the operating partnerships, limited liability
companies, joint ventures or similar entities in which the Borrower has,
directly or indirectly, invested, in each case which are consolidated in the
Borrower’s financial statements delivered pursuant to Section 7.1.1.

                “Contingent Liability” means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor in connection with such debtor’s Indebtedness, or otherwise
to assure a creditor against loss) the Indebtedness of any other Person (other
than by endorsements of instruments in the course of collection), or guarantees
the payment of dividends or other distributions upon the Equity Interests of any
other Person. The amount of any Person’s obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.

                “Continuation/Conversion Notice” means a notice of continuation
or conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit D hereto.

                “Controlled Group” means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.

                “Copyright Security Agreement” means any copyright security
agreement executed and delivered by any Obligor, substantially in the form of
Exhibit C to any Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.

                “Credit Extension” means, as the context may require, (a) the
making of a Loan by a Lender or (b) the issuance of any Letter of Credit, or the
extension of any Stated Expiry Date of any existing Letter of Credit, by an
Issuer.

                “CSFB” is defined in the preamble.

                “Default” means any Event of Default or any condition,
occurrence or event which, after notice or lapse of time or both, would
constitute an Event of Default.

                “Disbursement” is defined in Section 2.6.2.

                “Disbursement Date” is defined in Section 2.6.2.

                “Disclosure Schedule” means the Disclosure Schedule attached
hereto as Schedule I, as it may be amended, supplemented, amended and restated
or otherwise modified from time to time by the Borrower with the written consent
of the Required Lenders.

                “Disposition” (or similar words such as “Dispose”) means any
sale, transfer, lease, contribution or other conveyance (including by way of
merger) of, or the granting of options, warrants or other rights to, any of the
Borrower’s or its Consolidated Entities’ assets (including accounts receivable
and Equity Interests of Subsidiaries, but excluding cash) to any other Person
(other than to another Obligor) in a single transaction or series of
transactions.

                “Documentation Agent” is defined in the preamble.

                “Dollar” and the sign “$” mean lawful money of the United
States.

                “EBITDA” means, for any applicable period, the sum of (a) Net
Income, plus (b) to the extent deducted in determining Net Income, the sum of
(i) amounts attributable to amortization, (ii) income tax expense, (iii)
Interest Expense and (iv) depreciation of assets; provided that, for the first
three Fiscal Quarters of the 2001 Fiscal Year, EBITDA shall be Annualized;
provided further that EBITDA shall be adjusted to give pro forma effect to
Permitted Acquisitions made during such period (such adjustment to be
satisfactory to the Administrative Agent) as if such Permitted Acquisitions had
been made at the beginning of such period; and provided further that, for
purposes of calculating the Fixed Charge Coverage Ratio and the Interest
Coverage Ratio, EBITDA shall include amounts attributable to Minority Interests
to the extent deducted in determining Net Income.

                “Effective Date” means the date this Agreement becomes effective
pursuant to Section 10.8.

                “Eligible Assignee” means (a) a Lender, (b) an Affiliate of a
Lender, (c) an Approved Fund or (d) any other Person (other than a natural
Person) approved (in the case of this clause (d)) by the Agents, the Issuer (but
then only in the case of any assignment of the Revolving Loan Commitment) and,
unless (i) such Person is taking delivery of an assignment in connection with
physical settlement of a credit derivatives transaction or (ii) an Event of
Default has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed)

                “Environmental Laws” means all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public health
and safety and protection of the environment.

                “Equity Interests” means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person’s capital, whether now outstanding
or issued after the Effective Date.

                “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to Sections of ERISA also refer to any successor Sections thereto.

                “Event of Default” is defined in Section 8.1.

                “Excess Cash Flow” means, for any Fiscal Year, (a) EBITDA for
such Fiscal Year less (b) the sum (for such Fiscal Year) of (i) Interest Expense
actually paid in cash by the Borrower and its Consolidated Entities, (ii)
principal repayments, to the extent actually made, of Indebtedness by the
Borrower and its Consolidated Entities (including Revolving Loans pursuant to
Section 3.1.1), (iii) all income Taxes actually paid in cash by the Borrower and
its Consolidated Entities, (iv) Capital Expenditures actually made by the
Borrower and its Consolidated Entities in such Fiscal Year, (v) extraordinary
non-recurring, non-cash charges acceptable to the Administrative Agent and (vi)
the increase, if any, in current assets over current liabilities of the Borrower
and its Consolidated Entities during such Fiscal Year, plus (c) the decrease, if
any, of current assets over current liabilities of the Borrower and its
Consolidated Entities during such Fiscal Year.

                “Exemption Certificate” is defined in clause (e) of Section 4.6.

                “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

                “Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal for each day during such period to

                (a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York; or

                (b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.

                “Fee Letter” means the confidential letter, dated June 6, 2001,
from the Agents to the Borrower.

                “Filing Agent” is defined in Section 5.1.8.

                “Filing Statements” is defined in Section 5.1.8.

                “Fiscal Quarter” means a quarter ending on the last day of
March, June, September or December.

                “Fiscal Year” means any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the “2001 Fiscal Year”) refer to the
Fiscal Year ending on December 31 of such calendar year.

                “Fixed Charge Coverage Ratio” means, as of the close of any
Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters of (a)
EBITDA (for all such Fiscal Quarters) minus Maintenance Capital Expenditures
made during such Fiscal Quarters to (b) the sum (for all such Fiscal Quarters)
of (i) Interest Expense, (ii) scheduled principal repayments of Indebtedness
made during such period, and (iii) all income Taxes actually paid in cash by the
Borrower and its Consolidated Entities; provided that, for the first three
Fiscal Quarters of the 2001 Fiscal Year, the amounts set forth in clauses (a)
and (b) shall be Annualized.

                “Foreign Subsidiary” means any Subsidiary that is not
incorporated or organized under the laws of the United States or a state
thereof.

                “F.R.S. Board” means the Board of Governors of the Federal
Reserve System or any successor thereto.

                “Ft. Worth” is defined in clause (j) of Section 7.2.5.

                “Ft. Worth Acquisition” is defined in clause (j) of Section
7.2.5.

                “GAAP” is defined in Section 1.4.

                “Governmental Authority” means the government of the United
States, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other Person exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

                “Hazardous Material” means (a) any “hazardous substance”, as
defined by CERCLA, (b) any “hazardous waste”, as defined by the Resource
Conservation and Recovery Act, as amended, or (c) any pollutant or contaminant
or hazardous, dangerous or toxic chemical, material or substance (including any
petroleum product) within the meaning of any other applicable federal, state or
local law, regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended.

                “Hedging Obligations” means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.

                “herein”, “hereof”, “hereto”, “hereunder” and similar terms
contained in any Loan Document refer to such Loan Document as a whole and not to
any particular Section, paragraph or provision of such Loan Document.

                “Holdings” is defined in the first recital.

                “Holdings Guaranty and Pledge Agreement” means the guaranty and
pledge agreement executed and delivered by an Authorized Officer of Holdings
pursuant to the terms of this Agreement, substantially in the form of Exhibit I
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.

                “Impermissible Qualification” means any qualification or
exception to the opinion or certification of any independent public accountant
as to any financial statement of the Borrower (a) which is of a “going concern”
or similar nature, (b) which relates to the limited scope of examination of
matters relevant to such financial statement, or (c) which relates to the
treatment or classification of any item in such financial statement and which,
as a condition to its removal, would require an adjustment to such item the
effect of which would be to cause the Borrower to be in Default.

                “including” and “include” means including without limiting the
generality of any description preceding such term, and, for purposes of each
Loan Document, the parties hereto agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.

                “Indebtedness” of any Person means:

                (a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments;.

                (b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and banker’s
acceptances issued for the account of such Person;

                (c) all Capitalized Lease Liabilities of such Person;

                (d) for purposes of Section 8.1.5 only, all other items which,
in accordance with GAAP, would be included as liabilities on the balance sheet
of such Person as of the date at which Indebtedness is to be determined;

                (e) net Hedging Obligations of such Person;

                (f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services after receipt or performance thereof (excluding trade
accounts payable in the ordinary course of business which are not overdue for a
period of more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person), and indebtedness secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on property owned or being acquired by such
Person (including indebtedness arising under conditional sales or other title
retention agreements, but excluding earn-outs or other contingent purchase price
adjustments in connection with acquisitions to the extent not yet determined),
whether or not such indebtedness shall have been assumed by such Person or is
limited in recourse;

                (g) obligations arising under Synthetic Leases; and

                (h) all Contingent Liabilities of such Person in respect of any
of the foregoing.

The Indebtedness of any Person shall include the Indebtedness of any other
Person (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

                “Indemnified Liabilities” is defined in Section 10.4.

                “Indemnified Parties” is defined in Section 10.4.

                “Interest Coverage Ratio” means, as of the last day of any
Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters of (a)
EBITDA (for all such Fiscal Quarters) to (b) the sum (for all such Fiscal
Quarters) of Interest Expense.

                “Interest Expense” means, for any applicable period, without
duplication, the aggregate interest expense (both accrued and paid and net of
any interest income paid during such period to the Borrower and its Consolidated
Entities) of the Borrower and its Consolidated Entities for such applicable
period, including the portion of any payments made in respect of Capitalized
Lease Liabilities allocable to interest expense.

                “Interest Period” means, relative to any LIBO Rate Loan, the
period beginning on (and including) the date on which such LIBO Rate Loan is
made or continued as, or converted into, a LIBO Rate Loan pursuant to Sections
2.3 or 2.4 and shall end on (but exclude) the day which numerically corresponds
to such date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Sections 2.3 or 2.4;
provided that

                (a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates occurring on
more than five different dates;

                (b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and

                (c) no Interest Period for any Loan may end later than the
Stated Maturity Date for such Loan.

                “Investment” means, relative to any Person, (a) any loan,
advance or extension of credit made by such Person to any other Person,
including the purchase by such Person of any bonds, notes, debentures or other
debt securities of any other Person, (b) Contingent Liabilities in favor of any
other Person, and (c) any Equity Interests held by such Person in any other
Person. The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon and shall, if
made by the transfer or exchange of property other than cash, be deemed to have
been made in an original principal or capital amount equal to the fair market
value of such property at the time of such Investment.

                “ISP Rules” is defined in Section 10.9.

                “Issuance Request” means a Letter of Credit request and
certificate duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit C hereto.

                “Issuer” means CSFB in its capacity as Issuer of the Letters of
Credit. At the request of CSFB and with the Borrower’s consent (not to be
unreasonably withheld), another Lender or an Affiliate of CSFB may issue one or
more Letters of Credit hereunder.

                “Lehman” is defined in the preamble.

                “Lender Assignment Agreement” means an assignment agreement,
substantially in the form of Exhibit L hereto.

                “Lenders” is defined in the preamble.

                “Lender’s Environmental Liability” means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys’ fees at trial and appellate levels and experts’ fees and
disbursements ands expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against the Administrative
Agent, any Lender or any Issuer or any of such Person’s Affiliates,
shareholders, directors, officers, employees, and agents in connection with or
arising from:

                (a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Consolidated Entities, the
groundwater thereunder, or any surrounding areas thereof to the extent caused by
Releases from the Borrower’s or any of its Consolidated Entities’ or any of
their respective predecessors’ properties;

                (b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;

                (c) any violation or claim of violation by the Borrower or any
of its Consolidated Entities of any Environmental Laws; or

                (d) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Borrower or any of its Consolidated Entities, or in
connection with any property owned or formerly owned by the Borrower or any of
its Consolidated Entities.

                “Letter of Credit” is defined in Section 2.1.2.

                “Letter of Credit Commitment” means the Issuer’s obligation to
issue Letters of Credit pursuant to Section 2.1.2.

                “Letter of Credit Commitment Amount” means, on any date, a
maximum amount of $2,500,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2.

                “Letter of Credit Outstandings” means, on any date, an amount
equal to the sum of (a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit, and (b) the then aggregate
amount of all unpaid and outstanding Reimbursement Obligations.

                “LIBO Rate” means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest equal to the average of the rates per annum at which
Dollar deposits in immediately available funds are offered to the Administrative
Agent’s LIBOR Office in the London interbank market as at or about 11:00 a.m.
London, England time two Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent’s LIBO Rate Loan
and for a period approximately equal to such Interest Period.

                “LIBO Rate Loan” means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a rate of interest
determined by reference to the LIBO Rate (Reserve Adjusted).

                “LIBO Rate (Reserve Adjusted)” means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum determined pursuant to the following formula:

LIBO Rate = LIBO Rate    

--------------------------------------------------------------------------------

(Reserve Adjusted)   1.00 - LIBOR Reserve Percentage

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.

                “LIBOR Office” means the office of a Lender designated as its
“LIBOR Office” on Schedule II hereto or in a Lender Assignment Agreement, or
such other office designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent, whether or not outside the United States,
which shall be making or maintaining the LIBO Rate Loans of such Lender.

                “LIBOR Reserve Percentage” means, relative to any Interest
Period for LIBO Rate Loans, the reserve percentage (expressed as a decimal)
equal to the maximum aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
“Eurocurrency Liabilities”, as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.

                “Lien” means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property, or other priority or
preferential arrangement of any kind or nature whatsoever, to secure payment of
a debt or performance of an obligation.

                “Loan” means a Revolving Loan.

                “Loan Documents” means, collectively, this Agreement, the
Revolving Notes, the Letters of Credit, each Rate Protection Agreement, the Fee
Letter, the Subsidiary Guaranty, each Pledge Agreement, each Mortgage, each
other agreement pursuant to which the Administrative Agent is granted a Lien to
secure the Obligations and each other agreement, certificate, document or
instrument delivered in connection with any Loan Document, whether or not
specifically mentioned herein or therein, but excluding the commitment letter,
dated June 6, 2001, from the Agents to the Borrower.

                “Maintenance Capital Expenditures” means any Capital
Expenditures made with respect to the maintenance of existing assets.

                “Material Adverse Effect” means a material adverse effect on (a)
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or the Borrower and its Consolidated
Entities taken as a whole, (b) the rights and remedies of any Secured Party
under any Loan Document or (c) the ability of any Obligor to perform its
Obligations under any Loan Document.

                “Minority Interests” means, with respect to Consolidated
Entities, the Equity Interests held by Persons other than the Borrower or
Subsidiary Guarantors as reflected in the financial statements of the Borrower
in accordance with GAAP.

                “Moody’s” means Moody’s Investors Service, Inc.

                “Mortgage” means each mortgage, deed of trust or agreement
executed and delivered by any Obligor in favor of the Administrative Agent for
the benefit of the Secured Parties pursuant to the requirements of this
Agreement, in form and substance satisfactory to the Administrative Agent, under
which a Lien is granted on the real property and fixtures described therein, in
each case as amended, supplemented, amended and restated or otherwise modified
from time to time.

                “Net Casualty Proceeds” means, with respect to any Casualty
Event, the amount of any insurance proceeds or condemnation awards received by
the Borrower or any of its Consolidated Entities in connection with such
Casualty Event in excess of $500,000, individually or in the aggregate over the
course of a Fiscal Year (net of all reasonable and customary collection expenses
thereof), but excluding any proceeds or awards required to be paid to a creditor
(other than the Lenders) which holds a first priority Lien permitted by Section
7.2.3 on the property which is the subject of such Casualty Event.

                “Net Disposition Proceeds” means, with respect to any
Disposition pursuant to clause (d) of Section 7.2.11, the excess of (a) the
gross cash proceeds received by the Borrower or any of its Consolidated Entities
from such Disposition and any cash payment received in respect of promissory
notes or other non-cash consideration delivered to the Borrower or its
Consolidated Entities in respect thereof, over (b) the sum of (i) all reasonable
and customary legal, investment banking, brokerage and accounting fees and
expenses incurred in connection with such Disposition, (ii) all taxes actually
paid or estimated by the Borrower to be payable in cash within the next 12
months in connection with such Disposition, (iii) payments made by the Borrower
or any of its Consolidated Entities to retire Indebtedness (other than the
Credit Extensions) where payment of such Indebtedness is required in connection
with such Disposition and (iv) amounts attributable to Minority Interests;
provided that if the amount of any estimated taxes pursuant to clause (ii)
exceeds the amount of taxes actually required to be paid in cash in respect of
such Disposition, the aggregate amount of such excess shall constitute Net
Disposition Proceeds.

                “Net Equity Proceeds” means, with respect to the sale or
issuance after the Closing Date by the Borrower to any Person of any Equity
Interests, warrants or options or the exercise of any such warrants or options,
the excess of (a) the gross cash proceeds received by such Person from such
sale, exercise or issuance, over (b) all reasonable and customary underwriting
commissions and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually incurred in
connection with such sale or issuance which have not been paid to Affiliates of
the Borrower in connection therewith.

                “Net Income” means, for any period, the aggregate of all amounts
(exclusive of all amounts in respect of any extraordinary gains but including
extraordinary losses) which would be included as net income on the consolidated
financial statements of the Borrower and its Consolidated Entities for such
period.

                “Non-Consolidated Entities” means each of the operating
partnerships, limited liability companies, joint ventures or similar entities in
which the Borrower has, directly or indirectly, invested, other than the
Consolidated Entities.

                “Non-Excluded Taxes” means any Taxes other than net income and
franchise taxes imposed with respect to any Secured Party by any Governmental
Authority under the laws of which such Secured Party is organized or in which it
maintains its applicable lending office.

                “Non-U.S. Lender” means any Lender that is not a “United States
person”, as defined under Section 7701(a)(30) of the Code.

                “Obligations” means all obligations (monetary or otherwise,
whether absolute or contingent, matured or unmatured) of the Borrower and each
other Obligor arising under or in connection with a Loan Document, including
Reimbursement Obligations and the principal of and premium, if any, and interest
(including interest accruing during the pendency of any proceeding of the type
described in Section 8.1.9, whether or not allowed in such proceeding) on the
Loans.

                “Obligor” means, as the context may require, the Borrower and
each other Person (other than a Secured Party) obligated under any Loan
Document.

                “Operating Entities” means the operating partnerships, limited
liability companies, joint ventures or similar entities in which the Borrower
has, directly or indirectly, invested and which actively engage in business
(other than solely in investment and management activities).

                “Organic Document” means, relative to any Obligor, as
applicable, its certificate of incorporation, by-laws, regulations, certificate
of partnership, partnership agreement, certificate of formation, limited
liability company agreement, operating agreement and all shareholder agreements,
voting trusts and similar arrangements applicable to any of such Obligor’s
partnership interests, limited liability company interests or authorized shares
of Equity Interests.

                “Other Taxes” means any and all stamp, documentary or similar
Taxes, or any other excise or property Taxes or similar levies that arise on
account of any payment made or required to be made under any Loan Document or
from the execution, delivery, registration, recording or enforcement of any Loan
Document.

                “OrthoLink” is defined in the second recital.

                “OrthoLink Refinancing” is defined in the second recital.

                “Parent” is defined in the first recital.

                “Parent Debt Conversion” is defined in the fourth recital.

                “Parent Guaranty and Pledge Agreement” means the guaranty and
pledge agreement executed and delivered by an Authorized Officer of Parent
pursuant to the terms of this Agreement, substantially in the form of Exhibit H
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.

                “Parent IPO” is defined in the second recital.

                “Parent Refinancing” is defined in the second recital.

                “Parent Stock Redemption” is defined in the second recital.

                “Parent Total Capitalization” means, at any time, the sum of (a)
the sum of all amounts (without duplication) which, in accordance with GAAP,
would be included in Parent’s stockholders’ equity (excluding unrealized gains
or losses recorded pursuant to FAS 115) as required to be reported in Parent’s
then most recent consolidated balance sheet, and (b) Parent Total Debt.

                “Parent Total Debt” means, on any date, the outstanding
principal amount of all Indebtedness of Parent and its Subsidiaries of the type
referred to in clauses (a), (b), (c) and (g), in each case of the definition of
“Indebtedness” and any Contingent Liability in respect of any of the foregoing.

                “Parent Total Debt to Parent Total Capitalization Ratio” means,
as of the last day of any Fiscal Quarter, the ratio of (a) Parent Total Debt
outstanding on such day to (b) Parent Total Capitalization on such day.

                “Participant” is defined in clause (d) of Section 10.10.

                “Patent Security Agreement” means any patent security agreement
executed and delivered by any Obligor, substantially in the form of Exhibit A to
any Pledge Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.

                “PBGC” means the Pension Benefit Guaranty Corporation and any
Person succeeding to any or all of its functions under ERISA.

                “Pension Plan” means a “pension plan”, as such term is defined
in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.

                “Percentage” means, relative to any Lender, the applicable
percentage relating to Revolving Loans set forth opposite its name on Schedule
II hereto under the Percentage column or set forth in a Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreements executed by such Lender and its assignee Lender and
delivered pursuant to Section 10.10. A Lender shall not have any Revolving Loan
Commitment if its Percentage is zero.

                “Permitted Acquisition” means an acquisition (whether pursuant
to an acquisition of Equity Interests, assets or otherwise) by the Borrower or
any Consolidated Entity from any Person of a business (or an increase of an
existing Equity Interest therein) in which the following conditions are
satisfied:

   (a) immediately before and after giving effect to such acquisition, no
Default shall have occurred and be continuing or would result therefrom
(including under Section 7.2.1); and

   (b) the Borrower shall have delivered to the Administrative Agent a
Compliance Certificate for the period of four full Fiscal Quarters immediately
preceding such acquisition (prepared in good faith and in a manner and using
such methodology which is consistent with the most recent financial statements
delivered pursuant to Section 7.1.1) giving pro forma effect to the consummation
of such acquisition and evidencing compliance with the covenants set forth in
Section 7.2.4.

                “Permitted Foreign Investment” means an Investment by the
Borrower in Foreign Subsidiaries of Holdings located in Western Europe in which
the following conditions are satisfied:

                (a) immediately before and after giving effect to such
Investment, no Default shall have occurred and be continuing or would result
therefrom; and

                (b) the Borrower shall have delivered to the Administrative
Agent a Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such Investment (prepared in good faith and in a manner
and using such methodology which is consistent with the most recent financial
statements delivered pursuant to Section 7.1.1) giving pro forma effect to the
consummation of such Investment and evidencing compliance with the covenants set
forth in Section 7.2.4.

                “Person” means any natural person, corporation, limited
liability company, partnership, joint venture, association, trust or
unincorporated organization, Governmental Authority or any other legal entity,
whether acting in an individual, fiduciary or other capacity.

                “Pledge Agreement” means, as the context may require, the Parent
Guaranty and Pledge Agreement, the Holdings Guaranty and Pledge Agreement, the
Borrower Pledge and Security Agreement or the Subsidiary Pledge and Security
Agreement.

                “Pledged Subsidiary” means each Subsidiary in respect of which
the Administrative Agent has been granted a security interest in or a pledge of
(i) any of the Equity Interests of such Subsidiary or (ii) any intercompany
notes of such Subsidiary owing to the Borrower or another Subsidiary.

                “Quarterly Payment Date” means the last day of March, June,
September and December, or, if any such day is not a Business Day, the next
succeeding Business Day.

                “Rate Protection Agreement” means, collectively, any interest
rate swap, cap, collar or similar agreement entered into by the Borrower or any
of its Consolidated Entities under which the counterparty of such agreement is
(or at the time such agreement was entered into, was) a Lender or an Affiliate
of a Lender.

                “Register” is defined in clause (b) of Section 2.7.

                “Reimbursement Obligation” is defined in Section 2.6.3.

                “Release” means a “release”, as such term is defined in CERCLA.

                “Required Lenders” means (a) at any time in which there are
three or less non-affiliated Lenders, all such Lenders and (b) at any time in
which there are four or more non-affiliated Lenders, Lenders holding at least
51% of the Total Exposure Amount.

                “Resource Conservation and Recovery Act” means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.

                “Restricted Entities” means those Consolidated Entities and
Non-Consolidated Entities that, due to restrictions contained in their Organic
Documents or in agreements to which they are a party, are unable to provide a
guaranty of the Obligations or place a Lien on their assets and in which the
Secured Parties are unable to obtain a pledge of their Equity Interests.

                “Restricted Payment” means the declaration or payment of any
dividend (other than dividends payable solely in Equity Interests of the
Borrower or any Consolidated Entity) on, or the making of any payment or
distribution on account of, or setting apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any class of Equity Interests of the Borrower or any Consolidated
Entity or any warrants or options to purchase any such Equity Interests, whether
now or hereafter outstanding, or the making of any other distribution in respect
thereof, either directly or indirectly, whether in cash or property, obligations
of the Borrower or any Consolidated Entity or otherwise.

                “Revolving Loan” is defined in Section 2.1.1.

                “Revolving Loan Commitment” means, relative to any Lender, such
Lender’s obligation (if any) to make Revolving Loans pursuant to Section 2.1.1.

                “Revolving Loan Commitment Amount” means, on any date,
$55,000,000, as such amount may be reduced from time to time pursuant to Section
2.2.

                “Revolving Note” means a promissory note of the Borrower payable
to any Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Revolving Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.

                “S&P” means Standard & Poor’s Rating Services, a division of
McGraw-Hill, Inc.

                “SEC” means the Securities and Exchange Commission.

                “Secured Parties” means, collectively, the Lenders, the Issuer,
the Administrative Agent, each counterparty to a Rate Protection Agreement that
is (or at the time such Rate Protection Agreement was entered into, was) a
Lender or an Affiliate thereof and (in each case), each of their respective
successors, transferees and assigns.

                “Senior Debt” means Total Debt less all Subordinated Debt.

                “Senior Debt to EBITDA Ratio” means, as of the last day of any
Fiscal Quarter, the ratio of (a) Senior Debt outstanding on such day to (b)
EBITDA computed for the period consisting of such Fiscal Quarter and each of the
three immediately preceding Fiscal Quarters.

                “SG” is defined in the preamble.

                “Stated Amount” means, on any date and with respect to a
particular Letter of Credit, the total amount then available to be drawn under
such Letter of Credit.

                “Stated Expiry Date” is defined in Section 2.6.

                “Stated Maturity Date” means June 13, 2004.

                “Sub Debt Documents” means, collectively, the WCAS Note and any
other loan agreements, indentures, note purchase agreements, promissory notes,
guarantees, and other instruments and agreements evidencing the terms of
Subordinated Debt, as amended, supplemented, amended and restated or otherwise
modified in accordance with Section 7.2.12.

                “Subordinated Debt” means the WCAS Debt and other unsecured
Indebtedness of the Borrower subordinated in right of payment to the Obligations
pursuant to documentation containing redemption and other prepayment events,
maturities, amortization schedules, covenants, events of default, remedies,
acceleration rights, subordination provisions and other material terms
satisfactory to
the Administrative Agent.

                “Subordination Provisions” is defined in Section 8.1.11.

                “Subsidiary” means, with respect to any Person, any other Person
of which more than 50% of the outstanding Voting Interests of such other Person
(irrespective of whether at the time Equity Interests of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term “Subsidiary” shall be a
reference to a Subsidiary of the Borrower.

                “Subsidiary Guarantor” means each Wholly-Owned Subsidiary.

                “Subsidiary Guaranty” means the subsidiary guaranty executed and
delivered by each Subsidiary Guarantor pursuant to the terms of this Agreement,
substantially in the form of Exhibit G hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

                “Subsidiary Pledge and Security Agreement” means the pledge and
security agreement executed and delivered by each Subsidiary Guarantor pursuant
to the terms of this Agreement, substantially in the form of Exhibit K hereto,
as amended, supplemented, amended and restated or otherwise modified from time
to time.

                “Syndication Agent” is defined in the preamble.

                “Synthetic Lease” means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (a) that is not a capital lease in
accordance with GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.

                “Taxes” means all income, stamp or other taxes, duties, levies,
imposts, charges, assessments, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, and all interest, penalties or similar liabilities with respect
thereto.

                “Termination Date” means the date on which all Obligations have
been paid in full in cash, all Letters of Credit have been terminated or expired
(or been Cash Collateralized), all Rate Protection Agreements have been
terminated and all Commitments shall have terminated.

                “Total Debt” means, on any date, the outstanding principal
amount of all Indebtedness of the Borrower and its Consolidated Entities of the
type referred to in clause (a) (which, in the case of the Loans, shall be deemed
to equal the average daily amount of the Loans outstanding for the Fiscal
Quarter ending on or immediately preceding the date of determination), clause
(b) (which, in the case of Letter of Credit Outstandings shall be deemed to
equal the average daily amount of Letter of Credit Outstandings for the Fiscal
Quarter ending on or immediately preceding the date of determination), clause
(c) and clause (g), in each case of the definition of “Indebtedness” (exclusive
of intercompany Indebtedness between the Borrower and its Consolidated Entities)
and any Contingent Liability in respect of any of the foregoing.

                “Total Debt to EBITDA Ratio” means, as of the last day of any
Fiscal Quarter, the ratio of (a) Total Debt outstanding on such day to (b)
EBITDA computed for the period consisting of such Fiscal Quarter and each of the
three immediately preceding Fiscal Quarters.

                “Total Exposure Amount” means, on any date of determination (and
without duplication), the outstanding principal amount of all Loans, the
aggregate amount of all Letter of Credit Outstandings and the unfunded amount of
the Commitments.

                “Trademark Security Agreement” means any trademark security
agreement executed and delivered by any Obligor, substantially in the form of
Exhibit B to any Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.

                “Transaction” is defined in the fourth recital.

                “Transaction Documents” means, collectively, each document
entered into in connection with any part the Transaction, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with Section 7.2.12.

                “type” means, relative to any Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a LIBO Rate Loan.

                “UCC” means the Uniform Commercial Code as in effect from time
to time in the State of New York; provided that if, with respect to any Filing
Statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, then “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions of
each Loan Document and any Filing Statement relating to such perfection or
effect of perfection or non-perfection.

                “United States” or “U.S.” means the United States of America,
its fifty states and the District of Columbia.

                “Voting Interests” means, with respect to any Person, Equity
Interests of any class or kind ordinarily having the power to vote for the
election of directors, managers or other voting members of the governing body of
such Person.

                “WCAS Debt” means the subordinated Indebtedness of the Borrower
owed to WCAS Capital Partners III, L.P. and evidenced by the WCAS Note.

                “WCAS Note” is defined in the fourth recital.

                “Welfare Plan” means a “welfare plan”, as such term is defined
in Section 3(1) of ERISA.

                “Wholly-Owned Subsidiary” means any Subsidiary all of the
outstanding Equity Interests of which (other than any director’s qualifying
shares) are owned directly or indirectly by the Borrower.

                SECTION 1.2. Use of Defined Terms. Unless otherwise defined or
the context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.

                SECTION 1.3. Cross-References. Unless otherwise specified,
references in a Loan Document to any Article or Section are references to such
Article or Section of such Loan Document, and references in any Article, Section
or definition to any clause are references to such clause of such Article,
Section or definition.

                SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used in each Loan Document shall be
interpreted, and all accounting determinations and computations thereunder
(including under Section 7.2.4 and the definitions used in such calculations)
shall be made, in accordance with those generally accepted accounting principles
(“GAAP”) applied in the preparation of the financial statements referred to in
clause (a) of Section 5.1.12. Unless otherwise expressly provided, all financial
covenants and defined financial terms shall be computed on a consolidated basis
for the Borrower and its Consolidated Entities, in each case without
duplication.

ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT

                SECTION 2.1. Commitments. On the terms and subject to the
conditions of this Agreement, the Lenders and the Issuer severally agree to make
Credit Extensions as set forth below.

                SECTION 2.1.1. Revolving Loan Commitment. From time to time on
any Business Day occurring from and after the Effective Date but prior to the
Commitment Termination Date, each Lender that has a Revolving Loan Commitment
agrees that it will make loans (relative to such Lender, its “Revolving Loans”)
to the Borrower equal to such Lender’s Percentage of the aggregate amount of
each Borrowing of the Revolving Loans requested by the Borrower to be made on
such day. On the terms and subject to the conditions hereof, the Borrower may
from time to time borrow, prepay and reborrow Revolving Loans. No Lender shall
be permitted or required to make any Revolving Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Revolving Loans of
such Lender, together with such Lender’s Percentage of the aggregate amount of
all Letter of Credit Outstandings, would exceed such Lender’s Percentage of the
then existing Revolving Loan Commitment Amount.

                SECTION 2.1.2. Letter of Credit Commitment. From time to time on
any Business Day occurring from and after the Effective Date but prior to the
Commitment Termination Date, the relevant Issuer agrees that it will

                (a) issue one or more standby letters of credit (relative to
such Issuer, its “Letter of Credit”) for the account of the Borrower or any
Subsidiary Guarantor in the Stated Amount requested by the Borrower on such day;
or

                (b) extend the Stated Expiry Date of an existing standby Letter
of Credit previously issued hereunder.

No Stated Expiry Date shall extend beyond the earlier of (i) the Commitment
Termination Date and (ii) unless otherwise agreed to by the Issuer in its sole
discretion, one year from the date of such extension. No Issuer shall be
permitted or required to issue any Letter of Credit if, after giving effect
thereto, (i) the aggregate amount of all Letter of Credit Outstandings would
exceed the Letter of Credit Commitment Amount or (ii) the sum of the aggregate
amount of all Letter of Credit Outstandings plus the aggregate principal amount
of all Revolving Loans then outstanding would exceed the Revolving Loan
Commitment Amount.

                SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time as set forth below.

                SECTION 2.2.1. Optional. The Borrower may, from time to time on
any Business Day occurring after the Effective Date, voluntarily reduce the
amount of the Revolving Loan Commitment Amount or the Letter of Credit
Commitment Amount on the Business Day so specified by the Borrower; provided
that all such reductions shall require at least one Business Day’s prior notice
to the Administrative Agent and be permanent, and any partial reduction of any
Commitment Amount shall be in a minimum amount of $1,000,000 and in an integral
multiple of $500,000. Any optional or mandatory reduction of the Revolving Loan
Commitment Amount pursuant to the terms of this Agreement which reduces the
Revolving Loan Commitment Amount below the Letter of Credit Commitment Amount
shall result in an automatic and corresponding reduction of the Letter of Credit
Commitment Amount (as directed by the Borrower in a notice to the Administrative
Agent delivered together with the notice of such voluntary reduction in the
Revolving Loan Commitment Amount) to an aggregate amount not in excess of the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of the Issuer.

                SECTION 2.2.2. Mandatory. The Revolving Loan Commitment Amount
shall, without any further action, automatically and permanently be reduced on
the date that Revolving Loans are required to be prepaid with any Net Equity
Proceeds, Net Disposition Proceeds or Net Casualty Proceeds in an amount equal
to the amount by which Revolving Loans are required to be prepaid.

                SECTION 2.3. Borrowing Procedures. By delivering a Borrowing
Request to the Administrative Agent on or before 10:00 a.m. on a Business Day,
the Borrower may from time to time irrevocably request, on such Business Day in
the case of Base Rate Loans, or on not less than three Business Days’ notice in
the case of LIBO Rate Loans, and in either case not more than five Business
Days’ notice, that a Borrowing be made, in the case of LIBO Rate Loans, in a
minimum amount of $1,000,000 and an integral multiple of $250,000, in the case
of Base Rate Loans, in a minimum amount of $250,000 and an integral multiple of
$100,000 or, in either case, in the unused amount of the applicable Commitment;
provided that all of the initial Loans shall be made as Base Rate Loans. On the
terms and subject to the conditions of this Agreement, each Borrowing shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such Borrowing Request. On or before 11:00 a.m. on such Business Day, each
Lender that has a Commitment to make the Loans being requested shall deposit
with the Administrative Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No Lender’s
obligation to make any Loan shall be affected by any other Lender’s failure to
make any Loan.

                SECTION 2.4. Continuation and Conversion Elections. By
delivering a Continuation/Conversion Notice to the Administrative Agent on or
before 10:00 a.m. on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Day’s notice in the case of
Base Rate Loans, or three Business Days’ notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days’ notice, that all, or any
portion in an aggregate minimum amount of $250,000 and an integral multiple of
$100,000 be, in the case of Base Rate Loans, converted into LIBO Rate Loans or
be, in the case of LIBO Rate Loans, converted into Base Rate Loans or continued
as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days (but not
more than five Business Days) before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided that (x) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Lenders that have made such Loans, and (y) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, LIBO Rate Loans when any Default has occurred and is continuing.

                SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill
its obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided that
such LIBO Rate Loan shall nonetheless be deemed to have been made and to be held
by such Lender, and the obligation of the Borrower to repay such LIBO Rate Loan
shall nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. In addition, the Borrower hereby
consents and agrees that, for purposes of any determination to be made for
purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that
each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in
its LIBOR Office’s interbank eurodollar market.

                SECTION 2.6. Issuance Procedures. By delivering to the
Administrative Agent an Issuance Request on or before 10:00 a.m. on a Business
Day, the Borrower may from time to time irrevocably request on not less than
three nor more than ten Business Days’ notice, in the case of an initial
issuance of a Letter of Credit and not less than three Business Days’ prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit (in each case, unless a shorter notice period is
agreed to by the Issuer, in its sole discretion), that an Issuer issue, or
extend the Stated Expiry Date of, a Letter of Credit in such form as may be
requested by the Borrower and approved by such Issuer, solely for the purposes
described in Section 7.1.7. Each Letter of Credit shall by its terms be stated
to expire on a date (its “Stated Expiry Date”) no later than the earlier to
occur of (i) the Commitment Termination Date or (ii) (unless otherwise agreed to
by an Issuer, in its sole discretion), one year from the date of its issuance.
Each Issuer will make available to the beneficiary thereof the original of the
Letter of Credit which it issues.

                SECTION 2.6.1. Other Lenders’ Participation. Upon the issuance
of each Letter of Credit, and without further action, each Lender (other than
such Issuer) shall be deemed to have irrevocably purchased, to the extent of its
Percentage, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Lender shall, to the extent of its Percentage, be responsible for
reimbursing within one Business Day the Issuer for Reimbursement Obligations
which have not been reimbursed by the Borrower in accordance with Section 2.6.3.
In addition, such Lender shall, to the extent of its Percentage, be entitled to
receive a ratable portion of the Letter of Credit fees payable pursuant to
Section 3.3.3 with respect to each Letter of Credit (other than the issuance
fees payable to an Issuer of such Letter of Credit pursuant to the last sentence
of Section 3.3.3) and of interest payable pursuant to Section 3.2 with respect
to any Reimbursement Obligation. To the extent that any Lender has reimbursed
any Issuer for a Disbursement, such Lender shall be entitled to receive its
ratable portion of any amounts subsequently received (from the Borrower or
otherwise) in respect of such Disbursement.

                SECTION 2.6.2. Disbursements. An Issuer will notify the Borrower
and the Administrative Agent promptly of the presentment for payment of any
Letter of Credit issued by such Issuer, together with notice of the date (the
“Disbursement Date”) such payment shall be made (each such payment, a
“Disbursement”). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the applicable Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 11:00 a.m. on
the first Business Day following the Disbursement Date, the Borrower will
reimburse the Administrative Agent, for the account of the applicable Issuer,
for all amounts which such Issuer has disbursed under such Letter of Credit,
together with interest thereon at a rate per annum equal to the rate per annum
then in effect for Base Rate Loans (with the then Applicable Margin for
Revolving Loans accruing on such amount) pursuant to Section 3.2 for the period
from the Disbursement Date through the date of such reimbursement. Without
limiting in any way the foregoing and notwithstanding anything to the contrary
contained herein or in any separate application for any Letter of Credit, the
Borrower hereby acknowledges and agrees that it shall be obligated to reimburse
the applicable Issuer upon each Disbursement of a Letter of Credit, and it shall
be deemed to be the obligor for purposes of each such Letter of Credit issued
hereunder (whether the account party on such Letter of Credit is the Borrower or
a Subsidiary Guarantor).

                SECTION 2.6.3. Reimbursement. The obligation (a “Reimbursement
Obligation”) of the Borrower under Section 2.6.2 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse an Issuer, each Lender’s obligation under Section
2.6.1 to reimburse an Issuer, shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or such Lender, as the case may be, may have or have
had against such Issuer or any Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit (if, in such Issuer’s good faith opinion, such Disbursement is determined
to be appropriate) or any non-application or misapplication by the beneficiary
of the proceeds of such Letter of Credit; provided that after paying in full its
Reimbursement Obligation hereunder, nothing herein shall adversely affect the
right of the Borrower or such Lender, as the case may be, to commence any
proceeding against an Issuer for any wrongful Disbursement made by such Issuer
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of such Issuer.

                SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and
during the continuation of any Default under Section 8.1.9 or upon notification
by the Administrative Agent (acting at the direction of the Required Lenders) to
the Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,

                (a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person, be deemed to
have been paid or disbursed by the Issuer of such Letters of Credit
(notwithstanding that such amount may not in fact have been paid or disbursed);
and

                (b) the Borrower shall be immediately obligated to reimburse the
Issuer for the amount deemed to have been so paid or disbursed by such Issuer.
Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to the
deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.

                SECTION 2.6.5. Nature of Reimbursement Obligations. The
Borrower, each other Obligor and, to the extent set forth in Section 2.6.1, each
Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. No Issuer (except to the extent of its own
gross negligence or wilful misconduct) shall be responsible for:

                (a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged;

                (b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
the proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;

                (c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;

                (d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise; or

                (e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter of
Credit.

None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Lender hereunder. In furtherance
and not in limitation or derogation of any of the foregoing, any action taken or
omitted to be taken by an Issuer in good faith (and not constituting gross
negligence or willful misconduct) shall be binding upon each Obligor and each
such Secured Party, and shall not put such Issuer under any resulting liability
to any Obligor or any Secured Party, as the case may be.

                SECTION 2.7. Revolving Notes. (a) The Borrower agrees that, upon
the request to the Administrative Agent by any Lender, the Borrower will execute
and deliver to such Lender a Revolving Note evidencing the Loans made by, and
payable to the order of, such Lender in a maximum principal amount equal to such
Lender’s Percentage of the Revolving Loan Commitment Amount. The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender’s Revolving Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal amount of, and the interest rate
and Interest Period applicable to the Loans evidenced thereby. Such notations
shall, to the extent not inconsistent with notations made by the Administrative
Agent in the Register, be conclusive and binding on each Obligor absent manifest
error; provided that the failure of any Lender to make any such notations shall
not limit or otherwise affect any Obligations of any Obligor.

                (b) The Borrower hereby designates the Administrative Agent to
serve as the Borrower’s agent, solely for the purpose of this clause, to
maintain a register (the “Register”) on which the Administrative Agent will
record each Lender’s Commitment, the Loans made by each Lender and each
repayment in respect of the principal amount of the Loans, annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 10.10. Failure to make
any recordation, or any error in such recordation, shall not affect any
Obligor’s Obligations. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders shall treat each Person in whose name a Loan is registered (or, if
applicable, to which a Revolving Note has been issued) as the owner thereof for
the purposes of all Loan Documents, notwithstanding notice or any provision
herein to the contrary. Any assignment or transfer of a Commitment or the Loans
made pursuant hereto shall be registered in the Register only upon delivery to
the Administrative Agent of a Lender Assignment Agreement that has been executed
by the requisite parties pursuant to Section 10.10. No assignment or transfer of
a Lender’s Commitment or Loans shall be effective unless such assignment or
transfer shall have been recorded in the Register by the Administrative Agent as
provided in this Section.

ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

                SECTION 3.1. Repayments and Prepayments; Application. The
Borrower agrees that the Loans shall be repaid and prepaid pursuant to the
following terms.

                SECTION 3.1.1. Repayments and Prepayments. The Borrower shall
repay in full the unpaid principal amount of each Loan upon the applicable
Stated Maturity Date therefor. Prior thereto, payments and prepayments of the
Loans shall or may be made as set forth below.

                (a) From time to time on any Business Day, the Borrower may make
a voluntary prepayment, in whole or in part, of the outstanding principal amount
of any Revolving Loans; provided that (A) any such prepayment of Revolving Loans
shall be made pro rata among the Revolving Loans of the same type and, if
applicable, having the same Interest Period of all Lenders that have made such
Revolving Loans; (B) all such voluntary prepayments shall require at least one
but no more than five Business Days’ prior notice to the Administrative Agent;
and (C) all such voluntary partial prepayments shall be, in the case of LIBO
Rate Loans, in an aggregate minimum amount of $1,000,000 and an integral
multiple of $250,000 and, in the case of Base Rate Loans, in an aggregate
minimum amount of $250,000 and an integral multiple of $100,000.

                (b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and (ii) the aggregate amount of all
Letter of Credit Outstandings exceeds the Revolving Loan Commitment Amount (as
it may be reduced from time to time pursuant to this Agreement), the Borrower
shall make a mandatory prepayment of Revolving Loans and, if necessary, Cash
Collateralize all Letter of Credit Outstandings, in an aggregate amount equal to
such excess.

                (c) Concurrently with the receipt by the Borrower of any Net
Equity Proceeds, the Borrower shall make a mandatory prepayment of the Loans in
an amount equal to 50% of such Net Equity Proceeds, to be applied as set forth
in Section 3.1.2; provided that no such prepayment shall be required to be made
beyond the extent that the amount of Total Debt as reduced by giving effect to
such prepayment would result, on a pro forma basis, in a Total Debt to EBITDA
Ratio of 3.0:1 or less as of the end of the immediately preceding Fiscal
Quarter.

                (d) Concurrently with the receipt by the Borrower or any of its
Subsidiary Guarantors of any Net Disposition Proceeds, the Borrower shall
deliver to the Administrative Agent a calculation of the amount of such Net
Disposition Proceeds and, to the extent the amount of such Net Disposition
Proceeds with respect to any single transaction or series of related
transactions exceeds $50,000 (up to a maximum aggregate amount equal to $250,000
in any Fiscal Year), make a mandatory prepayment of the Loans in an amount equal
to 100% of such Net Disposition Proceeds, to be applied as set forth in Section
3.1.2; provided that no mandatory prepayment on account of such Net Disposition
Proceeds shall be required under this clause if the Borrower informs the
Administrative Agent no later than 30 days following the receipt of any Net
Disposition Proceeds of its or its Subsidiary Guarantor’s good faith intention
to apply such Net Disposition Proceeds to the acquisition of other assets or
property consistent with the business permitted to be conducted pursuant to
Section 7.2.1 (including by way of merger or Investment) within 365 days
following the receipt of such Net Disposition Proceeds, with the amount of such
Net Disposition Proceeds unused after such 365 day period being applied to the
Loans as set forth in Section 3.1.2.

                (e) Concurrently with the receipt by the Borrower or any of its
Subsidiary Guarantors of any Net Casualty Proceeds, the Borrower shall make a
mandatory prepayment of the Loans in an amount equal to 100% of such Net
Casualty Proceeds, to be applied as set forth in Section 3.1.2; provided that no
mandatory prepayment on account of Net Casualty Proceeds shall be required under
this clause if the Borrower informs the Administrative Agent no later  than 30
days following the occurrence of the Casualty Event resulting in such Net
Casualty Proceeds of its or its Subsidiary Guarantor’s good faith intention to
apply such Net Casualty Proceeds to the rebuilding or replacement of the
damaged, destroyed or condemned assets or  property subject to such Casualty
Event or the acquisition of other assets or property consistent with the
business permitted to be conducted pursuant to Section 7.2.1 (including by way
of  merger or Investment) and in fact uses such Net Casualty Proceeds to rebuild
or replace the damaged, destroyed or condemned assets or property subject to
such Casualty Event or to acquire such other property or assets within 365 days
following the receipt of such Net Casualty Proceeds, with the amount of such Net
Casualty Proceeds unused after such 365 day period being applied to the Loans as
set forth in Section 3.1.2; provided further, however, that at any time when any
Event of Default shall have occurred and be continuing or Net Casualty Proceeds
not applied as provided above shall exceed $1,000,000, such Net Casualty
Proceeds will be deposited in an account maintained with the Administrative
Agent (over which the Administrative Agent has sole dominion and control) for
disbursement at the request of the Borrower to pay for such rebuilding,
replacement or acquisition.

                (f) No later than five Business Days following the delivery by
the Borrower of its annual audited financial reports required pursuant to clause
(b) of Section 7.1.1 (beginning with the financial reports delivered in respect
of the 2001 Fiscal Year), the Borrower shall deliver to the Administrative Agent
a calculation of the Excess Cash Flow for the Fiscal Year last ended and, no
later than five Business Days following the delivery of such calculation, make
or cause to be made a mandatory prepayment of the Loans in an amount equal to
50% of the Excess Cash Flow (if any) for such Fiscal Year, to be applied as set
forth in Section 3.1.2; provided that no such prepayment shall be required to be
made beyond the extent that the amount of Total Debt as reduced by giving effect
to such prepayment would result, on a pro forma basis, in a Total Debt to EBITDA
Ratio of 3.0:1 or less as of the end of the immediately preceding Fiscal
Quarter.

                (g) Immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, the Borrower shall
repay all the Loans, unless, pursuant to Section 8.3, only a portion of all the
Loans is so accelerated (in which case the portion so accelerated shall be so
repaid).

Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.

                SECTION 3.1.2. Application. Amounts prepaid pursuant to Section
3.1.1 shall be applied as set forth in this Section.

                (a) Subject to clause (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such prepayment or
repayment, first, to the principal amount thereof being maintained as Base Rate
Loans, and second, subject to the terms of Section 4.4, to the principal amount
thereof being maintained as LIBO Rate Loans.

                (b) Each prepayment of the Loans made pursuant to clauses (c),
(d) and (e) of Section 3.1.1 shall result in a corresponding reduction of the
Revolving Loan Commitment Amount in accordance with Section 2.2.2.

                SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with the
terms set forth below.

                SECTION 3.2.1. Rates. Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect that
Loans comprising a Borrowing accrue interest at a rate per annum:

                (a) on that portion maintained from time to time as a Base Rate
Loan, equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; and

                (b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate (Reserve
Adjusted) for such Interest Period plus the Applicable Margin.

All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.

                SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan or Reimbursement Obligation is due and payable (whether on
the Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to (a) in the
case of overdue principal on any Loan, the rate of interest that otherwise would
be applicable to such Loan plus 2% per annum; and (b) in the case of overdue
interest, fees, and other monetary Obligations, the Alternate Base Rate plus 2%
per annum.

                SECTION 3.2.3. Payment Dates. Interest accrued on each Loan
shall be payable, without duplication:

                (a) on the Stated Maturity Date therefor;

                (b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so paid or
prepaid;

                (c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Effective Date;

                (d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the date occurring on each three-month interval occurring after the
first day of such Interest Period);

                (e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and

                (f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon
such acceleration.

Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.

                SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth
below. All such fees shall be non-refundable.

                SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitments are suspended by reason of the
Borrower’s inability to satisfy any condition of Article V) commencing on the
Effective Date and continuing through the Commitment Termination Date, a
commitment fee in an amount per annum equal to 0.50% of such Lender’s Percentage
of the sum of the average daily unused portion of the Revolving Loan Commitment
Amount (net of Letter of Credit Outstandings). All commitment fees payable
pursuant to this Section shall be calculated on a year comprised of 360 days and
payable by the Borrower in arrears on the Effective Date and thereafter on each
Quarterly Payment Date, commencing with the first Quarterly Payment Date
following the Effective Date, and on the Commitment Termination Date.

                SECTION 3.3.2. Agent’s Fee. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees in the amounts and on the
dates set forth in the Fee Letter.

                SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay
to the Administrative Agent, for the pro rata account of the applicable Issuer
and each Lender, a Letter of Credit fee in an amount equal to the then effective
Applicable Margin for Revolving Loans maintained as LIBO Rate Loans, multiplied
by the Stated Amount of each such Letter of Credit, such fees being payable
quarterly in arrears on each Quarterly Payment Date following the date of
issuance of each Letter of Credit and on the Commitment Termination Date. The
Borrower further agrees to pay to the applicable Issuer quarterly in arrears on
each Quarterly Payment Date following the date of issuance of each Letter of
Credit and on the Commitment Termination Date an issuance fee as specified in
the Fee Letter or as otherwise agreed to by the Borrower and such Issuer.

ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS

                SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Administrative Agent, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of such Lender to make, continue or convert any such LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans payable to such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.

                SECTION 4.2. Deposits Unavailable. If the Administrative Agent
shall have determined that

                (a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or

                (b) by reason of circumstances affecting it’s relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans;

then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.

                SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower
agrees to reimburse each Lender and Issuer for any increase in the cost to such
Lender or Issuer of, or any reduction in the amount of any sum receivable by
such Secured Party in respect of, such Secured Party’s Commitments and the
making of Credit Extensions hereunder (including the making, continuing or
maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the Closing
Date of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for such changes with respect to increased capital costs and Taxes which are
governed by Sections 4.5 and 4.6, respectively. Each affected Secured Party
shall promptly notify the Administrative Agent and the Borrower in writing of
the occurrence of any such event, stating the reasons therefor and the
additional amount required fully to compensate such Secured Party for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower directly to such Secured Party within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower.

                SECTION 4.4. Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of

                (a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Article III or
otherwise;

                (b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or

                (c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice therefor;

then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower.

                SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person’s capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon notice from time to time by such
Secured Party to the Borrower, the Borrower shall within five days following
receipt of such notice pay directly to such Secured Party additional amounts
sufficient to compensate such Secured Party or such controlling Person for such
reduction in rate of return. A statement of such Secured Party as to any such
additional amount or amounts shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such Secured
Party may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.

                SECTION 4.6. Taxes. The Borrower covenants and agrees as follows
with respect to Taxes.

                (a) Any and all payments by the Borrower under each Loan
Document shall be made without setoff, counterclaim or other defense, and free
and clear of, and without deduction or withholding for or on account of, any
Taxes. In the event that any Taxes are imposed and required to be deducted or
withheld from any payment required to be made by any Obligor to or on behalf of
any Secured Party under any Loan Document, then:

                (i) subject to clause (f), if such Taxes are Non-Excluded Taxes,
the amount of such payment shall be increased as may be necessary so that such
payment is made, after withholding or deduction for or on account of such Taxes,
in an amount that is not less than the amount provided for in such Loan
Document; and

                (ii) the Borrower shall withhold the full amount of such Taxes
from such payment (as increased pursuant to clause (a)(i)) and shall pay such
amount to the Governmental Authority imposing such Taxes in accordance with
applicable law.

                (b) In addition, the Borrower shall pay all Other Taxes imposed
to the relevant Governmental Authority imposing such Other Taxes in accordance
with applicable law.

                (c) As promptly as practicable after the payment of any Taxes or
Other Taxes, and in any event within 45 days of any such payment being due, the
Borrower shall furnish to the Administrative Agent a copy of an official receipt
(or a certified copy thereof) evidencing the payment of such Taxes or Other
Taxes. The Administrative Agent shall make copies thereof available to any
Lender upon request therefor.

                (d) Subject to clause (f), the Borrower shall indemnify each
Secured Party for any Non-Excluded Taxes and Other Taxes levied, imposed or
assessed on (and whether or not paid directly by) such Secured Party whether or
not such Non-Excluded Taxes or Other Taxes are correctly or legally asserted by
the relevant Governmental Authority. Promptly upon having knowledge that any
such Non-Excluded Taxes or Other Taxes have been levied, imposed or assessed,
and promptly upon notice thereof by any Secured Party, the Borrower shall pay
such Non-Excluded Taxes or Other Taxes directly to the relevant Governmental
Authority (provided that no Secured Party shall be under any obligation to
provide any such notice to the Borrower). In addition, the Borrower shall
indemnify each Secured Party for any incremental Taxes that may become payable
by such Secured Party as a result of any failure of theBorrower to pay any Taxes
when due to the appropriate Governmental Authority or to deliver to the
Administrative Agent, pursuant to clause (c), documentation evidencing the
payment of Taxes or Other Taxes. With respect to indemnification for
Non-Excluded Taxes and Other Taxes actually paid by any Secured Party or the
indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date such Secured Party
makes written demand therefor. The Borrower acknowledges that any payment made
to any Secured Party or to any Governmental Authority in respect of the
indemnification obligations of the Borrower provided in this clause shall
constitute a payment in respect of which the provisions of clause (a) and this
clause shall apply.

                (e) Each Non-U.S. Lender, on or prior to the date on which such
Non-U.S. Lender becomes a Lender hereunder (and from time to time thereafter
upon the request of the Borrower or the Administrative Agent, but only for so
long as such non-U.S. Lender is legally entitled to do so), shall deliver to the
Borrower and the Administrative Agent either (i) two duly completed copies of
either (x) Internal Revenue Service Form W-8BEN claiming eligibility of the
Non-U.S. Lender for benefits of an income tax treaty to which the United States
is a party or (y) Internal Revenue Service Form W-8ECI, or in either case an
applicable successor form; or (ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause (e)(i), (x) a
certificate to the effect that such Non-U.S. Lender is not (A) a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder”
of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (referred to as an “Exemption
Certificate”) and (y) two duly completed copies of Internal Revenue Service Form
W-8BEN or applicable successor form.

                (f) The Borrower shall not be obligated to pay any additional
amounts to any Lender pursuant to clause (a)(i), or to indemnify any Lender
pursuant to clause (d), in respect of United States federal withholding taxes to
the extent imposed as a result of (i) the failure of such Lender to deliver to
the Borrower the form or forms and/or an Exemption Certificate, as applicable to
such Lender, pursuant to clause (e), (ii) such form or forms and/or Exemption
Certificate not establishing a complete exemption from U.S. federal withholding
tax or the information or certifications made therein by the Lender being untrue
or inaccurate on the date delivered in any material respect, or (iii) the Lender
designating a successor lending office at which it maintains its Loans which has
the effect of causing such Lender to become obligated for tax payments in excess
of those in effect immediately prior to such designation; provided that the
Borrower shall be obligated to pay additional amounts to any such Lender
pursuant to clause (a)(i), and to indemnify any such Lender pursuant to clause
(d), in respect of United States federal withholding taxes if (i) any such
failure to deliver a form or forms or an Exemption Certificate or the failure of
such form or forms or Exemption Certificate to establish a complete exemption
from U.S. federal withholding tax or inaccuracy or untruth contained therein
resulted from a change in any applicable statute, treaty, regulation or other
applicable law or any interpretation of any of the foregoing occurring after the
Closing Date, which change rendered such Lender no longer legally entitled to
deliver such form or forms or Exemption Certificate or otherwise ineligible for
a complete exemption from U.S. federal withholding tax, or rendered the
information or certifications made in such form or forms or Exemption
Certificate untrue or inaccurate in a material respect, (ii) the redesignation
of the Lender’s lending office was made at the request of the Borrower or (iii)
the obligation to pay any additional amounts to any such Lender pursuant to
clause (a)(i) or to indemnify any such Lender pursuant to clause (d) is with
respect to an assignee Lender that becomes a Lender as a result of an assignment
made at the request of the Borrower.

                SECTION 4.7. Payments, Computations, etc. Unless otherwise
expressly provided in a Loan Document, all payments by the Borrower pursuant to
each Loan Document shall be made by the Borrower to the Administrative Agent for
the pro rata account of the Secured Parties entitled to receive such payment.
All payments shall be made without setoff, deduction or counterclaim not later
than 11:00 a.m. on the date due in same day or immediately available funds to
such account as the Administrative Agent shall specify from time to time by
notice to the Borrower; provided that failure by the Administrative Agent to
provide such notice shall not excuse any required payments. Funds received after
that time shall be deemed to have been received by the Administrative Agent on
the next succeeding Business Day. The Administrative Agent shall promptly remit
in same day funds to each Secured Party its share, if any, of such payments
received by the Administrative Agent for the account of such Secured Party. All
interest (including interest on LIBO Rate Loans) and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Payments due on other than a Business Day shall (except
as otherwise required by clause (c) of the definition of “Interest Period”) be
made on the next succeeding Business Day and such extension of time shall be
included in computing interest and fees in connection with that payment.

                SECTION 4.8. Sharing of Payments. If any Secured Party shall
obtain any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) on account of any Credit Extension or
Reimbursement Obligation (other than pursuant to the terms of Sections 4.3, 4.4,
4.5 or 4.6) in excess of its pro rata share of payments obtained by all Secured
Parties, such Secured Party shall purchase from the other Secured Parties such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Secured Party to share the excess payment or other recovery
ratably (to the extent such other Secured Parties were entitled to receive a
portion of such payment or recovery) with each of them; provided that if all or
any portion of the excess payment or other recovery is thereafter recovered from
such purchasing Secured Party, the purchase shall be rescinded and each Secured
Party which has sold a participation to the purchasing Secured Party shall repay
to the purchasing Secured Party the purchase price to the ratable extent of such
recovery together with an amount equal to such selling Secured Party’s ratable
share (according to the proportion of (a) the amount of such selling Secured
Party’s required repayment to the purchasing Secured Party to (b) total amount
so recovered from the purchasing Secured Party) of any interest or other amount
paid or payable by the purchasing Secured Party in respect of the total amount
so recovered. The Borrower agrees that any Secured Party purchasing a
participation from another Secured Party pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment (including
pursuant to Section 4.9) with respect to such participation as fully as if such
Secured Party were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law any Secured Party receives a secured claim in lieu of a setoff to which this
Section applies, such Secured Party shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Secured Parties entitled under this Section to share in the
benefits of any recovery on such secured claim.

                SECTION 4.9. Setoff. Each Secured Party shall, upon the
occurrence and during the continuance of any Default described in clauses (a)
through (d) of Section 8.1.9 or, with the consent of the Required Lenders, upon
the occurrence and during the continuance of any other Event of Default, have
the right to appropriate and apply to the payment of the Obligations owing to it
(whether or not then due), and (as security for such Obligations) the Borrower
hereby grants to each Secured Party a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Secured Party; provided that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Secured Party agrees promptly to notify the Borrower and the Administrative
Agent after any such setoff and application made by such Secured Party; provided
that the failure to give such notice shall not affect the validity of such
setoff and application. The rights of each Secured Party under this Section are
in addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Secured Party may have.

ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS

                SECTION 5.1. Initial Credit Extension. The obligations of the
Lenders and, if applicable, the Issuer to fund the initial Credit Extension
shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Article.

                SECTION 5.1.1. Resolutions, etc. The Administrative Agent shall
have received from each Obligor, as applicable, (i) a copy of a good standing
certificate, dated a date reasonably close to the Closing Date, for each such
Obligor and (ii) a certificate, dated the Closing Date, duly executed and
delivered by such Obligor’s Secretary or Assistant Secretary, managing member or
general partner, as applicable, as to

                (a) resolutions of each such Obligor’s Board of Directors (or
other managing body, in the case of other than a corporation) then in full force
and effect authorizing, to the extent relevant, all aspects of the Transaction
applicable to such Obligor and the execution, delivery and performance of each
Loan Document to be executed by such Obligor and the transactions contemplated
hereby and thereby;

                (b) the incumbency and signatures of those of its officers,
managing member or general partner, as applicable, authorized to act with
respect to each Loan Document to be executed by such Obligor; and

                (c) the full force and validity of each Organic Document of such
Obligor and copies thereof;

upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Obligor canceling
or amending the prior certificate of such Obligor.

                SECTION 5.1.2. Delivery of Revolving Notes. The Administrative
Agent shall have received, for the account of each Lender that has requested a
Revolving Note, such Lender’s Revolving Notes, duly executed and delivered by an
Authorized Officer of the Borrower.

                SECTION 5.1.3. Subsidiary Guaranty. The Administrative Agent
shall have received the Subsidiary Guaranty, dated as of the date hereof, duly
executed and delivered by an Authorized Officer of each Subsidiary Guarantor.

                SECTION 5.1.4. Parent Guaranty and Pledge Agreement. The
Administrative Agent shall have received the Parent Guaranty and Pledge
Agreement, dated as of the date hereof, duly executed and delivered by an
Authorized Officer of Parent, together with certificates evidencing all of the
issued and outstanding Equity Interests of Holdings, which certificates in each
case shall be accompanied by undated instruments of transfer duly executed in
blank. The Administrative Agent and its counsel shall be satisfied that (i) the
Lien granted to the Administrative Agent, for the benefit of the Secured
Parties, in the collateral described above is a first priority (or local
equivalent thereof) security interest, and (ii) no Lien exists on any of the
collateral described above other than the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan
Document.

                SECTION 5.1.5. Holdings Guaranty and Pledge Agreement. The
Administrative Agent shall have received the Holdings Guaranty and Pledge
Agreement, dated as of the date hereof, duly executed and delivered by an
Authorized Officer of Holdings, together with certificates evidencing all of the
issued and outstanding Equity Interests of the Borrower and USP International
Holdings, Inc., which certificates in each case shall be accompanied by undated
instruments of transfer duly executed in blank. The Administrative Agent and its
counsel shall be satisfied that (i) the Lien granted to the Administrative
Agent, for the benefit of the Secured Parties, in the collateral described above
is a first priority (or local equivalent thereof) security interest, and (ii) no
Lien exists on any of the collateral described above other than the Lien created
in favor of the Administrative Agent, for the benefit of the Secured Parties,
pursuant to a Loan Document.

                SECTION 5.1.6. Borrower Pledge and Security Agreement. The
Administrative Agent shall have received the Borrower Pledge and Security
Agreement, dated as of the date hereof, duly executed and delivered by an
Authorized Officer of the Borrower, together with:

                (a) certificates evidencing all of the issued and outstanding
Equity Interests owned by the Borrower in its Subsidiaries (other than
Restricted Entities), which certificates in each case shall be accompanied by
undated instruments of transfer duly executed in blank, or, if any Equity
Interests are uncertificated Equity Interests, confirmation and evidence
satisfactory to the Administrative Agent that the security interest therein has
been transferred to and perfected by the Administrative Agent for the benefit of
the Secured Parties in accordance with Articles 8 and 9 of the UCC and all laws
otherwise applicable to the perfection of the pledge of such Equity Interests;

                (b) all Intercompany Notes (as defined in the Borrower Pledge
and Security Agreement), if any, evidencing Indebtedness payable to the Borrower
duly endorsed to the order of the Administrative Agent, together with Filing
Statements (or similar instruments) in respect of such Intercompany Notes
executed by the Borrower to be filed in such jurisdictions as the Administrative
Agent may reasonably request;

                (c) executed copies of Filing Statements naming the Borrower as
a debtor and the Administrative Agent as the secured party, or other similar
instruments or documents to be filed under the UCC of all jurisdictions as may
be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the security interests of the Administrative Agent pursuant to the
Borrower Pledge and Security Agreement;

                (d) executed copies of proper UCC Form UCC-3 termination
statements, if any, necessary to release all Liens and other rights of any
Person (i) in any collateral described in the Borrower Pledge and Security
Agreement previously granted by any Person, and (ii) securing any of the
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule, together
with such other UCC Form UCC-3 termination statements as the Administrative
Agent may reasonably request from such Obligors; and

                (e) certified copies of UCC Requests for Information or Copies
(Form UCC-11), or a similar search report certified by a party acceptable to the
Administrative Agent, dated a date reasonably near to the Closing Date, listing
all effective financing statements which name the Borrower (under its present
name and any previous names) as the debtor, together with copies of such
financing statements (none of which shall cover any collateral described in any
Loan Document).

The Administrative Agent and its counsel shall be satisfied that (i) the Lien
granted to the Administrative Agent, for the benefit of the Secured Parties, in
the collateral described above is a first priority (or local equivalent thereof)
security interest, and (ii) no Lien exists on any of the collateral described
above other than the Lien created in favor of the Administrative Agent, for the
benefit of the Secured Parties, pursuant to a Loan Document.

                SECTION 5.1.7. Subsidiary Pledge and Security Agreement. The
Administrative Agent shall have received the Subsidiary Pledge and Security
Agreement, dated as of the date hereof, duly executed and delivered by an
Authorized Officer of each Subsidiary Guarantor, together with:

                (a) certificates evidencing all of the issued and outstanding
Equity Interests owned by such Subsidiary Guarantor in its Subsidiaries (other
than Restricted Entities), which certificates in each case shall be accompanied
by undated instruments of transfer duly executed in blank, or, if any Equity
Interests are uncertificated Equity Interests, confirmation and evidence
satisfactory to the Administrative Agent that the security interest therein has
been transferred to and perfected by the Administrative Agent for the benefit of
the Secured Parties in accordance with Articles 8 and 9 of the UCC and all laws
otherwise applicable to the perfection of the pledge of such Equity Interests;

                (b) all Intercompany Notes (as defined in the Subsidiary Pledge
and Security Agreement), if any, evidencing Indebtedness payable to a Subsidiary
duly endorsed to the order of the Administrative Agent, together with Filing
Statements (or similar instruments) in respect of such Intercompany Notes
executed by such Subsidiary to be filed in such jurisdictions as the
Administrative Agent may reasonably request;

                (c) executed copies of Filing Statements naming each such
Subsidiary as a debtor and the Administrative Agent as the secured party, or
other similar instruments or documents to be filed under the UCC of all
jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interests of the Administrative Agent
pursuant to the Borrower Pledge and Security Agreement;

                (d) executed copies of proper UCC Form UCC-3 termination
statements, if any, necessary to release all Liens and other rights of any
Person (i) in any collateral described in the Subsidiary Pledge and Security
Agreement previously granted by any Person, and (ii) securing any of the
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule, together
with such other UCC Form UCC-3 termination statements as the Administrative
Agent may reasonably request from such Obligors; and

                (e) certified copies of UCC Requests for Information or Copies
(Form UCC-11), or a similar search report certified by a party acceptable to the
Administrative Agent, dated a date reasonably near to the Closing Date, listing
all effective financing statements which name any such Subsidiary (under its
present name and any previous names) as the debtor, together with copies of such
financing statements (none of which shall cover any collateral described in any
Loan Document).

The Administrative Agent and its counsel shall be satisfied that (i) the Lien
granted to the Administrative Agent, for the benefit of the Secured Parties, in
the collateral described above is a first priority (or local equivalent thereof)
security interest, and (ii) no Lien exists on any of the collateral described
above other than the Lien created in favor of the Administrative Agent, for the
benefit of the Secured Parties, pursuant to a Loan Document. Notwithstanding the
foregoing, no Lien shall be granted by USP Chandler, Inc. on its Equity
Interests in Warner Park Surgery Center, L.P., so long as such Equity Interests
are assigned by USP Chandler, Inc. to Orthopedic and Surgical Specialty Company,
LLC on or before December 31, 2001.

                SECTION 5.1.8. Filing Agent, etc. All Uniform Commercial Code
financing statements or other similar financing statements and Uniform
Commercial Code (Form UCC-3) termination statements required pursuant to the
Loan Documents (collectively, the “Filing Statements”) shall have been delivered
to CT Corporation System or another similar filing service company acceptable to
the Administrative Agent (the “Filing Agent”). The Filing Agent shall have
acknowledged in a writing satisfactory to the Administrative Agent and its
counsel (i) the Filing Agent’s receipt of all Filing Statements, (ii) that the
Filing Statements have either been submitted for filing in the appropriate
filing offices or will be submitted for filing in the appropriate offices within
ten days following the Closing Date and (iii) that the Filing Agent will notify
the Administrative Agent and its counsel of the results of such submissions
within 30 days following the Closing Date.

                SECTION 5.1.9. Closing Date Certificate. The Administrative
Agent shall have received the Borrower Closing Date Certificate, dated the
Closing Date, duly executed and delivered by an Authorized Officer of the
Borrower, in which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct representations
and warranties of the Borrower as of such date, and, at the time each such
certificate is delivered, such statements shall in fact be true and correct. All
documents and agreements required to be appended to the Borrower Closing Date
Certificate shall be in form and substance satisfactory to the Administrative
Agent.

                SECTION 5.1.10. Solvency, etc. The Administrative Agent shall
have received a solvency certificate, dated the Closing Date, duly executed and
delivered by the chief financial or accounting Authorized Officer of the
Borrower, in form and substance satisfactory to the Administrative Agent.

                SECTION 5.1.11. Insurance. The Administrative Agent shall have
received certified copies of the insurance policies (or binders in respect
thereof), from one or more insurance companies satisfactory to the
Administrative Agent, evidencing coverage required to be maintained pursuant to
each Loan Document.

                SECTION 5.1.12. Financial Information, etc. The Administrative
Agent shall have received

                (a) (i) audited consolidated financial statements of OrthoLink
as at December 31, 2000, (ii) an audited consolidated balance sheet of the
Borrower and its Consolidated Entities as at December 31, 2000, and (iii) an
unaudited income statement of the Borrower and its Consolidated Subsidiaries as
December 31, 2000;

                (b) a pro forma unaudited consolidated balance sheet of the
Borrower and its Consolidated Entities as of April 30, 2001, certified by the
chief financial or accounting Authorized Officer of the Borrower, giving effect
to the consummation of the Transaction and all the transactions contemplated by
this Agreement (including the making of the initial Credit Extension), which
shall be satisfactory to the Administrative Agent;

                (c) a pro forma Compliance Certificate, dated the Closing Date,
certified by the chief financial or accounting Authorized Officer of the
Borrower, giving effect to the consummation of the Transaction and all the
transactions contemplated by this Agreement (including the making of the initial
Credit Extension) as of April 30, 2001, and as to such items therein as the
Administrative Agent reasonably requests;

                (d) a business plan for the 2001 through 2003 Fiscal Years,
together with cash flow projections for the 2001 through 2006 Fiscal Years and a
written analysis of the business and prospects of Parent, Holdings, the Borrower
and its Consolidated Entities for the period from the Closing Date through the
Stated Maturity Date, in each case satisfactory to the Administrative Agent; and

                (e) evidence satisfactory to the Administrative Agent that the
Borrower’s consolidated pro forma EBITDA, adjusted to give effect to the
subtraction of amounts attributable to Minority Interests and the consummation
of the acquisition of OrthoLink and inclusive of add-backs for certain one-time,
non-recurring charges not exceeding $6,700,000, for the 2000 Fiscal Year is not
less than $17,500,000.

                SECTION 5.1.13. Opinions of Counsel. The Administrative Agent
shall have received opinions, dated the Closing Date and addressed to the
Administrative Agent and all Lenders, from

                (a) Nossaman, Guthner, Knox & Elliott, LLP, special counsel to
the Obligors, in form and substance satisfactory to the Administrative Agent;

                (b) Reboul, MacMurray, Hewitt, Maynard & Kristol, New York
counsel to the Obligors, in form and substance satisfactory to the
Administrative Agent;

                (c) Greenebaum, Doll, McDonald, PLCC, Tennessee counsel to the
Obligors, in form and substance satisfactory to the Administrative Agent; and

                (d) Donohoe, Jameson & Carroll, PC, Texas counsel to the
Obligors, in form and substance satisfactory to the Administrative Agent.

                SECTION 5.1.14. Consummation of Transaction. The Administrative
Agent shall have received evidence satisfactory to it that all actions necessary
to consummate the Transaction shall have been taken in accordance with all
applicable law and in accordance with the terms of each applicable Transaction
Document, without amendment or waiver of any material provision thereof.

                SECTION 5.1.15. Transaction Documents. The Administrative Agent
shall have received copies of fully executed versions of the Transaction
Documents reasonably requested by the Administrative Agent, certified to be true
and complete copies thereof by an Authorized Officer of the Borrower. Each
Transaction Document shall be in full force and effect and shall not have been
modified or waived in any material respect, nor shall there have been any
forbearance to exercise any material rights with respect to any of the terms or
provisions relating to the conditions to the consummation of the Transaction, as
applicable, unless otherwise agreed to by the Required Lenders.

                SECTION 5.1.16. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule, together
with all interest, all prepayment premiums and other amounts due and payable
with respect thereto, shall have been paid in full from the proceeds of the
initial Credit Extension and the commitments in respect of such Indebtedness
shall have been terminated, and all Liens securing payment of any such
Indebtedness have been released and the Administrative Agent shall have received
all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith.

                SECTION 5.1.17. Closing Fees, Expenses, etc. The Administrative
Agent shall have received for its own account, or for the account of each
Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to Sections 3.3 and, if then invoiced, 10.3.

                SECTION 5.2. All Credit Extensions. The obligation of each
Lender and each Issuer to make any Credit Extension shall be subject to and the
satisfaction of each of the conditions precedent set forth below.

                SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:

                (a) the representations and warranties set forth in each Loan
Document shall, in each case, be true and correct with the same effect as if
then made (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date); and

                (b) no Default shall have then occurred and be continuing.

                SECTION 5.2.2. Credit Extension Request, etc. The Administrative
Agent shall have received a Borrowing Request if Loans are being requested, or
an Issuance Request if a Letter of Credit is being requested or extended. Each
of the delivery of a Borrowing Request or Issuance Request and the acceptance by
the Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct in all material respects.

                SECTION 5.2.3. Satisfactory Legal Form. All documents executed
or submitted pursuant hereto by or on behalf of any Obligor shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel,
and the Administrative Agent and its counsel shall have received all
information, approvals, opinions, documents or instruments as the Administrative
Agent or its counsel may reasonably request.

 

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

                In order to induce the Secured Parties to enter into this
Agreement and to make Credit Extensions hereunder, the Borrower represents and
warrants to each Secured Party as set forth in this Article.

                SECTION 6.1. Organization, etc. Each Obligor is validly
organized and existing and in good standing under the laws of the state or
jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its business requires such qualification (except where the failure
to so qualify would not, individually or in the aggregate, have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party, to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.

                SECTION 6.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by each Obligor of each Loan Document
executed or to be executed by it, each Obligor’s participation in the
consummation of all aspects of the Transaction, and the execution, delivery and
performance by the Borrower or (if applicable) any Obligor of the agreements
executed and delivered by it in connection with the Transaction are in each case
within such Person’s powers, have been duly authorized by all necessary action,
and do not

                (a) contravene or result in a default under any (i) Obligor’s
Organic Documents, (ii) contractual restriction binding on or affecting any
Obligor, (iii) court decree or order binding on or affecting any Obligor or (iv)
law or governmental regulation binding on or affecting any Obligor; or

                (b) result in, or require the creation or imposition of, any
Lien on any Obligor’s properties (except as permitted by this Agreement).

                SECTION 6.3. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other Person (other than those that have been, or
on the Closing Date will be, duly obtained or made and which are, or on the
Closing Date will be, in full force and effect, and other than those filings
required to be made after the Closing Date) is required for the consummation of
the Transaction or the due execution, delivery or performance by any Obligor of
any Loan Document to which it is a party, or for the due execution, delivery
and/or performance of Transaction Documents, in each case by the parties thereto
or the consummation of the Transaction. Neither the Borrower nor any of its
Consolidated Entities is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company”, within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

                SECTION 6.4. Validity, etc. Each Loan Document and each
Transaction Document to which any Obligor is a party constitutes the legal,
valid and binding obligations of such Obligor, enforceable against such Obligor
in accordance with their respective terms (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by
principles of equity).

                SECTION 6.5. Financial Information. The financial statements of
the Borrower and its Consolidated Entities furnished to the Administrative Agent
and each Lender pursuant to clause (a) of Section 5.1.12 have been prepared in
accordance with GAAP consistently applied, and present fairly the consolidated
financial condition of the Persons covered thereby as at the dates thereof and
the results of their operations for the periods then ended. All balance sheets,
all statements of income and of cash flow and all other financial information of
each of the Borrower and its Consolidated Entities furnished pursuant to Section
7.1.1 have been and will for periods following the Effective Date be prepared in
accordance with GAAP consistently applied with the financial statements
delivered pursuant to clause (a) of Section 5.1.12, and do or will present
fairly the consolidated financial condition of the Persons covered thereby as at
the dates thereof and the results of their operations for the periods then
ended.

                SECTION 6.6. No Material Adverse Change. There has been no
material adverse change in the condition (financial or otherwise), results of
operations, assets, business, properties or prospects of the Borrower or the
Borrower and its Consolidated Entities, taken as a whole, since December 31,
2000.

                SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower or any of its Consolidated
Entities, threatened litigation, action, proceeding or labor controversy

                (a) except as disclosed in Item 6.7 of the Disclosure Schedule,
affecting any Obligor or any of its properties, businesses, assets or revenues,
which could reasonably be expected to have a Material Adverse Effect, and no
adverse development has occurred in any labor controversy, litigation,
arbitration or governmental investigation or proceeding disclosed in Item 6.7,
or

                (b) which purports to affect the legality, validity or
enforceability of any Loan Document, the Transaction Documents or the
Transaction.

                SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries,
except those Subsidiaries which are identified in Item 6.8 of the Disclosure
Schedule, or which are permitted to have been organized or acquired in
accordance with Sections 7.2.5 or 7.2.10. Item 6.8 of the Disclosure Schedule
sets forth each Consolidated Entity, Non-Consolidated Entity, Operating Entity
and Restricted Entities.

                SECTION 6.9. Ownership of Properties. The Borrower and each of
its Consolidated Entities owns (a) in the case of owned real property, good fee
title to, and (b) in the case of owned personal property, good and valid title
to, or, in the case of leased real or personal property, valid and enforceable
leasehold interests (as the case may be) in, all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever, free and
clear in each case of all Liens or claims, except for Liens permitted pursuant
to Section 7.2.3.

                SECTION 6.10. Taxes. The Borrower and each of its Consolidated
Entities has filed all tax returns and reports required by law to have been
filed by it and has paid all material Taxes thereby shown to be due and owing,
except any such Taxes which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.

                SECTION 6.11. Pension and Welfare Plans. Except as disclosed in
Item 6.11 of the Disclosure Schedule, during the twelve-consecutive-month period
prior to the Effective Date and prior to the date of any Credit Extension
hereunder, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by the Borrower or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 6.11 of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled Group
has any contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part 6
of Title I of ERISA.

                SECTION 6.12. Environmental Warranties. Except as set forth in
Item 6.12 of the Disclosure Schedule:

                (a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Consolidated Entities
have been, and continue to be, owned or leased by the Borrower and its
Consolidated Entities in material compliance with all Environmental Laws;

                (b) there have been no past, and there are no pending or
threatened (i) claims, complaints, notices or requests for information received
by the Borrower or any of its Consolidated Entities with respect to any alleged
violation of any Environmental Law, or (ii) complaints, notices or inquiries to
the Borrower or any of its Consolidated Entities regarding potential liability
under any Environmental Law;

                (c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower or any of
its Consolidated Entities that have, or could reasonably be expected to have, a
Material Adverse Effect;

                (d) the Borrower and its Consolidated Entities have been issued
and are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters;

                (e) no property now or previously owned or leased by the
Borrower or any of its Consolidated Entities is listed or proposed for listing
(with respect to owned property only) on the National Priorities List pursuant
to CERCLA, on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;

                (f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or previously
owned or leased by the Borrower or any of its Consolidated Entities that, singly
or in the aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect;

                (g) neither the Borrower nor any Consolidated Entity has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for listing on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material claims
against the Borrower or such Consolidated Entity for any remedial work, damage
to natural resources or personal injury, including claims under CERCLA;

                (h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Borrower or any
Consolidated Entity that, singly or in the aggregate, have, or could reasonably
be expected to have, a Material Adverse Effect; and

                (i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of time, or
the giving of notice or both, would give rise to material liability under any
Environmental Law.

                SECTION 6.13. Accuracy of Information. The factual information
heretofore or contemporaneously furnished in writing to the Agents by or on
behalf of any Obligor, taken as a whole, in connection with any Loan Document or
any transaction contemplated hereby (including the Transaction) does not contain
any untrue statement of a material fact, or omits to state any fact necessary to
make any material statement contained therein not misleading in any material
respect, and no other factual information hereafter furnished in connection with
any Loan Document by or on behalf of any Obligor to any Secured Party will
contain any untrue statement of a material fact or will omit to state any fact
necessary to make any material information contained therein not misleading in
any material respect on the date as of which such information is dated or
certified.

                SECTION 6.14. Regulations T, U and X. No Obligor is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Credit Extensions will be used to purchase
or carry margin stock or otherwise for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulations T, U or X. Terms for which meanings
are provided in F.R.S. Board Regulations T, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this Section
with such meanings.

                SECTION 6.15. Absence of Any Undisclosed Liabilities. As of the
Closing Date, there are no material liabilities of any Obligor of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
which could be expected to result in such a liability, other than those
liabilities provided for or disclosed in the most recently delivered financial
statements or those liabilities that have been disclosed to the Administrative
Agent prior to the Closing Date.

                SECTION 6.16. Issuance of Subordinated Debt; Status of
Obligations as Senior Indebtedness, etc. The Borrower has the power and
authority to incur the Subordinated Debt as provided for under the Sub Debt
Documents applicable thereto and has duly authorized, executed and delivered the
Sub Debt Documents applicable to such Subordinated Debt. The Borrower has
issued, pursuant to due authorization, the Subordinated Debt under the
applicable Sub Debt Documents, and such Sub Debt Documents constitute the legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally and by principles of equity). The subordination
provisions of the Subordinated Debt contained in the Sub Debt Documents are
enforceable against the holders of the Subordinated Debt by the holder of any
“Senior Indebtedness” or similar term referring to the Obligations (as defined
in the Sub Debt Documents). All Obligations, including those to pay principal of
and interest (including post-petition interest, whether or not allowed as a
claim under bankruptcy or similar laws) on the Loans and Reimbursement
Obligations, and fees and expenses in connection therewith, constitute “Senior
Indebtedness” or similar term relating to the Obligations (as defined in the Sub
Debt Documents) and all such Obligations are entitled to the benefits of the
subordination created by the Sub Debt Documents. The Borrower acknowledges that
the Administrative Agent, each Lender and each Issuer is entering into this
Agreement and is extending its Commitments in reliance upon the subordination
provisions of the Sub Debt Documents.

 

ARTICLE VII
COVENANTS

                SECTION 7.1. Affirmative Covenants. The Borrower agrees with
each Lender, each Issuer and the Administrative Agent that until the Termination
Date has occurred, the Borrower will, and will cause its Consolidated Entities
to, perform or cause to be performed the obligations set forth below.

                SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish each Lender and the Administrative Agent copies of the
following financial statements, reports, notices and information:

                (a) as soon as available and in any event within 45 days after
the end of each Fiscal Quarter of each Fiscal Year, (i) unaudited consolidated
and consolidating balance sheets of the Borrower and its Consolidated Entities
as of the end of such Fiscal Quarter and consolidated statements of income and
cash flow of the Borrower and its Consolidated Entities for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in, and year
to date portion of, the immediately preceding Fiscal Year, and (ii) unaudited
consolidated and consolidating balance sheets of Parent and its Subsidiaries as
of the end of such Fiscal Quarter and consolidated and consolidating statements
of income and cash flow of Parent and its Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in, and year
to date portion of, the immediately preceding Fiscal Year, in the case of each
of clauses (i) and (ii) certified as presenting fairly the consolidated
financial condition of the Persons covered thereby by the chief financial or
accounting Authorized Officer of the Borrower;

                (b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a copy of the consolidated balance sheet of the
Borrower and its Consolidated Entities, and the related consolidated statements
of income and cash flow of the Borrower and its Consolidated Entities for such
Fiscal Year, setting forth in comparative form the figures for the immediately
preceding Fiscal Year, audited (without any Impermissible Qualification) by
independent public accountants acceptable to the Administrative Agent, which
shall include a calculation of the financial covenants set forth in Section
7.2.4 and a statement by such accountants that, in performing the examination
necessary to deliver the audited financial statements of the Borrower, no
knowledge was obtained of any Event of Default;

                (c) concurrently with the delivery of the financial information
pursuant to clauses (a) and (b), a Compliance Certificate, executed by the chief
financial or accounting Authorized Officer of the Borrower, showing compliance
with the financial covenants set forth in Section 7.2.4 and stating that no
Default has occurred and is continuing (or, if a Default has occurred,
specifying the details of such Default and the action that the Borrower or an
Obligor has taken or proposes to take with respect thereto);

                (d) as soon as possible and in any event within three days after
the Borrower or any other Obligor obtains knowledge of the occurrence of a
Default, a statement of an Authorized Officer of the Borrower setting forth
details of such Default and the action which the Borrower or such Obligor has
taken and proposes to take with respect thereto;

                (e) as soon as possible and in any event within three days after
the Borrower or any other Obligor obtains knowledge of (i) the occurrence of any
material adverse development with respect to any litigation, action, proceeding
or labor controversy described in Item 6.7 of the Disclosure Schedule or (ii)
the commencement of any litigation, action, proceeding or labor controversy of
the type and materiality described in Section 6.7, notice thereof and, to the
extent the Administrative Agent requests, copies of all documentation relating
thereto;

                (f) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which any Obligor
files with the SEC or any national securities exchange;

                (g) immediately upon becoming aware of (i) the institution of
any steps by any Person to terminate any Pension Plan, (ii) the failure to make
a required contribution to any Pension Plan if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any
action with respect to a Pension Plan which could result in the requirement that
any Obligor furnish a bond or other security to the PBGC or such Pension Plan,
or (iv) the occurrence of any event with respect to any Pension Plan which could
result in the incurrence by any Obligor of any material liability, fine or
penalty, notice thereof and copies of all documentation relating thereto;

                (h) promptly upon receipt thereof, copies of all “management
letters” submitted to the Borrower or any other Obligor by the independent
public accountants referred to in clause (b) in connection with each audit made
by such accountants;

                (i) promptly following the mailing or receipt of any notice or
report delivered under the terms of any Subordinated Debt, copies of such notice
or report; and

                (j) such other financial and other information as any Lender or
Issuer through the Administrative Agent may from time to time reasonably request
(including information and reports in such detail as the Administrative Agent
may request with respect to the terms of and information provided pursuant to
the Compliance Certificate).

                SECTION 7.1.2. Maintenance of Existence; Compliance with Laws,
etc. The Borrower will, and will cause each of its Consolidated Entities to,
preserve and maintain its legal existence (except as otherwise permitted by
Section 7.2.10), and comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same become
delinquent), of all Taxes, imposed upon the Borrower or its Consolidated
Entities or upon their property except to the extent being diligently contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside on the books of the Borrower or its
Consolidated Entities, as applicable.

                SECTION 7.1.3. Maintenance of Properties. The Borrower will, and
will cause each of its Consolidated Entities to, maintain, preserve, protect and
keep its and their respective properties in good repair, working order and
condition (ordinary wear and tear excepted), and make necessary repairs,
renewals and replacements so that the business carried on by the Borrower and
its Consolidated Entities may be properly conducted at all times, unless the
Borrower or such Consolidated Entity determines in good faith that the continued
maintenance of such property is no longer economically desirable.

                SECTION 7.1.4. Insurance. The Borrower will, and will cause each
of its Consolidated Entities to:

                (a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles) customarily maintained, and against
such risks as are typically insured against in the same general area, by Persons
of comparable size engaged in the same or similar business as the Borrower and
its Consolidated Entities; and

                (b) all worker’s compensation, employer’s liability insurance or
similar insurance as may be required under the laws of any state or jurisdiction
in which it may be engaged in business.

Without limiting the foregoing, all insurance policies required pursuant to this
Section that are maintained by the Borrower and the Subsidiary Guarantors with
respect to their operations and assets shall, if requested by the Administrative
Agent, (i) name the Administrative Agent on behalf of the Secured Parties as
loss payee (in the case of property insurance) or additional insured (in the
case of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days’ prior written
notice to the Administrative Agent and (ii) be in addition to any requirements
to maintain specific types of insurance contained in the other Loan Documents.

                SECTION 7.1.5. Books and Records. The Borrower will, and will
cause each of its Consolidated Entities to, keep books and records in accordance
with GAAP which accurately reflect all of its business affairs and transactions
and permit each Secured Party or any of its representatives, at reasonable times
and intervals upon reasonable notice to the Borrower, to visit each Obligor’s
offices, to discuss such Obligor’s financial matters with its officers,
employees and independent public accountants (and the Borrower hereby authorizes
such independent public accountant to discuss each Obligor’s financial matters
with each Secured Party and its representatives whether or not any
representative of such Obligor is present) and to examine (and photocopy
extracts from) any of its books and records. The Borrower shall pay any fees of
such independent public accountant incurred in connection with any Secured
Party’s exercise of its rights pursuant to this Section.

                SECTION 7.1.6. Environmental Law Covenant. The Borrower will,
and will cause each of its Consolidated Entities to,

                (a) use and operate all of its and their facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with all
applicable Environmental Laws; and

                (b) promptly notify the Administrative Agent and provide copies
upon receipt of all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties in respect of, or as to
compliance with, Environmental Laws, and shall promptly resolve any
non-compliance with Environmental Laws and keep its property free of any Lien
imposed by any Environmental Law.

                SECTION 7.1.7. Use of Proceeds. The Borrower will apply the
proceeds of the Credit Extensions as follows:

                (a) to repay the Indebtedness identified in Item 7.2.2(b) of the
Disclosure Schedule;

                (b) for working capital and general corporate purposes of the
Borrower and the Subsidiary Guarantors, including Investments permitted by this
Agreement; and

                (c) for issuing Letters of Credit for the account of the
Borrower and the Subsidiary Guarantors.

                SECTION 7.1.8. Future Guarantors, Security, etc. The Borrower
will, and will cause each Subsidiary Guarantor to, execute any documents, Filing
Statements, agreements (including any guaranty, security and/or pledge
agreement) and instruments, and take all further action (including filing
Mortgages within 150 days of the acquisition of any real property) that may be
required under applicable law, or that the Administrative Agent may reasonably
request, in order to effectuate the transactions contemplated by the Loan
Documents and in order to grant, preserve, protect and perfect the validity and
first priority (subject to Liens permitted by Section 7.2.3) of the Liens
created or intended to be created by the Loan Documents. The Borrower will cause
any subsequently acquired or organized Wholly-Owned Subsidiary to execute the
Subsidiary Guaranty (or a supplement thereto) and each applicable Loan Document
in favor of the Secured Parties. In addition, from time to time, the Borrower
will, and will cause each Subsidiary Guarantor to, at the Borrower’s cost and
expense, promptly secure the Obligations by pledging or creating, or causing to
be pledged or created, perfected Liens with respect to such of its assets and
properties as the Administrative Agent or the Required Lenders shall designate,
it being agreed that it is the intent of the parties that the Obligations shall
be secured by, among other things, substantially all the assets of the Borrower
and Subsidiary Guarantors, including real and personal property acquired
subsequent to the Effective Date. Such Liens will be created under the Loan
Documents in form and substance satisfactory to the Administrative Agent, and
the Borrower shall deliver or cause to be delivered to the Administrative Agent
all such instruments and documents (including legal opinions, title insurance
policies and lien searches) as the Administrative Agent shall reasonably request
to evidence compliance with this Section. Notwithstanding the foregoing, (a) the
obligation to grant a Mortgage with respect to any real property shall be
subject to Section 7.1.10, (b) this Section 7.1.8 shall not apply to any
Subsidiary Guarantor that is an Operating Entity (or which becomes an Operating
Entity within six months after the formation or initial acquisition of an Equity
Interest in such Subsidiary) and (c) no Subsidiary Guarantor shall be obligated
to grant a Lien with respect to any Equity Interest in a partnership, joint
venture or limited liability company in which an Equity Interest is also held by
a Person that owns or is affiliated with a non-profit hospital.

                SECTION 7.1.9. Rate Protection Agreements. No later than
February 28, 2002, the Borrower will enter into interest rate swap, cap, collar
or similar arrangements designed to protect the Borrower against fluctuations in
interest rates with respect to at least 50% of the average outstanding amount of
the Borrower’s Indebtedness for the Fiscal Quarter ending December 31, 2001 for
a period and on terms satisfactory to the Administrative Agent.

                SECTION 7.1.10. Dispositions of Real Property. The Borrower
shall Dispose of, or cause to be Disposed, the properties listed on Item 7.1.10
of the Disclosure Schedule no later than 150 days after the Closing Date or, if
not Disposed of by such time, the Borrower shall deliver to the Administrative
Agent, as mortgagee for the ratable benefit of the Secured Parties, counterparts
of a Mortgage relating to each such property, each dated as of the date of such
delivery, duly executed by the Borrower or the applicable Subsidiary Guarantor,
together with (a) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of such Mortgage as may be
necessary or, in the reasonable opinion of the Administrative Agent, desirable
effectively to create a valid, perfected first priority Lien, subject to Liens
permitted by Section 7.2.3, against the properties purported to be covered
thereby and (b) such other approvals, opinions or documents as the Agents may
reasonably request.

                SECTION 7.1.11. Restricted Entity Acknowledgments. The Borrower
shall use commercially reasonable efforts to, no later than 90 days after the
Closing Date, have an acknowledgment in form and substance reasonably
satisfactory to the Administrative Agent executed by each holder of Equity
Interests of each Restricted Entity (other than any Obligor) with respect to the
restriction on the ability to pledge the Equity Interests of such Restricted
Entity and the agreement of such holder not to consent to the pledge by any
Obligor of its Equity Interests in such Restricted Entity.

                SECTION 7.2. Negative Covenants. The Borrower covenants and
agrees with each Lender, each Issuer and the Administrative Agent that until the
Termination Date has occurred, the Borrower will, and will cause its
Consolidated Entities to, perform or cause to be performed the obligations set
forth below.

                SECTION 7.2.1. Business Activities. The Borrower will not, and
will not permit any of its Consolidated Entities to, engage in any business
activity except those business activities engaged in on the Closing Date and
activities reasonably related thereto.

                SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Consolidated Entities to, create, incur, assume or permit to
exist any Indebtedness, other than:

                (a) Indebtedness in respect of the Obligations;

                (b) until the Closing Date, Indebtedness that is to be repaid in
full as further identified in Item 7.2.2(b) of the Disclosure Schedule;

                (c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule, and refinancing of such
Indebtedness in a principal amount not in excess of that which is outstanding on
the Effective Date (as such amount has been reduced following the Effective
Date);

                (d) unsecured Indebtedness (i) incurred in the ordinary course
of business of the Borrower and its Consolidated Entities (including open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services which are not overdue for a period of more than
90 days or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the books of
the Borrower or such Consolidated Entity) and (ii) in respect of performance,
surety or appeal bonds provided in the ordinary course of business, but
excluding (in each case), Indebtedness incurred through the borrowing of money
or Contingent Liabilities in respect thereof;

                (e) Indebtedness of any Subsidiary Guarantor owing to the
Borrower or any other Subsidiary Guarantor, which Indebtedness shall be either
(i) evidenced by one or more promissory notes in form and substance satisfactory
to the Administrative Agent, duly executed and delivered in pledge to the
Administrative Agent pursuant to a Loan Document, or (ii) reflected in an open
account on the books and records of such Person,

and shall, in each case, not be forgiven or otherwise discharged for any
consideration other than payment in full or in part in cash (provided that only
the amount repaid in part shall be discharged);

                (f) unsecured subordinated Indebtedness (not evidenced by a note
or other instrument) of the Borrower owing to a Subsidiary so long as the
agreement pursuant to which such Indebtedness was incurred contains
subordination provisions and other terms which are reasonably satisfactory in
all respects to the Administrative Agent;

                (g) unsecured Subordinated Debt of the Borrower incurred
pursuant to the terms of the Sub Debt Documents in a principal amount not to
exceed $36,000,000 and refinancings of such Subordinated Debt which continue to
satisfy the terms of the definition of “Subordinated Debt”;

                (h) Indebtedness consisting of obligations of the Borrower to
Operating Entities in connection with any cash management system operated by the
Borrower in the ordinary course of business under which the Borrower receives
and holds cash that belongs to such Operating Entities pending disbursement of
such cash to or for the benefit of the respective Operating Entities;

                (i) other Indebtedness of the Borrower and its Consolidated
Entities in an aggregate amount at any time outstanding not to exceed the
greater of (i) $35,000,000 and (ii) an amount equal to EBITDA of the Borrower
and its Consolidated Entities for the four Fiscal Quarters for which the most
recent Compliance Certificate was delivered to the Administrative Agent by the
Borrower pursuant to clause (c) of Section 7.1.1; provided that such
Indebtedness shall, if payable to the Borrower or a Subsidiary Guarantor, be
either (A) evidenced by one or more promissory notes in form and substance
satisfactory to the Administrative Agent, duly executed and delivered in pledge
to the Administrative Agent pursuant to a Loan Document, or (B) reflected in an
open account on the books and records of such Person, and shall, in each case,
not be forgiven or otherwise discharged for any consideration other than payment
in full or in part in cash (provided that only the amount repaid in part shall
be discharged);

provided that no Indebtedness otherwise permitted by clauses (c), (e), (g) or
(i) shall be assumed, created or otherwise incurred if a Default has occurred
and is then continuing or would result therefrom.

                SECTION 7.2.3. Liens. The Borrower will not, and will not permit
any of its Consolidated Entities to, create, incur, assume or permit to exist
any Lien upon any of its property (including Equity Interests of any Person),
revenues or assets, whether now owned or hereafter acquired, except:

                (a) Liens securing payment of the Obligations;

                (b) until the Closing Date, Liens securing payment of
Indebtedness of the type described in clause (b) of Section 7.2.2;

                (c) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(c) of the Disclosure Schedule securing Indebtedness described in
clause (c) of Section 7.2.2, and refinancings of such Indebtedness; provided
that no such Lien shall encumber any additional property and the amount of
Indebtedness secured by such Lien is not increased from that existing on the
Effective Date (as such Indebtedness may have been permanently reduced
subsequent to the Effective Date);

                (d) Liens securing Indebtedness of the type permitted under
clause (i) of Section 7.2.2; provided that (i) such Lien is granted within 60
days after such Indebtedness is incurred and (ii) such Lien secures only the
assets that are the subject of the Indebtedness referred to in such clause;

                (e) Liens in favor of carriers, warehousemen, mechanics,
materialmen and landlords granted in the ordinary course of business for amounts
not overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;

                (f) Liens incurred or deposits made in the ordinary course of
business in connection with worker’s compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, bids, leases or other similar obligations (other
than for borrowed money) entered into in the ordinary course of business or to
secure obligations on surety and appeal bonds or performance bonds;

                (g) judgment Liens in existence for less than 45 days after the
entry thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by insurance
maintained with responsible insurance companies and which do not otherwise
result in an Event of Default under Section 8.1.6;

                (h) easements, rights-of-way, zoning restrictions, minor defects
or irregularities in title and other similar encumbrances not interfering in any
material respect with the value or use of the property to which such Lien is
attached; and

                (i) Liens for Taxes not at the time delinquent or thereafter
payable without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.

                SECTION 7.2.4. Financial Condition and Operations. The Borrower
will not permit any of the events set forth below to occur.

                (a) The Borrower will not permit the Total Debt to EBITDA Ratio
as of the last day of any Fiscal Quarter set forth below to be greater than the
ratio set forth opposite such Fiscal Quarter:

 

Fiscal Quarter Total Debt
to EBITDA Ratio

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

June 30, 2001
4.50:1
September 30, 2001
4.50:1
December 31, 2001
4.50:1
March 31, 2002
4.50:1
June 30, 2002
4.25:1
September 30, 2002
4.25:1
December 31, 2002
4.25:1
March 31, 2003
4.251
Each Fiscal Quarter thereafter
4.00:1

                (b) The Borrower will not permit the Senior Debt to EBITDA Ratio
as of the last day of any Fiscal Quarter set forth below to be greater than the
ratio set forth opposite such Fiscal Quarter:

Fiscal Quarter Senior Debt
to EBITDA Ratio

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

June 30, 2001
3.00:1 September 30, 2001
3.00:1 December 31, 2001
3.00:1 March 31, 2002
3.00:1 June 30, 2002
2.75:1 September 30, 2002
2.75:1 December 31, 2002
2.75:1 March 31, 2003
2.75:1 Each Fiscal Quarter thereafter
2.50:1

                (c) The Borrower will not permit the Fixed Charge Coverage Ratio
as of the last day of any Fiscal Quarter set forth below to be less than the
ratio set forth opposite such Fiscal Quarter:

Fiscal Quarter Fixed Charge Coverage Ratio

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

June 30, 2001
1.00:1 September 30, 2001
1.10:1 December 31, 2001
1.10:1 March 31, 2002
1.10:1 June 30, 2002
1.25:1 September 30, 2002
1.25:1 December 31, 2002
1.25:1 March 31, 2003
1.50:1 Each Fiscal Quarter thereafter
1.50:1

                (d) The Borrower will not permit the Interest Coverage Ratio as
of the last day of any Fiscal Quarter set forth below to be less than the ratio
set forth opposite such Fiscal Quarter:

Fiscal Quarter Interest Coverage Ratio

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

June 30, 2001
1.85:1 September 30, 2001
1.85:1 December 31, 2001
2.10:1 March 31, 2002
2.25:1 June 30, 2002
2.25:1 September 30, 2002
2.25:1 December 31, 2002
2.25:1 March 31, 2003
2.50:1 Each Fiscal Quarter thereafter
2.50:1

                SECTION 7.2.5. Investments. The Borrower will not, and will not
permit any of its Consolidated Entities to, purchase, make, incur, assume or
permit to exist any Investment in any other Person, except:

                (a) Investments existing on the Effective Date and identified in
Item 7.2.5(a) of the Disclosure Schedule;

                (b) Cash Equivalent Investments;

                (c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

                (d) Investments permitted as Capital Expenditures pursuant to
Section 7.2.7;

                (e) Investments (i) by the Borrower in any Consolidated Entity,
(ii) by any Consolidated Entity in the Borrower or another Consolidated Entity,
or (iii) by the Borrower or any Consolidated Entity in any Non-Consolidated
Entity to which the Borrower or a Consolidated Entity provides management
services and receives a fee therefor and which Non-Consolidated Entity has no
restrictions on the payment of dividends or distributions to holders of its
Equity Interests; provided that the aggregate amount of Investments under this
clause (iii) (in addition to any such Investments permitted pursuant to clause
(a) of this Section 7.2.5) (A) at any time outstanding shall not exceed
$12,500,000 plus (x) the reduction of the aggregate amount of Investments
outstanding pursuant to clause (a) of this Section 7.2.5 plus (y) 50% of the
cumulative Net Equity Proceeds received by the Borrower since the Closing Date,
and (B) incurred in any Fiscal Year shall not exceed $5,000,000 plus 15% of the
cumulative Net Equity Proceeds received by the Borrower since the Closing Date;

                (f) Investments constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of business;

                (g) Investments by way of the acquisition of Equity Interests
constituting Permitted Acquisitions in an aggregate amount not to exceed
$10,000,000 in cash (net of any amounts that have been syndicated to other
investors) during any twelve month period following the Closing Date; provided
that the maximum aggregate amount set forth above shall be $5,000,000 for any
twelve month period in which the Ft. Worth Acquisition is consummated; provided
further that (i) any such Investments shall result in the acquisition of a
Wholly-Owned Subsidiary and (ii) upon making such Investments, the provisions of
Section 7.1.8 are complied with;

                (h) Investments consisting of any deferred portion of the sales
price received by the Borrower or any Consolidated Entity in connection with any
Disposition permitted under Section 7.2.11;

                (i) Investments constituting Permitted Foreign Investments in an
aggregate amount not to exceed $25,000,000 during the term of this Agreement;
provided that the aggregate amount of such Investments incurred during the 2001
Fiscal Year shall not exceed $15,000,000 and incurred during each Fiscal Year
thereafter shall not exceed $10,000,000; provided further that the aggregate
amount of such Investments in any one country shall not exceed $10,000,000;

                (j) an Investment by way of the acquisition (the “Ft. Worth
Acquisition”) of Equity Interests in Ft. Worth Surgicare Partners Ltd., a Texas
limited partnership (“Ft. Wort”) in an aggregate amount not to exceed
$12,500,000 (with any excess amount of the purchase price to be subject to
clause (e) of this Section 7.2.5);

                (k) Investments constituting Indebtedness permitted pursuant to
Section 7.2.2; and

                (l) other Investments in an amount not to exceed $1,000,000 over
the term of this Agreement;

provided that

                (m) any Investment which when made complies with the
requirements of the definition of the term “Cash Equivalent Investment” may
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; and

                (n) no Investment otherwise permitted by clauses (d), (e)(i),
(e)(ii), (g), (i), (j) or (l) shall be permitted to be made if any Default has
occurred and is continuing or would result therefrom.

                SECTION 7.2.6. Restricted Payments. The Borrower will not, and
will not permit any of its Consolidated Entities to, declare or make a
Restricted Payment, or make any deposit for any Restricted Payment, other than
(a) Restricted Payments made by Consolidated Entities to holders of their Equity
Interests and (b) Restricted Payments in connection with the repurchase of
individual investors’ Equity Interests in Operating Entities.

                SECTION 7.2.7. Capital Expenditures. The Borrower will not, and
will not permit any of its Consolidated Entities to, make or commit to make
Capital Expenditures in excess of $10,000,000 in the aggregate during the
portion of the 2001 Fiscal Year following the Closing Date and $20,000,000 in
the aggregate during any Fiscal Year thereafter.

                SECTION 7.2.8. No Prepayment of Subordinated Debt. The Borrower
will not, and will not permit any of its Consolidated Entities to,

                (a) make any payment or prepayment of principal of, or premium
or interest on, any Subordinated Debt (i) other than the stated, scheduled date
for payment of interest set forth in the applicable Sub Debt Documents, or (ii)
which would violate the terms of this Agreement or the applicable Sub Debt
Documents;

                (b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt; or

                (c) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes.

Furthermore, neither the Borrower nor any Consolidated Entity will designate any
Indebtedness other than the Obligations as “Designated Senior Debt” (or any
analogous term) in any Sub Debt Document.

                SECTION 7.2.9. Issuance of Equity Interests. The Borrower will
not, and will not permit any of its Consolidated Entities to, issue any Equity
Interests (whether for value or otherwise) to any Person other than (i) in the
case of Consolidated Entities, to the Borrower or a Subsidiary Guarantor, (ii)
in the case of the Borrower, if the Net Equity Proceeds from such issuance are
applied to prepay the Loans as required by the terms of this Agreement or (iii)
in the case of Operating Entities, to physicians in the ordinary course of
business.

                SECTION 7.2.10. Consolidation, Merger, etc. The Borrower will
not, and will not permit any of its Consolidated Entities to, liquidate or
dissolve, consolidate with, or merge into or with, any other Person, or purchase
or otherwise acquire all or substantially all of the assets of any Person (or
any division thereof), except

                (a) any Consolidated Entity may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any other
Consolidated Entity (provided that a Subsidiary Guarantor may only liquidate or
dissolve into, or merge with and into, the Borrower or another Subsidiary
Guarantor), and the assets or Equity Interests of any Subsidiary may be
purchased or otherwise acquired by the Borrower or any other Subsidiary
(provided that the assets or Equity Interests of any Subsidiary Guarantor may
only be purchased or otherwise acquired by the Borrower or another Subsidiary
Guarantor); provided that in no event shall any Pledged Subsidiary consolidate
with or merge with and into any Subsidiary other than another Pledged Subsidiary
unless after giving effect thereto, the Administrative Agent shall have a
perfected pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding interests of Equity Interests (on a
fully diluted basis) of the surviving Person as the Administrative Agent had
immediately prior to such merger or consolidation in form and substance
satisfactory to the Administrative Agent and its counsel, pursuant to such
documentation and opinions as shall be necessary in the opinion of the
Administrative Agent to create, perfect or maintain the collateral position of
the Secured Parties therein;

                (b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its Consolidated
Entities may (to the extent permitted by clauses (e) or (g) of Section 7.2.5)
purchase all or substantially all of the assets or Equity Interests of any
Person (or any division thereof), or acquire such Person by merger; and

                (c) as permitted by Section 7.2.11.

                SECTION 7.2.11. Permitted Dispositions. The Borrower will not,
and will not permit any of its Consolidated Entities to, Dispose of any of the
Borrower’s or such Consolidated Entity’s assets (including accounts receivable
and Equity Interests of Consolidated Entities) to any Person in one transaction
or series of transactions unless such Disposition is (a) inventory or obsolete
property Disposed of in the ordinary course of its business, (b) permitted by
Section 7.2.10, (c) Dispositions of Equity Interests in Operating Entities to
physicians in the ordinary course of business or (d) (i) such Disposition is for
fair market value and, unless otherwise agreed to by the Administrative Agent,
the consideration received shall consist of no less than 80% in cash, (ii) the
Net Disposition Proceeds received from such Disposition, together with the Net
Disposition Proceeds of all other assets Disposed of pursuant to this clause
since the Closing Date, does not exceed (individually or in the aggregate)
$5,000,000 in any Fiscal Year and (iii) the Net Disposition Proceeds from such
Disposition are applied pursuant to Sections 3.1.1 and 3.1.2.

                SECTION 7.2.12. Modification of Certain Agreements. The Borrower
will not, and will not permit any of its Consolidated Entities to, consent to
any amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,

                (a) the Sub Debt Documents, other than any amendment,
supplement, waiver or modification for which no fee is payable to the holders of
the Subordinated Debt and which (i) extends the date or reduces the amount of
any required repayment, prepayment or redemption of the principal of such
Subordinated Debt, (ii) reduces the rate or extends the date for payment of the
interest, premium (if any) or fees payable on such Subordinated Debt or (iii)
makes the covenants, events of default or remedies in such Sub Debt Documents
less restrictive on the Borrower; or

                (b) any of the Transaction Documents.

                SECTION 7.2.13. Transactions with Affiliates. The Borrower will
not, and will not permit any of its Consolidated Entities to, enter into or
cause or permit to exist any arrangement, transaction or contract (including for
the purchase, lease or exchange of property or the rendering of services) with
any of its other Affiliates, unless such arrangement, transaction or contract
(a) is on fair and reasonable terms no less favorable to the Borrower or such
Consolidated Entity than it could obtain in an arm’s-length transaction with a
Person that is not an Affiliate and (b) is of the kind which would be entered
into by a prudent Person in the position of the Borrower or such Consolidated
Entity with a Person that is not one of its Affiliates.

                SECTION 7.2.14. Restrictive Agreements, etc. The Borrower will
not, and will not permit any of its Consolidated Entities to, enter into any
agreement prohibiting

                (a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, other than with
respect to Restricted Entities;

                (b) the ability of any Obligor to amend or otherwise modify any
Loan Document; or

                (c) the ability of any Consolidated Entity to make any payments,
directly or indirectly, to the Borrower, including by way of dividends,
advances, repayments of loans, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments.

The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document or (ii) in the case of clause (a), any agreement governing any
Indebtedness permitted by clause (i) of Section 7.2.2 as to the assets financed
with the proceeds of such Indebtedness.

                SECTION 7.2.15. Sale and Leaseback. The Borrower will not, and
will not permit any of its Consolidated Entities to, directly or indirectly
enter into any agreement or arrangement providing for the sale or transfer by it
of any property (other than real property), now owned or hereafter acquired, to
a Person and the subsequent lease or rental of such property or other similar
property from such Person.

                SECTION 7.2.16. Foreign Subsidiaries. Notwithstanding any other
provisions of this Agreement to the contrary, the Borrower will not, and will
not permit any of its Consolidated Entities to, organize or acquire any Foreign
Subsidiaries.

                SECTION 7.2.17. Amendment of Organic Documents. The Borrower
will not, and will not permit any Consolidated Entity to, amend, supplement or
otherwise modify, or permit, consent or suffer to occur any amendment,
supplement or modification of any terms or provisions contained in, or
applicable to, any Organic Document of the Borrower or such Consolidated Entity
if the effect thereof is to impair, or is in any manner adverse to, the rights,
interests or obligations of any Secured Party under any Loan Document.

                SECTION 7.2.18. Fiscal Year. The Borrower will not change its
Fiscal Year.

ARTICLE VIII
EVENTS OF DEFAULT

                SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Article shall constitute an “Event of
Default”.

                SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of

                (a) any principal of any Loan, or any Reimbursement Obligation
or any deposit of cash for collateral purposes pursuant to Section 2.6.4; or

                (b) any interest on any Loan or any fee described in Article III
or any other monetary Obligation, and such default shall continue unremedied for
a period of four days after such amount was due.

                SECTION 8.1.2. Breach of Warranty. Any representation or
warranty of any Obligor made or deemed to be made in any Loan Document
(including any certificates delivered pursuant to Article V) is or shall be
incorrect when made or deemed to have been made in any material respect.

                SECTION 8.1.3. Non-Performance of Certain Covenants and
Obligations. The Borrower shall default in the due performance or observance of
any of its obligations under Section 7.1.1, Section 7.1.7 or Section 7.2, or any
Obligor shall default in the due performance or observance of its obligations
under Article IV of the Subsidiary Guaranty or Article IV of a Pledge Agreement.

                SECTION 8.1.4. Non-Performance of Other Covenants and
Obligations. Any Obligor shall default in the due performance and observance of
any other agreement contained in any Loan Document executed by it, and such
default shall continue unremedied for a period of 30 days after notice thereof
shall have been given to the Borrower by the Administrative Agent or any Lender.

                SECTION 8.1.5. Default on Other Indebtedness. A default shall
occur in the payment of any amount when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any principal or stated amount
of, or interest or fees on, any Indebtedness (other than Indebtedness described
in Section 8.1.1) of any Obligor having a principal or stated amount,
individually or in the aggregate, in excess of $2,500,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause or declare such
Indebtedness to become due and payable or to require such Indebtedness to be
prepaid, redeemed, purchased or defeased, or require an offer to purchase or
defease such Indebtedness to be made, prior to its expressed maturity.

                SECTION 8.1.6. Judgments. Any judgment or order for the payment
of money individually or in the aggregate in excess of $1,000,000 (exclusive of
any amounts fully covered by insurance (less any applicable deductible) and as
to which the insurer has acknowledged its responsibility to cover such judgment
or order) shall be rendered against any Obligor and such judgment shall not have
been vacated or discharged or stayed or bonded pending appeal within 30 days
after the entry thereof or enforcement proceedings shall have been commenced by
any creditor upon such judgment or order.

                SECTION 8.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan

                (a) the institution of any steps by the Borrower, any member of
its Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be required to
make a contribution to such Pension Plan, or could reasonably expect to incur a
liability or obligation to such Pension Plan, in excess of $1,000,000; or

                (b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.

                SECTION 8.1.8. Change in Control. Any Change in Control shall
occur.

                SECTION 8.1.9. Bankruptcy, Insolvency, etc. Any Obligor shall

                (a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they become
due;

                (b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part of
the property of any thereof, or make a general assignment for the benefit of
creditors;

                (c) in the absence of such application, consent or acquiescence
in or permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian shall not
be discharged within 60 days; provided that each Obligor hereby expressly
authorizes each Secured Party to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend its rights
under the Loan Documents;

                (d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any Consolidated Entity or any Obligor, such case or
proceeding shall be consented to or acquiesced in by the Borrower, such
Consolidated Entity or such Obligor, as the case may be, or shall result in the
entry of an order for relief or shall remain for 60 days undismissed; provided
that the Borrower, each Consolidated Entity and each Obligor hereby expressly
authorizes each Secured Party to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents; or

                (e) take any action authorizing, or in furtherance of, any of
the foregoing.

                SECTION 8.1.10. Impairment of Security, etc. Any Loan Document
or any Lien granted thereunder shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; any
Obligor or any other party shall, directly or indirectly, contest in any manner
such effectiveness, validity, binding nature or enforceability; or, except as
permitted under any Loan Document, any Lien securing any Obligation shall, in
whole or in part, cease to be a perfected first priority Lien.

                SECTION 8.1.11. Failure of Subordination. Unless otherwise
waived or consented to by the Administrative Agent, the Lenders and the Issuer
in writing, the subordination provisions relating to any Subordinated Debt (the
“Subordination Provisions”) shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuer in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute “Senior Indebtedness” (or similar
term) referring to the Obligations; or the Borrower or any of its Consolidated
Entities shall, directly or indirectly, disavow or contest in any manner (i) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the Issuer or (iii) that all payments of
principal of or premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Obligor, shall be subject to any of such
Subordination Provisions.

                SECTION 8.1.12. Parent Total Debt to Parent Total Capitalization
Ratio. The Parent Total Debt to Parent Total Capitalization Ratio shall exceed
0.60:1, and such default shall continue unremedied for a period of 30 days.

                SECTION 8.2. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 8.1.9 with respect to the
Borrower shall occur, the Commitments (if not theretofore terminated) shall
automatically terminate and the outstanding principal amount of all outstanding
Loans and all other Obligations (including Reimbursement Obligations) shall
automatically be and become immediately due and payable, without notice or
demand to any Person and each Obligor shall automatically and immediately be
obligated to Cash Collateralize all Letter of Credit Outstandings.

                SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d) of
Section 8.1.9 with respect to the Borrower) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent, upon the
direction of the Required Lenders, shall by notice to the Borrower declare all
or any portion of the outstanding principal amount of the Loans and other
Obligations (including Reimbursement Obligations) to be due and payable and/or
the Commitments (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate and the Borrower shall automatically and immediately
be obligated to Cash Collateralize all Letter of Credit Outstandings.

ARTICLE IX
THE ADMINISTRATIVE AGENT

                SECTION 9.1. Actions. Each Lender hereby appoints CSFB as its
Administrative Agent under and for purposes of each Loan Document. Each Lender
authorizes the Administrative Agent to act on behalf of such Lender under each
Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Administrative Agent (with
respect to which the Administrative Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel in order
to avoid contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof, together with such powers as may be
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Administrative Agent, pro rata
according to such Lender’s proportionate Total Exposure Amount, from and against
any and all liabilities, obligations, losses, damages, claims, costs or expenses
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against, the Administrative Agent in any way relating to or
arising out of any Loan Document, (including attorneys’ fees), and as to which
the Administrative Agent is not reimbursed by the Borrower; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted from
the Administrative Agent’s gross negligence or wilful misconduct. The
Administrative Agent shall not be required to take any action under any Loan
Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in
favor of the Administrative Agent shall be or become, in the Administrative
Agent’s determination, inadequate, the Administrative Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.

                SECTION 9.2. Funding Reliance, etc. Unless the Administrative
Agent shall have been notified in writing by any Lender by 3:00 p.m. on the
Business Day prior to a Borrowing that such Lender will not make available the
amount which would constitute its Percentage of such Borrowing on the date
specified therefor, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent and, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If and
to the extent that such Lender shall not have made such amount available to the
Administrative Agent, such Lender and the Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to the Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing (in the case of the Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid), and thereafter at the interest rate applicable
to Loans comprising such Borrowing.

                SECTION 9.3. Exculpation. Neither the Administrative Agent nor
any of its directors, officers, employees or agents shall be liable to any
Secured Party for any action taken or omitted to be taken by it under any Loan
Document, or in connection therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution of
any Loan Document, nor for the creation, perfection or priority of any Liens
purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by any Obligor of
its Obligations. Any such inquiry which may be made by the Administrative Agent
shall not obligate it to make any further inquiry or to take any action. The
Administrative Agent shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or writing
which the Administrative Agent believes to be genuine and to have been presented
by a proper Person.

                SECTION 9.4. Successor. The Administrative Agent may resign as
such at any time upon at least 30 days’ prior notice to the Borrower and all
Lenders. If the Administrative Agent at any time shall resign, the Required
Lenders may appoint another Lender as a successor Administrative Agent which
shall thereupon become the Administrative Agent hereunder. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent’s giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the United States (or any State thereof)
or a United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $250,000,000; provided that
if, such retiring Administrative Agent is unable to find a commercial banking
institution which is willing to accept such appointment and which meets the
qualifications set forth in above, the retiring Administrative Agent’s
resignation shall nevertheless thereupon become effective and the Lenders shall
assume and perform all of the duties of the Administrative Agent hereunder until
such time, if any, as the Required Lenders appoint a successor as provided for
above. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
be entitled to receive from the retiring Administrative Agent such documents of
transfer and assignment as such successor Administrative Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent under the Loan Documents, and
Section 10.3 and Section 10.4 shall continue to inure to its benefit.

                SECTION 9.5. Credit Extensions by CSFB. CSFB shall have the same
rights and powers with respect to (x) the Credit Extensions made by it or any of
its Affiliates, and (y) the Revolving Notes held by it or any of its Affiliates
as any other Lender and may exercise the same as if it were not the
Administrative Agent. CSFB and its Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower or any
Consolidated Entity or Affiliate of the Borrower as if CSFB were not the
Administrative Agent hereunder.

                SECTION 9.6. Credit Decisions. Each Lender acknowledges that it
has, independently of the Administrative Agent and each other Lender, and based
on such Lender’s review of the financial information of the Borrower, the Loan
Documents (the terms and provisions of which being satisfactory to such Lender)
and such other documents, information and investigations as such Lender has
deemed appropriate, made its own credit decision to extend its Commitments. Each
Lender also acknowledges that it will, independently of the Administrative Agent
and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under the Loan Documents.

                SECTION 9.7. Copies, etc. The Administrative Agent shall give
prompt notice to each Lender of each notice or request required or permitted to
be given to the Administrative Agent by the Borrower pursuant to the terms of
the Loan Documents (unless concurrently delivered to the Lenders by the
Borrower). The Administrative Agent will distribute to each Lender each document
or instrument received for its account and copies of all other communications
received by the Administrative Agent from the Borrower for distribution to the
Lenders by the Administrative Agent in accordance with the terms of the Loan
Documents.

                SECTION 9.8. Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telecopy, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by the Loan
Documents, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, thereunder in accordance with instructions
given by the Required Lenders or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all Secured Parties. For
purposes of applying amounts in accordance with this Section, the Administrative
Agent shall be entitled to rely upon any Secured Party that has entered into a
Rate Protection Agreement with any Obligor for a determination (which such
Secured Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Obligations owed to such Secured Party
under any Rate Protection Agreement. Unless it has actual knowledge evidenced by
way of written notice from any such Secured Party and the Borrower to the
contrary, the Administrative Agent, in acting in such capacity under the Loan
Documents, shall be entitled to assume that no Rate Protection Agreements or
Obligations in respect thereof are in existence or outstanding between any
Secured Party and any Obligor.

                SECTION 9.9. Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received a written notice from a Lender or the Borrower
specifying such Default and stating that such notice is a “Notice of Default”.
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 10.1)
take such action with respect to such Default as shall be directed by the
Required Lenders; provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Secured
Parties except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.

                SECTION 9.10. Syndication Agent and Documentation Agent. The
Lenders identified on the signature pages of this Agreement as the “Syndication
Agent” and the “Documentation Agent” shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement (or any other
Loan Document) other than those applicable to all Lenders as such. Without
limiting the foregoing, the Lenders so identified as the “Syndication Agent” and
the “Documentation Agent” shall not have or be deemed to have any fiduciary
relationship with any other Lender. Each Lender acknowledges that it has not
relied, and will not rely, on the Lenders so identified as the “Syndication
Agent” and as the “Documentation Agent” in deciding to enter into this Agreement
and each other Loan Document to which it is a party or in taking or not taking
action hereunder or thereunder.

ARTICLE X
MISCELLANEOUS PROVISIONS

                SECTION 10.1. Waivers, Amendments, etc. The provisions of each
Loan Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders; provided that no such amendment, modification or
waiver shall:

                (a) modify this Section without the consent of all Lenders;

                (b) increase the aggregate amount of any Credit Extensions
required to be made by a Lender pursuant to its Commitments, extend the final
Commitment Termination Date of Credit Extensions made (or participated in) by a
Lender or extend the final Stated Maturity Date for any Lender’s Loan, in each
case without the consent of such Lender (it being agreed, however, that any vote
to rescind any acceleration made pursuant to Section 8.2 and Section 8.3 of
amounts owing with respect to the Loans and other Obligations shall only require
the vote of the Required Lenders);

                (c) reduce the principal amount of or rate of interest on any
Lender’s Loan, reduce any fees described in Article III payable to any Lender or
extend the date on which interest or fees are payable in respect of such
Lender’s Loans, in each case without the consent of such Lender;

                (d) reduce the percentage set forth in the definition of
“Required Lenders” or modify any requirement hereunder that any particular
action be taken by all Lenders without the consent of all Lenders;

                (e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;

                (f) except as otherwise expressly provided in a Loan Document,
release (i) the Borrower from its Obligations under the Loan Documents, Parent
from its obligations under the Parent Guaranty and Pledge Agreement, Holdings
from its obligations under the Holdings Guaranty and Pledge Agreement or any
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty, or (ii)
all or substantially all of the collateral security under the Loan Documents, in
each case without the consent of all Lenders; or

                (g) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent) or any Issuer
(in its capacity as Issuer), unless consented to by the Administrative Agent or
such Issuer, as the case may be.

No failure or delay on the part of any Secured Party in exercising any power or
right under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on any Obligor in any case shall entitle it to any notice or demand
in similar or other circumstances. No waiver or approval by any Secured Party
under any Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

                SECTION 10.2. Notices; Time. All notices and other
communications provided under each Loan Document shall be in writing or by
facsimile and addressed, delivered or transmitted to the applicable Person at
its address or facsimile number set forth on Schedule II hereto or set forth in
a Lender Assignment Agreement, or at such other address or facsimile number as
may be designated by such Person in a notice to the other parties. Any notice,
if mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when the confirmation
of transmission thereof is received by the transmitter. The parties hereto agree
that delivery of an executed counterpart of a signature page to this Agreement
and each other Loan Document by facsimile shall be effective as delivery of an
original executed counterpart of this Agreement or such other Loan Document.
Unless otherwise indicated, all references to the time of a day in a Loan
Document shall refer to New York time.

                SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees
to pay on demand all expenses of the Agents (including the fees and
out-of-pocket expenses of Mayer, Brown & Platt, counsel to the Administrative
Agent and of local counsel, if any, who may be retained by or on behalf of the
Administrative Agent) in connection with

                (a) the negotiation, preparation, execution, delivery and
ongoing administration of each Loan Document, including schedules and exhibits,
and any amendments, waivers, consents, supplements or other modifications to any
Loan Document as may from time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated; and

                (b) the filing or recording of any Loan Document (including the
Filing Statements) and all amendments, supplements, amendment and restatements
and other modifications to any thereof, searches made following the Effective
Date in jurisdictions where Filing Statements (or other documents evidencing
Liens in favor of the Secured Parties) have been recorded and any and all other
documents or instruments of further assurance required to be filed or recorded
by the terms of any Loan Document; and

                (c) the preparation and review of the form of any document or
instrument relevant to any Loan Document.

The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of each Loan Document, the Credit Extensions or
the issuance of the Revolving Notes. The Borrower also agrees to reimburse each
Secured Party upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys’ fees and legal expenses of counsel to each Secured Party)
incurred by such Secured Party in connection with (x) the negotiation of any
restructuring or “work-out” with the Borrower, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.

                SECTION 10.4. Indemnification. In consideration of the execution
and delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
“Indemnified Parties”) free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys’ fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the “Indemnified Liabilities”), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to

                (a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
Transaction;

                (b) the entering into and performance of any Loan Document by
any of the Indemnified Parties (including any action brought by or on behalf of
the Borrower as the result of any determination by the Required Lenders pursuant
to Article V not to fund any Credit Extension; provided that any such action is
resolved in favor of such Indemnified Party);

                (c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary thereof of
all or any portion of the Equity Interests or assets of any Person, whether or
not an Indemnified Party is party thereto;

                (d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by any Obligor or any Subsidiary
thereof of any Hazardous Material;

                (e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by any Obligor or any Subsidiary thereof of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, such Obligor or Subsidiary; or

                (f) each Lender’s Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of the
property of any Obligor or its Subsidiaries by foreclosure or by a deed in lieu
of foreclosure for any Lender’s Environmental Liability, regardless of whether
caused by, or within the control of, such Obligor or such Subsidiary);

except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party’s gross negligence
or wilful misconduct. Each Obligor and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any Indemnified Party is strictly liable under
any Environmental Laws, each Obligor’s obligation to such Indemnified Party
under this indemnity shall likewise be without regard to fault on the part of
any Obligor with respect to the violation or condition which results in
liability of an Indemnified Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Obligor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

                SECTION 10.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders
under Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and the occurrence of the
Termination Date. The representations and warranties made by each Obligor in
each Loan Document shall survive the execution and delivery of such Loan
Document.

                SECTION 10.6. Severability. Any provision of any Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such
provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
such Loan Document or affecting the validity or enforceability of such provision
in any other jurisdiction.

                SECTION 10.7. Headings. The various headings of each Loan
Document are inserted for convenience only and shall not affect the meaning or
interpretation of such Loan Document or any provisions thereof.

                SECTION 10.8. Execution in Counterparts, Effectiveness, etc.
This Agreement may be executed by the parties hereto in several counterparts,
each of which shall be an original and all of which shall constitute together
but one and the same agreement. This Agreement shall become effective when
counterparts hereof executed on behalf of the Borrower, the Administrative Agent
and each Lender (or notice thereof satisfactory to the Administrative Agent),
shall have been received by the Administrative Agent.

                SECTION 10.9. Governing Law; Entire Agreement. EACH LOAN
DOCUMENT (OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES (ISP98—INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER
590 (THE “ISP RULES”)) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
thereof and supersede any prior agreements, written or oral, with respect
thereto.

                SECTION 10.10. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Indemnified Parties) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

                (b) Any Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitments and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitments (which
for this purpose includes Loans outstanding thereunder) or principal outstanding
balance of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Lender Assignment Agreement with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Agents and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consent (each such consent
not to be unreasonably withheld or delayed), (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations under this Agreement with respect to the Loans and/or the
Commitments assigned, except that this clause (ii) shall not prohibit any Lender
from assigning all or a portion of its rights and obligations among separate
tranches, if applicable, on a non- pro rata basis, and (iii) the parties to each
assignment shall execute and deliver to the Administrative Agent a Lender
Assignment Agreement (including, if the Eligible Assignee is not a Lender, the
completion of the administrative details information attached thereto and the
provision of any required tax forms), together with, if requested by the
Administrative Agent, a processing and recordation fee of $3,500. Subject to
acceptance and recording thereof by the Administrative Agent pursuant to clause
(c), from and after the effective date specified in each Lender Assignment
Agreement, the Eligible Assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Lender Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Lender
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of a Lender Assignment Agreement covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto, but shall continue to be entitled to the benefits of any
provisions of this Agreement which by their terms survive the termination of
this Agreement). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this clause shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with clause (d). If the consent of the
Borrower to an assignment or to an Eligible Assignee is required hereunder
(including a consent to an assignment which does not meet the minimum assignment
thresholds specified in this Section), the Borrower shall be deemed to have
given its consent five Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.

                (c) The Administrative Agent shall record each assignment made
in accordance with this Section in the Register pursuant to clause (b) of
Section 2.7. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.

                (d) Any Lender may, without the consent of, or notice to, the
Borrower or the Agents, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitments
and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agents and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver with
respect to the following: (i) any reduction in the interest rate or amount of
fees that such Participant is otherwise entitled to, (ii) a decrease in the
principal amount of, or an extension of the final Stated Maturity Date of, any
Loan in which such Participant has purchased a participating interest or (iii) a
release of all or substantially all of the collateral security under the Loan
Documents, Parent from its obligations under the Parent Guaranty and Pledge
Agreement, Holdings from its obligations under the Holdings Guaranty and Pledge
Agreement or all or substantially all of the Subsidiary Guarantors from their
obligations under the Subsidiary Guaranty, in each case except as otherwise
specifically provided in a Loan Document. Subject to clause (e), the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 4.3,
4.4, 4.5, 4.6, 10.3 and 10.4 to the same extend as if it were a Lender and had
acquired its interest by assignment pursuant to clause (b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 4.9 as though it were a Lender; provided such Participant agrees to be
subject to Section 4.8 as though it were a Lender.

                (e) A Participant shall not be entitled to receive any greater
payment under Section Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Non-U.S. Lender if it were a Lender shall not be
entitled to the benefits of clause (a) of Section 4.6 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with clause (e) of Section
4.6 as though it were a Lender.

                (f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

                SECTION 10.11. Other Transactions. Nothing contained herein
shall preclude the Administrative Agent, any Issuer or any other Lender from
engaging in any transaction, in addition to those contemplated by the Loan
Documents, with the Borrower or any of its Affiliates in which the Borrower or
such Affiliate is not restricted hereby from engaging with any other Person.

                SECTION 10.12. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER
OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK,
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT. RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN
SECTION 10.2. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

                SECTION 10.13. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT,
EACH LENDER, EACH ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR THE BORROWER IN CONNECTION
THEREWITH. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH ISSUER
ENTERING INTO THE LOAN DOCUMENTS.

                SECTION 10.14. Confidentiality. Each of the Lenders, the Issuer
and the Administrative Agent agrees (on behalf of itself and each of its
affiliates, directors, officers, employees, agents, advisors and
representatives) to (a) use any Confidential Information only in connection with
participating as a Lender, Issuer or the Administrative Agent hereunder and not
for any other purpose and (b) keep confidential any Confidential Information,
and in connection therewith comply with its customary procedures for handling
confidential information of this nature; provided that nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) as requested or required by
any governmental agency or representative thereof, (iii) to counsel and other
professional advisors for any of the Lenders, the Issuer or the Administrative
Agent, (iv) to any Lender’s, the Issuer’s or the Administrative Agent’s
examiners, auditors or accountants, (v) to the Administrative Agent, any other
Lender or the Issuer, (vi) by the Administrative Agent, any Lender or the Issuer
to an Affiliate of such Person, (vii) in connection with any litigation relating
to enforcement of the Loan Documents or (viii) to any assignee Lender or
Participant (or prospective assignee Lender or Participant) or to direct
contractual counterparties in Rate Protection Agreements entered into in
connection with a portion or all of a Lender’s rights to receive payments
hereunder (or such contractual counterparties’ professional advisors); provided
further that, in the case of the preceding clause (i), such Lender, the Issuer
or the Administrative Agent, as the case may be, shall, to the extent legally
permissible, use reasonable efforts to notify the Borrower of the proposed
disclosure as soon as is reasonably practicable under the circumstances at such
time.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective Authorized Officers as of the day and year first above
written.

 

  USP DOMESTIC HOLDINGS, INC.           By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Financial Officer              
CREDIT SUISSE FIRST BOSTON,
as the Administrative Agent and a Lender           By:  /s/ William S. Lutkins  
 

--------------------------------------------------------------------------------

    Title: Vice President               By:  /s/ Bill O'Daly    

--------------------------------------------------------------------------------

    Title: Vice President               LEHMAN COMMERCIAL PAPER INC.,
as the Syndication Agent and a Lender           By:  /s/ Michele Swanson    

--------------------------------------------------------------------------------

    Title: Authorized Signaotory               SOCIÉTÉ GÉNÉRALE,
as the Documentation Agent           By:  /s/ Richard Bernal    

--------------------------------------------------------------------------------

    Title: Director  Corporate Banking

 

  SOCIÉTÉ GÉNÉRALE FINANCIAL CORPORATION,
as a Lender           By:  /s/ Powell Robinson III    

--------------------------------------------------------------------------------

    Title: First Vice President

 

SCHEDULE I

DISCLOSURE SCHEDULE TO CREDIT AGREEMENT

ITEM 6.7. Litigation.
ITEM 6.8. Subsidiaries.
ITEM 6.11. Employee Benefit Plans.
ITEM 6.12. Environmental Matters.
ITEM 7.1.10. Properties.
ITEM 7.2.2(b). Indebtedness to be Paid.
ITEM 7.2.2(c). Ongoing Indebtedness.
ITEM 7.2.3(c). Ongoing Liens.
ITEM 7.2.5(a). Ongoing Investments

SCHEDULE II

NOTICE INFORMATION;
PERCENTAGES; LIBOR OFFICE

NAME AND NOTICE
ADDRESS OF LENDER   LIBOR OFFICE   PERCENTAGE  

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010
Attention:
Tel:
Fax:

  Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010   43.63636364 % Lehman Commercial Paper Inc.
3 World Financial Center
New York, NY 10285
Attention: Nancy Wong
Tel: 212-526-6535
Fax: 212-526-7365

  Lehman Commercial Paper Inc.
3 World Financial Center
New York, NY 10285   29.09090909 % Société Générale Financial Corporation
1221 Avenue of the Americas
New York, NY 10020
Attention: Paul Sottnik
Tel: 212-278-6446
Fax: 212-278-7320   Société Générale
Financial Corporation
1221 Avenue of the Americas
New York, NY 10020   27.27272727 %

 

 

BORROWER AND
ADMINISTRATIVE AGENT
NOTICE ADDRESS    

--------------------------------------------------------------------------------

    Borrower:   USP Domestic Holdings, Inc.
17103 Preston Road, Suite 200 North
Dallas, TX 75248
Attention: Donald E. Steen, CEO
Tel: 972-713-3500
Fax: 972-713-3550

Administrative Agent:   Credit Suisse First Boston
Eleven Madison Avenue
New York, NY 10010
Attention: Julia Kingsbury
Tel: 212-325-9937
Fax: 212-325-8304

 

BORROWER CLOSING DATE CERTIFICATE
USP DOMESTIC HOLDINGS, INC.

This certificate is delivered pursuant to Section 5.1.9 of the Credit Agreement,
dated as of June 13, 2001 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the “Credit Agreement”), among USP
Domestic Holdings, Inc., a Delaware corporation (the “Borrower”), the Lenders,
Credit Suisse First Boston, as Administrative Agent, Lehman Commercial Paper
Inc., as Syndication Agent, and Société Générale, as Documentation Agent. Terms
used herein, unless otherwise defined herein, have the meanings provided in the
Credit Agreement.

The undersigned hereby certifies, represents and warrants that, as of the
Closing Date:

   1. Authority. The undersigned is an Authorized Officer of the Borrower and,
in such capacity, is authorized and empowered to execute this certificate on
behalf of the Borrower.

   2. Insurance. Attached hereto as Annex I are true and complete certified
copies of the insurance policies (or binders in respect thereof) evidencing
insurance in compliance with Section 5.1.11 of the Credit Agreement.

   3. Consummation of Transaction. All actions necessary to consummate the
Transaction have been taken in accordance with all applicable law and in
accordance with the terms of each applicable Transaction Document, without
amendment or waiver of any material provision thereof. At and as of the Closing
Date (after giving effect to the Transaction and the initial Credit Extensions),
there exist no conditions that would constitute a default or an event of default
under any of the Transaction Documents. In connection with the Transaction,

     (a) the Parent IPO has been consummated and Parent has received gross cash
proceeds of at least $115,000,000 therefrom which proceeds have been used in
part to consummate the Parent Refinancing, the OrthoLink Refinancing, and the
Parent Stock Redemption;

     (b) OrthoLink has become a direct, wholly owned Subsidiary of the Borrower;
and

     (c) the Parent Debt Conversion and the Borrower Debt Conversion have been
consummated.

   4. Delivery of Transaction Documents. Attached hereto as Annex II are true
and complete, fully executed copies of the Transaction Documents relating to the
Parent Debt Conversion and the Borrower Debt Conversion and all certificates,
opinions and other documents delivered thereunder. Each Transaction Document is
in full force and effect and has not been modified or waived in any material
respect, nor has there been any forbearance to exercise any material rights with
respect to any of the terms or provisions relating to the conditions to the
consummation of the Transaction, as applicable.

   5. Payment of Outstanding Indebtedness, etc. All Indebtedness identified in
Item 7.2.2(b) of the Disclosure Schedule to the Credit Agreement, together with
all interest, all prepayment premiums and other amounts due and payable with
respect thereto, has been (or, contemporaneously with the making of the initial
Credit Extensions, will be) paid in full from the proceeds of the initial Credit
Extension and the commitments in respect of such Indebtedness have been
terminated, and all Liens securing payment of any such Indebtedness have been
(or, contemporaneously with the making of the initial Credit Extensions, will
be) released, and attached hereto as Annex III are copies of all executed UCC
termination statements (Form UCC-3) or other instruments as may be suitable or
appropriate in connection therewith.

   6. Closing Fees, Expenses, etc. The Administrative Agent has received for its
own account, or for the account of each Lender, as the case may be, all fees,
costs and expenses due and payable pursuant to Sections 3.3 and 10.3 of the
Credit Agreement, to the extent invoiced.

   7. Financial Information, etc. Attached hereto as Annex IV are each of the
following:

     (a)(i) audited consolidated financial statements of OrthoLink as at
December 31, 2000, (ii) an audited consolidated balance sheet of the Borrower
and its Consolidated Entities as at December 31, 2000, and (iii) an unaudited
income statement of the Borrower and its Consolidated Subsidiaries as December
31, 2000;

     (b) a pro forma unaudited consolidated balance sheet of the Borrower and
its Consolidated Entities as of April 30, 2001, giving effect to the
consummation of the Transaction and all the other transactions contemplated by
the Credit Agreement;

     (c) a pro forma Compliance Certificate, dated the Closing Date, giving
effect to the consummation of the Transaction and all the other transactions
contemplated by the Credit Agreement as of April 30, 2001; and

     (d) a business plan for the 2001 through 2003 Fiscal Years, together
withcash flow projections for the 2001 through 2006 Fiscal Years and a written
analysis of the business and prospects of Parent, Holdings, the Borrower and its
Consolidated Entities for the period from the Closing Date through the Stated
Maturity Date.

   8. Pro Forma EBITDA. The Borrower’s consolidated pro forma EBITDA, adjusted
to give effect to the subtraction of amounts attributable to Minority Interests
and the consummation of the acquisition of OrthoLink and inclusive of add-backs
for certain one-time, non-recurring charges not exceeding $6,700,000, for the
2000 Fiscal Year is not less than $17,5000,000.

                9. Closing Conditions. All conditions precedent to the initial
Credit Extensions set forth in Section 5.1 of the Credit Agreement have been
satisfied in full.

               

                IN WITNESS WHEREOF, the undersigned has caused this Certificate
to be executed and delivered, and the certifications, representations and
warranties contained herein to be made, by its duly Authorized Officer this 13th
day of June, 2001.

 

   USP DOMESTIC HOLDINGS, INC.   By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Finanical Officer

ANNEX I

Insurance Policies

ANNEX II

Transaction Documents

ANNEX III

UCC Termination Statements

ANNEX IV

Financial Information

 

[EXECUTION COPY]

BORROWER PLEDGE AND SECURITY AGREEMENT

                This BORROWER PLEDGE AND SECURITY AGREEMENT, dated as of June
13, 2001 (as amended, supplemented, amended and restated or otherwise modified
from time to time, this “Security Agreement”), is made by USP DOMESTIC HOLDINGS,
INC., a Delaware corporation (the “Grantor”), in favor of CREDIT SUISSE FIRST
BOSTON, as administrative agent (together with its successor(s) thereto in such
capacity, the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Grantor, the Lenders, Lehman
Commercial Paper Inc., as the Syndication Agent, Société Générale, as the
Documentation Agent, and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Grantor; and

                WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, the Grantor is required to execute and
deliver this Security Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

ARTICLE I
DEFINITIONS

                SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

                “Administrative Agent” is defined in the preamble.

                “Collateral” is defined in Section 2.1.

                “Collateral Account” is defined in clause (c) of Section 4.3.

                “Computer Hardware and Software Collateral” means:

                (a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape drives,
hard and soft disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and all peripheral devices and other related computer
hardware;

                (b) all software programs (including both source code, object
code and all related applications and data files), whether now owned, licensed
or leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing hardware described in clause (a) above;

                (c) all firmware associated therewith;

                (d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware, software and
firmware described in the preceding clauses (a) through (c); and

                (e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.

                “Control Agreement” means an agreement in form and substance
satisfactory to the Administrative Agent which provides for the Administrative
Agent to have “control” (as defined in Section 8-106 of the UCC, as such term
relates to investment property (other than certificated securities or commodity
contracts), or as used in Section 9-115(e) of the UCC, as such term
relates to commodity contracts).

                “Copyright Collateral” means all copyrights of the Grantor,
whether statutory or common law, registered or unregistered and whether
published or unpublished, now or hereafter in force throughout the world
including all of the Grantor’s right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule V
hereto, and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of Schedule V hereto, the
right to sue for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

                “Credit Agreement” is defined in the first recital.

                “Distributions” means all non-cash dividends paid on Equity
Interests, liquidating dividends paid on Equity Interests, shares of Equity
Interests resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Equity Interests constituting
Collateral, but excluding Dividends.

                “Dividends” means cash dividends and cash distributions with
respect to any Equity Interests constituting Collateral that are not a
liquidating dividend.

                “Equipment” is defined in clause (c) of Section 2.1.

                “Grantor” is defined in the preamble.

                “Intellectual Property Collateral” means, collectively, the
Computer Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.

                “Intercompany Note” means a promissory note payable to the
Grantor, either (a) in the form delivered to the Administrative Agent on the
Closing Date or (b) substantially in the form of Exhibit A hereto (with such
modifications as agreed to by the Administrative Agent), as amended, modified or
supplemented from time to time in accordance with clause (d) of Section 4.6,
together with any notes delivered in extension or renewal thereof or
substitution therefor.

                “Inventory” is defined in clause (d) of Section 2.1.

                “Patent Collateral” means:

                (a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing and each patent and patent application referred to in Item A of Schedule
III hereto;

                (b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any of the
items described in clause (a);

                (c) all patent licenses, and other agreements providing the
Grantor with the right to use any items of the type referred to in clauses (a)
and (b) above, including each patent license referred to in Item B of Schedule
III hereto; and

                (d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right to
sue third parties for past, present or future infringements of any patent or
patent application, and for breach or enforcement of any patent license.

                “Receivables” is defined in clause (e) of Section 2.1.

                “Related Contracts” is defined in clause (e) of Section 2.1.

                “Securities Act” is defined in clause (a) of Section 6.2.

                “Security Agreement” is defined in the preamble.

                “Specified Event” means the occurrence and continuance of a
Default under clauses (a) through (d) of Section 8.1.9 of the Credit Agreement
or any other Event of Default.

                “Trademark Collateral” means:

                (a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired including those referred to in Item A of
Schedule IV hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any other
country or political subdivision thereof or otherwise, and all common-law rights
relating to the foregoing, and (ii) the right to obtain all reissues, extensions
or renewals of the foregoing (collectively referred to as the “Trademark”);

                (b) all Trademark licenses for the grant by or to the Grantor of
any right to use any Trademark, including each Trademark license referred to in
Item B of Schedule IV hereto; and

                (c) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the extent
applicable clause (b);

                (d) the right to sue third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to the
extent applicable, clause (b); and

                (e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past, present or
future infringement or dilution of any Trademark, Trademark registration or
Trademark license, or for any injury to the goodwill associated with the use of
any such Trademark or for breach or enforcement of any Trademark license and all
rights corresponding thereto throughout the world.

                “Trade Secrets Collateral” means all common law and statutory
trade secrets and all other confidential, proprietary or useful information and
all know-how obtained by or used in or contemplated at any time for use in the
business of the Grantor (all of the foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI hereto, and
including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

                SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.

                SECTION 1.3. UCC Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Security Agreement, including
its preamble and recitals, with such meanings.

ARTICLE II
SECURITY INTEREST

                SECTION 2.1. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Collateral”):

                (a) all Intercompany Notes in which the Grantor has an interest
(including each Intercompany Note described in Item A of Schedule I hereto
(including the right to receive payment of the principal of and accrued interest
on such Intercompany Note, and other rights of the Grantor arising in its
capacity as the payee of such Intercompany Note));

                (b) (i) all investment property in which the Grantor has an
interest (including the Equity Interests of each issuer of such Equity Interests
described in Item B of Schedule I hereto) and (ii) all other Equity Interests
which are interests in limited liability companies or partnerships in which the
Grantor has an interest (including the Equity Interests of each issuer of such
Equity Interests described in Item B of Schedule I hereto), in each case
together with Dividends and Distributions payable in respect of the Collateral
described in the foregoing clauses (b)(i) and (b)(ii);

                (c) all equipment of the Grantor, including all parts thereof
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related thereto
(collectively referred to as the “Equipment”);

                (d) all inventory in all of its forms of the Grantor, including
(i) all raw materials and work in process therefor, finished goods thereof, and
materials used or consumed in the manufacture or production thereof, (ii) all
goods in which the Grantor has an interest in mass or a joint or other interest
or right of any kind (including goods in which the Grantor has an interest or
right as consignee), and (iii) all goods which are returned to or repossessed by
the Grantor, and all accessions thereto, products thereof and documents therefor
(all of the foregoing collectively referred to as the “Inventory”);

                (e) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds) of the
Grantor, whether or not arising out of or in connection with the sale or lease
of goods or the rendering of services, and all rights of the Grantor now or
hereafter existing in and to all security agreements, guaranties, leases and
other contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general intangibles
(all of the foregoing collectively referred to as the “Receivables”, and any and
all such security agreements, guaranties, leases and other contracts
collectively referred to as the “Related Contracts”);

                (f) all Intellectual Property Collateral of the Grantor;

                (g) the Collateral Account, all cash, checks, drafts, notes,
bills of exchange, money orders, other like instruments and all investment
property held in the Collateral Account (or in any sub-account thereof) and all
interest, earnings and proceeds in respect thereof;

                (h) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this Section;

                (i) all of the Grantor’s other property and rights of every kind
and description and interests therein; and

                (j) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in clauses
(a) through (i) above, and, to the extent not otherwise included, all payments
under insurance (whether or not the Administrative Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral).

Notwithstanding the foregoing, “Collateral” shall not include (i) the Grantor’s
real property leaseholds, (ii) any general intangibles or other rights arising
under any contracts, instruments, licenses or other documents as to which the
grant of a security interest would (A) constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and
until any required consents shall have been obtained or (B) give any other party
to such contract, instrument, license or other document the right to terminate
its obligations thereunder, (iii) any Equity Interest in a Restricted Entity,
and (iv) investment property consisting of Equity Interests of an issuer that is
a Foreign Subsidiary (other than a Foreign Subsidiary that (i) is treated as a
partnership under the Code or (ii) is not treated as an entity that is separate
from (A) the Grantor, (B) any Person that is treated as a partnership under the
Code or (C) any “United States person” (as defined in Section 7701(a)(30) of the
Code)) of the Grantor, in excess of 65% of the total combined voting power of
all Equity Interests of each such Foreign Subsidiary; provided further, that, in
the event of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase in of, any law or regulation,
directive or guideline of any Governmental Authority that could reasonably be
expected to alter the amount of United States federal income tax that would
otherwise be payable by the Grantor in the absence of such pledge, the
Administrative Agent or the Required Lenders may require the Grantor to pledge
such Equity Interests.

                SECTION 2.2. Security for Obligations. This Security Agreement
and the Collateral in which the Administrative Agent for the benefit of the
Secured Parties is granted a security interest hereunder by the Grantor secures
the payment of all Obligations of the Grantor now or hereafter existing.

                SECTION 2.3. Grantor Remains Liable. Anything herein to the
contrary notwithstanding

                (a) the Grantor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and will
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Security Agreement had not been executed;

                (b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Grantor from any of its duties or
obligations under any such contracts or agreements included in the Collateral;
and

                (c) no Secured Party will have any obligation or liability under
any contracts or agreements included in the Collateral by reason of this
Security Agreement, nor will any Secured Party be obligated to perform any of
the obligations or duties of the Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

                SECTION 2.4. Security Interest Absolute, etc. This Security
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable grant of security interest, and shall remain in full force and
effect until the Termination Date. All rights of the Secured Parties and the
security interests granted to the Administrative Agent (for its benefit and the
ratable benefit of each other Secured Party) hereunder, and all obligations of
the Grantor hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:

                (a) any lack of validity, legality or enforceability of any Loan
Document;

                (b) the failure of any Secured Party

                (i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person (including any other Guarantor)
under the provisions of any Loan Document or otherwise, or

                (ii) to exercise any right or remedy against any other guarantor
(including any other Guarantor) of, or collateral securing, any Obligations;

                (c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;

                (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and the Grantor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;

                (e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan Document;

                (f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor (including the Grantor
hereunder) of the Obligations, or any surrender or non-perfection of any
collateral, or any amendment to or waiver or release or addition to, or consent
to or departure from, any other guaranty held by any Secured Party
securing any of the Obligations; or

                (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

                In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, and to induce Secured Parties
to enter into Rate Protection Agreements, the Grantor represents and warrants to
each Secured Party as set forth below.

                SECTION 3.1. As to Equity Interests of the Grantor. With respect
to any Subsidiary of the Grantor that is

                (a) a corporation, business trust, joint stock company or
similar Person, all Equity Interests issued by such Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and represented by
a certificate; and

                (b) a partnership or limited liability company, no Equity
Interests issued by such Subsidiary (i) are dealt in or traded on securities
exchanges or in securities markets, (ii) expressly provide that such Equity
Interests are a security governed by Article 8 of the UCC, (iii) are held in a
securities account, or (iv) are represented by a certificate.

The percentage of the issued and outstanding Equity Interests of each Subsidiary
pledged by the Grantor hereunder are as set forth on Schedule I hereto.

                SECTION 3.2. Intercompany Notes. All Intercompany Notes have
been duly authorized, executed, endorsed, issued and delivered, and are the
legal, valid and binding obligation of the Issuer thereof, and are not in
default.

                SECTION 3.3. Location of Collateral, etc. All of the Equipment,
Inventory and lock boxes of the Grantor are located at the places specified in
Item A, Item B and Item C, respectively, of Schedule II hereto, as each such
Item may be supplemented or otherwise modified from time to time pursuant to
clause (a) of Section 4.2. None of the Equipment and Inventory has, within the
four months preceding the date of this Security Agreement, been located at any
place other than the places specified in Item A and Item B, respectively, of
Schedule II hereto except as set forth in a footnote thereto. The place(s) of
business and the chief executive office of the Grantor and the office(s) where
the Grantor keeps its records concerning the Receivables, and all originals of
all chattel paper which evidence Receivables, are located at the addresses set
forth in Item D of Schedule II hereto, as each such Item may be supplemented or
otherwise modified from time to time pursuant to clause (a) of Section 4.3. The
Grantor has no trade names other than those set forth in Item E of Schedule II
hereto. During the four months preceding the date hereof, the Grantor has not
been known by any legal name different from the one set forth on the signature
page hereto, nor has the Grantor been the subject of any merger or other
corporate reorganization, except as set forth in Item F of Schedule II hereto.
The Grantor’s federal taxpayer identification number is (and, during the four
months preceding the date hereof, the Grantor has not had a federal taxpayer
identification number different from the one) set forth in Item G of Schedule II
hereto. If the Collateral of the Grantor includes any Inventory located in the
State of California, such Grantor is not a “retail merchant” within the meaning
of Section 9102 of the California UCC. [All Receivables evidenced by a
promissory note or other instrument, negotiable document or chattel paper have
been duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent
and delivered and pledged to the Administrative Agent pursuant to Section 4.6.]
The Grantor is not a party to any federal, state or local government contract
except as set forth in Item H of Schedule II hereto.

                SECTION 3.4. Ownership, No Liens, etc. The Grantor owns its
Collateral free and clear of any Lien, except for Liens (a) created by this
Security Agreement, and, in the case of Collateral other than any investment
property (including Equity Interests) in which the Grantor has an interest, (b)
permitted by Section 7.2.3 of the Credit Agreement or (c) in favor of owners of
Computer Software Collateral that is licensed to the Grantor. No effective
financing statement or other filing similar in effect covering any Collateral is
on file in any recording office, except those filed in favor of the
Administrative Agent relating to this Security Agreement or those filed in
connection with Liens permitted by Section 7.2.3 of the Credit Agreement.

                SECTION 3.5. Possession of Inventory, etc. The Grantor agrees
that it will maintain exclusive possession of its goods, instruments and
Inventory, other than Inventory in transit in the ordinary course of business
and Inventory which is in the possession or control of a warehouseman, bailee
agent or other Person (other than a Person controlled by or under common control
with the Grantor) that has been notified of the security interest created in
favor of the Secured Parties pursuant to this Security Agreement, and has agreed
to hold such Inventory subject to the Secured Parties’ Lien and waive any Lien
held by it against such Inventory.

                SECTION 3.6. Negotiable Documents, Instruments and Chattel
Paper. The Grantor has delivered to the Administrative Agent possession of all
originals of all negotiable documents, instruments and chattel paper owned or
held by the Grantor on the Closing Date and agrees that it will, promptly
following receipt, deliver to the Administrative Agent possession of all
originals of negotiable documents, instruments and chattel paper that it
acquires following the Closing Date.

                SECTION 3.7. Intellectual Property Collateral. With respect to
any Intellectual Property Collateral the loss, impairment or infringement of
which could reasonably be expected to have a Material Adverse Effect:

                (a) such Intellectual Property Collateral is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part;

                (b) such Intellectual Property Collateral is valid and
enforceable;

                (c) the Grantor has made all necessary filings and recordations
to protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and (subject to the
terms of the Credit Agreement) in corresponding offices throughout the world,
and its claims to the Copyright Collateral in the United States Copyright Office
and (subject to the terms of the Credit Agreement) in corresponding offices
throughout the world;

                (d) the Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual Property
Collateral and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and

                (e) the Grantor has performed and will continue to perform all
acts and has paid and will continue to pay all required fees and taxes to
maintain each and every such item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable.

The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor’s
business.

                SECTION 3.8. Validity, etc. This Security Agreement creates a
valid security interest in the Collateral securing the payment of the
Obligations. The Grantor has filed or caused to be filed all Filing Statements
in the appropriate offices therefor (or has executed and delivered to the
Administrative Agent originals thereof suitable for filing in such offices) and
has taken all of the actions necessary to create perfected and (in the case of
Collateral other than Equity Interests pledged hereunder, subject to Section
7.2.3 of the Credit Agreement) first-priority security interests in the
applicable Collateral including (a) in the case of Collateral comprised of
certificated securities or instruments, delivery of such Collateral to the
Administrative Agent, duly endorsed in blank and (b) in the case of Collateral
comprised of uncertificated securities and other investment property (other than
certificated securities), such actions causing the Administrative Agent to have
“control” (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-115(e) of the UCC, as such term relates to commodity
contracts) of such Collateral; provided that, notwithstanding any of the
foregoing, with respect to any Collateral which constitutes motor vehicles, the
ownership of which is evidenced by a certificate of title filed with a
department of motor vehicles or similar agency of a Governmental Authority,
following the execution and delivery by the Grantor of this Security Agreement,
the Administrative Agent shall only have a valid security interest in such
Collateral.

                SECTION 3.9. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either

                (a) for the grant by the Grantor of the security interest
granted hereby, the pledge by the Grantor of any Collateral pursuant hereto or
for the execution, delivery and performance of this Security Agreement by the
Grantor;

                (b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder; or

                (c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Security Agreement, or, except (i) with
respect to any securities issued by a Subsidiary of the Grantor, as may be
required in connection with a disposition of such securities by laws affecting
the offering and sale of securities generally, the remedies in respect of the
Collateral pursuant to this Security Agreement and (ii) any “change of control”
or similar filings required by state licensing agencies.

ARTICLE IV
COVENANTS

                The Grantor covenants and agrees that, until the Termination
Date, the Grantor will perform, comply with and be bound by the obligations set
forth below.

                SECTION 4.1. As to Investment Property and Intercompany Notes,
Etc.

                SECTION 4.1.1. Equity Interests of Subsidiaries. The Grantor
will cause each of its Subsidiaries that is

                (a) a corporation, business trust, joint stock company or
similar Person, to provide in its Organic Documents that all securities issued
by such Subsidiary will be represented by a certificate; and

                (b) a partnership or limited liability company, to require that
none of the Equity Interests issued by such Subsidiary will (i) be dealt in or
traded on securities exchanges or in securities markets, (ii) expressly provide
that such Equity Interests are securities governed by Article 8 of the UCC,
(iii) be held in a securities account, or (iv) be represented by a certificate.

                SECTION 4.1.2. Investment Property (other than Certificated
Securities). With respect to any investment property (other than certificated
securities) owned by the Grantor, the Grantor will cause a Control Agreement
relating to such investment property to be executed and delivered by the Grantor
and the applicable financial intermediary in favor of the Administrative Agent.

                SECTION 4.1.3. Stock Powers, etc. The Grantor agrees that all
certificated securities delivered by the Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Administrative Agent.

                SECTION 4.1.4. Continuous Pledge. The Grantor will (subject to
the terms of the Credit Agreement) deliver to the Administrative Agent and at
all times keep pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis all investment property constituting Collateral,
all Dividends and Distributions with respect thereto, all Intercompany Notes
(duly endorsed by the Grantor to the order of the Administrative Agent), and all
interest and principal with respect to the Intercompany Notes, and all proceeds
and rights from time to time received by or distributable to the Grantor in
respect of any of the foregoing Collateral.

                SECTION 4.1.5. Voting Rights; Dividends, etc. The Grantor
agrees:

                (a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event (as such term is defined in the Credit
Agreement) from the Administrative Agent and without any request therefor by the
Administrative Agent, so long as such Specified Event shall continue, to deliver
(properly endorsed where required hereby or requested by the Administrative
Agent) to the Administrative Agent all Dividends and Distributions with respect
to investment property, all interest, principal, other cash payments on
Intercompany Notes, and all proceeds of the Collateral, in each case thereafter
received by the Grantor, all of which shall be held by the Administrative Agent
as additional Collateral; and

                (b) subject to clause (c)(ii) of Section 3.9 and, with respect
to Collateral consisting of general partner interests or limited liability
company interests, modifications to the respective Organic Documents to admit
the Administrative Agent as a general partner or member, respectively,
immediately upon the occurrence and continuance of a Specified Event and so long
as the Administrative Agent has notified the Grantor of the Administrative
Agent’s intention to exercise its voting power under this clause,

                (i) that the Administrative Agent may exercise (to the exclusion
of such Grantor) the voting power and all other incidental rights of ownership
with respect to any investment property constituting Collateral and the Grantor
hereby grants the Administrative Agent an irrevocable proxy, exercisable under
such circumstances, to vote such investment property; and

                (ii) to promptly deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow the
Administrative Agent to exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Grantor but which the
Grantor is then obligated to deliver to the Administrative Agent, shall, until
delivery to the Administrative Agent, be held by the Grantor separate and apart
from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless a Specified Event shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in clause (b), the Grantor will have the exclusive voting power with
respect to any investment property constituting Collateral and the
Administrative Agent will, upon the written request of the Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Grantor which are necessary to allow the Grantor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by the Grantor that would impair any such
Collateral or be inconsistent with or violate any provision of any Loan
Document.

                SECTION 4.2. As to Equipment and Inventory. The Grantor hereby
agrees that it will

                (a) keep all the Equipment and Inventory (other than Equipment
and Inventory Disposed of in accordance with Section 7.2.11 of the Credit
Agreement, motor vehicles and Inventory in transit) at the places therefor
specified in Section 3.3 or, upon 30 days’ prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III shall be true and
correct, and all action required pursuant to Section 4.6 shall have been taken
with respect to the Equipment and Inventory;

                (b) cause the Equipment to be maintained and preserved in good
repair and working order, ordinary wear and tear excepted, and in accordance
with any manufacturer’s manual unless the Grantor determines in good faith that
the repair or maintenance of such property is no longer economically feasible;
and forthwith, or in the case of any loss or damage to any of the Equipment, as
quickly as practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection therewith which
are necessary or desirable to such end; and promptly furnish to the
Administrative Agent a statement respecting any loss or damage to any of the
Equipment; and

                (c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside.

                SECTION 4.3. As to Receivables. (a) The Grantor will keep its
chief executive office and the office(s) where it keeps its records concerning
the Receivables, and all originals of all chattel paper which evidences
Receivables located at the addresses set forth in Item D of Schedule II hereto,
or, upon 30 days’ prior written notice to the Administrative Agent, at such
other locations in a jurisdiction where all actions required by Section 4.6
shall have been taken with respect to the Receivables and other Collateral. The
Grantor will not change its name or federal taxpayer identification number
except upon 30 days’ prior written notice to the Administrative Agent. In
addition, the Grantor shall supplement the information contained in Schedule II
hereto on the Compliance Certificate on each date a Compliance Certificate is
required to be delivered to the Administrative Agent under the Credit Agreement,
including any changes to the information set forth in Section 3.3.

                (b) The Grantor shall have the right to collect all Receivables
so long as no Specified Event shall have occurred and be continuing.

                (c) Upon (i) the occurrence and continuance of a Specified Event
and (ii) the delivery of written notice by the Administrative Agent to the
Grantor, all proceeds of Collateral received by the Grantor shall be delivered
in kind to the Administrative Agent for deposit to a deposit account (the
“Collateral Account”) of the Grantor maintained with the Administrative Agent,
and such Grantor shall not commingle any such proceeds, and shall hold separate
and apart from all other property, all such proceeds in express trust for the
benefit of the Administrative Agent until delivery thereof is made to the
Administrative Agent.

                (d) Following the delivery of notice pursuant to clause (c)(ii)
of this Section, the Administrative Agent shall have the right to apply any
amount in the Collateral Account to the payment of any Obligations which are due
and payable.

                (e) With respect to the Collateral Account, it is hereby
confirmed and agreed that (i) deposits in each Collateral Account are subject to
a security interest as contemplated hereby, (ii) each such Collateral Account
shall be under the sole dominion and control of the Administrative Agent and
(iii) the Administrative Agent shall have the sole right of withdrawal over such
Collateral Account.

                SECTION 4.4. As to Collateral.

                (a) Subject to clause (b) of this Section, the Grantor (i) may
in the ordinary course of its business, at its own expense, sell, lease or
furnish under the contracts of service any of the Inventory normally held by the
Grantor for such purpose, and use and consume, in the ordinary course of its
business, any raw materials, work in process or materials normally held by the
Grantor for such purpose, (ii) will, at its own expense, endeavor to collect, as
and when due, all amounts due with respect to any of the Collateral, including
the taking of such action with respect to such collection as the Administrative
Agent may reasonably request following the occurrence of a Specified Event or,
in the absence of such request, as the Grantor may deem advisable, and (iii) may
grant, in the ordinary course of business, to any party obligated on any of the
Collateral, any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods, the sale
or lease of which shall have given rise to such Collateral.

                (b) At any time following the occurrence and during the
continuance of a Specified Event, whether before or after the maturity of any of
the Obligations, the Administrative Agent may (i) revoke any or all of the
rights of the Grantor set forth in clause (a), (ii) notify any parties obligated
on any of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder and (iii) enforce collection of any of
the Collateral by suit or otherwise and surrender, release, or exchange all or
any part thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or evidenced
thereby.

                (c) Upon request of the Administrative Agent following the
occurrence and during the continuance of a Specified Event, the Grantor will, at
its own expense, notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder.

                (d) The Grantor hereby authorizes the Administrative Agent to
endorse, in the name of the Grantor, any item, howsoever received by the
Administrative Agent, representing any payment on or other proceeds of any of
the Collateral.

                SECTION 4.5. As to Intellectual Property Collateral. The Each
Grantor covenants and agrees to comply with the following provisions as such
provisions relate to any Intellectual Property Collateral material to the
operations or business of the Grantor:

                (a) the Grantor will not (i) do or fail to perform any act
whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable, (ii) permit any of its licensees to (A) fail to
continue to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment for
non-use, (B) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral, (C) fail to employ all
of the Trademark Collateral registered with any federal or state or foreign
authority with an appropriate notice of such registration, (D) adopt or use any
other Trademark which is confusingly similar or a colorable imitation of any of
the Trademark Collateral, (E) use any of the Trademark Collateral registered
with any federal, state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark Collateral
has been made or (F) do or permit any act or knowingly omit to do any act
whereby any of the Trademark Collateral may lapse or become invalid or
unenforceable, or (G) do or permit any act or knowingly omit to do any act
whereby any of the Copyright Collateral or any of the Trade Secrets Collateral
may lapse or become invalid or unenforceable or placed in the public domain
except upon expiration of the end of an unrenewable term of a registration
thereof, unless, in the case of any of the foregoing requirements in clauses
(i), (ii) and (iii), the Grantor shall either (x) reasonably and in good faith
determine that any of such Intellectual Property Collateral is of negligible
economic value to the Grantor, or (y) have a valid business purpose to do
otherwise;

                (b) the Grantor shall promptly notify the Administrative Agent
if it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may become
abandoned or dedicated to the public or placed in the public domain or invalid
or unenforceable, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding the Grantor’s
ownership of any of the Intellectual Property Collateral, its right to register
the same or to keep and maintain and enforce the same;

                (c) in no event will the Grantor or any of its agents,
employees, designees or licensees file an application for the registration of
any Intellectual Property Collateral with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, unless it promptly
informs the Administrative Agent, and upon request of the Administrative Agent
(subject to the terms of the Credit Agreement), executes and delivers all
agreements, instruments and documents as the Administrative Agent may reasonably
request to evidence the Administrative Agent’s security interest in such
Intellectual Property Collateral;

                (d) the Grantor will take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or (subject to the terms of the Credit Agreement) any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and taxes
(except to the extent that dedication, abandonment or invalidation is permitted
under the foregoing clause (a) or (b)); and

                (e) the Grantor will promptly (but no less than quarterly)
execute and deliver to the Administrative Agent (as applicable) a Patent
Security Agreement, Trademark Security Agreement and/or Copyright Security
Agreement, as the case may be, in the forms of Exhibit B, Exhibit C and Exhibit
D hereto following its obtaining an interest in any such Intellectual Property,
and shall execute and deliver to the Administrative Agent any other document
required to acknowledge or register or perfect the Administrative Agent’s
interest in any part of such item of Intellectual Property Collateral.

                SECTION 4.6. Further Assurances, etc. The Grantor agrees that,
from time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Grantor will

                (a) from time to time upon the request of the Administrative
Agent, promptly deliver to the Administrative Agent such stock powers,
instruments and similar documents, satisfactory in form and substance to the
Administrative Agent, with respect to such Collateral as the Administrative
Agent may reasonably request and will, from time to time upon the request of the
Administrative Agent after the occurrence and during the continuance of any
Specified Event promptly transfer any securities constituting Collateral into
the name of any nominee designated by the Administrative Agent; if any
Receivable shall be evidenced by an instrument, negotiable document or chattel
paper, deliver and pledge to the Administrative Agent hereunder such instrument,
negotiable document or chattel paper duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;

                (b) execute and file (or cause to be filed) such Filing
Statements or continuation statements, or amendments thereto, and such other
instruments or notices (including any assignment of claim form under or pursuant
to the federal assignment of claims statute, 31 U.S.C. § 3726, any successor or
amended version thereof or any regulation promulgated under or pursuant to any
version thereof), as may be necessary or that the Administrative Agent may
reasonably request in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative Agent
hereby;

                (c) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis, at the reasonable request of the Administrative Agent, all
investment property constituting Collateral, all Dividends and Distributions
with respect thereto, all Intercompany Notes (duly endorsed by such Grantor to
the order of the Administrative Agent), and all interest and principal with
respect to the Intercompany Notes, and all proceeds and rights from time to time
received by or distributable to such Grantor in respect of any of the foregoing
Collateral;

                (d) not enter into any agreement amending, supplementing or
waiving any provision of any Intercompany Note (including any underlying
instrument pursuant to which such Intercompany Note is issued), or compromising,
releasing or extending the time for payment of any obligation of the maker
thereof;

                (e) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any obligation
of the maker of any Intercompany Note or other instrument constituting
Collateral; and

                (f) furnish to the Administrative Agent, from time to time at
the Administrative Agent’s request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.

With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of the Grantor where permitted
by law. The Grantor agrees that a carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.

ARTICLE V
THE ADMINISTRATIVE AGENT

                SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact.
The Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time in the Administrative
Agent’s discretion, following the occurrence and during the continuance of a
Specified Event, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Security Agreement, including:

                (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                (b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

                (c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and

                (d) to perform the affirmative obligations of the Grantor
hereunder (including all obligations of the Grantor pursuant to Section 4.6).

The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

                SECTION 5.2. Administrative Agent May Perform. If the Grantor
fails to perform any agreement contained herein within 30 days after written
notice from the Administrative Agent, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Grantor pursuant to Section 6.4.

                SECTION 5.3. Administrative Agent Has No Duty. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or responsibility for

                (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
investment property, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters, or

                (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

                SECTION 5.4. Reasonable Care. The Administrative Agent is
required to exercise reasonable care in the custody and preservation of any of
the Collateral in its possession; provided that the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Event, but failure of the Administrative
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.

ARTICLE VI
REMEDIES

                SECTION 6.1. Certain Remedies. If any Specified Event shall have
occurred and be continuing:

                (a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may

                (i) require the Grantor to, and the Grantor hereby agrees that
it will, at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place to be designated by
the Administrative Agent which is reasonably convenient to both parties, and

                (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. The Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days prior notice to the Grantor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

                (b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied by the Administrative Agent against, all
or any part of the Obligations as set forth in Section 2.7 of the Subsidiary
Guaranty.

                (c) The Administrative Agent may

                (i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder,

                (ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to become due
thereunder,

                (iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

                (iv) endorse any checks, drafts, or other writings in the
Grantor’s name to allow collection of the Collateral,

                (v) take control of any proceeds of the Collateral, and

                (vi) execute (in the name, place and stead of the Grantor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

                SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 6.1, the Grantor agrees that, upon request of the Administrative Agent,
the Grantor will, at its own expense:

                (a) use its best efforts to exempt the Collateral under the
state securities or “Blue Sky” laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Administrative
Agent; and

                (b) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.

The Grantor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by any of the Secured Parties by reason of the
failure of the Grantor to perform any of the covenants contained in this Section
and consequently, to the extent permitted under applicable law, agrees that, if
the Grantor shall fail to perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Administrative Agent) of the Collateral on the date the
Administrative Agent shall demand compliance with this Section.

                SECTION 6.3. Compliance with Restrictions. The Grantor agrees
that in any sale of any of the Collateral whenever a Specified Event shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or
restriction.

                SECTION 6.4. Protection of Collateral. The Administrative Agent
may from time to time, at its option, perform any act which the Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given after the occurrence and during the continuance of
a Specified Event) and the Administrative Agent may from time to time take any
other action which the Administrative Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of its
security interest therein.

ARTICLE VII
MISCELLANEOUS PROVISIONS

                SECTION 7.1. Loan Document. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof, including Article X thereof.

                SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon the Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Grantor may not (unless otherwise permitted under the terms of
the Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.

                SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by the
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

                SECTION 7.4. Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile and addressed,
delivered or transmitted to the appropriate party at the address or facsimile
number of such party (in the case of any Subsidiary, in care of the Grantor)
specified in the Credit Agreement or at such other address or facsimile number
as may be designated by such party in a notice to the other party. Any notice or
other communication, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any such notice or other communication, if transmitted by
facsimile, shall be deemed given when transmitted and electronically confirmed.

                SECTION 7.5. Release of Liens. Upon (a) the Disposition of
Collateral in accordance with the Credit Agreement or (b) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (i) such Collateral (in the case of clause (a)) or
(ii) all Collateral (in the case of clause (b)). Upon any such Disposition or
termination, the Administrative Agent will, at the Grantor’s sole expense,
deliver to the Grantor, without any representations, warranties or recourse of
any kind whatsoever, all Collateral held by the Administrative Agent hereunder,
and execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.

                SECTION 7.6. No Waiver; Remedies. In addition to, and not in
limitation of Section 2.4, no failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

                SECTION 7.7. Section Captions. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.

                SECTION 7.8. Severability. Wherever possible each provision of
this Security Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.

                SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This
Security Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto.

                SECTION 7.10. Counterparts. This Security Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be duly executed and delivered by its Authorized Officer
as of the date first above written.

  USP DOMESTIC HOLDINGS, INC.         By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Financial Officer              
CREDIT SUISSE FIRST BOSTON,
 as Administrative Agent           By:  /s/ Julia P. Kingsbury    

--------------------------------------------------------------------------------

    Title: Vice President               By:  /s/ William S. Lutkins    

--------------------------------------------------------------------------------

    Title: Vice President

SCHEDULE I
to Borrower Pledge and Security Agreement

Item A. Intercompany Notes

None.

Item B. Equity Interests

      Common Stock        

--------------------------------------------------------------------------------

        # of   Authorized   Outstanding   % of Shares   Issuer (corporate) Cert.
#   Shares   Shares   Shares   Pledged  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  USP North Texas, Inc. 2   1,000   1,000   1,000   100 % Health Horizons of
Nashville, Inc. 8   1,000   1,000   1,000   100 % Health Horizons of Kansas
City, Inc. 4   1,000   1,000   1,000   100 % Health Horizons of Murfreesboro,
Inc. 3   1,000   1,000   1,000   100 % Health Horizons of Decatur, Inc. 4  
1,000   1,000   1,000   100 % USP Nevada, Inc. 2   1,000   1,000   1,000   100 %
USP Winter Park, Inc. 2   1,000   10,000   1,000   100 % USP Long Island, Inc. 1
  1,000   1,000   1,000   100 % USP New Jersey, Inc. 2   1,000   1,000   1,000  
100 % Texas Outpatient Surgicare Center, Inc. 34   2,600   100,000   2,600   100
% USP Chandler, Inc. 2   1,000   1,000   1,000   100 % USP South Houston, Inc. 2
  1,000   1,000   1,000   100 % USP Pasadena, Inc. 2   1,000   1,000   1,000  
100 % USP Manhattan, Inc. 1   1,000   1,000   1,000   100 % USP Las Cruces, Inc.
1   1,000   1,000   1,000   100 % OrthoLink Physicians Corporation 2   1,000  
1,000   1,000   100 %

 

SCHEDULE II
to Borrower Pledge and Security Agreement

Item A. Locations of Equipment

                None.

Item B. Location of Inventory

                None.

Item C. Location of Lock Boxes

                None.

Item D. Places of Business and Chief Executive Office

                17103 Preston Road
                Suite 200 North
                Dallas, TX 75248

Item E. Trade Names

                None.

Item F. Merger or Other Corporate Reorganization

                None.

Item G. Federal Taxpayer Identification Number

                75-286611

Item H. Government Contracts

                None.

SCHEDULE III
to Borrower Pledge and Security Agreement

Item A. Patents

                None.

Item B. Patent Licenses

                None.

SCHEDULE IV
to Borrower Pledge and Security Agreement

Item A. Trademarks

                None.

Item B. Trademark Licenses

                None.

SCHEDULE V
to Borrower Pledge and Security Agreement

Item A. Copyrights/Mask Works

                None.

Item B. Copyright/Mask Work Licenses

                None.

SCHEDULE VI
to Borrower Pledge and Security Agreement

Trade Secret or Know-How Licenses

None.

EXHIBIT A
to Borrower Pledge and Security Agreement

DEMAND NOTE

$____________  ____________ ___, ____

                FOR VALUE RECEIVED, the undersigned, [NAME OF MAKER], a
____________ [corporation] (the “Maker”), promises to pay on demand to the order
of USP DOMESTIC HOLDINGS, INC., a ____________ corporation (the “Payee”), the
principal sum of ____________________ DOLLARS ($____________) or such lesser
amount which equals the aggregate unpaid principal amount of all intercompany
loans made by the Payee to the Maker.

                The unpaid principal amount of this demand note (this “Note”)
shall bear interest at a rate equal to such rate per annum as shall be agreed
upon from time to time by the Payee and the Maker, payable at such times as
shall be agreed upon by the Payee and the Maker, and all payments of principal
of and interest on this Note shall be payable in same day or immediately
available funds in Dollars. Except as set forth in the next sentence, all
payments on this Note shall be made by the Maker to the Payee’s account as
notified to the Maker from time to time, and shall be evidenced on the books and
records of the Maker and the Payee. The Maker hereby agrees that upon Credit
Suisse First Boston (including its successors, transferees or assigns, referred
to as the “Administrative Agent”) notifying the Maker that a Specified Event has
occurred and is continuing (collectively referred to as a “Payment Event”), it
will make (and the Payee irrevocably instructs the Maker to make) all payments
of principal and accrued interest on this Note on demand to an account
identified by the Administrative Agent, and upon the delivery of such notice
(which can include a facsimile notice), the Administrative Agent shall have all
rights of the Payee to demand (and collect) payment of, and enforce all rights
with respect to, the Indebtedness evidenced by this Note.

                This Note is one of the Intercompany Notes referred to in the
Borrower Pledge and Security Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Security Agreement”), among various Persons (including the Payee) and the
Administrative Agent and has been pledged to the Administrative Agent (for its
benefit and the ratable benefit of each other Secured Party) as security for the
Obligations outstanding from time to time under the Loan Documents. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Note have the meanings provided in (or by reference in) the Security Agreement.

                THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK). THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THIS NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.

  [NAME OF MAKER]           By:      

--------------------------------------------------------------------------------

    Title:               Pay to the order of CREDIT SUISSE FIRST BOSTON, as
Administrative Agent             USP DOMESTIC HOLDINGS, INC.           By:      

--------------------------------------------------------------------------------

    Title:

EXHIBIT B
to Borrower Pledge and Security Agreement

PATENT SECURITY AGREEMENT

                This PATENT SECURITY AGREEMENT, dated as of ____________ ___,
_____ (this “Agreement”), is made between USP DOMESTIC HOLDINGS, INC., a
Delaware corporation (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Grantor, the Lenders, Société
Générale, as the Documentation Agent, Lehman Commercial Paper Inc., as the
Syndication Agent, and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Borrower Pledge and Security Agreement, dated as of
June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Patent Collateral (as defined below) to secure
all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Patent Collateral”):

                (a) all of its letters patent and applications for letters
patent throughout the world, including all patent applications in preparation
for filing and each patent and patent application referred to in Item A of
Schedule I attached hereto;

                (b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any of the
items described in clause (a);

                (c) all of its patent licenses, and other agreements providing
the Grantor with the right to use any items of the type referred to in clauses
(a) and (b) above, including each patent license referred to in Item B of
Schedule I attached hereto; and

                (d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right to
sue third parties for past, present or future infringements of any patent or
patent application, and for breach or enforcement of any patent license.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Patent Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of Patent
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Patent Collateral (in the case of clause (i))
or (B) all Patent Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor’s sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Patent Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Patent Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officers as of the
date first above written.

  USP DOMESTIC HOLDINGS,INC.           By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Financial Officer              
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent             By:  /s/ Julia p. Kingsbury    

--------------------------------------------------------------------------------

    Title: Vice President               By:  /s/ William S. Lutkins    

--------------------------------------------------------------------------------

    Title:  Vice President

SCHEDULE I
to Patent Security Agreement

Item A. Patents

Issued Patents              

--------------------------------------------------------------------------------

              Country Patent No.   Issue Date   Inventor(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Pending Patent Applications  

--------------------------------------------------------------------------------

  Country Serial No.   Filing Date   Inventor(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Patent Applications in Preparation  

--------------------------------------------------------------------------------

  Country Docket No.   Expected
Filing Date   Inventor(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Item B. Patent Licenses

Country or         Effective   Expiration   Subject   Territory Licensor  
Licensee   Date   Date   Matter  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

EXHIBIT C
to Borrower Pledge and Security Agreement

TRADEMARK SECURITY AGREEMENT

                This TRADEMARK SECURITY AGREEMENT, dated as of ____________ ___,
_____ (this “Agreement”), is made between USP DOMESTIC HOLDINGS, INC., a
Delaware corporation (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H:

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Grantor, the Lenders, Société
Générale, as the Documentation Agent, Lehman Commercial Paper Inc., as the
Syndication Agent, and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Borrower Pledge and Security Agreement, dated as of
June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Trademark Collateral (as defined below) to
secure all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Trademark Collateral”):

                (a) (i) all of its trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired including those referred to in Item A of
Schedule I hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any other
country or political subdivision thereof or otherwise, and all common-law rights
relating to the foregoing, and (ii) the right to obtain all reissues, extensions
or renewals of the foregoing (collectively referred to as the “Trademark”);

                (b) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the extent
applicable clause (b);

                (c) the right to sue third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to the
extent applicable, clause (b); and

                (d) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present or
future infringement or dilution of any Trademark, Trademark registration or
Trademark license, or for any injury to the goodwill associated with the use of
any such Trademark or for breach or enforcement of any Trademark license and all
rights corresponding thereto throughout the world.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Trademark Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of
Trademark Collateral in accordance with the Credit Agreement or (ii) the
occurrence of the Termination Date, the security interests granted herein shall
automatically terminate with respect to (A) such Trademark Collateral (in the
case of clause (i)) or (B) all Trademark Collateral (in the case of clause
(ii)). Upon any such Disposition or termination, the Administrative Agent will,
at the Grantor’s sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all Trademark
Collateral held by the Administrative Agent hereunder, and execute and deliver
to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Trademark Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by Authorized Officer as of the date
first above written.

  USP DOMESTIC HOLDINGS, INC.           By:      

--------------------------------------------------------------------------------

    Title:               CREDIT SUISSE FIRST BOSTON,
as Administrative Agent             By:      

--------------------------------------------------------------------------------

    Title:               By:      

--------------------------------------------------------------------------------

    Title:

SCHEDULE I
to Trademark Security Agreement

Item A. Trademarks

Registered Trademarks  

--------------------------------------------------------------------------------

  Country Trademark   Registration No.   Registration Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

Pending Trademark Applications  

--------------------------------------------------------------------------------

  Country Trademark   Serial No.   Filing Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Trademark Applications in Preparation  

--------------------------------------------------------------------------------

            Expected   Products/   Country Trademark   Docket No.   Filing Date
  Services  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Item B. Trademark Licenses

Country or             Effective   Expiration   Territory Trademark   Licensor  
Licensee   Date   Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

EXHIBIT D
to Borrower Pledge and Security Agreement

COPYRIGHT SECURITY AGREEMENT

                This COPYRIGHT SECURITY AGREEMENT, dated as of ____________ ___,
_____ (this “Agreement”), is made between USP DOMESTIC HOLDINGS, INC., a
Delaware corporation (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Grantor, the Lenders, Société
Générale, as the Documentation Agent, Lehman Commercial Paper Inc., as the
Syndication Agent, and the Administrative Agent, the Lenders and the Issuer have
extended Commitments to make Credit Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Borrower Pledge and Security Agreement, dated as of
June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Copyright Collateral (as defined below) to
secure all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following Copyright Collateral (as defined below),
whether now or hereafter existing or acquired by the Grantor.

                “Copyright Collateral” means all copyrights of the Grantor,
whether statutory or common law, registered or unregistered and whether
published or unpublished, now or hereafter in force throughout the world
including all of the Grantor’s right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule I
attached hereto, and registrations and recordings thereof and all applications
for registration thereof, whether pending or in preparation, all copyright
licenses, including each copyright license referred to in Item B of Schedule I
attached hereto, the right to sue for past, present and future infringements of
any of the foregoing, all rights corresponding thereto, all extensions and
renewals of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Copyright Collateral with the United
States Copyright Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Administrative
Agent for its benefit and the ratable benefit of each other Secured Party under
the Security Agreement. The Security Agreement (and all rights and remedies of
the Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of
Copyright Collateral in accordance with the Credit Agreement or (ii) the
occurrence of the Termination Date, the security interests granted herein shall
automatically terminate with respect to (A) such Copyright Collateral (in the
case of clause (i)) or (B) all Copyright Collateral (in the case of clause
(ii)). Upon any such Disposition or termination, the Administrative Agent will,
at the Grantor’s sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all Copyright
Collateral held by the Administrative Agent hereunder, and execute and deliver
to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Copyright Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  USP DOMESTIC HOLDINGS, INC.             By:      

--------------------------------------------------------------------------------

    Title:               CREDIT SUISSE FIRST BOSTON,
as Administrative Agent               By: _________________________________    
Title:               By: _________________________________     Title:

SCHEDULE I
to Copyright Security Agreement

Item A. Copyrights/Mask Works

Registered Copyrights/Mask Works  

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  Country Registration No.   Registration Date   Author(s)   Title  

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Copyright/Mask Work Pending Registration Applications  

--------------------------------------------------------------------------------

  Country Serial No.   Filing Date   Author(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Copyright/Mask Work Registration Applications in Preparation  

--------------------------------------------------------------------------------

    Expected               Country Docket No.   Filing Date   Author(s)   Title
 

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--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

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Item B. Copyright/Mask Work Licenses

Country or         Effective   Expiration   Territory Licensor   Licensee   Date
  Date  

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EXHIBIT B

BORROWING REQUEST

Credit Suisse First Boston,
  as Administrative Agent
11 Madison Avenue
New York, New York 10010
Attention:______________________

USP DOMESTIC HOLDINGS, INC.

Ladies and Gentlemen:

                This Borrowing Request is delivered to you pursuant to Section
2.3 of the Credit Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among USP Domestic Holdings, Inc., a Delaware corporation
(the “Borrower”), the Lenders, Credit Suisse First Boston , as Administrative
Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Société Générale,
as Documentation Agent. Terms used herein, unless otherwise defined herein, have
the meanings provided in the Credit Agreement.

                The Borrower hereby requests that a Revolving Loan be made in
the aggregate principal amount of $____________ on _____________ ___, _________
as a [Base Rate Loan] [LIBO Rate Loan having an Interest Period of _____
months].

                The Borrower hereby acknowledges that, pursuant to Section 5.2.2
of the Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitutes a representation and warranty by the Borrower that, on the date of
the making of such Loans, and both before and after giving effect thereto and to
the application of the proceeds therefrom, all statements set forth in Section
5.2.1 of the Credit Agreement are true and correct in all material respects
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date).

                The Borrower agrees that if prior to the time of the Borrowing
requested hereby any matter certified to herein by it will not be true and
correct in all material respects at such time as if then made, it will
immediately so notify the Administrative Agent. Except to the extent, if any,
that prior to the time of the Borrowing requested hereby the Administrative
Agent shall receive written notice to the contrary from the Borrower, each
matter certified to herein shall be deemed once again to be certified as true
and correct in all material respects at the date of such Borrowing as if then
made.

                Please wire transfer the proceeds of the Borrowing to the
accounts of the following persons at the fi nancial institutions indicated
respectively:

 

  Person to be Paid   Amount to

--------------------------------------------------------------------------------

Name, Address, etc. be Transferred Name Account No. Of Transferee Lender

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

        $_________________________ __________________________
__________________________ __________________________      
__________________________       Attention: _________________        
$_________________________ __________________________ __________________________
__________________________       __________________________       Attention:
_________________         $_________________________ __________________________
__________________________ __________________________      
__________________________       Attention: _________________ Balance of such  
    proceeds The Borrower   _________________________      
__________________________       Attention: _________________

 

                IN WITNESS WHEREOF, the Borrower has caused this Borrowing
Request to be executed and delivered, and the certifications and warranties
contained herein to be made, by its duly Authorized Officer this _____ day of
___________, ________.

 

  USP DOMESTIC HOLDINGS, INC.           By:      

--------------------------------------------------------------------------------

    Title:

 

COMPLIANCE CERTIFICATE

USP DOMESTIC HOLDINGS, INC.

                This Compliance Certificate is delivered pursuant to Clause (c)
of Section 7.1.1 of the Credit Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among USP Domestic Holdings, Inc., a Delaware corporation
(the “Borrower”), the Lenders, Credit Suisse First Boston, as Administrative
Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Société Générale,
as Documentation Agent. Unless otherwise defined herein or the context otherwise
requires, terms used herein or in any of the attachments hereto have the
meanings
provided in the Credit Agreement.

                The Borrower hereby certifies, represents and warrants in
respect of the period (the “Computation Period”) of four Fiscal Quarters ending
on ______ __, ____ (such latter date being the “Computation Date”):

(a) As of the Computation Date, no Default had occurred and was continuing[,
except for ________________].     (b) The Total Debt to EBITDA Ratio was ___:1,
as computed on Attachment 1 hereto. The maximum Total Debt to EBITDA Ratio
permitted pursuant to clause (a) of Section 7.2.4 of the Credit Agreement on the
Computation Date is ___:1, and, accordingly, the covenant [has][has not] been
complied with.     (c) The Senior Debt to EBITDA Ratio was __:1, as computed on
Attachment 2 hereto. The maximum Senior Debt to EBITDA Ratio permitted pursuant
to clause (b) of Section 7.2.4 of the Credit Agreement on the Computation Date
is ___:1, and, accordingly, the covenant [has][has not] been complied with.    
(d) The Fixed Charge Coverage Ratio was __:1, as computed on Attachment 3
hereto. The minimum Fixed Charge Coverage Ratio required pursuant to clause (c)
of Section 7.2.4 of the Credit Agreement on the Computation Date is ___:1, and,
accordingly, the covenant [has][has not] been complied with.     (e) The
Interest Coverage Ratio was __:1, as computed on Attachment 4 hereto. The
minimum Interest Coverage Ratio required pursuant to clause (d) of Section 7.2.4
of the Credit Agreement on the Computation Date is ___:1, and, accordingly, the
covenant [has][has not] been complied with.     (f) The Parent Total Debt to
Parent Total Capitalization Ratio was ___:1, as computed on Attachment 5 hereto.
The maximum Parent Total Debt to Parent Total Capitalization Ratio permitted
pursuant to Section 8.1.12 if the Credit Agreement is 0.60:1, and, accordingly,
[no][a] Default has occurred [and is continuing].

                IN WITNESS WHEREOF, the Borrower has caused this Compliance
Certificate to be executed and delivered, and the certification and warranties
contained herein to be made, by its officer thereunto duly authorized as of the
date first above written.

  USP DOMESTIC HOLDINGS, INC.           By:      

--------------------------------------------------------------------------------

    Title:

Attachment 1
(to _/_/_ Compliance
Certificate)

TOTAL DEBT TO EBITDA RATIO
on __________
(the “Computation Date”)

--------------------------------------------------------------------------------

A. Total Debt: the outstanding principal amount of the following types of
Indebtedness of the Borrower and its Consolidated Entities (in each case
exclusive of intercompany Indebtedness between the Borrower and its Consolidated
Entities):  

--------------------------------------------------------------------------------

  (1) All obligations for borrowed money or advances and all obligations
evidenced by bonds, debentures, notes or other similar instruments (which, in
the case of the Loans, shall be deemed to equal the average daily amount of the
Loans outstanding for the Fiscal Quarter ending on or immediately preceding the
Computation Date) $__________

--------------------------------------------------------------------------------

  (2) All obligations, contingent or otherwise, relative to the face amount of
all letters of credit, whether or not drawn, and banker’s acceptances, in each
case issued for the account of the Borrower and its Consolidated Entities
(which, in the case of Letter of Credit Outstandings, shall be deemed to equal
the average daily amount of Letter of Credit Outstandings for the Fiscal Quarter
ending on or immediately preceding the Computation Date) $__________

--------------------------------------------------------------------------------

  (3) All Capitalized Lease Liabilities (all monetary obligations under any
leasing or similar arrangement which have been (or in accordance with GAAP
should be) classified as capitalized leases and for purposes of each Loan
Document the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP, and the stated maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a premium or penalty) $__________

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  (4) All obligations arising under Synthetic Leases (any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which the Borrower or any of its Consolidated Entities is the
lessor) $__________

--------------------------------------------------------------------------------

  (5) Contingent Liabilities in respect of any of the foregoing. $__________

--------------------------------------------------------------------------------

  (6) The sum of Items A(1) through A(5) $__________

--------------------------------------------------------------------------------

B. EBIDTA 1: the sum, for the Borrower and its Consolidated Entities, of:  

--------------------------------------------------------------------------------

  1 EBITDA shall be adjusted to give pro forma effect to Permitted Acquisitions
made during any period as if such Permitted Acquisitions had been made at the
beginning of such period. In addition, for the first three Fiscal Quarters of
the 2001 Fiscal Year, EBITDA shall be Annualized.

--------------------------------------------------------------------------------

  (1) Net Income (the aggregate of all amounts, exclusive of all amounts in
respect of any extraordinary gains but including extraordinary losses, which
would be included as net income on the consolidated financial statements of the
Borrower and its Consolidated Entities) $__________

--------------------------------------------------------------------------------

  (2) To the extent deducted in determining Net Income, the sum of the
following:  

--------------------------------------------------------------------------------

    (a) Amounts attributable to amortization $__________

--------------------------------------------------------------------------------

    (b) Income tax expense $__________

--------------------------------------------------------------------------------

    (c) Interest Expense (without duplication, the aggregate interest expense
(both accrued and paid and net of any interest income paid during such period to
the Borrower and it Consolidated Entities) of the Borrower and its Consolidated
Entities for the Computation Period (including the portion of any payments made
in respect of Capitalized Lease Liabilities allocable to interest expense)
$__________

--------------------------------------------------------------------------------

    (d)  Depreciation of assets $__________

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  (3) The sum of Items B(2)(a) through B(2)(d) $__________           (4) EBITDA:
the sum of Items B(1) and B(3) $__________         C. TOTAL DEBT TO EBITDA
RATIO: the ratio of Item A(6) to Item B(4) _________: 1

--------------------------------------------------------------------------------

 

Attachment 2
(to _/_/_ Compliance
Certificate)

SENIOR DEBT TO EBITDA RATIO
on ___________
(the “Computation Date”)

 

--------------------------------------------------------------------------------

A. Senior Debt:  

--------------------------------------------------------------------------------

  (1) Total Debt (see Item A(6) of Attachment 1) $___________

--------------------------------------------------------------------------------

  (2) Subordinated Debt (the WACS Debt and other unsecured Indebtedness of the
Borrower subordinated in right of payment to the Obligations pursuant to
documentation containing redemption and other prepayment events, maturities,
amortization schedules, covenants, events of default, remedies, acceleration
rights, subordination provisions and other material terms satisfactory to the
Administrative Agent) $___________

--------------------------------------------------------------------------------

  (3) Item A(1) less Item A(2) $___________

--------------------------------------------------------------------------------

B. EBITDA (see Item B(4) of Attachment 1) $___________

--------------------------------------------------------------------------------

C. SENIOR DEBT TO EBITDA RATIO: the ratio of Item A(3) to Item B ___________: 1

--------------------------------------------------------------------------------

 

Attachment 3
(to _/_/_ Compliance
Certificate)

FIXED CHARGE COVERAGE RATIO
on ___________
(the “Computation Date”)

--------------------------------------------------------------------------------

A. EBITDA (see Item B(4) of Attachment 1) $ _________

--------------------------------------------------------------------------------

B. Amounts attributable to Minority Interests to the extent deducted in
determining Net Income $ _________

--------------------------------------------------------------------------------

C. Maintenance Capital Expenditures (any Capital Expenditures made with respect
to the maintenance of existing assets) $ _________

--------------------------------------------------------------------------------

D. The sum of Item A and Item B less Item C $ _________

--------------------------------------------------------------------------------

E. Fixed Charges 2: $ _________

--------------------------------------------------------------------------------

  2 For the first three Fiscal Quarters of the 2001 Fiscal Year, the amount of
Fixed Charges shall be Annualized.  

--------------------------------------------------------------------------------

  (1) Interest Expense (see Item B(2)(c) of Attachment 1) $ _________

--------------------------------------------------------------------------------

  (2) All scheduled principal repayments of Indebtedness made during the
Computation Period $ _________

--------------------------------------------------------------------------------

  (3) All income Taxes actually paid in cash $ _________

--------------------------------------------------------------------------------

  (4) The sum of Items B(1) through B(3) $ _________

--------------------------------------------------------------------------------

F. FIXED CHARGE COVERAGE RATIO: the ratio of Item D to Item E(4) _________: 1

--------------------------------------------------------------------------------

Attachment 4
(to _/_/_ Compliance
Certificate)

INTEREST COVERAGE RATIO
on ___________
(the “Computation Date”)

--------------------------------------------------------------------------------

A. EBITDA (see Item B(4) of Attachment 1) $ _________

--------------------------------------------------------------------------------

B. Amounts attributable to Minority Interests to the extent deducted in
determining Net Income $____________

--------------------------------------------------------------------------------

C. The sum of Item A and Item B $____________

--------------------------------------------------------------------------------

D. Interest Expense (see Item B(2)(c) of Attachment 1) $____________

--------------------------------------------------------------------------------

E. INTEREST COVERAGE RATIO: the ratio of Item C to Item D ___________:1

--------------------------------------------------------------------------------

 

Attachment 5
(to _/_/_ Compliance
Certificate)

PARENT TOTAL DEBT TO PARENT TOTAL CAPITALIZATION RATIO
on ___________
(the “Computation Date”)

--------------------------------------------------------------------------------

A. Parent Total Debt: the outstanding principal amount of the following types of
Indebtedness of the Parent and its Subsidiaries: $___________

--------------------------------------------------------------------------------

  (1) All obligations for borrowed money or advances and all obligations
evidenced by bonds, debentures, notes or other similar instruments $___________

--------------------------------------------------------------------------------

  (2) All obligations, contingent or otherwise, relative to the face amount of
all letters of credit, whether or not drawn, and banker’s acceptances, in each
case issued for the account of the Parent and its Subsidiaries $___________

--------------------------------------------------------------------------------

  (3) All Capitalized Lease Liabilities (all monetary obligations under any
leasing or similar arrangement which have been (or in accordance with GAAP
should be) classified as capitalized leases and for purposes of each Loan
Document the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP, and the stated maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee without
payment of a premium or penalty) $___________

--------------------------------------------------------------------------------

  (4) All obligations arising under Synthetic Leases (any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such
lease under which Parent and its Subsidiaries is the lessor) $___________

--------------------------------------------------------------------------------

  (5) Contingent Liabilities in respect of any of the foregoing. $___________

--------------------------------------------------------------------------------

B. The sum of Items A(1) through A(5)  

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

C. Parent Total Capitalization:  

--------------------------------------------------------------------------------

  (1) All amounts (without duplication) which, in accordance with GAAP, would be
included in Parent’s stockholders’ equity (excluding unrealized gains or losses
recorded pursuant to FAS 115) as required to be reported in Parent’s then most
recent consolidated balance sheet $___________

--------------------------------------------------------------------------------

  (2) Parent Total Debt (see Item B) $___________

--------------------------------------------------------------------------------

D. The sum of Items C(1) and C(2) $___________

--------------------------------------------------------------------------------

E. PARENT TOTAL DEBT TO PARENT TOTAL CAPITALIZATION RATIO: the ratio of Item B
to Item D ___________:1

--------------------------------------------------------------------------------

 

 

EXHIBIT D

CONTINUATION/CONVERSION NOTICE

Credit Suisse First Boston,
  as Administrative Agent
11 Madison Avenue
New York, New York 10010
Attention:______________________

USP DOMESTIC HOLDINGS, INC.

Ladies and Gentlemen:

                This Continuation/Conversion Notice is delivered to you pursuant
to Section 2.4 of the Credit Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among USP Domestic Holdings, Inc., a Delaware corporation
(the “Borrower”), the Lenders, Credit Suisse First Boston, as Administrative
Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Société Générale,
as Documentation Agent. Terms used herein, unless otherwise defined herein, have
the meanings provided in the Credit Agreement.

                The Borrower hereby requests that on ___________ ___, ________,

                (1) $____________ of the presently outstanding principal amount
of the Revolving Loans originally made on ____________ ___, _____, presently
being maintained as [Base Rate Loans] [LIBO Rate Loans],

                (2) be [converted into] [continued as],

                (3) 1[LIBO Rate Loans having an Interest Period of _____ months]
[Base Rate Loans].

--------------------------------------------------------------------------------

1 Insert appropriate interest rate option and, if applicable, the number of
months with respect to LIBO Rate Loans.

 

The Borrower hereby:

                (a) certifies and warrants that no Default has occurred and is
continuing; and

                (b) agrees that if prior to the time of the [continuation]
[conversion] requested hereby any matter certified to herein by it will not be
true and correct at such time as if then made, it will immediately so notify the
Administrative Agent.

Except to the extent, if any, that prior to the time of the [continuation]
[conversion] requested hereby the Administrative Agent shall receive written
notice to the contrary from the Borrower, each matter certified to herein shall
be deemed once again to be certified as true and correct in all material
respects at the date of such [continuation] [conversion] as if then made.

                IN WITNESS WHEREOF, the Borrower has caused this
Continuation/Conversion Notice to be executed and delivered, and the
certifications and warranties contained herein to be made, by its duly
Authorized Officer this _____ day of ____________, _______.

 

  USP DOMESTIC HOLDINGS, INC.           By:      

--------------------------------------------------------------------------------

    Title:

 

 

[EXECUTION COPY]

HOLDINGS GUARANTY AND PLEDGE AGREEMENT

                This HOLDINGS GUARANTY AND PLEDGE AGREEMENT, dated as of June
13, 2001 (as amended, supplemented, amended and restated or otherwise modified
from time to time, this “Agreement”), is made by UNITED SURGICAL PARTNERS
HOLDINGS, INC., a Delaware corporation (the “Pledgor”), in favor of CREDIT
SUISSE FIRST BOSTON, as administrative agent (together with any successor(s)
thereto in such capacity, the “Administrative Agent”) for each of the Secured
Parties.

W I T N E S S E T H:

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among USP Domestic Holdings, Inc., a
Delaware corporation (the “Borrower”), the Lenders, Lehman Commercial Paper
Inc., as the Syndication Agent, Société Générale, as the Documentation Agent,
and the Administrative Agent, the Lenders and the Issuer have extended
Commitments to make Credit Extensions to the Borrower;

                WHEREAS, the Borrower is a wholly-owned Subsidiary of the
Pledgor;

                WHEREAS, pursuant to the terms of the Credit Agreement, the
Pledgor is required to execute and deliver this Agreement;

                WHEREAS, the Pledgor has duly authorized the execution, delivery
and performance of this Agreement; and

                WHEREAS, it is in the best interests of the Pledgor to execute
this Agreement inasmuch as the Pledgor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement;

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:

ARTICLE I
DEFINITIONS

                SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):

                “Administrative Agent” is defined in the preamble.

                “Agreement” is defined in the preamble.

                “Borrower” is defined in the first recital.

                “Collateral” is defined in Section 2.1.

                “Credit Agreement” is defined in the first recital.

                “Distributions” means all non-cash dividends paid on Equity
Interests, liquidating dividends paid on Equity Interests, shares of Equity
Interests resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Equity Interests constituting
Collateral, but excluding Dividends.

                “Dividends” means cash dividends and cash distributions with
respect to any Equity Interests constituting Collateral that are not a
liquidating dividend.

                “Equity Interests Issuer” means each Person identified in
Attachment 1 hereto as the issuer of the Equity Interests identified opposite
the name of such Person.

                “Equity Interests” means all of the Equity Interests in the
Equity Interests Issuer.

                “Permitted Liens” means Liens of the type referred to in clauses
(b), (d) and (g) of Section 7.2.3 of the Credit Agreement.

                “Pledgor” is defined in the preamble.

                “Specified Event” means the occurrence and continuance of a
Default under clauses (a) through (d) of Section 8.1.9 of the Credit Agreement
or any other Event of Default.

                 SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.

                SECTION 1.3. UCC Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Agreement, including its
preamble and recitals, with such meanings.

ARTICLE II
PLEDGE

                SECTION 2.1. Grant of Security Interest. The Pledgor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Collateral”):

                (a) all investment property in which the Pledgor has an interest
(including the Equity Interests of each issuer of such Equity Interests
described in Schedule I hereto); and;

                (b) all other Equity Interests which are interests in limited
liability companies or partnerships in which the Pledgor has an interest
(including the Equity Interests of each Equity Interests Issuer described in
Schedule I hereto), in each case together with Dividends and Distributions
payable in respect of the Collateral described in the foregoing clauses (a) and
(b) and all proceeds of each of the foregoing.

                SECTION 2.2. Pledgor Remains Liable. Anything herein to the
contrary notwithstanding

                (a) the Pledgor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and will
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Agreement had not been executed;

                (b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Pledgor from any of its duties or
obligations under any such contracts or agreements included in the Collateral;
and

                (c) no Secured Party will have any obligation or liability under
any contracts or agreements included in the Collateral by reason of this
Agreement, nor will any Secured Party be obligated to perform any of the
obligations or duties of the Pledgor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.

                SECTION 2.3. Postponement of Subrogation. The Pledgor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall the
Pledgor seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made under any Loan Document or otherwise,
until following the Termination Date. Any amount paid to the Pledgor on account
of any such subrogation rights prior to the Termination Date shall be held in
trust for the benefit of the Secured Parties and shall immediately be paid and
turned over to the Administrative Agent for the benefit of the Secured Parties
in the exact form received by the Pledgor (duly endorsed in favor of the
Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 7.1;
provided that if the Pledgor has made payment to the Secured Parties of all or
any part of the Obligations and the Termination Date has occurred, then at the
Pledgor’s request, the Administrative Agent (on behalf of the Secured Parties)
will, at the expense of the Pledgor, execute and deliver to the Pledgor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to the Pledgor of an interest
in the Obligations resulting from such payment. In furtherance of the foregoing,
at all times prior to the Termination Date, the Pledgor shall refrain from
taking any action or commencing any proceeding against any Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Agreement to any Secured Party.

ARTICLE III
GUARANTY PROVISIONS

                SECTION 3.1. Guaranty. The Pledgor hereby absolutely,
unconditionally and irrevocably

                (a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of the Borrower and each other Obligor now or
hereafter existing under the Credit Agreement, any Letter of Credit and each
other Loan Document to which the Borrower or such other Obligor is or may become
a party (or, in the case of Letters of Credit, is or may become the account
party), whether for principal, interest, Reimbursement Obligations, fees,
expenses or otherwise (including all such amounts which would become due but for
the operation of any provision of any bankruptcy, insolvency, reorganization,
moratorium or similar law relating to or affecting creditors’ rights generally,
such as the automatic stay under Section 362(a) of the United States Bankruptcy
Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)); and

                (b) indemnifies and holds harmless each Secured Party for any
and all costs and expenses (including reasonable attorney’s fees and expenses)
incurred by such Secured Party in enforcing any rights under this Agreement,

This Agreement constitutes a guaranty of payment when due and not of collection,
and the Pledgor specifically agrees that it shall not be necessary or required
that any Secured Party exercise any right, assert any claim or demand or enforce
any remedy whatsoever against the Borrower or any other Obligor or any other
Person before or as a condition to the obligations of the Pledgor hereunder.

                SECTION 3.2. Acceleration of Guaranty. The Pledgor agrees that,
(a) in the event of the occurrence of any Specified Event with respect to any
Obligor, or (b) upon written notice from the Administrative Agent to the Pledgor
of the breach by the Pledgor in any material respect of any of the
representations, warranties or covenants contained herein, and if any such
events shall occur at a time when any of the Obligations may not then be due and
payable, the Pledgor will pay to the Lenders forthwith the full amount which
would be payable hereunder by the Pledgor if all such Obligations were then due
and payable.

                SECTION 3.3. Reinstatement, etc. The Pledgor agrees that this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any of the Secured
Obligations is rescinded or must otherwise be restored by any Secured Party,
upon the insolvency, bankruptcy or reorganization of any other Obligor or
otherwise, all as though such payment had not been made.

                SECTION 3.4. Guaranty and Security Interest Absolute, etc. This
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment and shall remain in full force and effect until
the Termination Date. The Pledgor guarantees that the Obligations will be paid
strictly in accordance with the terms of each Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Secured Party
with respect thereto. The liability of the Pledgor under this Agreement, and all
rights of the Administrative Agent and the security interests granted to the
Administrative Agent hereunder, and all obligations of the Pledgor hereunder,
shall, to the extent permitted under applicable law, be absolute, unconditional
and irrevocable irrespective of:

                (a) any lack of validity, legality or enforceability of any Loan
Document;

                (b) the failure of any Secured Party

                (i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person (including any other Guarantor)
under the provisions of any Loan Document or otherwise, or

                (ii) to exercise any right or remedy against any other guarantor
(including any other Guarantor) of, or collateral securing, any Obligations;

                (c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations or any other extension,
compromise or renewal of any Obligation;

                (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and the Pledgor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;

                (e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan Document;

                (f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor (including the Pledgor) of the
Obligations, or any surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or departure
from, any other guaranty held by any Secured Party securing any of the
Obligations; or

                (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.

                SECTION 3.5. Setoff. The Pledgor hereby irrevocably authorizes
the Administrative Agent and each Lender, without the requirement that any
notice be given to the Pledgor (such notice being expressly waived by the
Pledgor), upon the occurrence and during the continuance of any Default
described in Section 8.1.9 of the Credit Agreement or, with the consent of the
Required Lenders, upon the occurrence and during the continuance of any other
Specified Event, to set-off and appropriate and apply to the payment of the
Obligations (whether or not then due, and whether or not any Secured Party has
made any demand for payment of the Obligations), any and all balances, claims,
credits, deposits (general or special, time or demand, provisional or final),
accounts or money of the Pledgor then or thereafter maintained with such Secured
Party; provided that any such appropriation and application shall be subject to
the provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees
to notify the Pledgor and the Administrative Agent after any such setoff and
application made by such Secured Party; provided further that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Secured Party under this Section are in addition to other
rights and remedies (including other rights of setoff under applicable law or
otherwise) which such Secured Party may have.

                SECTION 3.6. Waiver, etc. The Pledgor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that the Administrative Agent
or any other Secured Party protect, secure, perfect or insure any security
interest or Lien, or any property subject thereto, or exhaust any right or take
any action against the Borrower, any other Obligor or any other Person
(including any other guarantor) or any collateral securing the Obligations.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

                SECTION 4.1. Representations and Warranties, etc. The Pledgor
represents and warrants unto each Secured Party, as at the date of each pledge
and delivery hereunder (including each pledge and delivery of Equity Interests)
by the Pledgor to the Administrative Agent of any Collateral, as set forth in
this Article.

                SECTION 4.1.1. Organization, etc. The Pledgor is validly
organized and existing and in good standing under the laws of the state or
jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its business requires such qualification (except where the failure
to so qualify would not, individually or in the aggregate, have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party, to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.

                SECTION 4.1.2. Ownership, No Liens, etc. The Pledgor is the
legal and beneficial owner of, and has good and marketable title to (and has
full right and authority to pledge and assign) the Collateral, free and clear of
all Liens except (i) any Lien granted pursuant hereto in favor of the
Administrative Agent and (ii) Permitted Liens.

                SECTION 4.1.3. Valid Security Interest. The execution and
delivery of this Agreement, together with the delivery of such Collateral to the
Administrative Agent, is effective to create a valid, perfected, first-priority
security interest in such Collateral and all proceeds thereof, securing the
Secured Obligations, subject only to Permitted Liens. Possession by the
Administrative Agent of the Collateral is the only action necessary to perfect
or protect such security interest in the Collateral, subject to Section 9-306 of
the UCC.

                SECTION 4.1.4. As to Equity Interests. In the case of any Equity
Interests constituting Collateral, all of such Equity Interests are duly
authorized and validly issued, fully paid and non-assessable, and constitute all
of the Equity Interests of each Equity Interests Issuer owned by the Pledgor. On
the Closing Date, the Pledgor has no direct Subsidiary other than each Equity
Interests Issuer.

                SECTION 4.1.5. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either

                (a) for the grant by the Pledgor of the security interest
granted hereby, the pledge by the Pledgor of any Collateral pursuant hereto or
for the execution, delivery and performance of this Agreement by the Pledgor;

                (b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder; or

                (c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Agreement, except (i) with respect to any
securities issued by a Subsidiary of the Pledgor, as may be required in
connection with a disposition of such securities by laws affecting the offering
and sale of securities generally, the remedies in respect of the Collateral
pursuant to this Agreement and (ii) any “change of control” or similar filings
required by state licensing agencies and, with respect to Ortholink Securities
Corporation, the National Association of Securities Dealers.

                SECTION 4.1.6. Credit Agreement Representations and Warranties.
The representations and warranties contained in Article VI of the Credit
Agreement, insofar as the representations and warranties contained therein are
applicable to the Pledgor and its properties, are true and correct in all
material respects, each such representation and warranty set forth in such
Article (insofar as applicable as aforesaid) and all other terms of the Credit
Agreement to which reference is made therein, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Agreement by reference as though specifically set forth in this Section.

ARTICLE V
COVENANTS

                SECTION 5.1. Protect Collateral; Further Assurances, etc. The
Pledgor will not sell, assign, transfer, pledge, or encumber in any other manner
the Collateral (except in favor of the Administrative Agent hereunder) to the
extent prohibited under the Credit Agreement. The Pledgor will warrant and
defend the right and title herein granted unto the Administrative Agent in and
to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.

                SECTION 5.2. Stock Powers, etc. The Pledgor agrees that all
Equity Interests delivered by the Pledgor pursuant to this Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Administrative Agent. The Pledgor
will, from time to time upon the request of the Administrative Agent, promptly
deliver to the Administrative Agent such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Administrative Agent, with
respect to the Collateral as the Administrative Agent may reasonably request and
will, from time to time upon the request of the Administrative Agent after the
occurrence and during the continuation of any Specified Event, promptly transfer
any Equity Interests constituting Collateral into the name of any nominee
designated by the Administrative Agent.

                SECTION 5.3. Continuous Pledge. Subject to the Credit Agreement,
the Pledgor will, at all times, keep pledged to the Administrative Agent
pursuant hereto, on a first-priority, perfected basis all investment property
constituting Collateral and, to the extent required under the Credit Agreement,
all Dividends and Distributions with respect thereto and all other Collateral
and other securities, instruments, proceeds, and rights from time to time
received by or distributable to the Pledgor in respect of any Collateral, and
will not permit the Borrower to issue any Voting Stock which shall not have been
immediately duly pledged hereunder on a first priority perfected basis.

                SECTION 5.4. Voting Rights; Dividends, etc. The Pledgor agrees:

                (a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event from the Administrative Agent and without any
request therefor by the Administrative Agent, so long as such Specified Event
shall continue, to deliver (properly endorsed where required hereby or requested
by the Administrative Agent) to the Administrative Agent all Dividends and
Distributions with respect to investment property, all interest, principal, and
all proceeds of the Collateral, in each case thereafter received by the Pledgor,
all of which shall be held by the Administrative Agent as additional Collateral;
and

                (b) subject to clause (c)(ii) of Section 4.1.5 and, with respect
to Collateral consisting of general partner interests or limited liability
company interests, modifications to the respective Organic Documents to the
admission of the Administrative Agent as a general partner or member,
respectively, immediately upon the occurrence and continuance of a Specified
Event and so long as the Administrative Agent has notified the Pledgor of the
Administrative Agent’s intention to exercise its voting power under this clause,

 

                 (i) that the Administrative Agent may exercise (to the
exclusion of the Pledgor) the voting power and all other incidental rights of
ownership with respect to any investment property constituting Collateral and
the Pledgor hereby grants the Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote such investment property; and

                (ii) to promptly deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow the
Administrative Agent to exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Administrative Agent, shall, until
delivery to the Administrative Agent, be held by the Pledgor separate and apart
from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless a Specified Event shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in clause (b), the Pledgor will have the exclusive voting power with
respect to any investment property constituting Collateral and the
Administrative Agent will, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by the Pledgor that would impair any such
Collateral or be inconsistent with or violate any provision of any Loan
Document.

                SECTION 5.5. Amendment of Organic Documents. The Pledgor will
not amend, upplement or otherwise modify, or permit, consent or suffer to occur
any amendment, supplement or modification of any terms or provisions contained
in, or applicable to, any Organic Document of any issuer of any Security
comprising the Collateral in which it has an equity interest if the effect
thereof is to impair, or is in any manner adverse to, the rights or interests of
the Administrative Agent or any other Senior Secured Party hereunder or under
the Credit Agreement or any other Loan Document, without the prior written
consent of the Administrative Agent and the Majority Lenders.

                 SECTION 5.6. Payment of Net Equity Proceeds. Upon receipt of
any Net Equity Proceeds, from the Borrower in violation of Section 3.1.1 of the
Credit Agreement, the Pledgor shall pay or repay the Loans in the amounts and on
the dates required pursuant to clause (c) of Section 3.1.1 of the Credit
Agreement.

                SECTION 5.7. Compliance with Laws, etc. The Pledgor will comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include:

                (a) the maintenance and preservation of its corporate existence
and qualification as a foreign corporation; provided that this clause (a) will
not prohibit any transaction otherwise permitted under Section 5.9; and

                (b) the payment, before the same become delinquent, of all
material taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.

                SECTION 5.8. No Defaults. The Pledgor will not, and will not
permit the Borrower or any of its Subsidiaries to, take any action or fail to
take any action if such action or failure to act would result in a Default under
the Credit Agreement.

                SECTION 5.9. Activities of the Pledgor.

                (a) Without limiting the effect of any provision contained in
this Article V, the Pledgor will not engage in any business activity other than
its continuing ownership of all of the Equity Interests in the Borrower and USP
International Holdings, Inc., its compliance with the obligations applicable to
it under the Loan Documents, its payment of any dividends or other distributions
in respect of, or its repurchase or redemption of, any of its Equity Interests
not otherwise prohibited hereunder, its issuance of any Equity Interests or
Indebtedness not otherwise prohibited hereunder, its payment of principal and
interest on any Indebtedness not otherwise prohibited hereunder and its payment
of overhead expenses and taxes.

                (b) Without limiting the generality of clause (a) above, the
Pledgor will not (i) create, assume or suffer to exist any Lien upon, or grant
any options or other rights with respect to, any of its revenues, property or
other assets, whether now owned or hereafter acquired other than as contemplated
by the Loan Documents, wind-up, liquidate or dissolve itself (or suffer to exist
any of the foregoing), or consolidate or amalgamate with or merge into or with
any other Person, or Dispose of all or any part of its assets, in one
transaction or a series of transactions, to any Person or Persons other than
contemplated by the Loan Documents, (ii) without the prior written consent of
the Required Lenders, consent to any amendment, supplement, amendment and
restatement, waiver or other modification of any of the terms or provisions
contained in, or applicable to, any schedules, exhibits or agreements, in each
case which would adversely affect the rights or remedies of the Lenders or the
Pledgor’s or any other Obligor’s ability to perform hereunder or under any Loan
Document, or increase the obligations of the Pledgor thereunder to the detriment
of the Lenders, or which would increase the Pledgor’s, the Borrower’s or any of
its Subsidiaries’ obligations or liabilities, contingent or otherwise, (iii)
without the consent of the Agents, create, incur, assume or suffer to exist any
Investment in any other Person, other than an Investment in the Borrower and USP
International Holdings, Inc.

                (c) The Pledgor agrees not to commence or cause the commencement
of any of the actions described in clause (b), (c) or (d) of Section 8.1.9 of
the Credit Agreement with respect to the Borrower or any of its Subsidiaries.

                SECTION 5.10. Corporate Status. The Pledgor agrees not to change
its passive holding company status.

ARTICLE VI
THE ADMINISTRATIVE AGENT

                 SECTION 6.1. Administrative Agent Appointed Attorney-in-Fact.
The Pledgor hereby irrevocably appoints the Administrative Agent it’s
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time in the Administrative
Agent’s discretion, following the occurrence and during the continuance of a
Specified Event and subject to delivery of notice to the Pledgor, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including:

                (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                (b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

                (c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and

                (d) to perform the affirmative obligations of the Pledgor
hereunder (including all obligations of the Pledgor pursuant to Section 5.1).

The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

                SECTION 6.2. Administrative Agent May Perform. If the Pledgor
fails to perform any agreement contained herein within 30 days after written
notice from the Administrative Agent, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Pledgor pursuant to Section 8.4.

                SECTION 6.3. Administrative Agent Has No Duty. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or responsibility for (a) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any investment property, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.

                SECTION 6.4. Reasonable Care. The Administrative Agent is
required to exercise reasonable care in the custody and preservation of any of
the Collateral in its possession; provided that the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Event, but failure of the Administrative
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.

ARTICLE VII
REMEDIES

                SECTION 7.1. Certain Remedies. If any Specified Event shall have
occurred and be continuing:

                (a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may

                (i) require the Pledgor to, and the Pledgor hereby agrees that
it will, at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place to be designated by
the Administrative Agent which is reasonably convenient to both parties, and

                (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days prior notice to the Pledgor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

                (b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied by the Administrative Agent against, all
or any part of the Obligations as set forth in Section 2.7 of the Subsidiary
Guaranty.

                (c) The Administrative Agent may

                (i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder,

                (ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to become due
thereunder,

                (iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

                (iv) endorse any checks, drafts, or other writings in the
Pledgor’s name to allow collection of the Collateral,

                (v) take control of any proceeds of the Collateral, and

                (vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

                 SECTION 7.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 7.1, the Pledgor agrees that, upon request of the Administrative Agent,
the Pledgor will, at its own expense:

                (a) use its best efforts to exempt the Collateral under the
state securities or “Blue Sky” laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Administrative
Agent; and

 

                (b) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.

The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by any of the Secured Parties by reason of the
failure of the Pledgor to perform any of the covenants contained in this Section
and consequently, to the extent permitted under applicable law, agrees that, if
the Pledgor shall fail to perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Administrative Agent) of the Collateral on the date the
Administrative Agent shall demand compliance with this Section.

                SECTION 7.3. Compliance with Restrictions. The Pledgor agrees
that in any sale of any of the Collateral whenever a Specified Event shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Pledgor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Pledgor for
any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

SECTION 7.4. Indemnity and Expenses.

                (a) The Pledgor agrees to indemnify the Administrative Agent
from and against any and all claims, losses and liabilities arising out of or
resulting from this Agreement (including enforcement of this Agreement), except
claims, losses, or liabilities resulting from the Administrative Agent’s gross
negligence or wilful misconduct.

                (b) The Pledgor, upon demand, will pay to the Administrative
Agent the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with

                (i) the administration of each Loan Document,

                (ii) the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral,

 

                (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, or

                (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.

ARTICLE VIII
MISCELLANEOUS PROVISIONS

                SECTION 8.1. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.

                SECTION 8.2. Binding on Successors, Transferees and Assigns;
Assignment. This Agreement shall remain in full force and effect until the
Termination Date, shall be jointly and severally binding upon the Pledgor and
its successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Pledgor may not (unless otherwise permitted under the terms of
the Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.

                SECTION 8.3. Amendments, etc. No amendment to or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor from its
obligations under this Agreement shall in any event be effective unless the same
shall be in writing and signed by the Administrative Agent (on behalf of the
Lenders or the Required Lenders, as the case may be pursuant to Section 10.1 of
the Credit Agreement), and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.

                SECTION 8.4. Protection of Collateral. The Administrative Agent
may from time to time, at its option, perform any act which the Pledgor agrees
hereunder to perform and which the Pledgor shall fail to perform within 30 days
after being requested in writing so to perform and the Administrative Agent may
from time to time take any other action which the Administrative Agent
reasonably deems necessary for the maintenance, preservation or protection of
any of the Collateral or of its security interest therein.

                SECTION 8.5. Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile and addressed,
delivered or transmitted to the appropriate party at the address or facsimile
number of such party specified in the Credit Agreement or at such other address
or facsimile number as may be designated by such party in a notice to the other
party. Any notice or other communication, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or other communication, if
transmitted by facsimile, shall be deemed given when transmitted and
electronically confirmed.

                SECTION 8.6. No Waiver; Remedies. In addition to, and not in
limitation of, Section 3.4 and Section 3.6, no failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

                SECTION 8.7. Section Captions. Section captions used in this
Agreement are for convenience of reference only, and shall not affect the
construction of this Agreement.

                SECTION 8.8. Severability. Wherever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

                SECTION 8.9. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

                SECTION 8.10. Governing Law, Entire Agreement, etc. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This
Agreement and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.

                SECTION 8.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, ANY ISSUER OR THE PLEDGOR IN CONNECTION HEREWITH OR
THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PLEDGOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED FOR THE PLEDGOR IN SECTION 10.2 OF THE CREDIT AGREEMENT. THE
PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

                SECTION 8.12. Waiver of Jury Trial. THE PLEDGOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR
THE PLEDGOR IN CONNECTION THEREWITH. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH
LENDER AND EACH ISSUER ENTERING INTO THE LOAN DOCUMENTS.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
day and year first above written.

  UNITED SURGICAL PARTNERS HOLDINGS, INC.            By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Financial Officer                    
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent               By:  /s/ William S. Lutkins    

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     Title: Vice President                By:  /s/ Julia P. Kingsbury    

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    Title: Vice President

ATTACHMENT 1
 to Holdings Guaranty and Pledge Agreement

Equity Interests

      Description        

--------------------------------------------------------------------------------

                % of                 Outstanding     Certificate   Authorized  
Outstanding   Shares   Equity Interests Issuer No.   Shares   Shares   Pledged  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  USP Domestic Holdings, Inc. [                    ]   [                    ]  
[                     ]   100%   USP International Holdings, Inc. [         
          ]   [                    ]   [                     ]   100%  

 

EXHIBIT C

ISSUANCE REQUEST

Credit Suisse First Boston,
  as Administrative Agent
11 Madison Avenue
New York, New York 10010
Attention:______________________

USP DOMESTIC HOLDINGS, INC.

Ladies and Gentlemen:

                This Issuance Request is delivered to you pursuant to Section
2.6 of the Credit Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among USP Domestic Holdings, Inc., a Delaware corporation
(the “Borrower”), the Lenders, Credit Suisse First Boston, as Administrative
Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Société Générale,
as Documentation Agent. Terms used herein, unless otherwise defined herein, have
the meanings provided in the Credit Agreement.

                The Borrower hereby requests that on ____________ ___, ______
(the “Date of Issuance”) [Name of Issuer]1(the “Issuer”) [issue a Letter of
Credit in the initial Stated Amount of $____________ with a Stated Expiry Date
(as defined therein) of ____________ ___, _____] [extend the Stated Expiry Date
(as defined under Letter of Credit No. ___, issued on ____________ ___, _____,
in the initial Stated Amount of $____________) to a revised Stated Expiry Date
(as defined therein) of ____________ ___, _____].

--------------------------------------------------------------------------------

1 USUALLY THE ADMINISTRATIVE AGENT.

 

                The beneficiary of the requested Letter of Credit will be
_________________________, and such Letter of Credit will be in support of
_________________________.

                The Borrower hereby acknowledges that, pursuant to Section 5.2.2
of the Credit Agreement, each of the delivery of this Issuance Request and the
acceptance by the Borrower of the [issuance] [extension] of the Letter of Credit
requested hereby constitutes a representation and warranty by the Borrower that,
on the date of such [issuance] [extension], and both before and after giving
effect thereto and to the application of the proceeds or benefits of the Letter
of Credit [issued] [extended] in accordance herewith, all statements set forth
in Section 5.2.1 of the Credit Agreement are true and correct in all material
respects (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date).

                The Borrower agrees that if prior to the time of the [issuance]
[extension] of the Letter of Credit requested hereby any matter certified to
herein by it will not be true and correct in all material respects at such time
as if then made, it will immediately so notify the Administrative Agent. Except
to the extent, if any, that prior to the time of the [issuance] [extension] of
the Letter of Credit requested hereby the Administrative Agent shall receive
written notice to the contrary from the Borrower, each matter certified to
herein shall be deemed once again to be certified as true and correct in all
material respects at the date of such [issuance] [extension] as if then made.

                IN WITNESS WHEREOF, the Borrower has caused this Issuance
Request to be executed and delivered, and the certifications and warranties
contained herein to be made, by its duly Authorized Officer this _____ day of
________________, ________.

  USP DOMESTIC HOLDINGS, INC.   By:      

--------------------------------------------------------------------------------

    Title:

 

EXHIBIT L

LENDER ASSIGNMENT AGREEMENT

___________ ___, ______

USP Domestic Holdings, Inc.
17103 Preston Road
Suite 200 North
Dallas, TX 75248
Attention: Donald E. Steen

Credit Suisse First Boston,
  as Administrative Agent
11 Madison Avenue
New York, New York 10010
Attention:______________________

USP DOMESTIC HOLDINGS, INC..

Ladies and Gentlemen:

                We refer to clause (d) of Section 10.11.1 of the Credit
Agreement, dated as of June 13, 2001 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the “Credit Agreement”), among
USP Domestic Holdings, Inc., a Delaware corporation (the “Borrower”), the
Lenders, Credit Suisse First Boston, as Administrative Agent, Lehman Commercial
Paper Inc., as Syndication Agent, and Société Générale, as Documentation Agent.
Terms used herein, unless otherwise defined herein, have the meanings provided
in the Credit Agreement.

                As of ______________ ___, ________ (the “Assignment Date”),
___________________ (the “Assignor”) irrevocably sells, transfers, conveys and
assigns, without recourse, representation or warranty (except as expressly set
forth herein), to ____________________ (the “Assignee”), and the Assignee
irrevocably purchases from the Assignor that portion of the Loans and
Commitments of the Assignor as set forth on Schedule I hereto (the “Assigned
Portion”) with, if applicable, conveyances of the Revolving Loans to include the
Assignor’s pro rata portion of any Letter of Credit Outstandings as of the
Assignment Date under the Credit Agreement, so that, after giving effect to the
foregoing assignment and delegation, the Assignor’s and the Assignee’s
Percentages for the purposes of each Loan Document will be as set forth on
Schedule I hereto.

                In addition, this agreement constitutes notice to each of you,
pursuant to clause (c) of Section 10.11.1 of the Credit Agreement, of the
assignment and delegation to the Assignee of the Assigned Portion of the Credit
Extensions and Commitments of the Assignor outstanding under the Credit
Agreement as of the Assignment Date.

                Any accrued and unpaid interest, fees and other payments related
to the Assigned Portion applicable to the period prior to the Assignment Date
shall be for the account of the Assignor. Any accrued and unpaid interest, fees
and other payments related to the Assigned Portion applicable to the period from
and after the Assignment Date shall be for the account of the Assignee. Each of
the Assignor and the Assignee severally agrees that it will hold for the other
party any interest, fees and other payments which it may receive to which the
other party is entitled pursuant to any agreement between the parties and pay to
the other party any such amounts which it may receive promptly upon receipt
thereof. In furtherance of the foregoing, the Administrative Agent will, and is
hereby authorized to, pay over to the Assignee and the Assignor such amounts to
which each is entitled.

                The Assignee hereby acknowledges and confirms that it has
received a copy of the Credit Agreement and the exhibits related thereto,
together with (to the extent requested by the Assignee in writing) copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the Credit Extensions thereunder. The Assignee
further confirms and agrees that in becoming a Lender and in making its
Commitments and Credit Extensions under the Credit Agreement, such actions have
and will be made without recourse to, or representation or warranty by, the
Administrative Agent.

                The Assignor represents and warrants that it is legally
authorized to enter into and deliver this agreement and represents that it is
the legal and beneficial owner of the Assigned Portion and that such Assigned
Portion is free and clear of any adverse claim. Except as set forth in the
previous sentence, the Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made pursuant to or in connection with this agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto, including the financial condition of the Borrower or
any of its Subsidiaries or the performance or observance by any Lender of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant hereto or thereto. The Assignee represents and warrants that
it is legally authorized to enter into and deliver this agreement and confirms
that it has received copies of the most recent financial statements delivered
pursuant to the Credit Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this agreement. In addition, the Assignee independently and without
reliance upon the Assignor, the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, shall continue to make its own credit decisions in taking or not taking
action under the Loan Documents and the other instruments and documents
delivered in connection therewith.

                Except as otherwise provided in the Credit Agreement, effective
as of the Assignment Date,

                (a) the Assignee

                (i) shall be deemed automatically to have become a party to the
Credit Agreement and shall have all the rights and obligations of a “Lender”
under the Loan Documents as if it were an original signatory thereto to the
extent specified in the second paragraph hereof; and

                (ii) agrees to be bound by the terms and conditions set forth in
the each of the Loan Documents as if it were an original signatory thereto; and

                (b) the Assignor shall be released from its obligations under
the Loan Documents to the extent specified in the second paragraph hereof.

                [The Assignor and the Assignee hereby agree that the
[Assignor][Assignee] will pay to the Administrative Agent the processing fee, if
applicable, referred to in Section 10.11.1 of the Credit Agreement.]

                The Assignee hereby advises each of you that the Assignee’s
administrative details with respect to the Assigned Portion are on file with the
Administrative Agent, and requests the Administrative Agent to acknowledge
receipt of this document.

                The Assignee agrees (for the benefit of the Assignor, the
Borrower and the Administrative Agent) to furnish, if required by Section 4.6 of
the Credit Agreement, the applicable Internal Revenue Service forms or other
forms required thereunder no later than the date of acceptance hereof by the
Administrative Agent. In addition, the Assignee represents and warrants (for the
benefit of the Assignor, the Borrower and the Administrative Agent) that, under
applicable law and treaties in effect as of the date hereof, no United States
federal taxes will be required to be withheld by the Administrative Agent or the
Borrower with respect to any payments to be made to the Assignee in respect of
the Credit Agreement.

                Notwithstanding any other provisions hereof, to the extent the
consents of or notice to the Borrower, the Administrative Agent and/or the
Issuer are required under Section 10.11.1 of the Credit Agreement, the
assignment and delegation contemplated in this agreement shall not be effective
unless such consents or notices shall have been obtained and in any event no
such assignment and delegation shall be effective unless and until such
assignment has been recorded in the Register by the Administrative Agent.

                This Agreement may be executed by the Assignor and Assignee
(and, if applicable, accepted and agreed to by the Administrative Agent, the
Issuer and the Borrower) in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).

                IN WITNESS WHEREOF, the parties have caused this Lender
Assignment Agreement to be duly executed and delivered as of the date first
above written.

    [NAME OF ASSIGNOR]                 By _________________________________    
  Title:                     [NAME OF ASSIGNEE]                 By:
_________________________________               Title:                 Accepted
and Acknowledged     this _____ day of ________________, _________:            
        USP DOMESTIC HOLDINGS, INC.                 By:        

--------------------------------------------------------------------------------

      Title:                     CREDIT SUISSE FIRST BOSTON,     as
Administrative Agent [and as Issuer]                   By:        

--------------------------------------------------------------------------------

      Title:                     By:        

--------------------------------------------------------------------------------

      Title:    

 

SCHEDULE I

  ASSIGNOR’S   ADJUSTED   ADJUSTED     ORIGINAL   ASSIGNOR   ASSIGNEE    
PERCENTAGE   PERCENTAGE   PERCENTAGE    

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  REVOLVING LOAN COMMITMENT             REVOLVING LOANS OUTSTANDING            

 

[EXECUTION COPY]

PARENT GUARANTY AND PLEDGE AGREEMENT

                This PARENT GUARANTY AND PLEDGE AGREEMENT, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, this “Agreement”), is made by UNITED SURGICAL PARTNERS
INTERNATIONAL, INC., a Delaware corporation (the “Pledgor”), in favor of CREDIT
SUISSE FIRST BOSTON, as administrative agent (together with any successor(s)
thereto in such capacity, the “Administrative Agent”) for each of the Secured
Parties.

W I T N E S S E T H:

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among USP Domestic Holdings, Inc., a
Delaware corporation (the “Borrower”), the Lenders, Lehman Commercial Paper
Inc., as the Syndication Agent, Société Générale, as the Documentation Agent,
and the Administrative Agent, the Lenders and the Issuer have extended
Commitments to make Credit Extensions to the Borrower;

                WHEREAS, the Borrower is a wholly-owned Subsidiary of the
Pledgor;

                WHEREAS, pursuant to the terms of the Credit Agreement, the
Pledgor is required to execute and deliver this Agreement;

                WHEREAS, the Pledgor has duly authorized the execution, delivery
and performance of this Agreement; and

                WHEREAS, it is in the best interests of the Pledgor to execute
this Agreement inasmuch as the Pledgor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement;

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:

ARTICLE I
DEFINITIONS

                SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):

                “Administrative Agent” is defined in the preamble.

                “Agreement” is defined in the preamble.

                “Borrower” is defined in the first recital.

                “Collateral” is defined in Section 2.1.

                “Credit Agreement” is defined in the first recital.

                “Distributions” means all non-cash dividends paid on Equity
Interests, liquidating dividends paid on Equity Interests, shares of Equity
Interests resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Equity Interests constituting
Collateral, but excluding Dividends.

                “Dividends” means cash dividends and cash distributions with
respect to any Equity Interests constituting Collateral that are not a
liquidating dividend.

                “Equity Interests Issuer” means each Person identified in
Attachment 1 hereto as the issuer of the Equity Interests identified opposite
the name of such Person.

                “Equity Interests” means all of the Equity Interests in the
Equity Interests Issuer.

                “Permitted Liens” means Liens of the type referred to in clauses
(b), (d) and (g) of Section 7.2.3 of the Credit Agreement.

                “Pledgor” is defined in the preamble.

                “Specified Event” means the occurrence and continuance of a
Default under clauses (a) through (d) of Section 8.1.9 of the Credit Agreement
or any other Event of Default.

                SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.

                SECTION 1.3. UCC Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Agreement, including its
preamble and recitals, with such meanings.

ARTICLE II
PLEDGE

                SECTION 2.1. Grant of Security Interest. The Pledgor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Collateral”):

                (a) all investment property in which the Pledgor has an interest
(including the Equity Interests of each issuer of such Equity Interests
described in Schedule I hereto); and;

                (b) all other Equity Interests which are interests in limited
liability companies or partnerships in which the Pledgor has an interest
(including the Equity Interests of each Equity Interests Issuer described in
Schedule I hereto), in each case together with Dividends and Distributions
payable in respect of the Collateral described in the foregoing clauses (a) and
(b) and all proceeds of each of the foregoing.

                SECTION 2.2. Pledgor Remains Liable. Anything herein to the
contrary notwithstanding

                (a) the Pledgor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and will
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Agreement had not been executed;

                (b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Pledgor from any of its duties or
obligations under any such contracts or agreements included in the Collateral;
and

                (c) no Secured Party will have any obligation or liability under
any contracts or agreements included in the Collateral by reason of this
Agreement, nor will any Secured Party be obligated to perform any of the
obligations or duties of the Pledgor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.

                SECTION 2.3. Postponement of Subrogation. The Pledgor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall the
Pledgor seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made under any Loan Document or otherwise,
until following the Termination Date. Any amount paid to the Pledgor on account
of any such subrogation rights prior to the Termination Date shall be held in
trust for the benefit of the Secured Parties and shall immediately be paid and
turned over to the Administrative Agent for the benefit of the Secured Parties
in the exact form received by the Pledgor (duly endorsed in favor of the
Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 7.1;
provided that if the Pledgor has made payment to the Secured Parties of all or
any part of the Obligations and the Termination Date has occurred, then at the
Pledgor’s request, the Administrative Agent (on behalf of the Secured Parties)
will, at the expense of the Pledgor, execute and deliver to the Pledgor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to the Pledgor of an interest
in the Obligations resulting from such payment. In furtherance of the foregoing,
at all times prior to the Termination Date, the Pledgor shall refrain from
taking any action or commencing any proceeding against any Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in respect of payments made under this
Agreement to any Secured Party.

ARTICLE III
GUARANTY PROVISIONS

                SECTION 3.1. Guaranty. The Pledgor hereby absolutely,
unconditionally and irrevocably

                (a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of the Borrower and each other Obligor now or
hereafter existing under the Credit Agreement, any Letter of Credit and each
other Loan Document to which the Borrower or such other Obligor is or may become
a party (or, in the case of Letters of Credit, is or may become the account
party), whether for principal, interest, Reimbursement Obligations, fees,
expenses or otherwise (including all such amounts which would become due but for
the operation of any provision of any bankruptcy, insolvency, reorganization,
moratorium or similar law relating to or affecting creditors’ rights generally,
such as the automatic stay under Section 362(a) of the United States Bankruptcy
Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)); and.

                (b) indemnifies and holds harmless each Secured Party for any
and all costs and expenses (including reasonable attorney’s fees and expenses)
incurred by such Secured Party in enforcing any rights under this Agreement,

This Agreement constitutes a guaranty of payment when due and not of collection,
and the Pledgor specifically agrees that it shall not be necessary or required
that any Secured Party exercise any right, assert any claim or demand or enforce
any remedy whatsoever against the Borrower or any other Obligor or any other
Person before or as a condition to the obligations of the Pledgor hereunder.

                SECTION 3.2. Acceleration of Guaranty. The Pledgor agrees that,
(a) in the event of the occurrence of any Specified Event with respect to any
Obligor, or (b) upon written notice from the Administrative Agent to the Pledgor
of the breach by the Pledgor in any material respect of any of the
representations, warranties or covenants contained herein, and if any such
events shall occur at a time when any of the Obligations may not then be due and
payable, the Pledgor will pay to the Lenders forthwith the full amount which
would be payable hereunder by the Pledgor if all such Obligations were then due
and payable.

                SECTION 3.3. Reinstatement, etc. The Pledgor agrees that this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any of the Secured
Obligations is rescinded or must otherwise be restored by any Secured Party,
upon the insolvency, bankruptcy or reorganization of any other Obligor or
otherwise, all as though such payment had not been made.

                SECTION 3.4. Guaranty and Security Interest Absolute, etc. This
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment and shall remain in full force and effect until
the Termination Date. The Pledgor guarantees that the Obligations will be paid
strictly in accordance with the terms of each Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Secured Party
with respect thereto. The liability of the Pledgor under this Agreement, and all
rights of the Administrative Agent and the security interests granted to the
Administrative Agent hereunder, and all obligations of the Pledgor hereunder,
shall, to the extent permitted under applicable law, be absolute, unconditional
and irrevocable irrespective of:

                (a) any lack of validity, legality or enforceability of any Loan
Document;

                (b) the failure of any Secured Party

                (i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person (including any other Guarantor)
under the provisions of any Loan Document or otherwise, or

                (ii) to exercise any right or remedy against any other guarantor
(including any other Guarantor) of, or collateral securing, any Obligations;

                (c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations or any other extension,
compromise or renewal of any Obligation;

                (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and the Pledgor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;

                (e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan Document;

                (f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor (including the Pledgor) of the
Obligations, or any surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or departure
from, any other guaranty held by any Secured Party securing any of the
Obligations; or

                (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.

                SECTION 3.5. Setoff. The Pledgor hereby irrevocably authorizes
the Administrative Agent and each Lender, without the requirement that any
notice be given to the Pledgor (such notice being expressly waived by the
Pledgor), upon the occurrence and during the continuance of any Default
described in Section 8.1.9 of the Credit Agreement or, with the consent of the
Required Lenders, upon the occurrence and during the continuance of any other
Specified Event, to set-off and appropriate and apply to the payment of the
Obligations (whether or not then due, and whether or not any Secured Party has
made any demand for payment of the Obligations), any and all balances, claims,
credits, deposits (general or special, time or demand, provisional or final),
accounts or money of the Pledgor then or thereafter maintained with such Secured
Party; provided that any such appropriation and application shall be subject to
the provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees
to notify the Pledgor and the Administrative Agent after any such setoff and
application made by such Secured Party; provided further that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Secured Party under this Section are in addition to other
rights and remedies (including other rights of setoff under applicable law or
otherwise) which such Secured Party may have.

                SECTION 3.6. Waiver, etc. The Pledgor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that the Administrative Agent
or any other Secured Party protect, secure, perfect or insure any security
interest or Lien, or any property subject thereto, or exhaust any right or take
any action against the Borrower, any other Obligor or any other Person
(including any other guarantor) or any collateral securing the Obligations.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

                SECTION 4.1. Representations and Warranties, etc. The Pledgor
represents and warrants unto each Secured Party, as at the date of each pledge
and delivery hereunder (including each pledge and delivery of Equity Interests)
by the Pledgor to the Administrative Agent of any Collateral, as set forth in
this Article.

                SECTION 4.1.1. Organization, etc. The Pledgor is validly
organized and existing and in good standing under the laws of the state or
jurisdiction of its incorporation or organization, is duly qualified to do
business and is in good standing as a foreign entity in each jurisdiction where
the nature of its business requires such qualification (except where the failure
to so qualify would not, individually or in the aggregate, have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party, to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.

                SECTION 4.1.2. Ownership, No Liens, etc. The Pledgor is the
legal and beneficial owner of, and has good and marketable title to (and has
full right and authority to pledge and assign) the Collateral, free and clear of
all Liens except (i) any Lien granted pursuant hereto in favor of the
Administrative Agent and (ii) Permitted Liens.

                SECTION 4.1.3. Valid Security Interest. The execution and
delivery of this Agreement, together with the delivery of such Collateral to the
Administrative Agent, is effective to create a valid, perfected, first-priority
security interest in such Collateral and all proceeds thereof, securing the
Secured Obligations, subject only to Permitted Liens. Possession by the
Administrative Agent of the Collateral is the only action necessary to perfect
or protect such security interest in the Collateral, subject to Section 9-306 of
the UCC.

                SECTION 4.1.4. As to Equity Interests. In the case of any Equity
Interests constituting Collateral, all of such Equity Interests are duly
authorized and validly issued, fully paid and non-assessable, and constitute all
of the Equity Interests of each Equity Interests Issuer owned by the Pledgor. On
the Closing Date, the Pledgor has no direct Subsidiary other than each Equity
Interests Issuer.

                SECTION 4.1.5. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either

                (a) for the grant by the Pledgor of the security interest
granted hereby, the pledge by the Pledgor of any Collateral pursuant hereto or
for the execution, delivery and performance of this Agreement by the Pledgor;

                (b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder; or

                (c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Agreement, except (i) with respect to any
securities issued by a Subsidiary of the Pledgor, as may be required in
connection with a disposition of such securities by laws affecting the offering
and sale of securities generally, the remedies in respect of the Collateral
pursuant to this Agreement and (ii) any “change of control” or similar filings
required by state licensing agencies and, with respect to Ortholink Securities
Corporation, the National Association of Securities Dealers.

                SECTION 4.1.6. Credit Agreement Representations and Warranties.
The representations and warranties contained in Article VI of the Credit
Agreement, insofar as the representations and warranties contained therein are
applicable to the Pledgor and its properties, are true and correct in all
material respects, each such representation and warranty set forth in such
Article (insofar as applicable as aforesaid) and all other terms of the Credit
Agreement to which reference is made therein, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Agreement by reference as though specifically set forth in this Section.

ARTICLE V
COVENANTS

                SECTION 5.1. Protect Collateral; Further Assurances, etc. The
Pledgor will not sell, assign, transfer, pledge, or encumber in any other manner
the Collateral (except in favor of the Administrative Agent hereunder) to the
extent prohibited under the Credit Agreement. The Pledgor will warrant and
defend the right and title herein granted unto the Administrative Agent in and
to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.

                SECTION 5.2. Stock Powers, etc. The Pledgor agrees that all
Equity Interests delivered by the Pledgor pursuant to this Agreement will be
accompanied by duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Administrative Agent. The Pledgor
will, from time to time upon the request of the Administrative Agent, promptly
deliver to the Administrative Agent such stock powers, instruments, and similar
documents, satisfactory in form and substance to the Administrative Agent, with
respect to the Collateral as the Administrative Agent may reasonably request and
will, from time to time upon the request of the Administrative Agent after the
occurrence and during the continuation of any Specified Event, promptly transfer
any Equity Interests constituting Collateral into the name of any nominee
designated by the Administrative Agent.

                SECTION 5.3. Continuous Pledge. Subject to the Credit Agreement,
the Pledgor will, at all times, keep pledged to the Administrative Agent
pursuant hereto, on a first-priority, perfected basis all investment property
constituting Collateral and, to the extent required under the Credit Agreement,
all Dividends and Distributions with respect thereto and all other Collateral
and other securities, instruments, proceeds, and rights from time to time
received by or distributable to the Pledgor in respect of any Collateral, and
will not permit the Borrower to issue any Voting Stock which shall not have been
immediately duly pledged hereunder on a first priority perfected basis.

                SECTION 5.4. Voting Rights; Dividends, etc. The Pledgor agrees:

                (a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event from the Administrative Agent and without any
request therefor by the Administrative Agent, so long as such Specified Event
shall continue, to deliver (properly endorsed where required hereby or requested
by the Administrative Agent) to the Administrative Agent all Dividends and
Distributions with respect to investment property, all interest, principal, and
all proceeds of the Collateral, in each case thereafter received by the Pledgor,
all of which shall be held by the Administrative Agent as additional Collateral;
and

                (b) subject to clause (c)(ii) of Section 4.1.5 and, with respect
to Collateral consisting of general partner interests or limited liability
company interests, modifications to the respective Organic Documents to the
admission of the Administrative Agent as a general partner or member,
respectively, immediately upon the occurrence and continuance of a Specified
Event and so long as the Administrative Agent has notified the Pledgor of the
Administrative Agent’s intention to exercise its voting power under this clause,

                (i) that the Administrative Agent may exercise (to the exclusion
of the Pledgor) the voting power and all other incidental rights of ownership
with respect to any investment property constituting Collateral and the Pledgor
hereby grants the Administrative Agent an irrevocable proxy, exercisable under
such circumstances, to vote such investment property; and

                (ii) to promptly deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow the
Administrative Agent to exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Administrative Agent, shall, until
delivery to the Administrative Agent, be held by the Pledgor separate and apart
from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless a Specified Event shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in clause (b), the Pledgor will have the exclusive voting power with
respect to any investment property constituting Collateral and the
Administrative Agent will, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by the Pledgor that would impair any such
Collateral or be inconsistent with or violate any provision of any Loan
Document.

                SECTION 5.5. Amendment of Organic Documents. The Pledgor will
not amend, supplement or otherwise modify, or permit, consent or suffer to occur
any amendment, supplement or modification of any terms or provisions contained
in, or applicable to, any Organic Document of any issuer of any Security
comprising the Collateral in which it has an equity interest if the effect
thereof is to impair, or is in any manner adverse to, the rights or interests of
the Administrative Agent or any other Senior Secured Party hereunder or under
the Credit Agreement or any other Loan Document, without the prior written
consent of the Administrative Agent and the Majority Lenders.

                SECTION 5.6. Payment of Net Equity Proceeds. Upon receipt of any
Net Equity Proceeds, from the Borrower in violation of Section 3.1.1 of the
Credit Agreement, the Pledgor shall pay or repay the Loans in the amounts and on
the dates required pursuant to clause (c) of Section 3.1.1 of the Credit
Agreement.

                SECTION 5.7. Compliance with Laws, etc. The Pledgor will comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include:

                (a) the maintenance and preservation of its corporate existence
and qualification as a foreign corporation; and

                (b) the payment, before the same become delinquent, of all
material taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.

                SECTION 5.8. No Defaults. The Pledgor will not, and will not
permit the Borrower or any of its Subsidiaries to, take any action or fail to
take any action if such action or failure to act would result in a Default under
the Credit Agreement.

ARTICLE VI
THE ADMINISTRATIVE AGENT

                SECTION 6.1. Administrative Agent Appointed Attorney-in-Fact.
The Pledgor hereby irrevocably appoints the Administrative Agent it’s
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time in the Administrative
Agent’s discretion, following the occurrence and during the continuance of a
Specified Event and subject to delivery of notice to the Pledgor, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including:

                (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                (b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

                (c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and

                (d) to perform the affirmative obligations of the Pledgor
hereunder (including all obligations of the Pledgor pursuant to Section 5.1).

The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

                SECTION 6.2. Administrative Agent May Perform. If the Pledgor
fails to perform any agreement contained herein within 30 days after written
notice from the Administrative Agent, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Pledgor pursuant to Section 8.4.

                SECTION 6.3. Administrative Agent Has No Duty. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or responsibility for (a) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any investment property, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or (b) taking any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.

                SECTION 6.4. Reasonable Care. The Administrative Agent is
required to exercise reasonable care in the custody and preservation of any of
the Collateral in its possession; provided that the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Event, but failure of the Administrative
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.

ARTICLE VII
REMEDIES

                SECTION 7.1. Certain Remedies. If any Specified Event shall have
occurred and be continuing:

                (a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may

                (i) require the Pledgor to, and the Pledgor hereby agrees that
it will, at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place to be designated by
the Administrative Agent which is reasonably convenient to both parties, and

                (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days prior notice to the Pledgor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

                (b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied by the Administrative Agent against, all
or any part of the Obligations as set forth in Section 2.7 of the Subsidiary
Guaranty.

                (c) The Administrative Agent may

                (i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder,

                (ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to become due
thereunder,

                (iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

                (iv) endorse any checks, drafts, or other writings in the
Pledgor’s name to allow collection of the Collateral,

                (v) take control of any proceeds of the Collateral, and

                (vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

                SECTION 7.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 7.1, the Pledgor agrees that, upon request of the Administrative Agent,
the Pledgor will, at its own expense:

                (a) use its best efforts to exempt the Collateral under the
state securities or “Blue Sky” laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Administrative
Agent; and

                (b) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.

The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by any of the Secured Parties by reason of the
failure of the Pledgor to perform any of the covenants contained in this Section
and consequently, to the extent permitted under applicable law, agrees that, if
the Pledgor shall fail t o perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Administrative Agent) of the Collateral on the date the
Administrative Agent shall demand compliance with this Section.

                SECTION 7.3. Compliance with Restrictions. The Pledgor agrees
that in any sale of any of the Collateral whenever a Specified Event shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Pledgor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Pledgor for
any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

                SECTION 7.4. Indemnity and Expenses.

                (a) The Pledgor agrees to indemnify the Administrative Agent
from and against any and all claims, losses and liabilities arising out of or
resulting from this Agreement (including enforcement of this Agreement), except
claims, losses, or liabilities resulting from the Administrative Agent’s gross
negligence or wilful misconduct.

                (b) The Pledgor, upon demand, will pay to the Administrative
Agent the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with

                (i) the administration of each Loan Document,

                (ii) the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral,

                (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, or

                (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.

ARTICLE VIII
MISCELLANEOUS PROVISIONS

                SECTION 8.1. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.

                SECTION 8.2. Binding on Successors, Transferees and Assigns;
Assignment. This Agreement shall remain in full force and effect until the
Termination Date, shall be jointly and severally binding upon the Pledgor and
its successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Pledgor may not (unless otherwise permitted under the terms of
the Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.

                SECTION 8.3. Amendments, etc. No amendment to or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor from its
obligations under this Agreement shall in any event be effective unless the same
shall be in writing and signed by the Administrative Agent (on behalf of the
Lenders or the Required Lenders, as the case may be pursuant to Section 10.1 of
the Credit Agreement), and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.

                SECTION 8.4. Protection of Collateral. The Administrative Agent
may from time to time, at its option, perform any act which the Pledgor agrees
hereunder to perform and which the Pledgor shall fail to perform within 30 days
after being requested in writing so to perform and the Administrative Agent may
from time to time take any other action which the Administrative Agent
reasonably deems necessary for the maintenance, preservation or protection of
any of the Collateral or of its security interest therein.

                SECTION 8.5. Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile and addressed,
delivered or transmitted to the appropriate party at the address or facsimile
number of such party specified in the Credit Agreement or at such other address
or facsimile number as may be designated by such party in a notice to the other
party. Any notice or other communication, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or other communication, if
transmitted by facsimile, shall be deemed given when transmitted and
electronically confirmed.

                SECTION 8.6. No Waiver; Remedies. In addition to, and not in
limitation of, Section 3.4 and Section 3.6, no failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

                SECTION 8.7. Section Captions. Section captions used in this
Agreement are for convenience of reference only, and shall not affect the
construction of this Agreement.

                SECTION 8.8. Severability. Wherever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

                SECTION 8.9. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

                SECTION 8.10. Governing Law, Entire Agreement, etc. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This
Agreement and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.

                SECTION 8.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, ANY ISSUER OR THE PLEDGOR IN CONNECTION HEREWITH OR
THEREWITH. MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK
OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PLEDGOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED FOR THE PLEDGOR IN SECTION 10.2 OF THE CREDIT AGREEMENT. THE
PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PLEDGOR HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

                SECTION 8.12. Waiver of Jury Trial. THE PLEDGOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR
THE PLEDGOR IN CONNECTION THEREWITH. THE PLEDGOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE. ADMINISTRATIVE AGENT, EACH
LENDER AND EACH ISSUER ENTERING INTO THE LOAN DOCUMENTS.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
day and year first above written.

  UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.           By:  /s/ Mark A. Kopser    

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    Title: Senior Vice President and Chief Financial Officer              
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent           By:  /s/ Julia P. Kingsbury    

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    Title: Vice President               By:  /s/ William S. Lutkins    

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    Title: Vice President

ATTACHMENT 1
to Parent Guaranty and Pledge Agreement

Equity Interests

  Description    

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                % of                 Outstanding     Certificate   Authorized  
Outstanding   Shares   Equity Interests Issuer No.   Shares   Shares   Pledged  

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  United Surgical Partners Holdings, Inc. [                    ]  
[                    ]   [                     ]   100%  

 

 

REVOLVING NOTE

 

$15,000,000.00 June 13, 2001

                FOR VALUE RECEIVED, USP DOMESTIC HOLDINGS, INC., a Delaware
corporation (the “Borrower”), promises to pay to the order of SOCIÉTÉ GÉNÉRALE
FINANCIAL CORPORATION (the “Lender”) on the Stated Maturity Date the principal
sum of FIFTEEN MILLION DOLLARS ($15,000,000.00) or, if less, the aggregate
unpaid principal amount of all Revolving Loans shown on the schedule attached
hereto (and any continuation thereof) made (or continued) by the Lenders
pursuant to that certain Credit Agreement, dated as of June 13, 2001 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the various financial
institutions and other Persons from time to time parties hereto (including the
Lender), Credit Suisse First Boston, as Administrative Agent, Lehman Commercial
Paper Inc., as Syndication Agent, and Société Générale, as Documentation Agent.
Terms used in this Note, unless otherwise defined herein, have the meanings
provided in the Credit Agreement.

                The Borrower also promises to pay interest on the unpaid
principal amount hereof from time to time outstanding from the date hereof until
maturity (whether by acceleration or otherwise) and, after maturity, until paid,
at the rates per annum and on the dates specified in the Credit Agreement.

                Payments of both principal and interest are to be made in
Dollars in same day or immediately available funds to the account designated by
the Administrative Agent pursuant to the Credit Agreement.

                This Note is one of the Revolving Notes referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to which reference
is made for a description of the security for this Note and for a statement of
the terms and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Note and on which such Indebtedness may be declared to be immediately due and
payable.

                All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.

                THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

  USP DOMESTIC HOLDINGS, INC.           By:  /s/ Mark A. Kopser    

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    Title: Senior Vice President and Chief Financial Officer

REVOLVING LOANS AND PRINCIPAL PAYMENTS

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    Amount of Revolving Loan Made       Amount of Principal Repaid   Unpaid
Principal Balance            

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          Date Alternate Base Rate   LIBO Rate   Interest Period   Alternate
Base Rate   LIBO Rate   Alternate Base Rate   LIBO Rate   Total   Notation Made
By  

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[EXECUTION COPY]

SOLVENCY CERTIFICATE

USP DOMESTIC HOLDING, INC.

                This Solvency Certificate (this “Certificate”), dated as of June
13, 2001, is delivered pursuant to Section 5.1.10 of the Credit Agreement, dated
as of June 13, 2001, among USP Domestic Holdings, Inc., a Delaware corporation
(the “Borrower”), the Lenders, Credit Suisse First Boston, as Administrative
Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Société Générale,
as Documentation Agent. Terms used herein, unless otherwise defined herein, have
the meanings provided in the Credit Agreement.

                The undersigned hereby certifies that he is an Authorized
Officer (in such capacity, the “Authorized Officer”) of the Borrower, and that,
as such, he is authorized to execute this Certificate on behalf of the Borrower.
Any term or provision hereof to the contrary notwithstanding, the Authorized
Officer is executing this Certificate in his capacity as an officer of, and
solely on behalf of, the Borrower, and not in his individual capacity. On behalf
of the Borrower, the Authorized Officer further certifies that:

   1. The Authorized Officer has knowledge of, and has participated in, the
preparation and negotiation of the Credit Agreement, each other Loan Document,
and the agreements executed in connection therewith and the transactions
contemplated thereunder.

   2. The Authorized Officer is familiar (both before and after giving effect to
the Transaction) with the finances of the Borrower and its Subsidiaries and has
participated in the preparation of the financial statements of the Borrower and
its Subsidiaries, including the pro forma consolidated balance sheets and
statements of income and cash flows for the Borrower and its Subsidiaries. The
Authorized Officer has also participated in the development of financial
projections for Parent, Holdings, the Borrower and its Subsidiaries giving
effect to the Transaction and the financing and transactions contemplated
pursuant to and in connection with the Credit Agreement.

   3. On a pro forma basis after giving effect to the transactions contemplated
under the Credit Agreement (including the Transaction), as of the Closing Date:

     (a) the fair salable value of the assets of the Borrower and its Subsidiary
Guarantors, on a consolidated and going concern basis, is greater than the total
amount of liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Borrower and its Subsidiary Guarantors on a
consolidated basis;

     (b) the fair salable value of the assets of the Borrower and its Subsidiary
Guarantors, on a consolidated and going concern basis, is not less than the
amount that will be required to pay their probable liabilities on a consolidated
basis (including contingent, subordinated, unmatured and unliquidated
liabilities) as they become absolute and matured;

     (c) the Borrower and its Subsidiary Guarantors, on a consolidated basis,
are not engaged in a business or a transaction, and are not about to be engaged
in a business or a transaction for which their properties would constitute an
unreasonably small capital; and

     (d) the Borrower and its Subsidiary Guarantors, on a consolidated basis, do
not intend to, and do not believe that they will, incur debts or liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities)
beyond their ability to pay as such debts and liabilities mature in the ordinary
course of business.

For purposes of the foregoing, the amount of contingent liabilities have been
computed as the amount that, in light of all the facts and circumstances
existing at the time hereof, can reasonably be expected to become an actual or
matured liability.

                IN WITNESS WHEREOF, the undersigned Authorized Officer has
executed and delivered this solvency certificate on behalf of the Borrower as of
the date first written above.

  USP DOMESTIC HOLDINGS, INC.   By:  /s/ Mark A. Kopser    

--------------------------------------------------------------------------------

    Title: Senior Vice President and Chief Financial Officer

 

[EXECUTION COPY]

SUBSIDIARY GUARANTY

                This SUBSIDIARY GUARANTY, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
“Guaranty”), is made by each Subsidiary of USP Domestic Holdings, Inc., a
Delaware corporation (the “Borrower”), from time to time a party to this
Guaranty (each individually a “Guarantor” and collectively, the “Guarantors”),
in favor of CREDIT SUISSE FIRST BOSTON, as administrative agent (together with
its successor(s) thereto in such capacity, the “Administrative Agent”) for each
of the Secured Parties.

W I T N E S S E T H:

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the Lenders, Lehman
Commercial Paper Inc., as the Syndication Agent, Société Générale, as the
Documentation Agent, and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower;

                WHEREAS, pursuant to the terms of the Credit Agreement, each
Guarantor is required to execute and deliver this Guaranty;

                WHEREAS, each Guarantor has duly authorized the execution,
delivery and performance of this Agreement; and

                WHEREAS, it is in the best interests of each Guarantor to
execute this Agreement inasmuch as each Guarantor will derive substantial direct
and indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement;

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each Guarantor agrees, for the
benefit of each Secured Party, as follows:

ARTICLE I
DEFINITIONS

                SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):

                “Administrative Agent” is defined in the preamble.

                “Borrower” is defined in the preamble.

                “Credit Agreement” is defined in the first recital.

                “Guarantor” and “Guarantors” are defined in the preamble.

                “Guaranty” is defined in the preamble.

                SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Guaranty,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.

ARTICLE II
GUARANTY PROVISIONS

                SECTION 2.1. Guaranty. Each Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably

                (a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of each Obligor now or hereafter existing, whether
for principal, interest (including interest accruing at the then applicable rate
provided in the Credit Agreement after the occurrence of any Default set forth
in Section 8.1.9 of the Credit Agreement, whether or not a claim for post-filing
or post-petition interest is allowed under applicable law following the
institution of a proceeding under bankruptcy, insolvency or similar laws), fees,
Reimbursement Obligations, expenses or otherwise (including all such amounts
which would become due but for the operation of the automatic stay under Section
362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a), and the
operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C. §502(b) and §506(b)); and

                (b) indemnifies and holds harmless each Secured Party for any
and all costs and expenses (including reasonable attorneys’ fees and expenses)
incurred by such Secured Party in enforcing any rights under this Guaranty;

provided that each Guarantor shall only be liable under this Guaranty for the
maximum amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount. This Guaranty constitutes a guaranty of payment when due and not
of collection, and each Guarantor specifically agrees that it shall not be
necessary or required that any Secured Party exercise any right, assert any
claim or demand or enforce any remedy whatsoever against any Obligor or any
other Person before or as a condition to the obligations of such Guarantor
hereunder.

                SECTION 2.2. Reinstatement, etc. Each Guarantor hereby jointly
and severally agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Obligations is invalidated, declared to be fraudulent or
preferential, set aside, rescinded or must otherwise be restored by any Secured
Party, including upon the occurrence of any Default set forth in Section 8.1.9
of the Credit Agreement or otherwise, all as though such payment had not been
made.

                SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until the Termination Date.
Each Guarantor jointly and severally guarantees that the Obligations will be
paid strictly in accordance with the terms of each Loan Document under which
they arise, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The liability of each Guarantor under this
Guaranty shall be joint and several, absolute,
unconditional and irrevocable irrespective of:

                (a) any lack of validity, legality or enforceability of any Loan
Document;

                (b) the failure of any Secured Party

                (i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person (including any other Guarantor)
under the provisions of any Loan Document or otherwise, or

                (ii) to exercise any right or remedy against any other guarantor
(including any other Guarantor) of, or collateral securing, any Obligations;

                (c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;

                (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each Guarantor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;

                (e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan Document;

                (f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor (including a Guarantor
hereunder) of the Obligations, or any surrender or non-perfection of any
collateral, or any amendment to or waiver or release or addition to, or consent
to or departure from, any other guaranty held by any Secured Party securing any
of the Obligations; or

                (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.

                SECTION 2.4. Setoff. Each Guarantor hereby irrevocably
authorizes the Administrative Agent and each Lender, without the requirement
that any notice be given to such Guarantor (such notice being expressly waived
by each Guarantor), upon the occurrence and during the continuance of any
Default described in Section 8.1.9 of the Credit Agreement or, with the consent
of the Required Lenders, upon the occurrence and during the continuance of any
other Event of Default, to set-off and appropriate and apply to the payment of
the Obligations (whether or not then due, and whether or not any Secured Party
has made any demand for payment of the Obligations), any and all balances,
claims, credits, deposits (general or special, time or demand, provisional or
final), accounts or money of such Guarantor then or thereafter maintained with
such Secured Party; provided that any such appropriation and application shall
be subject to the provisions of Section 4.8 of the Credit Agreement. Each
Secured Party agrees to notify the applicable Guarantor and the Administrative
Agent after any such setoff and application made by such Secured Party; provided
further that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Secured Party under this Section
are in addition to other rights and remedies (including other rights of setoff
under applicable law or otherwise) which such Secured Party may have.

                SECTION 2.5. Waiver, etc. Each Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations and this Guaranty and any requirement that any Secured
Party protect, secure, perfect or insure any Lien, or any property subject
thereto, or exhaust any right or take any action against any Obligor or any
other Person (including any other guarantor) or entity or any collateral
securing the Obligations, as the case may be.

                SECTION 2.6. Postponement of Subrogation, etc. Each Guarantor
agrees that it will not exercise any rights which it may acquire by way of
rights of subrogation under any Loan Document to which it is a party, nor shall
any Guarantor seek or be entitled to seek any contribution or reimbursement from
any Obligor, in respect of any payment made under any Loan Document or
otherwise, until following the Termination Date. Any amount paid to any
Guarantor on account of any such subrogation rights prior to the Termination
Date shall be held in trust for the benefit of the Secured Parties and shall
immediately be paid and turned over to the Administrative Agent for the benefit
of the Secured Parties in the exact form received by such Guarantor (duly
endorsed in favor of the Administrative Agent, if required), to be credited and
applied against the Obligations, whether matured or unmatured, in accordance
with Section 2.7; provided that if any Guarantor has made payment to the Secured
Parties of all or any part of the Obligations and the Termination Date has
occurred, then at such Guarantor’s request, the Administrative Agent (on behalf
of the Secured Parties) will, at the expense of such Guarantor, execute and
deliver to such Guarantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Obligations resulting from such payment. In
furtherance of the foregoing, at all times prior to the Termination Date, each
Guarantor shall refrain from taking any action or commencing any proceeding
against any Obligor (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in respect of
payments made under this Guaranty to any Secured Party.

                SECTION 2.7. Payments; Application. Each Guarantor hereby agrees
with each Secured Party as follows:

                (a) Each Guarantor agrees that all payments made by such
Guarantor hereunder will be made in Dollars to the Administrative Agent, without
set-off, counterclaim or other defense and in accordance with Sections 4.6 and
4.7 of the Credit Agreement, free and clear of and without deduction for any
Taxes, each Guarantor hereby agreeing to comply with and be bound by the
provisions of Sections 4.6 and 4.7 of the Credit Agreement in respect of all
payments made by it hereunder and the provisions of which Sections are hereby
incorporated into and made a part of this Guaranty by this reference as if set
forth herein; provided that references to the “Borrower” in such Sections shall
be deemed to be references to each Guarantor, and references to “this Agreement”
in such Sections shall be deemed to be references to this Guaranty.

                (b) All payments made hereunder shall be applied upon receipt

                (i) first, to the payment of all Obligations owing to the
Administrative Agent, in its capacity as the Administrative Agent (including the
fees and expenses of counsel to the Administrative Agent),

                (ii) second, after payment in full in cash of the amounts
specified in clause (b)(i), to the ratable payment of all interest and fees
owing with respect to the Credit Extensions and all costs and expenses owing to
the Secured Parties pursuant to the terms of the Credit Agreement,

                (iii) third, after payment in full in cash of the amounts
specified in clauses (b)(i) and (b)(ii), to the ratable payment of the principal
amount of the Loans then outstanding, amounts owing to Secured Parties under
Rate Protection Agreements, the aggregate Reimbursement Obligations then owing
and Cash Collateralization for contingent liabilities under Letter of Credit
Outstandings,

                (iv) fourth, after payment in full in cash of the amounts
specified in clauses (b)(i) through (b)(iii), to the ratable payment of all
other Obligations owing to the Secured Parties,

                (v) fifth, after payment in full in cash of the amounts
specified in clauses (b)(i) through (b)(iv), and following the Termination Date,
to each applicable Guarantor or any other Person lawfully entitled to receive
such surplus.

For purposes of this Guaranty, the “credit exposure” at any time of any Secured
Party with respect to a Rate Protection Agreement to which such Secured Party is
a party shall be determined at such time in accordance with the customary
methods of calculating credit exposure under similar arrangements by the
counterparty to such arrangements, taking into account potential interest rate
movements and the respective termination provisions and notional principal
amount and term of such Rate Protection Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

                In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, and to induce the Secured
Parties to enter into Rate Protection Agreements, each Guarantor represents and
warrants to each Secured Party as set forth below.

                SECTION 3.1. Credit Agreement Representations and Warranties.
The representations and warranties contained in Article VI of the Credit
Agreement, insofar as the representations and warranties contained therein are
applicable to such Guarantor and its properties, are true and correct in all
material respects, each such representation and warranty set forth in such
Article (insofar as applicable as aforesaid) and all other terms of the Credit
Agreement to which reference is made therein, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Guaranty by this reference as though specifically set forth in this Article.

                SECTION 3.2. Financial Condition, etc. Each Guarantor has
knowledge of each other Obligor’s financial condition and affairs and has
adequate means to obtain from the each such Obligor on an ongoing basis
information relating thereto and to such Obligor’s ability to pay and perform
the Obligations, and agrees to assume the responsibility for keeping, and to
keep, so informed for so long as this Guaranty is in effect. Each Guarantor
acknowledges and agrees that the Secured Parties shall have no obligation to
investigate the financial condition or affairs of any Obligor for the benefit of
such Guarantor nor to advise such Guarantor of any fact respecting, or any
change in, the financial condition or affairs of any other Obligor that might
become known to any Secured Party at any time, whether or not such Secured Party
knows or believes or has reason to know or believe that any such fact or change
is unknown to such Guarantor, or might (or does) materially increase the risk of
such Guarantor as guarantor, or might (or would) affect the willingness of such
Guarantor to continue as a guarantor of the Obligations.

                SECTION 3.3. Best Interests. It is in the best interests of each
Guarantor to execute this Guaranty inasmuch as such Guarantor will, as a result
of being a Subsidiary of the Borrower, derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuer pursuant to the Credit Agreement and the execution
and delivery of Rate Protection Agreements between the Borrower, other Obligors
and certain Secured Parties, and each Guarantor agrees that the Secured Parties
are relying on this representation in agreeing to make Credit Extensions to the
Borrower.

ARTICLE IV
COVENANTS, ETC.

                Each Guarantor covenants and agrees that, at all times prior to
the Termination Date, it will perform, comply with and be bound by all of the
agreements, covenants and obligations contained in the Credit Agreement
(including Article VII and Section 8.1.9 of the Credit Agreement) which are
applicable to such Guarantor or its properties, each such agreement, covenant
and obligation contained in the Credit Agreement and all other terms of the
Credit Agreement to which reference is made in this Article, together with all
related definitions and ancillary provisions, being hereby incorporated into
this Guaranty by this reference as though
specifically set forth in this Article.

ARTICLE V
MISCELLANEOUS PROVISIONS

                SECTION 5.1. Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. This Guaranty shall remain in full force and effect until the
Termination Date, shall be jointly and severally binding upon each Guarantor and
its successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that no Guarantor may (unless otherwise permitted under the terms of
the Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.

                SECTION 5.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by any Guarantor from
its obligations under this Guaranty, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent (on behalf of
the Lenders or the Required Lenders, as the case may be, pursuant to Section
10.1 of the Credit Agreement) and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

                SECTION 5.4. Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile and addressed,
delivered or transmitted to the appropriate party at the address or facsimile
number of such party (in the case of any Guarantor, in care of the Borrower)
specified in the Credit Agreement or at such other address or facsimile number
as may be designated by such party in a notice to the other party. Any notice or
other communication, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any such notice or other communication, if transmitted by
facsimile, shall be deemed given when transmitted and electronically confirmed.

                SECTION 5.5. Additional Guarantors. Upon the execution and
delivery by any other Person of a supplement in the form of Annex I hereto, such
Person shall become a “Guarantor” hereunder with the same force and effect as if
it were originally a party to this Guaranty and named as a “Guarantor”
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Guarantor hereunder, and the rights and obligations of each
Guarantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Guaranty.

                SECTION 5.6. Release of Guarantor. Upon the occurrence of the
Termination Date, this Guaranty and all obligations of each Guarantor hereunder
shall terminate, without delivery of any instrument or performance of any act by
any party. In addition, at the request of the Borrower, and at the sole expense
of the Borrower, a Guarantor shall be released from its obligations hereunder in
the event that the Equity Interests of such Guarantor are Disposed of in a
transaction permitted by the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent, at least three Business Days prior
to the date of the proposed release, a written request for release identifying
the relevant Guarantor and a certification by the Borrower stating that such
transaction is in compliance with the Loan Documents.

                SECTION 5.7. No Waiver; Remedies. In addition to, and not in
limitation of, Sections 2.3 and 2.5, no failure on the part of any Secured Party
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

                SECTION 5.8. Section Captions. Section captions used in this
Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.

                SECTION 5.9. Severability. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

                SECTION 5.10. Governing Law, Entire Agreement, etc. THIS
GUARANTY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This
Guaranty and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto.

                SECTION 5.11. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY SECURED PARTY OR
ANY GUARANTOR IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK,
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH GUARANTOR IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED FOR
THE BORROWER IN SECTION 10.2 OF THE CREDIT AGREEMENT. EACH GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.

                SECTION 5.12. Waiver of Jury Trial. EACH GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, THE ISSUER OR
SUCH GUARANTOR IN CONNECTION THEREWITH. EACH GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE ISSUER ENTERING INTO THE LOAN DOCUMENTS.

                SECTION 5.13. Counterparts. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                 WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its Authorized Officer as of the date first above
written.

  USP NEVADA HOLDINGS, LLC   USP TEXAS, L.P.   HEALTH HORIZONS OF NASHVILLE,
INC.   HEALTH HORIZONS OF KANSAS CITY, INC.   HEALTH HORIZONS OF MURFREESBORO,
INC.   HEALTH HORIZONS OF DECATUR, INC.   USP NEVADA, INC.   USP WINTER PARK,
INC.   USP LONG ISLAND, INC.   USP NORTH TEXAS, INC.   USP NEW JERSEY, INC.  
TEXAS OUTPATIENT SURGICARE CENTER, INC.   USP CHANDLER, INC.   USP SOUTH
HOUSTON, INC.   USP PASADENA, INC.   USP MANHATTAN, INC.   ORTHOLINK PHYSICIANS
CORPORATION   ORTHOEXCEL, INC.   GEORGIA MUSCULOSKELETAL NETWORK, INC.  
TENNESSEE MUSCULOSKELETAL NETWORK, INC.   ORTHOLINK OCCUPATIONAL MEDICINE
SERVICES CORPORATION   ORTHOLINK SECURITIES CORPORATION   ORTHOLINK OF COLORADO,
INC.   SOUTHWEST SPINE CENTER, INC.   NEURO-SURGICAL ASSOCIATES, INC.  
ORTHOLINK ASC CORPORATION   ORTHOLINK/GEORGIA ASC, INC.   ORTHOLINK/NEW MEXICO
ASC, INC.   ORTHOLINK/TN ASC, INC.   DAY-OP SURGERY CONSULTING COMPANY, LLC  
DAY-OP MANAGEMENT COMPANY, INC.   USP LAS CRUCES, INC.   MEDICAL DOCUMENTATING
SYSTEMS, INC.   MEDCENTER MANAGEMENT SERVICES, INC.             By:  /s/ Mark A.
Kopser    

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    Name: Mark A. Kopser     Title: Chief Financial Officer and Vice President

 

 

ACCEPTED AND AGREED FOR ITSELF   AND ON BEHALF OF THE SECURED PARTIES:          
CREDIT SUISSE FIRST BOSTON,   as Administrative Agent               By:  /s/
Julia P. Kingsbury    

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    Title: Vice President               By:  /s/ Williams S. Lutkins    

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    Title: Vice President  

ANNEX I to
the Subsidiary Guaranty

                THIS SUPPLEMENT, dated as of ____________ ___, _____ (this
“Supplement”), is to the Subsidiary Guaranty, dated as of June 13, 2001 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the “Guaranty”), among the Guarantors (such capitalized term, and other
terms used in this Supplement, to have the meanings set forth in Article I of
the Guaranty) from time to time party thereto, in favor of CREDIT SUISSE FIRST
BOSTON, as administrative agent (together with its successor(s) thereto in such
capacity, the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to the provisions of Section 5.5 of the
Guaranty, each of the undersigned is becoming a Guarantor under the Guaranty;
and

                WHEREAS, each of the undersigned desires to become a “Guarantor”
under the Guaranty in order to induce the Secured Parties to continue to extend
Credit Extensions under the Credit Agreement;

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each of the undersigned agrees,
for the benefit of each Secured Party, as follows.

                SECTION 1. Party to Guaranty, etc. In accordance with the terms
of the Guaranty, by its signature below, each of the undersigned hereby
irrevocably agrees to become a Guarantor under the Guaranty with the same force
and effect as if it were an original signatory thereto and each of the
undersigned hereby (a) agrees to be bound by and comply with all of the terms
and provisions of the Guaranty applicable to it as a Guarantor and (b)
represents and warrants that the representations and warranties made by it as a
Guarantor thereunder are true and correct as of the date hereof. In furtherance
of the foregoing, each reference to a “Guarantor” and/or “Guarantors” in the
Guaranty shall be deemed to include each of the undersigned.

                SECTION 2. Representations. Each of the undersigned hereby
represents and warrants that this Supplement has been duly authorized, executed
and delivered by it and that this Supplement and the Guaranty constitute the
legal, valid and binding obligation of each of the undersigned, enforceable
against it in accordance with its terms.

                SECTION 3. Full Force of Guaranty. Except as expressly
supplemented hereby, the Guaranty shall remain in full force and effect in
accordance with its terms.                 SECTION 4. Severability. Wherever
possible each provision of this Supplement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Supplement shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Supplement or the Guaranty.

                SECTION 5. Governing Law, Entire Agreement, etc. THIS SUPPLEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Supplement and the
other Loan Documents constitute the entire understanding among the parties
hereto with respect to the subject matter thereof and supersede any prior
agreements, written or oral, with respect thereto.

                SECTION 6. Counterparts. This Supplement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the undersigned has caused this
Supplement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  [NAME OF ADDITIONAL SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:               [NAME OF ADDITIONAL SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:               [NAME OF ADDITIONAL SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:             ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:       CREDIT SUISSE FIRST BOSTON,
as Administrative Agent             By:      

--------------------------------------------------------------------------------

    Title:               By:      

--------------------------------------------------------------------------------

    Title:  

 

[EXECUTION COPY]

SUBSIDIARY PLEDGE AND SECURITY AGREEMENT

                This SUBSIDIARY PLEDGE AND SECURITY AGREEMENT, dated as of June
13, 2001 (as amended, supplemented, amended and restated or otherwise modified
from time to time, this “Security Agreement”), is made by each Subsidiary of USP
Domestic Holdings, Inc., a Delaware corporation (the “Borrower”), from time to
time party hereto (each individually a “Grantor” and collectively, the
“Grantors”), in favor of CREDIT SUISSE FIRST BOSTON, as administrative agent
(together with its successor(s) thereto in such capacity, the “Administrative
Agent”) for each of the Secured Parties.

W I T N E S S E T H:

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, the Lenders, Lehman
Commercial Paper Inc., as the Syndication Agent, Société Générale, as the
Documentation Agent, and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower; and

                WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, each Grantor is required to execute and
deliver this Security Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each Grantor agrees, for the
benefit of each Secured Party, as follows:

ARTICLE I
DEFINITIONS

                SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

                “Administrative Agent” is defined in the preamble.

                “Borrower” is defined in the preamble.

                “Collateral” is defined in Section 2.1.

                “Collateral Account” is defined in clause (c) of Section 4.3.

                “Computer Hardware and Software Collateral” means:

                (a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape drives,
hard and soft disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and all peripheral devices and other related computer
hardware;

                (b) all software programs (including both source code, object
code and all related applications and data files), whether now owned, licensed
or leased or hereafter acquired by any Grantor, designed for use on the
computers and electronic data processing hardware described in clause (a) above;

                (c) all firmware associated therewith;

                (d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware, software and
firmware described in the preceding clauses (a) through (c); and

                (e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.

                “Control Agreement” means an agreement in form and substance
satisfactory to the Administrative Agent which provides for the Administrative
Agent to have “control” (as defined in Section 8-106 of the UCC, as such term
relates to investment property (other than certificated securities or commodity
contracts), or as used in Section 9-115(e) of the UCC, as such term relates to
commodity contracts).

                “Copyright Collateral” means all copyrights of each Grantor,
whether statutory or common law, registered or unregistered and whether
published or unpublished, now or hereafter in force throughout the world
including all of such Grantor’s right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule V
hereto, and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of Schedule V hereto, the
right to sue for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

                “Credit Agreement” is defined in the first recital.

                “Distributions” means all non-cash dividends paid on Equity
Interests, liquidating dividends paid on Equity Interests, shares of Equity
Interests resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Equity Interests constituting
Collateral, but excluding Dividends.

                “Dividends” means cash dividends and cash distributions with
respect to any Equity Interests constituting Collateral that are not a
liquidating dividend.

                “Equipment” is defined in clause (c) of Section 2.1.

                “Grantor” and “Grantors” are defined in the preamble.

                “Intellectual Property Collateral” means, collectively, the
Computer Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.

                “Intercompany Note” means a promissory note payable to any
Grantor, either (a) in the form delivered to the Administrative Agent on the
Closing Date or (b) substantially in the form of Exhibit A hereto (with such
modifications as agreed to by the Administrative Agent), as amended, modified or
supplemented from time to time in accordance with clause (d) of Section 4.6,
together with any notes delivered in extension or renewal thereof or
substitution therefor.

                “Inventory” is defined in clause (d) of Section 2.1.

                “Patent Collateral” means:

                (a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation for
filing and each patent and patent application referred to in Item A of Schedule
III hereto;

                (b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any of the
items described in clause (a);

                (c) all patent licenses, and other agreements providing each
Grantor with the right to use any items of the type referred to in clauses (a)
and (b) above, including each patent license referred to in Item B of Schedule
III hereto; and

                (d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right to
sue third parties for past, present or future infringements of any patent or
patent application, and for breach or enforcement of any patent license.

                “Receivables” is defined in clause (e) of Section 2.1.

                “Related Contracts” is defined in clause (e) of Section 2.1.

                “Securities Act” is defined in clause (a) of Section 6.2.

                “Security Agreement” is defined in the preamble.

                “Specified Event” means the occurrence and continuance of a
Default under clauses (a) through (d) of Section 8.1.9 of the Credit Agreement
or any other Event of Default.

                “Trademark Collateral” means:

                (a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired including those referred to in Item A of
Schedule IV hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any other
country or political subdivision thereof or otherwise, and all common-law rights
relating to the foregoing, and (ii) the right to obtain all reissues, extensions
or renewals of the foregoing (collectively referred to as the “Trademark”);

                (b) all Trademark licenses for the grant by or to any Grantor of
any right to use any Trademark, including each Trademark license referred to in
Item B of Schedule IV hereto; and

                (c) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the extent
applicable clause (b);

                (d) the right to sue third parties for past, present and future
infringements of any Trademark Collateral described in clause (a) and, to the
extent applicable, clause (b); and

                (e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past, present or
future infringement or dilution of any Trademark, Trademark registration or
Trademark license, or for any injury to the goodwill associated with the use of
any such Trademark or for breach or enforcement of any Trademark license and all
rights corresponding thereto throughout the world.

                “Trade Secrets Collateral” means all common law and statutory
trade secrets and all other confidential, proprietary or useful information and
all know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a “Trade
Secret”), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI hereto, and
including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

                SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in this Security
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.

                SECTION 1.3. UCC Definitions. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the UCC are used in this Security Agreement, including
its preamble and recitals, with such meanings.

ARTICLE II
SECURITY INTEREST

                SECTION 2.1. Grant of Security Interest. Each Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by such Grantor (the “Collateral”):

                (a) all Intercompany Notes in which such Grantor has an interest
(including each Intercompany Note described in Item A of Schedule I hereto
(including the right to receive payment of the principal of and accrued interest
on such Intercompany Note, and other rights of such Grantor arising in its
capacity as the payee of such Intercompany Note));

                (b) (i) all investment property in which such Grantor has an
interest (including the Equity Interests of each issuer of such Equity Interests
described in Item B of Schedule I hereto) and (ii) all other Equity Interests
which are interests in limited liability companies or partnerships in which such
Grantor has an interest (including the Equity Interests of each issuer of such
Equity Interests described in Item B of Schedule I hereto), in each case
together with Dividends and Distributions payable in respect of the Collateral
described in the foregoing clauses (b)(i) and (b)(ii);

                (c) all equipment of such Grantor, including all parts thereof
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related thereto
(collectively referred to as the “Equipment”);

                (d) all inventory in all of its forms of such Grantor, including
(i) all raw materials and work in process therefor, finished goods thereof, and
materials used or consumed in the manufacture or production thereof, (ii) all
goods in which such Grantor has an interest in mass or a joint or other interest
or right of any kind (including goods in which such Grantor has an interest or
right as consignee), and (iii) all goods which are returned to or repossessed by
such Grantor, and all accessions thereto, products thereof and documents
therefor (all of the foregoing collectively referred to as the “Inventory”);

                (e) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds) of such
Grantor, whether or not arising out of or in connection with the sale or lease
of goods or the rendering of services, and all rights of such Grantor now or
hereafter existing in and to all security agreements, guaranties, leases and
other contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general intangibles
(all of the foregoing collectively referred to as the “Receivables”, and any and
all such security agreements, guaranties, leases and other contracts
collectively referred to as the “Related Contracts”);

                (f) all Intellectual Property Collateral of such Grantor;

                (g) the Collateral Account, all cash, checks, drafts, notes,
bills of exchange, money orders, other like instruments and all investment
property held in the Collateral Account (or in any sub-account thereof) and all
interest, earnings and proceeds in respect thereof;

                (h) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this Section;

                (i) all of such Grantor’s other property and rights of every
kind and description and interests therein; and

                (j) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in clauses
(a) through (i) above, and, to the extent not otherwise included, all payments
under insurance (whether or not the Administrative Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral).

Notwithstanding the foregoing, “Collateral” shall not include (i) each Grantor’s
real property leaseholds, (ii) any general intangibles or other rights arising
under any contracts, instruments, licenses or other documents as to which the
grant of a security interest would (A) constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and
until any required consents shall have been obtained or (B) give any other party
to such contract, instrument, license or other document the right to terminate
its obligations thereunder, (iii) any Equity Interest in a Restricted Entity or
in Warner Park Surgery Center, L.P., and (iv) investment property consisting of
Equity Interests of an issuer that is a Foreign Subsidiary (other than a Foreign
Subsidiary that (i) is treated as a partnership under the Code or (ii) is not
treated as an entity that is separate from (A) any Grantor, (B) any Person that
is treated as a partnership under the Code or (C) any “United States person” (as
defined in Section 7701(a)(30) of the Code)) of such Grantor, in excess of 65%
of the total combined voting power of all Equity Interests of each such Foreign
Subsidiary; provided further, that, in the event of any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or phase
in of, any law or regulation, directive or guideline of any Governmental
Authority that could reasonably be expected to alter the amount of United States
federal income tax that would otherwise be payable by such Grantor in the
absence of such pledge, the Administrative Agent or the Required Lenders may
require such Grantor to pledge such Equity Interests.

                SECTION 2.2. Security for Obligations. This Security Agreement
and the Collateral in which the Administrative Agent for the benefit of the
Secured Parties is granted a security interest hereunder by each Grantor secures
the payment of all Obligations of such Grantor now or hereafter existing.

                SECTION 2.3. Grantors Remain Liable. Anything herein to the
contrary notwithstanding

                (a) each Grantor will remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and will
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Security Agreement had not been executed;

                (b) the exercise by the Administrative Agent of any of its
rights hereunder will not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the Collateral;
and

                (c) no Secured Party will have any obligation or liability under
any contracts or agreements included in the Collateral by reason of this
Security Agreement, nor will any Secured Party be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

                SECTION 2.4. Security Interest Absolute, etc. This Security
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable grant of security interest, and shall remain in full force and
effect until the Termination Date has occurred. All rights of the Secured
Parties and the security interests granted to the Administrative Agent (for its
benefit and the ratable benefit of each other Secured Party) hereunder, and all
obligations of each Grantor hereunder, shall, in each case, be absolute,
unconditional and irrevocable irrespective of:

                (a) any lack of validity, legality or enforceability of any Loan
Document;

                (b) the failure of any Secured Party

                (i) to assert any claim or demand or to enforce any right or
remedy against any Obligor or any other Person (including any other Grantor)
under the provisions of any Loan Document or otherwise, or

                (ii) to exercise any right or remedy against any other guarantor
(including any other Grantor) of, or collateral securing, any Obligations;

                (c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;

                (d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each Grantor hereby
waives any right to or claim of) any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;

                (e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan Document;

                (f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor (including a Grantor hereunder)
of the Obligations, or any surrender or non-perfection of any collateral, or any
amendment to or waiver or release or addition to, or consent to or departure
from, any other guaranty held by any Secured Party securing any of the
Obligations; or

                (g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Obligor, any
surety or any guarantor.

                SECTION 2.5. Postponement of Subrogation, etc. Each Grantor
agrees that it will not exercise any rights which it may acquire by way of
rights of subrogation under any Loan Document to which it is a party, nor shall
any Grantor seek or be entitled to seek any contribution or reimbursement from
any Obligor, in respect of any payment made under any Loan Document or
otherwise, until following the Termination Date. Any amount paid to any Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Administrative Agent for its benefit and the ratable
benefit of each other Secured Party in the exact form received by such Grantor
(duly endorsed in favor of the Administrative Agent, if required), to be
credited and applied against the Obligations, whether matured or unmatured, in
accordance with clause (b) of Section 6.1; provided that if any Grantor has made
payment to the Secured Parties of all or any part of the Obligations and the
Termination Date has occurred, then at such Grantor’s request, the
Administrative Agent (on behalf of the Secured Parties) will, at the expense of
such Grantor, execute and deliver to such Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to such Grantor of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, each Grantor shall refrain from taking any action or
commencing any proceeding against any Obligor (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in respect of payments made under this Security Agreement to any Secured
Party.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

                In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, and to induce Secured Parties
to enter into Rate Protection Agreements, each Grantor represents and warrants
to each Secured Party as set forth below.

                SECTION 3.1. As to Equity Interests of Subsidiaries. With
respect to any Subsidiary of any Grantor that is

                (a) a corporation, business trust, joint stock company or
similar Person, all Equity Interests issued by such Subsidiary are duly
authorized and validly issued, fully paid and non-assessable, and represented by
a certificate; and

                (b) a partnership or limited liability company, no Equity
Interests issued by such Subsidiary (i) are dealt in or traded on securities
exchanges or in securities markets, (ii) expressly provide that such Equity
Interests are a security governed by Article 8 of the UCC, (iii) are held in a
securities account, or (iv) are represented by a certificate.

The percentage of the issued and outstanding Equity Interests of each Subsidiary
pledged by each Grantor hereunder are as set forth on Schedule I hereto.

                SECTION 3.2. Intercompany Notes. All Intercompany Notes have
been duly authorized, executed, endorsed, issued and delivered, and are the
legal, valid and binding obligation of the Issuer thereof, and are not in
default.

                SECTION 3.3. Location of Collateral, etc. All of the Equipment,
Inventory and lock boxes of each Grantor are located at the places specified in
Item A, Item B and Item C, respectively, of Schedule II hereto, as each such
Item may be supplemented or otherwise modified from time to time pursuant to
clause (a) of Section 4.2. None of the Equipment and Inventory has, within the
four months preceding the date of this Security Agreement, been located at any
place other than the places specified in Item A and Item B, respectively, of
Schedule II hereto except as set forth in a footnote thereto. The place(s) of
business and the chief executive office of each Grantor and the office(s) where
such Grantor keeps its records concerning the Receivables, and all originals of
all chattel paper which evidence Receivables, are located at the addresses set
forth in Item D of Schedule II hereto, as each such Item may be supplemented or
otherwise modified from time to time pursuant to clause (a) of Section 4.3. No
Grantor has any trade names other than those set forth in Item E of Schedule II
hereto. During the four months preceding the date hereof, no Grantor has been
known by any legal name different from the one set forth on the signature page
hereto, nor has any Grantor been the subject of any merger or other corporate
reorganization, except as set forth in Item F of Schedule II hereto. Each
Grantor’s federal taxpayer identification number is (and, during the four months
preceding the date hereof, such Grantor has not had a federal taxpayer
identification number different from the one) set forth in Item G of Schedule II
hereto. If the Collateral of any Grantor includes any Inventory located in the
State of California, such Grantor is not a “retail merchant” within the meaning
of Section 9102 of the California UCC. All Receivables evidenced by a promissory
note or other instrument, negotiable document or chattel paper have been duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Administrative Agent and delivered
and pledged to the Administrative Agent pursuant to Section 4.6. No Grantor is a
party to any federal, state or local government contract except as set forth in
Item H of Schedule II hereto.

                SECTION 3.4. Ownership, No Liens, etc. Each Grantor owns its
Collateral free and clear of any Lien, except for Liens (a) created by this
Security Agreement, and, in the case of Collateral other than any investment
property (including Equity Interests of any Subsidiary of such Grantor) in which
such Grantor has an interest, (b) permitted by Section 7.2.3 of the Credit
Agreement or (c) in favor of owners of Computer Software Collateral that is
licensed to such Grantor. No effective financing statement or other filing
similar in effect covering any Collateral is on file in any recording office,
except those filed in favor of the Administrative Agent relating to this
Security Agreement or those filed in connection with Liens permitted by Section
7.2.3 of the Credit Agreement.

                SECTION 3.5. Possession of Inventory, etc. Each Grantor agrees
that it will maintain exclusive possession of its goods, instruments and
Inventory, other than Inventory in transit in the ordinary course of business
and Inventory which is in the possession or control of a warehouseman, bailee
agent or other Person (other than a Person controlled by or under common control
with such Grantor) that has been notified of the security interest created in
favor of the Secured Parties pursuant to this Security Agreement, and has agreed
to hold such Inventory subject to the Secured Parties’ Lien and waive any Lien
held by it against such Inventory.

                SECTION 3.6. Negotiable Documents, Instruments and Chattel
Paper. Each Grantor has delivered to the Administrative Agent possession of all
originals of all negotiable documents, instruments and chattel paper owned or
held by such Grantor on the Closing Date and agrees that it will, promptly
following receipt, deliver to the Administrative Agent possession of all
originals of negotiable documents, instruments and chattel paper that it
acquires following the Closing Date.

                SECTION 3.7. Intellectual Property Collateral. With respect to
any Intellectual Property Collateral the loss, impairment or infringement of
which could reasonably be expected to have a Material Adverse Effect:

                (a) such Intellectual Property Collateral is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part;

                (b) such Intellectual Property Collateral is valid and
enforceable;

                (c) each Grantor has made all necessary filings and recordations
to protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and (subject to the
terms of the Credit Agreement) in corresponding offices throughout the world,
and its claims to the Copyright Collateral in the United States Copyright Office
and (subject to the terms of the Credit Agreement) in corresponding offices
throughout the world;

                (d) each Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual Property
Collateral and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and

                (e) each Grantor has performed and will continue to perform all
acts and has paid and will continue to pay all required fees and taxes to
maintain each and every such item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable.

Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor’s
business.

                SECTION 3.8. Validity, etc. This Security Agreement creates a
valid security interest in the Collateral securing the payment of the
Obligations. Each Grantor has filed or caused to be filed all Filing Statements
in the appropriate offices therefor (or has executed and delivered to the
Administrative Agent originals thereof suitable for filing in such offices) and
has taken all of the actions necessary to create perfected and (in the case of
Collateral other than Equity Interests pledged hereunder, subject to Section
7.2.3 of the Credit Agreement) first-priority security interests in the
applicable Collateral including (a) in the case of Collateral comprised of
certificated securities or instruments, delivery of such Collateral to the
Administrative Agent, duly endorsed in blank and (b) in the case of Collateral
comprised of uncertificated securities and other investment property (other than
certificated securities), such actions causing the Administrative Agent to have
“control” (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-115(e) of the UCC, as such term relates to commodity
contracts) of such Collateral; provided that, notwithstanding any of the
foregoing, with respect to any Collateral which constitutes motor vehicles, the
ownership of which is evidenced by a certificate of title filed with a
department of motor vehicles or similar agency of a Governmental Authority,
following the execution and delivery by each Grantor of this Security Agreement,
the Administrative Agent shall only have a valid security interest in such
Collateral.

                SECTION 3.9. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required either

                (a) for the grant by each Grantor of the security interest
granted hereby, the pledge by each Grantor of any Collateral pursuant hereto or
for the execution, delivery and performance of this Security Agreement by each
Grantor;

                (b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder; or

                (c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Security Agreement, except (i) with respect
to any securities issued by a Subsidiary of any Grantor, as may be required in
connection with a disposition of such securities by laws affecting the offering
and sale of securities generally, the remedies in respect of the Collateral
pursuant to this Security Agreement and (ii) any “change of control” or similar
filings required by state licensing agencies and, with respect to Ortholink
Securities Corporation, the National Association of Securities Dealers.

                SECTION 3.10. Best Interests. It is in the best interests of
each Grantor to execute this Security Agreement inasmuch as such Grantor will,
as a result of being a Subsidiary of the Borrower, derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders and the Issuer pursuant to the Credit Agreement and the
execution and delivery of Rate Protection Agreements between the Borrower, other
Obligors and certain Secured Parties, and each Grantor agrees that the Secured
Parties are relying on this representation in agreeing to make Credit Extensions
to the Borrower.

ARTICLE IV
COVENANTS

Each Grantor covenants and agrees that, until the Termination Date, such Grantor
will perform, comply with and be bound by the obligations set forth below.

                SECTION 4.1. As to Investment Property and Intercompany Notes,
Etc.

                SECTION 4.1.1. Equity Interests of Subsidiaries. Each Grantor
will cause each of its Subsidiaries that is

                (a) a corporation, business trust, joint stock company or
similar Person, to provide in its Organic Documents that all securities issued
by such Subsidiary will be represented by a certificate; and

                (b) a partnership or limited liability company, to require that
none of the Equity Interests issued by such Subsidiary will (i) be dealt in or
traded on securities exchanges or in securities markets, (ii) expressly provide
that such Equity Interests are securities governed by Article 8 of the UCC,
(iii) be held in a securities account, or (iv) be represented by a certificate.

                SECTION 4.1.2. Investment Property (other than Certificated
Securities). With respect to any investment property (other than certificated
securities) owned by any Grantor, such Grantor will cause a Control Agreement
relating to such investment property to be executed and delivered by such
Grantor and the applicable financial intermediary in favor of the Administrative
Agent.

                SECTION 4.1.3. Stock Powers, etc. Each Grantor agrees that all
certificated securities delivered by such Grantor pursuant to this Security
Agreement will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Administrative Agent.

                SECTION 4.1.4. Continuous Pledge. Each Grantor will (subject to
the terms of the Credit Agreement) deliver to the Administrative Agent and at
all times keep pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis all investment property constituting Collateral,
all Dividends and Distributions with respect thereto, all Intercompany Notes
(duly endorsed by such Grantor to the order of the Administrative Agent), and
all interest and principal with respect to the Intercompany Notes, and all
proceeds and rights from time to time received by or distributable to such
Grantor in respect of any of the foregoing Collateral.

                SECTION 4.1.5. Voting Rights; Dividends, etc. Each Grantor
agrees:

                (a) promptly upon receipt of notice of the occurrence and
continuance of a Specified Event from the Administrative Agent and without any
request therefor by the Administrative Agent, so long as such Specified Event
shall continue, to deliver (properly endorsed where required hereby or requested
by the Administrative Agent) to the Administrative Agent all Dividends and
Distributions with respect to investment property, all interest, principal,
other cash payments on Intercompany Notes, and all proceeds of the Collateral,
in each case thereafter received by such Grantor, all of which shall be held by
the Administrative Agent as additional Collateral; and

                (b) subject to clause (c)(ii) of Section 3.9 and, with respect
to Collateral consisting of general partner interests or limited liability
company interests, modifications to the respective Organic Documents to the
admission of the Administrative Agent as a general partner or member,
respectively, immediately upon the occurrence and continuance of a Specified
Event and so long as the Administrative Agent has notified such Grantor of the
Administrative Agent’s intention to exercise its voting power under this clause,

                (i) that the Administrative Agent may exercise (to the exclusion
of such Grantor) the voting power and all other incidental rights of ownership
with respect to any investment property constituting Collateral and such Grantor
hereby grants the Administrative Agent an irrevocable proxy, exercisable under
such circumstances, to vote such investment property; and

                (ii) to promptly deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow the
Administrative Agent to exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by any Grantor but which
such Grantor is then obligated to deliver to the Administrative Agent, shall,
until delivery to the Administrative Agent, be held by such Grantor separate and
apart from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless a Specified Event shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in clause (b), each Grantor will have the exclusive voting power
with respect to any investment property constituting Collateral and the
Administrative Agent will, upon the written request of such Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such Grantor which are necessary to allow such Grantor to exercise
that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by such Grantor that would impair any such
Collateral or be inconsistent with or violate any provision of any Loan
Document.

                SECTION 4.2. As to Equipment and Inventory. Each Grantor hereby
agrees that it will

                (a) keep all the Equipment and Inventory (other than Equipment
and Inventory Disposed of in accordance with Section 7.2.11 of the Credit
Agreement, motor vehicles and Inventory in transit) at the places therefor
specified in Section 3.3 or, upon 30 days’ prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III shall be true and
correct, and all action required pursuant to Section 4.6 shall have been taken
with respect to the Equipment and Inventory;

                (b) cause the Equipment to be maintained and preserved in good
repair and working order, ordinary wear and tear excepted, and in accordance
with any manufacturer’s manual unless such Grantor determines in good faith that
the repair or maintenance of such property is no longer economically feasible;
and forthwith, or in the case of any loss or damage to any of the Equipment, as
quickly as practicable after the occurrence thereof, make or cause to be made
all repairs, replacements, and other improvements in connection therewith which
are necessary or desirable to such end; and promptly furnish to the
Administrative Agent a statement respecting any loss or damage to any of the
Equipment; and

                (c) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside.

                SECTION 4.3. As to Receivables. (a) Each Grantor will keep its
chief executive office and the office(s) where it keeps its records concerning
the Receivables, and all originals of all chattel paper which evidences
Receivables located at the addresses set forth in Item D of Schedule II hereto,
or, upon 30 days’ prior written notice to the Administrative Agent, at such
other locations in a jurisdiction where all actions required by Section 4.6
shall have been taken with respect to the Receivables and other Collateral. No
Grantor will change its name or federal taxpayer identification number except
upon 30 days’ prior written notice to the Administrative Agent. In addition,
each Grantor shall supplement the information contained in Schedule II hereto on
the Compliance Certificate on each date a Compliance Certificate is required to
be delivered to the Administrative Agent under the Credit Agreement, including
any changes to the information set forth in Section 3.3.

                (b) Each Grantor shall have the right to collect all Receivables
so long as no Specified Event shall have occurred and be continuing.

                (c) Upon (i) the occurrence and continuance of a Specified Event
and (ii) the delivery of written notice by the Administrative Agent to each
Grantor, all proceeds of Collateral received by such Grantor shall be delivered
in kind to the Administrative Agent for deposit to a deposit account (the
“Collateral Account”) of such Grantor maintained with the Administrative Agent,
and such Grantor shall not commingle any such proceeds, and shall hold separate
and apart from all other property, all such proceeds in express trust for the
benefit of the Administrative Agent until delivery thereof is made to the
Administrative Agent.

                (d) Following the delivery of notice pursuant to clause (c)(ii)
of this Section, the Administrative Agent shall have the right to apply any
amount in the Collateral Account to the payment of any Obligations which are due
and payable.

                (e) With respect to the Collateral Account, it is hereby
confirmed and agreed that (i) deposits in each Collateral Account are subject to
a security interest as contemplated hereby, (ii) each such Collateral Account
shall be under the sole dominion and control of the Administrative Agent and
(iii) the Administrative Agent shall have the sole right of withdrawal over such
Collateral Account.

                SECTION 4.4. As to Collateral.

                (a) Subject to clause (b) of this Section, each Grantor (i) may
in the ordinary course of its business, at its own expense, sell, lease or
furnish under the contracts of service any of the Inventory normally held by
such Grantor for such purpose, and use and consume, in the ordinary course of
its business, any raw materials, work in process or materials normally held by
such Grantor for such purpose, (ii) will, at its own expense, endeavor to
collect, as and when due, all amounts due with respect to any of the Collateral,
including the taking of such action with respect to such collection as the
Administrative Agent may reasonably request following the occurrence of a
Specified Event or, in the absence of such request, as such Grantor may deem
advisable, and (iii) may grant, in the ordinary course of business, to any party
obligated on any of the Collateral, any rebate, refund or allowance to which
such party may be lawfully entitled, and may accept, in connection therewith,
the return of goods, the sale or lease of which shall have given rise to such
Collateral.

                (b) At any time following the occurrence and during the
continuance of a Specified Event, whether before or after the maturity of any of
the Obligations, the Administrative Agent may (i) revoke any or all of the
rights of any Grantor set forth in clause (a), (ii) notify any parties obligated
on any of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder and (iii) enforce collection of any of
the Collateral by suit or otherwise and surrender, release, or exchange all or
any part thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or evidenced
thereby.

                (c) Upon request of the Administrative Agent following the
occurrence and during the continuance of a Specified Event, each Grantor will,
at its own expense, notify any parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amounts due or to become due
thereunder.

                (d) Each Grantor hereby authorizes the Administrative Agent to
endorse, in the name of such Grantor, any item, howsoever received by the
Administrative Agent, representing any payment on or other proceeds of any of
the Collateral.

                SECTION 4.5. As to Intellectual Property Collateral. Each
Grantor covenants and agrees to comply with the following provisions as such
provisions relate to any Intellectual Property Collateral material to the
operations or business of such Grantor:

                (a) such Grantor will not (i) do or fail to perform any act
whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable, (ii) permit any of its licensees to (A) fail to
continue to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment for
non-use, (B) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral, (C) fail to employ all
of the Trademark Collateral registered with any federal or state or foreign
authority with an appropriate notice of such registration, (D) adopt or use any
other Trademark which is confusingly similar or a colorable imitation of any of
the Trademark Collateral, (E) use any of the Trademark Collateral registered
with any federal, state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark Collateral
has been made or (F) do or permit any act or knowingly omit to do any act
whereby any of the Trademark Collateral may lapse or become invalid or
unenforceable, or (G) do or permit any act or knowingly omit to do any act
whereby any of the Copyright Collateral or any of the Trade Secrets Collateral
may lapse or become invalid or unenforceable or placed in the public domain
except upon expiration of the end of an unrenewable term of a registration
thereof, unless, in the case of any of the foregoing requirements in clauses
(i), (ii) and (iii), such Grantor shall either (x) reasonably and in good faith
determine that any of such Intellectual Property Collateral is of negligible
economic value to such Grantor, or (y) have a valid business purpose to do
otherwise;

                (b) such Grantor shall promptly notify the Administrative Agent
if it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may become
abandoned or dedicated to the public or placed in the public domain or invalid
or unenforceable, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding such Grantor’s
ownership of any of the Intellectual Property Collateral, its right to register
the same or to keep and maintain and enforce the same;

                (c) in no event will such Grantor or any of its agents,
employees, designees or licensees file an application for the registration of
any Intellectual Property Collateral with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, unless it promptly
informs the Administrative Agent, and upon request of the Administrative Agent
(subject to the terms of the Credit Agreement), executes and delivers all
agreements, instruments and documents as the Administrative Agent may reasonably
request to evidence the Administrative Agent’s security interest in such
Intellectual Property Collateral;

                (d) such Grantor will take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or (subject to the terms of the Credit Agreement) any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and taxes
(except to the extent that dedication, abandonment or invalidation is permitted
under the foregoing clause (a) or (b)); and

                (e) such Grantor will promptly (but no less than quarterly)
execute and deliver to the Administrative Agent (as applicable) a Patent
Security Agreement, Trademark Security Agreement and/or Copyright Security
Agreement, as the case may be, in the forms of Exhibit B, Exhibit C and Exhibit
D hereto following its obtaining an interest in any such Intellectual Property,
and shall execute and deliver to the Administrative Agent any other document
required to acknowledge or register or perfect the Administrative Agent’s
interest in any part of such item of Intellectual Property Collateral.

                SECTION 4.6. Further Assurances, etc. Each Grantor agrees that,
from time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, each Grantor will

                (a) from time to time upon the request of the Administrative
Agent, promptly deliver to the Administrative Agent such stock powers,
instruments and similar documents, satisfactory in form and substance to the
Administrative Agent, with respect to such Collateral as the Administrative
Agent may reasonably request and will, from time to time upon the request of the
Administrative Agent after the occurrence and during the continuance of any
Specified Event promptly transfer any securities constituting Collateral into
the name of any nominee designated by the Administrative Agent; if any
Receivable shall be evidenced by an instrument, negotiable document or chattel
paper, deliver and pledge to the Administrative Agent hereunder such instrument,
negotiable document or chattel paper duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;

                (b) execute and file (or cause to be filed) such Filing
Statements or continuation statements, or amendments thereto, and such other
instruments or notices (including any assignment of claim form under or pursuant
to the federal assignment of claims statute, 31 U.S.C. § 3726, any successor or
amended version thereof or any regulation promulgated under or pursuant to any
version thereof), as may be necessary or that the Administrative Agent may
reasonably request in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative Agent
hereby;

                (c) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis, at the reasonable request of the Administrative Agent, all
investment property constituting Collateral, all Dividends and Distributions
with respect thereto, all Intercompany Notes (duly endorsed by such Grantor to
the order of the Administrative Agent), and all interest and principal with
respect to the Intercompany Notes, and all proceeds and rights from time to time
received by or distributable to such Grantor in respect of any of the foregoing
Collateral;

                (d) not enter into any agreement amending, supplementing or
waiving any provision of any Intercompany Note (including any underlying
instrument pursuant to which such Intercompany Note is issued), or compromising,
releasing or extending the time for payment of any obligation of the maker
thereof;

                (e) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any obligation
of the maker of any Intercompany Note or other instrument constituting
Collateral; and

                (f) furnish to the Administrative Agent, from time to time at
the Administrative Agent’s request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.

With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. Each Grantor agrees that a carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.

ARTICLE V
THE ADMINISTRATIVE AGENT

                SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the
Administrative Agent’s discretion, following the occurrence and during the
continuance of a Specified Event, to take any action and to execute any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including:

                (a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                (b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

                (c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
the Administrative Agent with respect to any of the Collateral; and

                (d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to Section 4.6).

Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

                SECTION 5.2. Administrative Agent May Perform. If any Grantor
fails to perform any agreement contained herein within 30 days after written
notice from the Administrative Agent, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Grantor pursuant to Section 6.4.

                SECTION 5.3. Administrative Agent Has No Duty. The powers
conferred on the Administrative Agent hereunder are solely to protect its
interest (on behalf of the Secured Parties) in the Collateral and shall not
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Administrative Agent shall have no duty as to any
Collateral or responsibility for

                (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
investment property, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters, or

                (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

                SECTION 5.4. Reasonable Care. The Administrative Agent is
required to exercise reasonable care in the custody and preservation of any of
the Collateral in its possession; provided that the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Event, but failure of the Administrative
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.

ARTICLE VI
REMEDIES

                SECTION 6.1. Certain Remedies. If any Specified Event shall have
occurred and be continuing:

                (a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may

                (i) require each Grantor to, and such Grantor hereby agrees that
it will, at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place to be designated by
the Administrative Agent which is reasonably convenient to both parties, and

                (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days prior notice to such Grantor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

                (b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied by the Administrative Agent against, all
or any part of the Obligations as set forth in Section 2.7 of the Subsidiary
Guaranty.

                (c) The Administrative Agent may

                (i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder,

                (ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to become due
thereunder,

                (iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

                (iv) endorse any checks, drafts, or other writings in any
Grantor’s name to allow collection of the Collateral,

                (v) take control of any proceeds of the Collateral, and

                (vi) execute (in the name, place and stead of any Grantor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

                SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant to
Section 6.1, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense:

                (a) use its best efforts to exempt the Collateral under the
state securities or “Blue Sky” laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Administrative
Agent; and

                (b) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.

Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by any of the Secured Parties by reason of the
failure of such Grantor to perform any of the covenants contained in this
Section and consequently, to the extent permitted under applicable law, agrees
that, if such Grantor shall fail to perform any of such covenants, it shall pay,
as liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Administrative Agent) of the Collateral on the date the
Administrative Agent shall demand compliance with this Section.

                SECTION 6.3. Compliance with Restrictions. Each Grantor agrees
that in any sale of any of the Collateral whenever a Specified Event shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and such
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to such Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

                SECTION 6.4. Protection of Collateral. The Administrative Agent
may from time to time, at its option, perform any act which any Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given after the occurrence and during the continuance of
a Specified Event) and the Administrative Agent may from time to time take any
other action which the Administrative Agent reasonably deems necessary for the
maintenance, preservation or protection of any of the Collateral or of its
security interest therein.

ARTICLE VII
MISCELLANEOUS PROVISIONS

                SECTION 7.1. Loan Document. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof, including Article X thereof.

                SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon each Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that no Grantor may (unless otherwise permitted under the terms of the
Credit Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.

                SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by any
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

                SECTION 7.4. Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile and addressed,
delivered or transmitted to the appropriate party at the address or facsimile
number of such party (in the case of any Grantor, in care of the Borrower)
specified in the Credit Agreement or at such other address or facsimile number
as may be designated by such party in a notice to the other party. Any notice or
other communication, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any such notice or other communication, if transmitted by
facsimile, shall be deemed given when transmitted and electronically confirmed.

                SECTION 7.5. Release of Liens. Upon (a) the Disposition of
Collateral in accordance with the Credit Agreement or (b) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (i) such Collateral (in the case of clause (a)) or
(ii) all Collateral (in the case of clause (b)). Upon any such Disposition or
termination, the Administrative Agent will, at the applicable Grantor’s sole
expense, deliver to such Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.

                SECTION 7.6. Additional Grantors. Upon the execution and
delivery by any other Person of a supplement in the form of Annex I hereto, such
Person shall become a “Grantor” hereunder with the same force and effect as if
it were originally a party to this Security Agreement and named as a “Grantor”
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Grantor hereunder, and the rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Security Agreement.

                SECTION 7.7. No Waiver; Remedies. In addition to, and not in
limitation of Section 2.4, no failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

                SECTION 7.8. Section Captions. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.

                SECTION 7.9. Severability. Wherever possible each provision of
this Security Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.

                SECTION 7.10. Governing Law, Entire Agreement, etc. THIS
SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This
Security Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and thereof and supersede any prior agreements, written or oral, with respect
thereto.

                SECTION 7.11. Counterparts. This Security Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be duly executed and delivered

by its Authorized Officer as of the date first above written.

  USP NEVADA HOLDINGS, LLC   USP TEXAS, L.P.   HEALTH HORIZONS OF NASHVILLE,
INC.   HEALTH HORIZONS OF KANSAS CITY, INC.   HEALTH HORIZONS OF MURFREESBORO,
INC.   HEALTH HORIZONS OF DECATUR, INC.   USP NEVADA, INC.   USP WINTER PARK,
INC.   USP LONG ISLAND, INC.   USP NORTH TEXAS, INC.   USP NEW JERSEY, INC.  
TEXAS OUTPATIENT SURGICARE CENTER, INC.   USP CHANDLER, INC.   USP SOUTH
HOUSTON, INC.   USP PASADENA, INC.   USP MANHATTAN, INC.   ORTHOLINK PHYSICIANS
CORPORATION   ORTHOEXCEL, INC.   GEORGIA MUSCULOSKELETAL NETWORK, INC.  
TENNESSEE MUSCULOSKELETAL NETWORK, INC.   ORTHOLINK OCCUPATIONAL MEDICINE  
SERVICES CORPORATION   ORTHOLINK SECURITIES CORPORATION   ORTHOLINK OF COLORADO,
INC.   SOUTHWEST SPINE CENTER, INC.   NEURO-SURGICAL ASSOCIATES, INC.  
ORTHOLINK ASC CORPORATION   ORTHOLINK/GEORGIA ASC, INC.   ORTHOLINK/NEW MEXICO
ASC, INC.   ORTHOLINK/TN ASC, INC.   DAY-OP SU RGERY CONSULTING COMPANY, LLC  
DAY-OP MANAGEMENT COMPANY, INC.   USP LAS CRUCES, INC.   MEDICAL DOCUMENTATING
SYSTEMS, INC.   MEDCENTER MANAGEMENT SERVICES, INC.               By:  /s/ Mark
A. Kopser    

--------------------------------------------------------------------------------

    Name: Mark A. Kopser     Title: Chief Financial Officer and Vice President

 

 

  CREDIT SUISSE FIRST BOSTON,
 as Administrative Agent             By:  /s/ Williams S. Lutkins    

--------------------------------------------------------------------------------

    Title: Vice President                     By:  /s/ Julia P. Kingsbury    

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    Title: Vice President

 

SCHEDULE I
to Subsidiary Pledge and Security Agreement

                Item A. Intercompany Notes

Maker Payee   Maximum Amount of Intercompany Loans Evidenced Thereby   Date    
         

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  Day-Op Acquisition Corp. (subsequently merged into Day-Op Center of Long
Island, Inc.) Day-Op Surgery Consulting Company, L.L.C. (f/k/a USP
Administrative Subsidiary, LLC)   $ 950,000   1/4/2000                 Day-Op
Acquisition Corp. (subsequently merged into Day-Op Center of Long Island, Inc.)
Day-Op Surgery Consulting Company, L.L.C. (f/k/a USP Administrative Subsidiary,
LLC)   $ 10,450,000   1/4/2000                 DeSoto Surgicare Partners, Ltd.
USP Texas, L.P.   $ 989,000   7/1/2000                

 

                Item B. Equity Interests

 

            Common Stock              

--------------------------------------------------------------------------------

          # of   Authorized   Outstanding   % of Shares   Pledgor Issuer
(corporate) Cert. #   Shares   Shares   Shares   Pledged  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

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                          Day-Op Surgery Consulting Company, L.L.C. Day-Op
Management Company, Inc. 3   200   200   200   100%                          
OrthoLink Physicians Corporation Ortho Excel, Inc. AB101   648.1113   10,000,000
  648.1113   100%                           OrthoExcel, Inc. Medical Documenting
Systems, Inc. A002     100     1,000     100     100%   OrthoExcel, Inc.
MedCenter Management Services, Inc. 2       100       750       750       100%  
                       

 

 

            Common Stock              

--------------------------------------------------------------------------------

          # of   Authorized   Outstanding   % of Shares   Pledgor Issuer
(corporate) Cert. #   Shares   Shares   Shares   Pledged  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

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                          OrthoLink Physicians Corporation Georgia
Musculoskeletal Network, Inc. 1   1,000   1,000   1,000   100%                  
        OrthoLink Physicians Corporation Tennessee Musculoskeletal Network, Inc.
2   1,000   1,000   1,000   100%                           OrthoLink Physicians
Corporation OrthoLink Occupational Medicine Services Corporation 1   1,000  
1,000   1,000   100%                           OrthoLink Physicians Corporation
OrthoLink Securities Corp. 1   1,000   1,000   1,000   100%                    
      OrthoLink Physicians Corporation OrthoLink of Colorado, Inc. 14   440.772
  750   440.772   100%                           OrthoLink Physicians
Corporation Southwest Spine Center, Inc. 3   675   1,000   675   100%          
                OrthoLink Physicians Corporation Neuro-Surgical Associates, Inc.
3   80   25,000   80   100%                           OrthoLink Physicians
Corporation OrthoLink ASC Corporation 1   1,000   1,000   1,000   100%          
                OrthoLink ASC Corporation OrthoLink/Georgia ASC, Inc. 1   1,000
  1,000   1,000   100%                           OrthoLink ASC Corporation
OrthoLink/New Mexico ASC, Inc. 1   1,000   1,000   1,000   100%                
          OrthoLink ASC Corporation OrthoLink/TN ASC, Inc. 1   100   1,000   100
  100%  

 

 

      Limited Liability Company Interests        

--------------------------------------------------------------------------------

  Pledgor Issuer
(limited liability company)   % of Interests Owned   % of Interests Pledged  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  USP North Texas, Inc. USP Nevada Holdings, LLC   100%   100%                
USP Long Island, Inc. Day-Op Surgery Consulting Company, L.L.C   100%   100%    
            USP Manhattan, Inc. NYCAS Administrative Services, L.L.C.   100%  
100%                 USP Las Cruces, Inc. Las Cruces Surgical Center, LLC   50%
  100%                 OrthoLink ASC Corporation OrthoLink/Baptist ASC, LLC  
49%   100%                 OrthoLink ASC Corporation OrthoLink/Murfreeboro ASC,
LLC   31%   100%  

 

      Partnership Interests      

--------------------------------------------------------------------------------

Pledgor Issuer
(partnership)   % of Partnership Interests Owned   % of Partnership
Interests Pledged

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

USP North Texas, Inc. USP Texas, L.P.   1%   100%             USP Nevada
Holdings, LLC USP Texas, L.P.   99%   100%             Health Horizons of
Nashville, Inc. Physicians Pavilion, L.P.   72.4%   100%             Health
Horizons of Kansas City, Inc. Creekwood Surgery Center, L.P.   75%   100%      
      Health Horizons of Murfreesboro, Inc. Middle Tennessee Ambulatory Surgery
Center, L.P.   36.5%   100%             Health Horizons of Decatur, Inc. Decatur
Surgery Center, L.P.   66%   100%             USP Winter Park, Inc. University
Surgery Center, Ltd.   70%   100%             Texas Outpatient Surgicare Center,
Inc. TOPS Specialty Hospital, Ltd.   55%   100%             USP South Houston,
Inc. United Surgery Center - Southeast Ltd.   94.5%   100%             USP
Pasadena, Inc. Doctors Outpatient Surgicenter, Ltd.   91.25%   100%            
OrthoLink Physicians Corporation Middle Tennessee Ambulatory Surgery Center,
L.P.   2.48%   100%             OrthoLink/Georgia ASC, Inc East-West Surgery
Center, L.P.   99%   100%             OrthoLink/New Mexico ASC, Inc. New Mexico
Orthopaedic Surgery Center, L.P.   51%   100%

 

 

SCHEDULE II
to Subsidiary Pledge and Security Agreement

Item A. Location of Equipment

 

Grantor Description Location

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

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                See Item D.

Item B. Location of Inventory

                See Item D.

Item C. Location of Lock Boxes

                None.

Item D. Places of Business and Chief Executive Office

 

      Federal Taxpayer   Grantor Address   Identification Number  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

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  Day-Op Management Company, Inc. Day-Op Center of Long Island
110 Willis Avenue
Mineola, NY 11501   11-2908189             Day-Op Surgery Consulting Company,
LLC Day-Op Center of Long Island
110 Willis Avenue
Mineola, NY 11501   75-2790863             Georgia Muscoloskeletal Network, Inc.
5901 Peachtree Dunwoody Road
Suite 300
Atlanta, GA 30328   62-1749874             Health Horizons of Decatur, Inc.
Decatur Surgery Center
2828 Highway 31 South (35603)
P.O. Box 747
Decatur, AL 35602   62-1497774             Health Horizons of Kansas City, Inc.
Creekwood Surgery Center
211 Northeast 54thStreet
Suite 100
Kansas City, MO 64118   62-1545988             Health Horizons of Murfreesboro,
Inc. Middle Tennessee Ambulatory Surgery Center
503 E. Bell St., Suite 100
Murfreesboro, TN 37130

  62-1699666             Health Horizons of Nashville, Inc. Physicians Pavilion
Surgery Ctr
360 Wallace Road
Nashville, TN 37211

  62-1481503             MedCenter Management Services, Inc. 103 Powell Court,
Suite 350
Brentwood, TN 37027   31-1277552             Medical Documenting Systems, Inc.
103 Powell Court, Suite 350
Brentwood, TN 37027

  41-1636501             Neuro-Surgical Associates, Inc. 201 Cedar St. S.E.
Suite 7650
Albuquerque, NM 87106   85-0213432             OrthoExcel, Inc. 103 Powell
Court, Suite 350
Brentwood, TN 37027   31-1447996             OrthoLink ASC Corporation 103
Powell Court, Suite 350
Brentwood, TN 37027   62-1691093             OrthoLink Occupational
Medicine Services Corporation 103 Powell Court, Suite 350
Brentwood, TN 37027   62-1723531             OrthoLink of Colorado, Inc. 8200 E.
Belleview Ave
Suite 615
Englewood, CO 80111   84-1415404             OrthoLink Physicians Corporation
103 Powell Court, Suite 350
Brentwood, TN 37027   62-1646034             OrthoLink Securities Corporation
103 Powell Court, Suite 350
Brentwood, TN 37027   62-1781381             OrthoLink/Georgia ASC, Inc. 103
Powell Court, Suite 350
Brentwood, TN 37027   62-1832694             OrthoLink/New Mexico ASC, Inc. 201
Cedar St. S.E.
Suite 7650
Albuquerque, NM 87106   62-1807450             OrthoLink/TN ASC, Inc. 103 Powell
Court, Suite 350
Brentwood, TN 37027   62-1825621             Southwest Spine Center, Inc. 201
Cedar St. S.E.
Suite 7650
Albuquerque, NM 87106   85-0255325             Tennessee MusculoskeletalNetwork,
Inc. 103 Powell Court, Suite 350
Brentwood, TN 37027   62-1709381             Texas Outpatient Surgicare Center,
Inc. TOPS Surgical Specialty Hospital
17080 Red Oak Dr.
Houston, TX 77090   74-2112653             USP Chandler, Inc. Warner Park
Surgery Center
604 W. Warner Rd., Bldg. A
Chandler, AZ 85225   75-282457             USP Las Cruces, Inc. 1205 S. Telshor
Blvd.
Las Cruces, NM 88011   75-2924966             USP Long Island, Inc. Day-Op
Center of Long Island
110 Willis Avenue
Mineola, NY 11501   75-2853167             USP Manhattan, Inc. Day-Op Center of
Long Island
110 Willis Avenue
Mineola, NY 11501   13-4090380             USP Nevada Holdings, LLC 101
Convention Center Dr.
Suite 850
Las Vegas, NV 89109   88-0452476             USP Nevada, Inc. Parkway Surgery
Center
100 N. Green Valley Parkway
# 125
Henderson, NV 89014   88-0401393             USP New Jersey, Inc. Shrewsbury
Surgery Center
655 Shrewsbury Avenue
Shrewsbury, NJ 07702   75-2839367             USP North Texas, Inc. 17103
Preston Road
Suite 200 North
Dallas, TX 75248   75-2851636             USP Pasadena, Inc. Doctors Outpatient
Surgicenter
3534 Vista Boulevard
Pasadena, TX 77504   75-2832362             USP South Houston, Inc. United
Surgery Center - Southeast
12700 N. Featherwood Dr.
Suite 100
Houston, TX 77034   75-2832364             USP Texas, L.P. 17103 Preston Road
Suite 200 North
Dallas, TX 75248   75-2850832             USP Winter Park, Inc. University
Surgical Center
7251 University Blvd., Suite 100
Winter Park, FL 32792   75-2785714  

Item E. Trade Names

                None.

Item F. Merger or Other Corporate Reorganization

                None.

Item G. Federal Taxpayer Identification Number

                See Item D.

Item H. Government Contracts

                None.

SCHEDULE III
to Subsidiary Pledge and Security Agreement

Item A. Patents

None.

Item B. Patent Licenses

None.

SCHEDULE IV
to Subsidiary Pledge and Security Agreement

Item A. Trademarks

None.

Item B. Trademark Licenses

None.

SCHEDULE V
to Subsidiary Pledge and Security Agreement

Item A. Copyrights/Mask Works

None.

Item B. Copyright/Mask Work Licenses

None.

SCHEDULE VI
to Subsidiary Pledge and Security Agreement

Trade Secret or Know-How Licenses

None.

EXHIBIT A
to Subsidiary Pledge and Security Agreement

DEMAND NOTE

$____________ ____________ ___, ____

 

                FOR VALUE RECEIVED, the undersigned, [NAME OF MAKER], a
____________ [corporation] (the “Maker”), promises to pay on demand to the order
of [NAME OF APPLICABLE SUBSIDIARY], a ____________ [corporation] (the “Payee”),
the principal sum of ____________________ DOLLARS ($____________) or such lesser
amount which equals the aggregate unpaid principal amount of all intercompany
loans made by the Payee to the Maker.

                The unpaid principal amount of this demand note (this “Note”)
shall bear interest at a rate equal to such rate per annum as shall be agreed
upon from time to time by the Payee and the Maker, payable at such times as
shall be agreed upon by the Payee and the Maker, and all payments of principal
of and interest on this Note shall be payable in same day or immediately
available funds in Dollars. Except as set forth in the next sentence, all
payments on this Note shall be made by the Maker to the Payee’s account as
notified to the Maker from time to time, and shall be evidenced on the books and
records of the Maker and the Payee. The Maker hereby agrees that upon Credit
Suisse First Boston (including its successors, transferees or assigns, referred
to as the “Administrative Agent”) notifying the Maker that a Specified Event has
occurred and is continuing (collectively referred to as a “Payment Event”), it
will make (and the Payee irrevocably instructs the Maker to make) all payments
of principal and accrued interest on this Note on demand to an account
identified by the Administrative Agent, and upon the delivery of such notice
(which can include a facsimile notice), the Administrative Agent shall have all
rights of the Payee to demand (and collect) payment of, and enforce all rights
with respect to, the Indebtedness evidenced by this Note.

                This Note is one of the Intercompany Notes referred to in the
Subsidiary Pledge and Security Agreement, dated as of June 13, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Security Agreement”), among various Persons (including the Payee) and the
Administrative Agent and has been pledged to the Administrative Agent (for its
benefit and the ratable benefit of each other Secured Party) as security for the
Obligations outstanding from time to time under the Loan Documents. Unless
otherwise defined herein or the context otherwise requires, terms used in this
Note have the meanings provided in (or by reference in) the Security Agreement.

                THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK). THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THIS NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.

  [NAME OF MAKER]           By:      

--------------------------------------------------------------------------------

    Title:               Pay to the order of CREDIT SUISSE FIRST
BOSTON, as Administrative Agent           [NAME OF APPLICABLE SUBSIDIARY]      
By:      

--------------------------------------------------------------------------------

    Title:

 

EXHIBIT B
to Subsidiary Pledge and Security Agreement

PATENT SECURITY AGREEMENT

                This PATENT SECURITY AGREEMENT, dated as of ____________ ___,
_____ (this “Agreement”), is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among USP Domestic Holdings, Inc. (the
“Borrower”), the Lenders, Lehman Commercial Paper Inc., as the Syndication
Agent, Société Générale, as the Documentation Agent, and the Administrative
Agent, the Lenders and the Issuer have extended Commitments to make Credit
Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Subsidiary Pledge and Security Agreement, dated as
of June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Patent Collateral (as defined below) to secure
all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Patent Collateral”):

   (a) all of its letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing and each
patent and patent application referred to in Item A of Schedule I attached
hereto;

   (b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in clause
(a);

   (c) all of its patent licenses, and other agreements providing each Grantor
with the right to use any items of the type referred to in clauses (a) and (b)
above, including each patent license referred to in Item B of Schedule I
attached hereto; and

   (d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to sue third
parties for past, present or future infringements of any patent or patent
application, and for breach or enforcement of any patent license.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Patent Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of Patent
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Patent Collateral (in the case of clause (i))
or (B) all Patent Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor’s sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Patent Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Patent Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  [NAME OF APPLICABLE SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:               CREDIT SUISSE FIRST BOSTON,
as Administrative Agent               By:  /s/ William S. Lutkins    

--------------------------------------------------------------------------------

    Title: Vice President               By:  /s/ Julia P. Kingsbury    

--------------------------------------------------------------------------------

    Title: Vice President

 

SCHEDULE I
to Patent Security Agreement

Item A. Patents

Issued Patents      

--------------------------------------------------------------------------------

      10/ Country Patent No. Issue Date Inventor(s) Title

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

Pending Patent Applications

--------------------------------------------------------------------------------

10/ Country Serial No. Filing Date Inventor(s) Title

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

Patent Applications in Preparation

--------------------------------------------------------------------------------

    Expected     10/ Country Docket No. Filing Date Inventor(s) Title

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

Item B. Patent Licenses

1/ Country or     Effective Expiration Subject Territory Licensor Licensee Date
Date Matter

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

1/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

 

EXHIBIT C
to Subsidiary Pledge and Security Agreement

TRADEMARK SECURITY AGREEMENT

                This TRADEMARK SECURITY AGREEMENT, dated as of ____________ ___,
_____ (this “Agreement”), is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among USP Domestic Holdings, Inc. (the
“Borrower”), the Lenders, Lehman Commercial Paper Inc., as the Syndication
Agent, Société Générale, as the Documentation Agent, and the Administrative
Agent, the Lenders and the Issuer have extended Commitments to make Credit
Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Subsidiary Pledge and Security Agreement, dated as
of June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Trademark Collateral (as defined below) to
secure all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following property, whether now or hereafter existing or
acquired by the Grantor (the “Trademark Collateral”):

   (a) (i) all of its trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired including those referred to in Item A of
Schedule I hereto, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether pending
or in preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any office
or agency of the United States of America or any State thereof or any other
country or political subdivision thereof or otherwise, and all common-law rights
relating to the foregoing, and (ii) the right to obtain all reissues, extensions
or renewals of the foregoing (collectively referred to as the “Trademark”);

   (b) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clause (a), and to the extent applicable
clause (b);

   (c) the right to sue third parties for past, present and future infringements
of any Trademark Collateral described in clause (a) and, to the extent
applicable, clause (b); and

   (d) all proceeds of, and rights associated with, the foregoing, including any
claim by any Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or Trademark
license, or for any injury to the goodwill associated with the use of any such
Trademark or for breach or enforcement of any Trademark license and all rights
corresponding thereto throughout the world.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Trademark Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Administrative Agent and each Secured Party
thereunder) shall remain in full force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of
Trademark Collateral in accordance with the Credit Agreement or (ii) the
occurrence of the Termination Date, the security interests granted herein shall
automatically terminate with respect to (A) such Trademark Collateral (in the
case of clause (i)) or (B) all Trademark Collateral (in the case of clause
(ii)). Upon any such Disposition or termination, the Administrative Agent will,
at the Grantor’s sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all Trademark
Collateral held by the Administrative Agent hereunder, and execute and deliver
to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Trademark Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  [NAME OF APPLICABLE SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:               CREDIT SUISSE FIRST BOSTON,
as Administrative Agent               By:      

--------------------------------------------------------------------------------

    Title:               By:      

--------------------------------------------------------------------------------

    Title:

 

SCHEDULE I
to Trademark Security Agreement

Item A. Trademarks

Registered Trademarks  

--------------------------------------------------------------------------------

  12/Country Trademark   Registration No.   Registration Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

 

Pending Trademark Applications  

--------------------------------------------------------------------------------

  12/Country Trademark   Serial No.   Filing Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Trademark Applications in Preparation  

--------------------------------------------------------------------------------

            Expected   Products/   12/Country Trademark   Docket No.   Filing
Date   Services  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Item B. Trademark Licenses

2/Country or             Effective   Expiration   Territory Trademark   Licensor
  Licensee   Date   Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

2/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

 

EXHIBIT D
to Subsidiary Pledge and Security Agreement

COPYRIGHT SECURITY AGREEMENT

                This COPYRIGHT SECURITY AGREEMENT, dated as of ____________ ___,
__ (this “Agreement”), is made between [NAME OF APPLICABLE SUBSIDIARY], a
____________ [corporation] (the “Grantor”), and CREDIT SUISSE FIRST BOSTON, as
administrative agent (together with its successor(s) thereto in such capacity,
the “Administrative Agent”) for each of the Secured Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to a Credit Agreement, dated as of June 13,
2001 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among USP Domestic Holdings, Inc. (the
“Borrower”), the Lenders, Lehman Commercial Paper Inc., as the Syndication
Agent, Société Générale, as the Documentation Agent, and the Administrative
Agent, the Lenders and the Issuer have extended Commitments to make Credit
Extensions to the Borrower;

                WHEREAS, in connection with the Credit Agreement, the Grantor
has executed and delivered a Subsidiary Pledge and Security Agreement, dated as
of June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”);

                WHEREAS, pursuant to the Credit Agreement and pursuant to clause
(e) of Section 4.5 of the Security Agreement, the Grantor is required to execute
and deliver this Agreement and to grant to the Administrative Agent a continuing
security interest in all of the Copyright Collateral (as defined below) to
secure all Obligations; and

                WHEREAS, the Grantor has duly authorized the execution, delivery
and performance of this Agreement; and

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

                SECTION 1. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, including its preamble
and recitals, have the meanings provided in the Security Agreement.

                SECTION 2. Grant of Security Interest. The Grantor hereby
assigns, pledges, hypothecates, charges, mortgages, delivers, and transfers to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its benefit
and the ratable benefit of each other Secured Party, a continuing security
interest in all of the following Copyright Collateral (as defined below),
whether now or hereafter existing or acquired by the Grantor.

                “Copyright Collateral” means all copyrights of the Grantor,
whether statutory or common law, registered or unregistered and whether
published or unpublished, now or hereafter in force throughout the world
including all of the Grantor’s right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule I
hereto, and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation, all copyright licenses,
including each copyright license referred to in Item B of Schedule I hereto, the
right to sue for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

                SECTION 3. Security Agreement. This Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Copyright Collateral with the United
States Copyright Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Administrative
Agent for its benefit and the ratable benefit of each other Secured Party under
the Security Agreement. The Security Agreement (and all rights and remedies of
the Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.

                SECTION 4. Release of Liens. Upon (i) the Disposition of
Copyright Collateral in accordance with the Credit Agreement or (ii) the
occurrence of the Termination Date, the security interests granted herein shall
automatically terminate with respect to (A) such Copyright Collateral (in the
case of clause (i)) or (B) all Copyright Collateral (in the case of clause
(ii)). Upon any such Disposition or termination, the Administrative Agent will,
at the Grantor’s sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all Copyright
Collateral held by the Administrative Agent hereunder, and execute and deliver
to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.

                SECTION 5. Acknowledgment. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Administrative Agent
with respect to the security interest in the Copyright Collateral granted hereby
are more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.

                SECTION 6. Loan Document. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.

                SECTION 7. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  [NAME OF APPLICABLE SUBSIDIARY]           By:      

--------------------------------------------------------------------------------

    Title:               CREDIT SUISSE FIRST BOSTON,
as Administrative Agent               By:      

--------------------------------------------------------------------------------

    Title:               By:      

--------------------------------------------------------------------------------

    Title:

 

SCHEDULE I
to Copyright Security Agreement

Item A. Copyrights/Mask Works

Registered Copyrights/Mask Works  

--------------------------------------------------------------------------------

  14/Country Registration No.   Registration Date   Author(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Copyright/Mask Work Pending Registration Applications  

--------------------------------------------------------------------------------

  14/Country Serial No.   Filing Date   Author(s)   Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Copyright/Mask Work Registration Applications in Preparation  

--------------------------------------------------------------------------------

    Expected               14/Country Docket No.   Filing Date   Author(s)  
Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

Item B. Copyright/Mask Work Licenses

3/Country or         Effective   Expiration   Territory Licensor   Licensee  
Date   Date  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

3/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

 

ANNEX I
to the Subsidiary Pledge and Security Agreement

SUPPLEMENT NO. [ ] TO SUBSIDIARY
PLEDGE AND SECURITY AGREMENT

                This SUPPLEMENT, dated as of ____________ ___, _____ (this
“Supplement”), is to the Subsidiary Pledge and Security Agreement, dated as of
June 13, 2001 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Subsidiary Pledge and Security Agreement”),
among the Grantors (such capitalized term, and other terms used in this
Supplement, to have the meanings set forth in Article I of the Subsidiary Pledge
and Security Agreement) from time to time party thereto, in favor of CREDIT
SUISSE FIRST BOSTON, as administrative agent (together with its successor(s)
thereto in such capacity, the “Administrative Agent”) for each of the Secured
Parties.

W I T N E S S E T H :

                WHEREAS, pursuant to the provisions of Section 7.7 of the
Subsidiary Pledge and Security Agreement, each of the undersigned is becoming a
Grantor under the Subsidiary Pledge and Security Agreement; and

                WHEREAS, each of the undersigned desires to become a “Grantor”
under the Subsidiary Pledge and Security Agreement in order to induce the
Secured Parties to continue to extend Credit Extensions under the Credit
Agreement;

                NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each of the undersigned agrees,
for the benefit of each Secured Party, as follows.

                SECTION 1. Party to Subsidiary Pledge and Security Agreement,
etc. In accordance with the terms of the Subsidiary Pledge and Security
Agreement, by its signature below each of the undersigned hereby irrevocably
agrees to become a Grantor under the Subsidiary Pledge and Security Agreement
with the same force and effect as if it were an original signatory thereto and
each of the undersigned hereby (a) agrees to be bound by and comply with all of
the terms and provisions of the Subsidiary Pledge and Security Agreement
applicable to it as a Grantor and (b) represents and warrants that the
representations and warranties made by it as a Grantor thereunder are true and
correct as of the date hereof, unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date. In furtherance of the foregoing, each reference
to a “Grantor” and/or “Grantors” in the Subsidiary Pledge and Security Agreement
shall be deemed to include each of the undersigned.

                SECTION 2. Representations. Each of the undersigned Grantor
hereby represents and warrants that this Supplement has been duly authorized,
executed and delivered by it and that this Supplement and the Subsidiary Pledge
and Security Agreement constitute the legal, valid and binding obligation of
each of the undersigned, enforceable against it in accordance with its terms.

                SECTION 3. Full Force of Subsidiary Pledge and Security
Agreement. Except as expressly supplemented hereby, the Subsidiary Pledge and
Security Agreement shall remain in full force and effect in accordance with its
terms.

                SECTION 4. Severability. Wherever possible each provision of
this Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Supplement or the
Subsidiary Pledge and Security Agreement.

                SECTION 5. Governing Law, Entire Agreement, etc. THIS SUPPLEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Supplement and the
other Loan Documents constitute the entire understanding among the parties
hereto with respect to the subject matter thereof and supersede any prior
agreements, written or oral, with respect thereto.

                SECTION 6. Counterparts. This Supplement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.

* * * * *

                IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.

  [NAME OF ADDITIONAL SUBSIDIARY]           By:      

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    Title:               [NAME OF ADDITIONAL SUBSIDIARY]           By:      

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    Title:             ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:       CREDIT SUISSE FIRST BOSTON,
as Administrative Agent             By:  /s/ Julia P. Kingsbury    

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    Title: Vice President               By:  /s/ William S. Lutkins    

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    Title: Vice President  

SCHEDULE I
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Item A. Intercompany Notes

Maker   Maximum Amount of Intercompany Loans Evidenced Thereby   Date          
   

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Item B. Equity Interests

    Common Stock      

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      Authorized   Outstanding   % of Shares   Pledgor Issuer (corporate) Shares
  Shares   Pledged  

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      Limited Liability Company Interests        

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  Pledgor Issuer
(limited liability company)   % of Limited Liability Company Interests Pledged  
Type of Limited Liability Company Interests Pledged  

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      Partnership Interests      

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Pledgor Issuer
(partnership)   % of Partnership Interests Owned   % of Partnership
Interests Pledged

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SCHEDULE II
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Item A. Location of Equipment

  Description Location  

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1.           2.          

 

Item B. Location of Inventory

  Description Location  

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1.           2.          

Item C. Location of Lock Boxes

Bank Name and Address Account Number Contact Person

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1.           2.          

Item D. Places of Business and Chief Executive Office

Item E. Trade Names

Item F. Merger or Other Corporate Reorganization

Item G. Federal Taxpayer Identification Number

Item H. Government Contracts

SCHEDULE III
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Item A. Patents

Issued Patents              

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              15/Country Patent No.   Issue Date   Inventor(s)   Title  

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Pending Patent Applications  

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  15/Country Serial No.   Filing Date   Inventor(s)   Title  

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Patent Applications in Preparation  

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  15/Country Docket No.   Expected
Filing Date   Inventor(s)   Title  

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Item B. Patent Licenses

4/Country or         Effective   Expiration   Subject   Territory Licensor  
Licensee   Date   Date   Matter  

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4/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

 

SCHEDULE IV
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Item A. Trademarks

Registered Trademarks  

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  5/Country Trademark   Registration No.   Registration Date  

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Pending Trademark Applications  

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  16/Country Trademark   Serial No.   Filing Date  

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Trademark Applications in Preparation  

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            Expected   Products/   16/Country Trademark   Docket No.   Filing
Date   Services  

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Item B. Trademark Licenses

16/Country or             Effective   Expiration   Territory Trademark  
Licensor   Licensee   Date   Date  

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5/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

SCHEDULE V
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Item A. Copyrights/Mask Works

Registered Copyrights/Mask Works  

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  17/Country Registration No.   Registration Date   Author(s)   Title  

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Copyright/Mask Work Pending Registration Applications  

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  17/Country Serial No.   Filing Date   Author(s)   Title  

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Copyright/Mask Work Registration Applications in Preparation  

--------------------------------------------------------------------------------

    Expected               17/Country Docket No.   Filing Date   Author(s)  
Title  

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

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Item B. Copyright/Mask Work Licenses

6/Country or         Effective   Expiration   Subject   Territory Licensor  
Licensee   Date   Date   Matter  

--------------------------------------------------------------------------------

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6/ List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.

 

SCHEDULE VI
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])

Trade Secret or Know-How Licenses

7/ Country or     Effective Expiration Subject Territory Licensor Licensee Date
Date Matter

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7/* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.