Document:

<PAGE>          1
                                                                    Exhibt 10.14
                                    Borrower

Idaho Independent Bank        Hecla Mining Company            VARIABLE RATE
912 Northwest Boulevard                                        COMMERCIAL
Coeur d'Alene, Idaho 83814         Address                    REVOLVING OR
(208) 765-3619 "LENDER"       6500 MINERAL DRIVE                DRAW NOTE
                              COEUR D'ALENE, ID  83814
                              TELEPHONE NO.              IDENTIFICATION NO.
                              208-769-4138                  82-0126240

 OFFICER   INTEREST   PRINCIPAL AMOUNT/   FUNDING/    MATURITY  CUSTOMER   LOAN
INTITIALS    RATE       CREDIT LIMIT   AGREEMENT DATE   DATE     NUMBER   NUMBER
   RBC     VARIABLE     $2,000,000       10/12/00     01/15/01          01111360
WORKING CAPITAL

                                 PROMISE TO PAY
For  value  received, Borrower promises to pay to the order of  Lender  indicted
above the principal amount of TWO MILLION AND NO/100 Dollars ($2,000,000,00) or,
if  less, the aggregate unpaid principal amount of all loans or advances made by
the Lender to the Borrower, plus interest on the unpaid principal balance at the
rate  and in the manner described below, until all amounts owing under this Note
are  paid  in  full.  All amounts received by Lender shall be applied  first  to
accrued  unpaid  interest, then to unpaid principal  and  then  to  unpaid  late
charges and expenses or in any other manner as determined by Lender, in Lender's
sole discretion, as permitted by law.
REVOLVING  OR  DRAW FEATURE:  X  This Note possesses a revolving  feature,  Upon
satisfaction  of  the  conditions set forth in  this  Note,  Borrower  shall  be
entitled to borrow up to the full principal amount of the Note and to repay  and
reborrow  from time to time during the term of this Note.    This Note possesses
a  draw  feature.  Upon satisfaction of the conditions set forth in  this  Note,
Borrower  shall  be  entitled to make one or more draws under  this  Note.   Any
repayment  may not be reborrowed.  The aggregate amount of such draws shall  not
exceed the full principal amount of this Note.

Information  with  regard  to any loans or advances under  this  Note  shall  be
recorded and maintained by Lender in its internal records and such records shall
be conclusive as to the information set forth therein absent manifest error. The
Lender's failure to record the date and amount of any loan or advance shall  not
limit  or  otherwise affect the obligations of the Borrower under this  Note  to
repay  the principal amount of the loans or advances together with all  interest
accruing thereon.  Lender shall not be obligated to provide Borrower with a copy
of  the  record  on a periodic basis. Borrower shall be entitled to  inspect  or
obtain a copy of the record during Lender's business hours.
CONDITIONS FOR ADVANCES:  If there is no default under this Note, Borrower shall
be  entitled  to  borrow  monies under this Note  (subject  to  the  limitations
described above) under the following conditions:
  DRAWS TO BE MADE UPON WRITTEN REQUEST OF ALAN LANG OR DAVE WOLFE AND
  DISPURSED VIA A CASHIER'S TO HECLA MINING COMPANY.

<PAGE>          2

INTEREST RATE: This Note has a variable rate feature.  The interest rate on this
Note  may  change from time to time if the Index Rate identified below  changes.
Interest  shall  be computed on the basis of 365 days and the actual  number  of
days  per  year.  Interest on this Note shall be calculated at a  variable  rate
equal  to  ONE AND N0/1000 percent (1.00%) per annum over the Index  Rate.   The
initial  Index Rate is currently NINE AND 500/1000 percent (9.500%)  per  annum.
The initial interest rate over on this Note shall be TEN

AND  500/1000  percent  (10.500%) per annum.  Any change in  the  interest  rate
resulting  from a change in the Index Rate will be effective on:  the  date  the
Index Rate changes
INDEX  RATE:  The  Index Rate for this Note shall be:  New York consensus  prime
lending rate as published by the Wall Street Journal
MINIMUM/MAXIMUM RATE:  The minimum interest rate on this Note shall be NINE  AND
500/1000  percent (9.500%) per annum.  The maximum interest rate  on  this  Note
shall  not exceed TWENTY-ONE AND N0/100 PERCENT (21.00%) per annum, or if  less,
or  if  a  maximum rate is not indicated, the maximum interest  rate  Lender  is
permitted to charge by law.
DEFAULT RATE:   In the event of any default under this Note, the Lender may,  in
its discretion, determine that all amounts owed to Lender shall bear interest at
the  lessor of : 21%, or the maximum interest rate Lender is permitted to charge
by law.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:
INTEREST  ONLY  PAYMENTS BEGINNING NOVEMBER 12, 2000 AND CONTINUING  AT  MONTHLY
TIME  INTERVALS  THEREAFTER.   A FINAL PAYMENT OF THE UNPAID  PRINCIPAL  BALANCE
PLUS ACCRUED INTEREST IS DUE AND PAYABLE ON JANUARY 15, 2001.

All  payments will be made to Lender at its address described above, or  at  any
other  address  so designated by Lender, and in lawful currency  of  the  United
States of American.
RENEWAL:  If checked,   this Note is a renewal of Loan Number          .
SECURITY:  To  secure the payment and performance of obligations incurred  under
this  Note,  Borrower  grants Lender a security interest  in,  and  pledges  and
assigns  to  Lender all of the Borrower's rights, title, and  interest,  in  all
monies,  instruments, savings, checking and other deposit accounts of Borrower's
(excluding  IRA, Keogh and trust accounts and deposits subject to tax  penalties
if so assigned) that are not or in the future in Lender's custody or control.  X
If checked, the obligations under this Note are also secured by a lien on and/or
security  interest  in  the  property described in  the  documents  executed  in
connection  with this Note as well as any other property designated as  security
for this Note now or in the future.
PREPAYMENT:   This  Note  may be prepaid in part or in full  on  or  before  its
maturity  date.   If this Note is prepaid in full, there will be:    No  minimum
finance charge.    X   A minimum finance charge of $35.00.
LATE  PAYMENT  CHARGE:  If a payment is received more than 15  days  late,
Borrower  will be charged a late payment charge of:     % of the unpaid  payment
amount;   X   $10.00  or 5.00% of the unpaid payment amount,  whichever  is   X
greater    less; as permitted by law.
-----------------------------------------------------------------------------

<PAGE>          3

BORROWER ACKNOWLEDGES THAT BORROWER HAS READ, UNDERSTANDS, AND AGREES TO THE
TERMS AND CONDITIONS OF THIS NOTE INCLUDING THE PROVISIONS ON THE REVERSE SIDE.
BORROWER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS NOTE.

NOTE DATE:  OCTOBER 12, 2000
BORROWER: HECLA MINING COMPANY               BORROWER:

   /s/ Michael B. White
------------------------------------         -----------------------------
MICHAEL B. WHITE
VICE PRESIDENT

BORROWER:                                    BORROWER:

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

BORROWER:                                    BORROWER:

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

BORROWER:                                    BORROWER:

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

<PAGE>          4

1.   DEFAULT: Borrower will be in default under this Note in the event that
Borrower, any guarantor or any other third party pledging collateral to secure
this Note:
(a)  fails to make any payment on this Note or any other indebtedness to
Lender when due;
(b)  fails to perform any obligation or breaches any warranty or covenant to
Lender contained in this Note, any security instrument, or any other, present or
future written agreement regarding this or any other indebtedness of Borrower to
Lender;
(c)  provides or causes any false or misleading signature or representation to
be provided to Lender;
(d)  allows the collateral securing this Note (if any) to be lost, stolen,
destroyed, damaged in any material respect, or subjected to seizure or
confiscation;
(e)  permits the entry or service of any garnishment, judgment, tax levy,
attachment or lien against the Borrower, any guarantor, or any of their
property;
(f)  dies, becomes legally incompetent, is dissolved or terminated, ceases to
operate its business, becomes insolvent, makes an assignment for the benefit of
creditors, fails to pay debts as they become due, or becomes the subject of any
bankruptcy, insolvency or debtor rehabilitation proceeding; or
(g)  causes Lender to deem itself insecure due to a significant decline in the
value of any real or personal property securing payment of this Note.
2.   RIGHTS  OF  LENDER ON DEFAULT: If there is a default under this  Note,
     Lender will  be  entitled to exercised one or more of the following
     remedies without notice or demand (except as required by law):
(a)  to cease making additional advances under this Note;
(b)  to declare the principal amount plus accrued interest under this Note and
all other present and future obligations of Borrower immediately due and payable
in full;
(c)  to collect the outstanding obligations of Borrower with or without
resorting to judicial process;
(d)  to take possession of any collateral in any manner permitted by law;
(e)  to require Borrower to deliver and make available to Lender any collateral
at a place reasonably convenience to Borrower and Lender;
(f)  to sell, lease or otherwise dispose of any collateral and collect any
deficiency balance with or without resorting to legal process;
(g)  to set-off Borrower's obligations against any amounts due to Borrower
including, but not limited to monies, instruments, and deposit accounts
maintained with Lender; and
(h)  to exercise all other rights available to Lender under any other written
agreement or applicable law.
Lender's rights are cumulative and may be exercised together, separately,  and
in  any  order.   Lender's remedies under this paragraph are  in  addition  to
those  available at common law, including, but not limited to,  the  right  of
set-off.
3.   DEMAND  FEATURE:  If this Note contains a demand feature,  Lender's  right
     to demand payment, at any time, and from time to time, shall be in Lender's
     sole and absolute discretion, whether or not any default has occurred.

<PAGE>          5

4.   POST-MATURITY  ADVANCES  AND  PAYMENTS: Lender's  acceptance of payments of
     principal, interest or otherwise hereon subsequent to the maturity hereof,
     or the  making of any additional advances hereunder will not effect an
     extension of  the  maturity date set forth herein.  The making of any
     advance hereunder subsequent to the maturity hereof shall be solely at the
     discretion of the Lender and the making of one or more advances shall in no
     way require Lender to make any further advance or advances.  Any advance or
     advances make by Lender hereunder subsequent to the maturity hereof shall
     bear interest at the same rate as other indebtedness outstanding hereunder
     and be payable upon demand.
5.   FINANCIAL INFORMATION: Borrower will at all times keep proper books of
     record and account in which full, true and correct entries shall be made in
     accordance with generally accepted accounting principles and will deliver
     to Lender, within ninety (90) days after the end of each fiscal year of
     Borrower, a copy of the annual financial statements of Borrower relating to
     such fiscal year, such statements to include (i) the balance sheet of
     Borrower as at the end of such fiscal year and (ii) the related income
     statement, statement of retained earnings and statement of changes in the
     financial position of Borrower for such fiscal year, prepared by such
     certified public accountants as may be reasonably satisfactory to Lender.
     Borrower also agrees to deliver to Lender within fifteen (15) days after
     filing same, a copy of Borrower's income tax returns and also, from time
     to time, such other financial information with respect to Borrower as
     Lender may request.
6.   MODIFICATION AND WAIVER: The modification or waiver  of  any of Borrower's
     obligations or Lender's rights under this Note must be contained in a
     writing signed by Lender.  Lender may perform any of Borrower's obligations
     or delay or fail to exercise any of its rights without causing a waiver of
     those obligations or rights.  A waiver on one occasion will not constitute
     a waiver on any other occasion.  Borrower's obligations under this Note
     shall not be affected if Lender amends, compromises, exchanges, fails to
     exercise, impairs or releases any of the obligations belonging to any
     co-borrower or guarantor or any of its rights against any co-borrower,
     guarantor or collateral.
7.   SEVERABILITY:  If any provision of this Note is invalid, illegal or
     unenforceable, the validity, legality, and enforceability of the remaining
     provisions shall not in any way be affected or impaired thereby;
8.   ASSIGNMENT:  Borrower will not be entitled to assign any of its rights,
     remedies or obligations described in this note without the prior written
     consent of Lender which may be withheld by Lender in its sole discretion.
     Lender will be entitled to assign some of all of its rights and remedies
     described in the Note without notice to or the prior consent of Borrower in
     any manner.
9.   NOTICE:  Any  notice  or  other communication to be provided to Borrower or
     Lender under this Note shall be in writing and sent to the  parties  at the
     addresses described in this Note or such other address  as  the parties may
     designate in writing from time to time.
10.  APPLICABLE LAW: This Note shall be governed by the laws of the state  of
     Idaho. Borrower consents to the jurisdiction and venue of any court located
     I such state  in  the  event  of  any  legal  proceeding  pertaining to the
     negotiation, execution, performance or enforcement of any term or condition
     contained  in  this  Note  or  any related loan document  and agrees not to
     commence or seek to remove such legal proceeding in or to a different
     court.

<PAGE>          6

11.  COLLECTION COSTS: If Lender hires an attorney to assist in collecting any
     amounts due or enforcing any right to remedy under this Note, Borrower
     agrees to pay  Lender's  reasonable  attorney's fees, to  the  extent
     permitted  by applicable law, and collection costs.
12.  INCONSISTENT  REPRESENTATIONS: Borrower  affirmatively  states  that  no
     representative of Lender has made any representation which are inconsistent
     with the terms of this Note and Borrower has not relied on any such promise
     or representation of any representative of Lender in executing this Note.
13.  ACTS OR OMISSIONS OF LENDER: If at any time Borrower discovers  or  has
     reason to believe  that any act or omission of Lender  has  caused  him any
     injury or damage, Borrower agrees to provide written notice to Lender
     within twenty (20)days informing Lender of the act or omission of Lender
     which Borrower believes  has  caused Borrower injury or damages.   Borrower
     agrees that the failure of Borrower to provide such notice to Lender  shall
     constitute a waiver of any such claim.
14.  LIMITATIONS ON LIABILITY/LIQUIDATED DAMAGES:  Lender's  responsibility   to
     Borrower  under this Note shall be limited to the making of advances to the
     Borrower  as required by the terms of this Note.  Borrower and Lender agree
     that in no event shall Lender be liable to Borrower on any claim whatsoever
     for consequential damages or for any amount in excess of the unpaid
     principal amount of the Note plus interest at the Note rate as liquidated
     damages.
15.  MISCELLANEOUS:  This  Note is being executed  for  commercial  purposes.
     Borrower  and  Lender  agree  that time is of the  essence.   Borrower
     waives presentment,  demand  for  payment, notice of dishonor and protest.
     All references  to  Borrower in this Note shall include all  the  parties
     signing this Note, and this Note shall be binding upon the heirs,
     successors and assigns of Borrower and Lender.  If there is more than one
     Borrower, they will be obligated jointly and individually.  This  Note  and
     any related documents represent the complete and integrated understanding
     between Borrower and Lender pertaining to the terms and conditions of those
     documents.
16.  NOTICE PURSUANT TO I.C. SECTION 9-505(5): Effective  July  1,  1993,  a
     promise  or  commitment  to lend money or to grant  or  extent credit in an
     original principal amount of fifty thousand dollars ($50,000) or more, made
     by a person or entity engaged in the business of lending money or extending
     credit, or some note or memorandum thereof, must be in writing and
     subscribed by the person or entity making the promise or commitment, or the
     agent of that person or entity, or the agreement is invalid.
17.  JURY TRIAL WAIVER: BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
     ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE COLLATERAL
     SECURING THIS NOTE.
(i)  ADDITIONAL TERMS

Pursuant to Idaho Code Section 9-505(5), a promise or commitment to lend money
or to grant or extend credit in an original principal amount of $50,000 or more
must be in a signed writing or the agreement is invalid.CREDIT AGREEMENT

 

 

 

$58,000,000

CREDIT AGREEMENT

DATED AS OF SEPTEMBER 8, 2000

AMONG

SUNRISE MEDICAL, INC.,

as Borrower,

THE LENDERS LISTED HEREIN,

as Lenders,

and

BANKERS TRUST COMPANY,

as Agent

 

 

 

 

TABLE OF CONTENTS

	
      Section 1.
	DEFINITITONS
	
      1.1
	
            Certain Defined Term

    
	
      1.2 
	
            Accounting Terms; Utilization of GAAP for Purposes of
            Calculations Under Agreement

    
	
      1.3 
	
            Other Definitional Provisions

    
		 
       

	
      Section 2.
	
            AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

    
	
      2.1 
	
            Commitments; Making of Loans; the Register; Notes

    
	
      2.2 
	
            Interest on the Loans

    
	
      2.3 
	
            Fees

    
	
      2.4 
	
            Repayments, Prepayments and Reductions in Revolving Loan
            Commitments; General Provisions Regarding Payments; Application of
            Proceeds of Collateral and Payments Under Subsidiary Guaranty

    
	
      2.5 
	
            Use of Proceeds

    
	
      2.6 
	
            Special Provisions Governing Eurodollar Rate Loans

    
	
      2.7 
	
            Increased Costs; Taxes; Capital Adequacy

    
	
      2.8 
	
            Statement of Lenders; Obligation of Lenders and Issuing Lenders
            to Mitigate

    
	
      2.9 
	
            Replacement of a Lender

    
	
      2.10 
	
            Collection, Deposit and Transfer of Payments in Respect of
            Accounts

    
		 
       

	
      Section
      3. 
	
            LETTERS OF CREDIT

    
	
      3.1 
	
            Issuance of Letters of Credit and Lenders' Purchase of
            Participations Therein

    
	
      3.2 
	
            Letter of Credit Fees

    
	
      3.3 
	
            Drawings and Reimbursement of Amounts Drawn Under Letters of
            Credit

    
	
      3.4 
	
            Obligations Absolute

    
	
      3.5 
	
            Indemnification; Nature of Issuing Lenders' Duties

    
		 
       

	
      Section
      4. 
	
            CONDITIONS TO LOANS AND LETTERS OF CREDIT

    
	
      4.1 
	
            Conditions to Initial Revolving Loans

    
	
      4.2 
	
            Conditions to All Loans

    
	
      4.3 
	
            Conditions to Letters of Credit

    
		 
       

	
      Section
      5. 
	
            COMPANY'S REPRESENTATIONS AND WARRANTIES

    
	
      5.1 
	
            Organization, Powers, Qualification, Good Standing, Business and
            Subsidiaries

    
	
      5.2 
	
            Authorization of Borrowing, etc.

    
	
      5.3 
	
            Financial Condition

    
	
      5.4 
	
            No Material Adverse Change; No Restricted Junior Payments

    
	
      5.5 
	
            Title to Properties; Liens; Real Property

    
	
      5.6 
	
            Litigation; Adverse Facts

    
	
      5.7 
	
            Payment of Taxes

    
	
      5.8 
	
            Performance of Agreements; Materially Adverse Agreements;
            Material Contracts

    
	
      5.9 
	
            Governmental Regulation

    
	
      5.10 
	
            Securities Activities

    
	
      5.11 
	
            Employee Benefit Plans

    
	
      5.12 
	
            Certain Fees

    
	
      5.13 
	
            Environmental Protection

    
	
      5.14 
	
            Employee Matters

    
	
      5.15 
	
            Solvency

    
	
      5.16 
	
            Matters Relating to Collateral

    
	
      5.17 
	
            Disclosure

    
		 
       

	
      Section
      6. 
	
            COMPANY'S AFFIRMATIVE COVENANTS

    
	
      6.1 
	
            Financial Statements and Other Reports

    
	
      6.2 
	
            Existence, etc.

    
	
      6.3 
	
            Payment of Taxes and Claims; Tax

    
	
      6.4 
	
            Maintenance of Properties; Insurance; Application of Net
            Insurance/ Condemnation Proceeds

    
	
      6.5 
	
            Inspection; Lender Meeting

    
	
      6.6 
	
            Compliance with Laws, etc.

    
	
      6.7 
	
            Company's Remedial Action Regarding Hazardous Materials

    
	
      6.8 
	
            Execution of Subsidiary Guaranty and Personal Property Collateral
            Documents After the Closing Date

    
		 
       

	
      Section
      7. 
	
            COMPANY'S NEGATIVE COVENANTS

    
	
      7.1 
	
            Indebtedness

    
	
      7.2 
	
            Liens and Related Matters

    
	
      7.3 
	
            Investments; Acquisitions

    
	
      7.4 
	
            Contingent Obligations

    
	
      7.5 
	
            Restricted Junior Payments

    
	
      7.6 
	
            Minimum Consolidated Adjusted EBITDA

    
	
      7.7 
	
            Restriction on Fundamental Changes; Asset Sales

    
	
      7.8 
	
            Maximum Consolidated Adjusted Capital Expenditures

    
	
      7.9 
	
            Deposit Accounts

    
	
      7.10 
	
            Sales and Lease-Backs

    
	
      7.11 
	
            Sale or Discount of Receivables

    
	
      7.12 
	
            Transactions with Shareholders and Affiliates

    
	
      7.13 
	
            Disposal of Subsidiary Stock

    
	
      7.14 
	
            Conduct of Business

    
	
      7.15 
	
            Amendments of Documents Relating to Certain Indebtedness

    
	
      7.16 
	
            Fiscal Year

    
		 
       

	
      Section 8.
	
             EVENTS OF DEFAULT

    
	
      8.1 
	
            Failure to Make Payments When Due

    
	
      8.2 
	
            Default in Other Agreements

    
	
      8.3 
	
            Breach of Certain Covenants

    
	
      8.4 
	
            Breach of Warranty

    
	
      8.5 
	
            Other Defaults Under Loan Documents

    
	
      8.6 
	
            Involuntary Bankruptcy; Appointment of Receiver, etc.

    
	
      8.7 
	
            Voluntary Bankruptcy; Appointment of Receiver, etc.

    
	
      8.8 
	
            Judgments and Attachments

    
	
      8.9 
	
            Dissolution

    
	
      8.10 
	
            Employee Benefit Plans

    
	
      8.11 
	
            Change in Control

    
	
      8.12 
	
            Invalidity of Subsidiary Guaranty

    
	
      8.13 
	
            Failure of Security

    
		 
       

	
      Section
      9. 
	
            AGENT

    
	
      9.1 
	
            Appointment

    
	
      9.2 
	
            Powers and Duties; General Immunity

    
	
      9.3 
	
            Independent Investigation by Lenders; No Responsibility For
            Appraisal of Creditworthiness

    
	
      9.4 
	
            Right to Indemnity

    
	
      9.5 
	
            Successor Agent

    
	
      9.6 
	
            Collateral Documents and Guaranties

    
	
      9.7 
	
            Agent May File Proofs of Claim

    
		 
       

	
      Section
      10. 
	
            MISCELLANEOUS

    
	
      10.1 
	
            Successors and Assigns; Assignments and Participations in Loans
            and Letters of Credit

    
	
      10.2 
	
            Expenses

    
	
      10.3 
	
            Indemnity

    
	
      10.4 
	
            Set-Off; Security Interest in Deposit Accounts

    
	
      10.5 
	
            Ratable Sharing

    
	
      10.6 
	
            Amendments and Waivers

    
	
      10.7 
	
            Independence of Covenants

    
	
      10.8 
	
            Notices

    
	
      10.9 
	
            Survival of Representations, Warranties and Agreements

    
	
      10.10 
	
            Failure or Indulgence Not Waiver; Remedies Cumulative

    
	
      10.11 
	
            Marshalling; Payments Set Aside

    
	
      10.12 
	
            Severability

    
	
      10.13 
	
            Obligations Several; Independent Nature of Lenders' Rights

    
	
      10.14 
	
            Headings

    
	
      10.15 
	
            Applicable Law

    
	
      10.16 
	
            Construction of Agreement

    
	
      10.17 
	
            Consent to Jurisdiction and Service of Process

    
	
      10.18 
	
            Waiver of Jury Trial

    
	
      10.19 
	
            Confidentiality

    
	
      10.20 
	
            Counterparts; Effectiveness

    

   

   

EXHIBITS

	
      I
	
FORM OF NOTICE OF BORROWING

    
	
      II
	
 FORM OF NOTICE OF CONVERSION/CONTINUATION

    
	
      III
	
 FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT

    
	
      IV 
	
 FORM OF REVOLVING NOTE

    
	
      V 
	
 FORM OF SUBSIDIARY GUARANTY

    
	
      VI 
	
 FORM OF COMPLIANCE CERTIFICATE

    
	
      VII 
	
 FORM OF SUBORDINATION PROVISIONS

    
	
      VIII 
	
 FORM OF BORROWING BASE CERTIFICATE

    
	
      IX 
	
           FORM OF OPINION OF LATHAM & WATKINS

    
	
      X 
	
 FORM OF OPINION OF O'MELVENY & MYERS

    
	
      XI 
	
 FORM OF ASSIGNMENT AGREEMENT

    
	
      
	
XII FORM OF BLOCKED ACCOUNT AGREEMENT

    
	
      
	
          XIII FORM OF COLLATERAL ACCESS AGREEMENT

    
	
      
	
XIV FORM OF LOCK BOX AGREEMENT

    
	
      
	
XV FORM OF SECURITY AGREEMENT

    

SCHEDULES

	
      1.1 
	
 RESTRUCTURING CHARGES AND RESTRUCTURING CAPITAL EXPENDITURES

    
	
      2.1 
	
 LENDERS' COMMITMENTS AND PRO RATA SHARES
    
	
      4.1C 
	
 CORPORATE, CAPITAL AND OWNERSHIP STRUCTURE
    
	
      5.1 
	
 SUBSIDIARIES OF COMPANY
    
	
      5.5 
	
 REAL PROPERTY ASSETS
    
	
      5.6 
	
 LITIGATION
    
	
      5.11 
	
 CERTAIN EMPLOYEE BENEFIT PLANS
    
	
      5.13 
	
 ENVIRONMENTAL MATTERS
    
	
      7.1 
	
 CERTAIN EXISTING INDEBTEDNESS
    
	
      7.2 
	
 CERTAIN EXISTING LIENS
    
	
      7.3 
	
 CERTAIN EXISTING INVESTMENTS
    
	
      7.4 
	
 CERTAIN CONTINGENT OBLIGATIONS
    

  
    
      
 

 

 

       

    

  

 

CREDIT AGREEMENT

This CREDIT AGREEMENT is dated
as of September 8, 2000 and entered into by and among SUNRISE MEDICAL,
INC., a Delaware corporation ("Company"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as "Lenders"),
and BANKERS TRUST COMPANY ("BTCo"), as agent for Lenders
(in such capacity, "Agent").

R E C I T A L S

WHEREAS, Company desires that
Lenders extend certain credit facilities to Company to provide financing for (i) refinancing
certain of Company's and its Subsidiaries' existing indebtedness in the
approximate aggregate principal amount of $41,000,000, and (ii) possible
refinancing of certain other indebtedness and working capital and other general
corporate purposes of Company and its Subsidiaries;

WHEREAS, Company has agreed to
secure its Obligations hereunder and under the other Loan Documents by granting
to Agent for the benefit of Lenders a first priority Lien on substantially all
of its Domestic Accounts and Domestic Inventory; and

WHEREAS, the Domestic
Subsidiaries of Company have agreed to guarantee the Obligations hereunder and
under the other Loan Documents and to secure their guaranties by granting to
Agent for the benefit of Lenders a first priority Lien on substantially all of
their Accounts and Inventory.

NOW, THEREFORE, in consideration
of the premises and the agreements, provisions and covenants herein contained,
Company, Lenders and Agent agree as follows:

Section 1.  DEFINITIONS

1.1 Certain Defined Terms.

The following terms used in this
Agreement shall have the following meanings:

"Account" means,
with respect to any Person, all present and future rights of such Person to
payment for goods sold or leased or for services rendered (except those
evidenced by instruments or chattel paper), whether now existing or hereafter
arising and wherever arising, and whether or not they have been earned by
performance.

"Acquisition Subordinated
Debt" has the meaning assigned that term in the definition of
"Subordinated Indebtedness."

"Adjusted Eurodollar Rate"
means, for any Interest Rate Determination Date with respect to an Interest
Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing
(i) the offered quotation (rounded upward to the nearest 1/16 of one
percent) to first class banks in the interbank Eurodollar market by BTCo for
U.S. dollar deposits of amounts in same day funds comparable to the principal
amount of the Eurodollar Rate Loan of BTCo for which the Adjusted Eurodollar
Rate is then being determined with maturities comparable to such Interest Period
as of approximately 12:00 Noon (New York City time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as
defined in Regulation D (or any successor category of liabilities under
Regulation D).

"Adjusted Pro Rata Share"
means, with respect to any Lender, the percentage obtained by dividing (i)
the Revolving Loan Exposure of that Lender by (ii) the aggregate
Revolving Loan Exposure of all Lenders other than Daily Funding Lender.

"Affected Lender" has the meaning
assigned to that term in subsection 2.6C.

"Affected Loans" has the meaning
assigned to that term in subsection 2.6C.

"Affiliate", as applied
to any Person, means any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person. For the purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

"Affiliated Fund"
means, with respect to any Lender, a fund that invests in commercial loans and
is managed by the same investment advisor as such Lender, an Affiliate of such
Lender or by an Affiliate of the same investment advisor as such Lender.

"Agent" has the meaning
assigned to that term in the introduction to this Agreement, and, with respect
to the issuance of any Letter of Credit and so long as BTCo serves as Agent
hereunder, includes any Affiliates of BTCo (including, without limitation,
Deutsche Bank AG) acting as an Issuing Lender, and also means and includes any
successor Agent appointed pursuant to subsection 9.5.

"Agreement" means this
Credit Agreement dated as of September 8, 2000, as it may be amended,
supplemented or otherwise modified from time to time.

"Asset Sale" means the
sale by Company or any of its Subsidiaries to any Person other than Company or
any of its wholly-owned Subsidiaries of (i) any of the stock of any of
Company's Subsidiaries, (ii) substantially all of the assets of any
division or line of business of Company or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Company or any
of its Subsidiaries (other than (a) inventory sold in the ordinary course of
business and (b) any such other assets to the extent that the aggregate value of
such assets sold in any single transaction or related series of transactions is
equal to $100,000 or less).

"Assignment Agreement"
means an Assignment Agreement in substantially the form of Exhibit XI
annexed hereto.

"Bankruptcy Code"
means Title 11 of the United States Code entitled "Bankruptcy",
as now and hereafter in effect, or any successor statute.

"Base Rate" means, at
any time, the higher of (x) the Prime Rate or (y) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate.

"Base Rate Loans" means
Loans bearing interest at rates determined by reference to the Base Rate as
provided in subsection 2.2A.

"Base Rate Margin"
means the margin over the Base Rate used in determining the rate of interest of
Base Rate Loans pursuant to subsection 2.2A.

"Blocked Account Agreement"
means the Blocked Account Agreement executed and delivered by a Concentration
Bank, Agent and the applicable Loan Party, substantially in the form of Exhibit
XII annexed hereto, as such Blocked Account Agreement may be amended,
supplemented or otherwise modified from time to time, and "Blocked
Account Agreements" means all such Blocked Account Agreements,
collectively.

"Borrowing Base" means, as at any date
of determination, an aggregate amount equal to:

  
    (i) seventy-five percent (75%) of Eligible
    Accounts Receivable plus

    
    (ii) fifty percent (50%) of Eligible Inventory up
    to a maximum amount for all such Eligible Inventory equal to thirty percent
    (30%) of the Total Utilization of Revolving Loan Commitments plus

    
    (iii) one hundred percent (100%) of the face
    amount of any certificate of deposit constituting a Cash Equivalent
    investment which certificate of deposit is pledged to Agent for the benefit
    of Lenders under the Security Agreement minus

    
    (iv) the aggregate amount of reserves, if any,
    established by Agent in the exercise of its Permitted Discretion against
    Eligible Accounts Receivable and Eligible Inventory;

  

provided that Agent, in the exercise of its Permitted
Discretion, may (a) increase or decrease reserves against Eligible Accounts
Receivable and Eligible Inventory and (b) reduce the advance rates provided in
this definition, or restore such advance rates to any level equal to or below
the advance rates in effect as of the Closing Date.

"Borrowing Base
Certificate" means a certificate substantially in the form of Exhibit
VIII annexed hereto delivered to Lenders by Company pursuant to subsection
4.1 or subsection 6.1(xviii).

"BTCo" has the meaning
assigned to that term in the introduction to this Agreement.

"BTCo Account" means an
account maintained by Agent at BTCo into which the applicable Concentration
Banks are instructed to transfer funds on deposit in the applicable
Concentration Accounts pursuant to the terms of the applicable Blocked Account
Agreement, if any.

"BT Concentration Account"
means an account under the exclusive dominion and control of Agent that is
maintained by any Loan Party with BTCo into which the applicable Lock Box Banks
are instructed to transfer funds on deposit in the Lock Box Accounts pursuant to
the terms of the Lock Box Agreements.

"Business Day" means
any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of the States of New York or California or is a day on which banking
institutions located in either such state are authorized or required by law or
other governmental action to close; provided that, with respect to any
Letter of Credit, "Business Day" shall mean any day excluding
Saturday, Sunday and any day which is a legal holiday under the laws of the
state where the Issuing Lender is domiciled or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close.

"Capital Lease", as
applied to any Person, means any lease of any property (whether real, personal
or mixed) by that Person as lessee that, in conformity with GAAP, is accounted
for as a capital lease on the balance sheet of that Person.

"Cash" means money,
currency or a credit balance in a Deposit Account.

"Cash Equivalents"
means, as at any date of determination, (a) marketable securities (1)
issued or directly and unconditionally guaranteed as to interest and principal
by the United States Government or (2) issued by any agency of the United States
the obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year after such date; (b) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof,
in each case maturing within one year after such date and having, at the time of
the acquisition thereof, the highest rating obtainable from either Standard
& Poor's Ratings Services ("S&P") or Moody's Investors
Service, Inc. ("Moody's"); (c) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1
from Moody's; (d) certificates of deposit or bankers' acceptances maturing
within one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (1) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (2) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (e) shares of any money market mutual fund that (1) has
at least 95% of its assets invested continuously in the types of investments
referred to in clauses (a) and (b) above, (2) has net assets of not less than
$500,000,000, and (3) has the highest rating obtainable from either S&P or
Moody's; (f) investment grade securities maturing within one year after
such date; and (g) overnight repurchase agreements maturing within one year
after such date.

"Cash Management Triggering
Event" means that either (x) an Event of Default has occurred or (y)
Excess Availability as reflected on Company's latest Borrowing Base Certificate
delivered pursuant to subsection 6.1(xviii) exceeds the Total Utilization of
Revolving Loan Commitments by less than $3,000,000.

"Closing Date" means
the date on or before September 15, 2000 on which the initial Loans are
made.

"Collateral" means,
collectively, all of the personal property in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.

"Collateral Access
Agreement" means any landlord waiver, mortgagee waiver, bailee letter
or any similar acknowledgement agreement of any landlord or mortgagee in respect
of any Real Property Asset where any Inventory is located or any warehouseman or
processor in possession of Inventory, substantially in the form of Exhibit XIII
annexed hereto, with such changes thereto as may be agreed to by Agent.

"Collateral Account"
has the meaning assigned to that term in the Security Agreement.

"Collateral Documents"
means the Security Agreement, the Blocked Account Agreements, the Collateral
Access Agreements, the Lock Box Agreements and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of the
other Loan Documents in order to grant to Agent, on behalf of Lenders, a Lien on
any personal property of that Loan Party as security for the Obligations.

"Commercial Letter of
Credit" means any letter of credit or similar instrument issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by Company or any of its
Subsidiaries in the ordinary course of business of Company or such Subsidiary.

"Commitments" means the
commitments of Lenders to make Loans as set forth in subsection 2.1A.

"Company" has the
meaning assigned to that term in the introduction to this Agreement.

"Compliance Certificate"
means a certificate substantially in the form of Exhibit VI annexed
hereto delivered to Agent and Lenders by Company pursuant to
subsection 6.1(iv).

"Concentration Accounts"
means, collectively, the BT Concentration Accounts and the Other Bank
Concentration Accounts.

"Concentration Bank"
means BTCo or any commercial bank satisfactory to Agent at which any Loan Party
maintains a Concentration Account.

"Consolidated Adjusted Capital
Expenditures" means, for any period, Consolidated Capital Expenditures
minus Restructuring Capital Expenditures; provided, however that
the Restructuring Capital Expenditures deducted from Consolidated Capital
Expenditures in any Fiscal Year shall not exceed (i) for the Fiscal Year ending
on or about June 30, 2001, $5,400,000, (ii) for the Fiscal Year ending on or
about June 30, 2002, (a) $16,600,000 minus (b) the amount of Restructuring
Capital Expenditures deducted from Consolidated Capital Expenditures for the
Fiscal Year ending on or about June 30, 2001; (iii) for the Fiscal Year ending
on or about June 30, 2003, (a) $17,400,000 minus (b) the amount of Restructuring
Capital Expenditures deducted from Consolidated Capital Expenditures for the
Fiscal Years ending on or about June 30, 2001 and June 30, 2002; and (iv) for
the Fiscal Year ending on or about June 30, 2004, (a) $17,400,000 minus (b) the
amount of Restructuring Capital Expenditures deducted from Consolidated Capital
Expenditures for the Fiscal Years ending on or about June 30, 2001, June 30,
2002 and June 30, 2003.

"Consolidated Adjusted EBITDA"
means, for any period, the sum, without duplication, of the amounts for such
period of (i) Consolidated EBITDA, (ii) income attributable to interest earned
on Cash and Cash Equivalents held by Company and its Subsidiaries, (iii) to the
extent deducted in determining Consolidated Net Income for such period, rental
expense attributable to the sale and leaseback after the Closing Date of any
Facility of Company or any of its Subsidiaries, which sale and leaseback is
permitted under subsection 7.10, (iv) to the extent deducted in determining
Consolidated Net Income for such period but not in excess of an aggregate
$1,500,000 for all periods, expenses attributable to any unconsummated sale,
merger, or transfer of Project Alpha and Project Beta, as those terms are
defined in a letter to Agent dated as of the date hereof, (v) to the extent
deducted in determining Consolidated Net Income for such period, any fees,
expenses and charges related to acquisitions and mergers of Company and its
Subsidiaries incurred not later than one year after the Closing Date, whether
consummated or unconsummated, and (vi) to the extent deducted in determining
Consolidated Net Income for such period, any Restructuring Charges; provided
however that the Restructuring Charges of Company and its Subsidiaries
included in Consolidated Adjusted EBITDA in any Fiscal Year pursuant to this
clause (vi) shall not exceed (i) for the Fiscal Year ending on or about June 30,
2001, $27,000,000, (ii) for the Fiscal Year ending on or about June 30, 2002,
(a) $44,000,000 minus (b) the amount of Restructuring Charges included in
Consolidated Adjusted EBITDA for the Fiscal Year ending on or about
June 30, 2001; (iii) for the Fiscal Year ending on or about June 30, 2003,
(a) $57,700,000 minus (b) the amount of Restructuring Charges included in
Consolidated Adjusted EBITDA for the Fiscal Years ending on or about June 30,
2001 and June 30, 2002; and (iv) for Fiscal Year ending on or about June
30, 2004, (a) $57,700,000 minus (b) the amount of Restructuring Charges included
in Consolidated Adjusted EBITDA for all prior Fiscal Years ending on or about
June 30, 2001 and thereafter.

"Consolidated Capital
Expenditures" means, for any period, the aggregate of all expenditures
(whether paid in cash or other consideration or accrued as a liability and
including that portion of Capital Leases which is capitalized on the
consolidated balance sheet of Company and its Subsidiaries) by Company and its
Subsidiaries during that period that, in conformity with GAAP, are included in
"additions to property, plant or equipment" or comparable items, net
of immaterial disposals, as reflected in the consolidated statement of cash
flows of Company and its Subsidiaries.

"Consolidated EBITDA"
means, for any period, the sum, without duplication, of the amounts for such
period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other
non-cash items deducted in the calculation of Consolidated Net Income (other
than any such non-cash item to the extent that it represents an accrual of or
reserve for cash expenditures in any future period) less other non-cash
items added in the calculation of Consolidated Net Income (other than any such
non-cash item to the extent that it will result in the receipt of cash payments
in any future period), all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.

"Consolidated Interest
Expense" means, for any period, total interest expense (including that
portion attributable to Capital Leases in accordance with GAAP and capitalized
interest) of Company and its Subsidiaries on a consolidated basis with respect
to all outstanding Indebtedness of Company and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Agent and Lenders on or
before the Closing Date.

"Consolidated Leverage
Ratio" means, as at any date, the ratio of (a) Consolidated Total Debt
as at such date to (b) Consolidated EBITDA for the consecutive four Fiscal
Quarters ending on the last day of the most recently ended Fiscal Quarter.

"Consolidated Net Income"
means, for any period, the net income (or loss) of Company and its Subsidiaries
on a consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; provided that there shall be excluded
(i) the income (or loss) of any Person (other than a Subsidiary of Company)
in which any other Person (other than Company or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries by such Person
during such period, (ii) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person's assets are acquired by
Company or any of its Subsidiaries, (iii) the income of any Subsidiary of
Company to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary, (iv) any after-tax gains or losses attributable to Asset Sales
or returned surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary gains or
net non-cash extraordinary losses.

"Consolidated Total Debt"
means, as at any date of determination, the aggregate stated balance sheet
amount of all Indebtedness of Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

"Contingent Obligation",
as applied to any Person, means any direct or indirect liability, contingent or
otherwise, of that Person (i) with respect to any Indebtedness, lease,
dividend or other obligation of another Person if the primary purpose or intent
thereof by the Person incurring the Contingent Obligation is to provide
assurance to the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof, (ii) with respect to any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings, or (iii) under
Hedge Agreements. Contingent Obligations shall include, without limitation, (a)
the direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (X) or (Y)
of this sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited.

"Contractual Obligation",
as applied to any Person, means any provision of any Security issued by that
Person or of any material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.

"Currency Agreement"
means any foreign exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap or other similar agreement or arrangement to
which Company or any of its Subsidiaries is a party.

"Daily Funding Lender"
means Agent, in its individual capacity as a Lender hereunder.

"Deposit Account" means
a demand, time, savings, passbook or like account with a bank, savings and loan
association, credit union or like organization, other than an account evidenced
by a negotiable certificate of deposit.

"Dollars" and the sign "$"
mean the lawful money of the United States of America.

"Domestic Account"
means an Account arising in a sale made in and to an account debtor located in
the United States of America.

"Domestic Inventory"
means Inventory held in the United States of America.

"Domestic Subsidiary"
means a direct or indirect Subsidiary of Company that is incorporated or
organized under the laws of a state of the United States of America.

"Dominant Domestic
Subsidiary" means, with respect to any Person, a Domestic Subsidiary of
such Person and such Person owns not less than 80% of the voting stock of such
Domestic Subsidiary.

"Eligible Accounts
Receivable" means, with respect to Company and Company's Domestic
Subsidiaries which are Loan Parties, Domestic Accounts of such Loan Party deemed
by Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the face amount of such Accounts shall be reduced by the amount
of all credit memo reserves, promissory notes, chargebacks, returns, discounts
(except for secondary cash discounts), deductions, sales taxes, claims, credits,
charges, or other allowances. Unless otherwise approved in writing by Agent, an
Account shall not be an Eligible Account Receivable if:

  
    (a) it arises out of a sale made
    by such Loan Party to an Affiliate, including without limitation intra/intercompany
    receivables and employee/sales person receivables; or

    (b) its payment terms are longer
    than 120 days from date of invoice; or

    (c) it is unpaid (i) more than 60
    days after the original payment due date on payment terms of 90 days or less
    from date of invoice, or (ii) more than 30 days after the original
    payment due date on payment terms of 120 days from date of invoice; or

    (d) it is from the same account
    debtor or its Affiliate and fifty percent (50%) or more of all Accounts from
    that account debtor (and its Affiliates) are ineligible under (c) above; or

    (e) the account debtor for such
    Account is a creditor of such Loan Party, has or has asserted a right of
    setoff against such Loan Party, or has disputed its liability or otherwise
    has made any claim with respect to such Account or any other Account which
    has not been resolved, in each case to the extent of the amount owed by such
    Loan Party to such account debtor, the amount of such actual or asserted
    right of setoff, or the amount of such dispute or claim, as the case may be;
    or

    (f) the account debtor is (or its
    assets are) the subject of an Insolvency Event; or

    (g) such Account is not payable
    in Dollars or the account debtor for such Account is located outside the
    United States unless such Account is supported by an irrevocable letter of
    credit satisfactory to Agent (as to form, substance and issuer) and assigned
    to and directly drawable by Agent; or

    (h) the sale to the account
    debtor is on a bill-and-hold, guarantied sale, sale-and-return, sale on
    approval or consignment basis or made pursuant to any other written
    agreement providing for repurchase or return; or

    (i) Agent determines pursuant to
    its Permitted Discretion by its own credit analysis that collection of such
    Account is uncertain or that such Account may not be paid; or

    (j) the Account consists of a
    right to payment of Medicare or Medicaid claims; or the account debtor is
    the United States of America, or any department, agency or instrumentality
    thereof unless the applicable Loan Party duly assigns its rights to payment
    of such Account to Agent pursuant to the Assignment of Claims Act of 1940,
    as amended (31 U.S.C. Sections 3727 et seq.); or

    (k) the goods giving rise to such
    Account have not been shipped and delivered to and accepted by the account
    debtor, the services giving rise to such Account have not been performed and
    accepted, or such Account otherwise does not represent a final sale; or

    (l) such Account does not comply
    with all Requirements of Law, including without limitation the Federal
    Consumer Credit Protection Act, the Federal Truth in Lending Act and
    Regulation Z of the Board of Governors of the Federal Reserve System;
    or

    (m) such Account is subject to
    any adverse security deposit, progress payment or other similar advance made
    by or for the benefit of the applicable account debtor; or

    (n) it is not subject to a valid
    and perfected first priority Lien in favor of Agent or does not otherwise
    conform to the representations and warranties contained in the Loan
    Documents; or

    (o) when aggregated with all
    other accounts of an account debtor, such Account exceeds 10% in face value
    of all Accounts of the Loan Parties, taken as a whole, then outstanding, but
    only to the extent of such excess, unless such excess is supported by an
    irrevocable letter of credit satisfactory to Agent (as to form, substance
    and issuer) and assigned to and directly drawable by Agent; or

  

provided that Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same) to the
standards of eligibility set forth in this definition; and provided further
that unless otherwise approved by Agent, Company and its Subsidiaries will
continue to extend payment terms on Accounts in accordance with their usual and
customary practices as in effect on the date of this Agreement.

"Eligible Assignee"
means (A) (i) a commercial bank organized under the laws of the United
States or any state thereof; (ii) a savings and loan association or savings
bank organized under the laws of the United States or any state thereof;
(iii) a commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (x) such bank is acting
through a branch or agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the Organization for
Economic Cooperation and Development or a political subdivision of such country;
and (iv) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including, but not limited to, insurance
companies, mutual funds and lease financing companies, in each case (under
clauses (i) through (iv) above) that is reasonably acceptable to Company and
Agent; and (B) any Lender, any Affiliate of any Lender and any Affiliated
Fund of any Lender; provided that neither Company nor any Affiliate of
Company shall be an Eligible Assignee.

"Eligible Inventory"
means, with respect to Company and Company's Domestic Subsidiaries which are
Loan Parties, the aggregate amount of Domestic Inventory of such Loan Party
deemed by Agent in the exercise of its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, Inventory shall be valued at the lower of cost or market on a
basis consistent with such Loan Party's current and historical accounting
practice and shall be net of all freight, duty and brokerage charges and all
reserves related thereto, including without limitation reserves for obsolete
inventory, inventory shrinkage, samples, inter-company profits, revaluations,
small components, LIFO reserves, favorable PPV reserves and other miscellaneous
reserves. Unless otherwise approved in writing by Agent, an item of Inventory
shall not be included in Eligible Inventory if:

  
    (a) it is not owned solely by
    such Loan Party or such Loan Party does not have good, valid and marketable
    title thereto; or

    (b) it is not located in the
    United States (but "Eligible Inventory" shall include "in
    transit" inventory inside the United States); or

    (c) it consists of goods on
    consignment; it is not located on, or in transit in the United States to,
    property owned or leased by such Loan Party or in a contract warehouse (but
    not including any such goods being held by any customs authorities), in each
    case subject to a Collateral Access Agreement executed by any applicable
    mortgagee, lessor or contract warehouseman, as the case may be, and
    segregated or otherwise separately identifiable from goods of others, if
    any, stored on the premises; or

    (d) it is not subject to a valid
    and perfected first priority Lien in favor of Agent except, with respect to
    Inventory stored at sites described in clause (c) above, for Liens for
    unpaid rent or normal and customary warehousing charges; or

    (e) it consists of goods returned
    or rejected by such Loan Party's customers or goods in transit to third
    parties (other than goods in transit in the United States to warehouse sites
    covered by a Collateral Access Agreement, but not including any such goods
    being held by any customs authorities); or

    (f) it is not first-quality
    goods, is obsolete or slow moving, or does not otherwise conform to the
    representations and warranties contained in the Loan Documents; or

    (g) it consists of unreconciled
    items between the stock status report and the general ledger or it consists
    of reconciled differences between the general ledger and perpetual; or

    (h) it consists of sample
    inventory or promotional materials and literature;

  

provided that Agent, in the exercise of its Permitted
Discretion, may impose additional restrictions (or eliminate the same) to the
standards of eligibility set forth in this definition.

"Employee Benefit Plan"
means any "employee benefit plan" as defined in Section 3(3) of ERISA
which is or was maintained or contributed to by Company, any of its Subsidiaries
or any of their respective ERISA Affiliates.

"Environmental Claim"
means any investigation, written notice, written notice of violation, claim,
action, suit, proceeding, written demand, abatement order or other order or
directive (conditional or otherwise), by any Government Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

"Environmental Laws"
means any and all current or future statutes, ordinances, orders, rules,
regulations, guidance documents, judgments, Governmental Authorizations, or any
other requirements of Government Authorities relating to (i) environmental
matters, including those relating to any Hazardous Materials Activity,
(ii) the generation, use, storage, transportation or disposal of Hazardous
Materials, or (iii) occupational safety and health, industrial hygiene,
land use or the protection of human, plant or animal health or welfare, in any
manner applicable to Company or any of its Subsidiaries or any Facility.

"ERISA" means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor thereto.

"ERISA Affiliate"
means, as applied to any Person, (i) any corporation that is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which that Person is a member; (ii) any trade or
business (whether or not incorporated) that is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any member of
an affiliated service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any corporation described in clause
(i) above or any trade or business described in clause (ii) above is a member.
Any former ERISA Affiliate of a Person or any of its Subsidiaries shall continue
to be considered an ERISA Affiliate of such Person or such Subsidiary within the
meaning of this definition with respect to the period such entity was an ERISA
Affiliate of such Person or such Subsidiary and with respect to liabilities
arising after such period for which such Person or such Subsidiary could be
liable under the Internal Revenue Code or ERISA.

"ERISA Event" means (i)
a "reportable event" within the meaning of Section 4043 of ERISA and
the regulations issued thereunder with respect to any Pension Plan (excluding
those for which the provision for 30-day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of
a notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (x) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.

"Eurodollar Rate Loans"
means Loans bearing interest at rates determined by reference to the Adjusted
Eurodollar Rate as provided in subsection 2.2A.

"Eurodollar Rate Margin" means
the margin over the Adjusted Eurodollar Rate used in determining the rate of
interest of Eurodollar Rate Loans pursuant to subsection 2.2A.

"Event of Default"
means each of the events set forth in Section 8.

"Excess Availability"
means, as at any date of determination, an aggregate amount equal to:

  
    
      (i) seventy-five percent (75%) of Eligible Accounts
      Receivable plus

      
      (ii) fifty percent (50%) of Eligible Inventory;

    

  

provided that if Agent, in the exercise of its Permitted
Discretion, changes the advance rates provided for above pursuant to the
definition of "Borrowing Base", the advance rates provided for above
will be correspondingly amended.

"Exchange Act" means
the Securities Exchange Act of 1934, as amended from time to time, and any
successor statute.

"Facilities" means all
real property (including, without limitation, all buildings, fixtures or other
improvements located thereon) and related facilities now, hereafter or
heretofore owned, leased, operated or used by Company or any of its
Subsidiaries.

"Federal Funds Effective
Rate" means, for any period, a fluctuating interest rate equal for each
day during such period to 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, 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 Agent from three Federal funds brokers of recognized standing
selected by Agent.

"Financial Plan" has
the meaning assigned to that term in subsection 6.1(xii).

"First Priority" means,
with respect to any Lien purported to be created in any Collateral pursuant to
any Collateral Document, that (i) such Lien has priority over any other Lien on
such Collateral and (ii) such Lien is the only Lien (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2) to which such
Collateral is subject.

"Fiscal Month" means a
fiscal month of any Fiscal Year.

"Fiscal Quarter" means
a fiscal quarter of any Fiscal Year.

"Fiscal Year" means the
52 or 53 week period of Company and its Subsidiaries ending on the Friday
closest to June 30 of each calendar year.

"Funding and Payment
Office" means (i) the office of Agent located at 130 Liberty Street,
New York, New York 10006, or (ii) such other office of Agent as may from time to
time hereafter be designated as such in a written notice delivered by Agent to
Company and each Lender.

"Funding Date" means
the date of the funding of a Loan.

"GAAP" means, subject
to the limitations on the application thereof set forth in subsection 1.2,
generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, in each
case as the same are applicable to the circumstances as of the date of
determination.

"Governing Body" means
the board of directors or other body having the power to direct or cause the
direction of the management and policies of a Person that is a corporation,
partnership, trust or limited liability company.

"Government Authority"
means any political subdivision or department thereof, any other governmental or
regulatory body, commission, central bank, board, bureau, organ or
instrumentality or any court, in each case whether federal, state, local or
foreign.

"Governmental
Authorization" means any permit, license, registration, authorization,
plan, directive, consent order or consent decree of or from, or notice to, any
Government Authority.

"Guaranties" means the
Subsidiary Guaranty.

"Guarantor" means, at
any time, any of Company's Domestic Subsidiaries that is then a party to the
Subsidiary Guaranty.

"Hazardous Materials"
means (i) any chemical, material or substance at any time defined as or
included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste",
"biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any
other term or expression intended to define, list or classify substances by
reason of properties harmful to health, safety or the indoor or outdoor
environment (including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) any
asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any Government Authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.

"Hazardous Materials
Activity" means any past, current, proposed or threatened activity,
event or occurrence involving any Hazardous Materials, including the use,
manufacture, possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

"Hedge Agreement" means
an Interest Rate Agreement or a Currency Agreement designed to hedge against
fluctuations in interest rates or currency values, respectively.

"Hedge Exposure" means
the amount of the credit exposure under a Hedge Agreement with any Lender as
determined by Agent in accordance with its usual and customary practices for
evaluating such credit risk.

"Inactive Subsidiary"
means any Subsidiary of Company that does not engage in any significant business
activity or own any asset or assets (including capital stock of another Person)
with an aggregate fair market value in excess of $25,000 or generate revenues in
excess of $25,000 annually and does not have any Subsidiary other than an
Inactive Subsidiary; provided that neither the aggregate assets owned nor
the aggregate revenues generated by all Inactive Subsidiaries shall exceed
$50,000.

"Indebtedness", as
applied to any Person, means (i) all indebtedness for borrowed money,
(ii) that portion of obligations with respect to Capital Leases that is
properly classified as a liability on a balance sheet in conformity with GAAP,
(iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money (other than trade or
other accounts payable incurred in the ordinary course of business in accordance
with customary terms and historical practices), (iv) any obligation owed
for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA, and other than trade or
other accounts payable incurred in the ordinary course of business in accordance
with customary terms and historical practices), and (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person but only to the
extent such indebtedness is included as a liability on the balance sheet of such
Person in accordance with GAAP. Obligations under Interest Rate Agreements and
Currency Agreements constitute (X) in the case of Hedge Agreements,
Contingent Obligations, and (Y) in all other cases, Investments, and in
neither case constitute Indebtedness.

"Indemnitee" has the
meaning assigned to that term in subsection 10.3.

"Insolvency Event"
means, with respect to any Person, the occurrence of any of the events described
in subsection 8.6 or 8.7; provided that, solely for purposes of this
definition, any references to Company or any of its Subsidiaries in subsection
8.6 or 8.7 shall be deemed to be a reference to such Person.

"Insolvency Laws" means
the Bankruptcy Code or any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect in the United States of America or any state
thereof.

"Intellectual Property"
means all patents, trademarks, tradenames, copyrights, technology, know-how and
processes used in or necessary for the conduct of the business of Company and
its Subsidiaries as currently conducted that are material to the condition
(financial or otherwise), business or operations of Company and its
Subsidiaries, taken as a whole.

"Interest Payment Date"
means (i) with respect to any Base Rate Loan, the first Business Day of
each calendar month, commencing on the first such date to occur after the
Closing Date, and (ii) with respect to any Eurodollar Rate Loan, the last
day of each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of six months "Interest Payment Date"
shall also include the date that is three months after the commencement of such
Interest Period.

"Interest Period" has
the meaning assigned to that term in subsection 2.2B.

"Interest Rate Agreement"
means any interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement or other similar agreement or arrangement to which Company
or any of its Subsidiaries is a party.

"Interest Rate Determination
Date" means, with respect to any Interest Period, the second Business
Day prior to the first day of such Interest Period.

"Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended to the date hereof and from
time to time hereafter, and any successor statute.

"Inventory" means, with
respect to any Person, all goods, merchandise and other personal property which
are held by such Person for sale or lease, work in process and all raw materials
to be used or consumed in the production or manufacture of all such goods,
merchandise and other property held for sale or lease by such Person, excluding
sample items and those held for display or demonstration and literature and
promotional materials.

"Investment" means (i) any
direct or indirect purchase or other acquisition by Company or any of its
Subsidiaries of, or of a beneficial interest in, any Securities of any other
Person (including any Subsidiary of Company), (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person other than Company or any of its
Subsidiaries, of any equity Securities of such Subsidiary (other than a
redemption, retirement, purchase or other acquisition that is made pro rata
among (x) Company and its Subsidiaries and (y) the other owners of
such Subsidiary), (iii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by Company or any of its Subsidiaries to any other Person (other
than a wholly-owned Subsidiary of Company that is a party to the Subsidiary
Guaranty), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business, or (iv) Interest Rate Agreements or
Currency Agreements not constituting Hedge Agreements. The amount of any
Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.

"Issuing Lender" means,
with respect to any Letter of Credit, the Lender that agrees or is otherwise
obligated to issue such Letter of Credit, determined as provided in subsection
3.1B(ii); provided that any Issuing Lender may be an Affiliate of BTCo
(including, without limitation, Deutsche Bank AG) so long as (i) BTCo is a
Lender under this Agreement and (ii) such Affiliate shall have executed a
counterpart of this Agreement on or prior to the date of any issuance of any
Letter of Credit by such Affiliate.

"Joint Venture" means a
joint venture, partnership or other similar arrangement, whether in corporate,
partnership or other legal form; provided that in no event shall any
corporate Subsidiary of any Person be considered to be a Joint Venture to which
such Person is a party.

"Lender" and "Lenders"
means the persons identified as "Lenders" and listed on the signature
pages of this Agreement, together with their successors and permitted assigns
pursuant to subsection 10.1, and the term "Lenders" shall include
BTCo as an Issuing Lender unless the context otherwise requires; provided
that the term "Lenders", when used in the context of a particular
Commitment, shall mean Lenders having that Commitment.

"Letter of Credit" or "Letters
of Credit" means Commercial Letters of Credit and Standby Letters of
Credit issued or to be issued by Issuing Lenders for the account of Company
pursuant to subsection 3.1.

"Letter of Credit Usage"
means, as at any date of determination, the sum of (i) the maximum aggregate
amount which is or at any time thereafter may become available for drawing under
all Letters of Credit then outstanding plus (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Lenders and not
theretofore reimbursed out of the proceeds of Revolving Loans pursuant to
subsection 3.3B or otherwise reimbursed by Company.

"Lien" means any lien,
mortgage, pledge, assignment, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest
other than any agreement not otherwise prohibited by this Agreement not intended
to create a lien but including language permitting recharacterization as such if
such intention is disregarded) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.

"Loan" or "Loans"
means one or more of the Revolving Loans.

"Loan Documents" means
this Agreement, the Notes, the Letters of Credit (and any applications for, or
reimbursement agreements or other documents or certificates executed by Company
in favor of an Issuing Lender relating to, the Letters of Credit), the
Guaranties and the Collateral Documents.

"Loan Parties" means
any of Company or any Subsidiary of Company executing a Loan Document.

"Lock Box" means a
lockbox maintained by any Loan Party pursuant to arrangements satisfactory to
Agent.

"Lock Box Account"
means a Deposit Account under the exclusive dominion and control of Agent that
is maintained by any Loan Party with a Lock Box Bank pursuant to a Lock Box
Agreement.

"Lock Box Agreement"
means a Lock Box Agreement executed and delivered by a Lock Box Bank, Agent and
the applicable Loan Party, substantially in the form of Exhibit XIV
annexed hereto, as such Lock Box Agreement may be amended, supplemented or
otherwise modified from time to time, and "Lock Box Agreements"
means all such Lock Box Agreements, collectively.

"Lock Box Bank" means
any commercial bank satisfactory to Agent at which any Loan Party maintains a
Lock Box Account.

"Margin Stock" has the
meaning assigned to that term in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

"Material Adverse Effect"
means (i) a material adverse effect upon the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and its Subsidiaries, taken as a whole, (ii) the material impairment of the
ability of Company or any of its Significant Subsidiaries to perform, or of
Agent or Lenders to enforce, the Obligations, or (iii) a material adverse effect
on the value of the Collateral or the amount which Agent or Lenders would be
likely to receive (after giving consideration to delays in payment and costs of
enforcement) in the liquidation of the Collateral.

"Material Contract"
means any contract or other arrangement to which Company or any of its
Subsidiaries is a party (other than the Loan Documents) for which breach,
nonperformance, cancellation or failure to renew could have a Material Adverse
Effect.

"Multiemployer Plan"
means any Employee Benefit Plan that is a "multiemployer plan" as
defined in Section 3(37) of ERISA.

"Net Insurance/Condemnation
Proceeds" means any Cash payments or proceeds received by Company or
any of its Subsidiaries (i) under any business interruption or casualty
insurance policy in respect of a covered loss thereunder or (ii) as a result of
the taking of any assets of Company or any of its Subsidiaries by any Person
pursuant to the power of eminent domain, condemnation or otherwise, or pursuant
to a sale of any such assets to a purchaser with such power under threat of such
a taking, in each case net of any actual and reasonable documented costs
incurred by Company or any of its Subsidiaries in connection with the adjustment
or settlement of any claims of Company or such Subsidiary in respect thereof.

"Non-US Lender" has the
meaning assigned to that term in subsection 2.7B(iii)(a).

"Notes" means one or
more of the Revolving Notes.

"Notice of Borrowing"
means a notice substantially in the form of Exhibit I annexed hereto
delivered by Company to Agent pursuant to subsection 2.1B with respect to a
proposed borrowing.

"Notice of
Conversion/Continuation" means a notice substantially in the form of Exhibit II
annexed hereto delivered by Company to Agent pursuant to subsection 2.2D with
respect to a proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified therein.

"Obligations" means all
obligations of every nature of each Loan Party from time to time owed to Agent,
Lenders or any of them under the Loan Documents, whether for principal, interest
(including interest accruing on or after the occurrence of an Insolvency Event),
reimbursement of amounts drawn under Letters of Credit, fees, expenses,
indemnification or otherwise.

"Officer" means the
president, chief executive officer, a vice president, chief financial officer,
general counsel, treasurer, general partner (if an individual), managing member
(if an individual) or other individual appointed by the Governing Body or the
organizational documents of a corporation, partnership, trust or limited
liability company to serve in a similar capacity as the foregoing.

"Officer's Certificate"
means, as applied to any Person that is a corporation, partnership, trust or
limited liability company, a certificate executed on behalf of such Person by
one or more Officers of such Person or one or more Officers of a general partner
or a managing member if such general partner or managing member is a
corporation, partnership, trust or limited liability company.

"Operating Lease"
means, as applied to any Person, any lease (including, without limitation,
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.

"Organizational Documents"
means the documents (including Bylaws, if applicable) pursuant to which a Person
that is a corporation, partnership, trust or limited liability company is
organized.

"Other Bank Concentration
Account" means an account under the exclusive dominion and control of
Agent that is maintained by any Loan Party with a Bank (other than BTCo) that is
satisfactory to Agent pursuant to a Blocked Account Agreement into which the
applicable Lock Box Banks are instructed to transfer funds on deposit in the
Lock Box Accounts pursuant to the terms of the Lock Box Agreements.

"Overadvance Deposit
Account" has the meaning assigned to that term in the Security
Agreement.

"PBGC" means the
Pension Benefit Guaranty Corporation (or any successor thereto).

"Pension Plan" means
any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
Section 412 of the Internal Revenue Code or Section 302 of ERISA.

"Permitted Discretion"
means Agent's good faith judgment as to the value of any item of Collateral
based upon any factor which it believes in good faith: (i) will or could
reasonably be expected to adversely affect the value of any Collateral, the
enforceability or priority of Agent's Liens thereon or the amount which Agent
and Lenders would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral; (ii)
suggests that any collateral report or financial information delivered to Agent
by any Person on behalf of any Loan Party is incomplete, inaccurate or
misleading in any material respect; (iii) materially increases the likelihood of
a bankruptcy, reorganization or other insolvency proceeding involving Company or
any of the Subsidiary Guarantors or any of the Collateral; or (iv) creates or
reasonably could be expected to create a Potential Event of Default or Event of
Default. In exercising such judgment, Agent may consider such factors already
included in or tested by the definition of Eligible Accounts Receivable or
Eligible Inventory, as well as any of the following: (i) the financial and
business climate of any Loan Party's industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to Loan
Parties' Accounts, (iii) changes in demand for, and pricing of, Loan Parties'
Inventory, (iv) changes in any concentration of risk with respect to such
Accounts or Inventory, and (v) any other factors that change the credit risk of
lending to Company on the security of such Accounts or Inventory. The burden of
establishing lack of good faith shall be on Company.

"Permitted Encumbrances"
means the following types of Liens (excluding any such Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA, any such
Lien relating to or imposed in connection with any Environmental Claim, and any
such Lien expressly prohibited by any applicable terms of any of the Collateral
Documents):

  
    (i) Liens for taxes, assessments
    or governmental charges or claims the payment of which is not, at the time,
    required by subsection 6.3;

    (ii) statutory Liens of
    landlords, statutory Liens and rights of set-off of banks, statutory Liens
    of carriers, warehousemen, mechanics, repairmen, workmen and materialmen,
    and other Liens imposed by law, in each case incurred in the ordinary course
    of business (a) for amounts not yet overdue or (b) for amounts that are
    overdue and that (in the case of any such amounts overdue for a period in
    excess of 30 days) are being contested in good faith by appropriate
    proceedings, so long as (1) such reserves or other appropriate provisions,
    if any, as shall be required by GAAP shall have been made for any such
    contested amounts, and (2) in the case of a Lien with respect to any portion
    of the Collateral, such contest proceedings conclusively operate to stay the
    sale of any portion of the Collateral on account of such Lien;

    (iii) Liens incurred or deposits
    made in the ordinary course of business in connection with workers'
    compensation, unemployment insurance and other types of social security, or
    to secure the performance of tenders, statutory obligations, surety and
    appeal bonds, bids, leases, government contracts, trade contracts,
    utilities, deposits made under Hedge Agreements permitted by this Agreement,
    performance and return-of-money bonds and other similar obligations
    (exclusive of obligations for the payment of borrowed money), so long as no
    foreclosure, sale or similar proceedings have been commenced with respect to
    any portion of the Collateral on account thereof;

    (iv) any attachment or judgment
    Lien not constituting an Event of Default under subsection 8.8;

    (v) leases or subleases granted
    to third parties and not interfering in any material respect with the
    ordinary conduct of the business of Company or any of its Subsidiaries or
    resulting in a material diminution in the value of any Collateral as
    security for the Obligations;

    (vi) easements, rights-of-way,
    restrictions, encroachments, and other minor defects or irregularities in
    title, in each case which do not and will not interfere in any material
    respect with the ordinary conduct of the business of Company or any of its
    Subsidiaries;

    (vii) any (a) interest or
    title of a lessor or sublessor under any lease not prohibited by this
    Agreement, (b) restriction or encumbrance that the interest or title of
    such lessor or sublessor may be subject to, or (c) subordination of the
    interest of the lessee or sublessee under such lease to any restriction or
    encumbrance referred to in the preceding clause (b), so long as the holder
    of such restriction or encumbrance agrees to recognize the rights of such
    lessee or sublessee under such lease;

    (viii) Liens arising from filing
    UCC financing statements relating solely to leases not prohibited by this
    Agreement;

    (ix) Liens in favor of customs
    and revenue authorities arising as a matter of law to secure payment of
    customs duties in connection with the importation of goods;

    (x) any zoning or similar law or
    right reserved to or vested in any governmental office or agency to control
    or regulate the use of any real property;

    (xi) Liens securing obligations
    (other than obligations representing Indebtedness for borrowed money) under
    operating, reciprocal easement or similar agreements entered into in the
    ordinary course of business of Company and its Subsidiaries; and

    (xii) licenses of patents,
    trademarks and other intellectual property rights granted by Company or any
    of its Subsidiaries in the ordinary course of business and not interfering
    in any material respect with the ordinary conduct of the business of Company
    or such Subsidiary.

  

"Person" means and
includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint
stock companies, Joint Ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments (whether federal, state or local, domestic or
foreign, and including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.

"Pledged Collateral"
means collectively, the "Pledged Collateral" as defined in the
Security Agreement.

"Potential Event of
Default" means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default.

"Pricing Certificate"
means an Officer's Certificate of Company certifying the Consolidated Leverage
Ratio as of the last day of any Fiscal Quarter and setting forth the calculation
of such Consolidated Leverage Ratio in reasonable detail, which Officer's
Certificate may be delivered to Agent at any time on or after the date of
delivery by Company of the Compliance Certificate with respect to the period
ending on the last day of such Fiscal Quarter pursuant to subsection 6.1(iv).

"Prime Rate" means the
rate that BTCo announces from time to time as its prime lending rate in the
United States for Dollar denominated loans, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. BTCo or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.

"Proceedings" means any
action, suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration.

"Pro Rata Share" means
with respect to all payments, computations and other matters relating to the
Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of
Credit issued or participations therein purchased by any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by
(y) the aggregate Revolving Loan Exposure of all Lenders, in any such case
as the applicable percentage may be adjusted by assignments permitted pursuant
to subsection 10.1 or required pursuant to subsection 10.5. The initial Pro Rata
Share of each Lender for purposes of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.

"Real Property Asset"
means, at any time of determination, any interest then owned by any Loan Party
in any real property.

"Register" has the
meaning assigned to that term in subsection 2.1E.

"Regulation D"
means Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.

"Reimbursement Date"
has the meaning assigned to that term in subsection 3.3B.

"Release" means any
release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Materials into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Materials through the air,
soil, surface water, groundwater or property.

"Request for Issuance of Letter
of Credit" means a request in the form of Exhibit III
annexed hereto delivered by Company to Agent pursuant to subsection 3.1B(i) with
respect to the proposed issuance of a Letter of Credit.

"Requirement of Law"
means (a) the certificates or articles of incorporation, by-laws and other
organizational or governing documents of a Person, (b) any law, treaty, rule,
regulation or determination of an arbitrator, court or other governmental
authority, or (c) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or approval binding
on a Person or any of its property.

"Requisite Lenders"
means Lenders having or holding more than 50% of the aggregate Revolving Loan
Exposure of all Lenders.

"Restricted Junior Payment"
means (i) any dividend or other distribution, direct or indirect, on
account of any shares of any class of stock of Company now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
to the holders of that class, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of Company now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
stock of Company now or hereafter outstanding, and (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, any Subordinated Indebtedness.

"Restructuring Capital
Expenditures" means Consolidated Capital Expenditures related to the
Company's restructuring incurred in connection with transactions with respect to
which the related expenses, charges and costs are Restructuring Charges, the
projected estimated amounts of which are set forth on Schedule 1.1 hereto.

"Restructuring Charges"
means those expenses or charges directly related to the restructuring of the
operations of Company and its Subsidiaries, which expenses and charges are
properly classified as "restructuring charges" or other similar items
reflected in its reports on Forms 10-Q and 10-K (including management discussion
and analysis) on a basis consistent with the rules and regulations promulgated
by the Securities and Exchange Commission, the projected estimated amounts of
which are set forth on Schedule 1.1 attached hereto.

"Revolving Lender"
means a Lender that has a Revolving Loan Commitment and/or that has an
outstanding Revolving Loan.

"Revolving Loan Commitment"
means the commitment of a Lender to make Revolving Loans to Company pursuant to
subsection 2.1A, and "Revolving Loan Commitments" means such
commitments of all Lenders in the aggregate.

"Revolving Loan Commitment
Termination Date" means April 30, 2004.

"Revolving Loan Exposure"
means, with respect to any Revolving Lender as of any date of determination (i) prior
to the termination of the Revolving Loan Commitments, that Lender's Revolving
Loan Commitment and (ii) after the termination of the Revolving Loan
Commitments, the sum of (a) the aggregate outstanding principal amount of
the Revolving Loans of that Lender plus (b) in the event that Lender
is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all
Letters of Credit issued by that Lender (in each case net of any participations
purchased by other Lenders in such Letters of Credit or in any unreimbursed
drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.

"Revolving Loans" means
the Loans made by Lenders to Company pursuant to subsection 2.1A.

"Revolving Notes" means
(i) the promissory notes of Company issued pursuant to subsection 2.1F
on the Closing Date and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 10.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Revolving Lenders, in each case substantially in the form of Exhibit IV
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.

"Secured Notes/Mortgages"
shall mean the items identified as such in Schedule 7.1.

"Securities" means any
stock, shares, partnership interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.

"Securities Act" means
the Securities Act of 1933, as amended from time to time, and any successor
statute.

"Security Agreement"
means the Security Agreement executed and delivered by Company and the Domestic
Subsidiaries (other than any Inactive Subsidiary) on the Closing Date,
substantially in the form of Exhibit XV annexed hereto, as such Security
Agreement may thereafter be amended, supplemented or otherwise modified from
time to time.

"Senior Note Agreement"
means, collectively, the Note Purchase Agreements dated as of October 1,
1997, among Company, the subsidiary guarantors signatory thereto and the various
purchasers listed on Schedule A thereto, pursuant to which the Senior Notes were
issued, as such Note Purchase Agreement may be amended from time to time to the
extent permitted under subsection 7.15.

"Senior Notes" means
the $50,000,000 in initial aggregate principal amount of 7.09% Series A Senior
Notes due October 28, 2004 of Company and the $50,000,000 in initial
aggregate principal amount of 7.25% Series B Senior Notes due October 28,
2007 of Company, in each case issued pursuant to the Senior Note Agreement, as
such notes may be amended from time to time to the extent permitted under
subsection 7.15.

"Significant Subsidiary"
means any subsidiary of a Person which accounts for 5% or more of the assets of
such Person and all of its Subsidiaries taken as a whole.

"Solvent" means, with
respect to any Person, that as of the date of determination both (A) (i) the
then fair saleable value of the property of such Person is (y) greater than
the total amount of liabilities (including contingent liabilities) of such
Person and (z) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) such Person does not intend to incur, or
believe (nor should it reasonably believe) that it will incur, debts beyond its
ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

"Standby Letter of Credit"
means any standby letter of credit or similar instrument issued for the purpose
of supporting (i) Indebtedness of Company or any of its Subsidiaries in
respect of industrial revenue or development bonds or financings,
(ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or
any of its Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, (iv) obligations with respect to Capital
Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any
of its Subsidiaries, in any case if required by law or governmental rule or
regulation or in accordance with custom and practice in the industry; provided
that Standby Letters of Credit may not be issued for the purpose of supporting
(a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).

"Subordinated Indebtedness"
means any unsecured Indebtedness of Company (other than Indebtedness to any of
its Subsidiaries) or, with respect to Acquisition Subordinated Debt, of its
Subsidiaries, that is subordinated in right of payment to the Obligations
pursuant to (i) with respect to Subordinated Indebtedness incurred in
connection with acquisitions permitted by this Agreement ("Acquisition
Subordinated Debt"), subordination provisions substantially in the form set
forth in Exhibit VII annexed hereto; provided that the
principal amount of Acquisition Subordinated Debt incurred in an individual
transaction or related transactions shall not exceed $3,000,000 and the
aggregate principal amount of all Acquisition Subordinated Debt shall not exceed
$10,000,000 at any time outstanding; or (ii) documentation containing
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory to Agent
and Requisite Lenders.

"Subsidiary" means,
with respect to any Person, any corporation, partnership, limited liability
company, association, joint venture or other business entity of which more than
50% of the total voting power of shares of stock or other ownership interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of the members of the Governing Body is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.

"Subsidiary Guarantors"
means the Guarantors.

"Subsidiary Guaranty"
means the Subsidiary Guaranty executed and delivered by Company's existing
Domestic Subsidiaries (other than any Inactive Subsidiary) on the Closing Date
and to be executed and delivered by Company's additional Subsidiaries from time
to time thereafter in accordance with subsection 6.8, substantially in the form
of Exhibit V annexed hereto, as such Subsidiary Guaranty may be amended,
supplemented or otherwise modified from time to time.

"SunMed Finance" means
SunMed Finance Inc., a Delaware corporation.

"Supplemental Collateral
Agent" has the meaning assigned to that term in subsection 9.1B.

"Tax" or "Taxes"
means any present or future tax, levy, impost, duty, charge, fee, deduction or
withholding of any nature and whatever called, by whomsoever, on whomsoever and
wherever imposed, levied, collected, withheld or assessed, including interest,
penalties, additions to tax and any similar liabilities with respect thereto;
except that, in the case of a Lender, there shall be excluded taxes that are
imposed on the overall net income or net profits (including franchise taxes
imposed in lieu thereof) by the United States, any state or other Government
Authority with respect to any state, or by any other Government Authority under
the laws of which the Lender is organized or has its principal office or
maintains its applicable lending office.

"Total Utilization of Revolving
Loan Commitments" means, as at any date of determination, the sum of (i)
the aggregate principal amount of all outstanding Revolving Loans made to
Company plus (ii) the Letter of Credit Usage with respect to all Letters
of Credit issued for the account of Company plus (iii) the amount of any
Hedge Exposure with respect to Company.

"Transaction Costs"
means the fees, costs and expenses payable by any Loan Party on or before the
Closing Date in connection with the transactions contemplated by the Loan
Documents.

"UCC" means the Uniform
Commercial Code (or any similar or equivalent legislation) as in effect in any
applicable jurisdiction.

1.2 Accounting Terms;
Utilization of GAAP for Purposes of Calculations Under Agreement.

Except as otherwise expressly
provided in this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP. Financial
statements and other information required to be delivered by Company to Lenders
pursuant to clauses (ii), (iii) and (xii) of subsection 6.1 shall be prepared in
accordance with GAAP as in effect at the time of such preparation (and delivered
together with the reconciliation statements provided for in subsection 6.1(v)).
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to in subsection
5.3.

The parties hereto agree that, if any
change in GAAP occurs from GAAP as used to prepare the financial statements
referred to in subsection 5.3 which affects the calculations necessary to
determine compliance with any of the financial covenants in Section 7 of this
Agreement, the parties shall negotiate in good faith to adjust the affected
financial covenants so as to take into account the relevant accounting changes, provided,
however, until any such agreement on adjustments is reached, Company will
continue to perform all calculations based on GAAP as it existed at the time the
financial statements referred to in subsection 5.3 were prepared.

1.3 Other Definitional
Provisions.

A. References to
"Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.

B. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.

C. The use in any of the Loan
Documents of the word "include" or "including", when
following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation" or "but not
limited to" or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that fall within
the broadest possible scope of such general statement, term or matter.

Section 2.  AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1 Commitments; Making of
Loans; the Register; Notes.

A. Commitments. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth, each Lender hereby severally agrees
to make the Loans described in subsection 2.1A(i).

  
    (i) Revolving Loans. Each
    Revolving Lender severally agrees, subject to the limitations set forth
    below with respect to the maximum amount of Revolving Loans permitted to be
    outstanding from time to time, to lend to Company from time to time during
    the period from the Closing Date to but excluding the Revolving Loan
    Commitment Termination Date an aggregate amount not exceeding its Pro Rata
    Share of the aggregate amount of the Revolving Loan Commitments to be used
    for the purposes identified in subsection 2.5B. The original amount of each
    Revolving Lender's Revolving Loan Commitment is set forth opposite its name
    on Schedule 2.1 annexed hereto and the aggregate original amount
    of the Revolving Loan Commitments is $58,000,000; provided that the
    Revolving Loan Commitments of Revolving Lenders shall be adjusted to give
    effect to any assignments of the Revolving Loan Commitments pursuant to
    subsection 10.1B; and provided, further that the amount of the
    Revolving Loan Commitments shall be reduced from time to time by the amount
    of any reductions thereto made pursuant to subsections 2.4A(ii) and 6.4C.
    Each Revolving Lender's Revolving Loan Commitment shall expire on the
    Revolving Loan Commitment Termination Date and all Revolving Loans and all
    other amounts owed hereunder with respect to the Revolving Loans and the
    Revolving Loan Commitments shall be paid in full no later than that date; provided
    that each Revolving Lender's Revolving Loan Commitment shall expire
    immediately and without further action on September 30, 2000 if the
    initial Revolving Loans are not made on or before that date. Amounts
    borrowed under this subsection 2.1A(i) may be repaid and reborrowed to but
    excluding the Revolving Loan Commitment Termination Date.

  

Anything contained in this Agreement
to the contrary notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the following limitations in the amounts
indicated:

  
    (a) in no event shall the sum of
    the Total Utilization of Revolving Loan Commitments at any time exceed the
    Revolving Loan Commitments then in effect;

    (b) in no event shall the Total
    Utilization of Revolving Loan Commitments at any time exceed the Borrowing
    Base then in effect;

    (c) in no event shall the
    outstanding Revolving Loans at any time exceed an amount equal to the
    Revolving Loan Commitments then in effect minus the sum of the
    Maximum Letter of Credit Usage pursuant to subsection 3.1A(ii) and the
    amount of any Hedge Exposure; and

    (d) so long as the Senior Notes
    are outstanding, in no event shall the Revolving Lenders be required to make
    Revolving Loans if the Total Utilization of Revolving Loan Commitments would
    exceed the limitations on the incurrence of debt contained in Sections
    11.3(c) and 11.4 of the Senior Note Agreement.

  

B. Borrowing Mechanics. Revolving
Loans made on any Funding Date (other than Revolving Loans made pursuant to
subsection 3.3B) shall be in an aggregate minimum amount of $1,000,000 and
multiples of $500,000 in excess of that amount; provided that Revolving
Loans made on any Funding Date as Eurodollar Rate Loans with a particular
Interest Period shall be in an aggregate minimum amount of $2,000,000 and
multiples of $250,000 in excess of that amount. Whenever Company desires that
Lenders make Revolving Loans it shall deliver to Agent a Notice of Borrowing no
later than 1:00 P.M. (New York City time) at least three Business Days in
advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or
at least one Business Day in advance of the proposed Funding Date (in the case
of a Base Rate Loan). Revolving Loans may be continued as or converted into Base
Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D.
Notwithstanding anything to the contrary herein contained, during the period
commencing on and including the Closing Date and ending on the earlier of (i)
the date which is 90 days after the Closing Date and (ii) the date on which
Agent sends notice to Company indicating that Lenders' primary syndication has
been concluded, Company may only request the borrowing of Base Rate Loans or
Eurodollar Rate Loans with an Interest Period of one month. In lieu of
delivering a Notice of Borrowing, Company may give Agent telephonic notice by
the required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Agent on or before the applicable Funding Date.

Neither Agent nor any Lender shall
incur any liability to Company in acting upon any telephonic notice referred to
above that Agent believes in good faith to have been given by a duly authorized
officer or other person authorized to borrow on behalf of Company or for
otherwise acting in good faith under this subsection 2.1B or under subsection
2.2D, and upon funding of Loans by Daily Funding Lender and/or Lenders, and upon
conversion or continuation of the applicable basis for determining the interest
rate with respect to any Loans pursuant to subsection 2.2D, in each case in
accordance with this Agreement, pursuant to any such telephonic notice Company
shall have effected Loans or a conversion or continuation, as the case may be,
hereunder.

Company shall notify Agent prior to
the funding of any Loans in the event that any of the matters to which Company
is required to certify in the applicable Notice of Borrowing is no longer true
and correct as of the applicable Funding Date, and the acceptance by Company of
the proceeds of any Loans shall constitute a re-certification by Company, as of
the applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.

Except as otherwise provided in
subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowing for, or a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and Company shall be bound to make
a borrowing or to effect a conversion or continuation in accordance therewith.

C. Disbursement of Funds.

  
  
  (i) Subject to this subsection 2.1C
  and subsection 2.1D, all Loans under this Agreement shall be made by Lenders
  simultaneously and proportionately to their respective Pro Rata Shares, it
  being understood that neither Agent nor any Lender shall be responsible for
  any default by any other Lender in that other Lender's obligation to make a
  Loan requested hereunder nor shall the Commitment of any Lender to make the
  particular type of Loan requested be increased or decreased as a result of a
  default by any other Lender in that other Lender's obligation to make a Loan
  requested hereunder.

  (ii) Notwithstanding anything to
  the contrary contained in this Agreement, the provisions of this subsection
  2.1C(ii) shall only be effective upon the occurrence of a Cash Management
  Triggering Event. Upon receipt by Agent of a Notice of Borrowing pursuant to
  subsection 2.1B (or telephonic notice in lieu thereof) for Revolving Loans
  that consist of Base Rate Loans and upon satisfaction or waiver of the
  conditions precedent specified in subsection 4.1 (in the case of Loans made on
  the Closing Date) and, subject to the provisions set forth in the immediately
  succeeding paragraph, subsection 4.2 (in the case of all Loans), Daily Funding
  Lender shall, without prior notice to the other Lenders, make such Revolving
  Loans for its own account on the applicable Funding Date (subject to
  settlement with the other Lenders in accordance with subsection 2.1D) by
  making the proceeds of such Revolving Loans available to Company on such
  Funding Date by causing an amount of same day funds equal to the proceeds of
  such Revolving Loans to be credited to the account of Company at the Funding
  and Payment Office. Such Revolving Loans shall constitute Revolving Loans by
  Daily Funding Lender for all purposes under the Loan Documents, subject to
  settlement with the other Lenders pursuant to subsection 2.1D. All interest
  accrued on any such Revolving Loans from the date made by Daily Funding Lender
  to the Settlement Date with respect thereto shall be for Daily Funding
  Lender's own account. Daily Funding Lender shall make Revolving Loans for its
  own account pursuant to this subsection 2.1C(ii) notwithstanding the fact that
  the principal amount of such Revolving Loans, when added to the aggregate
  principal amount of Daily Funding Lender's Revolving Loans then outstanding,
  may exceed Daily Funding Lender's Revolving Loan Commitment then in effect; provided
  that such Revolving Loans shall at all times be Obligations owed to Daily
  Funding Lender under this Agreement; and provided further that
  in no event shall the aggregate principal amount of all Revolving Loans,
  including such Revolving Loans, outstanding at any time exceed the limitations
  set forth in clauses (a), (c) and (d) of subsection 2.1A(i).

  Notwithstanding anything in this
  Agreement to the contrary, if the conditions precedent specified in subsection
  4.2 cannot be fulfilled with respect to any proposed Revolving Loans that
  consist of Base Rate Loans, Company shall, in its Notice of Borrowing or
  otherwise, give immediate written notice thereof (specifying the circumstances
  which prevent the conditions precedent from being fulfilled) to Agent, with a
  copy to each Lender, and Daily Funding Lender may (and each Lender hereby
  authorizes Daily Funding Lender to), but is not obligated to, continue to make
  Revolving Loans that are Base Rate Loans for 20 Business Days from the date
  Agent first receives such notice, or until sooner instructed by Requisite
  Lenders to cease making such Revolving Loans (the "Daily Funding
  Lender Discretionary Period"). Once notice is given by Company that
  circumstances exist which prevent the conditions precedent to borrowing from
  being fulfilled, no additional notice with respect to the same circumstances
  will be effective to commence a new Daily Funding Lender Discretionary Period.

  (iii) Promptly after receipt by
  Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic
  notice in lieu thereof) for any Loans (other than for Revolving Loans that
  consist of Base Rate Loans, which Notice of Borrowing is given after the
  occurrence of a Cash Management Triggering Event), Agent shall notify each
  Lender of the proposed borrowing. Each Lender shall make the amount of its
  Loan available to Agent, in same day funds in Dollars, at the Funding and
  Payment Office, not later than 12:00 Noon (New York City time) on the
  applicable Funding Date, in each case in same day funds in Dollars, at the
  Funding and Payment Office. Except as provided in subsection 3.3B with respect
  to Revolving Loans used to reimburse any Issuing Lender for the amount of a
  drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
  the conditions precedent specified in subsections 4.1 (in the case of Loans
  made on the Closing Date) and, subject to the provisions set forth in the
  immediately preceding paragraph, 4.2 (in the case of all Loans), Agent shall
  make the proceeds of such Loans available to Company on the applicable Funding
  Date by causing an amount of same day funds in Dollars equal to the proceeds
  of all such Loans received by Agent from Lenders to be credited to the account
  of Company at the Funding and Payment Office.

  Unless Agent shall have been
  notified by any Lender prior to the Funding Date for any Loans pursuant to
  this subsection 2.1C that such Lender does not intend to make available to
  Agent the amount of such Lender's Loan requested on such Funding Date, Agent
  may assume that such Lender has made such amount available to Agent on such
  Funding Date and Agent may, in its sole discretion, but shall not be obligated
  to, make available to Company a corresponding amount on such Funding Date. If
  such corresponding amount is not in fact made available to Agent by such
  Lender, Agent shall be entitled to recover such corresponding amount on demand
  from such Lender together with interest thereon, for each day from such
  Funding Date until the date such amount is paid to Agent, at the customary
  rate set by Agent for the correction of errors among banks for three Business
  Days and thereafter at the Base Rate. If such Lender does not pay such
  corresponding amount forthwith upon Agent's demand therefor, Agent shall
  promptly notify Company and Company shall immediately pay such corresponding
  amount to Agent together with interest thereon, for each day from such Funding
  Date until the date such amount is paid to Agent, at the rate payable under
  this Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be
  deemed to relieve any Lender from its obligation to fulfill its Commitments
  hereunder or to prejudice any rights that Company may have against any Lender
  as a result of any default by such Lender hereunder.

D. Settlement Procedures.
Notwithstanding anything to the contrary contained in this Agreement, the
provisions of this subsection 2.1D shall only be effective upon the occurrence
of a Cash Management Triggering Event.

  
    (i) Daily Funding Lender will
    from time to time notify the other Lenders, not later than 12:00 Noon (New
    York time) (a) on at least one Business Day during each seven
    calendar-day period, (b) on each date on which payment of interest on
    any Revolving Loans is required to be made pursuant to subsection 2.2C,
    (c) on the Revolving Loan Commitment Termination Date, and (d) at
    such other times as Daily Funding Lender in its discretion may determine
    (each such notice by Daily Funding Lender being a "Settlement
    Notice" and the date of each Settlement Notice being a "Settlement
    Date") of the aggregate principal amount of outstanding Revolving Loans
    made by Daily Funding Lender and each other Lender as of the close of
    business on the Business Day immediately preceding the applicable Settlement
    Date.

    (ii) If a Settlement Notice
    indicates that the aggregate principal amount of outstanding Revolving Loans
    made by Daily Funding Lender (including Revolving Loans made for its own
    account pursuant to subsection 2.1C(ii)) is in excess of Daily Funding
    Lender's Pro Rata Share of the aggregate principal amount of outstanding
    Revolving Loans made by all Lenders (the amount of such excess being the
    "Excess Funded Amount"), each other Lender will, not later than
    4:00 P.M. (New York time) on the applicable Settlement Date, pay to Daily
    Funding Lender, by depositing same day funds in the account specified by
    Daily Funding Lender at the Funding and Payment Office, an amount equal to
    such Lender's Adjusted Pro Rata Share of the Excess Funded Amount, upon
    which payment Daily Funding Lender shall be deemed to have sold, and such
    Lender shall be deemed to have purchased, as of the applicable Settlement
    Date, a portion of the outstanding Revolving Loans made by Daily Funding
    Lender for its own account pursuant to subsection 2.1C(ii) on or after the
    immediately preceding Settlement Date equal to such Lender's Adjusted Pro
    Rata Share of the Excess Funded Amount. The obligation of each Lender to
    purchase a portion of any Revolving Loan made by Daily Funding Lender as
    provided in this subsection 2.1D(ii) is subject to the condition that
    at the time such Revolving Loan was made by Daily Funding Lender (a) the
    duly authorized officer of Daily Funding Lender responsible for the
    administration of Daily Funding Lender's credit relationship with Company
    believed in good faith that either (X) no Event of Default had occurred
    and was continuing or (Y) any Event of Default that had occurred and
    was continuing had been waived by Requisite Lenders at the time such
    Revolving Loan was made or (b) a Daily Funding Lender Discretionary Period
    was in effect.

    (iii) If a Settlement Notice
    indicates that the aggregate principal amount of outstanding Revolving Loans
    made by Daily Funding Lender is less than Daily Funding Lender's Pro Rata
    Share of the aggregate principal amount of outstanding Revolving Loans made
    by all Lenders (the amount of such difference being the "Excess Paydown
    Amount"), Daily Funding Lender will, no later than 4:00 P.M. (New York
    time) on the applicable Settlement Date, unconditionally pay to each other
    Lender, by depositing same day funds in the account specified by such Lender
    to Daily Funding Lender, an amount equal to such Lender's Adjusted Pro Rata
    Share of the Excess Paydown Amount, upon which payment such Lender shall be
    deemed to have sold, and Daily Funding Lender shall be deemed to have
    purchased, as of the applicable Settlement Date, a portion of the
    outstanding Revolving Loans of such Lender equal to such Lender's Adjusted
    Pro Rata Share of the Excess Paydown Amount.

    (iv) Except as provided in
    subsection 2.1D(ii), the obligations of Daily Funding Lender and each other
    Lender pursuant to subsections 2.1D(ii) and 2.1D(iii) shall be absolute
    and unconditional and shall not be affected by any circumstance, including,
    without limitation, (a) any set-off, counterclaim, recoupment, defense
    or other right which Agent or any Lender may have against Agent, any other
    Lender, any Loan Party or any other Person for any reason whatsoever;
    (b) the occurrence or continuance of an Event of Default or a Potential
    Event of Default; (c) any adverse change in the condition (financial or
    otherwise) of any Loan Party; (d) any breach of this Agreement by
    Company, Agent or any Lender; or (e) any other circumstance, happening,
    or event whatsoever, whether or not similar to any of the foregoing. In the
    event that any Person (the "Payor") obligated to make a payment to
    any other Person (the "Payee") pursuant to this
    subsection 2.1D fails to make available to the Payee the amount of such
    payment required to be made by the Payor, the Payee shall be entitled to
    recover such amount on demand from the Payor together with interest at the
    customary rate set by BTCo for the correction of errors among Lenders for
    three Business Days and thereafter at the sum of the Base Rate plus 1.50%
    per annum.

    (v) In the event that all or any
    portion of any repayment of principal of the Revolving Loans is thereafter
    recovered by or on behalf of Company from Daily Funding Lender (including
    any such recovery in a proceeding under any applicable bankruptcy,
    insolvency or other similar law now or hereafter in effect) in an amount
    that is proportionately greater (based on the respective Pro Rata Shares of
    Lenders) than any such recovery from the other Lenders, the loss of the
    amount so recovered shall be ratably shared among all Lenders in the manner
    contemplated by subsection 10.5.

  

E. The Register.

Agent, acting for these purposes
solely as an agent of Company (it being acknowledged that Agent, in such
capacity, and its officers, directors, employees, agent and affiliates shall
constitute Indemnitees under subsection 10.3), shall maintain (and make
available for inspection by Company and Lenders upon reasonable prior notice at
reasonable times) at its address referred to in subsection 10.8 a register for
the recordation of, and shall record, the names and addresses of Lenders and the
Revolving Loan Commitment, and Revolving Loans of each Lender from time to time
(the "Register"). Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof; all
amounts owed with respect to any Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof; and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans. Each Lender shall record on its internal
records the amount of its Loans and Commitments and each payment in respect
hereof, and any such recordation shall be conclusive and binding on Company,
absent manifest error, subject to the entries in the Register, which shall,
absent manifest error, govern in the event of any inconsistency with any
Lender's records. Failure to make any recordation in the Register or in any
Lender's records, or any error in such recordation, shall not affect any Loans
or Commitments or any Obligations in respect of any Loans.

F. Notes. Company shall execute
and deliver on the Closing Date to Lenders (or to Agent for Lenders) a Revolving
Note substantially in the form of Exhibit IV annexed hereto to evidence
each Revolving Lender's Revolving Loans, in the principal amount of that
Lender's Revolving Loan Commitment and with other appropriate insertions.

2.2 Interest on the Loans.

A. Rate of Interest. Subject to
the provisions of subsections 2.6 and 2.7, each Revolving Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to, in the case of Loans, the Base Rate or the Adjusted Eurodollar
Rate. The applicable basis for determining the rate of interest with respect to
any Revolving Loan shall be selected by Company initially at the time a Notice
of Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and
the basis for determining the interest rate with respect to any Revolving Loan
may be changed from time to time pursuant to subsection 2.2D. If on any day a
Revolving Loan is outstanding with respect to which notice has not been
delivered to Agent in accordance with the terms of this Agreement specifying the
applicable basis for determining the rate of interest, then for that day that
Loan shall bear interest determined by reference to the Base Rate.

  
    (i) Subject to the provisions of
    subsections 2.2E, 2.2G and 2.7, the Revolving Loans shall bear interest
    through maturity as follows:

    
      (a) if a Base Rate Loan, then
      at the sum of the Base Rate plus the Base Rate Margin set forth in the
      table below opposite the Consolidated Leverage Ratio for the four Fiscal
      Quarter period for which the applicable Pricing Certificate has been
      delivered pursuant to subsection 6.1(iv); or

      (b) if a Eurodollar Rate Loan,
      then at the sum of the Adjusted Eurodollar Rate plus the Eurodollar Rate
      Margin set forth in the table below opposite the Consolidated Leverage
      Ratio for the four Fiscal Quarter period for which the applicable Pricing
      Certificate has been delivered pursuant to subsection 6.1(iv):

    

  

	
      Consolidated Leverage Ratio
	
      Eurodollar Rate Margin
	
      Base Rate 

      Margin

	
      4.50 and above
	
      3.00%
	
      2.00%

	
      3.50 to 4.49
	
      2.75%
	
      1.75%

	
      3.00 to 3.49
	
      2.50%
	
      1.50%

	
      2.50 to 2.99
	
      2.25%
	
      1.25%

	
      less than 2.50
	
      2.00%
	
      1.00%

 

  
    
    provided that, until the delivery of the Pricing
    Certificate and Company's audited annual financial statements pursuant to
    subsection 6.1(iii) for the Fiscal Year ending on or about June 30, 2001,
    the applicable margin for Revolving Loans that are Eurodollar Rate Loans
    shall be 2.50% per annum and Revolving Loans that are Base Rate Loans shall
    be 1.50% per annum.

    
      (ii) Upon delivery of the
      Pricing Certificate by Company to Agent pursuant to subsection 6.1(iv),
      the Base Rate Margin and the Eurodollar Rate Margin shall automatically be
      adjusted in accordance with such Pricing Certificate, such adjustment to
      become effective on the first day of the month following the month in
      which Agent receives such Pricing Certificate (subject to the provisions
      of the foregoing clause (i)); provided that, if at any time
      a Pricing Certificate is not delivered at the time required pursuant to
      subsection 6.1(iv), from the time such Pricing Certificate was required to
      be delivered until delivery of such Pricing Certificate, such applicable
      margins shall be the maximum percentage amount for the relevant Loan set
      forth above.

    

  

B. Interest Periods. In
connection with each Eurodollar Rate Loan, Company may, pursuant to the
applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case
may be, select an interest period (each an "Interest Period")
to be applicable to such Loan, which Interest Period shall be, at Company's
option, either a one, two, three or six month period; provided that:

  
    
      (i) the initial Interest Period
      for any Eurodollar Rate Loan shall commence on the Funding Date in respect
      of such Loan, in the case of a Loan initially made as a Eurodollar Rate
      Loan, or on the date specified in the applicable Notice of
      Conversion/Continuation, in the case of a Loan converted to a Eurodollar
      Rate Loan;

      (ii) in the case of immediately
      successive Interest Periods applicable to a Eurodollar Rate Loan continued
      as such pursuant to a Notice of Conversion/Continuation, each successive
      Interest Period shall commence on the day on which the next preceding
      Interest Period expires;

      (iii) if an Interest Period
      would otherwise expire on a day that is not a Business Day, such Interest
      Period shall expire on the next succeeding Business Day; provided that, if
      any Interest Period would otherwise expire on a day that is not a Business
      Day but is a day of the month after which no further Business Day occurs
      in such month, such Interest Period shall expire on the next preceding
      Business Day;

      (iv) any Interest Period that
      begins on the last Business Day of a calendar month (or on a day for which
      there is no numerically corresponding day in the calendar month at the end
      of such Interest Period) shall, subject to clause (v) of this subsection
      2.2B, end on the last Business Day of a calendar month;

      (v) no Interest Period with
      respect to any portion of the Revolving Loans shall extend beyond the
      Revolving Loan Commitment Termination Date;

      (vi) there shall be no more
      than seven (7) Interest Periods outstanding at any time; and

      (vii) in the event Company
      fails to specify an Interest Period for any Eurodollar Rate Loan in the
      applicable Notice of Borrowing or Notice of Conversion/Continuation,
      Company shall be deemed to have selected an Interest Period of one month.

    

  

C. Interest Payments. Subject to
the provisions of subsection 2.2E, interest on each Loan shall be payable in
arrears on and to each Interest Payment Date applicable to that Loan, upon any
prepayment of that Loan (to the extent accrued on the amount being prepaid) and
at maturity (including final maturity); provided that in the event any
Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4A(i), interest accrued on such Revolving Loans through the date of such
prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).

D. Conversion or Continuation.
Subject to the provisions of subsection 2.6, Company shall have the option (i)
to convert at any time all or any part of its outstanding Revolving Loans equal
to $2,000,000 and multiples of $250,000 in excess of that amount from Loans
bearing interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis, or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $2,000,000 and
multiples of $250,000 in excess of that amount as a Eurodollar Rate Loan; provided,
however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto,
unless Company pays on such conversion date all amounts owing to Lenders under
subsection 2.6D and provided further during the period commencing
on the Closing Date and ending on the earlier to occur of (a) the date which is
90 days after the Closing Date and (b) the date on which Agent notifies Company
that the primary syndication of the Commitments and the Loans has been
completed, no Loan may be continued as or converted to a Eurodollar Rate Loan
with an Interest Period of longer than one month.

Company shall deliver a Notice of
Conversion/Continuation to Agent no later than 1:00 P.M. (New York City time) at
least one Business Day in advance of the proposed conversion date (in the case
of a conversion to a Base Rate Loan) and at least three Business Days in advance
of the proposed conversion/continuation date (in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan). In lieu of delivering a Notice of
Conversion/Continuation, Company may give Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Agent on or before the
proposed conversion/continuation date. Upon receipt of written or telephonic
notice of any proposed conversion/continuation under this subsection 2.2D, Agent
shall promptly transmit such notice by telefacsimile or telephone to each Lender
of the Loan subject to the Notice of Conversion/Continuation.

E. Default Rate. Upon the
occurrence and during the continuation of any Event of Default, the outstanding
principal amount of all Loans and, to the extent permitted by applicable law,
any interest payments thereon not paid when due and any fees and other amounts
then due and payable hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable Insolvency Laws) payable upon demand at a rate that is 2% per annum
in excess of the interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans); provided that,
in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Agent or any Lender.

F. Computation of Interest.
Interest on the Loans shall be computed on the basis of a 360-day year, in each
case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan
or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of
conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may
be, shall be included, and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.

G. Limitation on Interest. It is
the intention of the parties hereto to comply with all applicable usury laws,
whether now existing or hereafter enacted. Accordingly, notwithstanding any
provision to the contrary in this Agreement, the Notes, the other Loan Documents
or any other document evidencing, securing, guaranteeing or otherwise pertaining
to the Obligations of Company to the Lenders, in no contingency or event
whatsoever, whether by acceleration of the maturity of indebtedness of Company
to the Lenders or otherwise, shall the interest contracted for, charged or
received by the Lenders exceed the maximum amount permissible under applicable
law. If from any circumstances whatsoever fulfillment of any provisions of this
Agreement, the Notes, the other Loan Documents or of any other document
evidencing, securing, guaranteeing or otherwise pertaining to the Obligations of
Company to the Lenders, at the time performance of such provision shall be due,
shall involve transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lenders shall ever receive
anything of value as interest or deemed interest by applicable law under this
Agreement, the Notes, the other Loan Documents or any other document evidencing,
securing, guaranteeing or otherwise pertaining to the Obligations of Company to
the Lenders or otherwise an amount that would exceed the highest lawful amount
(the "Maximum Rate"), such amount that would be excessive interest
shall be applied to the reduction of the principal amount owing in connection
with this Agreement or on account of any other indebtedness of Company to the
Lenders, and not to the payment of interest, or if such excessive interest
exceeds the unpaid balance of principal owing in connection with this Agreement
and such other indebtedness, such excess shall be refunded to Company. In
determining whether or not the interest paid or payable with respect to
indebtedness of Company to the Lenders, under any specific contingency, exceeds
the maximum nonusurious rate permitted under applicable law, the Lenders may, at
their option (a) characterize any non-principal payment as an expense, fee
or premium rather than as interest, (b) exclude voluntary prepayments and
the effects thereof, (c) amortize, prorate, allocate and spread the total amount
of interest throughout the full term of such indebtedness so that the actual
rate of interest on account of such indebtedness does not exceed the maximum
amount permitted by applicable law, and/or (d) allocate interest between
portions of the Obligations, to the end that no such portion shall bear interest
at a rate greater than that permitted by law. Notwithstanding the foregoing, if
for any period of time interest on any Obligations is calculated at the Maximum
Rate rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on such Obligations shall remain at the Maximum Rate until each Lender shall
have received the amount of interest which such Lender would have received
during such period on such Obligations had the rate of interest not been limited
to the Maximum Rate during such period.

2.3 Fees.

A. Commitment Fees. Company
agrees to pay to Agent, for distribution to each Revolving Lender in proportion
to that Revolving Lender's Pro Rata Share, commitment fees for the period from
and including the Closing Date to and excluding the Revolving Loan Commitment
Termination Date equal to the average of the daily excess of the Revolving Loan
Commitments over the Total Utilization of Revolving Loan Commitments multiplied
by the commitment fee set forth in the table below opposite the Consolidated
Leverage Ratio for which the applicable Pricing Certificate has been delivered
pursuant to subsection 6.1(iv), such commitment fees to be calculated on the
basis of a 360-day year and the actual number of days elapsed and to be payable
quarterly in arrears on the first Business Day of each calendar month,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date:

	
      Consolidated Leverage Ratio
	
      Commitment Fee

	
      3.00 and above
	
      0.50%

	
      less than 3.00
	
      0.375%

 

provided that until the delivery of the Pricing
Certificate and Company's audited annual financial statements pursuant to
subsection 6.1(iii) for the Fiscal Year ending on or about June 30, 2001, the
applicable commitment fee shall be 0.50% per annum.

B. Other Fees. Company agrees to
pay to Agent such other fees in the amounts and at the times separately agreed
upon between Company and Agent.

2.4 Repayments, Prepayments
and Reductions in Revolving Loan Commitments; General Provisions Regarding
Payments; Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty.

A. Prepayments and Reductions in
Revolving Loan Commitments.

  
  
  (i) Voluntary Prepayments.
  Company may, upon not less than one Business Day's prior written or telephonic
  notice, in the case of Base Rate Loans, and three Business Days' prior written
  or telephonic notice, in the case of Eurodollar Rate Loans, in each case given
  to Agent by 12:00 Noon (New York City time) on the date required and, if given
  by telephone, promptly confirmed in writing to Agent (which original written
  or telephonic notice Agent will promptly transmit by telefacsimile or
  telephone to each Lender for the Loans to be prepaid), at any time and from
  time to time prepay any Revolving Loans on any Business Day in whole or in
  part in an aggregate minimum amount of $500,000 and multiples of $250,000 in
  excess of that amount; provided, however, that a Eurodollar Rate
  Loan may only be prepaid on the expiration of the Interest Period applicable
  thereto unless Company pays on such date of prepayment all amounts owing to
  Lenders under subsection 2.6D. Notice of prepayment having been given as
  aforesaid, the principal amount of the Loans specified in such notice shall
  become due and payable on the prepayment date specified therein. Any such
  voluntary prepayment shall be applied as specified in subsection 2.4A(iv).

  (ii) Voluntary Reductions of
  Revolving Loan Commitments. Company may, upon not less than three Business
  Days' prior written or telephonic notice confirmed in writing to Agent (which
  original written or telephonic notice Agent will promptly transmit by
  telefacsimile or telephone to each Revolving Lender), at any time and from
  time to time terminate in whole or permanently reduce in part, without premium
  or penalty, the Revolving Loan Commitments in an amount up to the amount by
  which the Revolving Loan Commitments exceed the Total Utilization of Revolving
  Loan Commitments at the time of such proposed termination or reduction; provided
  that any such partial reduction of the Revolving Loan Commitments shall be in
  an aggregate minimum amount of $1,000,000 and multiples of $500,000 in excess
  of that amount. Company's notice to Agent shall designate the date (which
  shall be a Business Day) of such termination or reduction and the amount of
  any partial reduction, and such termination or reduction of the Revolving Loan
  Commitments shall be effective on the date specified in Company's notice and
  shall reduce the Revolving Loan Commitment of each Revolving Lender
  proportionately to its Pro Rata Share.

  (iii) Deposits into Overadvance
  Deposit Account and Mandatory Prepayments of Revolving Loans. The Loans
  shall be prepaid in the amounts and under the circumstances set forth below,
  all such prepayments to be applied as set forth in subsection 2.4A(iv):

  
    (a) Deposits into Overadvance
    Deposit Account Due to Reductions or Restrictions of Revolving Loan
    Commitments or Due to Insufficient Borrowing Base. Company shall from
    time to time make cash deposits into the Overadvance Deposit Account to the
    extent necessary to comply with the limitations set forth in clauses (a)-(c)
    of subsection 2.1A(i).

    (b) Prepayments of Revolving
    Loans from Amounts Transferred to BTCo Account. Notwithstanding anything
    to the contrary contained in this Agreement, the provisions of this
    subsection 2.4A(iii)(b) shall only be effective upon the occurrence of a
    Cash Management Triggering Event caused by the occurrence of an Event of
    Default. If any amounts are transferred to the BTCo Account on any Business
    Day pursuant to the terms of any Blocked Account Agreement, if any, then on
    such Business Day, if such amounts are transferred to the BTCo Account prior
    to 12:00 Noon (New York time) on such Business Day, or on the next
    succeeding Business Day, if such amounts are transferred to the BTCo Account
    on or after 12:00 Noon (New York time) on such Business Day, Company shall
    prepay Company's Revolving Loans in an amount equal to the amount
    transferred to the BTCo Account pursuant to the terms of the applicable
    Blocked Account Agreement on such Business Day (to the extent such amount
    relates to payments received in respect of Accounts of Company or any of its
    Subsidiaries) until all of Company's Revolving Loans shall have been paid in
    full.

    (iv) Application of Prepayments.

    (a) Application of Voluntary
    Prepayments. Any voluntary prepayments pursuant to subsection 2.4A(i)
    shall be applied as specified by Company in the applicable notice of
    prepayment.

    (b) Application of Prepayments
    to Base Rate Loans and Eurodollar Rate Loans. Any prepayment of
    Revolving Loans shall be applied first to Base Rate Loans to the full extent
    thereof before application to Eurodollar Rate Loans, in each case in a
    manner which minimizes the amount of any payments required to be made by
    Company pursuant to subsection 2.6D.

  

B. General Provisions Regarding
Payments.

  
  
  (i) Manner and Time of Payment.
  All payments by Company of principal, interest, fees and other Obligations
  hereunder and under the Notes shall be made in Dollars in same day funds,
  without defense, setoff or counterclaim, free of any restriction or condition,
  and delivered to Agent not later than 12:00 Noon (New York City time) on the
  date due at the Funding and Payment Office for the account of Lenders. Funds
  received by Agent after that time on such due date shall be deemed to have
  been paid by Company on the next succeeding Business Day. In order to effect
  timely payment of any interest, fees, commissions or other amounts due
  hereunder upon the occurrence of a Cash Management Triggering Event, Company
  hereby authorizes Agent to request Daily Funding Lender to make Revolving
  Loans for its own account (subject to settlement pursuant to subsection 2.1D)
  in a principal amount equal to such interest, fees, commissions or other
  amounts; provided that Agent shall not have the right to request such
  Revolving Loans if, after giving effect to such Revolving Loans, the aggregate
  outstanding principal amount of Revolving Loans would exceed the limitations
  set forth in clauses (a)-(d) of subsection 2.1A(i). Daily Funding Lender shall
  make the amount of such Revolving Loans (which shall be made as Base Rate
  Loans) available to Agent, in same day funds, at the Funding and Payment
  Office, not later than 1:00 P.M. (New York time) on the date requested by
  Agent, and Company and Lenders hereby authorize Agent, whether or not the
  conditions specified in subsection 4.2 have been satisfied or waived, to apply
  the proceeds of such Revolving Loans directly to the payment of such unpaid
  interest, fees, commissions or other amounts. Company hereby agrees that, upon
  the funding of any such Revolving Loans by Daily Funding Lender in accordance
  with the provisions of this subsection 2.4C(i), Company shall have effected
  Revolving Loans hereunder, which Revolving Loans shall for all purposes of
  this Agreement be deemed to have been made by Daily Funding Lender pursuant to
  and in accordance with the provisions of subsection 2.1C(ii). Agent shall
  deliver prompt notice to Company of the amount of Revolving Loans made
  pursuant to this subsection 2.4C together with copies of all invoices or other
  statements evidencing the fees, commissions or other amounts due hereunder
  (other than interest) paid with the proceeds of such Revolving Loans; provided
  that Agent shall give notice to Company five days in advance of the making of
  any such Revolving Loans for the payment of any amounts owed under subsection
  10.2 together with copies of all invoices or other statements evidencing such
  amounts. In addition, Company hereby authorizes Agent to charge its accounts
  with Agent in order to cause timely payment to be made to Agent of all
  principal, interest, fees and expenses due hereunder (subject to sufficient
  funds being available in its accounts for that purpose).

  (ii) Application of Payments to
  Principal and Interest. Except as provided in subsection 2.2C, all
  payments in respect of the principal amount of any Loan shall include payment
  of accrued interest on the principal amount being repaid or prepaid, and all
  such payments (and, in any event, any payments in respect of any Loan on a
  date when interest is due and payable with respect to such Loan) shall be
  applied to the payment of interest before application to principal.

  (iii) Apportionment of Payments.
  Aggregate principal and interest payments in respect of Revolving Loans shall
  be apportioned among all outstanding Loans to which such payments relate, in
  each case proportionately to Lenders' respective Pro Rata Shares of such
  Loans; provided that (i) payments of principal in respect of the
  Revolving Loans pursuant to subsection 2.4A(iii)(b) shall be applied to reduce
  the outstanding Revolving Loans of Daily Funding Lender (subject to settlement
  pursuant to subsection 2.1D) prior to application to the outstanding Revolving
  Loans of any other Lender and (ii) payments of interest in respect of
  Revolving Loans which are Base Rate Loans shall be apportioned ratably among
  Lenders in proportion to the average daily amount of such Base Rate Loans of
  each Lender outstanding during the period in which such interest shall have
  accrued. Agent shall promptly distribute to each Lender, at its primary
  address set forth below its name on the appropriate signature page hereof or
  at such other address as such Lender may request, its Pro Rata Share of all
  such payments received by Agent in respect of Loans and the commitment fees of
  such Lender when received by Agent pursuant to subsection 2.3.
  Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
  pursuant to the provisions of subsection 2.6C, any Notice of
  Conversion/Continuation is withdrawn as to any Affected Lender or if any
  Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
  Eurodollar Rate Loans, Agent shall give effect thereto in apportioning
  payments received thereafter.

  (iv) Payments on Business Days.
  Whenever any payment to be made hereunder shall be stated to be due on a day
  that is not a Business Day, such payment shall be made on the next succeeding
  Business Day and such extension of time shall be included in the computation
  of the payment of interest hereunder or of the commitment fees hereunder, as
  the case may be.

  (v) Notation of Payment.
  Each Lender agrees that before disposing of any Note held by it, or any part
  thereof (other than by granting participations therein), that Lender will make
  a notation thereon of all Loans evidenced by that Note and all principal
  payments previously made thereon and of the date to which interest thereon has
  been paid; provided that the failure to make (or any error in the
  making of) a notation of any Loan made under such Note shall not limit or
  otherwise affect the obligations of Company hereunder or under such Note with
  respect to any Loan or any payments of principal or interest on such Note.

C. Application of Proceeds of
Collateral and Payments after Event of Default.

Upon the occurrence and during the
continuation of an Event of Default, (a) all payments received on account of the
Obligations, whether from Company, from any Guarantor or otherwise, shall be
applied by Agent against the Obligations and (b) all proceeds received by Agent
in respect of any sale of, collection from, or other realization upon all or any
part of the Collateral under any Collateral Document may, in the discretion of
Agent, be held by Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Agent against, the applicable Secured
Obligations (as defined in such Collateral Document), in each case in the
following order of priority:

  
    (i) to the payment of all
    reasonable costs and expenses of such sale, collection or other realization,
    all other reasonable expenses, liabilities and advances made or incurred by
    Agent in connection therewith, and all amounts for which Agent is entitled
    to compensation (including the fees described in subsection 2.3),
    reimbursement and indemnification under any Loan Document and all advances
    made by Agent thereunder for the account of the applicable Loan Party, and
    to the payment of all reasonable costs and expenses paid or incurred by
    Agent in connection with the Loan Documents, all in accordance with
    subsections 9.4, 10.2 and 10.3 and the other terms of this Agreement and the
    Loan Documents;

    (ii) thereafter, to the extent of
    any excess such proceeds, to the payment of all other Obligations for the
    ratable benefit of the holders thereof (subject to the provisions of
    subsection 2.4B(ii) hereof); and

    (iii) thereafter, to the extent
    of any excess such proceeds, to the payment to or upon the order of such
    Loan Party or to whosoever may be lawfully entitled to receive the same or
    as a court of competent jurisdiction may direct.

  

2.5 Use of Proceeds.

A. Revolving Loans. The
proceeds of any other Revolving Loans shall be applied by Company to refinance
its existing indebtedness under the Third Amended and Restated Credit Agreement
referred to in subsection 4.1 N(i) and may be used to refinance the Secured
Notes/Mortgages and for working capital and other general corporate purposes,
which may include the making of intercompany loans to any of Company's
wholly-owned Subsidiaries, in accordance with subsection 7.1(iv), for their own
general corporate purposes.

B. Margin Regulations. No
portion of the proceeds of any borrowing under this Agreement shall be used by
Company or any of its Subsidiaries in any manner that might cause the borrowing
or the application of such proceeds to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act, in each case as
in effect on the date or dates of such borrowing and such use of proceeds.

2.6 Special Provisions
Governing Eurodollar Rate Loans.

Notwithstanding any other provision
of this Agreement to the contrary, the following provisions shall govern with
respect to Eurodollar Rate Loans as to the matters covered:

A. Determination of Applicable
Interest Rate. As soon as practicable after 10:00 A.M. (New York City time)
on each Interest Rate Determination Date, Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the Eurodollar Rate
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Company and each Lender.

B. Inability to Determine Applicable
Interest Rate. In the event that Agent shall have determined (which
determination shall be final and conclusive and binding upon all parties
hereto), on any Interest Rate Determination Date with respect to any Eurodollar
Rate Loans, that by reason of circumstances affecting the interbank Eurodollar
market adequate and fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the definition of Adjusted
Eurodollar Rate, Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Agent notifies Company and such Lenders
that the circumstances giving rise to such notice no longer exist and
(ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be for a Base Rate Loan.

C. Illegality or Impracticability of
Eurodollar Rate Loans. In the event that on any date any Lender shall have
determined (which determination shall be final and conclusive and binding upon
all parties hereto but shall be made only after consultation with Company and
Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order
(or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to comply
therewith would not be unlawful) or (ii) has become impracticable, or would
cause such Lender material hardship, as a result of contingencies occurring
after the date of this Agreement which materially and adversely affect the
interbank Eurodollar market or the position of such Lender in that market, then,
and in any such event, such Lender shall be an "Affected Lender"
and it shall on that day give notice (by telefacsimile or by telephone confirmed
in writing) to Company and Agent of such determination (which notice Agent shall
promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall
make such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan
(c) the Affected Lender's obligation to maintain its outstanding Eurodollar
Rate Loans (the "Affected Loans"), shall be terminated at the
earlier to occur of the expiration of the Interest Period then in effect with
respect to the Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described above
(which notice of rescission Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms of this Agreement.

D. Compensation For Breakage or
Non-Commencement of Interest Periods. Company shall compensate each Lender,
upon written request by that Lender (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all reasonable losses,
expenses and liabilities (including, without limitation, any interest paid by
that Lender to lenders of funds borrowed by it to make or carry its Eurodollar
Rate Loans and any loss, expense or liability sustained by that Lender in
connection with the liquidation or re-employment of such funds) which that
Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of
its Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default
by Company in the repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.

E. Booking of Eurodollar Rate Loans.
Any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the
account of any of its branch offices or the office of an Affiliate of that
Lender.

F. Assumptions Concerning Funding of
Eurodollar Rate Loans. Calculation of all amounts payable to a Lender under
this subsection 2.6 and under subsection 2.7A shall be made as though that
Lender had funded each of its Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable to the relevant
Interest Period, whether or not its Eurodollar Rate Loans had been funded in
such manner.

G. Eurodollar Rate Loans After
Default. After the occurrence of and during the continuation of a Potential
Event of Default or an Event of Default, (i) Company may not elect to have a
Loan be made or maintained as, or converted to, a Eurodollar Rate Loan after the
expiration of any Interest Period then in effect for that Loan and (ii) subject
to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed for a Base
Rate Loan or, if the conditions to making a Loan set forth in subsection 4.2
cannot then be satisfied, to be rescinded by Company.

2.7 Increased Costs; Taxes;
Capital Adequacy.

A. Compensation for Increased Costs.
Subject to the provisions of subsection 2.7B (which shall be controlling with
respect to the matters covered thereby), in the event that any Lender (including
any Issuing Lender) shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):

  
    (i) subjects such Lender to any
    additional Tax with respect to this Agreement or any of its obligations
    hereunder (including with respect to issuing or maintaining any Letters of
    Credit or purchasing or maintaining any participations therein or
    maintaining any Commitment hereunder) or any payments to such Lender of
    principal, interest, fees or any other amount payable hereunder;

    (ii) imposes, modifies or holds
    applicable any reserve, special deposit, compulsory loan, insurance charge
    or similar requirement against assets held by, or deposits or other
    liabilities in or for the account of, or advances or loans by, or other
    credit extended by, or any other acquisition of funds by, any office of such
    Lender (other than any such reserve or other requirements with respect to
    Eurodollar Rate Loans that are reflected in the definition of Adjusted
    Eurodollar Rate); or

    (iii) imposes any other condition
    (other than with respect to Taxes) on or affecting such Lender or its
    obligations hereunder or the interbank Eurodollar market;

  

and the result of any of the foregoing is to increase the
cost to such Lender of agreeing to make, making or maintaining its Loans or
Commitments or agreeing to issue, issuing or maintaining any Letter of Credit or
agreeing to purchase, purchasing or maintaining any participation therein or to
reduce any amount received or receivable by such Lender with respect thereto;
then, in any such case, Company shall promptly pay to such Lender, upon receipt
of the statement referred to in subsection 2.8A, such additional amount or
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder; provided
that Company shall not be obligated to pay such additional amounts to the extent
such additional amounts are incurred more than nine (9) months prior to the
giving of such statement.

B. Taxes.

  
  
  (i) Payments to Be Free and
  Clear. All sums payable by Company under this Agreement and the other Loan
  Documents shall be paid free and clear of, and without any deduction or
  withholding on account of, any Tax imposed, levied, collected, withheld or
  assessed by or within the United States of America or any political
  subdivision in or of the United States of America or any other jurisdiction
  from or to which a payment is made by or on behalf of Company or by any
  federation or organization of which the United States of America or any such
  jurisdiction is a member at the time of payment.

  (ii) Grossing-up of Payments.
  If Company or any other Person is required by law to make any deduction or
  withholding on account of any such Tax from any sum paid or payable by Company
  to Agent or any Lender under any of the Loan Documents:

  
    (a) Company shall notify Agent of
    any such requirement or any change in any such requirement as soon as
    Company becomes aware of it;

    (b) Company shall pay any such
    Tax when such Tax is due, such payment to be made (if the liability to pay
    is imposed on Company) for its own account or (if that liability is imposed
    on Agent or such Lender, as the case may be) on behalf of and in the name of
    Agent or such Lender;

    (c) the sum payable by Company in
    respect of which the relevant deduction, withholding or payment is required
    shall be increased to the extent necessary to ensure that, after the making
    of that deduction, withholding or payment, Agent or such Lender, as the case
    may be, receives on the due date a net sum equal to what it would have
    received had no such deduction, withholding or payment been required or
    made; and

    (d) within 30 days after paying
    any sum from which it is required by law to make any deduction or
    withholding, and within 30 days after the due date of payment of any Tax
    which it is required by clause (b) above to pay, Company shall deliver to
    Agent evidence satisfactory to the other affected parties of such deduction,
    withholding or payment and of the remittance thereof to the relevant taxing
    or other authority;

  

provided that no such additional amount shall be required
to be paid to any Lender under clause (c) above except to the extent that any
change after the date on which such Lender became a Lender in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date on which such Lender became a Lender, in
respect of payments to such Lender.

  
    (iii) Evidence of Exemption
    from U.S. Withholding Tax.

    
      (a) Each Lender that is
      organized under the laws of any jurisdiction other than the United States
      or any state or other political subdivision thereof (for purposes of this
      subsection 2.7B(iii), a "Non-US Lender") shall deliver to Agent
      and to Company, on or prior to the Closing Date (in the case of each
      Lender listed on the signature pages hereof) or on or prior to the date of
      the Assignment Agreement pursuant to which it becomes a Lender (in the
      case of each other Lender), and at such other times as may be necessary in
      the determination of Company or Agent (each in the reasonable exercise of
      its discretion), two original copies of Internal Revenue Service Form
      W-8BEN or W-8ECI (or any successor forms) properly completed and duly
      executed by such Lender, together with any other certificate or statement
      of exemption required under the Internal Revenue Code or the regulations
      issued thereunder to establish that such Lender is not subject to United
      States withholding tax with respect to any payments to such Lender of
      interest, fees or other amounts payable under any of the Loan Documents.

      (b) Each Non-US Lender hereby
      agrees, from time to time after the initial delivery by such Lender of
      such forms, certificates or other evidence, whenever a lapse in time or
      change in circumstances renders such forms, certificates or other evidence
      so delivered obsolete or inaccurate in any material respect, that such
      Lender shall promptly (1) deliver to Agent and to Company two original
      copies of renewals, amendments or additional or successor forms, properly
      completed and duly executed by such Lender, together with any other
      certificate or statement of exemption required in order to confirm or
      establish that such Lender is not subject to United States withholding tax
      with respect to payments to such Lender under the Loan Documents or (2)
      notify Agent and Company of its inability to deliver any such forms,
      certificates or other evidence.

      (c) Company shall not be
      required to pay any additional amount to any Non-US Lender under clause
      (c) of subsection 2.7B(ii) if such Lender shall have failed to satisfy the
      requirements of clause (a) or (b)(1) of this subsection 2.7B(iii); provided
      that if such Lender shall have satisfied the requirements of subsection
      2.7B(iii)(a) on the date such Lender became a Lender, nothing in this
      subsection 2.7B(iii)(c) shall relieve Company of its obligation to pay any
      amounts pursuant to subsection 2.7B(ii)(c) in the event that, as a result
      of any change in any applicable law, treaty or governmental rule,
      regulation or order, or any change in the interpretation, administration
      or application thereof, such Lender is no longer properly entitled to
      deliver forms, certificates or other evidence at a subsequent date
      establishing the fact that such Lender is not subject to withholding as
      described in subsection 2.7B(iii)(a).

    

  

C. Capital Adequacy Adjustment.
If any Lender shall have determined that the adoption, effectiveness, phase-in
or applicability after the date hereof of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Government Authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive regarding capital adequacy (whether or
not having the force of law) of any such Government Authority, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in subsection 2.8A, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction; provided
that Company shall not be obligated to pay such additional amounts to the extent
such additional amounts are incurred more than nine (9) months prior to the
giving of such statement.

2.8 Statement of Lenders;
Obligation of Lenders and Issuing Lenders to Mitigate.

A. Statements. Each Lender
claiming compensation or reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B
shall deliver to Company (with a copy to Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such compensation or
reimbursement, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.

B. Mitigation. Each Lender and
Issuing Lender agrees that, as promptly as practicable after the officer of such
Lender or Issuing Lender responsible for administering the Loans or Letters of
Credit of such Lender or Issuing Lender, as the case may be, becomes aware of
the occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender or Issuing
Lender to receive payments under subsection 2.7, use reasonable effort to make,
issue, fund or maintain the Commitments of such Lender or the Affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, if (i) as a result
thereof the circumstances which would cause such Lender to be an Affected Lender
would cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender or Issuing Lender pursuant to subsection 2.7 would be
materially reduced and (ii) as determined by such Lender or Issuing Lender in
its sole discretion, such action would not otherwise be disadvantageous to such
Lender or Issuing Lender; provided that such Lender or Issuing Lender
will not be obligated to utilize such other lending or letter of credit office
pursuant to this subsection 2.8B unless Company agrees to pay all incremental
expenses incurred by such Lender or Issuing Lender as a result of utilizing such
other lending or letter of credit office as described above.

2.9 Replacement of a Lender.

If Company receives a statement of
amounts due pursuant to subsection 2.7A or 2.8A from a Lender or a Lender
becomes an Affected Lender (any such Lender, a "Subject Lender"),
so long as (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing and Company has obtained a commitment from another
Lender or an Eligible Assignee to purchase at par the Subject Lender's Loans and
assume the Subject Lender's Commitments and all other obligations of the Subject
Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any
Letters of Credit outstanding (unless all such Letters of Credit are terminated
or arrangements acceptable to such Issuing Lender (such as a
"back-to-back" letter of credit) are made) and (iii), if applicable,
the Subject Lender is unwilling to withdraw the notice delivered to Company
pursuant to subsection 2.8 upon 10 days prior written notice to the Subject
Lender and Agent, Company may require the Subject Lender to assign all of its
Loans and Commitments to such other Lender, Lenders, Eligible Assignee or
Eligible Assignees pursuant to the provisions of subsection 10.1B; provided
that, prior to or concurrently with such replacement (1) Company has paid to the
Lender giving such notice all amounts under subsections 2.6D, 2.7 and/or 2.8B
(if applicable) through such date of replacement, (2) the processing fee
required to be paid by subsection 10.1B(i) shall have been paid to Agent, and
(3) all of the requirements for such assignment contained in subsection 10.1B,
including, without limitation, the consent of Agent (if required) and the
receipt by Agent of an executed Assignment Agreement and other supporting
documents, have been fulfilled.

2.10 Collection, Deposit
and Transfer of Payments in Respect of Accounts.

Subject to subsection 2.10G, Company
shall, and shall cause each of its Domestic Subsidiaries to, maintain in effect
at all times a system of accounts and procedures reasonably satisfactory to
Agent for the collection and deposit of payments in respect of such Person's
Accounts and the transfer of amounts so deposited to the applicable
Concentration Account and BTCo Account. Without limiting the generality of the
foregoing:

A. Maintenance of Lock Boxes, Lock
Box Accounts and Concentration Accounts.

  
  
  (i) Except as permitted under
  subsection 2.10A(ii), Company shall, and shall cause each of its Domestic
  Subsidiaries to, at all times maintain any Lock Boxes, Lock Box Accounts and
  Concentration Accounts established pursuant to the terms of this Agreement,
  the Lock Box Agreements and the Blocked Account Agreements, if any.

  (ii) Without the prior written
  approval of Agent, Company shall not, and shall not permit any of its Domestic
  Subsidiaries to, close any Lock Box Account or Concentration Account or open a
  new Lock Box Account or Concentration Account. As soon as practicable, the
  Company shall, and shall cause each of its Domestic Subsidiaries to, transfer
  each of its Deposit Accounts to Agent and, in any event, after the six-month
  anniversary of the Closing Date, the Company will not, and will not permit any
  of its Domestic Subsidiaries to, maintain a Deposit Account at any other
  financial institution other than Agent without the prior written consent of
  Agent. Notwithstanding anything herein to the contrary, Company and its
  Domestic Subsidiaries may maintain certain petty cash Deposit Accounts with
  financial institutions other than Agent (the "Petty Cash Accounts")
  which Petty Cash Accounts are not required to be subject to a Lock Box
  Agreement or Blocked Account Agreement provided that individual Petty
  Cash Accounts do not contain more than $50,000 at any time and that all such
  Petty Cash Accounts do not contain more than $300,000 in the aggregate at any
  time.

B. Collection and Deposit of Payments
in Respect of Accounts.

  
  
  (i) Company shall, and shall cause
  each of its Domestic Subsidiaries to, deliver such notices to account debtors
  and take all such other actions as may reasonably be necessary to cause all
  payments in respect of such Person's Accounts to be made directly to a Lock
  Box.

  (ii) Until such time as a Lock Box
  Agreement has been executed and delivered with respect to such Lock Box,
  Company shall, or shall cause each of its Domestic Subsidiaries to, direct its
  authorized representative, at least once on each Business Day, to retrieve all
  checks and other instruments delivered to a Lock Box and, as promptly as
  possible on the same Business Day so retrieved, to endorse for payment and
  deposit each such check or other instrument in the Lock Box Account related to
  such Lock Box. Notwithstanding the foregoing, if a Cash Management Triggering
  Event has occurred and is continuing and Agent has notified Company of its
  election to exercise its rights under this subsection 2.10B(ii), Company shall
  not, and shall not permit its Subsidiaries to, retrieve any items from any
  Lock Box unless accompanied by a representative of Agent, and Company hereby
  appoint Agent or any of its designees as Company's attorneys-in-fact with
  powers, upon notification by Agent as aforesaid, to (a) access all Lock
  Boxes and (b) endorse for payment any checks or other instruments representing
  payment in respect of any Accounts of such Persons that are delivered to any
  Lock Box. All acts of said attorneys or designees are hereby ratified and
  approved, and said attorneys or designees shall not be liable for any acts of
  omission or commission (other than acts or omissions constituting gross
  negligence or wilful misconduct as determined in a final order by a court of
  competent jurisdiction), nor for any error of judgment or mistake of fact or
  law. The power of attorney set forth in this subsection 2.10B(ii) is
  irrevocable until all Obligations shall have been paid in full and the
  Commitments shall have terminated.

  (iii) In the event that Company or
  any of its Domestic Subsidiaries receives any check, cash, note or other
  instrument representing payment of an Account (other than any item delivered
  to a Lock Box), Company shall, or shall cause such Domestic Subsidiary to,
  hold such item in trust for Agent and shall, as soon as practicable (and in
  any event within one Business Day) after receipt thereof, cause such item to
  be deposited into a Lock Box Account with any necessary endorsements.

  (iv) Company hereby agrees, if a
  Cash Management Triggering Event has occurred and is continuing and Agent has
  notified Company in writing that the provisions of this subsection 2.10B(iv)
  are to become effective until such later time, if any, as Agent shall have
  notified Company in writing that such provisions are no longer to be
  effective, not to deposit any monies into the Lock Box Accounts or to
  Concentration Accounts or to otherwise permit any monies to be deposited into
  any of such accounts, except payments received in respect of Company's
  Accounts.

C. Transfer of Amounts Deposited in
the Lock Box Accounts to the Concentration Accounts. Company shall cause all
amounts deposited in each Lock Box Account to be transferred on each Business
Day to the applicable Concentration Account in accordance with the terms of the
applicable Lock Box Agreement.

D. Transfer of Amounts Deposited in
the Concentration Accounts to the BTCo Account. Company shall cause all
amounts deposited in each Concentration Account to be transferred on each
Business Day to the BTCo Account. Any amounts so transferred to the BTCo Account
first shall be applied as provided in subsection 2.4A(iii)(b) to the
extent therein provided and thereafter, so long as no Event of Default
shall have occurred and be continuing, shall be available for disbursement to
the applicable Loan Parties for working capital and other general corporate
purposes.

E. Treatment of Accounts. Company
shall not, without Agent's prior written consent, grant any extension of the
time of payment of any Account, compromise or settle any Account for less than
the full amount thereof, release, in whole or in part, any person or property
liable for the payment thereof, or allow any credit or discount whatsoever
thereon, except, so long as no Event of Default has occurred and is continuing,
in accordance with their usual and customary business practices.

F. Company to Provide Information.
Company shall, at such intervals as Agent may reasonably request, furnish such
statements, schedules and/or information as Agent may request relating to
Company's and its Domestic Subsidiaries' Accounts and the collection, deposit
and transfer of payments in respect thereof, including, without limitation, all
invoices evidencing such Accounts.

G. Interim Cash Management
Arrangements. Notwithstanding the foregoing provisions of this subsection
2.10, the procedures described in subsections 2.10A through 2.10F (the
"Credit Agreement Cash Management Procedures") shall be implemented as
soon as practical after the Closing Date but in any event on or before the
six-month anniversary of the Closing Date and, prior to such implementation,
Company and Domestic Subsidiaries may continue utilizing their existing cash
collection and cash management systems in accordance with the provisions of this
subsection 2.10G. Company has advised Agent that Company currently has a lockbox
arrangement (the "BOA Lockbox") with Bank of America N.A.
("BOA") pursuant to which Company and its Domestic Subsidiaries cause
to be deposited upon receipt into the accounts (the "Blocked
Accounts") identified in the Third Party Agreement Relating to Lockbox
Services dated as of September 8, 2000 (the "BOA Blocked Account
Agreement") among Company, certain of Company's Domestic Subsidiaries,
Agent and BOA all of the cash, checks, drafts or other orders for payment of
money relating to or constituting payments made in respect of all present and
future accounts receivable and proceeds thereof of Company and such Domestic
Subsidiaries. Prior to the implementation of the Credit Agreement Cash
Management Procedures, Company shall, and shall cause its Domestic Subsidiaries
to, continue to operate their existing cash collection and cash management
systems, including the BOA Lockbox, in accordance with the procedures in effect
on the Closing Date, and without the prior written approval of Agent, Company
shall not, and shall not permit any of its Domestic Subsidiaries to, terminate
or otherwise modify the BOA Lockbox procedures from those in effect on the
Closing Date. Company acknowledges and agrees that upon the occurrence of an
Event of Default or a Cash Management Triggering Event, Agent may implement the
procedures provided for in the BOA Blocked Account Agreement and exercise all of
its rights and remedies thereunder. Company agrees to furnish from time to time
upon Agent's request therefor such information with respect to the Blocked
Accounts and the BOA Lockbox, including without limitation statements of
account, copies of checks or other remittances or deposit advices, as may be
reasonably requested by Agent.

Section 3. LETTERS OF CREDIT

3.1 Issuance of Letters of
Credit and Lenders' Purchase of Participations Therein.

A. Letters of Credit. In addition
to Company requesting that Lenders make Revolving Loans pursuant to subsection
2.1A(i), Company may request, in accordance with the provisions of this
subsection 3.1, from time to time during the period from the Closing Date to the
date that is thirty (30) days prior to the Revolving Loan Commitment Termination
Date, that one or more Revolving Lenders issue Commercial Letters of Credit or
Standby Letters of Credit for the account of Company for the purposes specified
in the definition of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Company herein set forth, any one or more
Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that neither Company shall request that any
Revolving Lender issue (and no Revolving Lender shall issue):

  
    (i) any Letter of Credit if,
    after giving effect to such issuance, the sum of the Total Utilization of
    Revolving Loan Commitments would exceed the Revolving Loan Commitments then
    in effect;

    (ii) any Letter of Credit if,
    after giving effect to such issuance, the Letter of Credit Usage would
    exceed an amount (the "Maximum Letter of Credit Usage") equal to
    $2,000,000 minus the amount of any Hedge Exposure;

    (iii) any Letter of Credit if,
    after giving effect to such issuance, the Total Utilization of Revolving
    Loan Commitments would exceed the Borrowing Base then in effect;

    (iv) so long as the Senior Notes
    are outstanding, any Letter of Credit, if after giving effect to such
    issuance, the Total Utilization of Revolving Loan Commitments would exceed
    the limitations on the incurrence of debt contained in Sections 11.3(c) and
    11.4 of the Senior Note Agreement;

    (v) any Standby Letter of Credit
    having an expiration date later than the earlier of (a) five Business
    Days prior to the Revolving Loan Commitment Termination Date and
    (b) the date which is one year from the date of issuance of such Letter
    of Credit; provided that the immediately preceding clause (b) shall
    not prevent any Issuing Lender from agreeing that a Standby Letter of Credit
    will automatically be extended for one or more successive periods not to
    exceed one year each unless such Issuing Lender elects not to extend for any
    such additional period; and provided, further that such
    Issuing Lender shall elect not to extend such Standby Letter of Credit if it
    has knowledge that an Event of Default has occurred and is continuing (and
    has not been waived in accordance with subsection 10.6) at the time such
    Issuing Lender must elect whether or not to allow such extension;

    (vi) any Commercial Letter of
    Credit having an expiration date (a) later than the earlier of (X) the date
    which is 30 days prior to the Revolving Loan Commitment Termination Date and
    (Y) the date which is 180 days from the date of issuance of such Commercial
    Letter of Credit or (b) that is otherwise unacceptable to the applicable
    Issuing Lender in its reasonable discretion; or

    (vii) any Letter of Credit
    denominated in a currency other than Dollars or Canadian Dollars.

    (viii) any Letter of Credit which
    would require drawings other than sight drawings.

  

B. Mechanics of Issuance.

  
    
      
      
      (i) Notice of Issuance.
      Whenever Company desires the issuance of a Letter of Credit, it shall
      deliver to Agent, in any manner provided for in subsection 10.8, a
      Request for Issuance of Letter of Credit in the form of Exhibit III
      annexed hereto no later than 12:00 Noon (New York City time) at least
      three Business Days (in the case of Standby Letters of Credit) or five
      Business Days (in the case of Commercial Letters of Credit), or such
      shorter period as may be agreed to by the Issuing Lender in any particular
      instance, in advance of the proposed date of issuance. The Issuing Lender,
      in its reasonable discretion, may require changes in the text of the
      proposed Letter of Credit or any documents described in or attached to the
      Request for Issuance of Letter of Credit.

      Company shall notify the
      applicable Issuing Lender (and Agent, if Agent is not such Issuing Lender)
      prior to the issuance of any Letter of Credit in the event that any of the
      matters to which Company is required to certify in the applicable Request
      for Issuance of Letter of Credit is no longer true and correct as of the
      proposed date of issuance of such Letter of Credit, and upon the issuance
      of any Letter of Credit Company shall be deemed to have re-certified, as
      of the date of such issuance, as to the matters to which Company is
      required to certify in the applicable Request for Issuance of Letter of
      Credit.

      (ii) Determination of
      Issuing Lender. Upon receipt by Agent of a Request for Issuance of
      Letter of Credit pursuant to subsection 3.1B(i) requesting the issuance of
      a Letter of Credit, in the event Agent elects to issue such Letter of
      Credit, Agent shall promptly so notify Company, and Agent shall be the
      Issuing Lender with respect thereto. In the event that Agent, in its sole
      discretion, elects not to issue such Letter of Credit, Agent shall
      promptly so notify Company, whereupon Company may request any other
      Revolving Lender to issue such Letter of Credit by delivering to such
      Revolving Lender a copy of the applicable Request for Issuance of Letter
      of Credit. Any Revolving Lender so requested to issue such Letter of
      Credit shall promptly notify Company and Agent whether or not, in its sole
      discretion, it has elected to issue such Letter of Credit, and any such
      Revolving Lender which so elects to issue such Letter of Credit shall be
      the Issuing Lender with respect thereto. In the event that all other
      Revolving Lenders shall have declined to issue such Letter of Credit,
      notwithstanding the prior election of Agent not to issue such Letter of
      Credit, Agent shall be obligated to issue such Letter of Credit and shall
      be the Issuing Lender with respect thereto, notwithstanding the fact that
      the Letter of Credit Usage with respect to such Letter of Credit and with
      respect to all other Letters of Credit issued by Agent, when aggregated
      with Agent's outstanding Revolving Loans, may exceed Agent's Revolving
      Loan Commitment then in effect.

      (iii) Issuance of Letter of
      Credit. Upon satisfaction or waiver (in accordance with subsection
      10.6) of the conditions set forth in subsection 4.3, the Issuing Lender
      shall issue the requested Letter of Credit in accordance with the Issuing
      Lender's standard operating procedures.

      (iv) Notification to
      Revolving Lenders. Upon the issuance of or amendment to any Standby
      Letter of Credit the Issuing Lender shall promptly notify Agent and
      Company, in writing, of such issuance or amendment and such notice shall
      be accompanied by a copy of such issuance or amendment. Promptly upon
      receipt of such notice (or, if Agent is the Issuing Lender, together with
      such notice), Agent shall notify each Revolving Lender of such issuance or
      amendment, and if so requested by any Revolving Lender, Agent shall
      provide such Lender with copies of any such Standby Letter of Credit
      issuance or amendment. In the case of Commercial Letters of Credit, in the
      event that the Issuing Lender is other than Agent, such Issuing Lender
      will send by facsimile transmission to the Agent, promptly on the first
      Business Day of each week, a report of its daily aggregate maximum amount
      available for drawing under Commercial Letters of Credit for the previous
      week. Promptly upon receipt of such report, Agent shall notify each
      Revolving Lender, in writing, of the contents of such reports.

    

  

C. Revolving Lenders' Purchase of
Participations in Letters of Credit. Immediately upon the issuance of each
Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees
to, have irrevocably purchased from the Issuing Lender a participation in such
Letter of Credit and any drawings honored thereunder in an amount equal to such
Revolving Lender's Pro Rata Share of the maximum amount which is or at any time
may become available to be drawn thereunder.

3.2 Letter of Credit Fees.

Company agrees to pay the following
amounts with respect to Letters of Credit issued hereunder:

  
    (i) with respect to each Letter
    of Credit, (a) a fronting fee, payable directly to the applicable
    Issuing Lender for its own account, equal to the greater of (X) $150 and (Y)
    0.25% per annum of the daily amount available to be drawn under such Letter
    of Credit and (b) a letter of credit fee, payable to Agent for the
    account of Revolving Lenders, equal to the applicable Eurodollar Rate Margin
    for Revolving Loans multiplied by the daily amount available to be
    drawn under such Letter of Credit, in each case payable in arrears on and to
    (but excluding) the first Business Day of each March, June, September and
    December of each year and computed on the basis of a 360-day year for the
    actual number of days elapsed;

    (ii) with respect to the
    issuance, amendment or transfer of each Letter of Credit and each payment of
    a drawing made thereunder (without duplication of the fees payable under
    clause (i) above), documentary and processing charges, payable directly to
    the applicable Issuing Lender for its own account, in accordance with such
    Issuing Lender's standard schedule for such charges in effect at the time of
    such issuance, amendment, transfer or payment, as the case may be; and

    (iii) For purposes of calculating
    any fees payable under clause (i) of this subsection 3.2, the daily amount
    available to be drawn under any Letter of Credit shall be determined as of
    the close of business on any date of determination. Promptly upon receipt by
    Agent of any amount described in clause (i)(b) of this subsection 3.2, Agent
    shall distribute to each Revolving Lender its Pro Rata Share of such amount.

  

3.3 Drawings and
Reimbursement of Amounts Drawn Under Letters of Credit.

A. Responsibility of Issuing Lender
With Respect to Drawings. In determining whether to honor any drawing under
any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
substantially in accordance with the terms and conditions of such Letter of
Credit.

B. Reimbursement by Company of
Amounts Paid Under Letters of Credit. In the event an Issuing Lender has
determined to honor a drawing under a Letter of Credit issued by it, such
Issuing Lender shall immediately notify Company and Agent, and Company shall
reimburse such Issuing Lender on or before the Business Day immediately
following the date on which such drawing is honored (the "Reimbursement
Date") in an amount in Dollars and in same day funds equal to the
amount of such payment; provided that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Agent and such Issuing Lender prior to 10:00 A.M. (New York City time)
on the date such drawing is honored that Company intends to reimburse such
Issuing Lender for the amount of such payment with funds other than the proceeds
of Revolving Loans, Agent shall request Revolving Lenders to make Revolving
Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
equal to the amount of such drawing and Company agrees that the Revolving Loans
under this subsection 3.3B shall be treated as Revolving Loans for all purposes
hereunder and (ii) subject to satisfaction or waiver of the conditions specified
in subsection 4.2B, Revolving Lenders shall, on the Reimbursement Date, make
Revolving Loans that are Base Rate Loans in the amount of such payment, the
proceeds of which shall be applied directly by Agent to reimburse such Issuing
Lender for the amount of such payment; and provided, further that if for any
reason proceeds of Revolving Loans are not received by such Issuing Lender on
the Reimbursement Date in an amount equal to the amount of such payment, Company
shall reimburse such Issuing Lender, on demand, in an amount in same day funds
equal to the excess of the amount of such payment over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to make
Revolving Loans on the terms and conditions set forth in this Agreement, and
Company shall retain any and all rights it may have against any Revolving Lender
resulting from the failure of such Revolving Lender to make such Revolving Loans
under this subsection 3.3B. In the event that there shall be a drawing under a
Letter of Credit denominated in Canadian Dollars, the reimbursement obligation
therefore shall be converted into U.S. Dollars at the spot exchange rate for
conversion of Canadian Dollars into U.S. Dollars at the time of such conversion
and the reimbursement obligation of Company, the amount of any Revolving Loans
made pursuant to this subsection 3.3B and the payment obligations owed to the
Issuing Lender shall all be obligations owing in U.S. Dollars.

C. Payment by Lenders of Unreimbursed
Amounts Paid Under Letters of Credit.

  
  
  (i) Payment by Revolving Lenders.
  In the event that Company shall fail for any reason to reimburse any Issuing
  Lender as provided in subsection 3.3B in an amount equal to the amount of any
  payment by such Issuing Lender under a Letter of Credit issued by it, such
  Issuing Lender shall promptly notify each other Lender of the unreimbursed
  amount of such honored drawing and of such other Revolving Lender's respective
  participation therein based on such Revolving Lender's Pro Rata Share. Each
  Revolving Lender shall make available to such Issuing Lender an amount equal
  to its respective participation, in Dollars and in same day funds, at the
  office of such Issuing Lender specified in such notice, not later than 12:00
  Noon (New York City time) on the first business day (under the laws of the
  jurisdiction in which such office of such Issuing Lender is located) after the
  date notified by such Issuing Lender. In the event that any Revolving Lender
  fails to make available to such Issuing Lender on such business day the amount
  of such Revolving Lender's participation in such Letter of Credit as provided
  in this subsection 3.3C, such Issuing Lender shall be entitled to recover such
  amount on demand from such Revolving Lender together with interest thereon at
  the rate customarily used by such Issuing Lender for the correction of errors
  among banks for three Business Days and thereafter at the Base Rate. Nothing
  in this subsection 3.3C shall be deemed to prejudice the right of any Lender
  to recover from any Issuing Lender any amounts made available by such
  Revolving Lender to such Issuing Lender pursuant to this subsection 3.3C in
  the event that it is determined by the final judgment of a court of competent
  jurisdiction that the payment with respect to a Letter of Credit by such
  Issuing Lender in respect of which payment was made by such Revolving Lender
  constituted gross negligence or willful misconduct on the part of such Issuing
  Lender.

  (ii) Distribution to Lenders of
  Reimbursements Received From Company. In the event any Issuing Lender
  shall have been reimbursed by other Revolving Lenders pursuant to subsection
  3.3C(i) for all or any portion of any payment by such Issuing Lender under a
  Letter of Credit issued by it, such Issuing Lender shall distribute to each
  other Revolving Lender that has paid all amounts payable by it under
  subsection 3.3C(i) with respect to such payment such other Revolving Lender's
  Pro Rata Share of all payments subsequently received by such Issuing Lender
  from Company in reimbursement of such payment under the Letter of Credit when
  such payments are received. Any such distribution shall be made to a Revolving
  Lender at its primary address set forth below its name on the appropriate
  signature page hereof or at such other address as such Revolving Lender may
  request.

D. Interest on Amounts Paid Under
Letters of Credit.

  
  
  (i) Payment of Interest by Company.
  Company agrees to pay to each Issuing Lender, with respect to payments under
  any Letters of Credit issued by it, interest on the amount paid by such
  Issuing Lender in respect of each such payment from the date a drawing is
  honored to but excluding the date such amount is reimbursed by Company
  (including any such reimbursement out of the proceeds of Revolving Loans
  pursuant to subsection 3.3B) at a rate equal to (a) for the period from the
  date such drawing is honored to but excluding the Reimbursement Date, the rate
  then in effect under this Agreement with respect to Revolving Loans that are
  Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess of
  the rate of interest otherwise payable under this Agreement with respect to
  Revolving Loans that are Base Rate Loans. Interest payable pursuant to this
  subsection 3.3D(i) shall be computed on the basis of a 360-day year for the
  actual number of days elapsed in the period during which it accrues and shall
  be payable on demand or, if no demand is made, on the date on which the
  related drawing under a Letter of Credit is reimbursed in full.

  (ii) Distribution of Interest
  Payments by Issuing Lender. Promptly upon receipt by any Issuing Lender of any
  payment of interest pursuant to subsection 3.3D(i) with respect to a payment
  under a Letter of Credit issued by it, (a) such Issuing Lender shall
  distribute to each other Revolving Lender, out of the interest received by
  such Issuing Lender in respect of the period from the date such drawing is
  honored to but excluding the date on which such Issuing Lender is reimbursed
  for the amount of such payment (including any such reimbursement out of the
  proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that such
  other Revolving Lender would have been entitled to receive in respect of the
  letter of credit fee that would have been payable in respect of such Letter of
  Credit for such period pursuant to subsection 3.2 if no drawing had been
  honored under such Letter of Credit, and (b) in the event such Issuing Lender
  shall have been reimbursed by other Revolving Lenders pursuant to subsection
  3.3C(i) for all or any portion of such payment, such Issuing Lender shall
  distribute to each other Revolving Lender that has paid all amounts payable by
  it under subsection 3.3C(i) with respect to such payment such other Revolving
  Lender's Pro Rata Share of any interest received by such Issuing Lender in
  respect of that portion of such payment so reimbursed by other Revolving
  Lenders for the period from the date on which such Issuing Lender was so
  reimbursed by other Revolving Lenders to but excluding the date on which such
  portion of such payment is reimbursed by Company. Any such distribution shall
  be made to a Revolving Lender at its primary address set forth below its name
  on the appropriate signature page hereof or at such other address as such
  Revolving Lender may request.

3.4 Obligations Absolute.

The obligation of Company to
reimburse each Issuing Lender for payments under the Letters of Credit issued by
it and to repay any Revolving Loans made by Revolving Lenders pursuant to
subsection 3.3B and the obligations of Revolving Lenders under subsection
3.3C(i) shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances including
any of the following circumstances:

  
    (i) any lack of validity or enforceability of any
    Letter of Credit;

    (ii) the existence of any claim, set-off, defense
    or other right which Company or any Lender may have at any time against a
    beneficiary or any transferee of any Letter of Credit (or any Persons for
    whom any such transferee may be acting), any Issuing Lender or other
    Revolving Lender or any other Person or, in the case of a Revolving Lender,
    against Company, whether in connection with this Agreement, the transactions
    contemplated herein or any unrelated transaction (including any underlying
    transaction between Company or one of its Subsidiaries and the beneficiary
    for which any Letter of Credit was procured);

    (iii) any draft or other document presented under
    any Letter of Credit proving to be forged, fraudulent, invalid or
    insufficient in any respect or any statement therein being untrue or
    inaccurate in any respect;

    (iv) payment to the beneficiary of such Letter of
    Credit by the applicable Issuing Lender under any Letter of Credit against
    presentation of a draft or other document which does not substantially
    comply with the terms of such Letter of Credit;

    (v) any adverse change in the business,
    operations, properties, assets, condition (financial or otherwise) or
    prospects of Company or any of its Subsidiaries;

    (vi) any breach of this Agreement or any other
    Loan Document by any party thereto;

    (vii) any other circumstance or happening
    whatsoever, whether or not similar to any of the foregoing; or

    (viii) the fact that an Event of Default or a
    Potential Event of Default shall have occurred and be continuing;

  

provided, in each case, that payment by the applicable
Issuing Lender under the applicable Letter of Credit shall not have constituted
gross negligence or willful misconduct of such Issuing Lender under the
circumstances in question (as determined by a final judgment of a court of
competent jurisdiction).

3.5 Indemnification; Nature
of Issuing Lenders' Duties.

A. Indemnification. In addition
to amounts payable as provided in subsection 2.7, Company hereby agrees to
protect, indemnify, pay and save harmless each Issuing Lender from and against
any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable fees, expenses and disbursements of outside
counsel and allocated costs of internal counsel) which such Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (i) the issuance
of any Letter of Credit by such Issuing Lender, other than as a result of (a)
the gross negligence or willful misconduct of such Issuing Lender as determined
by a final judgment of a court of competent jurisdiction or (b) subject to the
following clause (ii), the wrongful dishonor by such Issuing Lender of a proper
demand for payment made under any Letter of Credit issued by it or (ii) the
failure of such Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority.

B. Nature of Issuing Lenders' Duties.
As between Company and any Issuing Lender, Company assumes all risks of the acts
and omissions of, or misuse of the Letters of Credit issued by such Issuing
Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Government Authority specified in subsection 3.5A, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.

In furtherance and extension and not
in limitation of the specific provisions set forth in the first paragraph of
this subsection 3.5B, any action taken or omitted by any Issuing Lender under or
in connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
put such Issuing Lender under any resulting liability to Company.

Notwithstanding anything to the
contrary contained in this subsection 3.5, Company shall retain any and all
rights it may have against any Issuing Lender for any liability arising solely
out of the gross negligence or willful misconduct of such Issuing Lender, as
determined by a final judgment of a court of competent jurisdiction or the
wrongful dishonor of a demand for payment substantially in accordance with the
terms and conditions of such Letter of Credit, provided such dishonor is
not the result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority.

Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT

The obligations of Lenders to make
Revolving Loans and the issuance of Letters of Credit hereunder are subject to
the satisfaction of the following conditions.

4.1 Conditions to Initial
Revolving Loans.

The obligations of Lenders to make
the Revolving Loans to be made on the Closing Date are, in addition to the
conditions precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:

A. Loan Party Documents. On or
before the Closing Date, Company shall, and shall cause each other Loan Party
to, deliver to Lenders (or to Agent with sufficient originally executed copies,
where appropriate, for each Lender) the following with respect to Company or
such Loan Party, as the case may be, each, unless otherwise noted, dated the
Closing Date:

  
    (i) Copies of the Organizational
    Documents of such Person, certified by the Secretary of State of its
    jurisdiction of organization or, if such document is of a type that may not
    be so certified, certified by the secretary or similar officer of the
    applicable Loan Party, together with a good standing certificate from the
    Secretary of State of its jurisdiction of organization and each other state
    in which such Person is qualified to do business and, to the extent
    generally available, a certificate or other evidence of good standing as to
    payment of any applicable franchise or similar taxes from the appropriate
    taxing authority of each of such jurisdictions, each dated a recent date
    prior to the Closing Date except in jurisdictions where the failure to be so
    qualified or in good standing has not had and could not reasonably be
    expected to have a Material Adverse Effect;

    (ii) Resolutions of the Governing
    Body of such Person approving and authorizing the execution, delivery and
    performance of the Loan Documents to which it is a party, certified as of
    the Closing Date by the secretary or similar officer of such Person as being
    in full force and effect without modification or amendment;

    (iii) Signature and incumbency
    certificates of the officers of such Person executing the Loan Documents to
    which it is a party;

    (iv) Executed originals of the
    Loan Documents to which such Person is a party; and

    (v) Such other documents as Agent
    may reasonably request.

  

B. Fees. Company shall have paid
to Agent, for distribution (as appropriate) to Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.

C. Corporate and Capital Structure,
and Ownership.

  
  
  (i) Corporate Structure. The
  corporate organizational structure of Company and its Subsidiaries shall be
  satisfactory to Agent.

  (ii) Capital Structure and
  Ownership. The capital structure and ownership of Company shall be
  satisfactory to Agent.

D. Representations and Warranties;
Performance of Agreements. Company shall have delivered to Agent an
Officer's Certificate, in form and substance satisfactory to Agent, to the
effect that the representations and warranties in Section 5 hereof are true,
correct and complete in all material respects on and as of the Closing Date to
the same extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by Agent.

E. Financial Statements; Pro Forma
Balance Sheet. On or before the Closing Date, Lenders shall have received
from Company (i) audited financial statements of Company and its
Subsidiaries for Fiscal Years ended July 2, 1999 and July 3, 1998, consisting of
consolidated balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for each such Fiscal Year, (ii) unaudited
financial statements of Company and its Subsidiaries as at March 31, 2000,
consisting of consolidated balance sheets and the related consolidated
statements of income, stockholders' equity and cash flows for the nine-month
period ending on such date, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, (iii) unaudited financial
statements of Company and its Subsidiaries as at June 30, 2000, consisting of
consolidated balance sheets and the related consolidated statements of income,
stockholder's equity and cash flows for the twelve-month period ending on such
date, which financial statements shall demonstrate that Company's Consolidated
EBITDA for the twelve-month period then ending shall not be less than
$49,000,000 (provided that such $49,000,000 may be reduced by up to $500,000 of
non-cash, non-recurring charges which are reasonably satisfactory to Agent), all
in reasonable detail and certified by the chief financial officer of Company
that they fairly present the financial condition of Company and its Subsidiaries
as at the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, (iv) pro forma consolidated balance sheets of
Company and its Subsidiaries as at June 30, 2000 giving effect to the
transactions consummated on the Closing Date, prepared in accordance with GAAP
and reflecting the consummation of the financings and other transactions
contemplated hereby, (v) projected quarterly consolidated statements of income,
balance sheets and statements of cash flows of Company and its Subsidiaries for
each remaining month in Fiscal Year 2001, and (vi) projected consolidated
balance sheets and the related consolidated statements of income, operations,
stockholders' equity and cash flows for the five-year period after the Closing
Date, all of the foregoing in clauses (i) through (vi) to be substantially
consistent with any financial statements previously delivered to Agent and, in
the case of any such financial statements for subsequent periods, substantially
consistent with any projected financial results for such periods previously
delivered to Agent and otherwise in form and substance satisfactory to Agent and
the Lenders.

F. Borrowing Base Certificate. On
or before the Closing Date, Company shall have delivered to Agent and Lenders a
Borrowing Base Certificate substantially in the form of Exhibit VIII
annexed hereto, prepared as of a recent date prior to the Closing Date.

G. Opinions of Counsel to Loan
Parties. Lenders shall have received originally executed copies of one or
more favorable written opinions of Latham & Watkins, counsel for Loan
Parties, in form and substance reasonably satisfactory to Agent and its counsel,
dated as of the Closing Date and setting forth substantially the matters in the
opinions designated in Exhibit IX annexed hereto and as to such other
matters as Agent acting on behalf of Lenders may reasonably request (this Credit
Agreement constituting a written request by Company to such counsel to deliver
such opinions to Lenders).

H. Opinions of Agent's Counsel.
Lenders shall have received originally executed copies of one or more favorable
written opinions of O'Melveny & Myers LLP, counsel to Agent, dated as of the
Closing Date, substantially in the form of Exhibit X annexed hereto.

I. Evidence of Insurance. Agent
shall have reviewed the adequacy of the types and amounts of Loan Parties'
insurance coverage, including without limitation, casualty, hazard, business
interruption and product liability insurance, and such review shall be in form
and substance satisfactory to Agent. Agent shall have received a certificate
from Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to subsection 6.4 is in full force
and effect and that Agent on behalf of Lenders has been named as additional
insured and/or loss payee thereunder to the extent required under subsection
6.4.

J. Necessary Governmental
Authorizations and Consents; Expiration of Waiting Periods, Etc. Company
shall have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents and the continued operation of
the business conducted by Company and its Subsidiaries in substantially the same
manner as conducted prior to the Closing Date. Each such Governmental
Authorization or consent shall be in full force and effect, except in a case
where the failure to obtain or maintain a Governmental Authorization or consent,
either individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.

K. Officer's Certificate Concerning
Senior Note Purchase Agreement. Company shall have delivered to Agent an
Officer's Certificate, in form and substance reasonably satisfactory to Agent,
to the effect that the making of the Loans on the Closing Date and the creation
of the Liens under the Loan Documents complies in all respects with Sections
11.3(c), 11.4 and 11.6(j) of the Senior Note Agreement and attaching a schedule
with the related calculations demonstrating such compliance.

L. Security Interests in Personal
Property. Agent shall have received evidence satisfactory to it that Company
and Subsidiary Guarantors shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of items described in
clauses (ii) and (iii) below) that may be necessary or, in the opinion of Agent,
desirable in order to create in favor of Agent, for the benefit of Lenders, a
valid and (upon such filing and recording) perfected First Priority security
interest in the entire personal property Collateral. Such actions shall include
the following:

  
    (i) Schedules to Collateral
    Documents. Delivery to Agent of accurate and complete schedules to all
    of the applicable Collateral Documents;

    (ii) Lien Searches and UCC
    Termination Statements. Delivery to Agent of (a) the results of a recent
    search, by a Person satisfactory to Agent, of all effective UCC financing
    statements and fixture filings and all judgment and tax lien filings which
    may have been made with respect to any personal or mixed property of any
    Loan Party, together with copies of all such filings disclosed by such
    search, and (b) UCC termination statements duly executed or agreements to
    execute by all applicable Persons for filing in all applicable jurisdictions
    as may be necessary to terminate any effective UCC financing statements or
    fixture filings disclosed in such search (other than any such financing
    statements or fixture filings in respect of Liens permitted to remain
    outstanding pursuant to the terms of this Agreement);

    (iii) UCC Financing Statements.
    Delivery to Agent of UCC financing statements duly executed by each
    applicable Loan Party with respect to all personal property Collateral of
    such Loan Party, for filing in all jurisdictions as may be necessary or, in
    the opinion of Agent, desirable to perfect the security interests created in
    such Collateral pursuant to the Collateral Documents; and

    (iv) Cash Management.
    Delivery to Agent of a Lock Box Agreement or a Blocked Account Agreement
    executed by each Person that is a party thereto with respect to each Deposit
    Account listed on Schedule I annexed to the Security Agreement (other than
    the BT Concentration Account).

  

M. [Intentionally Omitted]

N. Matters Relating to Existing
Indebtedness of Company and its Subsidiaries.

  
  
  (i) Termination of Existing
  Credit Arrangements and Related Liens; Existing Letters of Credit. On the
  Closing Date, Company and its Subsidiaries shall have (a) repaid in full all
  Indebtedness outstanding under the Third Amended and Restated Credit Agreement
  dated as of August 28, 1997 among the Company, certain of the Company's
  Subsidiaries, Bank of America National Trust and Savings Association, as
  Agent, and certain other financial institutions party thereto, (b) terminated
  any commitments to lend or make other extensions of credit thereunder, (c)
  delivered or agreed to deliver to Agent all documents or instruments necessary
  to release all Liens securing Indebtedness or other obligations of Company and
  its Subsidiaries thereunder, and (d) made arrangements satisfactory to Agent
  with respect to the cancellation of any letters of credit outstanding
  thereunder or the issuance of Letters of Credit to support the obligations of
  Company and its Subsidiaries with respect thereto.

  (ii) Existing Indebtedness to
  Remain Outstanding. Agent shall have received an Officer's Certificate of
  Company stating that, after giving effect to the transactions described in
  this subsection 4.1N, the Indebtedness of Loan Parties (other than
  Indebtedness under the Loan Documents and the Senior Notes) shall consist of
  approximately $10,000,000 in aggregate principal amount of outstanding
  Indebtedness described in Schedule 7.1 annexed hereto. The terms and
  conditions of all such Indebtedness shall be in form and in substance
  reasonably satisfactory to Agent.

O. Collateral Audits and Appraisals.
Agent shall have received audits of the Inventory and Accounts of Company and
its Subsidiaries in form, scope and substance reasonably satisfactory to Agent
and the Lenders.

P. Completion of Proceedings. All
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders, and its
counsel shall be reasonably satisfactory in form and substance to Agent and such
counsel, and Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Agent may reasonably request.

4.2 Conditions to All Loans.

The obligations of Lenders to make
Loans on each Funding Date are subject to the following further conditions
precedent:

A. Agent shall have received
before that Funding Date, in accordance with the provisions of subsection 2.1B,
an originally executed Notice of Borrowing, in each case signed by a duly
authorized Officer of Company.

B. As of that Funding Date:

  
    (i) The representations and
    warranties contained herein and in the other Loan Documents shall be true,
    correct and complete in all material respects on and as of that Funding Date
    to the same extent as though made on and as of that date, except to the
    extent such representations and warranties specifically relate to an earlier
    date, in which case such representations and warranties shall have been
    true, correct and complete in all material respects on and as of such
    earlier date;

    (ii) No event shall have occurred
    and be continuing or would result from the consummation of the borrowing
    contemplated by such Notice of Borrowing that would constitute an Event of
    Default or a Potential Event of Default;

    (iii) Each Loan Party shall have
    performed in all material respects all agreements and satisfied all
    conditions which this Agreement provides shall be performed or satisfied by
    it on or before that Funding Date;

    (iv) No order, judgment or decree
    of any arbitrator or Government Authority shall purport to enjoin or
    restrain any Lender from making the Loans to be made by it on that Funding
    Date; and

    (v) Company shall have delivered
    such other certificates or documents that Agent shall reasonably request, in
    form and substance reasonably satisfactory to Agent.

  

4.3 Conditions to Letters of
Credit.

The issuance of any Letter of Credit
hereunder (whether or not the applicable Issuing Lender is obligated to issue
such Letter of Credit) is subject to the following conditions precedent:

A. On or before the date of
issuance of the initial Letter of Credit pursuant to this Agreement, the initial
Loans shall have been made.

B. On or before the date of
issuance of such Letter of Credit, Agent shall have received, in accordance with
the provisions of subsection 3.1B(i), an executed Request for Issuance of Letter
of Credit in each case signed by a duly authorized Officer of Company, together
with all other information specified in subsection 3.1B(i) and such other
documents or information as the applicable Issuing Lender may reasonably require
in connection with the issuance of such Letter of Credit.

C. On the date of issuance of
such Letter of Credit, all conditions precedent described in subsection 4.2B
shall be satisfied to the same extent as if the issuance of such Letter of
Credit were the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.

Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to enter
into this Agreement and to make the Loans, to induce Issuing Lenders to issue
Letters of Credit and to induce Revolving Lenders to purchase participations
therein, Company represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:

5.1 Organization, Powers,
Qualification, Good Standing, Business and Subsidiaries.

A. Organization and Powers.
Each Loan Party is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization as specified in Schedule
5.1 annexed hereto. Each Loan Party has all requisite power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents to which it is a
party and to carry out the transactions contemplated thereby.

B. Qualification and Good Standing.
Each Loan Party is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

C. Conduct of Business. Company
and its Subsidiaries are engaged only in the businesses permitted to be engaged
in pursuant to subsection 7.14.

D. Subsidiaries. All of the
Subsidiaries of Company are identified in Schedule 5.1 annexed hereto, as
said Schedule 5.1 may be supplemented from time to time pursuant to the
provisions of subsection 6.1(xvi). The capital stock or similar equity interests
of each of the Subsidiaries of Company identified in Schedule 5.1 annexed
hereto (as so supplemented) are duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock or similar equity interests
constitutes Margin Stock. Each of the Subsidiaries of Company identified in Schedule
5.1 annexed hereto (as so supplemented) is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of organization set forth therein, has all requisite power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such power and
authority has not had and could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Schedule 5.1 annexed
hereto (as so supplemented) correctly sets forth the ownership interest of
Company and each of its Subsidiaries in each of the Subsidiaries of Company
identified therein.

5.2 Authorization of
Borrowing, etc.

A. Authorization of Borrowing.
The execution, delivery and performance of the Loan Documents have been duly
authorized by all necessary action on the part of each Loan Party that is a
party thereto.

B. No Conflict. The execution,
delivery and performance by Loan Parties of the Loan Documents to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Organizational Documents of Company or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its Subsidiaries,
including without limitation the Senior Note Purchase Agreement, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created under
any of the Loan Documents in favor of Agent on behalf of Lenders), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, except
for (a) such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders, and (b) with respect to the
foregoing clauses (i), (ii) and (iv) above, such violations, conflicts,
breaches, defaults and failures to obtain approvals or consents which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

C. Governmental Consents. The
execution, delivery and performance by Loan Parties of the Loan Documents to
which they are parties and the consummation of the transactions contemplated by
the Loan Documents do not and will not require any Governmental Authorization
except for (i) filings and recordings required in connection with the perfection
of the security interests granted pursuant to the Loan Documents; (ii)
registrations, consents, approvals, notices and other actions which have been
taken or obtained prior to the Closing Date; (iii) notices and other actions
required to be taken after the Closing Date relating to operating licenses,
which notices and other action will be given or taken as required in due course;
and (iv) registrations, consents, approvals, notices and other actions the
failure to obtain or take have not and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

D. Binding Obligation. Each of
the Loan Documents has been duly executed and delivered by each Loan Party that
is a party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.

5.3 Financial Condition.

Company has heretofore delivered to
Lenders, at Lenders' request, the financial statements and information described
in subsection 4.1E. All such statements other than pro forma
financial statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. None of the Loan Parties have (and none of the
Loan Parties will have following the funding of the initial Loans) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that, as of the Closing Date,
is not reflected in the foregoing financial statements or the notes thereto and,
as of any Funding Date subsequent to the Closing Date, is not reflected in the
most recent financial statements delivered to Lenders pursuant to subsection 6.1
or the notes thereto and that, in any such case, is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries taken as a whole.

5.4 No Material Adverse
Change; No Restricted Junior Payments.

Since March 31, 2000, no event
or change has occurred that has caused or evidences, either in any case or in
the aggregate, a Material Adverse Effect. Since March 31, 2000, neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.

5.5 Title to Properties;
Liens; Real Property.

A. Title to Properties; Liens.
Company and its Subsidiaries have (i) good, sufficient and legal title to (in
the case of fee interests in real property), (ii) valid leasehold interests in
(in the case of leasehold interests in real or personal property), or (iii) good
title to (in the case of all other personal property), all of their respective
properties and assets reflected in the financial statements referred to in
subsection 5.3 or in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the date of
such financial statements in the ordinary course of business or as otherwise
permitted under subsection 7.7. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.

B. Real Property. As of the
Closing Date, Schedule 5.5 annexed hereto contains a true, accurate and
complete list of (i) all Real Property Assets and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. Except as specified in Schedule 5.5 annexed
hereto, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect (except for any such agreements terminated
in the ordinary course of business) and Company does not have knowledge of any
material default that has occurred and is continuing thereunder, and each such
agreement constitutes the legally valid and binding obligation of each
applicable Loan Party, enforceable against such Loan Party in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles.

5.6 Litigation; Adverse
Facts.

Except as set forth in Schedule 5.6
annexed hereto, there are no Proceedings (whether or not purportedly on behalf
of Company or any of its Subsidiaries) at law or in equity, or before or by any
court or other Government Authority (including any Environmental Claims) that
are pending or, to the knowledge of Company, threatened against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Company nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or other Government Authority, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.

5.7 Payment of Taxes.

Except to the extent permitted by
subsection 6.3, all material tax returns and reports of Company and its
Subsidiaries required to be filed by any of them have been timely filed, and all
taxes shown on such tax returns to be due and payable and all assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises that are due
and payable have been paid when due and payable. Company knows of no proposed
tax assessment against Company or any of its Subsidiaries that (i) could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or (ii) is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.

5.8 Performance of
Agreements; Materially Adverse Agreements; Material Contracts.

A. Neither Company nor any of its
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any of its Contractual
Obligations, and no condition exists that, with the giving of notice or the
lapse of time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.

B. Neither Company nor any of its
Subsidiaries is a party to or is otherwise subject to any agreements or
instruments or any charter or other internal restrictions which, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect.

C. All Material Contracts of
Company and its Subsidiaries are in full force and effect and no material
defaults currently exist thereunder.

5.9 Governmental Regulation.

Neither Company nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.

5.10 Securities Activities.

A. Neither Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.

B. Following application of the
proceeds of each Loan, not more than 25% of the value of the assets (either of
Company only or of Company and its Subsidiaries on a consolidated basis) subject
to the provisions of subsection 7.2 or 7.7 or subject to any restriction
contained in any agreement or instrument, between Company and any Lender or any
Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.

5.11 Employee Benefit Plans.

A. Company, each of its
Subsidiaries and each of their respective ERISA Affiliates are in substantial
compliance with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their material obligations under
each Employee Benefit Plan. Each Employee Benefit Plan that is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.

B. No ERISA Event has occurred or
is reasonably expected to occur.

C. Except to the extent required
under Section 4980B of the Internal Revenue Code or except as set forth in Schedule
5.11 annexed hereto, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company, any of its Subsidiaries or any of their respective
ERISA Affiliates.

D. As of the most recent
valuation date for any Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), does not exceed
$1,000,000.

E. As of the most recent
valuation date for each Multiemployer Plan for which the actuarial report is
available, the potential liability of Company, its Subsidiaries could reasonably
be expected to incur as a result of a complete withdrawal by Company or its
Subsidiaries or any ERISA Affiliate from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA, does not exceed $1,000,000.

5.12 Certain Fees.

No broker's or finder's fee or
commission will be payable with respect to this Agreement or any of the
transactions contemplated hereby, and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.

5.13 Environmental
Protection.

Except as set forth in Schedule
5.13 annexed hereto:

  
    (i) neither Company nor any of
    its Subsidiaries nor any of their respective Facilities or operations are
    subject to any outstanding written order, consent decree or settlement
    agreement with any Person relating to (a) any Environmental Law, (b) any
    Environmental Claim, or (c) any Hazardous Materials Activity that,
    individually or in the aggregate, could reasonably be expected to have a
    Material Adverse Effect;

    (ii) neither Company nor any of
    its Subsidiaries has received any letter or request for information under
    Section 104 of the Comprehensive Environmental Response, Compensation, and
    Liability Act (42 U.S.C. Section 9604) or any comparable state law that,
    individually or in the aggregate, could reasonably be expected to have a
    Material Adverse Effect;

    (iii) there are and, to Company's
    knowledge, have been no conditions, occurrences, or Hazardous Materials
    Activities that could reasonably be expected to form the basis of an
    Environmental Claim against Company or any of its Subsidiaries that,
    individually or in the aggregate, could reasonably be expected to have a
    Material Adverse Effect;

    (iv) compliance with all current
    or reasonably foreseeable future requirements pursuant to or under
    Environmental Laws will not, individually or in the aggregate, have a
    reasonable possibility of giving rise to a Material Adverse Effect.

  

5.14 Employee Matters.

There is no strike or work stoppage
in existence or threatened involving Company or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect.

5.15 Solvency.

Each Loan Party is and, upon the
incurrence of any Obligations by such Loan Party on any date on which this
representation is made, will be, Solvent.

5.16 Matters Relating to
Collateral.

A. Creation, Perfection and Priority
of Liens. The execution and delivery of the Collateral Documents by Loan
Parties, together with (i) the actions taken on or prior to the date hereof
pursuant to subsections 4.1L and 6.8 and (ii) the delivery to Agent of any
Pledged Collateral not delivered to Agent at the time of execution and delivery
of the applicable Collateral Document (all of which Pledged Collateral has been
so delivered) are effective to create in favor of Agent for the benefit of
Lenders, as security for the respective Secured Obligations (as defined in the
applicable Collateral Document in respect of any Collateral), a valid and
perfected First Priority Lien on all of the Collateral, and all filings and
other actions necessary or desirable to perfect and maintain the perfection and
First Priority status of such Liens have been duly made or taken and remain in
full force and effect, other than the filing of any UCC financing statements
delivered to Agent for filing (but not yet filed) and the periodic filing of UCC
continuation statements in respect of UCC financing statements filed by or on
behalf of Agent.

B. Governmental Authorizations.
No authorization, approval or other action by, and no notice to or filing with,
any Government Authority is required for either (i) the pledge or grant by any
Loan Party of the Liens purported to be created in favor of Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Agent of any rights or
remedies in respect of any Collateral (whether specifically granted or created
pursuant to any of the Collateral Documents or created or provided for by
applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.

C. Absence of Third-Party Filings.
Except such as may have been filed in favor of Agent as contemplated by
subsection 5.16A and to evidence permitted lease obligations and other Liens
permitted pursuant to subsection 7.2, no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office.

D. Margin Regulations. The pledge
of the Pledged Collateral pursuant to the Collateral Documents does not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve System.

E. Information Regarding Collateral.
All information supplied to Agent by or on behalf of any Loan Party with respect
to any of the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects.

5.17 Disclosure.

No representation or warranty of
Company or any of its Subsidiaries contained in any Loan Document or in any
other document, certificate or written statement furnished to Lenders by or on
behalf of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

Section 6. COMPANY'S AFFIRMATIVE COVENANTS

Company covenants and agrees that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.

6.1 Financial Statements and
Other Reports.

Company will maintain, and cause each
of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Company will deliver to Agent
and Lenders:

  
    (i) Events of Default, etc.:
    promptly upon any officer of Company obtaining knowledge (a) of any
    condition or event that constitutes an Event of Default or Potential Event
    of Default, or becoming aware that any Lender has given any notice (other
    than to Agent) or taken any other action with respect to a claimed Event of
    Default or Potential Event of Default, (b) that any Person has given any
    notice to Company or any of its Subsidiaries or taken any other action with
    respect to a claimed default or event or condition of the type referred to
    in subsection 8.2, (c) of any condition or event that would be required to
    be disclosed in a current report filed by Company with the Securities and
    Exchange Commission on Form 8-K if Company were required to file such
    reports under the Exchange Act, or (d) of the occurrence of any event or
    change that has caused or evidences, either in any case or in the aggregate,
    a Material Adverse Effect, an Officer's Certificate specifying the nature
    and period of existence of such condition, event or change, or specifying
    the notice given or action taken by any such Person and the nature of such
    claimed Event of Default, Potential Event of Default, default, event or
    condition, and what action Company has taken, is taking and proposes to take
    with respect thereto;

    (ii) Monthly and Quarterly
    Financials: as soon as available and in any event within 30 days after
    the end of each Fiscal Month ending after the Closing Date (other than a
    Fiscal Month that is also the end of a Fiscal Quarter) and within 50 days
    after the end of each Fiscal Quarter (or, with respect to the fourth Fiscal
    Quarter, 95 days), for Fiscal Quarters ending after the Closing Date, (a)
    the consolidated and consolidating balance sheets of Company and its
    Subsidiaries as at the end of such fiscal period and the related
    consolidated and consolidating statements of income and cash flows of
    Company and its Subsidiaries for such fiscal period and for the period from
    the beginning of the then current Fiscal Year to the end of such fiscal
    period, setting forth in each case in comparative form the corresponding
    figures for the corresponding periods of the previous Fiscal Year and the
    corresponding figures from the Financial Plan for the current Fiscal Year,
    to the extent prepared for such fiscal period, all in reasonable detail and
    certified by the chief executive officer or the chief financial officer of
    Company that they fairly present, in all material respects, the financial
    condition of Company and its Subsidiaries as at the dates indicated and the
    results of their operations and their cash flows for the periods indicated,
    subject to changes resulting from audit and normal year-end adjustments, and
    (b) for Fiscal Quarters, a narrative report describing the operations of
    Company and its Subsidiaries in the form prepared for presentation to senior
    management for such fiscal period and for the period from the beginning of
    the then current Fiscal Year to the end of such fiscal period;

    (iii) Year-End Financials:
    as soon as available and in any event within 95 days after the end of each
    Fiscal Year, (a) the consolidated and consolidating balance sheets of
    Company and its Subsidiaries as at the end of such Fiscal Year and the
    related consolidated and (other than for stockholders' equity) consolidating
    statements of income, stockholders' equity and cash flows of Company and its
    Subsidiaries for such Fiscal Year, setting forth in each case in comparative
    form the corresponding figures for the previous Fiscal Year and the
    corresponding figures from the Financial Plan for the Fiscal Year covered by
    such financial statements, all in reasonable detail and certified by the
    chief executive officer or the chief financial officer of Company that they
    fairly present, in all material respects, the financial condition of Company
    and its Subsidiaries as at the dates indicated and the results of their
    operations and their cash flows for the periods indicated, (b) a narrative
    report describing the operations of Company and its Subsidiaries in the form
    prepared for presentation to senior management for such Fiscal Year, and (c)
    in the case of such consolidated financial statements, a report thereon of
    KPMG or other independent certified public accountants of recognized
    national standing selected by Company and satisfactory to Agent, which
    report shall be unqualified as to scope of audit, shall express no doubts
    about the ability of Company and its Subsidiaries taken as a whole to
    continue as a going concern, and shall state that such consolidated
    financial statements fairly present, in all material respects, the
    consolidated financial position of Company and its Subsidiaries as at the
    dates indicated and the results of their operations and their cash flows for
    the periods indicated in conformity with GAAP applied on a basis consistent
    with prior years (except as otherwise disclosed in such financial
    statements) and that the examination by such accountants in connection with
    such consolidated financial statements has been made in accordance with
    generally accepted auditing standards;

    (iv) Pricing and Compliance
    Certificates: together with each delivery of quarterly and annual
    financial statements of Company and its Subsidiaries pursuant to
    subdivisions (ii) and (iii) above, (a) an Officer's Certificate of Company
    stating that the signers have reviewed the terms of this Agreement and have
    made, or caused to be made under their supervision, a review in reasonable
    detail of the transactions and condition of Company and its Subsidiaries
    during the accounting period covered by such financial statements and that
    such review has not disclosed the existence at the end of such accounting
    period, and that the signers do not have knowledge of the existence as at
    the date of such Officer's Certificate, of any condition or event that
    constitutes an Event of Default or Potential Event of Default, or, if any
    such condition or event existed or exists, specifying the nature and period
    of existence thereof and what action Company has taken, is taking and
    proposes to take with respect thereto; and (b) a Compliance Certificate
    demonstrating in reasonable detail compliance during and at the end of the
    applicable accounting periods with the restrictions contained in Section 7;
    in addition, on or before the 50th day following the end of each Fiscal
    Quarter (95th day for the final Fiscal Quarter or each Fiscal Year), a
    Pricing Certificate demonstrating in reasonable detail the calculation of
    the Consolidated Leverage Ratio as of the end of the four Fiscal Quarter
    period then ended;

    (v) Reconciliation Statements:
    if, as a result of any change in accounting principles and policies from
    those used in the preparation of the audited financial statements referred
    to in subsection 5.3 (other than changes resulting from the application of
    FAS 133), the consolidated financial statements of Company and its
    Subsidiaries delivered pursuant to subdivisions (ii), (iii) or (xii) of this
    subsection 6.1 will differ in any material respect from the consolidated
    financial statements that would have been delivered pursuant to such
    subdivisions had no such change in accounting principles and policies been
    made, then (a) together with the first delivery of financial statements
    pursuant to subdivision (ii), (iii) or (xii) of this subsection 6.1
    following such change, consolidated financial statements of Company and its
    Subsidiaries for (y) the current Fiscal Year to the effective date of such
    change and (z) the two full Fiscal Years immediately preceding the Fiscal
    Year in which such change is made, in each case prepared on a pro forma
    basis as if such change had been in effect during such periods, and (b)
    together with each delivery of financial statements pursuant to subdivision
    (ii), (iii) or (xii) of this subsection 6.1 following such change, a written
    statement of the chief accounting officer or chief financial officer of
    Company setting forth the differences (including any differences that would
    affect any calculations relating to the financial covenants set forth in
    subsections 7.6 and 7.8) which would have resulted if such financial
    statements had been prepared without giving effect to such change;

    (vi) Accountants'
    Certification: together with each delivery of consolidated financial
    statements of Company and its Subsidiaries pursuant to subdivision (iii)
    above, a written statement by the independent certified public accountants
    giving the report thereon (a) stating that their audit examination has
    included a review of the terms of this Agreement and the other Loan
    Documents as they relate to accounting matters, and (b) stating whether, in
    connection with their audit examination, any condition or event that
    constitutes a breach of certain covenants herein as they relate to
    accounting matters has come to their attention and, if such a condition or
    event has come to their attention, specifying the nature and period of
    existence thereof; provided that such accountants shall not be liable by
    reason of any failure to obtain knowledge of any such condition or event
    that would not be disclosed in the course of their audit examination;

    (vii) Accountants' Reports:
    promptly upon receipt thereof (unless restricted by applicable professional
    standards), copies of all reports submitted to Company by independent
    certified public accountants in connection with each annual, interim or
    special audit of the financial statements of Company and its Subsidiaries
    made by such accountants, including any comment letter submitted by such
    accountants to management in connection with their annual audit;

    (viii) SEC Filings and Press
    Releases: promptly upon their becoming available, copies of (a) all
    financial statements, reports, notices and proxy statements sent or made
    available generally by Company to its security holders or by any Subsidiary
    of Company to its security holders other than Company or another Subsidiary
    of Company, (b) all regular and periodic reports and all registration
    statements (other than on Form S-8 or a similar form) and prospectuses, if
    any, filed by Company or any of its Subsidiaries with any securities
    exchange or with the Securities and Exchange Commission or any governmental
    or private regulatory authority, and (c) all press releases and other
    statements made available generally by Company or any of its Subsidiaries to
    the public concerning material developments in the business of Company or
    any of its Subsidiaries;

    (ix) Litigation or Other
    Proceedings: (a) concurrently with the delivery of each Compliance
    Certificate, a report of (X) the institution of, or non-frivolous threat of,
    any Proceeding against or affecting Company or any of its Subsidiaries or
    any property of Company or any of its Subsidiaries not previously disclosed
    in writing by Company to Lenders or (Y) any material development in any
    Proceeding that, in any case:

    
      (1) if adversely determined, has a reasonable
      possibility after giving effect to the coverage and policy limits of
      insurance policies issued to Company and its Subsidiaries of giving rise
      to a Material Adverse Effect or a monetary liability in excess of
      $1,000,000; or

      (2) seeks to enjoin or otherwise prevent the
      consummation of, or to recover any damages or obtain relief as a result
      of, the transactions contemplated hereby;

    

    written notice thereof together with such other
    information as may be reasonably available to Company to enable Lenders and
    their counsel to evaluate such matters; and (b) concurrently with the
    delivery of each Compliance Certificate, a schedule of all Proceedings
    involving an alleged liability of, or claims against or affecting, Company
    or any of its Subsidiaries equal to or greater than $1,000,000, and promptly
    after request by Agent such other information as may be reasonably requested
    by Agent to enable Agent and its counsel to evaluate any of such
    Proceedings;

    (x) ERISA Events: promptly
    upon becoming aware of the occurrence of or forthcoming occurrence of any
    ERISA Event, a written notice specifying the nature thereof, what action
    Company, any of its Subsidiaries or any of their respective ERISA Affiliates
    has taken, is taking or proposes to take with respect thereto and, when
    known, any action taken or threatened by the Internal Revenue Service, the
    Department of Labor or the PBGC with respect thereto;

    (xi) ERISA Notices: with
    reasonable promptness, copies of (a) all notices received by Company, any of
    its Subsidiaries or any of their respective ERISA Affiliates from a
    Multiemployer Plan sponsor concerning an ERISA Event; and (b) copies of such
    other documents or governmental reports or filings relating to any Employee
    Benefit Plan as Agent shall reasonably request;

    (xii) Financial Plans: as
    soon as practicable and in any event no later than 60 days after the
    beginning of each Fiscal Year, a consolidated and consolidating plan and
    financial forecast for such Fiscal Year and the next four succeeding Fiscal
    Years (the "Financial Plan" for such Fiscal Years),
    including (a) forecasted consolidated and consolidating balance sheets and
    forecasted consolidated and consolidating statements of income and cash
    flows of Company and its Subsidiaries for each such Fiscal Year and an
    explanation of the assumptions on which such forecasts are based, (b)
    forecasted consolidated and consolidating statements of income and cash
    flows of Company and its Subsidiaries for each Fiscal Quarter of the first
    such Fiscal Year, together with an explanation of the assumptions on which
    such forecasts are based, and (c) such other information and projections as
    any Lender may reasonably request;

    (xiii) Governing Body:
    with reasonable promptness, written notice of any change in the Governing
    Body of Company;

    (xiv) Insurance: as soon
    as practicable and in any event by the last day of each Fiscal Year, a
    report in form and substance reasonably satisfactory to Agent outlining all
    material insurance coverage maintained as of the date of such report by
    Company and its Subsidiaries and all material insurance coverage planned to
    be maintained by Company and its Subsidiaries in the immediately succeeding
    Fiscal Year and confirming the status of Agent as additional insured and/or
    loss payee under all such insurance to the extent required by subsection
    6.4;

    (xv) Environmental Audits and
    Reports: as soon as practicable following receipt thereof, copies of all
    environmental audits and reports received by or made available to Company or
    its Subsidiaries, whether prepared by personnel of Company or any of its
    Subsidiaries or by independent consultants, with respect to significant
    environmental matters at any Facility or which relate to an Environmental
    Claim in either case which could reasonably be expected to result in a
    Material Adverse Effect;

    (xvi) New Subsidiaries:
    concurrently with the delivery of financial statements relating of each
    Fiscal Month, a written notice setting forth with respect to any Person
    becoming a Subsidiary of Company (a) the date on which such Person became a
    Subsidiary of Company and (b) all of the data required to be set forth in Schedule
    5.1 annexed hereto with respect to all Subsidiaries of Company (it being
    understood that such written notice shall be deemed to supplement Schedule
    5.1 annexed hereto for all purposes of this Agreement;

    (xvii) Material Contracts:
    promptly, and in any event within 10 Business Days after any Material
    Contract of Company or any of its Subsidiaries is terminated or amended in a
    manner that is materially adverse to Company or such Subsidiary, as the case
    may be, or any new Material Contract is entered into, a written statement
    describing such event with copies of such material amendments or new
    contracts, and an explanation of any actions being taken with respect
    thereto;

    (xviii) Borrowing Base
    Certificates: as soon as available and in any event within ten Business
    Days after the last Business Day of each Fiscal Month ending after the
    Closing Date, a Borrowing Base Certificate dated as of the last Business Day
    of such Fiscal Month, together with any additional schedules and other
    information as Agent may reasonably request (it being understood that (a)
    Company, in addition to such monthly Borrowing Base Certificates, may from
    time to time deliver to Agent and Lenders on any Business Day after the
    Closing Date a Borrowing Base Certificate dated as of such Business Day,
    together with any additional schedules and other information as Agent may
    reasonably request), and (b) the most recent Borrowing Base Certificate
    described in this clause (xviii) that is delivered to Agent shall be used in
    calculating the Borrowing Base as of any date of determination; and

    (xix) Restructuring Reports:
    as soon as practicable following receipt or production thereof, copies of
    all reports received by or produced for the Chief Executive Officer, Chief
    Financial Officer or members of the board of directors of the Company
    relating to Restructuring Charges or Restructuring Capital Expenditures; and

    (xx) Other Information:
    with reasonable promptness, such other information and data with respect to
    Company or any of its Subsidiaries as from time to time may be reasonably
    requested by any Lender.

  

6.2 Existence, etc.

Except as permitted under subsection
7.7, Company will, and will cause each of its Significant Subsidiaries to, at
all times preserve and keep in full force and effect its existence and all
rights and franchises material to its business; provided, however,
that neither Company nor any of its Significant Subsidiaries shall be required
to preserve any such right or franchise if the Governing Body of Company or such
Significant Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of Company or such Significant
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Significant Subsidiary or Lenders.

6.3 Payment of Taxes and
Claims; Tax.

A. Company will, and will cause
each of its Subsidiaries to, pay all material taxes, assessments and other
governmental charges imposed upon it or any of its material properties or assets
or in respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any material penalty or fine shall be incurred with respect thereto; provided
that no such charge or claim need be paid if it is being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted, so long
as (1) such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.

B. Company will not, nor will it
permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person (other than Company or any of its
Subsidiaries).

6.4 Maintenance of
Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds.

A. Maintenance of Properties.
Company will, and will cause each of its Subsidiaries to, maintain or cause to
be maintained in good repair, working order and condition, ordinary wear and
tear excepted, all material properties used or useful in the business of Company
and its Subsidiaries (including all Intellectual Property) and from time to time
will make or cause to be made all appropriate repairs, renewals and replacements
thereof.

B. Insurance. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, such public liability insurance, third party property damage
insurance, business interruption insurance and casualty insurance with respect
to liabilities, losses or damage in respect of the assets, properties and
businesses of Company and its Subsidiaries as may customarily be carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for corporations similarly
situated in the industry. Without limiting the generality of the foregoing,
Company will maintain or cause to be maintained replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Agent in its commercially reasonable
judgment. Each such policy of insurance shall (a) name Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to
Agent, that names Agent for the benefit of Lenders as the loss payee thereunder
for any covered loss in excess of $250,000 and provides for at least 30 days
prior written notice to Agent of any modification or cancellation of such
policy.

C. Deposit of Net
Insurance/Condemnation Proceeds. Upon the occurrence and during the
continuance of an Event of Default described in subsection 8.1 or during any
time and to the extent that Company is not in compliance with subsection
2.4A(iii)(a), upon receipt by Company or by Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected to be
received) by Company or by Agent in respect of any covered loss exceeds
$5,000,000, Company or Agent, as the case may be, shall deposit the proceeds so
received into the Collateral Account to be held as Collateral as provided in the
Security Agreement. To the extent Agent otherwise receives Net
Insurance/Condemnation Proceeds as loss payee, Agent shall promptly turn over
such proceeds to Company.

6.5 Inspection; Lender
Meeting.

Company shall, and shall cause each
of its Domestic Subsidiaries to, permit (i) any authorized representatives
designated by any Lender upon reasonable notice and at reasonable times to visit
and inspect any of the properties of Company or any of its Domestic Subsidiaries
up to five times per year (but without limitation on the number of visits and
inspections during the pendency of an Event of Default), including its and their
financial and accounting records, and to make copies and take extracts therefrom,
and to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that Company may,
if it so chooses, be present at or participate in any such discussion), and
(ii) any authorized representatives designated by Agent to conduct at least
two audits of all Inventory and Accounts of Loan Parties during each
twelve-month period after the Closing Date (exclusive of the audit of Inventory
and Accounts referred to in subsection 4.1O (the "Base Audit")),
each such audit to be substantially similar in scope and substance to the Base
Audit, all upon three Business Days' notice and during normal business hours and
as often as may be reasonably requested. Without in any way limiting the
foregoing, Company will, upon the request of Agent or Requisite Lenders,
participate in a meeting of Agent and Lenders once during each Fiscal Year to be
held at Company's corporate offices (or such other location as may be agreed to
by Company and Agent) at such time as may be agreed to by Company and Agent.

6.6 Compliance with Laws,
etc.

Company shall, and shall cause each
of its Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any Government Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
cause, individually or in the aggregate, a Material Adverse Effect.

6.7 Company's Remedial
Action Regarding Hazardous Materials.

Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all remedial
action in connection with the presence, storage, use, disposal, transportation
or Release of any Hazardous Materials on, under or about any Facility in order
to comply in all material respects with all applicable Environmental Laws and
Governmental Authorizations. In the event Company or any of its Subsidiaries
undertakes any remedial action with respect to any Hazardous Materials on, under
or about any Facility, Company or such Subsidiary shall conduct and complete
such remedial action in substantial compliance in all material respects with all
applicable Environmental Laws, and in accordance with the policies, orders and
directives of all federal, state and local governmental authorities except when,
and only to the extent that, Company's or such Subsidiary's liability for such
presence, storage, use, disposal, transportation or discharge of any Hazardous
Materials is being contested in good faith by Company or such Subsidiary.

6.8 Execution of Subsidiary
Guaranty and Personal Property Collateral Documents After the Closing Date.

A. Execution of Subsidiary Guaranty
and Personal Property Collateral Documents. In the event that any Person
becomes a Domestic Subsidiary of Company (other than any Inactive Subsidiary)
after the date hereof, Company will promptly notify Agent of that fact and cause
such Domestic Subsidiary to execute and deliver to Agent a counterpart of the
Subsidiary Guaranty and Security Agreement and to take all such further actions
and execute all such further documents and instruments (including actions,
documents and instruments comparable to those described in subsection 4.1L) as
may be necessary or, in the opinion of Agent, desirable to create in favor of
Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on
all of the Accounts and Inventory of such Domestic Subsidiary described in the
applicable forms of Collateral Documents.

B. Subsidiary Organizational
Documents, Legal Opinions, Etc. Company shall deliver to Agent, together
with such Loan Documents, (i) certified copies of such Subsidiary's
Organizational Documents, together with a good standing certificate from the
Secretary of State of the jurisdiction of its organization and each other state
in which such Person is qualified to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Agent, (ii) a certificate executed by the secretary or similar
officer of such Subsidiary as to (a) the fact that the attached resolutions of
the Governing Body of such Subsidiary approving and authorizing the execution,
delivery and performance of such Loan Documents are in full force and effect and
have not been modified or amended and (b) the incumbency and signatures of the
officers of such Subsidiary executing such Loan Documents, and (iii) if
such Subsidiary would constitute a Significant Subsidiary, a favorable opinion
of counsel to such Subsidiary, in form and substance reasonably satisfactory to
Agent and its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary and (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Agent may reasonably request, all of the foregoing to be
reasonably satisfactory in form and substance to Agent and its counsel.

C. Post-closing Actions with respect
to Certain Accounts.

  
    (i) Within 15 days after the
    Closing Date (or such later date as may be agreed to by Agent in its
    discretion), Agent shall have received a perfected security interest in the
    securities account maintained by Company with Salomon Smith Barney on terms
    and conditions reasonably satisfactory to Agent.

    (ii) Within 15 days after the
    Closing Date (or such later date as may be agreed to by Agent in its
    discretion), the Deposit Accounts maintained by Company and/or any of its
    Domestic Subsidiaries with PNC Bank shall be covered by a Blocked Account
    Agreement among PNC Bank, Agent and Company and such Domestic Subsidiaries.

    (iii) Within 15 days after the
    Closing Date (or such later date as may be agreed to by Agent in its
    discretion), the Agent shall have received a perfected security interest in
    such of the Petty Cash Accounts in which perfection may be obtained by
    notification to the depositary bank.

    
    

  

  Section 7. COMPANY'S NEGATIVE COVENANTS

  
Company covenants and agrees that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 7.

7.1 Indebtedness.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:

  
    (i) Company and its Subsidiaries
    may become and remain liable with respect to the Obligations;

    (ii) Company and its Subsidiaries
    may become and remain liable with respect to Contingent Obligations
    permitted by subsection 7.4 and, upon any matured obligations actually
    arising pursuant thereto, the Indebtedness corresponding to the Contingent
    Obligations so extinguished;

    (iii) Company and its
    Subsidiaries may become and remain liable with respect to Indebtedness in
    respect of Capital Leases;

    (iv) Company may become and
    remain liable with respect to Indebtedness to any of its Dominant Domestic
    Subsidiaries, and any Dominant Domestic Subsidiary of Company may become and
    remain liable with respect to Indebtedness to Company or any other Dominant
    Domestic Subsidiary of Company; provided that (a) all such
    intercompany Indebtedness shall be evidenced by promissory notes that are
    pledged to Agent pursuant to the terms of the applicable Security Agreement,
    (b) all such intercompany Indebtedness owed by Company to any of its
    Dominant Domestic Subsidiaries shall be subordinated in right of payment to
    the payment in full of the Obligations pursuant to the terms of the
    applicable promissory notes or an intercompany subordination agreement, and
    (c) any payment by any Dominant Domestic Subsidiary of Company under
    any guaranty of the Obligations shall result in a pro tanto
    reduction of the amount of any intercompany Indebtedness owed by such
    Dominant Domestic Subsidiary to Company or to any of its Dominant Domestic
    Subsidiaries for whose benefit such payment is made;

    (v) Company and its Subsidiaries,
    as applicable, may remain liable with respect to Indebtedness described in Schedule 7.1
    annexed hereto and any refinancings thereof; provided the principal
    amount thereof is not increased;

    (vi) the Senior Notes;

    (vii) Company and its
    Subsidiaries may become and remain liable with respect to other unsecured
    senior Indebtedness in an aggregate principal amount not to exceed
    $25,000,000 at any time outstanding;

    (viii) Company may become and
    remain liable with respect to Subordinated Indebtedness and Company and its
    Subsidiaries may become and remain liable with respect to Acquisition
    Subordinated Debt; provided that (a) no Potential Event of Default or
    Event of Default shall then exist or shall occur as a result of the
    incurrence of such Subordinated Indebtedness, and (b) at the time of such
    incurrence, the ratio of Consolidated Total Debt to Consolidated EBITDA for
    the four Fiscal Quarter period most recently ended does not exceed the ratio
    of (x) Consolidated Total Debt minus Subordinated Indebtedness as of
    the last day of the Fiscal Quarter most recently ended to (y) Consolidated
    EBITDA for the four Fiscal Quarter period most recently ended by greater
    than one multiple;

    (ix) Company and its Subsidiaries
    may become and remain liable with respect to other Indebtedness in an
    aggregate principal amount not to exceed $10,000,000 at any time
    outstanding;

    (x) Company may maintain
    unsecured overdraft lines with commercial banks in the ordinary course of
    business and consistent with past practices; provided that the
    aggregate amount of Indebtedness created thereunder shall not exceed
    $10,000,000 any time outstanding; and

    (xi) (i) Foreign Subsidiaries may
    become and remain liable with respect to Indebtedness to any other Foreign
    Subsidiary; (ii) Foreign Subsidiaries may become and remain liable with
    respect to Indebtedness to Company consistent with past practices; (iii)
    Foreign Subsidiaries may become and remain liable with respect to
    Indebtedness to Domestic Subsidiaries, in an aggregate principal amount not
    to exceed $10,000,000 at any time outstanding; and (iv) Company and its
    Domestic Subsidiaries may become and remain liable to any of its Foreign
    Subsidiaries.

  

7.2 Liens and Related
Matters.

A. Prohibition on Liens. Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of any kind (including any document or instrument in
respect of goods or accounts receivable) of Company or any of its Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
permit to remain in effect, any financing statement or other similar notice of
any Lien with respect to any such property, asset, income or profits under the
UCC or under any similar recording or notice statute, except:

  
    (i) Permitted Encumbrances;

    (ii) Liens granted pursuant to
    the Collateral Documents;

    (iii) Liens described in
    Schedule 7.2 annexed hereto;

    (iv) Liens evidencing Capital
    Leases permitted by subsection 7.1;

    (v) Liens related to sales of
    installment sale contracts and/or receivables owned or formerly owned by
    SunMed Finance portfolio;

    (vi) Liens securing purchase
    money Indebtedness permitted by subsection 7.1(ix); and

    (vii) Other Liens up to
    $5,000,000 at any time outstanding.

  

B. Equitable Lien in Favor of
Lenders. If Company or any of its Subsidiaries shall create or assume any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than Liens excepted by the provisions of subsection 7.2A, it
shall make or cause to be made effective provision whereby the Obligations will
be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; provided
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.

C. No Further Negative Pledges.
Except with respect to specific property encumbered to secure payment of
particular Indebtedness or Lease or to be sold pursuant to an executed agreement
with respect to an Asset Sale, none of Company or any of its Subsidiaries shall
enter into any agreement prohibiting the creation or assumption of any Lien upon
any of its properties or assets, whether now owned or hereafter acquired.

D. No Restrictions on Subsidiary
Distributions to Company or Other Subsidiaries. Except as provided herein,
Company will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Company or any other Subsidiary of Company,
(ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or
any other Subsidiary of Company, (iii) make loans or advances to Company or
any other Subsidiary of Company, or (iv) transfer any of its property or
assets to Company or any other Subsidiary of Company.

7.3 Investments;
Acquisitions.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including any Joint Venture, or acquire, by purchase
or otherwise, all or substantially all the business, property or fixed assets
of, or capital stock or other ownership interest of any Person, or any division
or line of business of any Person except:

  
    (i) Company and its Subsidiaries
    may make and own Investments in Cash Equivalents and Foreign Subsidiaries
    may make and own similar Investments customary for the countries in which
    they conduct business;

    (ii) Company and its Dominant
    Domestic Subsidiaries may make and own additional equity Investments in
    their respective Dominant Domestic Subsidiaries;

    (iii) Company and its
    Subsidiaries may make intercompany loans to the extent permitted under
    subsection 7.1(iv);

    (iv) Company and its Subsidiaries
    may make Consolidated Capital Expenditures permitted by subsection 7.8;

    (v) Company and its Subsidiaries
    may continue to own the Investments owned by them and described in Schedule 7.3
    annexed hereto;

    (vi) Company and its Subsidiaries
    may make finance and enter into, and receive contingent payment rights
    received in sales under subsection 7.11 under, installment sales
    contracts in the ordinary course of business and consistent with past
    practices;

    (vii) Company and its
    Subsidiaries may incur and remain liable with respect to recourse
    obligations arising under vendor financings provided to customers;

    (viii) Company and Domestic
    Subsidiaries may make and own Investments in Foreign Subsidiaries; provided
    that (i) with respect to Investments by Company, such Investments are
    consistent with prior practices, and (ii) with respect to Investments by
    Domestic Subsidiaries, such Investments after the Closing Date do not exceed
    in the aggregate $10,000,000 at any time; and

    (ix) Company and its Subsidiaries
    may make other Investments having a fair market value determined at the time
    made not in excess of $10,000,000 in any one Fiscal Year and continue to own
    such assets after the acquisition thereof; provided that Company
    shall, and shall cause its Subsidiaries to, comply with the requirements of
    subsection 6.8 with respect to each such acquisition that results in a
    Person becoming a Subsidiary.

  

7.4 Contingent Obligations.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create or become or
remain liable with respect to any Contingent Obligation, except:

  
    (i) Subsidiaries of Company may
    become and remain liable with respect to Contingent Obligations in respect
    of the Subsidiary Guaranty;

    (ii) Company may become and
    remain liable with respect to Contingent Obligations in respect of Letters
    of Credit;

    (iii) Company and its
    Subsidiaries may become and remain liable with respect to Contingent
    Obligations under Hedge Agreements;

    (iv) Company and its Subsidiaries
    may become and remain liable with respect to Contingent Obligations in
    respect of customary indemnification and purchase price adjustment
    obligations incurred in connection with Asset Sales or other sales of
    assets;

    (v) Company and its Subsidiaries
    may become and remain liable with respect to Contingent Obligations under
    guarantees in the ordinary course of business of the obligations of
    suppliers, customers, franchisees and licensees of Company and its
    Subsidiaries in an aggregate amount not to exceed at any time $1,000,000;

    (vi) Company may become and
    remain liable with respect to Contingent Obligations in respect of any
    leases and Indebtedness and other obligations permitted under the Agreement
    of any of Company's Subsidiaries;

    (vii) Company and its
    Subsidiaries, as applicable, may remain liable with respect to Contingent
    Obligations described in Schedule 7.4 annexed hereto;

    (viii) Subsidiaries of Company
    may become and remain liable with respect to Contingent Obligations in
    respect of unsecured guaranties of the Senior Notes contained in the Senior
    Note Agreement; provided that each such Subsidiary is also a
    Subsidiary Guarantor with respect to the Obligations under the Loan
    Documents; and

    (ix) Company and its Subsidiaries
    may become and remain liable with respect to Contingent Obligations arising
    under shared loss agreements relating to vendor financings provided to
    customers in the ordinary course of business and consistent with past
    practices; and

    (x) Company and its Subsidiaries
    may become and remain liable with respect to other Contingent Obligations in
    an aggregate amount not to exceed at any time $10,000,000.

  

7.5 Restricted Junior
Payments.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Junior Payment; provided
that so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, (i) Company may make
regularly scheduled payments of interest and principal in respect of any
Subordinated Indebtedness, and in the case of Acquisition Subordinated Debt
only, prepayments of principal, in each case in accordance with the terms of,
and only to the extent required by, and subject to the subordination provisions
contained in, the indenture or other agreement pursuant to which such
Subordinated Indebtedness was issued, as such indenture or other agreement may
be amended from time to time to the extent permitted under subsection 7.15; and
(ii) Company may repurchase shares of its common stock and stock options from
its current and former employees pursuant to the terms of any stock option plan
approved by its Board of Directors and Company may make payments to its
stockholders pursuant to the terms of the Amended and Restated Rights Agreement
dated May 16, 1997 and approved by its Board of Directors up to an amount
for all such repurchases and payments of $2,000,000.

7.6 Minimum Consolidated
Adjusted EBITDA.

Company shall not permit Consolidated
Adjusted EBITDA for any four Fiscal Quarter period ending as of the last day of
any Fiscal Quarter set forth below to be less than the correlative amount
indicated:

	
      Fiscal Quarter

      Ending on or about
		
      Minimum Consolidated

      Adjusted EBITDA

	
      September 30, 2000
		
      $41,000,000

	
      December 31, 2000
		
      42,000,000

	
      March 31, 2001
		
      46,000,000

	
      June 30, 2001
		
      50,000,000

	 		
       

    
	
      September 30, 2001
		
      57,000,000

	
      December 31, 2001
		
      63,000,000

	
      March 31, 2002
		
      66,000,000

	June 30, 2002 and each Fiscal

         Quarter thereafter		
      70,000,000

 

; provided however that upon the occurrence of
an Asset Sale permitted under subsection 7.7(iv) the minimum Consolidated
Adjusted EBITDA numbers set forth above shall be reduced by the Consolidated
Adjusted EBITDA attributable to the business or operations so sold or disposed
of for the four Fiscal Quarter period most recently ended, such reduction to be
set forth in an Officer's Certificate delivered to Agent and to be approved by
Agent.

7.7 Restriction on
Fundamental Changes; Asset Sales.

Company shall not, and shall not
permit any of its Subsidiaries to, alter the corporate, capital or legal
structure of Company or any of its Subsidiaries, or enter into any transaction
of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor
or sublessor), transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business, property or assets (including
its notes or receivables and stock or other ownership interests of a Subsidiary,
whether newly issued or outstanding), whether now owned or hereafter acquired,
except:

  
    (i) any Subsidiary of Company may
    be merged with or into Company or any wholly-owned Subsidiary Guarantor, or
    be liquidated, wound up or dissolved, or all or any part of its business,
    property or assets may be conveyed, sold, leased, transferred or otherwise
    disposed of, in one transaction or a series of transactions, to Company or
    any wholly-owned Subsidiary Guarantor; provided that, in the case of
    such a merger, Company or such wholly-owned Subsidiary Guarantor shall be
    the continuing or surviving Person;

    (ii) Company and its Subsidiaries
    may sell or otherwise dispose of assets in transactions that do not
    constitute Asset Sales; provided that the consideration received for
    such assets shall be in an amount at least equal to the fair market value
    thereof as reasonably determined by the Company's Chief Financial Officer or
    Chief Executive Officer;

    (iii) Company and its
    Subsidiaries may dispose of obsolete, worn out or surplus property in the
    ordinary course of business;

    (iv) Company and its Subsidiaries
    may make Asset Sales of "Project Alpha" and of "Project
    Beta," as such Assets Sales have been identified and described by
    Company in a letter to Agent dated of even date with this Agreement; provided
    that the consideration received for such Asset Sales shall be equal to the
    fair market value thereof as reasonably determined by the Company's Chief
    Financial Officer or Chief Executive Officer;

    (v) Company and its Subsidiaries
    may make Asset Sales of assets located in the United States having an
    aggregate fair market value not in excess of $5,000,000 in any Fiscal Year
    and of assets located outside of the United States having an aggregate fair
    market value not in excess of $5,000,000 in any Fiscal Year; provided
    that in each case the consideration received for such assets shall be in an
    amount at least equal to the fair market value thereof as reasonably
    determined by the Company's Chief Financial Officer or Chief Executive
    Officer;

    (vi) Company or a Subsidiary may
    sell or dispose of shares of capital stock or other equity Securities of any
    of its Subsidiaries, in order to qualify members of the Governing Body of
    the Subsidiary if required by applicable law;

    (vii) any non-Subsidiary
    Guarantor may be merged with or into any other non-Subsidiary Guarantor, or
    be liquidated, wound up or dissolved, or all or any part of its business,
    property or assets may be conveyed, sold, leased, transferred or otherwise
    disposed of, in one transaction or a series of transactions, to another
    non-Guarantor Subsidiary;

    (viii) Company and its
    Subsidiaries may make Asset Sales in connection with sale and leaseback
    transactions provided that the aggregate fair market value as
    reasonably determined by the Company's Chief Financial Officer or Chief
    Executive Officer of the assets so sold and leased back after the Closing
    Date does not exceed $30,000,000; and

    (ix) Company and its Subsidiaries
    may sell notes or accounts receivables permitted by subsection 7.11.

  

7.8 Maximum Consolidated
Adjusted Capital Expenditures.

Company shall not, and shall not
permit its Subsidiaries to, make or incur Consolidated Adjusted Capital
Expenditures, in any Fiscal Year indicated below, in an aggregate amount in
excess of the corresponding amount (the "Maximum Consolidated Adjusted
Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Adjusted Capital
Expenditures Amount for any Fiscal Year shall be increased by an amount equal to
the excess, if any, of the Maximum Consolidated Adjusted Capital Expenditures
Amount permitted for the previous Fiscal Year (as set forth in the table below)
over the actual amount of Consolidated Adjusted Capital Expenditures for such
previous Fiscal Year:

	
      Fiscal
      Year
		
      Maximum
      Consolidated

      Adjusted Capital Expenditures

	
      2001
		
      $19,500,000

	
      2002
		
      19,700,000

	
      2003
		
      19,900,000

	
      2004
		
      20,100,000

 

7.9 Deposit Accounts.

On and after the implementation of
the collection, deposit and transfer of payment procedures provided in
subsection 2.10, Company shall not, and shall not permit any of its Domestic
Subsidiaries to, maintain any Deposit Account which is not a Lock Box Account or
a Concentration Account or a disbursement account under the exclusive dominion
and control of Agent.

7.10 Sales and Lease-Backs.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, become or remain
liable as lessee or as a guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any property (whether real,
personal or mixed), whether now owned or hereafter acquired, (i) which
Company or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than Company or any of its Subsidiaries) or
(ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Company or any of its Subsidiaries) in connection with such lease; provided
that Company and its Subsidiaries may become and remain liable as lessee,
guarantor or other surety with respect to any such lease if and to the extent
that Company or any of its Subsidiaries would be permitted to enter into, and
remain liable under, such lease under subsection 7.7(viii).

7.11 Sale or Discount of
Receivables.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, sell with recourse,
or discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable; provided that Company may sell with recourse or
discount installment sale contracts and/or receivables owned or formerly owned
by Sun Med Finance.

7.12 Transactions with
Shareholders and Affiliates.

Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, enter into or permit
to exist any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of equity Securities of Company or with any
Affiliate of Company or of any such holder, on terms that are less favorable to
Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate; provided
that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries and (ii) reasonable and customary fees paid to
members of the Governing Bodies of Company and its Subsidiaries.

7.13 Disposal of Subsidiary
Stock.

Except pursuant to the Collateral
Documents and except for any sale or other disposition of 100% of the capital
stock or other equity Securities of any of its Subsidiaries in compliance with
the provisions of subsection 7.7, Company shall not:

  
    
      
        (i) directly or indirectly sell, assign, pledge or
        otherwise encumber or dispose of any shares of capital stock or other
        equity Securities of any of its Subsidiaries, except to qualify
        directors if required by applicable law; or

        (ii) permit any of its Subsidiaries directly or
        indirectly to sell, assign, pledge or otherwise encumber or dispose of
        any shares of capital stock or other equity Securities of any of its
        Subsidiaries (including such Subsidiary), except to Company, another
        Subsidiary of Company, or to qualify directors if required by applicable
        law.

      

    

  

7.14 Conduct of Business.

From and after the Closing Date,
Company shall not, and shall not permit any of its Subsidiaries to, engage in
any business other than (i) the businesses engaged in by Company and its
Subsidiaries on the Closing Date and similar or related businesses and (ii) such
other lines of business as may be consented to by Requisite Lenders.

7.15 Amendments of Documents
Relating to Certain Indebtedness.

A. Company shall not, and shall
not permit any of its Subsidiaries to, amend or otherwise change the terms of
any Senior Notes, or make any payment consistent with an amendment thereof or
change thereto, if the effect of such amendment or change is to increase the
interest rate on such Senior Notes, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the provisions of any guaranty thereof, or change any collateral therefor
(other than to release such collateral), or if the effect of such amendment or
change, together with all other amendments or changes made, is to increase
materially the obligations of the obligor thereunder or to confer any additional
rights on the holders of such Senior Notes (or a trustee or other representative
on their behalf) which would be adverse to Company or Lenders.

B. Company shall not, and shall
not permit any of its Subsidiaries to, amend or otherwise change the
subordination provisions of any Subordinated Indebtedness, if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness (or a trustee
or other representative on their behalf) which would be adverse to Company or
Lenders.

7.16 Fiscal Year.

Company shall not change its Fiscal
Year-end from the Friday closest to June 30.

Section 8. EVENTS OF DEFAULT

If any of the following conditions or
events ("Events of Default") shall occur:

8.1 Failure to Make Payments
When Due.

Failure by Company to pay any
installment of principal of any Loan when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; failure by Company to pay when due any amount payable to an Issuing
Lender in reimbursement of any drawing under a Letter of Credit; or failure by
Company to pay any interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or

8.2 Default in Other
Agreements.

  
  
  (i) Failure of Company or any of
  its Subsidiaries to pay when due any principal of or interest on or any other
  amount payable in respect of one or more items of Indebtedness (other than
  Indebtedness referred to in subsection 8.1) or Contingent Obligations in an
  individual principal amount of $1,000,000 or more or with an aggregate
  principal amount of $1,000,000 or more, in each case beyond the end of any
  grace period provided therefor; or (ii) breach or default by Company or any of
  its Subsidiaries with respect to any other material term of (a) one or more
  items of Indebtedness or Contingent Obligations in the individual or aggregate
  principal amounts referred to in clause (i) above or (b) any loan
  agreement, mortgage, indenture or other agreement relating to such item(s) of
  Indebtedness or Contingent Obligation(s), if the effect of such breach or
  default is to cause, or to permit the holder or holders of that Indebtedness
  or Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
  to cause, that Indebtedness or Contingent Obligation(s) to become or be
  declared due and payable prior to its stated maturity or the stated maturity
  of any underlying obligation, as the case may be (upon the giving or receiving
  of notice, lapse of time, both, or otherwise); or

8.3 Breach of Certain
Covenants.

Failure of Company to perform or
comply with any term or condition contained in subsection 2.5, 6.1(i)(a) or 6.2
or Section 7 of this Agreement; or

8.4 Breach of Warranty.

Any representation, warranty,
certification or other statement made by Company or any of its Subsidiaries in
any Loan Document or in any statement or certificate at any time given by
Company or any of its Subsidiaries in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or

8.5 Other Defaults Under
Loan Documents.

Company or any of its Subsidiaries
shall default in the performance of or compliance with any term contained in
this Agreement or any of the other Loan Documents, other than any such term
referred to in any other subsection of this Section 8, and such default
shall not have been remedied or waived within 30 days after receipt by Company
or such Subsidiary of notice from Agent or any Lender of such default; or

8.6 Involuntary Bankruptcy;
Appointment of Receiver, etc.

  
  
  (i) A court having jurisdiction in
  the premises shall enter a decree or order for relief in respect of Company or
  any Significant Subsidiary of Company in an involuntary case under the
  Bankruptcy Code or under any other Insolvency Laws which decree or order is
  not stayed; or any other similar relief shall be granted under any applicable
  Insolvency Laws; or

  (ii) an involuntary case shall be
  commenced against Company or any Significant Subsidiary of Company under the
  Bankruptcy Code or under any other Insolvency Laws; or a decree or order of a
  court having jurisdiction in the premises for the appointment of a receiver,
  liquidator, sequestrator, trustee, custodian or other officer having similar
  powers over Company or any Significant Subsidiary of Company, or over all or a
  substantial part of its property, shall have been entered; or there shall have
  occurred the involuntary appointment of an interim receiver, trustee or other
  custodian of Company or any Significant Subsidiary of Company for all or a
  substantial part of its property; or a warrant of attachment, execution or
  similar process shall have been issued against any substantial part of the
  property of Company or any Significant Subsidiary of Company, and any such
  event described in this clause (ii) shall continue for 60 days unless
  dismissed, bonded or discharged; or

8.7 Voluntary Bankruptcy;
Appointment of Receiver, etc.

  
  
  (i) Company or any Significant
  Subsidiary of Company shall have an order for relief entered with respect to
  it or commence a voluntary case under the Bankruptcy Code or under any other
  Insolvency Laws, or shall consent to the entry of an order for relief in an
  involuntary case, or to the conversion of an involuntary case to a voluntary
  case, under any such law, or shall consent to the appointment of or taking
  possession by a receiver, trustee or other custodian for all or a substantial
  part of its property; or Company or any Significant Subsidiary of Company
  shall make any assignment for the benefit of creditors; or

  (ii) Company or any Significant
  Subsidiary of Company shall be unable, or shall fail generally, or shall admit
  in writing its inability, to pay its debts as such debts become due; or the
  Governing Body of Company or any Significant Subsidiary of Company (or any
  committee thereof) shall adopt any resolution or otherwise authorize any
  action to approve any of the actions referred to in clause (i) above or this
  clause (ii); or

8.8 Judgments and
Attachments.

Any money judgment, writ or warrant
of attachment or similar process involving (i) in any individual case an
amount in excess of $1,000,000 or (ii) in the aggregate at any time an
amount in excess of $1,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or

8.9 Dissolution.

Any order, judgment or decree shall
be entered against Company or any of its Subsidiaries decreeing the dissolution
or split up of Company or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or

8.10 Employee Benefit Plans.

There shall occur one or more ERISA
Events which individually or in the aggregate results in or might reasonably be
expected to result in liability of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $1,000,000 during the term of
this Agreement; or there shall exist an amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), which exceeds
$1,000,000; or

8.11 Change in Control.

  
  
  (i) A change shall occur in the
  Board of Directors of Company so that a majority of the Board of Directors of
  Company ceases to consist of the individuals who constituted the Board of
  Directors of Company on the Closing Date (or individuals whose election or
  nomination for election was approved by a vote of at least 75% of the
  directors then in office who either were directors of Company on the Closing
  Date or whose election or nomination for election previously was so approved);
  or

  (ii) any Person or Group (within
  the meaning of Rule 13d-3 of the Securities and Exchange Commission), shall
  become or be the owner, directly or indirectly, beneficially or of record, of
  shares representing more than 30% of the aggregate ordinary voting power
  represented by the issued and outstanding capital stock of Company on a fully
  diluted basis; or

8.12 Invalidity of
Subsidiary Guaranty.

Subsidiary Guaranty for any reason,
other than the satisfaction in full of all Obligations, ceases to be in full
force and effect (other than in accordance with its terms) or is declared to be
null and void, or any Loan Party contests the validity or enforceability of any
Loan Document in writing or denies in writing that it has any further liability,
including without limitation with respect to future advances by Lenders, under
any Loan Document to which it is a party, or gives notice to such effect; or

8.13 Failure of Security.

Any Collateral Document shall, at any
time, cease to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms thereof) or shall be declared null and
void, or the validity or enforceability thereof shall be contested by any Loan
Party, or Agent shall not have or cease to have a valid and perfected First
Priority Lien in the Collateral:

THEN (i) upon the
occurrence of any Event of Default described in subsection 8.6 or 8.7, each of
(a) the unpaid principal amount of and accrued interest on the Loans,
(b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Agent to issue any Letter of Credit and the right of any Lender to
issue any Letter of Credit hereunder shall thereupon terminate, and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Agent shall, upon the written request or with the written consent of
Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (c) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, the obligation of Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i).

Any amounts described in clause (b)
above, when received by Agent, shall be held by Agent pursuant to the terms of
the Security Agreement and shall be applied as therein provided.

Notwithstanding anything contained in
the second preceding paragraph, if at any time within 60 days after an
acceleration of the Loans pursuant to such paragraph Company shall pay all
arrears of interest and all payments on account of principal which shall have
become due otherwise than as a result of such acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified in this Agreement) and all Events of Default and Potential Events of
Default (other than non-payment of the principal of and accrued interest on the
Loans, in each case which is due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to subsection 10.6, then Requisite Lenders,
by written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Agent or Lenders from exercising any of the rights or remedies available to them
under any of the Loan Documents, even if the conditions set forth in this
paragraph are met.

Section 9. AGENT

9.1 Appointment.

A. Appointment of Agent. BTCo is
hereby appointed Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Loan Documents. Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agent and Lenders and, except as specifically provided herein, no Loan Party
shall have rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this Agreement, Agent (other than
as provided in subsection 2.1E) shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any other Loan Party.

B. Appointment of Supplemental
Collateral Agents. It is the purpose of this Agreement and the other Loan
Documents that there shall be no violation of any law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as agent or trustee in such jurisdiction. It is recognized
that in case of litigation under this Agreement or any of the other Loan
Documents, and in particular in case of the enforcement of any of the Loan
Documents, or in case Agent deems that by reason of any present or future law of
any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be necessary
that Agent appoint an additional individual or institution as a separate
trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental
Collateral Agents").

In the event that Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and every
right, power, privilege or duty expressed or intended by this Agreement or any
of the other Loan Documents to be exercised by or vested in or conveyed to Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either Agent or
such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Agent shall inure to the benefit
of such Supplemental Collateral Agent and all references therein to Agent shall
be deemed to be references to Agent and/or such Supplemental Collateral Agent,
as the context may require.

Should any instrument in writing from
Company or any other Loan Party be required by any Supplemental Collateral Agent
so appointed by Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Agent. In case any Supplemental Collateral
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Agent until the appointment of a new Supplemental Collateral Agent.

9.2 Powers and Duties;
General Immunity.

A. Powers; Duties Specified. Each
Lender irrevocably authorizes Agent take such action on such Lender's behalf and
to exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Agent shall have only those duties and responsibilities that
are expressly specified in this Agreement and the other Loan Documents. Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

B. No Responsibility for Certain
Matters. Agent shall not be responsible to any Lender for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
Agent to Lenders or by or on behalf of Company to Agent or any Lender in
connection with the Loan Documents and the transactions contemplated thereby or
for the financial condition or business affairs of Company or any other Person
liable for the payment of any Obligations, nor shall Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.

C. Exculpatory Provisions.
Neither Agent nor any of its officers, directors, employees or agents shall be
liable to Lenders for any action taken or omitted by Agent under or in
connection with any of the Loan Documents except to the extent caused by Agent's
gross negligence or willful misconduct. Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give
such instructions under subsection 10.6) and, upon receipt of such instructions
from Requisite Lenders (or such other Lenders, as the case may be), Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).

D. Agent Entitled to Act as Lender.
The agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Agent shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not performing
the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the
context clearly otherwise indicates, include Agent in its individual capacity.
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust, financial advisory or other business with
Company or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Company for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.

9.3 Independent
Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness.

Each Lender agrees that it has made
its own independent investigation of the financial condition and affairs of
Company and its Subsidiaries in connection with the making of the Loans and the
issuance of Letters of Credit hereunder and that it has made and shall continue
to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Agent shall not have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

9.4 Right to Indemnity.

Each Lender, in proportion to its Pro
Rata Share, severally agrees to indemnify Agent and the officers, directors,
employees, agents, attorneys, professional advisors and affiliates of Agent to
the extent that any such Person shall not have been reimbursed by Company, for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements and fees and disbursements of any financial advisor engaged by
Agent) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Agent or and other such Persons in
exercising the powers, rights and remedies of Agent or performing duties of
Agent hereunder or under the other Loan Documents or otherwise in its capacity
as Agent in any way relating to or arising out of this Agreement or the other
Loan Documents; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence or willful misconduct. If any indemnity furnished to Agent or any
other such Person for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.

9.5 Successor Agent.

Agent may resign at any time by
giving 30 days' prior written notice thereof to Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint (1) any Lender as the successor
Agent, (2) with the consent of Company, which consent shall not be unreasonably
withheld, any other Person as successor Agent; provided that if
Company and Requisite Lenders shall fail to agree upon a successor Agent, upon
the effectiveness of the resignation of prior Agent, this Agreement shall be
administered directly between Company and Lenders without any diminution of the
substantive rights and obligations of Company and Lenders. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.

9.6 Collateral Documents and
Guaranties.

Each Lender hereby further authorizes
Agent, on behalf of and for the benefit of Lenders, to enter into each
Collateral Document as secured party and to be the agent for and representative
of Lenders under the Subsidiary Guaranty, and each Lender agrees to be bound by
the terms of each Collateral Document and the Subsidiary Guaranty; provided
that Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further
written consent or authorization from Lenders, Agent may execute any documents
or instruments necessary to (a) release any Lien encumbering any item of
Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or to which Requisite Lenders have otherwise
consented or (b) release any Subsidiary Guarantor from the Subsidiary
Guaranty if all of the capital stock of such Subsidiary Guarantor is sold to any
Person (other than an Affiliate of Company) pursuant to a sale or other
disposition permitted hereunder or to which Requisite Lenders have otherwise
consented. Anything contained in any of the Loan Documents to the contrary
notwithstanding, Company, Agent and each Lender hereby agree that (X) no Lender
shall have any right individually to realize upon any of the Collateral under
any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Agent for the
benefit of Lenders in accordance with the terms thereof, and (Y) in the event of
a foreclosure by Agent on any of the Collateral pursuant to a public or private
sale, Agent or any Lender may be the purchaser of any or all of such Collateral
at any such sale and Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Agent at such sale.

9.7 Agent May File Proofs of
Claim.

In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to Company or any
of the Subsidiaries of Company, Agent (irrespective of whether the principal of
any Loan shall then be due and payable as herein expressed or by declaration or
otherwise and irrespective of whether Agent shall have made any demand on
Company) shall be entitled and empowered, by intervention in such proceeding or
otherwise

  
    (i) to file and prove a claim for
    the whole amount of principal and interest owing and unpaid in respect of
    the Loans and any other Obligations that are owing and unpaid and to file
    such other papers or documents as may be necessary or advisable in order to
    have the claims of Lenders and Agent (including any claim for the reasonable
    compensation, expenses, disbursements and advances of Lenders and Agent and
    their agents and counsel and all other amounts due Lenders and Agent under
    subsections 2.3 and 10.2) allowed in such judicial proceeding, and

    (ii) to collect and receive any
    moneys or other property payable or deliverable on any such claims and to
    distribute the same;

  

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Lender to make such payments to Agent and, in the event that
Agent shall consent to the making of such payments directly to Lenders, to pay
to Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of Agent and its agents and counsel, and any other amounts due
Agent under subsections 2.3 and 10.2 hereof.

Nothing herein contained shall be
deemed to authorize Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lenders or to
authorize Agent to vote in respect of the claim of any Lender in any such
proceeding.

Section 10.  MISCELLANEOUS

10.1 Successors and Assigns;
Assignments and Participations in Loans and Letters of Credit.

A. General. This Agreement
shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and the successors
and assigns of Lenders (it being understood that Lenders' rights of assignment
are subject to the further provisions of this subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders. Subject to subsection 10.1B, each Lender shall have the right at any
time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its
Commitments or any Loan or Loans made by it or its Letters of Credit or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that (x) except as provided in subsection 10.5, no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Agent and recorded in the
Register as provided in subsection 10.1B(ii) and (y) no such sale, assignment,
transfer or participation shall, without the consent of Company, require Company
to file a registration statement with the Securities and Exchange Commission or
apply to qualify such sale, assignment, transfer or participation under the
securities laws of any state; and provided further that no such
sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Revolving Lender effecting such sale, assignment,
transfer or participation. Except as otherwise provided in this subsection 10.1,
no Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.

B. Assignments.

  
  
  (i) Amounts and Terms of
  Assignments. Each Commitment, Loan, Letter of Credit or participation
  therein, or other Obligation may (a) be assigned in any amount to another
  Lender, or to an Affiliate or Affiliated Fund of the assigning Lender or
  another Lender, with the giving of notice to Company and Agent and with the
  consent of Agent and, so long as no Event of Default shall have occurred and
  be continuing, of Company (which consents shall not be unreasonably withheld
  or delayed) or (b) be assigned in an aggregate amount of not less than
  $5,000,000 (or such lesser amount as shall constitute the aggregate amount of
  the Commitments, Loans, Letters of Credit and participations therein, and
  other Obligations of the assigning Lender) to any other Eligible Assignee with
  the giving of notice to Company and with the consent of Agent and, so long as
  no Event of Default shall have occurred and be continuing, of Company (which
  consents shall not be unreasonably withheld or delayed). To the extent of any
  such assignment in accordance with either clause (a) or (b) above, the
  assigning Lender shall be relieved of its obligations with respect to its
  Commitments, Loans, Letters of Credit or participations therein, or other
  Obligations or the portion thereof so assigned. The parties to each such
  assignment shall execute and deliver to Agent, for its acceptance and
  recording in the Register, an Assignment Agreement, together with a processing
  and recordation fee of $3,500 and such forms, certificates or other evidence,
  if any, with respect to United States federal income tax withholding matters
  as the assignee under such Assignment Agreement may be required to deliver to
  Agent pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
  acceptance and recordation, from and after the effective date specified in
  such Assignment Agreement, (y) the assignee thereunder shall be a party
  hereto and, to the extent that rights and obligations hereunder have been
  assigned to it pursuant to such Assignment Agreement, shall have the rights
  and obligations of a Lender hereunder and (z) the assigning Lender
  thereunder shall, to the extent that rights and obligations hereunder have
  been assigned by it pursuant to such Assignment Agreement, relinquish its
  rights (other than any rights which survive the termination of this Agreement
  under subsection 10.9B) and be released from its obligations under this
  Agreement (and, in the case of an Assignment Agreement covering all or the
  remaining portion of an assigning Lender's rights and obligations under this
  Agreement, such Lender shall cease to be a party hereto; provided that,
  anything contained in any of the Loan Documents to the contrary
  notwithstanding, if such Lender is the Issuing Lender with respect to any
  outstanding Letters of Credit such Lender shall continue to have all rights
  and obligations of an Issuing Lender with respect to such Letters of Credit
  until the cancellation or expiration of such Letters of Credit and the
  reimbursement of any amounts drawn thereunder). If any such assignment occurs
  after the issuance of the Notes hereunder, the assigning Lender shall, upon
  the effectiveness of such assignment or as promptly thereafter as practicable,
  surrender its applicable Notes to Agent for cancellation, and thereupon new
  Notes shall be issued to the assignee and/or to the assigning Lender,
  substantially in the form of Exhibit IV annexed hereto, with
  appropriate insertions, to reflect the new Commitments and/or outstanding
  Revolving Loans, as the case may be, of the assignee and/or the assigning
  Lender.

  (ii) Acceptance by Agent;
  Recordation in Register. Upon its receipt of an Assignment Agreement
  executed by an assigning Lender and an assignee representing that it is an
  Eligible Assignee, together with the processing and recordation fee referred
  to in subsection 10.1B(i) and any forms, certificates or other evidence with
  respect to United States federal income tax withholding matters that such
  assignee may be required to deliver to Agent pursuant to subsection
  2.7B(iii)(a), Agent shall, if Agent and Company consented to the assignment
  evidenced thereby (to the extent such consent is required pursuant to
  subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
  counterpart thereof as provided therein (which acceptance shall evidence any
  required consent of Agent to such assignment), (b) record the information
  contained therein in the Register, and (c) give prompt notice thereof to
  Company. Agent shall maintain a copy of each Assignment Agreement delivered to
  and accepted by it as provided in this subsection 10.1B(ii).

C. Participations. The holder of
any participation, other than an Affiliate of the Lender granting such
participation, shall not be entitled to require such Lender to take or omit to
take any action hereunder except action directly affecting (i) the
extension of the scheduled final maturity date of any Loan allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation
will give rise to a direct obligation of Company to the participant and
(b) the participant shall be considered to be a "Lender".

D. Assignments to Federal Reserve
Banks. In addition to the assignments and participations permitted under the
foregoing provisions of this subsection 10.1, any Lender may assign and pledge
all or any portion of its Loans, the other Obligations owed to such Lender, and
its Note or Notes to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and
any operating circular issued by such Federal Reserve Bank; provided that
(i) no Lender shall, as between Company and such Lender, be relieved of any
of its obligations hereunder as a result of any such assignment and pledge and
(ii) in no event shall such Federal Reserve Bank be considered to be a
"Lender" or be entitled to require the assigning Lender to take or
omit to take any action hereunder.

E. Information. Each Lender may
furnish any information concerning Company and its Subsidiaries in the
possession of that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to subsection 10.19.

F. Agreements of Lenders. Each
Lender listed on the signature pages hereof hereby agrees (i) that it is an
Eligible Assignee described in clause (A) of the definition thereof; (ii) that
it has experience and expertise in the making of loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course of
its business and without a view to distribution of such Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the agreements of such
Lender contained in Section 2(c) of such Assignment Agreement are incorporated
herein by this reference.

10.2 Expenses.

Whether or not the transactions
contemplated hereby shall be consummated, Company agrees to pay promptly (i) all
the actual and reasonable costs and expenses of preparation of the Loan
Documents and any consents, amendments, waivers or other modifications thereto;
(ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions reasonably requested by Agent or Lenders as to any legal
matters arising hereunder) and of Company's performance of and compliance with
all agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to Agent
(including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
any consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual and
reasonable costs and expenses of creating and perfecting Liens in favor of Agent
on behalf of Lenders pursuant to any Loan Document, including costs of
conducting record searches, examining Collateral, opening bank accounts and
lockboxes, depositing checks, receiving and transferring funds (including
charges for checks for which there are insufficient funds), and fees and taxes
in connection with the filing of financing statements, costs of preparing and
recording Loan Documents, reasonable fees and expenses of counsel for providing
such opinions as Agent or Requisite Lenders may reasonably request, and
reasonable fees and expenses of legal counsel to Agent; (v) all the actual
and reasonable costs and expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any consultants,
advisors and agents employed or retained by Agent or its counsel) of obtaining
and reviewing any appraisals provided for under this Agreement; (vi) the
actual and reasonable costs of the custody or preservation of any of the
Collateral; (vii) after the occurrence and during the continuance of any
Event of Default, all other actual and reasonable costs and expenses incurred by
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Agent and Lenders in enforcing any Obligations of or in collecting
any payments due from any Loan Party hereunder or under the other Loan Documents
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Subsidiary Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.

10.3 Indemnity.

In addition to the payment of
expenses pursuant to subsection 10.2, whether or not the transactions
contemplated hereby shall be consummated, Company agrees to defend (subject to
Indemnitees' selection of counsel), indemnify, pay and hold harmless Agent and
Lenders, and the officers, directors, employees, agents and affiliates of Agent
and Lenders (collectively called the "Indemnitees"), from and
against any and all Indemnified Liabilities (as hereinafter defined); provided
that Company shall not have any obligation to any Indemnitee hereunder with
respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.

As used herein, "Indemnified
Liabilities" means, collectively, any and all liabilities, obligations,
losses, damages (including natural resource damages), penalties, actions,
judgments, suits, claims (including Environmental Claims), costs (including the
costs of any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate,
clean up or abate any Hazardous Materials Activity), expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto, and any fees or expenses incurred by Indemnitees in enforcing
this indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty, or any liability, cost, expense,
indemnity, claim or damages incurred by Agent with respect to the BOA Blocked
Account Agreement or the BOA Blocked Accounts), (ii) the statements contained in
the commitment letter delivered by any Lender to Company with respect thereto,
or (iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past or present activity,
operation, land ownership, or practice of Company or any of its Subsidiaries.

To the extent that the undertakings
to defend, indemnify, pay and hold harmless set forth in this subsection 10.3
may be unenforceable in whole or in part because they are violative of any law
or public policy, Company shall contribute the maximum portion that it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.

10.4 Set-Off; Security
Interest in Deposit Accounts.

In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence of any Event of Default and consultation with Agent
each Lender is hereby authorized by Company at any time or from time to time,
without notice to Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Company and each other Loan Party against and on
account of the obligations and liabilities of Company or any other Loan Party to
that Lender or to any other Lender under this Agreement, the Letters of Credit
and participations therein and the other Loan Documents, including all claims of
any nature or description arising out of or connected with this Agreement, the
Letters of Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any amounts
in respect of the Letters of Credit or any other amounts due hereunder shall
have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to Agent and each Lender a security interest in
all deposits and accounts maintained with Agent or such Lender as security for
the Obligations.

10.5 Ratable Sharing.

Lenders hereby agree among themselves
that if any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms of this
Agreement), by realization upon security, through the exercise of any right of
set-off or banker's lien, by counterclaim or cross action or by the enforcement
of any right under the Loan Documents or otherwise, or as adequate protection of
a deposit treated as cash collateral under the Bankruptcy Code or under any
other Insolvency Laws, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder or
under the other Loan Documents (collectively, the "Aggregate Amounts
Due" to such Lender) that is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Agent and each other Lender of the receipt of such payment and (ii) apply a
portion of such payment to purchase assignments (which it shall be deemed to
have purchased from each seller of an assignment simultaneously upon the receipt
by such seller of its portion of such payment) of the Aggregate Amounts Due to
the other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided
that if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such assignments shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
purchaser of an assignment so purchased may exercise any and all rights of a
Lender as to such assignment as fully as if that Lender had complied with the
provisions of subsection 10.1B with respect to such assignment. In order to
further evidence such assignment (and without prejudice to the effectiveness of
the assignment provisions set forth above), each purchasing Lender and each
selling Lender agree to enter into an Assignment Agreement at the request of a
selling Lender or a purchasing Lender, as the case may be, in form and substance
reasonably satisfactory to each such Lender.

10.6 Amendments and Waivers.

No amendment, modification,
termination or waiver of any provision of this Agreement or of the Notes, and no
consent to any departure by Company therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders; provided that no
such amendment, modification, termination, waiver or consent shall, without the
consent of (a) each Lender with Obligations directly affected (whose
consent shall be required for any such amendment, modification, termination or
waiver in addition to that of Requisite Lenders) (1) reduce the principal
amount of any Loan, (2) increase the maximum aggregate amount of Letters of
Credit, (3) postpone the scheduled final maturity date (but not the date of any
scheduled installment of principal) of any Loan, (4) postpone the date on which
any interest or any fees are payable, (5) decrease the interest rate borne by
any Loan (other than any waiver of any increase in the interest rate applicable
to any of the Loans pursuant to subsection 2.2E) or the amount of any fees
payable hereunder, (6) reduce the amount or postpone the due date of any amount
payable in respect of any Letter of Credit, (7) extend the expiration date of
any Letter of Credit beyond the Revolving Loan Commitment Termination Date, (8)
increase the Commitment of such Lender, or (9) change in any manner the
obligations of Revolving Lenders relating to the purchase of participations in
Letters of Credit; (b) each Lender, (1) change in any manner the definition
of "Pro Rata Share" or the definition of "Requisite Lenders"
(except for any changes resulting solely from an increase in Commitments
approved by Requisite Lenders), (2) change in any manner any provision of this
Agreement that, by its terms, expressly requires the approval or concurrence of
all Lenders, (3) increase the maximum duration of Interest Periods
permitted hereunder, (4) release any Lien granted in favor of Agent with respect
to all or substantially all of the Collateral or release any Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty, in each case other
than in accordance with the terms of the Loan Documents, (5) change in any
manner or waive the provisions contained in subsection 8.1 or this subsection
10.6; (6) change in any manner the provisions contained in the second
paragraph of subsection 2.1C(ii); or (7) increase the advance rate with
respect to the Revolving Loans (except for the restoration by Agent of an
advance rate in whole or in part to its original level after the prior reduction
thereof by Agent).

In addition, (i) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note, (ii) no amendment, modification, termination or waiver of any
provision of Section 3 shall be effective without the written concurrence of
Agent and, with respect to the purchase of participations in Letters of Credit,
without the written concurrence of each Issuing Lender that has issued an
outstanding Letter of Credit or has not been reimbursed for a payment under a
Letter of Credit, and (iii) no amendment, modification, termination or
waiver of any provision of Section 9 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
Agent shall be effective without the written concurrence of Agent.

If, in connection with any proposed
amendment, modification, termination or waiver of any of the provisions of this
Agreement or the Notes which requires the consent of all Lenders, the consent of
Requisite Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Company shall have the
right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clause (i) or (ii) below, to either
(i) replace each such non-consenting Lender or Lenders with one or more
Replacement Lenders pursuant to subsection 2.9 so long as at the time of such
replacement, each such Replacement Lender consents to the proposed amendment,
modification, termination or waiver, or (ii) terminate such non-consenting
Lender's Commitments and repay in full its outstanding Loans in accordance with
subsections 2.4B(i) and 2.4B(ii); provided that unless the Commitments that are
terminated and the Loans that are repaid pursuant to the preceding clause (ii)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Commitments and/or outstanding Loans of existing
Lenders (who in each case must specifically consent thereto), then in the case
of any action pursuant to the preceding clause (ii), the Requisite Lenders
(determined before giving effect to the proposed action) shall specifically
consent thereto; provided further that Company shall not have the right to
terminate such non-consenting Lender's Commitment and repay in full its
outstanding Loans pursuant to clause (ii) of this subsection 10.6 if,
immediately after the termination of such Lender's Revolving Loan Commitment in
accordance with subsection 2.4B(ii)(b), the Revolving Loan Exposure of all
Lenders would exceed the Revolving Loan Commitments of all Lenders; provided
still further that Company shall not have the right to replace a Lender solely
as a result of the exercise of such Lender's rights (and the withholding of any
required consent by such Lender) pursuant to the second paragraph of this
subsection 10.6.

Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.

10.7 Independence of
Covenants.

All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of an Event of Default or Potential Event of
Default if such action is taken or condition exists.

10.8 Notices.

Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices
to Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Company and Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other
address as shall be designated by such party in a written notice delivered to
Agent.

10.9 Survival of
Representations, Warranties and Agreements.

A. All representations,
warranties and agreements made herein shall survive the execution and delivery
of this Agreement and the making of the Loans and the issuance of the Letters of
Credit hereunder.

B. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Company set
forth in subsections 2.6D, 2.7, 3.5A, 10.2, 10.3 and 10.4 and the agreements of
Lenders set forth in subsections 9.2C, 9.4 and 10.5 shall survive the payment of
the Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.

10.10 Failure or Indulgence
Not Waiver; Remedies Cumulative.

No failure or delay on the part of
Agent or any Lender in the exercise of any power, right or privilege hereunder
or under any other Loan Document shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

10.11 Marshalling; Payments
Set Aside.

Neither Agent nor any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the extent
that Company makes a payment or payments to Agent or Lenders (or to Agent for
the benefit of Lenders), or Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.

10.12 Severability.

In case any provision in or
obligation under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

10.13 Obligations Several;
Independent Nature of Lenders' Rights.

The obligations of Lenders hereunder
are several and no Lender shall be responsible for the obligations or
Commitments of any other Lender hereunder. Nothing contained herein or in any
other Loan Document, and no action taken by Lenders pursuant hereto or thereto,
shall be deemed to constitute Lenders as a partnership, an association, a joint
venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.

10.14 Headings.

Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.

10.15 Applicable Law.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

10.16 Construction of
Agreement.

Each of the parties hereto
acknowledges that it has been represented by counsel in the negotiation and
documentation of the terms of this Agreement, that it has had full and fair
opportunity to review and revise the terms of this Agreement, and that this
Agreement has been drafted jointly by all of the parties hereto. Accordingly,
each of the parties hereto acknowledges and agrees that the terms of this
Agreement shall not be construed against or in favor of another party.

10.17 Consent to
Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA, COUNTY AND CITY OF LOS
ANGELES. BY EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:

  (I) ACCEPTS GENERALLY AND
  UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

  (II) WAIVES ANY DEFENSE OF FORUM
  NON CONVENIENS;

  (III) AGREES THAT SERVICE OF ALL
  PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
  CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED
  IN ACCORDANCE WITH SUBSECTION 10.8;

  (IV) AGREES THAT SERVICE AS
  PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
  OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
  CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

  (V) AGREES THAT LENDERS RETAIN THE
  RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
  PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND

  (VI) AGREES THAT THE PROVISIONS OF
  THIS SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
  ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA OR OTHERWISE.

10.18 Waiver of Jury Trial.

EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING
ESTABLISHED. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.

10.19 Confidentiality.

Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with such Lender's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by Company that in any event a Lender may make (a) disclosures to
Affiliates and professional advisors of such Lender, (b) disclosures
reasonably required by (i) any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participations therein, or (ii) any direct or
indirect contractual counterparties in swap agreements or such contractual
counterparties' professional advisors provided that such assignee,
transferee, participant, contractual counterparty or professional advisor agrees
in writing to keep such information confidential to the same extent required of
the Lenders hereunder, or (c) disclosures required or requested by any
Government Authority or representative thereof or pursuant to legal process and
that no written or oral communications from counsel to Agent and no information
that is or is designated as privileged or as attorney work product may be
disclosed to any Person unless such Person is a Lender or a participant
hereunder; provided that, unless specifically prohibited by applicable
law or court order, each Lender shall notify Company of any request by any
Government Authority or representative thereof (other than any such request in
connection with any examination of the financial condition of such Lender by
such Government Authority) for disclosure of any such non-public information
prior to disclosure of such information; and provided, further
that in no event shall any Lender be obligated or required to return any
materials furnished by Company or any of its Subsidiaries.

10.20 Counterparts;
Effectiveness.

This Agreement and any amendments,
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Agreement shall become
effective upon the execution of a counterpart hereof by each of the parties
hereto and receipt by Company and Agent of written or telephonic notification of
such execution and authorization of delivery thereof.

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

  
    
      
        
          
                        
                        Company:

                        SUNRISE MEDICAL, INC.

                        
                        By:  ____________________

                        Title:  ___________________

                        Notice Address:

                        2382 Faraday Avenue

                        Carlsbad, CA 92008

                        Attention: Mr. Ted N. Tarbet

                        Senior Vice President & Chief Financial
                                Officer

                        Facsimile: (760) 930-1580

                        
                        LENDERS:

                        BANKERS TRUST COMPANY,

                        as a Lender and as Agent

                        By:  ____________________

                        Name: Eric S. Miller

                        Title: Vice President

                        Notice Address:

                        130 Liberty Street, 14th Floor

                        New York, New York 10006

                        Facsimile: (212) 669-0142

                        Attention: Ira Lubinsky

                        
                         

                        DEUTSCHE BANK, AG, New York Branch,

                        as an Issuing Lender

                        By:  ____________________

                        Name: Eric S. Miller

                        Title: Vice President

                        Notice Address:

                        130 Liberty Street, 14th Floor

                        New York, New York 10006

                        Attention: Ira Lubinsky

                        Facsimile: (212) 669-0142

            
              
                
                  
                    
                      
                         

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

EXHIBIT I

FORM OF NOTICE OF BORROWING

Pursuant to that certain Credit
Agreement dated as of September 8, 2000 as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so amended,
supplemented or otherwise modified, being the "Credit Agreement", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Sunrise Medical, Inc., a Delaware corporation
("Company"), the financial institutions listed therein as Lenders
("Lenders"), and Bankers Trust Company, as Agent ("Agent"),
this represents Company's request to borrow as follows:

  	1. Date of borrowing:
        ___________________, 200_
	2. Amount of borrowing:
        $___________________
	3. Interest rate option:	[ ] a. Base Rate Loan(s)
		[ ] b. Eurodollar Rate Loans with an initial Interest
        Period of ____________ month(s)

The proceeds of such Loans are to be deposited in Company's
account at the Funding and Payment Office.

The undersigned officer, solely in
his or her capacity as an officer of the Company, to the best of his or her
knowledge, and Company certify that:

  (i) The representations and
  warranties contained in the Credit Agreement and the other Loan Documents are
  true, correct and complete in all material respects on and as of the date
  hereof to the same extent as though made on and as of the date hereof, except
  to the extent such representations and warranties specifically relate to an
  earlier date, in which case such representations and warranties were true,
  correct and complete in all material respects on and as of such earlier date;

  (ii) No event has occurred and is
  continuing or would result from the consummation of the borrowing contemplated
  hereby that would constitute an Event of Default or a Potential Event of
  Default;

  (iii) Each Loan Party has performed
  in all material respects all agreements and satisfied all conditions which the
  Credit Agreement provides shall be performed or satisfied by it on or before
  the date hereof; and

  (iv) After giving effect to the
  requested Loans, the Total Utilization of Revolving Loan Commitments will not
  exceed the Revolving Loan Commitments then in effect and the Borrowing Base
  then in effect and the requested Loan will otherwise comply with the
  requirements of subsection 2.1A of the Credit Agreement.

  
     

  

DATED: ____________________

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:___________________________

              Title:__________________________

              
                
                  
                    
                      
                        
                          
                             

                             

                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

EXHIBIT II

FORM OF NOTICE OF CONVERSION/CONTINUATION

Pursuant to that certain Credit
Agreement dated as of September 8, 2000, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so amended,
supplemented or otherwise modified, being the "Credit Agreement", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Sunrise Medical, Inc., a Delaware corporation
("Company"), the financial institutions listed therein as Lenders, and
Bankers Trust Company, as Agent ("Agent"), this represents Company's
request to convert or continue Loans as follows:

  1. Date of conversion/continuation:
  __________________, 200__

  2. Amount of Loans being converted/continued:
  $___________________

  3. Nature of conversion/continuation:

  
    [ ] a. Conversion of Base Rate Loans to Eurodollar Rate
    Loans

    [ ] b. Conversion of Eurodollar Rate Loans to Base Rate Loans

    [ ] c. Continuation of Eurodollar Rate Loans as such

  

  4. If Loans are being continued as or converted to
  Eurodollar Rate Loans, the duration of the new Interest Period that commences
  on the conversion/ continuation date: _______________ month(s)

In the case of a conversion to or
continuation of Eurodollar Rate Loans, the undersigned officer, solely in his or
her capacity as an officer of the Company, to the best of his or her knowledge,
and Company certify that no Event of Default or Potential Event of Default has
occurred and is continuing under the Credit Agreement.

 

DATED: ____________________

  
    
      
        
          
            
              
                SUNRISE MEDICAL, INC.

                By:__________________________

                Title:__________________________

                
                  
                    
                      
                        
                          
                             

                             

                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                         

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                            

                            

                             

                             

                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

EXHIBIT III

FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT

Pursuant to that certain Credit
Agreement dated as of September 8, 2000, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so amended,
supplemented or otherwise modified, being the "Credit Agreement", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Sunrise Medical, Inc., a Delaware corporation
("Company"), the financial institutions listed therein as Lenders, and
Bankers Trust Company, as Agent ("Agent"), this represents Company's
request for the issuance of a Letter of Credit as follows:

  1. Issuing Lender: 

  
    [ ] a. Agent

    [ ] b. _________________________________

  

  2. Letter of Credit Type:  

  
    [ ] a. Commercial Letter of Credit

    [ ] b. Standby Letter of Credit

  

  3. Date of issuance of Letter of Credit:
  ________________, 200__

  4. Face amount of Letter of Credit:
  $________________________

  5. Expiration date of Letter of Credit:
  ________________, 200__

  6. Name and address of beneficiary:

  
    ___________________________________________

    ___________________________________________

    ___________________________________________

    ___________________________________________

  

  7. Attached hereto is:

  
    [ ] a. the verbatim text of such proposed Letter of
    Credit

    [ ] b. a description of the proposed terms and conditions
    of such Letter of Credit, including a precise description of any documents
    to be presented by the beneficiary which, if presented by the beneficiary
    prior to the expiration date of such Letter of Credit, would require the
    Issuing Lender to make payment under such Letter of Credit.

  

The undersigned officer, solely in
his or her capacity as an officer of the Company and to the best of his or her
knowledge, and Company certify that:

  (i) The representations and
  warranties contained in the Credit Agreement and the other Loan Documents are
  true, correct and complete in all material respects on and as of the date
  hereof to the same extent as though made on and as of the date hereof, except
  to the extent such representations and warranties specifically relate to an
  earlier date, in which case such representations and warranties were true,
  correct and complete in all material respects on and as of such earlier date;

  (ii) No event has occurred and is
  continuing or would result from the issuance of the Letter of Credit
  contemplated hereby that would constitute an Event of Default or a Potential
  Event of Default;

  (iii) Each Loan Party has performed
  in all material respects all agreements and satisfied all conditions which the
  Credit Agreement provides shall be performed or satisfied by it on or before
  the date hereof; and

  (iv) After giving effect to the
  requested Letter of Credit, the Total Utilization of Revolving Loan
  Commitments will not exceed the Revolving Loan Commitments then in effect or
  the Borrowing Base then in effect, and the requested Letter of Credit will
  otherwise comply with the provisions of subsection 3.1A of the Credit
  Agreement.

  
     

  

DATED: ____________________

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:__________________________

              Title:__________________________

              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

EXHIBIT IV

FORM OF REVOLVING NOTE

SUNRISE MEDICAL, INC.

	$58,000,000 	
      Los Angeles, California

      September 8, 2000

 

FOR VALUE RECEIVED, Sunrise Medical,
Inc., a Delaware corporation ("Company"), promises to pay to BANKERS
TRUST COMPANY ("Payee") or its registered assigns, the lesser of (x) fifty
eight million dollars ($58,000,000) and (y) the unpaid principal amount of
all advances made by Payee to Company as Revolving Loans under the Credit
Agreement referred to below. The principal amount of this Note shall be payable
on the dates and in the amounts specified in the Credit Agreement; provided
that the last such installment shall be in an amount sufficient to repay the
entire unpaid principal balance of this Note, together with all accrued and
unpaid interest thereon.

Company also promises to pay interest
on the unpaid principal amount hereof, from the date hereof until paid in full,
at the rates and at the times which shall be determined in accordance with the
provisions of that certain Credit Agreement dated as of September 8_, 2000
by and among Company, the financial institutions listed therein as Lenders, and
Bankers Trust Company, as Agent (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein
being used herein as therein defined).

This Note is one of Company's
"Revolving Notes" and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid.

All payments of principal and
interest in respect of this Note shall be made in lawful money of the United
States of America in same day funds at the Funding and Payment Office or at such
other place as shall be designated in writing for such purpose in accordance
with the terms of the Credit Agreement. Unless and until an Assignment Agreement
effecting the assignment or transfer of this Note shall have been accepted by
Agent and recorded in the Register as provided in the Credit Agreement, Company
and Agent shall be entitled to deem and treat Payee as the owner and holder of
this Note and the Loans evidenced hereby. Payee hereby agrees, by its acceptance
hereof, that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however,
that the failure to make a notation of any payment made on this Note shall not
limit or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.

Whenever any payment on this Note
shall be stated to be due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest on this Note.

This Note is subject to mandatory
prepayment as provided in the Credit Agreement and to prepayment at the option
of Company as provided in the Credit Agreement.

THIS NOTE AND THE RIGHTS AND
OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

Upon the occurrence of an Event of
Default, the unpaid balance of the principal amount of this Note, together with
all accrued and unpaid interest thereon, may become, or may be declared to be,
due and payable in the manner, upon the conditions and with the effect provided
in the Credit Agreement.

The terms of this Note are subject to
amendment only in the manner provided in the Credit Agreement.

This Note is subject to restrictions
on transfer or assignment as provided in the Credit Agreement.

No reference herein to the Credit
Agreement and no provision of this Note or the Credit Agreement shall alter or
impair the obligations of Company, which are absolute and unconditional, to pay
the principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.

Company promises to pay all costs and
expenses, including reasonable attorneys' fees, all as provided in the Credit
Agreement, incurred in the collection and enforcement of this Note. Company and
any endorsers of this Note hereby consent to renewals and extensions of time at
or after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.

 

IN WITNESS WHEREOF, Company has
caused this Note to be duly executed and delivered by its officer thereunto duly
authorized as of the date and at the place first written above.

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:__________________________

              Title:__________________________

              
                
                  
                    
                      
                        
                          
                             

                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

TRANSACTIONS

ON

REVOLVING NOTE

 

	
       

       

      
      Date
	
      Type of

      Loan Made

      This Date

    	
      Amount of

      Loan Made

        This Date  

    	
      Amount of

      Principal Paid

         This Date  

    	
      Outstanding

      Principal Balance

         This Date  

    	
       

      Notation

      Made By

    
	 	 	 	 	 	 

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

EXHIBIT V

FORM OF SUBSIDIARY GUARANTY

This SUBSIDIARY GUARANTY is entered into as of
September 8, 2000 by the undersigned (each a "Guarantor", and
together with any future Subsidiaries executing this Guaranty, being
collectively referred to herein as the "Guarantors") in favor of and
for the benefit of BANKERS TRUST COMPANY, as agent for and representative of (in
such capacity herein called "Guarantied Party") the financial
institutions ("Lenders") party to the Credit Agreement referred to
below and any Exchangers (as hereinafter defined), and for the benefit of the
other Beneficiaries (as hereinafter defined).

RECITALS.

Sunrise Medical, Inc., a Delaware
corporation ("Company"), has entered into that certain Credit
Agreement dated as of September 8, 2000 with Lenders and Guarantied Party,
as Agent for Lenders (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement"; capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined).

Company may from time to time enter,
or may from time to time have entered, into one or more Interest Rate Agreements
and/or one or more Currency Agreements (collectively, the "Hedge
Agreements") with one or more Persons that are Lenders or Affiliates of
Lenders at the time such Hedge Agreements are entered into (in such capacity,
collectively, "Exchangers") in accordance with the terms of the Credit
Agreement, and it is desired that the obligations of Company under the Hedge
Agreements, including without limitation any obligation of Company to make
payments thereunder in the event of early termination thereof, together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.

Guarantied Party and Lenders and each
Exchanger for which Guarantied Party has received the notice required by Section
18 hereof are sometimes referred to herein as "Beneficiaries".

A portion of the proceeds of the
Loans may be advanced to Guarantors and thus the Guarantied Obligations (as
hereinafter defined) are being incurred for and will inure to the benefit of
Guarantors (which benefits are hereby acknowledged).

It is a condition precedent to the
making of the initial Loans under the Credit Agreement that Company's
obligations thereunder be guarantied by Guarantors.

Guarantors are willing irrevocably
and unconditionally to guaranty such obligations of Company.

NOW, THEREFORE, based upon the
foregoing and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in order to induce Lenders and Guarantied
Party to enter into the Credit Agreement and to make Loans and other extensions
of credit thereunder and to induce Exchangers to enter into the Hedge
Agreements, Guarantors hereby agree as follows:

1. Guaranty. (a) In order to induce Lenders to extend
credit to Company pursuant to the Credit Agreement and the entry by Exchangers
into the Hedge Agreements, Guarantors jointly and severally irrevocably and
unconditionally guaranty, as primary obligors and not merely as sureties, the
due and punctual payment in full of all Guarantied Obligations (as hereinafter
defined) when the same shall become due, whether at stated maturity, by
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "Guarantied
Obligations" is used herein in its most comprehensive sense and includes
any and all Obligations of Company and all obligations of Company under Hedge
Agreements, now or hereafter made, incurred or created, whether absolute or
contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the Credit Agreement, the Hedge Agreements,
this Guaranty and the other Loan Documents, including those arising under
successive borrowing transactions under the Credit Agreement which shall either
continue such obligations of Company or from time to time renew them after they
have been satisfied.

Each Guarantor acknowledges that a
portion of the Loans may be advanced to it, that Letters of Credit may be issued
for the benefit of its business and that the Guarantied Obligations are being
incurred for and will inure to its benefit.

Any interest on any portion of the
Guarantied Obligations that accrues after the commencement of any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Company (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceeding had not
been commenced) shall be included in the Guarantied Obligations because it is
the intention of each Guarantor and Guarantied Party that the Guarantied
Obligations should be determined without regard to any rule of law or order that
may relieve Company of any portion of such Guarantied Obligations.

In the event that all or any portion
of the Guarantied Obligations is paid by Company, the obligations of each
Guarantor hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such
payment(s) is rescinded or recovered directly or indirectly from Guarantied
Party or any other Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments that are so rescinded or recovered shall
constitute Guarantied Obligations.

Subject to the other provisions of
this Section 1, upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, each Guarantor will upon
demand pay, or cause to be paid, in cash, to Guarantied Party for the ratable
benefit of Beneficiaries, an amount equal to the aggregate of the unpaid
Guarantied Obligations.

(b) Anything contained in this
Guaranty to the contrary notwithstanding, the obligations of each Guarantor
under this Guaranty shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in respect of
intercompany indebtedness to Company or other affiliates of Company to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder and (y) under any guaranty of
Subordinated Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this Section 1(b), pursuant to which the
liability of such Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets to
the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, reimbursement, indemnification or
contribution of such Guarantor pursuant to applicable law or pursuant to the
terms of any agreement.

(c) Each Guarantor under this
Guaranty, and each guarantor under other guaranties, if any, relating to the
Credit Agreement (the "Related Guaranties") that contain a
contribution provision similar to that set forth in this Section 1(c), together
desire to allocate among themselves (collectively, the "Contributing
Guarantors"), in a fair and equitable manner, their obligations arising
under this Guaranty and the Related Guaranties. Accordingly, in the event any
payment or distribution is made on any date by a Guarantor under this Guaranty
or a guarantor under a Related Guaranty, each such Guarantor or such other
guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the maximum amount permitted by law so as to maximize
the aggregate amount of the Guarantied Obligations paid to Beneficiaries.

2. Guaranty Absolute; Continuing
Guaranty. The obligations of each Guarantor hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guarantied Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees
that: (a) this Guaranty is a guaranty of payment when due and not of
collectibility; (b) Guarantied Party may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement or the occurrence
of an early termination date or similar event under any Hedge Agreements
notwithstanding the existence of any dispute between Company and any Beneficiary
with respect to the existence of such event; (c) the obligations of each
Guarantor hereunder are independent of the obligations of Company under the Loan
Documents or the Hedge Agreements and the obligations of any other Guarantor and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not any action is brought against Company or any of such
other Guarantors and whether or not Company is joined in any such action or
actions; and (d) a payment of a portion, but not all, of the Guarantied
Obligations by one or more Guarantors shall in no way limit, affect, modify or
abridge the liability of such or any other Guarantor for any portion of the
Guarantied Obligations that has not been paid. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its successors and
assigns, and each Guarantor irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any Guarantied Obligations.

3. Actions by Beneficiaries. Any
Beneficiary may from time to time, without notice or demand and without
affecting the validity or enforceability of this Guaranty or giving rise to any
limitation, impairment or discharge of any Guarantor's liability hereunder, (a) renew,
extend, accelerate or otherwise change the time, place, manner or terms of
payment of the Guarantied Obligations, (b) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the
benefit of any Beneficiary in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Guarantied Party or the other Beneficiaries, or any
of them, may have against any such security, as Guarantied Party in its
discretion may determine consistent with the Credit Agreement, the Hedge
Agreements and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and (f) exercise
any other rights available to Guarantied Party or the other Beneficiaries, or
any of them, under the Loan Documents or the Hedge Agreements.

4. No Discharge. This Guaranty and
the obligations of Guarantors hereunder shall be valid and enforceable and shall
not be subject to any limitation, impairment or discharge for any reason (other
than payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not any Guarantor
shall have had notice or knowledge of any of them: (a) any failure to
assert or enforce or agreement not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or remedy with
respect to the Guarantied Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the Guarantied
Obligations, (b) any waiver or modification of, or any consent to departure
from, any of the terms or provisions of the Credit Agreement, any of the other
Loan Documents, the Hedge Agreements or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the Guarantied
Obligations, (c) the Guarantied Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect, (d) the application of payments received from any source to the
payment of indebtedness other than the Guarantied Obligations, even though
Guarantied Party or the other Beneficiaries, or any of them, might have elected
to apply such payment to any part or all of the Guarantied Obligations (other
than payments made by the applicable Guarantor pursuant to the Loan Documents or
the Hedge Agreements, as the case may be, or from the proceeds of any security
granted by the applicable Guarantor for the Guarantied Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations), (e) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Guarantied Obligations, (f) any defenses, set-offs or counterclaims which
Company may assert against Guarantied Party or any Beneficiary in respect of the
Guarantied Obligations, including but not limited to failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury, and (g) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of a Guarantor as an obligor in respect of the Guarantied
Obligations.

5. Waivers. Each Guarantor waives,
for the benefit of Beneficiaries: (a) any right to require Guarantied Party
or the other Beneficiaries, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including
any other Guarantor) of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any other guarantor of the
Guarantied Obligations or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Company or any other Person, or (iv) pursue any
other remedy in the power of any Beneficiary; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Company including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Guarantied Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company from any cause other than payment in full of the
Guarantied Obligations; (c) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any
defense based upon Guarantied Party's or any other Beneficiary's errors or
omissions in the administration of the Guarantied Obligations, except behavior
that amounts to bad faith, gross negligence or willful misconduct; (e) (i) any
principles or provisions of law, statutory or otherwise, that are or might be in
conflict with the terms of this Guaranty and any legal or equitable discharge of
such Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and
(iv) promptness, diligence and any requirement that any Beneficiary
protect, secure, perfect or insure any Lien or any property subject thereto; (f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, including acceptance of this Guaranty,
notices of default under the Credit Agreement, notices of default or early
termination under any Hedge Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guarantied
Obligations or any agreement related thereto, notices of any extension of credit
to Company and notices of any of the matters referred to in Section 3 and 4
hereof and any right to consent to any thereof; and (g) to the fullest
extent permitted by law, any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.

As used in this paragraph, any
reference to "the principal" includes Company, and any reference to
"the creditor" includes Guarantied Party and each other Beneficiary.
In accordance with Section 2856 of the California Civil Code (a) Guarantor
waives any and all rights and defenses available to Guarantor by reason of
Sections 2787 to 2855, inclusive, 2899 and 3433 of the California Civil Code,
including without limitation any and all rights or defenses Guarantor may have
by reason of protection afforded to the principal with respect to any of the
Guarantied Obligations, or to any other guarantor of any of the Guarantied
Obligations with respect to any of such guarantor's obligations under its
guaranty, in either case pursuant to the antideficiency or other laws of the
State of California limiting or discharging the principal's indebtedness or such
guarantor's obligations, including without limitation Section 580a, 580b, 580d,
or 726 of the California Code of Civil Procedure; and (b) Guarantor waives all
rights and defenses arising out of an election of remedies by the creditor, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a Guarantied Obligation, has destroyed Guarantor's rights of
subrogation and reimbursement against the principal by the operation of Section
580d of the Code of Civil Procedure or otherwise; and even though that election
of remedies by the creditor, such as nonjudicial foreclosure with respect to
security for an obligation of any other guarantor of any of the Guarantied
Obligations, has destroyed Guarantor's rights of contribution against such other
guarantor. No other provision of this Guaranty shall be construed as limiting
the generality of any of the covenants and waivers set forth in this paragraph.

6. Guarantors' Rights of Subrogation,
Contribution, Etc.; Subordination of Other Obligations. Each Guarantor waives
any claim, right or remedy, direct or indirect, that such Guarantor now has or
may hereafter have against Company or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract,
by statute (including without limitation under California Civil Code Section
2847, 2848 or 2849), under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification
that such Guarantor now has or may hereafter have against Company, (b) any
right to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by any Beneficiary. In addition, until the Guarantied Obligations
(other than Guarantied Obligations which, after the occurrence of the foregoing
events, are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Hedge Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit and the
termination, expiration or cancellation of all Hedge Agreements) shall have been
paid in full and the Commitments shall have terminated, and all Letters of
Credit shall have expired or been cancelled, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor of any of the Guarantied Obligations. Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
Guarantied Party or the other Beneficiaries may have against Company, to all
right, title and interest Guarantied Party or the other Beneficiaries may have
in any such collateral or security, and to any right Guarantied Party or the
other Beneficiaries may have against such other guarantor.

Any indebtedness of Company now or
hereafter held by any Guarantor is subordinated in right of payment to the
Guarantied Obligations, and any such indebtedness of Company to a Guarantor
collected or received by such Guarantor after an Event of Default has occurred
and is continuing, and any amount paid to a Guarantor on account of any
subrogation, reimbursement, indemnification or contribution rights referred to
in the preceding paragraph when all Guarantied Obligations have not been paid in
full, shall be held in trust for Guarantied Party on behalf of Beneficiaries and
shall forthwith be paid over to Guarantied Party for the benefit of
Beneficiaries to be credited and applied against the Guarantied Obligations but
without affecting, impairing or limiting in any manner the liability of such
Guarantor under any other provision of this Guaranty; provided that any
payment on such indebtedness received by any Guarantor prior to the occurrence
and continuance of an Event of Default or Potential Event of Default and in
accordance with this Guaranty or the Credit Agreement shall be permitted and
need not be held in trust for or paid over to Guarantied Party on behalf of
Beneficiaries.

7. Expenses. Guarantors jointly and
severally agree to pay, or cause to be paid, on demand, and to save Guarantied
Party and the other Beneficiaries harmless against liability for, any and all
reasonable costs and expenses (including fees and disbursements of counsel and
allocated costs of internal counsel) incurred or expended by Guarantied Party or
any other Beneficiary in connection with the enforcement of or preservation of
any rights under this Guaranty.

8. Financial Condition of Company. No
Beneficiary shall have any obligation, and each Guarantor waives any duty on the
part of any Beneficiary, to disclose or discuss with such Guarantor its
assessment, or such Guarantor's assessment, of the financial condition of
Company or any matter or fact relating to the business, operations or condition
of Company. Each Guarantor has adequate means to obtain information from Company
on a continuing basis concerning the financial condition of Company and its
ability to perform its obligations under the Loan Documents and the Hedge
Agreements, and each Guarantor assumes the responsibility for being and keeping
informed of the financial condition of Company and of all circumstances bearing
upon the risk of nonpayment of the Guarantied Obligations.

9. Representations and Warranties.
Each Guarantor makes, for the benefit of Beneficiaries, each of the
representations and warranties made in the Credit Agreement by Company as to
such Guarantor, its assets, financial condition, operations, organization, legal
status, business and the Loan Documents to which it is a party.

10. Covenants. Each Guarantor agrees
that, so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding, or any Lender shall have any Commitment
or any Exchanger shall have any obligation under any Hedge Agreement, such
Guarantor will, unless Requisite Lenders shall otherwise consent in writing,
perform or observe, and cause its Subsidiaries to perform or observe, all of the
terms, covenants and agreements that the Loan Documents state that Company is to
cause a Guarantor and such Subsidiaries to perform or observe.

11. Set Off. In addition to any other
rights any Beneficiary may have under law or in equity, if any amount shall at
any time be due and owing by a Guarantor to any Beneficiary under this Guaranty,
such Beneficiary is authorized at any time or from time to time, without notice
(any such notice being expressly waived), to set off and to appropriate and to
apply any and all deposits (general or special, including but not limited to
indebtedness evidence by certificates of deposit, whether matured or unmatured)
and any other indebtedness of such Beneficiary owing to a Guarantor and any
other property of such Guarantor held by a Beneficiary to or for the credit or
the account of such Guarantor against and on account of the Guarantied
Obligations and liabilities of such Guarantor to any Beneficiary under this
Guaranty.

12. Discharge of Guaranty Upon Sale
of Guarantor. If all of the stock of a Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of (including
by merger or consolidation) in a sale not prohibited by the Credit Agreement or
otherwise consented to by Requisite Lenders, the obligations of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such sale.

13. Amendments and Waivers. No
amendment, modification, termination or waiver of any provision of this
Guaranty, and no consent to any departure by any Guarantor therefrom, shall in
any event be effective without the written concurrence of Guarantied Party and,
in the case of any such amendment or modification, Guarantors. Any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given.

14. Miscellaneous. It is not
necessary for Beneficiaries to inquire into the capacity or powers of any
Guarantor or Company or the officers, directors or any agents acting or
purporting to act on behalf of any of them.

The rights, powers and remedies given
to Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the Loan Documents or Hedge
Agreements or any agreement between one or more Guarantors and one or more
Beneficiaries or between Company and one or more Beneficiaries. Any forbearance
or failure to exercise, and any delay by any Beneficiary in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.

In case any provision in or
obligation under this Guaranty shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

This Guaranty shall inure to the
benefit of Beneficiaries and their respective successors and assigns.

ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH GUARANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Each Guarantor
agrees that service of all process in any such proceeding in any such court may
be made by registered or certified mail, return receipt requested, to such
Guarantor at its address set forth below its signature hereto, such service
being acknowledged by such Guarantor to be sufficient for personal jurisdiction
in any action against such Guarantor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of Guarantied Party or any Beneficiary to bring proceedings against such
Guarantor in the courts of any other jurisdiction.

EACH GUARANTOR AND, BY ITS ACCEPTANCE
OF THE BENEFITS HEREOF, GUARANTIED PARTY EACH AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the benefits hereof,
Guarantied Party each (i) acknowledges that this waiver is a material
inducement for such Guarantor and Guarantied Party to enter into a business
relationship, that such Guarantor and Guarantied Party have already relied on
this waiver in entering into this Guaranty or accepting the benefits thereof, as
the case may be, and that each will continue to rely on this waiver in their
related future dealings, and (ii) further warrants and represents that each
has reviewed this waiver with its legal counsel and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF THIS GUARANTY. In the event of
litigation, this Guaranty may be filed as a written consent to a trial by the
court.

15. Additional Guarantors. The
initial Guarantor(s) hereunder shall be such of the Subsidiaries of Company as
are signatories hereto on the date hereof. From time to time subsequent to the
date hereof, Subsidiaries of Company may become parties hereto, as additional
Guarantors (each an "Additional Guarantor"), by executing a
counterpart, a form of which is attached as Exhibit A, of this Guaranty. Upon
delivery of any such counterpart to Guarantied Party, notice of which is hereby
waived by Guarantors, each such Additional Guarantor shall be a Guarantor and
shall be as fully a party hereto as if such Additional Guarantor were an
original signatory hereof. Each Guarantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Guarantor hereunder, nor by any election of the Guarantied Party
not to cause any Subsidiary of Company to become an Additional Guarantor
hereunder. This Guaranty shall be fully effective as to any Guarantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Guarantor hereunder.

16. Counterparts; Effectiveness. This
Guaranty may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original for all purposes; but all such
counterparts together shall constitute but one and the same instrument. This
Guaranty shall become effective as to each Guarantor upon the execution of a
counterpart hereof by such Guarantor (whether or not a counterpart hereof shall
have been executed by any other Guarantor) and receipt by the Guaranteed Party
of written or telephonic notification of such execution and authorization of
delivery thereof.

17. Guarantied Party as Agent.

(a) Guarantied Party has been
appointed to act as Guarantied Party hereunder by Lenders. Guarantied Party
shall be obligated, and shall have the right hereunder, to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking any action, solely in accordance with this Guaranty and the
Credit Agreement.

(b) Guarantied Party shall at all
times be the same Person that is Agent under the Credit Agreement. Written
notice of resignation by Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Guarantied Party under
this Guaranty; and appointment of a successor Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Agent under subsection 9.5 of the Credit Agreement by successor Agent, that
successor Agent shall thereupon succeed to become vested with all the rights,
powers, privileges and duties of the retiring Guarantied party under this
Guaranty, and the retiring Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring Guarantied Party shall be discharged
from its duties and obligations under this Guaranty. After any retiring
Guarantied Party's resignation hereunder as Guarantied Party, the provisions of
this Guaranty shall inure to its benefits as to any actions taken or omitted to
be taken by it under this Guaranty while it was Guarantied Party hereunder.

18. Notice of Hedge Agreements.
Guarantied Party shall not be deemed to have any duty whatsoever with respect to
any Exchanger until it shall have received written notice in form and substance
satisfactory to Guarantied Party from Company, a Guarantor or the Exchanger as
to the existence and terms of the applicable Hedge Agreement.

 

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first written above.

		SUNRISE MEDICAL HHG INC.
      By: __________________________

		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    
		
      DYNAVOX SYSTEMS INC.

      
      By: __________________________

    
		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    
		
      SUNRISE MEDICAL CCG INC.

      
      By: __________________________

    
		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    
	`	
      SUNRISE MARIN HOLDINGS INC.

      
      By: __________________________

    
		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    
		
      SUNMED FINANCE INC.

      
      By: __________________________

    
		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    

ACKNOWLEDGED AND FOR PURPOSES

OR THE WAIVER OF JURY TRIAL SET

FORTH IN SECTION 14 ONLY, AGREED

AS OF THE DATE FIRST WRITTEN ABOVE

BANKERS TRUST COMPANY,

as Guarantied Party

By:_____________________________

  Name:

  Title:

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

EXHIBIT A

FORM OF COUNTERPART FOR ADDITIONAL GUARANTORS

This COUNTERPART (this
"Counterpart"), dated _______, 20__, is delivered pursuant to Section
15 of the Guaranty referred to below. The undersigned hereby agrees that this
Counterpart may be attached to the Guaranty, dated as of _____________, 20___
(as it may be from time to time amended, modified or supplemented, the
"Guaranty"; capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed therein), among the Guarantors named therein
and Bankers Trust Company, as Guarantied Party. The undersigned, by executing
and delivering this Counterpart, hereby becomes an Additional Guarantor under
the Guaranty in accordance with Section 15 thereof and agrees to be bound by all
of the terms thereof.

IN WITNESS WHEREOF, the undersigned
has caused this Counterpart to be duly executed and delivered by its officer
thereunto duly authorized as of ______________, 20__.

		
      [NAME OF ADDITIONAL GUARANTOR]

      
      By: __________________________

    
		
      
        Name:

        Title:

      

      Address:

      
        __________________________

        __________________________

        __________________________

      

    

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

EXHIBIT VI

FORM OF COMPLIANCE CERTIFICATE

THE UNDERSIGNED, SOLELY IN HIS OR HER CAPACITY AS AN OFFICER
OF THE COMPANY, HEREBY CERTIFIES THAT:

(1) I am the duly elected [Title] of
Sunrise Medical, Inc., a Delaware corporation ("Company");

(2) I have reviewed the terms of that
certain Credit Agreement dated as of September 8, 2000, as amended,
supplemented or otherwise modified to the date hereof (said Credit Agreement, as
so amended, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by and among
Company, the financial institutions listed therein as Lenders, and Bankers Trust
Company, as Agent, and the terms of the other Loan Documents, and we have made,
or have caused to be made under our supervision, a review in reasonable detail
of the transactions and condition of Company and its Subsidiaries during the
accounting period covered by the attached financial statements;

(3) The examination described in
paragraph (2) demonstrated and I hereby represent that the Company and its
subsidiaries have become and remain liable with respect to Contingent
Obligations under guarantees in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Company and
its Subsidiaries in an aggregate amount not in excess of $1,000,000; and

(4) The examination described in
paragraph (2) above did not disclose, and we have no knowledge of, the existence
of any condition or event which constitutes an Event of Default or Potential
Event of Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate[, except as
set forth below].

[Set forth [below] [in a separate
attachment to this Certificate] are all exceptions to paragraph (4) above
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Company has taken, is taking, or
proposes to take with respect to each such condition or event:

The foregoing certifications,
together with the computations set forth in Attachment No. 1 annexed hereto
and made a part hereof and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ____ day of
_____________, ____ pursuant to subsection 6.1(iv) of the Credit Agreement.

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:__________________________

              Name:__________________________

              Title:__________________________

              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

ATTACHMENT NO. 1

TO COMPLIANCE CERTIFICATE

 

This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, _______, and pertains to the
period from ___________, _______ to ___________, ________. Subsection references
herein relate to subsections of the Credit Agreement.

	
      A. Indebtedness
	
       

    
	
      1. Other unsecured senior Indebtedness permitted
      under subsection

          7.1(vii):
	
      $________________

	
      2. Maximum unsecured senior Indebtedness
      permitted under

          subsection 7.1(vii):
	
      $25,000,000

	
      3. Subordinated Indebtedness incurred during
      Fiscal Quarter
	
      $________________

	
      
        a. At time of incurrence:
      

    	
       

    
	
      1. Ratio of incurred Consolidated Total
      Indebtedness to

          Consolidated EBITDA for prior four Fiscal Quarter

          period:
	
      ___:1.00

	
      2. Ratio of consolidated total senior debt to
      Consolidated

          EBITDA for prior four Fiscal Quarter period (3.a.1 not

          to exceed 3.a.2 by greater than one multiple):
	
      ___:1.00

	
      b. Acquisition Subordinated Debt in each
      individual or related

          transactions incurred during Fiscal Quarter:
	
      $________________

	
      c. Maximum Acquisition Subordinated Debt
      permitted in individual

          or related transactions under subsection 1.1:
	
      $3,000,000

	
      d. Aggregate permitted Acquisition Subordinated
      Debt under

          subsection 1.1:
	
      $________________

	
      e. Maximum aggregate permitted Acquisition
      Subordinated Debt:
	
      $10,000,000

	
      4. Aggregate other Indebtedness:
	
      $________________

	
      5. Maximum aggregate other Indebtedness
      permitted under subsection

          7.1(ix):
	
      $10,000,000

	
      6. Aggregate Indebtedness created under permitted overdraft lines

          with commercial banks:
	
      $________________

	
      7. Maximum aggregate Indebtedness created under permitted

          overdraft lines with commercial banks under subsection
      7.1(x):
	
      $10,000,000

	
      8. Aggregate Indebtedness of Foreign Subsidiaries to Domestic

          Subsidiaries:
	
      $________________

	
      9. Maximum aggregate Indebtedness of Foreign Subsidiaries to

          Domestic Subsidiaries permitted under subsection
      7.1(xi):
	
      $10,000,000

	 	 
	
      B. Liens
	 
	
      1. Other Liens permitted under subsection 7.2A(vii):
	
      $________________

	
      6. Maximum other Liens permitted under subsection 7.2A(vii)::
	
      $5,000,000

	 	 
	
      C. Investments
	 
	
      1. Aggregate Investments made after the Closing Date in Foreign

          Subsidiaries by Domestic Subsidiaries:
	
      $_______________

	
      2. Maximum aggregate Investments after the Closing Date in Foreign

          Subsidiaries by Domestic Subsidiaries permitted under
      subsection

          7.3(viii)::
	
      $10,000,000

	
      3. Aggregate fair market value of other Investments in Fiscal

          Year-to-date as permitted under subsection 7.3(ix):
	
      $_______________

	
      4. Maximum aggregate fair market value of other Investments in

          Fiscal Year as permitted under subsection 7.3(ix):
	
      $10,000,000

	D. Contingent Obligations	 
	1. Aggregate liability of other Contingent
      Obligations permitted under

          subsection 7.4(x):	
      $_______________

	2. Maximum aggregate liability of other
      Contingent Obligations

          permitted under subsection 7.4(x):	
      $10,000,000

	E. Minimum Consolidated Adjusted EBITDA (for
      the four-Fiscal

          Quarter period ending __________, _______)	
      $______________

	1. Consolidated Net Income:	 
	2. Consolidated Interest Expense:	
      $______________

	3. Provisions for taxes based on income:	
      $______________

	4. Total depreciation expense:	
      $______________

	5. Total amortization expense:	
      $______________

	6. Other permitted non-cash items deducted in
      the calculation of

          Consolidated Net Income:	
      $_______________

	7. Other permitted non-cash items added in the
      calculation of

          Consolidated Net Income:	
      $_______________

	8. Consolidated EBITDA (1+2+3+4+5+6-7):	
      $_______________

	9. Income attributable to interest earned on
      Cash and Cash

          Equivalents held by Company and its Subsidiaries:	
      $_______________

	10. To extent deducted in determining
      Consolidated Net Income for

            such period, rental expense attributable to
      the permitted sale and

            leaseback of Facilities:	
      $_______________

	11. To extent deducted in determining
      Consolidated Net Income for

            such period but not in excess of an
      aggregate $1,500,000 for all

            periods, expenses attributable to any
      unconsummated sale,

            merger or transfer of Project Alpha or
      Project Beta:	
      $_______________

	
      12. To extent deducted in determining Consolidated Net Income for

            such period, fees, expenses and charges
      related to acquisitions

            and mergers of Company and its Subsidiaries
      incurred not later

            than one year after the Closing Date:
	
      $_______________

	
      13. To extent deducted in determining Consolidated Net Income for

            such period, any Restructuring Charges (not
      to exceed maximum

            permitted Restructuring Charges as
      calculated below):
	
      $_______________

	
      
        a. Maximum Annual Restructuring Charges:

      

      1. FY 2001: $27,000,000

      2. FY 2002: $44,000,000 minus the amount
      of Restructuring Charges included in Consolidated Adjusted EBITDA for FY
      2001

      3. FY 2003 and thereafter: $57,7000,000 minus
      the amount of Restructuring Charges included in Consolidated Adjusted
      EBITDA for all prior Fiscal Years ending on or about June 30, 2001 and
      thereafter
	
      $_______________

	
      14. Consolidated Adjusted EBITDA (8+9+10+11+12+13):
	
      $_______________

	
      15. Reduction upon Asset Sale under subsection 7.6 (Officer's

            Certificate attached):
	
      $_______________

	
      16. Minimum Consolidated Adjusted EBITDA permitted under

            subsection 7.6:
	
      $_______________

	
      17. Reduced Minimum Consolidated Adjusted EBITDA permitted

            under subsection 7.6 (16-15).
	
      $_______________

	 	 
	
      F. Fundamental Changes; Assets Sales
	 
	
      1. Aggregate fair market value of Asset Sales of assets located in the

          United States permitted under subsection 7.7(v):
	
      $_______________

	
      2. Maximum aggregate fair market value of Asset Sales of assets

          located in the United States permitted under subsection
      7.7(v):
	
      $5,000,000

	
      3. Aggregate fair market value of Asset Sales of assets located

          outside the United States permitted under subsection
      7.7(v):
	
      $_______________

	
      4. Maximum aggregate fair market value of Asset Sales of assets

          located outside the United States permitted under
      subsection

          7.7(v):
	
      $5,000,000

	
      5. Aggregate fair market value of Asset Sales in connection with

          permitted sale and leaseback transactions:
	
      $_______________

	
      6. Maximum aggregate fair market value of Asset Sales in connection

          with permitted sale and leaseback transactions under
      subsection

          7.7(viii):
	
      $30,000,000

	 	 
	
      G. Consolidated Adjusted Capital Expenditures
	 
	
      1. Consolidated Capital Expenditures for Fiscal Year-to-date:
	
      $______________

	
      2. Deductible Restructuring Capital Expenditures for Fiscal

          Year-to-date (not to exceed maximum permitted
      deductible

          Restructuring Capital Expenditures as calculated
      below):
	
      $______________

	
      a. Maximum annual deductible Restructuring
      Capital Expenditures:

      1. FY 2001: $5,400,000

      2. FY 2002: $16,600,000 minus the amount
      of Restructuring Capital Expenditures deducted from Consolidated Capital
      Expenditures for FY 2001

      3. FY 2003: $17,400,000 minus the amount
      of Restructuring Capital Expenditures deducted from Consolidated Capital
      Expenditures for FY 2001 and FY 2002

      4. FY 2004: $17,400,000 minus the amount
      of Restructuring Capital Expenditures deducted from Consolidated Capital
      Expenditures for FY 2001, FY 2002 and FY 2003
	
      $_______________

	
      3. Consolidated Adjusted Capital Expenditures (1-2):
	
      $_______________

	
      4. Maximum Consolidated Adjusted Capital Expenditures

          permitted under subsection 7.8 (as calculated from the
      table

          below):
	
      $_______________

	
      a. Maximum annual Consolidated Adjusted Capital
      Expenditures:

      1. FY 2001: $19,500,000

      2. FY 2002: $19,700,000 plus the excess,
      if any, of $19,500,000 over the Consolidated Adjusted Capital Expenditures
      for FY 2001

      3. FY 2003: $19,900,000 plus the excess,
      if any, of $19,700,000 over the Consolidated Adjusted Capital Expenditures
      for FY 2002

      4. FY 2004: $20,100,000 plus the excess,
      if any, of $19,900,000 over the Consolidated Adjusted Capital Expenditures
      for FY 2003
	 
	 	 
	
      H. Restricted Junior Payments
	 
	
      1. Aggregate amount of stock and stock option repurchases and

          poison pill payments made since Closing Date under
      subsection

          7.5(ii):
	
      $_______________

	
      2. Maximum aggregate amount of stock and stock option

          repurchases and poison pill payments made since Closing
      Date

          permitted under subsection 7.5(ii):
	
      $2,000,000

	 	 
	
      I. Litigation (attach schedule of all Proceedings involving an
      alleged liability of, or claims against or affecting, Company or any of
      its Subsidiaries equal to or greater than $1,000,000 as required by
      subsection 6.1(ix)).
	 

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

 

 

 

EXHIBIT VII

FORM OF SUBORDINATION PROVISIONS

_________________, 20__

FOR VALUE RECEIVED, Sunrise Medical, Inc., a Delaware
corporation (the "Maker"), having its principal place of business at
2382 Faraday Avenue, Suite 200, Carlsbad, California 92008, hereby promises to
pay ____________________, the principal sum of ______________________________
(_______________), which principal shall be due in five equal payments of
______________________________ (_______________) each on __________, ____, ____,
____, ____ and ____. The outstanding principal amount shall bear interest at the
rate of _____% per annum, with interest payable quarterly until this note is
fully paid. [The note shall be guaranteed by the general credit of Sunrise
Medical, Inc. ("Guarantor"), the 100% shareholder of
______________________________.]

This Note may be prepaid at the option of the Maker
in whole at any time or in part from time to time without notice or penalty.
Each such prepayment shall be applied to accrued but unpaid interest and then to
the next installment(s) of principal becoming due.

This Note is issued pursuant to a
____________________ Purchase Agreement, dated _______________ (the
"Agreement"), between Sunrise Medical, Inc. and the vendors of
____________________. This Note is subject to provisions of the Agreement,
including, without limitation, adjustment of, and offset to the principal amount
pursuant to the Agreement.

If an Event of Default (as hereinafter defined) shall
occur, then, at the option of the holder hereof, and subject to the
subordination provisions below, this Note shall upon presentment become
immediately due and payable.

An "Event of Default" shall be deemed to
have occurred hereunder if (a) the Maker shall fail to make any payment under
this Note in full when due and such failure shall not be cured within twenty
(20) days following receipt of written notice thereof; or (b) any proceeding
shall be commenced by the Maker, as debtor, under any bankruptcy,
reorganization, insolvency, readjustment of debt, arrangement, receivership or
liquidation law or statute, and such proceeding is not dismissed within 60 days
or is not timely controverted in good faith and on reasonable grounds by the
Maker or an order of relief is granted in such proceedings.

The indebtedness represented by this Note (including
the interest thereon) shall be subordinate and junior in right of payment, to
the extent set forth herein, to the prior payment in full of all indebtedness
(including, without limitation, all interest accrued thereon and all fees and
expenses accrued or incurred in relation thereto) of the Maker or the Guarantor,
whether presently existing or hereafter incurred, and any extensions, renewals
or modifications thereof, for money borrowed from or guaranteed to any banks,
trust companies, insurance companies or other lending institutions (the
"Senior Indebtedness").

The indebtedness represented by this Note (including
the interest thereon) shall be equal in priority with all other Acquisition
Indebtedness (as hereinafter defined) including, without limitation, all
interest incurred in relation thereto of the Maker or the Guarantor.
"Acquisition Indebtedness" shall mean all indebtedness of the Maker or
the Guarantor incurred in full or partial payment for the assets or stock
associated with business acquired by the Maker or the Guarantor heretofore
except Senior Indebtedness arising as a result of each acquisition.

No payment shall be made hereunder if an event which
would, or which with the giving of notice or passage of time would, permit any
Senior Indebtedness to be accelerated and to became immediately due at the
option of the holder thereof shall have occurred and be continuing or would
occur and exist by virtue of ouch payment, and such event shall not have been
waived or consented to by the holders of such Senior Indebtedness.

In the event an Event of Default occurs hereunder, or
any voluntary liquidation, dissolution or other winding up of the Maker or
Guarantor shall occur, all Senior Indebtedness must first be paid in full before
any payment or distribution of any character shall be made in respect of this
Note, and all payments and distributions which would otherwise (but for the
terms hereof) be payable or deliverable in respect of this Note shall be paid or
delivered directly to the holder of Senior Indebtedness at the time outstanding,
in accordance with the priorities of payment thereof, until all such Senior
Indebtedness shall have been paid in full. If any payment or distribution shall
be received by any holder of this Note in contravention of any of the terms
hereof and before all Senior Indebtedness shall be paid in full, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of the Senior Indebtedness at the time outstanding
for application to the payment of all Senior Indebtedness remaining unpaid, in
accordance with the priorities of payment thereof, to the extent necessary to
pay all Senior Indebtedness in full.

No act or failure to act on the part of the Maker,
and no default or breach of any agreement of the maker, whether or not herein
set forth, shall in any way prevent or limit the holder of any Senior
Indebtedness from enforcing fully the subordination herein provided for,
irrespective of any knowledge or notice which such holder hereof may at any time
have.

So long as any Senior Indebtedness shall be
outstanding, the Maker shall not, without the prior written consent of the
holders thereof, alter or amend any of the terms of this Note in any manner
which might adversely affect the holder of Senior Indebtedness. Nothing in this
note shall impair or qualify, as between the Maker and holder hereof, (i) the
obligation of the Maker to pay the holder hereof the principal of and interest
on this Note when and as due as set forth elsewhere herein, or (ii) the rights
of the holder hereof upon an Event of Default, all subject to the rights of the
holders of Senior Indebtedness as provided herein.

The Maker hereby waives all rights to offset against
its obligations hereunder and claims which it may now or hereafter have against
the payee or subsequent holder hereof, except for claims arising under the
Agreement or any agreement or instruments entered into pursuant thereto.

If any action should be commenced to collect this
Note or any portion thereof, such sum as the Court may deed reasonable shall be
added hereto as attorneys' fees. The prevailing party shall be entitled to
recover its reasonable attorneys' fees and costs of suit.

In the event that any term, covenant, condition,
provision or agreement herein contained is held to be invalid, void or otherwise
enforceable by any court of competent jurisdiction, the fact that such term,
covenant, condition, provision or agreement is invalid, void or otherwise
unenforceable shall in no way affect the validity or enforceability of any other
term, covenant, condition, provision or agreement herein contained.

This Note shall be governed by and construed in
accordance with the laws of ____________________ without regard to principles of
conflict of laws, and may not be amended, modified or cancelled orally.

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:

              
              Name:

              
              Title:

              
                
                  
                    
                      
                      
                       

                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                   

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                      

                      

                       

                       

                       

                    

                  

                

              

              

            

          

        

      

    

  

EXHIBIT VIII

FORM OF BORROWING BASE CERTIFICATE

____________, ____

Reference is made to the Credit
Agreement dated as September 8____, 2000 (as it may be amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among Sunrise Medical, Inc., a Delaware corporation
("Company"), the Lenders listed on the signature pages thereof, and
Bankers Trust Company, as Agent. Terms defined in the Credit Agreement and
undefined herein are used herein as defined therein.

Pursuant to subsection
[4.1F][6.1(xviii)] of the Credit Agreement, the undersigned, solely in his or
her capacity as the Chief Financial Officer of Company, hereby certifies that
attached hereto as Annex 1 is a true and accurate calculation of the
Borrowing Base as of __________, _____ determined in accordance with the
requirements of the Credit Agreement.

IN WITNESS WHEREOF, the undersigned
has caused this certificate to be duly executed as of ____________, ____.

  
    
      
        
          
            
              SUNRISE MEDICAL, INC.

              By:__________________________

              Name:__________________________

              Title:__________________________

               

               

              
                
                  
                    
                      
                        
                          
                            

                            

                             

                             

                             

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

  

ANNEX 1 TO

____________________

BORROWING BASE CERTIFICATE

 

  
  
  Borrowing Base Certificate #: _______________ As of Date: _______________

	
       

    	
      Total

	
      I. RECEIVABLES

    
	
       

    
	
      
        A. Total Accounts Receivable (Note:
        parenthetical references are to clauses in the definition of
        "Eligible Accounts Receivable")
      

    	
      _____

	
      
        
          Less:
        

      

    	
       

    
	
      
        
          
            Promissory Notes
          

        

      

    	
      _____

	
      
        
          
            Chargebacks
          

        

      

    	
      _____

	
      
        
          
            Sales to Affiliate,
            including without limitation intra/intercompany receivables and
            employee/salesperson receivables(a)
            

          

        

      	
      _____

	
      
        
          
            Payment Terms more than
            120 days(b)
            

          

        

      	
      _____

	
      
        
          
            Unpaid (i) more than 60
            days on payment terms of 90 days or less, or (ii) more than 30 days
            on payment terms of 120 days(c)
            

          

        

      	
      _____

	
      
        
          
            50% or more from
            Account Debtor Past Due(d)
            

          

        

      	
      _____

	
      
        
          
            Creditor or subject to
            a claim or setoff, to extent of same(e)
          

        

      

    	
      _____

	
      
        
          
            Insolvency Event
            Accounts(f)
            

          

        

      	
      _____

	
      
        
          
            Non-US Dollar/Foreign
            Accounts, unless letter of credit to Agent(g)
            

          

        

      	
      _____

	
      
        
          
            Bill/Hold; Sale/Return;
            Approval; Guarantied Sale; Consignment(h)
            

          

        

      	
      _____

	
      
        
          
            Uncertain Collection(i)
            

          

        

      	
      _____

	
      
        
          
            Medicare/Medicaid;
            Account Debtor is U.S. Government(j)
            

          

        

      	
      _____

	
      
        
          
            Goods not Shipped,
            Delivered, Accepted (valid sale)(k)
            

          

        

      	
      _____

	
      
        
          
            Account not comply
            legal requirements(l)
            

          

        

      	
      _____

	
      
        
          
            Account subject to
            Security Deposit, Progress Payment or Advance(m)
            

          

        

      	
      _____

	
      
        
          
            Account not subject to
            first priority Lien for Agent or not comply with Loan Documents(n)
            

          

        

      	
      _____

	
      
        
          
            Accounts exceed 10% of
            A/R of Loan Parties, to extent of such excess, unless letter of
            credit to Agent(o)
            

          

        

      	
      _____

	
      
        
          
            Other Ineligibility
            Imposed by Agent
          

        

      

    	
      _____

	
      B. Total Ineligible Accounts
	
      _____

	
      C. Gross Eligible Accounts (I.A.
      - I.B.)
	
      _____

	
      D. Less:
	
       

    
	
      
        Returns, credit memo
        reserves, discounts (other than secondary cash discounts), deductions,
        claims, credits, sales taxes, etc.
      

    	
      _____

	
      E. Net Eligible Accounts (I.C.
      - I.D.)
	
      _____

	
       

    	
       

    
	
      II. INVENTORY
	
       

    
	
      
        A. Total Inventory (Note: parenthetical
        references are to clauses in the definition of "Eligible
        Inventory")
      

    	
      _____

	
      Less:
	
       

    
	
      Inventory not owned solely
      by Loan Party or invalid title(a)
	
      _____

	
      Inventory not located in
      the U.S.(b)
	
      _____

	
      Consignments; Inventory not
      located on property of Loan Party and not subject to Collateral Access
      Agreement(c)

    
	
      _____

	
      Inventory not subject to
      first priority Lien for Agent(d)
	
      _____

	
      Inventory returned by third
      party or in transit(e)
	
      _____

	
      Inventory not first-quality
      goods or slow moving(f)
	
      _____

	
      Unreconciled/reconciled
      Items(g)
	
      _____

	
      Sample Inventory and
      Promotional Materials and Literature(h)
	
      _____

	
      Other Ineligibility imposed
      by Agent
	
      _____

	
      
        B. Total Ineligible Inventory
      

    	
      _____

	
      
        C. Eligible Inventory (II.A. - II.B.)
      

    	
      _____

	
      
        D. Less:
      

    	
       

    
	
      
        freight, duty, brokerage
        charges and all reserves
      

    	
      _____

	
      
        E. Net Eligible Inventory (II.C. - II.D.)
      

    	
      _____

	
       

    	
       

    
	
      III. BORROWING BASE
	
       

    
	
      A. 1. Net Eligible Accounts
      (I.E.)
	
      _____

	
      
        
          2. Multiplied by Advance Rate of 75%
          

        

      	
      0.75

	
      
        
          3. Total Accounts Availability (III.A.1.
          x 0.75)
        

      

    	
      _____

	
      B. 1. Net Eligible Inventory
      (II.E)
	
      _____

	
      
        
          2. Multiplied by Advance Rate of 50%
          

        

      	
      0.50

	
      
        
          3. Inventory Availability (III.B.1 x
          0.50)
        

      

    	
      _____

	
      
        
          4. Utilization Limitation (III.H x 0.30)
        

      

    	
      _____

	
      
        
          5. Total Inventory Availability (lesser
          of III.B.3 and III.B.4)
        

      

    	
      _____

	
      C. Qualifying Certificate of
      Deposit
	
      _____

	
      D. Total Borrowing Base
      Availability (III.A.3. + III.B.5. + III.C.)
	
      _____

	
      
        
          1. Less:
        

      

    	
       

    
	
      
        
              Reserve Established by
          Agent
        

      

    	
      _____

	
      
        E. Net Borrowing Base (III.D. - III.D.1.)
      

    	
      _____

	
      
        F. Loans Outstanding
      

    	
      _____

	
      
        G. Letter of Credit Obligations
      

    	
      _____

	
      
        H. Hedge Exposure
      

    	
      _____

	
      
        I. TOTAL UTILIZATION (III.F. + III.G. +III.H.)
      

    	
      _____

	
      
        J. NET AVAILABILITY FOR COMPANY

        (III.E. minus III.I.)
      

    	
      _____

    

 

 

EXHIBIT IX

FORM OF OPINION OF LATHAM & WATKINS

[DRAFT]

September 8, 2000

Bankers Trust Company, as Administrative Agent

130 Liberty Street

New York, New York 10006

and

The Lenders Listed on Schedule A Hereto

  
    Re: Credit Agreement, dated as of September 8, 2000, and entered
    into by and among Sunrise Medical, Inc., a Delaware corporation, the
    financial institutions listed therein, and Bankers Trust Company, as agent

  

Ladies and Gentlemen:

We have acted as counsel to Sunrise Medical, Inc., a
Delaware corporation ("Borrower"), Sunrise Medical HHG, Inc., a
California corporation ("HHG"), Dynavox Systems Inc., a
Pennsylvania corporation ("Dynavox"), and Sunrise Medical CCG
Inc., a Wisconsin corporation ("CCG", and together with, HHG
and Dynavox, "Guarantors" and together with Borrower,
collectively, the "Loan Parties" and individually, a "Loan
Party") in connection with that certain Credit Agreement dated as of
September 8, 2000 (the "Credit Agreement") and entered
into by and among Borrower, the financial institutions listed on the signatures
pages thereof (collectively, "Lenders", and individually, a
"Lender"), and Bankers Trust Company ("Bankers"),
as agent for the Lenders (in such capacity, "Agent"). This
opinion is rendered to you pursuant to Section 4.1G of the Credit Agreement.
Capitalized terms defined in the Credit Agreement, used herein and not otherwise
defined herein shall have the meanings given them in the Credit Agreement.

As such counsel, we have examined such matters of
fact and questions of law as we have considered appropriate for purposes of
rendering the opinions expressed below, except where a statement is qualified as
to knowledge or awareness, in which case we have made no or limited inquiry as
specified below. We have examined, among other things, the following:

  
    (a) the Credit Agreement;

    (b) that certain Revolving Note, dated September 8_,
    2000, in the original principal amount of $___________________ made by
    Borrower payable to Bankers (the "Note");

    (c) that certain Subsidiary Guaranty, entered
    into as of September 8_, 2000 (the "Subsidiary Guaranty"),
    by Guarantors in favor of Bankers, as agent for and representative of (in
    such capacity, "Collateral Agent") the Lenders and the
    Interest Rate Exchangers (as defined therein);

    (d) that certain Security Agreement, dated as of
    September 8_, 2000 (the "Security Agreement"), entered
    into by and among Borrower, the Subsidiaries of Borrower signatory thereto
    and Collateral Agent;

    (e) that certain Lockbox Agreement, dated as of
    September 8_, 2000 (the "Lockbox Agreement"), entered
    into by and among Borrower, Agent and ________________________;

    (f) [photocopies of the UCC-1 financing
    statements naming [insert names of Loan Parties filing California financing
    statements] as debtor and [Collateral Agent] as secured party, together with
    all schedules and exhibits to such financing statements, to be filed in the
    Office of the Secretary of State of the State of California (the "California
    Financing Statements");]

    (g) [photocopies of the UCC-1 financing
    statements naming [insert names of Loan Parties filing Delaware financing
    statements] as debtor and [Collateral Agent] as secured party, together with
    all schedules and exhibits to such financing statements, to be filed in the
    Office of the Secretary of State of the State of Delaware (the "Delaware
    Financing Statements");]

    (h) [photocopies of the UCC-1 financing
    statements naming [insert names of Loan Parties filing Pennsylvania
    financing statements] as debtor and [Collateral Agent] as secured party,
    together with all schedules and exhibits to such financing statements, to be
    filed in the Office of the Secretary of Commonwealth of the Commonwealth of
    Pennsylvania (the "Pennsylvania Financing Statements");]

    (i) [photocopies of the UCC-1 financing
    statements naming [insert names of Loan Parties filing Wisconsin financing
    statements] as debtor and [Collateral Agent] as secured party, together with
    all schedules and exhibits to such financing statements, to be filed in the
    Office of the Secretary of State of the State of Wisconsin (the "Wisconsin
    Financing Statements", and together with the California Financing
    Statements, the Delaware Financing Statements and the Pennsylvania Financing
    Statements, the "Financing Statements");]

    (j) the Certificate of Incorporation and Bylaws
    of Borrower (the "Borrower Governing Documents");

    (k) the Articles of Incorporation and Bylaws of
    HHG (the "HHG Governing Documents", and together with the
    Borrower Governing Documents, the "Governing Documents");

    (l) the indenture(s), note(s), loan agreement(s),
    mortgage(s), deed(s) of trust, security agreement(s), and other written
    agreement(s) and instrument(s) creating, evidencing or securing indebtedness
    of the Loan Parties for borrowed money, identified to us by an officer of
    Borrower as material to the Loan Parties and identified on Schedule B hereto
    (collectively, the "Material Agreements"); and

    (m) the court and administrative orders, writs,
    judgments and decrees specifically directed to the Loan Parties, identified
    to us by an officer of Borrower as material to the Loan Parties and
    identified on Schedule C hereto (the "Court Orders").

  

The documents described in subsections (a)-(e) above are referred to herein
collectively as the "Loan Documents". As used in this opinion,
the "California UCC" shall mean the Uniform Commercial Code as
now in effect in the State of California.

In our examination, we have assumed the genuineness
of all signatures (other than those of officers of the Loan Parties on the Loan
Documents), the legal capacity of all natural persons executing documents, the
authenticity of all documents submitted to us as originals, and the conformity
to authentic original documents of all documents submitted to us as copies. In
addition, we have assumed that the parties to the Loan Documents have not
entered into any agreements of which we are unaware which modify the terms of
the Loan Documents and have not otherwise expressly or by implication waived any
requirement of, or agreed to any modification of, the Loan Documents.

We have been furnished with and have relied upon
certificates of officers of the Loan Parties with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.

We are opining herein as to the effect on the subject
transactions only of the federal laws of the United States, the internal laws of
the State of California and the General Corporation Law of the State of Delaware
(the "DGCL") except with respect to our opinions set forth in
 paragraph 7 (i) as they relate to the Delaware Financing Statements
and the Delaware UCC (as defined below), we are opining as to the effect of the
subject transaction only of the Delaware UCC; (ii) as they relate to the
Pennsylvania Financing Statements and the Pennsylvania UCC (as defined below),
we are opining as to the effect of the subject transaction only of the
Pennsylvania UCC; and (iii)  as they relate to the Wisconsin Financing
Statements and the Wisconsin UCC (as defined below), we are opining as to the
effect of the subject transaction only of the Wisconsin UCC. Except as described
in the previous sentence, we express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws or as to any matters of
municipal law or the laws of any local agencies within any state or any federal
or state laws which are applicable to the parties thereto or the subject
transactions solely because of the nature or extent of their business.

With your permission, we have based our opinions set
forth in paragraph 7 with respect to (i) the Delaware Financing Statements
solely upon our review of Sections 9-103, 9-104, 9-105, 9-106, 9110, 9203, 9302,
9303, 9304, 9306, 9401, 9402, 9403 and 9406 of the Uniform Commercial Code as in
effect on the date hereof in the State of Delaware as set forth in the CCH
Secured Transactions Guide, copies of which are attached hereto as Exhibit
A, incorporated herein by reference and referred to herein as the "Delaware
UCC"; (ii) the Pennsylvania Financing Statements solely upon our
review of Sections 9-103, 9-104, 9-105, 9-106, 9110, 9203, 9302, 9303, 9304,
9306, 9401, 9402, 9403 and 9406 of the Uniform Commercial Code as in effect on
the date hereof in the Commonwealth of Pennsylvania as set forth in the CCH
Secured Transactions Guide, copies of which are attached hereto as Exhibit
B, incorporated herein by reference and referred to herein as the "Pennsylvania
UCC"; and (iii) the Wisconsin Financing Statements solely upon our
review of Sections 9-103, 9-104, 9-105, 9-106, 9110, 9203, 9302, 9303, 9304,
9306, 9401, 9402, 9403 and 9406 of the Uniform Commercial Code as in effect on
the date hereof in the State of Wisconsin as set forth in the CCH Secured
Transactions Guide, copies of which are attached hereto as Exhibit C,
incorporated herein by reference and referred to herein as the "Wisconsin
UCC". We have assumed that (i) the provisions of the Delaware UCC
are in effect on the date hereof in the State of Delaware and have not been
modified in any respect by any other statute, regulation or decision with
respect to the laws of the State of Delaware; (ii) the provisions of the
Pennsylvania UCC are in effect on the date hereof in the Commonwealth of
Pennsylvania and have not been modified in any respect by any other statute,
regulation or decision with respect to the laws of the Commonwealth of
Pennsylvania; and (iii) the provisions of the Wisconsin UCC are in effect
on the date hereof in the State of Wisconsin and have not been modified in any
respect by any other statute, regulation or decision with respect to the laws of
the State of Wisconsin. We call to your attention that we are not licensed to
practice law in any of the State of Delaware, the Commonwealth of Pennsylvania
or the State of Wisconsin, nor do we profess any expertise with respect to the
laws thereof (other than the DGCL).

Our opinions set forth in paragraph 4 below are based
upon our consideration of only those statutes, rules and regulations which, in
our experience, are normally applicable to borrowers and guarantors in secured
loan transactions. Whenever a statement herein is qualified by "to the best
of our knowledge" or a similar phrase, such qualification is intended to
indicate that those attorneys in this firm who have rendered legal services in
connection with the Credit Agreement do not have current actual knowledge of the
inaccuracy of such statement. However, except as otherwise expressly indicated,
we have not undertaken any independent investigation to determine the accuracy
of any such statement, and no inference that we have any knowledge of any
matters pertaining to such statement should be drawn from our representation of
the Loan Parties.

Subject to the foregoing and the other matters set
forth herein, and in reliance thereon, it is our opinion that, as of the date
hereof:

1. Borrower has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware, with
corporate power and authority to conduct its business as now conducted and to
enter into the Loan Documents to which it is a party and perform its obligations
thereunder. HHG has been duly incorporated and is validly existing and in good
standing under the laws of the State of California, with corporate power and
authority to conduct its business as now conducted and to enter into the Loan
Documents to which it is a party and perform its obligations thereunder.

2. The execution, delivery and performance by
Borrower of the Loan Documents to which Borrower is a party and the execution
and delivery of the Financing Statements executed by Borrower have been duly
authorized by all necessary corporate action of Borrower and the Loan Documents
to which Borrower is a party have been duly executed and delivered by Borrower.
The execution, delivery and performance by HHG of the Loan Documents to which
HHG is a party and the execution and delivery of the Financing Statements
executed by HHG have been duly authorized by all necessary corporate action of
HHG and the Loan Documents to which HHG is a party have been duly executed and
delivered by HHG.

3. Each of the Loan Documents constitutes a legally
valid and binding obligation of each Loan Party that is a party to such Loan
Document, enforceable against each such Loan Party in accordance with its terms.

4. The execution and delivery of the Loan Documents
and the Financing Statements by the Loan Parties, the issuance and payment of
the Note pursuant to the Credit Agreement, and the performance of the
obligations of the Loan Parties under the Loan Documents on the date hereof do
not: (a) to the best of our knowledge violate any federal or California statute,
rule or regulation applicable to any Loan Parties (including, without
limitation, Regulations T, U or X of the Board of Governors of the Federal
Reserve System) or the DGCL; (b) violate the provisions of the Governing
Documents; (c) result in the breach of or a default under any of the
Material Agreements or Court Orders, or result in the creation of a Lien (other
than pursuant to the Loan Documents) upon or with respect to any of the
properties of the Loan Parties under any Material Agreement; or (d) require
any consents, approvals, authorizations, registrations, declarations or filings
by the Loan Parties under any federal or California statute, rule or regulation
applicable to any Loan Party or the DGCL except the filing of the Financing
Statements. No opinion is expressed in clauses (a) and (d) of this paragraph 4
as to the application of Section 548 of the federal Bankruptcy Code and
comparable provisions of state law or of any antifraud, trade regulation or
securities laws.

5. To the best of our knowledge, there is no action,
suit, proceeding or investigation pending or threatened against or affecting any
of the Loan Parties or any of their properties or assets that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge any of the Loan
Documents.

6. The provisions of the Security Agreement are
effective to create valid security interests in favor of Collateral Agent in
that portion of the collateral described in Section 1 of the Security Agreement
which is subject to Division 9 of the California UCC (the "Collateral")
as security for the payment, to the extent set forth therein, of all obligations
of the Loan Parties to the Lenders under the Loan Documents.

7. The California Financing Statements are in
appropriate form for filing in the Office of the Secretary of State of the State
of California. Upon the proper filing of the California Financing Statements in
the Office of the Secretary of State of the State of California, the security
interest in favor of Collateral Agent in the Collateral described in the
California Financing Statements will be perfected to the extent a security
interest in such Collateral can be perfected by filing a financing statement in
the State of California. The Delaware Financing Statements are in appropriate
form for filing in the Office of the Secretary of State of the State of
Delaware. Upon the proper filing of the Delaware Financing Statements in the
Office of the Secretary of State of the State of Delaware, the security interest
in favor of Collateral Agent in the Collateral described in the Delaware
Financing Statements will be perfected to the extent a security interest in such
Collateral can be perfected by filing a financing statement in the State of
Delaware. The Pennsylvania Financing Statements are in appropriate form for
filing in the Office of the Secretary of the Commonwealth of Pennsylvania. Upon
the proper filing of the Pennsylvania Financing Statements in the Office of the
Secretary of the Commonwealth of Pennsylvania, the security interest in favor of
Collateral Agent in the Collateral described in the Pennsylvania Financing
Statements will be perfected to the extent a security interest in such
Collateral can be perfected by filing a financing statement in the Commonwealth
of Pennsylvania. The Wisconsin Financing Statements are in appropriate form for
filing in the Department of Financial Institutions of the State of Wisconsin.
Upon the proper filing of the Wisconsin Financing Statements in the Department
of Financial Institutions of the State of Wisconsin, the security interest in
favor of Collateral Agent in the Collateral described in the Wisconsin Financing
Statements will be perfected to the extent a security interest in such
Collateral can be perfected by filing a financing statement in the State of
Wisconsin.

8. It is not necessary in connection with the
execution and delivery of the Notes under the circumstances contemplated by the
Credit Agreement to register the Notes under the Securities Act of 1933, as
amended.

9. None of the Loan Parties is an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.

The opinions expressed in paragraphs 3 and 4 do not
include any opinions with respect to the creation, validity, perfection or
priority of any security interest or lien. The opinions expressed in paragraph 3
and the opinions expressed in paragraphs 6 and 7 as to the creation, validity
and perfection of the security interests and liens referred to therein are
further subject to the following limitations, qualifications and exceptions:

  
    (a) such opinions are subject to the effect of
    bankruptcy, insolvency, reorganization, moratorium or other similar laws
    relating to or affecting the rights of creditors, including, without
    limitation, the effect of Section 548 of the federal Bankruptcy Code and
    comparable provisions of state law;

    (b) the effect of general principles of equity,
    including without limitation concepts of materiality, reasonableness, good
    faith and fair dealing and the possible unavailability of specific
    performance or injunctive relief regardless of whether considered in a
    proceeding in equity or at law;

    (c) certain rights, remedies and waivers
    contained in the Loan Documents may be limited or rendered ineffective by
    applicable California laws or judicial decisions governing such provisions,
    but such laws or judicial decisions do not render the Loan Documents invalid
    or unenforceable as a whole and there exists in the Loan Documents, or
    pursuant to applicable law legally adequate remedies for a practical
    realization of the principal benefits intended to be provided by the Loan
    Documents;

    (d) we express no opinion as to the validity or
    enforceability of any provision of the Loan Documents that permit Agent or
    any Lender to increase the rate of interest or collect a late charge or
    prepayment premium in the event of a delinquency or default;

    (e) the unenforceability under certain
    circumstances, under California or federal law or court decisions, of
    provisions expressly or by implication waiving broadly or vaguely stated
    rights, unknown future rights, defenses to obligations or rights granted by
    law, where such waivers are against public policy or prohibited by law;

    (f) the unenforceability under certain
    circumstances of provisions to the effect that rights or remedies are not
    exclusive, that every right or remedy is cumulative and may be exercised in
    addition to or with any other right or remedy, that election of a particular
    remedy or remedies does not preclude recourse to one or more other remedies,
    that any right or remedy may be exercised without notice, or that failure to
    exercise or delay in exercising rights or remedies will not operate as a
    waiver of any such right or remedy;

    (g) the unenforceability under certain
    circumstances of provisions indemnifying a party against liability for its
    own wrongful or negligent acts or where such indemnification is contrary to
    public policy or prohibited by law;

    (h) the effect of Section 1717 of the California
    Civil Code, which provides that, where a contract permits one party to the
    contract to recover attorneys' fees, the prevailing party in any action to
    enforce any provision of the contract shall be entitled to recover its
    reasonable attorneys' fees;

    (i) the effect of California law, which provides
    that a court may refuse to enforce, or may limit the application of, a
    contract or any clause thereof which the court finds as a matter of law to
    have been unconscionable at the time it was made or contrary to public
    policy;

    (j) we express no opinion with respect to the
    enforceability of any forum selection clause by a federal court;

    (k) the effect of Section 631(d) of the
    California Code of Civil Procedure, which provides that a court may, in its
    discretion upon just terms, allow a trial by jury although there may have
    been a waiver of trial by jury;

    (l) the unenforceability under certain
    circumstances of contractual provisions respecting self-help or summary
    remedies without notice or opportunity for hearing or correction;

    (m) the effect of the provisions of the UCC which
    require a secured party, in any disposition of personal property collateral,
    to act in good faith and in a commercially reasonable manner;

    (n) we have assumed that the security interests
    in any portion of the Collateral constituting "inventory of a retail
    merchant" (within the meaning of Section 9102 of the California UCC)
    secure a debt as to which the secured party has made no restriction as to
    use of funds, other than those which are commercially reasonable and made in
    good faith, as contemplated by Section 9102(5)(b) of the California UCC;

    (o) we express no opinion with respect to the
    perfection of any security interest in any portion of the Collateral which
    may be "fixtures" (as such term is used in the California UCC, the
    Delaware UCC, the Pennsylvania UCC or the Wisconsin UCC);

    (p) the effect of California law and court
    decisions which provide that certain suretyship rights and defenses are
    available to a party that encumbers its property to secure the obligations
    of another; and

    (q) we also advise you of California statutory
    provisions and case law to the effect that, in certain circumstances, a
    surety may be exonerated if the creditor materially alters the original
    obligation of the principal without the consent of the guarantor, elects
    remedies for default that impair the subrogation rights of the guarantor
    against the principal, or otherwise takes any action without notifying the
    guarantor that materially prejudices the guarantor. However, there is also
    authority to the effect that a guarantor may validly waive such rights if
    the waivers are expressly set forth in the guaranty. While we believe that a
    California court should hold that the explicit language contained in the
    Subsidiary Guaranty waiving such rights is enforceable, we express no
    opinion with respect to the effect of: (i) any modification to or amendment
    of the obligations of Borrower that materially increases such obligations;
    (ii) any election of remedies by Agent, Collateral Agent or any Lenders
    following the occurrence of an event of default under the Loan Documents; or
    (iii) any other action by Agent, Collateral Agent or any Lenders that
    materially prejudices the guarantor.

  

In rendering the opinions expressed in paragraph 4
insofar as they require interpretation of the Material Agreements (i) we have
assumed with your permission that all courts of competent jurisdiction would
enforce such agreements as written but would apply the internal laws of the
State of California without giving effect to any choice of law provisions
contained therein or any choice of law principles which would result in
application of the internal laws of any other state, (ii) to the extent that any
questions of legality or legal construction have arisen in connection with our
review, we have applied the laws of the State of California in resolving such
questions and (iii) we express no opinion with respect to the effect of any
action or inaction required to be taken or not taken after the date hereof by
the Loan Parties under the Loan Documents or the Material Agreements which may
result in a breach or default under any Material Agreement. We advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.

For purposes of our opinions expressed in paragraph
8, we have assumed with your permission, without independent investigation, that
each Lender is a commercial lender or a financial institution which makes loans
in the ordinary course of its business and that it is receiving the Notes to be
received by it and will make each Loan under the Credit Agreement to be made by
it for its own account in the ordinary course of its commercial banking or
lending business and not with a view to or for sale in connection with any
distribution of such Notes.

Our opinions in paragraphs 6 and 7 are also subject
to the following assumptions, exceptions, limitations and qualifications:

  
    (i) we express no opinion as to the creation,
    validity or perfection of any security interest that is not governed by, or
    that is excluded from coverage by, Division 9 of the California UCC, Article
    9 of the Delaware UCC, Article 9 of the Pennsylvania UCC or Article 9 of the
    Wisconsin UCC and we express no opinion as to the priority of any security
    interest or lien;

    (ii) we have assumed that the Loan Parties have
    "rights" in the Collateral, as contemplated by Section 9203 of the
    California UCC, Section 9-203 of the Delaware UCC, Section 9-203 of the
    Pennsylvania UCC and Section 9-203 of the Wisconsin UCC;

    (iii) we call to your attention the fact that the
    perfection of a security interest in "proceeds" (as defined in the
    California UCC, Delaware UCC, the Pennsylvania UCC and the Wisconsin UCC) of
    collateral is governed and restricted by Section 9306 of the California UCC,
    Section 9-306 of the Delaware UCC, Section 9-306 of the Pennsylvania UCC and
    Section 9-306 of the Wisconsin UCC;

    (iv) we call to your attention the fact that
    under the California UCC, the Delaware UCC, the Pennsylvania UCC and the
    Wisconsin UCC, with certain limited exceptions, the effectiveness of the
    Financing Statements will lapse five years after the date of filing thereof
    and your security interest will become unperfected, unless a continuation
    statement is filed within six months prior to the end of such five-year
    period. We also call to your attention the fact that perfection of security
    interests under the California UCC, the Delaware UCC, the Pennsylvania UCC
    and the Wisconsin UCC in any of the Collateral will be terminated as to any
    Collateral acquired by any Loan Party more than four (4) months after such
    Loan Party changes its name, identity or corporate structure to such an
    extent as to make the Financing Statements seriously misleading, unless a
    new appropriate financing statement or an appropriate amendment to such
    Financing Statements, indicating the new name, identity or corporate
    structure of such Loan Party is properly filed before the expiration of four
    (4) months after such change;

    (v) we have assumed that none of the Collateral
    consists of consumer goods, crops growing or to be grown, timber to be cut,
    minerals or the like (including oil and gas) or accounts resulting from the
    sale of minerals or the like at the wellhead or the minehead;

    (vi) we note that the law is not clear with
    respect to the specificity of description necessary to create a valid
    security interest in personal property. To ensure that a sufficient
    description has been provided, the personal property intended to be subject
    to the security interest should be identified by serial, account or other
    identification numbers or by some other method of specific identification.
    However, the more general description of the personal property used in the
    Security Agreement and in the Financing Statements to be filed in connection
    therewith is consistent with that commonly used by major lenders in
    California and, although the matter is not free from doubt, in our opinion
    should be held by courts in California to be sufficient to create a security
    interest in the personal property described therein; however, we express no
    opinion as to whether the phrase "all personal property" or
    similarly general phrases would be held to describe any particular item or
    items of collateral; and

    (vii) we have assumed for purposes of this
    opinion that each of the Lenders is a national bank, a bank organized under
    the laws of a State of the United States, or a entity which is otherwise
    exempt from the restrictions of the usury laws of the State of California.

  

To the extent that the obligations of the Loan
Parties may be dependent upon such matters, we assume for purposes of this
opinion that: (i) all parties to the Loan Documents other than Borrower and HHG
are duly organized, validly existing and in good standing under the laws of
their respective jurisdictions of organization; (ii) all parties to the Loan
Documents other than Borrower and HHG have the requisite organizational power
and authority to execute and deliver the Loan Documents and to perform their
respective obligations under the Loan Documents to which they are a party; (iii)
the Loan Documents to which such parties other than Borrower and HHG are a party
have been duly authorized, executed and delivered by such parties; (iv) the
Loan Documents to which parties other than the Loan Parties are a party
constitute the legally valid and binding obligations of such parties,
enforceable against them in accordance with their terms; and (iv) all parties to
the Loan Documents other than the Loan Parties have complied with any applicable
requirement to file returns and pay taxes under the Franchise Tax Law of the
State of California.

This opinion is rendered only to you and is solely
for your benefit in connection with the transactions covered hereby. This
opinion may not be relied upon by you for any other purpose, or furnished to,
quoted to or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent. At your request, we hereby consent
to reliance hereon by any future participants or assigns of your interest in the
Credit Agreement which are financial institutions as expressly permitted by
Section 10.1 of the Credit Agreement; provided that this opinion speaks only as
of the date hereof and to its addressee and that we have no responsibility or
obligation to update this opinion, to consider its applicability or correctness
to other than its addressee, or to take into account changes in law, facts or
any other development of which we may later become aware.

  
    
      
        
          
            
              
                Very truly yours,

                 

                 

              

            

          

        

      

    

  

 

 

SCHEDULE A

List of Lenders

Bankers Trust Company

	Name  	Notice Address for each Subsidiary Grantor
	Sunrise Medical HHG Inc.	
      Attn Treasurer

      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

      

    
	Sunrise Medical CCG Inc.	Attn Treasurer

      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    
	DynaVox Systems Inc.	Attn Treasurer

      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    
	Sunrise Marin Holdings Inc.	Attn Treasurer

      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    
	SunMed Finance Inc.	Attn Treasurer

      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    

 

 

 

 

SCHEDULE B

List of Material Agreements

 

 

 

SCHEDULE C

List of Material Court Orders

 

 

 

EXHIBIT A

Delaware UCC Provisions

 

 

 

EXHIBIT B

Pennsylvania UCC Provisions

 

 

 

EXHIBIT C

Wisconsin UCC Provisions

 

 

 

EXHIBIT X

FORM OF OPINION OF O'MELVENY & MYERS LLP

September 8, 2000

 

Bankers Trust Company

One Bankers Trust Plaza

130 Liberty Street

New York, New York 10006

  and

The Lenders Party to the Credit

Agreement Referenced Below

  Re: Loans to Sunrise Medical, Inc.

  

Ladies and Gentlemen:

We have acted as counsel to Bankers
Trust Company, as Agent (in such capacity, "Agent"), in connection
with the preparation and delivery of a Credit Agreement dated as of September 8_____,
2000 (the "Credit Agreement") among Sunrise Medical, Inc., a Delaware
corporation ("Company"), the financial institutions listed therein as
lenders, and Agent and in connection with the preparation and delivery of
certain related documents.

We have participated in various
conferences with representatives of Company and Agent and conferences and
telephone calls with Latham & Watkins, counsel to Company ("Latham
& Watkins"), and with your representatives, during which the Credit
Agreement and related matters have been discussed, and we have also participated
in the meeting held on the date hereof (the "Closing") incident to the
funding of the initial loans made under the Credit Agreement. We have reviewed
the forms of the Credit Agreement and the exhibits thereto, including the forms
of the promissory notes annexed thereto (the "Notes"), and the opinion
of Latham & Watkins (the "Opinion") and the officers' certificates
and other documents delivered at the Closing. We have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
or copies and the due authority of all persons executing the same, and we have
relied as to factual matters on the documents that we have reviewed.

Although we have not independently
considered all of the matters covered by the Opinion to the extent necessary to
enable us to express the conclusions therein stated, we believe that the Credit
Agreement and the exhibits thereto are in substantially acceptable legal form
and that the Opinion and the officers' certificates and other documents
delivered in connection with the execution and delivery of, and as conditions to
the making of the initial loans under, the Credit Agreement and the Notes are
substantially responsive to the requirements of the Credit Agreement.

  
    
      
        
          
            
              Respectfully submitted,

               

               

              

              

               

               

            

          

        

      

    

  

EXHIBIT XI

FORM OF ASSIGNMENT AGREEMENT

This ASSIGNMENT AGREEMENT (this
"Agreement") is entered into by and between the parties designated as
Assignor ("Assignor") and Assignee ("Assignee") above the
signatures of such parties on the Schedule of Terms attached hereto and hereby
made an integral part hereof (the "Schedule of Terms") and relates to
that certain Credit Agreement described in the Schedule of Terms (said Credit
Agreement, as amended, supplemented or otherwise modified to the date hereof and
as it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined).

IN CONSIDERATION of the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:

SECTION Assignment and Assumption.

Effective upon the Settlement Date
specified in Item 4 of the Schedule of Terms (the "Settlement Date"),
Assignor hereby sells and assigns to Assignee, without recourse, representation
or warranty (except as expressly set forth herein), and Assignee hereby
purchases and assumes from Assignor, that percentage interest in all of
Assignor's rights and obligations as a Lender arising under the Credit Agreement
and the other Loan Documents with respect to Assignor's Commitments and
outstanding Loans, if any, which represents, as of the Settlement Date, the
percentage interest specified in Item 3 of the Schedule of Terms of all
rights and obligations of Lenders arising under the Credit Agreement and the
other Loan Documents with respect to the Commitments and any outstanding Loans
(the "Assigned Share"). Without limiting the generality of the
foregoing, the parties hereto hereby expressly acknowledge and agree that any
assignment of all or any portion of Assignor's rights and obligations relating
to Assignor's Revolving Loan Commitment shall include (i) in the event
Assignor is an Issuing Lender with respect to any outstanding Letters of Credit
(any such Letters of Credit being "Assignor Letters of Credit"), the
sale to Assignee of a participation in the Assignor Letters of Credit and any
drawings thereunder as contemplated by subsection 3.1C of the Credit Agreement
and (ii) the sale to Assignee of a ratable portion of any participations
previously purchased by Assignor pursuant to said subsection 3.1C with respect
to any Letters of Credit other than the Assignor Letters of Credit.

In consideration of the assignment
described above, Assignee hereby agrees to pay to Assignor, on the Settlement
Date, the principal amount of any outstanding Loans included within the Assigned
Share, such payment to be made by wire transfer of immediately available funds
in accordance with the applicable payment instructions set forth in Item 5 of
the Schedule of Terms.

Assignor hereby represents and
warrants that Item 3 of the Schedule of Terms correctly sets forth the amount of
the Commitments and the Pro Rata Share corresponding to the Assigned Share.

Assignee hereby agrees that, as of
the date hereof, the Company will not be obligated to make any additional
payments to Assignee pursuant to the terms of subsection 2.7B(ii) of the Credit
Agreement with respect to payments made to Assignee under the Credit Agreement
and the other Loan Documents.

Assignor and Assignee hereby agree
that, upon giving effect to the assignment and assumption described above, (i) Assignee
shall be a party to the Credit Agreement and shall have all of the rights and
obligations under the Loan Documents, and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents, arising out of or
otherwise related to the Assigned Share, and (ii) Assignor shall be
absolutely released from any of such obligations, covenants and agreements
assumed or made by Assignee in respect of the Assigned Share. Assignee hereby
acknowledges and agrees that the agreement set forth in this Section 1(e) is
expressly made for the benefit of Company, Agent, Assignor and the other Lenders
and their respective successors and permitted assigns.

Assignor and Assignee hereby
acknowledge and confirm their understanding and intent that (i) this
Agreement shall effect the assignment by Assignor and the assumption by Assignee
of Assignor's rights and obligations with respect to the Assigned Share, (ii) any
other assignments by Assignor of a portion of its rights and obligations with
respect to the Commitments and any outstanding Loans shall have no effect on the
Commitments, the Pro Rata Share corresponding to the Assigned Share as set forth
in Item 3 of the Schedule of Terms or on the interest of Assignee in any
outstanding Revolving Loans corresponding thereto, and (iii) from and after
the Settlement Date, Agent shall make all payments under the Credit Agreement in
respect of the Assigned Share (including all payments of principal and accrued
but unpaid interest, commitment fees and letter of credit fees with respect
thereto) (A) in the case of any such interest and fees that shall have
accrued prior to the Settlement Date, to Assignor, and (B) in all other
cases, to Assignee; provided that Assignor and Assignee shall make
payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor and/or Assignee
by Agent under the Loan Documents in respect of the Assigned Share in the event
that, for any reason whatsoever, the payment of consideration contemplated by
Section 1(b) occurs on a date other than the Settlement Date.

SECTION Certain Representations,
Warranties and Agreements.

Assignor represents and warrants that
it is the legal and beneficial owner of the Assigned Share, free and clear of
any adverse claim.

Assignor shall not be responsible to
Assignee for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of any of the Loan Documents or
for any representations, warranties, recitals or statements made therein or made
in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
Assignor to Assignee or by or on behalf of Company or any of its Subsidiaries to
Assignor or Assignee in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
Assignor be required to ascertain or inquire as to the performance or observance
of any of the terms, conditions, provisions, covenants or agreements contained
in any of the Loan Documents or as to the use of the proceeds of the Loans or
the use of the Letters of Credit or as to the existence or possible existence of
any Event of Default or Potential Event of Default.

Assignee represents and warrants that
it is an Eligible Assignee; that it has experience and expertise in the making
of loans such as the Loans; that it has acquired the Assigned Share for its own
account in the ordinary course of its business and without a view to
distribution of the Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of subsection 10.1 of the Credit Agreement, the disposition of
the Assigned Share or any interests therein shall at all times remain within its
exclusive control); and that it has received, reviewed and approved a copy of
the Credit Agreement (including all Exhibits and Schedules thereto).

Assignee represents and warrants that
it has received from Assignor such financial information regarding Company and
its Subsidiaries as is available to Assignor and as Assignee has requested, that
it has made its own independent investigation of the financial condition and
affairs of Company and its Subsidiaries in connection with the assignment
evidenced by this Agreement, and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. Assignor
shall have no duty or responsibility, either initially or on a continuing basis,
to make any such investigation or any such appraisal on behalf of Assignee or to
provide Assignee with any other credit or other information with respect
thereto, whether coming into its possession before the making of the initial
Loans or at any time or times thereafter, and Assignor shall not have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Assignee.

Each party to this Agreement
represents and warrants to the other party hereto that it has full power and
authority to enter into this Agreement and to perform its obligations hereunder
in accordance with the provisions hereof, that this Agreement has been duly
authorized, executed and delivered by such party and that this Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity.

SECTION Miscellaneous.

Each of Assignor and Assignee hereby
agrees from time to time, upon request of the other such party hereto, to take
such additional actions and to execute and deliver such additional documents and
instruments as such other party may reasonably request to effect the
transactions contemplated by, and to carry out the intent of, this Agreement.

Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated, except by an instrument
in writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought.

Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed. For the purposes hereof, the
notice address of each of Assignor and Assignee shall be as set forth on the
Schedule of Terms or, as to either such party, such other address as shall be
designated by such party in a written notice delivered to the other such party.
In addition, the notice address of Assignee set forth on the Schedule of Terms
shall serve as the initial notice address of Assignee for purposes of subsection
10.8 of the Credit Agreement.

In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.

This Agreement may be executed in one
or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

This Agreement shall become effective
upon the date (the "Effective Date") upon which all of the following
conditions are satisfied: (i) the execution of a counterpart hereof by each
of Assignor and Assignee, (ii) the receipt by Agent of the processing and
recordation fee referred to in subsection 10.1B(i) of the Credit Agreement,
(iii) in the event Assignee is a Non-US Lender (as defined in subsection
2.7B(iii)(a) of the Credit Agreement), the delivery by Assignee to Agent of such
forms, certificates or other evidence with respect to United States federal
income tax withholding matters as Assignee may be required to deliver to Agent
pursuant to said subsection 2.7B(iii)(a), (iv) the execution of a
counterpart hereof by Agent as evidence of its acceptance hereof in accordance
with subsection 10.1B(ii) of the Credit Agreement, (v) to the extent required by
subsection 10.1B(ii) of the Credit Agreement, the execution of a counterpart
hereof by Company as evidence of acceptance hereof in accordance with such
subsection, (vi) the receipt by Agent of originals or telefacsimiles of the
counterparts described above and authorization of delivery thereof, and (vii) the
recordation by Agent in the Register of the pertinent information regarding the
assignment effected hereby in accordance with subsection 10.1B(ii) of the Credit
Agreement.

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized, such execution being made as of
the Effective Date.

 

 

 

 

SCHEDULE OF TERMS

1. Company: Sunrise Medical, Inc.

2. Name and Date of Credit Agreement: Credit Agreement
dated as of September 8, 2000 by and among Sunrise Medical, Inc., the
financial institutions listed therein as Lenders, and Bankers Trust Company, as
Agent.

3. Amounts:

		
      Re: Revolving

         Loans  

      
	
      
        (a) Aggregate Commitments of all Lenders: 

      

    	$58,000,000
	
      
        (b) Assigned Share/Pro Rata Share:

      

    	_____%
	
      
        (c) Amount of Assigned Share of Commitments: 

      

    	$________

4. Settlement Date: ____________, ____

5. Payment Instructions:

	
      
        ASSIGNOR: 

      

    	
      
	
      ASSIGNEE:

	
       
	
      
	
       

	
       
	
      
	
       

	
       
	
      
	
       

	
      Attention:
      __________________ 

      Reference: _________________
	
      
	
      Attention: __________________

      Reference: _________________

6. Notice Addresses:

	
      
        ASSIGNOR: 

      

    	
      
	
      ASSIGNEE:

	
       
	
      
	
       

	
       
	
      
	
       

	
       
	
      
	
       

7. Signatures:

	
       [NAME OF ASSIGNOR], 

      as Assignor as Assignee

      

      By:                                      
       

            Title: 
	
      
	
       [NAME
      OF ASSIGNEE],

      as Assignor as Assignee

      

      By:                                     

            Title: 

Accepted in accordance with subsection

10.1B(ii) of the Credit Agreement

BANKERS TRUST COMPANY,

as Agent

By: _______________________

      Title:

[If Required]

SUNRISE MEDICAL, INC.

By: _______________________

      Title:

 

 

 

EXHIBIT XII

FORM OF BLOCKED ACCOUNT AGREEMENT

This BLOCKED ACCOUNT AGREEMENT
("Agreement") is entered into as of _______________, _____ and entered
into by and between [Guarantor Subsidiary/Company] ("Pledgor"), and
BANKERS TRUST COMPANY, as agent for and representative of (in such capacity
herein called "Agent") the financial institutions
("Lenders") party to the Credit Agreement (as hereinafter defined),
and _______________, as the account bank ("Bank").

PRELIMINARY STATEMENTS

A. Agent and certain financial
institutions acting as Lenders ("Lenders") have entered into that
certain Credit Agreement, dated as of September 8__, 2000 (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement") with [Pledgor/Sunrise
Medical, Inc.], wherein Pledgor has granted the Lenders a security interest in
its present and future accounts receivable, and all proceeds thereof and Pledgor
has agreed that all collections and proceeds of such accounts receivable shall
be remitted in kind to the Agent;

B. Pledgor has granted to Agent a
security interest in the Account (as defined below) and in the funds deposited
in the Account;

C. Pledgor has agreed to maintain
deposit account number _______________ in its name (the "Account") in
which Pledgor shall deposit cash, checks, drafts or other orders for payment of
money; and

D. Pledgor, Agent and Bank are
entering into this Agreement to provide for the disposition of net proceeds of
cash, checks, drafts and other orders for the payment of money deposited by
Pledgor into the Account.

NOW, THEREFORE, in consideration of
the premises and the mutual covenants and agreements hereinafter set forth,
Pledgor, Agent and Bank agree as follows:

1. Pledgor hereby authorizes Bank and
Bank hereby agrees:

(a) to charge the Account for all
returned checks associated with this Agreement and to charge the Account for
service charges and other fees, charges and expenses associated with this
Agreement;

(b) to follow its usual procedures
in the event the Account or any check, draft or other order for payment of money
should be or become the subject of any writ, levy, order or other similar
judicial or regulatory order or process;

(c) to supply any necessary
endorsements and to deposit any and all monies and instruments received by Bank
in the Account when received, whether in the form of checks, wire transfers or
otherwise; and

(d) to transfer pursuant to Agent's
instructions any collected and available balances in the Account each Business
Day by wire transfer to the following account:

	
      Bank Name:
	
      

	
      Location:
	
      

	
      [ABA Routing No.: ]
	
      

	
      Credit Account No.:

      	
      

Agent will give Bank sufficient
advance written notice of any change in the instructions, subject to Pledgor's
prior consent (which consent shall not be unreasonably withheld and shall not be
required if a Cash Management Triggering Event or an Event of Default has
occurred and is continuing), for Bank to act upon such changes. Funds are not
available if, in the reasonable determination of Bank, they are subject to a
hold, dispute or legal process preventing their withdrawal. "Business
Day" means each Monday through Friday, excluding Bank holidays.

2. (a) If the balances in the Account
are not sufficient to pay Bank for any returned check, draft or other order for
the payment of money, Bank can make a demand for such deficiency upon Agent in
writing, no later than 30 days after the date of the returned item and Agent, on
behalf of itself and Lenders, agrees to promptly reimburse Bank for the amount
of the deficiency. If Agent makes any payments pursuant to this Section 2(a),
Pledgor will promptly reimburse Agent for such payment.

(b) Pledgor agrees to pay Bank on
demand (i) the amount for any fees or charges due Bank under this
Agreement, and (ii) all expenses for the maintenance of the Account, and
Bank agrees that except as provided in Section 1(a) such fees, charges or
expenses under this Section 2(b) are the responsibility of Pledgor and will not
deduct such amounts from funds in the Account or seek payment from Agent.

(c) Bank agrees it shall not offset
against the Account, except as permitted under this Agreement, until it has been
advised in writing by Pledgor and Agent that all of Pledgor's obligations, which
are secured by the Account and all funds deposited in the Account, are paid in
full. Agent shall notify Bank promptly in writing upon payment in full of
Pledgor's obligations and this Agreement shall automatically terminate upon
receipt of such notice. Bank further agrees that the Account and the funds
deposited in such Account shall not be subject to any banker's lien, deductions
or any other right in favor of any person (including Bank) other than Agent,
except as expressly provided for herein with respect to Bank.

3. Termination of this Agreement
shall be as follows:

(a) Bank may terminate this
Agreement upon 60 days' prior written notice to Pledgor and Agent. If an Event
of Default has occurred and is continuing, Agent may terminate this Agreement at
any time which termination shall be effective upon receipt of written notice by
the Bank and by Pledgor. Pledgor may not terminate this Agreement except with
the written consent of Agent and upon 60 days' prior written notice to Bank and
Agent.

(b) Notwithstanding subsection 3(a),
Bank may terminate this Agreement at any time by written notice to Pledgor and
Agent if (i) either Pledgor or Agent breaches any of the terms of this
Agreement or any other agreement with Bank; (ii) either Pledgor or Agent
terminates its business, fails generally or admits in writing its inability to
pay its debts as they become due; any bankruptcy, reorganization, arrangement,
insolvency, dissolution or similar proceeding is instituted with respect to
either Pledgor or Agent; either Pledgor or Agent makes any assignment for the
benefit of creditors or enters into any composition with creditors or takes any
action in furtherance of any of the foregoing; or (iii) any material
adverse change occurs in either Pledgor's or Agent's financial condition,
results of operations or ability to perform its obligations under this
Agreement. Pledgor and Agent shall each promptly give written notice to Bank of
the occurrence of any of the foregoing events as it applies to it.

4. (a) Bank will not be liable to
Pledgor or Agent for any expense, claim, loss, damage or cost
("Damages") arising out of or relating to its performance under this
Agreement other than those Damages which result directly from its acts or
omissions constituting negligence or intentional misconduct, subject to the
limits in the next succeeding sentence. Bank's liability is limited to direct
money Damages actually incurred in an amount not exceeding the compensation for
the service in which such acts or omissions occurred.

(b) In no event will Bank be liable
for any special, indirect, exemplary or consequential damages, including but not
limited to lost profits.

(c) Bank will be excused from
failing to act or delay in acting, and no such failure or delay shall constitute
a breach of this Agreement or otherwise give rise to any liability of Bank, if (i) such
failure or delay is caused by circumstances beyond Bank's reasonable control,
including but not limited to legal constraint, emergency conditions, action or
inaction of governmental, civil or military authority, fire, strike, lockout or
other labor dispute, war, riot, theft, flood, earthquake or other natural
disaster, breakdown of public or private or common carrier communications or
transmission facilities, equipment failure, or act, negligence or default of
Pledgor or Agent or (ii) such failure or delay resulted from Bank's
reasonable belief that the action would have violated any guideline, rule or
regulation of any governmental authority.

5. Pledgor hereby agrees to indemnify
Bank against, and hold it harmless from, any and all liabilities, claims,
reasonable costs, reasonable expenses and damages of any nature (including but
not limited to reasonable allocated costs of staff counsel, other reasonable
attorneys' fees and any reasonable fees and expenses incurred in enforcing this
Agreement) in any way arising out of or relating to disputes or legal actions
concerning this Agreement or the Account. This section does not apply to any
cost or damage attributable to the gross negligence or intentional misconduct of
Bank. Pledgor's obligations under this section shall survive termination of this
Agreement.

6. Pledgor and Agent each represent
and warrant to Bank that (i) this Agreement constitutes its duly
authorized, legal, valid, binding and enforceable obligation; (ii) the
performance of its obligations under this Agreement and the consummation of the
transactions contemplated hereunder will not (A) constitute or result in a
breach of its certificate or articles of incorporation, by-laws or partnership
agreement, as applicable, or the provisions of any material contract to which it
is a party or by which it is bound or (B) result in the violation of any
law, regulation, judgment, decree or governmental order applicable to it; and
(iii) all approvals and authorizations required to permit the execution,
delivery, performance and consummation of this Agreement and the transactions
contemplated hereunder have been obtained.

7. Pledgor represents and warrants
that it has not assigned or granted a security interest in the Account or any
funds now or hereafter deposited in the Account, except to Agent.

8. Pledgor agrees that:

(a) Subject to the terms of this
Agreement, Agent shall have exclusive interest in and control of the Account,
and, if a Cash Management Triggering Event or an Event of Default has occurred
and is continuing, all items and funds received by and held in the Account shall
be the sole and exclusive property of Agent for the benefit of itself and the
Lenders;

(b) Except for transfer in
accordance with Section 1(1) it cannot, and will not, withdraw any monies from
the Account until such time as Agent advises Bank in writing that Agent no
longer claims any interest in the Account and the monies deposited and to be
deposited in the Account; and

(c) Except to the extent permitted
under the Credit Agreement, it will not permit the Account to become subject to
any other pledge, assignment, lien, charge or encumbrance of any kind, nature or
description, other than Agent's security interest referred to herein.

9. Agent acknowledges and agrees that
Bank has the right to charge the Account from time to time, as set forth in this
Agreement and the Account agreement, as said agreements are amended from time to
time, and that Agent has no right to the sums so withdrawn by Bank.

10. In addition to the original
statement which will be provided to Pledgor, Bank will provide Agent with a
duplicate statement and such other account information reasonably requested by
Agent. Pledgor authorizes Bank to provide any account information reasonably
requested by Agent.

11. Pledgor agrees to pay to Bank,
upon receipt of Bank's invoice, all reasonable costs, reasonable expenses and
reasonable attorneys' fees (including reasonable allocated costs for in-house
legal services) incurred by Bank in connection with the preparation of this
Agreement, the administration (including any amendments), and enforcement of
this Agreement and any instrument or agreement required hereunder, including but
not limited to any such reasonable costs, expenses and fees arising out of the
resolution of any conflict, dispute, motion regarding entitlement to rights or
rights of action, or other action to enforce Bank's rights hereunder in a case
arising under Title 11, United States Code.

12. Notwithstanding any of the other
provisions in this Agreement, in the event of the commencement of a case
pursuant to Title 11, United States Code filed by or against Pledgor, or in the
event of the commencement of any similar case under then applicable federal or
state law providing for the relief of debtors or the protection of creditors by
or against Pledgor, Bank may act as Bank deems necessary to comply with all
applicable provisions of governing statutes and neither Pledgor nor Agent shall
assert any claim against Bank for so doing.

13. This Agreement may be amended
only by a writing signed by Pledgor, Agent and Bank; except that Bank's charges
are subject to change by Bank upon 30 days' prior written notice to Pledgor and
Agent.

14. This Agreement may be executed in
counterparts; all such counterparts shall constitute but one and the same
agreement.

15. Any written notice or other
written communication to be given to each party under this Agreement shall be
addressed to the person at the address set forth on the signature page of this
Agreement or to such other person or address as a party may specify in writing.
Except as otherwise expressly provided herein, any such notice shall be
effective upon receipt.

16. This Agreement supersedes all
prior understandings, writings, proposals, representations and communications,
oral or written, of any party relating to the subject matter hereof.

17. Neither Pledgor nor Agent may
assign any of its rights under this Agreement without the prior written consent
of Bank.

18. This Agreement shall be
interpreted in accordance with the laws of _______________, without giving
effect to the conflicts of law principles thereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.

	
      SUNRISE MEDICAL, INC.

      
      By:_________________________________

      Name:

      Title:

    	
      Address for notices:

      _________________________________

      _________________________________

      _________________________________

      Attention:__________________________

    
	
      BANKERS TRUST COMPANY,

      as Agent

      By:_________________________________

      Name:

      Title:
	
      Address for notices:

      _________________________________

      _________________________________

      _________________________________

      Attention:__________________________

    
	
      [BANK]

      
      By:_________________________________

      Name:

      Title:

      By:_________________________________

      Name:

      Title:
	
      Address for notices:

      _________________________________

      _________________________________

      _________________________________

      Attention:__________________________

    

 

EXHIBIT XIII

FORM OF COLLATERAL ACCESS AGREEMENT

	
      RECORDING REQUESTED BY:

      O'Melveny & Myers LLP

      AND WHEN RECORDED MAIL TO:

      O'Melveny & Myers LLP

      400 South Hope St., 15th Floor

      Los Angeles, CA 90071

      Attn: Brian T. May, Esq.

      Re: Sunrise Medical, Inc.
	 

Space above this line
for recorder's use only

REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT

This REAL PROPERTY HOLDER'S WAIVER
AND CONSENT AGREEMENT (this "Agreement") is dated as of
_______________, 2000 and entered into by _________________________, a
____________________ ("Real Property Holder"), to and for the benefit
of BANKERS TRUST COMPANY, located at One Bankers Trust Plaza, 130 Liberty
Street, New York, New York 10006 ("Agent"), as agent for the financial
institutions ("Lenders") which are or may hereafter become parties to
the Credit Agreement (as hereinafter defined).

R E C I T A L S

A. [Name of Subsidiary]
("Company"), has possession of and occupies all or a portion of the
property described on Exhibit A annexed hereto (the
"Premises").

B. Company's interest in the Premises
arises under the lease agreement (the "Lease") more particularly
described on Exhibit B annexed hereto, pursuant to which Real Property
Holder has rights, upon the terms and conditions set forth therein, to take
possession of, and otherwise assert control over, the Premises.

C. Agent and Lenders have entered
into that certain Credit Agreement dated as of _____________, 2000 (said Credit
Agreement, as amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement") with Sunrise Medical, Inc., a Delaware
corporation ("Borrower"). In connection with the Credit Agreement,
Company and other subsidiaries of Borrower (together with Company, the
"Subsidiary Guarantors") have executed that certain Subsidiary
Guaranty dated as of ______________, 2000 (said Subsidiary Guaranty, as amended,
supplemented or otherwise modified from time to time, being the "Subsidiary
Guaranty"), and Borrower and the Subsidiary Guarantors have executed a
security agreement and other collateral documents in relation to the Credit
Agreement and the Subsidiary Guaranty.

D. The extensions of credit made by
Lenders to Company under the Credit Agreement will be secured, in part, by all
raw materials, work-in-process and finished goods inventory of Borrower and the
Subsidiary Guarantors (including all inventory of Company now or hereafter
located on the Premises (the "Inventory" or the
"Collateral")).

E. Agent has requested that Real
Property Holder execute this Agreement as a condition to the extension of credit
to Borrower under the Credit Agreement.

NOW, THEREFORE, in consideration of
the premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Real Property Holder hereby
represents and warrants to, and covenants and agrees with, Agent as follows:

1. Real Property Holder hereby (a) waives
and releases unto Agent and its successors and assigns any and all rights
granted by or under any present or future laws to levy or distraint for rent or
any other charges which may be due to Real Property Holder against the
Collateral, and any and all other claims, liens and demands of every kind which
it now has or may hereafter have against the Collateral, and (b) agrees
that any rights it may have in or to the Collateral, no matter how arising (to
the extent not effectively waived pursuant to clause (a) of this paragraph 1),
shall be second and subordinate to the rights of Agent in respect thereof. Real
Property Holder acknowledges that the Collateral is and will remain personal
property and not fixtures even though it may be affixed to or placed on the
Premises.

2. Real Property Holder certifies
that (a) Real Property Holder is the landlord under the Lease, (b) the
Lease is in full force and effect and has not been amended, modified, or
supplemented except as set forth on Exhibit B annexed hereto, (c) there
is no defense, offset, claim or counterclaim by or in favor of Real Property
Holder against Company under the Lease or against the obligations of Real
Property Holder under the Lease, (d) no notice of default has been given
under or in connection with the Lease which has not been cured, and Real
Property Holder has no knowledge of the occurrence of any other default under or
in connection with the Lease, and (e) except as disclosed to Agent, no portion
of the Premises is encumbered in any way by any deed of trust or mortgage
lien or ground or superior lease.

3. Real Property Holder consents to
the installation or placement of the Collateral on the Premises, and Real
Property Holder grants to Agent a license to enter upon and into the Premises to
do any or all of the following with respect to the Collateral: assemble, have
appraised, display, remove, maintain, prepare for sale or lease, repair,
transfer, or sell (at public or private sale). In entering upon or into the
Premises, Agent hereby agrees to indemnify, defend and hold Real Property Holder
harmless from and against any and all claims, judgments, liabilities, costs and
expenses incurred by Real Property Holder caused solely by Agent's entering upon
or into the Premises and taking any of the foregoing actions with respect to the
Collateral. Such costs shall include any damage to the Premises made by Agent in
severing and/or removing the Collateral therefrom.

4. Real Property Holder agrees that
it will not prevent Agent or its designee from entering upon the Premises at all
reasonable times to inspect or remove the Collateral. In the event that Real
Property Holder has the right to, and desires to, obtain possession of the
Premises (either through expiration of the Lease or termination thereof due to
the default of Company thereunder), Real Property Holder will deliver notice
(the "Real Property Holder's Notice") to Agent to that effect. Within
the 45 day period after Agent receives the Real Property Holder's Notice, Agent
shall have the right, but not the obligation, to cause the Collateral to be
removed from the Premises. During such 45 day period, Real Property Holder will
not remove the Collateral from the Premises nor interfere with Agent's actions
in removing the Collateral from the Premises or Agent's actions in otherwise
enforcing its security interest in the Collateral. Notwithstanding anything to
the contrary in this paragraph, Agent shall at no time have any obligation to
remove the Collateral from the Premises.

5. Real Property Holder shall send to
Agent a copy of any notice of default under the Lease sent by Real Property
Holder to Company. In addition, Real Property Holder shall send to Agent a copy
of any notice received by Real Property Holder of a breach or default under any
other lease, mortgage, deed of trust, security agreement or other instrument to
which Real Property Holder is a party which may affect Company's rights in, or
possession of, the Premises.

6. All notices to Agent under this
Agreement shall be in writing and sent to Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.

7. The provisions of this Agreement
shall continue in effect until Real Property Holder shall have received Agent's
written certification that all amounts advanced under the Credit Agreement have
been paid in full.

8. This Agreement and the rights and
obligations of the parties hereunder shall be governed by, and shall be
construed and enforced in accordance with, the internal laws of the State of
___________, without regard to conflicts of laws principles.

 

 

IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be duly executed and delivered as of the day and year first set
forth above.

  
    
      
        
          [NAME OF REAL PROPERTY HOLDER]

           

          By: ________________________________

          Name:

          Title:

        

      

    

  

 

 

 

By its acceptance hereof, as of the day and year
first set forth above, Agent agrees to be bound by the provisions hereof.

  
    
      
        
          
            BANKERS TRUST COMPANY,

            as Agent

            By: ______________________________

            Name:

            Title:

          

        

      

    

  

 

 

 

EXHIBIT A

LEGAL DESCRIPTION OF PREMISES

 

 

 

 

EXHIBIT B

DESCRIPTION OF LEASE

 

 

 

EXHIBIT XIV

FORM OF LOCK BOX AGREEMENT

This LOCK BOX AGREEMENT (this
"Agreement"), dated as of _______________, 2000, is entered into by
and among [Subsidiary Guarantor/Company] ("Company"), BANKERS TRUST
COMPANY, as agent ("Agent"), and ______________ ("Bank").

PRELIMINARY STATEMENTS

A. Agent and certain financial
institutions acting as Lenders ("Lenders") have entered into that
certain Credit Agreement, dated as of September 8_, 2000 (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement") with [Company/Sunrise
Medical, Inc.], wherein the Company has granted the Lenders a security interest
in its present and future accounts receivable, and all proceeds thereof and
Company has agreed that all collections and proceeds of such accounts receivable
shall be remitted in kind to the Agent;

B. In order to provide for a more
efficient and faster collection and deposit of said collection and proceeds the
Agent and Company desire to use the lock box service of Bank; and

C. Bank is willing to provide said
service for Company and the Agent commencing as of September 8_, 2000.

NOW, THEREFORE, the parties hereto
hereby agree as follows:

1. Post Office Box. The Bank
will rent P.O. Box                       
(the "Lock Box") of the post office located at                                 
          
in the name of Company. Customers of Company have been, or will be,
instructed to mail their remittances to the Lock Box.

2. Access to Mail. The Bank
will have exclusive and unrestricted access to the Lock Box and will have
complete and exclusive authority to receive, pick up and open all regular,
registered, certified or insured mail addressed to the Lock Box. If an Event of
Default has occurred and is continuing, on written demand of the Agent, Bank
shall cease its processing of said mail, and shall release same, in kind, to the
Agent, without the prior consent of Company, and the Agent shall thereafter
process said mail promptly in accordance with this Agreement. Bank shall not
inquire into the Agent's right to make such a demand under any agreement among
the Agent, the Lenders and Company, and shall be forever released of all
obligations with respect to said remittances upon release to the Agent. If an
Event of Default has occurred and is continuing, Company shall have no control
whatsoever over any mail, checks, money orders, collections or other forms of
remittances received in the Lock Box. Appropriate instructions have been, or
will be, given by the Bank to the post office where the Lock Box is maintained,
and such instructions shall not be revoked without the prior written consent of
the Agent. Any instruction given to the Bank by Company without the prior or
concurrent written agreement of the Agent shall be void and of no force or
effect. All mail addressed to the Lock Box will be picked up by the Bank
according to its regular collection schedule.

3. Remittance Collection. On
the day received the Bank will open all mail addressed to the Lock Box and
remove and inspect the enclosures. All checks, money orders and other forms or
orders for the payment of money and other collection remittances (hereinafter
collectively referred to as "checks") shall be processed by the Bank
as follows:

(1) Missing Date. All undated
checks will be dated by the Bank as of the postmark date and processed as
hereafter provided.

(2) Postdated. Checks
postdated up to three days from the date of receipt shall be processed on the
date indicated on the check. Bank shall not deposit checks postdated more than
three days, but shall notify the Agent by telephone of such checks and follow
the Agent's instructions for disposition of such checks.

(3) Stale Date. Checks dated
six months or more prior to the date of collection will not be deposited and
shall be sent to Company, with a copy to the Agent.

(4) Different Amount. Where
written and numeric amounts differ, a check will be processed by the Bank only
if the correct amount can be determined from the accompanying documents,
otherwise the check will not be deposited and shall be sent to Company, with a
copy to the Agent.

(5) Signature Missing. Checks
which do not bear the drawer's signature and do not indicate the drawer's
identity will not be deposited but shall be sent to Company, with a copy to the
Agent. If, as determined by the Bank, the drawer can be identified from the face
of the check, the Bank will deposit and process the check by affixing a stamped
impression requesting the drawer bank to contact the drawer for authority to
pay.

(6) Alterations and Restrictions.
Checks with alterations and checks bearing restrictive notations such as
"Payment in Full" will not be deposited, and the Bank shall notify the
Agent of such checks by telephone on the day of receipt and will deposit, hold
or forward such checks to Company, with a copy to the Agent, with accompanying
written matter, if any, as requested by the Agent.

(7) Foreign Banks and Currency.
Checks drawn in foreign currency will be processed in accordance with the Bank's
normal procedure for such checks and the Agent will be notified by advice of any
such checks on the date received by the Bank.

(8) Other Items. Any items
which the Agent has specifically instructed the Bank in writing not to process
will not be deposited and shall be sent to the Company, with a copy to the
Agent.

Notwithstanding anything to the
contrary contained in this Agreement, Bank shall have no obligation to perform
services on a basis any different than it performs lockbox services in the
normal course of business, except with respect to receiving instructions from
the Agent rather than Company if an Event of Default has occurred and is
continuing.

4. Processing Acceptable Checks.
All checks, except those not acceptable for deposit under the terms of this
Agreement, shall be deposited on the day of receipt by the Bank to Account No.                     
(the "Lender Account"), which if an Event of Default has occurred and
is continuing is an account owned and controlled exclusively by the Agent, and
all such checks shall be endorsed as follows:

  
    
      credited to account number                 ;
      absence of endorsement hereby supplied and guarantied by [insert name of
      Bank];

    

  

Until a Notice of Redirection substantially in the form of Exhibit
A hereto (a "Notice") is delivered by Agent to Bank, all available
balances in the Lender Account will be transferred on a daily basis via the
automated clearing house system or wire transfer with the following
instructions:

________________

_______________

[ABA No. ______________]

Account No. _____________

Account Name: ____________ as Agent for ___________

Ref.: _____________

Attn: ________________

Upon the delivery of a Notice by Agent to Bank, Bank shall
transfer such funds only as provided in such Notice.

All remittance advices, envelopes, and written matter (except
as expressly provided herein) received in the Lock Box together with photocopies
of all checks shall be sent to Company and, if requested by the Agent, copies of
same shall be sent to the Agent. Bank shall mail both a deposit advice for all
deposits to the Lender Account, on a daily basis, and a statement of account, on
a monthly basis, to both the Agent and Company and, if no deposit is made on a
bank business day, a deposit advice, correctly dated, will be sent to the Agent
and Company with the notation "No Deposit' appearing thereon. In addition,
Bank shall indicate by telephone to the Agent on each Bank business day by 2:30
P.M. New York City time the amount of each day's deposit total.

5. Returned Checks. Checks
deposited in the Lender Account which are returned unpaid because of
"Insufficient Funds," "Uncollected Funds," etc. will be
redeposited by the Bank only once, except that if a returned check exceeds
$1,000, the Bank shall not redeposit such check but shall telephone the Agent
for further instructions on the day such check is received. If redeposit is not
warranted for reasons such as "account closed" or "payment
stopped" or if a check is returned a second time, the Bank will charge the
Lender Account and send a debit advice with the item to Company with copies of
same to Agent.

6. Remittance Received by Company.
Remittances which are sent directly to or received by Company shall be forwarded
to the Lock Box on the day received.

7. Record Maintenance. All
deposit checks will be microfilmed (on front and back) by the Bank and retained
for three years by the Bank prior to destruction. Photocopies of filmed items
will be provided to the Agent or Company on request, within the five-year
period.

8. Bank Charges. All charges
of Bank for services rendered pursuant to this Agreement shall be billed to and
paid directly by Company. Said charges shall not be charged against remittances
nor shall they be debited to the Lender Account.

9. No Offset. Bank hereby
agrees that it will treat all remittances received in the Lock Box in accordance
with the terms of this Agreement and it will not offset or assert any claim
against the Lock Box or the Lender Account or divert such remittances on account
of any obligations owed to the Bank by Company or by the party making the
remittance, except as provided in paragraph 5 hereof.

10. Bank Liability. In acting
under this Agreement Bank shall not be liable to the Agent, the Lenders or
Company for any error of judgment, or for any act done or step taken or omitted
by it in good faith, except for gross negligence or willful misconduct.

11. Term. This Agreement shall
continue in full force and effect until termination by the Bank on 60 days'
prior written notice to all other parties. If an Event of Default has occurred
and is continuing, the Agent may terminate this Agreement, which termination
shall be effective on receipt of written notice by Bank and in the event of such
termination, the Agent shall at its option, have the sole right to remove mail
from the Lock Box. Company shall have no right to terminate this Agreement
without the prior written consent of Agent.

12. Modification. This
Agreement may only be modified by a writing signed by all of the parties hereto.

13. Addresses.

(1) All notices, including phone
notice, daily deposit advices, monthly statements of account and copies of all
checks and the documents which are to be given or sent to the Agent shall be
sent to the following address, and, where applicable, given at the following
phone number:

Bankers Trust Company

________________________________________

________________________________________

________________________________________

Attn: ____________________________________

Fax: ____________________________________

(2) All notices to Bank shall be
sent to:

________________________________________

________________________________________

________________________________________

Attn: ____________________________________

Fax: ____________________________________

(3) All notices and items which are
to be sent to Company shall be sent to:

Sunrise Medical, Inc.

________________________________________

________________________________________

Attn: ____________________________________

Fax: ____________________________________

14. Agent Agreement. The Agent
agrees that it will indemnify and hold Bank harmless from any and all loss,
liability, reasonable expense or damage that Bank may incur in processing
lockbox items in accordance with this Agreement, including, without limitation,
any loss that Bank experiences as a result of returned items to the extent the
balances in the Lender Account referenced in paragraph 5 are insufficient to
cover such losses or in the event the balances in such Lender Account are
insufficient to cover Bank charges referenced in paragraph 8.

15. Limitation on Liability.
The Agent and Company acknowledge that the Bank undertakes to perform only such
duties as are expressly set forth in this Agreement and those which are normally
undertaken by Bank in connection with lockbox processing. Notwithstanding any
other provision of this Agreement, it is agreed by the parties that Bank shall
not be liable for any action taken by Bank or any of its directors, officers,
agents or employees in accordance with this Agreement, except for Bank's or such
natural person's gross negligence or willful misconduct. In no event shall Bank
be liable for losses or delays resulting from force majeure, computer
malfunction, interruption of communication facilities, labor difficulties or
other causes beyond its reasonable control or for any indirect, special or
consequential damages.

16. Governing Law. This
Agreement shall be governed in accordance with the laws of California, without
giving effect to the conflict of law principles thereof.

17. Effectiveness. This
Agreement shall become effective upon its receipt by the Agent, properly
executed by all of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.

  
    
      
        
          
            BANKERS TRUST COMPANY, 

            as Agent

             

            By:_______________________________

            Name:

            Title:

            [NAME OF BANK]

             

            By:_______________________________

            Name:

            Title:

            SUNRISE MEDICAL, INC., as Company

             

            By:_______________________________

            Name:

            Title:

            
              
                
                  
                    
                      
                         

                        

                      

                    

                  

                

              

            

          

        

      

    

  

                        
  

  

   

EXHIBIT A

[Form of] Notice of Redirection

 

[Bank]

______________________________________

______________________________________

______________________________________

Attn:

  
    
      
        
          Re: _________________ Account for                             

          Account No.

          

        

      

    

  

Ladies and Gentlemen:

Reference is made to that certain
Lock Box Agreement, dated as of _______________, 2000 (the
"Agreement") among you, us, as Agent, and Sunrise Medical, Inc.
pursuant to which we, for our benefit and for the benefit of the Lenders (as
defined in the Agreement), were after the occurrence of an Event of Default
given exclusive interest and control of the Account. This notice is given in
accordance with the terms of the Agreement.

We hereby certify that an Event of
Default has occurred and, effective immediately and continuing until we shall
authorize you in writing to do otherwise, we hereby direct you to transfer on a
daily basis all funds deposited into the Account with the instructions attached
hereto.

  
    
      
        
          Very truly yours,

          BANKERS TRUST COMPANY, as Agent

          

          By:____________________________________

          Name: _____________________________

          Title: ______________________________

        

      

    

  

 

 

[attach instructions]

  
    
      
        
          
            
              
                
                  
                    
                      
                        
                         

                        

                      

                    

                  

                

              

            

          

        

      

    

  

  

  

   

 

 

EXHIBIT XV

FORM OF SECURITY AGREEMENT

This SECURITY AGREEMENT (this
"Agreement") is dated as of September 8__, 2000 and entered into
by and among SUNRISE MEDICAL, INC., a Delaware corporation
("Company"), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES
of Company (each of such undersigned Subsidiaries being a "Subsidiary
Grantor" and collectively "Subsidiary Grantors") and each
ADDITIONAL GRANTOR that may become a party hereto after the date hereof in
accordance with Section 18 hereof (each of the Company, each Subsidiary Grantor,
and each Additional Grantor being a "Grantor" and collectively the
"Grantors") and BANKERS TRUST COMPANY, as agent for and representative
of (in such capacity herein called "Secured Party") the financial
institutions ("Lenders") party to the Credit Agreement referred to
below and any Exchangers (as hereinafter defined).

PRELIMINARY STATEMENTS

A.  Pursuant to the Credit
Agreement dated as of September 8__, 2000 (said Credit Agreement, as
amended, to the date hereof, and as it may hereafter be further amended,
restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Company, the
financial institutions listed therein as Lenders, and Bankers Trust Company, as
Agent (in such capacity, "Agent"), Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.

B.  Company may from time to
time enter, or may from time to time have entered, into one or more Interest
Rate Agreements and/or one or more Currency Agreements (collectively, the
"Hedge Agreements") with one or more Persons that are Lenders or
Affiliates of Lenders at the time such Hedge Agreements are entered into (in
such capacity, collectively, "Exchangers") in accordance with the
terms of the Credit Agreement, and it is desired that the obligations of Company
under the Hedge Agreements, including without limitation any obligation of
Company to make payments thereunder in the event of early termination thereof,
together with all obligations of Company under the Credit Agreement and the
other Loan Documents, be secured hereunder.

C.  Subsidiary Grantors have
executed and delivered that certain Subsidiary Guaranty dated the date hereof
(said Subsidiary Guaranty, as amended, to the date hereof, and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the "Subsidiary Guaranty") in favor of Secured
Party for the benefit of Lenders and any Exchangers, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Credit Agreement and all obligations of
Company under the Hedge Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination
thereof.

D.  It is a condition precedent
to the initial extensions of credit by Lenders under the Credit Agreement that
Grantors listed on the signature pages hereof shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.

NOW, THEREFORE, in consideration of
the premises and in order to induce Lenders to make Loans and other extensions
of credit under the Credit Agreement and to induce Exchangers to enter into the
Hedge Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with
Secured Party as follows:

Section 1. Grant of Security.

Each Grantor hereby assigns to
Secured Party, and hereby grants to Secured Party a security interest in, all of
such Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing, whether tangible or intangible, or in which
such Grantor now has or hereafter acquires an interest and wherever the same may
be located (the "Collateral"):

(a) all inventory in all of its
forms, including but not limited to (i) all goods held by such Grantor for
sale or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise used
or consumed in such Grantor's business, (iii) all goods in which such
Grantor has an interest in mass or a joint or other interest or right of any
kind, and (iv) all goods which are returned to or repossessed by such
Grantor and all accessions thereto and products thereof (collectively the
"Inventory") and all negotiable and non-negotiable documents of title
(including without limitation warehouse receipts, dock receipts and bills of
lading) issued by any Person covering any Inventory (any such negotiable
document of title being a "Negotiable Document of Title");

(b) all accounts, contract rights,
chattel paper, documents, instruments, general intangibles and other rights and
obligations of any kind owned by or owing to such Grantor and all rights in, to
and under all security agreements, leases and other contracts securing or
otherwise relating to any such accounts, contract rights, chattel paper,
documents, instruments, general intangibles or other obligations (any and all
such accounts, contract rights, chattel paper, documents, instruments, general
intangibles and other obligations being the "Accounts", and any and
all such security agreements, leases and other contracts being the "Related
Contracts");

(c) all deposit accounts
("Deposit Accounts") including the restricted deposit account
established and maintained by Secured Party pursuant to Section 9(a) (the
"Collateral Account"), the account established and maintained by
Secured Party pursuant to Section 9(b) (the "Overadvance Deposit
Account") and the accounts described on Schedule 1(c), together with
(i) all amounts on deposit from time to time in such deposit accounts and (ii)
all interest, cash, instruments, securities and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing;

(d) all books, records, ledger cards,
files, correspondence, computer programs, tapes, disks and related data
processing software that at any time evidence or contain information relating to
any of the Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and

(e) all proceeds, products, rents and
profits of or from any and all of the foregoing Collateral and, to the extent
not otherwise included, all payments under insurance (whether or not Secured
Party 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. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.

Section 2. Security for
Obligations.

This Agreement secures, and the
Collateral assigned by each Grantor is collateral security for, the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including without
limitation the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), of all
Secured Obligations of such Grantor. "Secured Obligations" means:

(a) with respect to Company, all
obligations and liabilities of every nature of Company now or hereafter existing
under or arising out of or in connection with the Credit Agreement and the other
Loan Documents and any Hedge Agreement, and

(b) with respect to each Subsidiary
Grantor and Additional Grantor, all obligations and liabilities of every nature
of such Grantors now or hereafter existing under or arising out of or in
connection with the Guaranty;

in each case together with all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in bankruptcy
with respect to Company or any other Grantor, would accrue on such obligations,
whether or not a claim is allowed against Company or such Grantor for such
interest in the related bankruptcy proceeding), reimbursement of amounts drawn
under Letters of Credit, payments for early termination of Hedge Agreements,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender or Exchanger as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Grantors now or hereafter
existing under this Agreement.

Section 3. Grantors Remain Liable.

Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by
Secured Party of any of its rights hereunder shall not release any Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) Secured Party shall not have any obligation or
liability under any contracts, licenses, and agreements included in the
Collateral by reason of this Agreement, nor shall 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 4. Representations and
Warranties.

Each Grantor represents and warrants
as follows:

(a) Ownership of Collateral. Except
as expressly permitted by the Credit Agreement and for the security interest
created by this Agreement, such Grantor owns the Collateral owned by such
Grantor free and clear of any Lien. Except as expressly permitted by the Credit
Agreement and such as may have been filed in favor of Secured Party relating to
this Agreement, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.

(b) Locations of Equipment and
Inventory. All of the Inventory is, as of the date hereof, or in the case of
each Additional Grantor, the date of the applicable counterpart entered into
pursuant to Section 18 (each, a "Counterpart"), located at the places
specified in Schedule 4(b), except for Inventory which, in the
ordinary course of business, is in transit either (i) from a supplier to a
Grantor, (ii) between the locations specified in Schedule 4(b),
or (ii) to customers of a Grantor.

(c) Negotiable Documents of Title. No
Negotiable Documents of Title are outstanding with respect to any of the
Inventory.

(d) Office Locations. The chief place
of business, the chief executive office and the office where such Grantor keeps
its records regarding the Accounts and all originals of all chattel paper that
evidence Accounts are, as of the date hereof, and, except as set forth on Schedule 4(d),
have been for the four month period preceding the date hereof, or, in the case
of an Additional Grantor, the date of the applicable Counterpart, located at the
locations set forth on Schedule 4(d);

(e) Names. No Grantor (or predecessor
by merger or otherwise of such Grantor) has, within the four month period
preceding the date hereof, or, in the case of an Additional Grantor, the date of
the applicable Counterpart, had a different name from the name of such Grantor
listed or the signature pages hereof, except the names listed in Schedule
4(e) annexed hereto.

(f) Delivery of Certain Collateral.
All certificates or instruments (excluding checks) evidencing, comprising or
representing the Collateral have been delivered to Secured Party duly endorsed
or accompanied by duly executed instruments of transfer or assignment in blank.

(g) Perfection. The security
interests in the Collateral granted to Secured Party for the ratable benefit of
the Lenders and Exchangers hereunder constitute valid security interests in the
Collateral, securing the payment of the Secured Obligations. Upon the filing of
UCC financing statements naming each Grantor as "debtor", naming
Secured Party as "secured party" and describing the Collateral in the
filing offices with respect to such Grantor set forth on Schedule 4(g), the
security interests in the Collateral granted to Secured Party for the ratable
benefit of the Lenders and Exchangers will, to the extent a security interest in
the Collateral may be perfected by filing UCC financing statements, constitute
perfected security interests therein prior to all other Liens (except for
Permitted Encumbrances), and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly made or
taken.

Section 5. Further Assurances.

(a) Generally. Each Grantor agrees
that from time to time, at the expense of Grantors, such Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will: (i) at
the request of Secured Party, mark conspicuously each item of chattel paper
included in the Accounts, each Related Contract and, at the request of Secured
Party, each of its records pertaining to the Collateral, with a legend, in form
and substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) at the request of
Secured Party, deliver and pledge to Secured Party hereunder all promissory
notes and other instruments (including checks) and all original counterparts of
chattel paper constituting Collateral, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail, (v) at any reasonable time, upon
request by Secured Party, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, (vi) at
Secured Party's reasonable request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral, and (vii) use commercially
reasonable efforts to obtain any necessary consents of third parties to the
assignment and perfection of a security interest to Secured Party with respect
to any Collateral. Each Grantor hereby authorizes Secured Party 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 any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be sufficient
as a financing statement and may be filed as a financing statement in any and
all jurisdictions.

Section 6. Certain Covenants of
Grantors.

Each Grantor shall:

(a) not use or permit any Collateral
to be used unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Collateral;

(b) notify Secured Party of any
change in such Grantor's name, identity or corporate structure within 15 days of
such change;

(c) give Secured Party 30 days' prior
written notice of any change in such Grantor's chief place of business, chief
executive office or residence or the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that evidence
Accounts;

(d) if Secured Party gives value to
enable such Grantor to acquire rights in or the use of any Collateral, use such
value for such purposes; and

(e) except as expressly permitted by
the Credit Agreement, pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all material
claims (including claims for labor, services, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being contested in
good faith; provided that such Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to the
date of any proposed sale under any judgment, writ or warrant of attachment
entered or filed against such Grantor or any of the Collateral as a result of
the failure to make such payment.

Section 7. Special Covenants With
Respect to Inventory.

Each Grantor shall:

(a) keep the Inventory owned by such
Grantor at the places therefor specified on Schedule 4(b) or, upon 30 days'
prior written notice to Secuz, at its own expense, maintain insurance with
respect to the Inventory in accordance with the terms of the Credit Agreement.

Section 8. Special Covenants with
respect to Accounts and Related Contracts.

(a) Each Grantor shall keep its chief
place of business and chief executive office and the office where it keeps its
records concerning the Accounts and Related Contracts, and all originals of all
chattel paper that evidence Accounts, at the locations therefor set forth on
Schedule 4(d) or, upon 30 days' prior written notice to Secured Party, at such
other location in a jurisdiction where all action that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby, or to
enable Secured Party to exercise and enforce its rights and remedies hereunder,
with respect to such Accounts and Related Contracts shall have been taken. Each
Grantor will hold and preserve such records and chattel paper and will permit
representatives of Secured Party at any time during normal business hours to
inspect and make abstracts from such records and chattel paper, and each Grantor
agrees to render to Secured Party, at Grantor's cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.
Promptly upon the request of Secured Party, each Grantor shall deliver to
Secured Party complete and correct copies of each Related Contract.

(b) Each Grantor shall, for not less
than three (3) years from the date on which each Account of such Grantor arose,
maintain (i) complete records of such Account, including records of all
payments received, credits granted and merchandise returned, and (ii) all
documentation relating thereto.

(c) Except as otherwise provided in
this subsection (c), each Grantor shall continue to collect, at its own
expense, all amounts due or to become due to such Grantor under the Accounts and
Related Contracts. In connection with such collections, each Grantor may take
(and, upon the occurrence and during the continuance of an Event of Default at
Secured Party's direction, shall take) such action as such Grantor or Secured
Party may deem necessary or advisable to enforce collection of amounts due or to
become due under the Accounts; provided however, that Secured
Party shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default and upon written notice to such Grantor of
its intention to do so, to notify the account debtors or obligors under any
Accounts of the assignment of such Accounts to Secured Party and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to Secured Party, to notify each Person
maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party and, upon such notification and at the expense of Grantors, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of the Accounts and the Related Contracts shall be received
in trust for the benefit of Secured Party hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over or delivered to
Secured Party in the same form as so received (with any necessary endorsement)
to be held as cash Collateral and applied as provided by Section 14, and
(ii) such Grantor shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.

Section 9. Collateral and
Overadvance Deposit Accounts.

(a) Collateral Account. Secured Party
is hereby authorized to establish and maintain at its office at 130 Liberty
Street, New York, New York 10006 as a blocked account in the name of Company and
under the sole dominion and control of Secured Party, a restricted deposit
account designated as "Sunrise Medical, Inc. Collateral Account". All
amounts at any time held in the Collateral Account shall be beneficially owned
by Grantors but shall be held in the name of Secured Party hereunder, for the
benefit of Lenders, as collateral security for the Secured Obligations upon the
terms and conditions set forth herein. Grantors shall have no right to withdraw,
transfer or, except as expressly set forth herein, otherwise receive any funds
deposited into the Collateral Account. Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or governmental authority,
as may now or hereafter be in effect. All deposits of funds in the Collateral
Account shall be made by wire transfer (or, if applicable, by intra-bank
transfer from another account of a Grantor) of immediately available funds, in
each case addressed in accordance with instructions of Secured Party. Each
Grantor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit. Cash held by Secured Party in the Collateral
Account shall not be invested by Secured Party but instead shall be maintained
as a cash deposit in the Collateral Account pending application thereof as
elsewhere provided in this Agreement. To the extent permitted under Regulation Q
of the Board of Governors of the Federal Reserve System, any cash held in the
Collateral Account shall bear interest at the standard rate paid by Secured
Party to its customers for deposits of like amounts and terms. Subject to
Secured Party's rights hereunder, any interest earned on deposits of cash in the
Collateral Account shall be deposited directly in, and held in the Collateral
Account.

(b) Overadvance Deposit Account.
Secured Party is hereby authorized to establish and maintain at its office at
130 Liberty Street, New York, New York 10006 as a blocked account in the name of
Company and under the sole dominion and control of Secured Party, a restricted
deposit account designated as "Sunrise Medical, Inc. Overadvance Deposit
Account". All amounts at any time held in the Overadvance Deposit Account
shall be beneficially owned by Grantors but shall be held in the name of Secured
Party hereunder, for the benefit of Lenders, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein. Grantors
shall have no right to withdraw, transfer or, except as expressly set forth
herein, otherwise receive any funds deposited into the Overadvance Deposit
Account. Anything contained herein to the contrary notwithstanding, the
Overadvance Deposit Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect. All deposits of funds in the Overadvance Deposit Account
shall be made by wire transfer (or, if applicable, by intra-bank transfer from
another account of a Grantor) of immediately available funds, in each case
addressed in accordance with instructions of Secured Party. Each Grantor shall,
promptly after initiating a transfer of funds to the Overadvance Deposit
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit. Cash held by Secured Party in the
Overadvance Deposit Account shall not be invested by Secured Party but instead
shall be maintained as a cash deposit in the Overadvance Deposit Account pending
application thereof as elsewhere provided in this Agreement. To the extent
permitted under Regulation Q of the Board of Governors of the Federal Reserve
System, any cash held in the Overadvance Deposit Account shall bear interest at
the standard rate paid by Secured Party to its customers for deposits of like
amounts and terms. Subject to Secured Party's rights hereunder, any interest
earned on deposits of cash in the Overadvance Deposit Account shall be deposited
directly in, and held in the Overadvance Deposit Account.

Section 10. Secured Party
Appointed Attorney-in-Fact.

Each Grantor hereby irrevocably
appoints Secured Party as such Grantor's attorney-in-fact, with full authority
in the place and stead of such Grantor and in the name of such Grantor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:

(a) upon the occurrence and during
the continuance of an Event of Default, to obtain and adjust insurance required
to be maintained by such Grantor or paid to Secured Party pursuant to Section 7;

(b) upon the occurrence and during
the continuance of an Event of Default, to ask for, demand, collect, sue for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;

(c) upon the occurrence and during
the continuance of an Event of Default, to receive, endorse and collect any
drafts or other instruments, documents and chattel paper in connection with
clauses (a) and (b) above;

(d) upon the occurrence and during
the continuance of an Event of Default, to file any claims or take any action or
institute any proceedings that Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;

(e) to pay or discharge taxes or
Liens (other than Liens permitted under this Agreement or the Credit Agreement)
levied or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Secured Party in its sole discretion, any such payments made by
Secured Party to become obligations of such Grantor to Secured Party, due and
payable immediately without demand; provided, however, that
Secured Party shall not pay or discharge any tax or Lien if such tax or Lien is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim;

(f) upon the occurrence and during
the continuance of an Event of Default, to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in connection with
Accounts and other documents relating to the Collateral; and

(g) upon the occurrence and during
the continuance of an Event of Default, generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantors' expense, at
any time or from time to time, all acts and things that Secured Party reasonably
deems necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

Section 11. Secured Party May
Perform.

If any Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Grantors under Section 15(b).

Section 12. Standard of Care.

The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.

Section 13. Remedies.

(a) Generally. If any Event of
Default (as defined in the Credit Agreement) or the occurrence of an Early
Termination Date (as defined in a Master Agreement in the form prepared by the
International Swap and Derivatives Association, Inc. or a similar event under
any similar swap agreement) under any Hedge Agreement (either such occurrence
being an "Event of Default" for purposes of this Agreement) shall have
occurred and be continuing, Secured Party may exercise in respect of the
Collateral, in addition to all 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 each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of such Grantor's equipment for the purpose of completing any work
in process, taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, (v) 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 Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or prices
and upon such other terms as Secured Party may deem commercially reasonable and
(vi) exercise dominion and control over and refuse to permit further withdrawals
from any Deposit Account maintained with Secured Party or any Lender
constituting a part of the Collateral. Secured Party or any Lender or Exchanger
may be the purchaser of any or all of the Collateral at any such sale and
Secured Party, as agent for and representative of Lenders and Exchangers (but
not any Lender or Exchanger in its individual capacity unless Requisite Obligees
(as defined in Section 17(a)) shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by Secured Party at such sale.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
days' 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. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party 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. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree; provided that such sale was conducted in a commercially
reasonable manner. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations, Grantors shall
be jointly and severally liable for the deficiency and the fees of any attorneys
employed by Secured Party to collect such deficiency. Each Grantor further
agrees that a breach of any of the covenants contained in this Section will
cause irreparable injury to Secured Party, that Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and each Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.

(b) Collateral Account. If an Event
of Default has occurred and is continuing and, in accordance with Section 8
of the Credit Agreement, Company is required to pay to Secured Party an amount
(the "Aggregate Available Amount") equal to the maximum amount that
may at any time be drawn under all Letters of Credit then outstanding under the
Credit Agreement, Company shall deliver funds in such an amount for deposit in
the Collateral Account. If for any reason the aggregate amount delivered by
Company for deposit in the Collateral Account as aforesaid is less than the
Aggregate Available Amount, the aggregate amount so delivered by Company shall
be apportioned among all outstanding Letters of Credit for purposes of this
Section in accordance with the ratio of the maximum amount available for drawing
under each such Letter of Credit (as to such Letter of Credit, the "Maximum
Available Amount") to the Aggregate Available Amount. Upon any drawing
under any outstanding Letter of Credit in respect of which Company has deposited
in the Collateral Account any amounts described above, Secured Party shall apply
such amounts to reimburse the Issuing Lender for the amount of such drawing. In
the event of cancellation or expiration of any Letter of Credit in respect of
which Company has deposited in the Collateral Account any amounts described
above, or in the event of any reduction in the Maximum Available Amount under
such Letter of Credit, Secured Party shall apply the amount then on deposit in
the Collateral Account in respect of such Letter of Credit (less, in the case of
such a reduction, the Maximum Available Amount under such Letter of Credit
immediately after such reduction) first, to the payment of any amounts
payable to Secured Party pursuant to Section 14 hereof, second, to
the extent of any excess, to the cash collateralization pursuant to the terms of
this Agreement of any outstanding Letters of Credit in respect of which Company
has failed to pay all or a portion of the amounts described above (such cash
collateralization to be apportioned among all such Letters of Credit in the
manner described above), third, to the extent of any further excess, to
the payment of any other outstanding Secured Obligations in such order as
Secured Party shall elect, and fourth, to the extent of any further
excess, to the payment to whomsoever shall be lawfully entitled to receive such
funds.

Section 14. Application of
Proceeds.

Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral shall be applied as provided in subsection 2.4C of the Credit
Agreement.

Section 15. Indemnity and Expenses.

(a) Grantors jointly and severally
agree to indemnify Secured Party, each Lender and each Exchanger from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including without limitation enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's or Exchanger's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.

(b) Grantors jointly and severally
agree to pay to Secured Party upon demand the amount of any and all reasonable
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Secured Party may incur in connection with (i) the
administration of this Agreement, (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
Secured Party hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.

(c) The obligations of Grantors in
this Section 15 shall survive the termination of this Agreement and the
discharge of Grantors' other obligations under this Agreement, the Hedge
Agreements, the Credit Agreement and the other Loan Documents.

Section 16. Continuing Security
Interest; Transfer of Loans; Termination and Release.

(a) This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect until the payment in full of the Secured Obligations (other
than Secured Obligations which, after the occurrence of all of the foregoing
actions, are contingent and unliquidated and not due and owing on such date and
which pursuant to the provisions of the Credit Agreement, Hedge Agreements,
Letters of Credit or the Loan Documents survive the termination of the Credit
Agreement, the repayment of the Secured Obligations, the termination of the
Commitments, the expiration or cancellation of all Letters of Credit and the
termination, expiration or cancellation of all Hedge Agreements), the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, (ii) be binding upon
Grantors and their respective successors and assigns, and (iii) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (iii), (A) but subject to the provisions
of subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise, and (B) any Exchanger may assign or otherwise
transfer any Hedge Agreement to which it is a party to any other Person in
accordance with the terms of such Hedge Agreement, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Exchangers herein or otherwise.

(b) Upon the payment in full of all
Secured Obligations (other than Secured Obligations which, after the occurrence
of all of the foregoing actions, are contingent and unliquidated and not due and
owing on such date and which pursuant to the provisions of the Credit Agreement,
Hedge Agreements, Letters of Credit or the Loan Documents survive the
termination of the Credit Agreement, the repayment of the Secured Obligations,
the termination of the Commitments, the expiration or cancellation of all
Letters of Credit and the termination, expiration or cancellation of all Hedge
Agreements), the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Secured Party will,
at Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination. In addition, upon any
sale, transfer or other disposition of any Collateral by a Grantor in accordance
with the Credit Agreement, the security interest herein with respect to the
Collateral so sold, transferred or otherwise disposed of shall automatically,
without any further action by any Grantor or Secured Party, be released. In
addition, if such Grantor desires to obtain evidence of such release from
Secured Party, such Grantor shall deliver an Officers' Certificate (x) stating
that the Collateral subject to such disposition is being or has been sold,
transferred or otherwise disposed of in compliance with the terms of the Credit
Agreement and (y) specifying the Collateral that is being or has been sold,
transferred or otherwise disposed of in the proposed transaction. Upon the
receipt of such Officers' Certificate, Secured Party shall, at such Grantor's
expense, so long as Secured Party has no reason to believe that the Officers'
Certificate delivered by such Grantor with respect to such sale is not true and
correct, execute and deliver such evidence of releases of its security interest
in such Collateral which is to be or has been so sold, transferred or disposed
of, as may be reasonably requested by such Grantor.

Section 17. Secured Party as Agent.

(a) Secured Party has been appointed
to act as Secured Party hereunder by Lenders and, by their acceptance of the
benefits hereof, Exchangers. Secured Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including without limitation the release or substitution of Collateral), solely
in accordance with this Agreement and the Credit Agreement; provided that
Secured Party shall exercise, or refrain from exercising, any remedies provided
for in Section 13 in accordance with the instructions of (i) Requisite
Lenders, or (ii) after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the cancellation or expiration of all
Letters of Credit and the termination of the Commitments, (A) the holders of a
majority of the aggregate notional amount under all Hedge Agreements (including
Hedge Agreements that have been terminated) or (B) if all Hedge Agreements have
been terminated in accordance with their terms, the aggregate amount then due
and payable (exclusive of expenses and similar payments but including any early
termination payments then due) under such Hedge Agreements (Requisite Lenders
or, if applicable, such holders being referred to herein as "Requisite
Obligees"). In furtherance of the foregoing provisions of this Section 17(a),
each Exchanger, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Exchanger that all rights and remedies
hereunder may be exercised solely by Secured Party for the benefit of Lenders
and Exchangers in accordance with the terms of this Section 17(a).

(b) Secured Party shall at all times
be the same Person that is Agent under the Credit Agreement. Written notice of
resignation by Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement; and
appointment of a successor Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute appointment of a successor Secured Party under
this Agreement. Upon the acceptance of any appointment as Agent under subsection
9.5 of the Credit Agreement by a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Secured Party under this Agreement, and the retiring
Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent's
resignation hereunder as Secured Party, the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was Secured Party hereunder.

(c) Secured Party shall not be deemed
to have any duty whatsoever with respect to any Exchanger until it shall have
received written notice in form and substance satisfactory to Secured Party from
a Grantor or the Exchanger as to the existence and terms of the applicable Hedge
Agreement.

Section 18. Additional Grantors.

The initial Subsidiary Grantors
hereunder shall be such of the Subsidiaries of Company as are signatories hereto
on the date hereof. From time to time subsequent to the date hereof, additional
Subsidiaries of Company may become parties hereto as additional Grantors (each
an "Additional Grantor"), by executing a Counterpart substantially in
the form of Exhibit I annexed hereto. Upon delivery of any such
Counterpart to Secured Party, notice of which is hereby waived by Grantors, each
such Additional Grantor shall be a Grantor and shall be as fully a party hereto
as if such Additional Grantor were an original signatory hereto. Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Administrative Agent not to cause any Subsidiary of Company to
become an Additional Grantor hereunder. This Agreement shall be fully effective
as to any Grantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Grantor hereunder.

Section 19. Amendments; Etc.

No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by Secured Party and, in the case of any
such amendment or modification, by Grantors; provided that this Agreement
may be modified by the execution of a Counterpart by an Additional Grantor in
accordance with Section 18 and Grantors hereby waive any requirement of notice
of or consent to any such amendment. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.

Section 20. Notices.

Any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective
until received; provided further that, if Secured Party changes
its address to be used for purposes of this Section 20, and if Company does not
have any actual knowledge of such address change, then, so long as Company
continues to not have actual knowledge of such address change, the preceding
proviso shall not be applicable and the effectiveness of notices to Secured
Party shall be determined in accordance with the first sentence of this Section
20 without regard to the preceding proviso. For the purposes hereof, the address
of each party hereto shall be as provided in subsection 10.8 of the Credit
Agreement or as set forth under such party's name on the signature pages hereof
or such other address as shall be designated by such party in a written notice
delivered to the other parties hereto.

Section 21. Failure or Indulgence
Not Waiver; Remedies Cumulative.

No failure or delay on the part of
Secured Party in the exercise of any power, right or privilege hereunder shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude any other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

Section 22. Severability.

In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

Section 23. Headings.

Section and subsection headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.

Section 24. Governing Law; Terms;
Rules of Construction.

THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of California are used herein as therein
defined. The rules of construction set forth in subsection 1.3 of the Credit
Agreement shall be applicable to this Agreement mutatis mutandis.

Section 25. Consent to
Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY GRANTOR ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF CALIFORNIA. BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 20; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY RETAINS THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SECTION 25 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
CALIFORNIA LAW.

Section 26. Waiver of Jury Trial.

GRANTORS AND SECURED PARTY HEREBY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Each Grantor and Secured Party
acknowledge that this waiver is a material inducement for Grantors and Secured
Party to enter into a business relationship, that Grantors and Secured Party
have already relied on this waiver in entering into this Agreement and that each
will continue to rely on this waiver in their related future dealings. Each
Grantor and Secured Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 26 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

Section 27. Counterparts.

This Agreement may be executed in one
or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

 

IN WITNESS WHEREOF, Grantors and
Secured Party have caused this Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first written
above.

SUNRISE MEDICAL, INC.

By:_____________________________

Name:

Title:

Each of the entities listed on Schedule A
annexed hereto

By: _________________________________

on behalf of each of the entities listed on

Schedule A annexed hereto

Name:

Title:

 

BANKERS TRUST COMPANY,

as Secured Party

By: ______________________________

Name:

Title:

 

 

Schedule A

	Name  	Notice Address for each Subsidiary Grantor

      
	Sunrise Medical HHG Inc.	Attn Treasurer

    2382 Faraday Avenue, Suite 200

    Carlsbad, CA 92008

  
	Sunrise Medical CCG Inc.	Attn Treasurer

    2382 Faraday Avenue, Suite 200

    Carlsbad, CA 92008

  
	DynaVox Systems Inc.	Attn Treasurer

    2382 Faraday Avenue, Suite 200

    Carlsbad, CA 92008

  
	Sunrise Marin Holdings Inc.	Attn Treasurer

    2382 Faraday Avenue, Suite 200

    Carlsbad, CA 92008

  
	SunMed Finance Inc.	Attn Treasurer

    2382 Faraday Avenue, Suite 200

    Carlsbad, CA 92008

  

 

 

 

	
      Name of Grantor

      	
      Locations of Inventory

	
      Sunrise Medical HHG Inc.

      (Continued)

    	
      2060 Luna Rd., Suite 300,

      Carrollton, TX 75006

    
	 	
      1550 Distribution Dr.,

      Lithia Springs, GA 30057

    
	 	
      1140 Windham Parkway,

      Romeoville, IL 60446

    
	 	
      3371 E. Central Avenue,

      Fresno, CA 93725

    
	 	 
	
      Sunrise Medical CCG Inc.

    	
      5001 Joerns Drive,

      Stevens Point, WI 54481

    
	 	 
	
      DynaVox Systems Inc.
	
      2100 Wharton Street, Suite 400,

      Pittsburgh, PA 15203

    
	 	 
	
      Sunrise Marin Holdings Inc.

    	
      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    
	 	 
	
      SunMed Finance Inc.

    	
      7477 E. Dry Creek Pkwy,

      Longmont, CO 80503

    

 

 

 

 

 

SCHEDULE 1(c)

TO SECURITY AGREEMENT

Deposit Accounts

	
      Division
	
      Bank Name
	
      Department
	
      Address
	
      City-State
	
      Account Mngr.
	
      Account Name
	
      Account Number
	
      Account Type

	
      CCG
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, CCG, Inc.
	
      1235106555
	
      Payroll Account

	
      CCG
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, CCG, Inc.
	
      7765-3-60344
	
      Accounts Payable

	
      CCG
	
      Royal Bank of Canada
	
      

    	
      200 Bay Street
	
      Toronto, ON M5J 2J5

      Canada

    	
      

    	
      Sunrise Medical, CCG, Inc.
	
      101-065-1
	
      Deposit Account

	
      Corporate
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, Inc. - Payroll Account
	
      1455 3 02232
	
      Payroll Account

	
      Corporate
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical,, Inc.
	
      77 654-60339
	
      Controlled Disbursement Account (Main Account)

	
      Corporate
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, Inc. Money Market Account
	
      12571-53582
	
      COR Account

	
      Corporate
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, PS/Savings Plan
	
      12336-27071
	
      PS/Savings Plan

	
      Corporate
	
      Salomon, Smith Barney
	
      

    	
      333 South Grand Avenue, Ste. 5200
	
      Los Angeles, CA

      90071

    	
      Harlan Spinner
	
      Sunrise Medical, Inc.
	
      2041821618106
	
      Money Market - Mutual Funds

	
      Corporate
	
      Salomon, Smith Barney
	
      

    	
      334 South Grand Avenue, Ste. 5200
	
      Los Angeles, CA 

      90072

    	
      Harlan Spinner
	
      Sunrise Medical, Inc. Market Securities Account
	
      2041821519274
	
      Securities Account

	
      DynaVox
	
      PNC Bank
	
      Norwin Hills Office
	
      8735 Norwin Avenue
	
      North Huntingdon, PA

      15642-2744

    	
      Debra Lakatosh
	
      DynaVox Systems Inc.
	
      10-0469-6679
	
      Deposit Account

	
      DynaVox
	
      PNC Bank
	
      Norwin Hills Office
	
      8735 Norwin Avenue
	
      North Huntingdon, PA

      15642-2744

    	
      Debra Lakatosh
	
      DynaVox Systems Inc.
	
      0001818330
	
      

    
	
      DynaVox
	
      PNC Bank
	
      Norwin Hills Office
	
      8735 Norwin Avenue
	
      North Huntingdon, PA

      15642-2744

    	
      Debra Lakatosh
	
      DynaVox Systems Inc. - Payroll Account
	
      1009268067
	
      Payroll Account

	
      HHG
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc.
	
      1233-1-30656
	
      Payroll Account

	
      HHG
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc.
	
      8765-4-63172
	
      A/P

	
      HHG/Mobility
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc-Quickie - British Pounds account
	
      10140003
	
      SafeWire Funds Transfer Service

	
      HHG/Mobility
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc-Mobility Products
	
      81884-04764
	
      Wires, VA ACH's - rqst'd VA to use another acct - need to verify before
      closing

	
      HHG/PC
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc-PCP Division
	
      8188204765
	
      Business Deposit Account

	
      HHG/Respiratory
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc-Respiratory Products Development
	
      12335-26492
	
      P/R

	
      HHG/Respiratory
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      Sunrise Medical, HHG, Inc-Respiratory Products Development
	
      8188-0-04766
	
      A/P

	
      SunMed Finance
	
      Bank of America
	
      Global Client Services
	
      333 South Beaudry Avenue, Unit 5583
	
      Los Angeles, CA

      90017-1466

    	
      Yolanda Hernandez
	
      SunMed Finance Inc.
	
      7765-5-60348
	
      

    
	
      SunMed Finance
	
      Wells Fargo Bank
	
      

    	
      6800 Van Nuys Blvd
	
      Van Nuys, CA

      91405

    	
      Cecilia Alvarado
	
      SunMed Finance Inc.
	
      0288-751019
	
      

    

 

Imprest (i.e. petty cash) accounts

	
      CCG
	
      Point Plus Credit Union
	
      

    	
      3101 Hoover Road,
	
      Stevens Point, WI 54481-0660
	
      

    	
      Sunrise Medical Corp
	
      12257
	
      Petty Cash

	
      HHG/Mobility
	
      First Merit
	
      

    	
      105 Court Street
	
      Elria, OH 44035
	
      

    	
      Sunrise Medical, HHG, Inc-Mobility Products (Formerly Quickie)
	
      0001-14045-0
	
      General-Checking wires

	
      HHG/Mobility
	
      Union Bank of California
	
      Fashion Fair Office
	
      565 East Shaw Avenue
	
      Fresno, CA 93710
	
      

    	
      Sunrise Medical, HHG, Inc-Sunrise Mobility Petty Cash Account
	
      12919705
	
      Analyzed Business Checking Summary-Petty Cash

	
      HHG
	
      First Security Bank
	
      

    	
      

    	
      Belgrade, MT
	
      

    	
      Sunrise Medical, HHG, Inc.
	
      164905
	
      

    

 

 

 

 

 

SCHEDULE 4(b)

TO

SECURITY AGREEMENT

Locations of Inventory

	
      Name of Grantor

      	
      Locations of Inventory

	
      Sunrise Medical HHG Inc.
	
      7477 E. Dry Creek Pkwy,

      Longmont, CO 80503

    
	 	
      2842 Business Park Ave.,

      Fresno, CA 93727

    
	 	
      100 DeVilbiss Drive,

      Somerset, PA. 15501

    
	 	
      1032 N. 4th St.,

      Baldwyn, Mississippi 38824

    
	 	
      732 Cruiser Lane,

      Belgrade, MT 59714

    
	 	
      33554 Pin Oak Parkway,

      Avon Lake, OH 44012

    
	 	
      2815 Oregon St.

      Oshkosh, WI 54902

    
	 	
      1401 Slate Hill Rd.,

      Camp Hill, PA 17011

    
	 	
      665 Independence Ave, Suite A

      Mechanicsburg, PA 17055

    

		
      2060 Luna Rd., Suite 300,

      Carrollton, TX 75006

    
	 	
      1550 Distribution Dr.,

      Lithia Springs, GA 30057

    
	 	
      1140 Windham Parkway,

      Romeoville, IL 60446

    
	 	
      3371 E. Central Avenue,

      Fresno, CA 93725

    
	
      Sunrise Medical CCG Inc.

    	
      5001 Joerns Drive,

      Stevens Point, WI 54481

    
	
      DynaVox Systems Inc.
	
      2100 Wharton Street, Suite 400,

      Pittsburgh, PA 15203

    
	
      Sunrise Marin Holdings Inc.

    	
      2382 Faraday Avenue, Suite 200

      Carlsbad, CA 92008

    
	
      SunMed Finance Inc.

    	
      7477 E. Dry Creek Pkwy,

      Longmont, CO 80503

    

 

 

 

 

SCHEDULE 4(d)

TO

SECURITY AGREEMENT

Office Locations

	
      Name of Grantor

      	
      Office Locations

	
      Sunrise Medical HHG Inc.
	
      7477 E. Dry Creek Pky,

      Longmont, CO 80503

    
	
      Sunrise Medical CCG Inc.

    	
      5001 Joerns Drive,

      Stevens Point, WI 54481

    
	
      DynaVox Systems Inc.
	
      2100 Wharton Street, Suite 400,

      Pittsburgh, PA 15203

    
	
      Sunrise Marin Holdings Inc.
	
      2382 Faraday Avenue, Suite 200,

      Carlsbad, CA 92008

    
	
      SunMed Finance Inc.
	
      7477 E. Dry Creek Pkwy,

      Longmont, CO 80503

    

 

 

 

 

SCHEDULE 4(e)

TO

SECURITY AGREEMENT

Other Names

Other Names (Within the past 5 years only)

 

	
      Name of Grantor

      	
      Other Names

	
      Sunrise Medical HHG Inc.
	
      Quickie Designs Inc.

      Jay Medical Ltd.

      Guardian Products Inc.

      DeVilbiss Healthcare Inc.

      Mechanical Application Designs, Inc.

      HHE Healthcare Consulting, LLC

    
	
      Sunrise Medical CCG Inc.
	
      Sunrise Habitat Inc.

      Joerns Healthcare Inc.

    
	
      DynaVox Systems Inc.
	
      Sentient Systems Technology, Inc.

	
      Sunrise Marin Holdings Inc.
	 
	
      SunMed Finance Inc.
	 

 

 

 

 

SCHEDULE 4(g)

TO

SECURITY AGREEMENT

Filing Offices

	
      Grantor
	  Filing Offices 
	Sunrise Medical, Inc.	California

      Secretary of State
		
      Delaware

      Secretary of State

    
	Sunrise Medical HHG Inc.	California

      Secretary of State
		Colorado

      Secretary of State
		Georgia

      Superior Court Clerks' Cooperative Authority
		Illinois

      Secretary of State
		Mississippi

      Secretary of State

      Office of the Chancery Clerk in Lee County

      Office of the Chancery Clerk in Prentiss County
		Montana

      Secretary of State
		Ohio

      Secretary of State

      Office of the County Recorder in Lorain County
		Pennsylvania *

      Department of State
		
      South Carolina

      Secretary of State

    
		Texas

      Secretary of State
		Wisconsin

      Department of Financial Institutions
	Sunrise Medical, CCG Inc. 	
      California

      Secretary of State

    
		Wisconsin

      Department of Financial Institutions
	DynaVox Systems Inc.	
      California

      Secretary of State

    
		Pennsylvania

      Department of State

      Office of the Prothonotary in Allegheny County
	Sunrise Marin Holdings Inc.	
      California

      Secretary of State

    
	SunMed Finance Inc.	
      California

      Secretary of State

    
		
      Colorado

      Secretary of State

    
		
      Delaware

      Secretary of State

    

PA is a dual filing state, but a county filing is required only when the
debtor has a place of business in only one county.

 

 

EXHIBIT I TO

SECURITY AGREEMENT

FORM OF COUNTERPART

This COUNTERPART (this "Counterpart"),
dated _______, is delivered pursuant to Section 18 of the Security Agreement
referred to below. The undersigned hereby agrees that this Counterpart may be
attached to the Security Agreement, dated as of _______________, _____ (as it
may be from time to time amended, modified or supplemented, the "Security
Agreement"; capitalized terms used herein not otherwise defined herein
shall have the meanings ascribed therein), among ____________________, the other
Grantors named therein, and Bankers Trust Company, as Secured Party. The
undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Security Agreement in accordance with Section 18 thereof and
agrees to be bound by all of the terms thereof. Without limiting the generality
of the foregoing, the undersigned hereby:

(i)  authorizes the Secured
Party to add the information set forth on the Schedules to this Agreement to the
correlative Schedules attached to the Security Agreement;

(ii)  agrees that all Collateral
of the undersigned, including the items of property described on the Schedules
hereto, shall become part of the Collateral and shall secure all Secured
Obligations; and

(iii)  makes the representations
and warranties set forth in the Security Agreement, as amended hereby, to the
extent relating to the undersigned.

[NAME OF ADDITIONAL GRANTOR]

By: ___________________________

Name:

Title:

 

____________________

1The Schedules to the Counterpart should include
copies of all Schedules that identify collateral to be granted by the Additional
Grantor.

 

 

SCHEDULE 1.1

RESTRUCTURING CHARGES

 

Restructuring Charges

 

	 	
      Planned P&L Expenses
	
      Cumulative P&L Expenses

	
      Fiscal 2001
	
      $22,443,000
	
      $22,443,000

	
      Fiscal 2002
	
      14,246,000
	
      36,689,000

	
      Fiscal 2003
	
      19,699,000
	
      56,388,000

	
      Fiscal 2004
	
      1,389,000
	
      57,777,000

	
      Total
	
      $57,777,000
	
       

    

 

 

Restructuring Capital Expenditures

 

	 	
      Planned Capex
	
      Cumulative Capex

	
      Fiscal 2001
	
      $4,500,000
	
      $4,500,000

	
      Fiscal 2002
	
      9,300,000
	
      13,800,000

	
      Fiscal 2003
	
      3,600,000
	
      17,400,000

	
      Fiscal 2004
	
      0
	
      17,400,000

	
      Total
	
      $17,400,000
	
       

    

 

All the above Restructuring Charges and Restructuring Capital Expenditures
are consistent with the detailed plans provided to the Agent.

 

 

 

 

 

SCHEDULE 4.1C

CORPORATE, CAPITAL AND OWNERSHIP STRUCTURE

 

	Capital Structure	
      
	
		
      unaudited

      June 2, 2000  
	% of total
	Total debt, per GAAP	
      $156,136,000
	
      37%

	Preferred stock	
      0
	
      0%

	Shareholders equity, per GAAP	
      261,655,000
	
      63%

		
      
	
      

	Total Capitalization	
      $417,791,000
	
      100%

 

Corporate and ownership structure

The corporate ownership structure is annotated on the
subsidiary organizational charts in Schedule 5.1

 

 

 

SCHEDULE 5.1

SUBSIDIARIES OF COMPANY

Domestic

 

 

International

 

 

 

 

SCHEDULE 5.5

REAL PROPERTY ASSETS

Owned Properties

	
      Address
	
      Country

	 	 
	
      1032 N. 4th St.,

      Baldwyn, Mississippi 38824

    	
      USA

	
      100 DeVilbiss Drive,

      Somerset, PA. 15501

    	
      USA

	
      732 Cruiser Lane,

      Belgrade, MT 59714

    	
      USA

	
      D-69254 Malsch/HD

    	
      Germany

	
      Queensway, Stem Lane,

      New Milton, Hampshire

    	
      England

	
      Sunrise Business Park, High Street, Wollaston, West Midlands, DY8 4PS

    	
      England

	
      Z.I. La Planche 37210 Rochecorbon

    	
      France

	
      Poligono Bakiola, 41, 48498 Arrankudiaga, Vizcaya (Main Address)

    	
      Spain

 

Leased Properties

	
      Address

      	
      Country

	
      5001 Joerns Drive,

      Stevens Point, WI 54481

    	
      USA

	
      2842 Business Park Ave.,

      Fresno, CA 93727

    	
      USA

	
      2382 Faraday Ave, Suite 200 Carlsbad, CA 92008

    	
      USA

	
      4175 Guardian St.,

      Simi Valley, CA 93062

    	
      USA

	
      33554 Pin Oak Parkway,

      Avon Lake, OH 44012

    	
      USA

	
      2815 Oregon St.

      Oshkosh, WI 54902

    	
      USA

	
      7477 E Drycreek Pky,

      Longmont, CO 80503

    	
      USA

	
      3833 Redwood Hwy,

      San Rafael, CA 94912

    	
      USA

    
	
      1401 Slate Hill Rd.,

      Camp Hill, PA 17011

    	
      USA

	
      665 Independence Ave, Suite A Mechanicsburg, PA 17055

    	
      USA

	
      2060 Luna Rd., Suite 300,

      Carrollton, TX 75006

    	
      USA

    
	
      1550 Distribution Dr.,

      Lithia Springs, GA 30057

    	
      USA

	
      1140 Windham Parkway, 

      Romeoville, IL 60446

    	
      USA

    

	
      2100 Wharton St., Ste 400, 

      Pittsburgh, PA

    	
      USA

	
      400 Arbor Lake Dr., Suite B850, Columbia, SC

    	
      USA

    
	
      3371 E. Central Avenue,

      Fresno, CA 93725

    	
      USA

	
      2233 Faraday Ave, Suite H&I, Carlsbad, CA 92008

    	
      USA

    
	
      65 W. Easy St, #106,

      Simi Valley CA 93065

    	
      USA

	
      811 S. Sherman St.,

      Longmont, CO 80501

    	
      USA

	
      350 Merrydale Ave.,

      San Rafael, CA 94912

    	
      USA

    
	
      237 Romina Dr., Unit 3, Concord, Ontario L4K 4V3

    	
      Canada

	
      9633 Clement St, LaSalle,

      Quebec H8R 4B4

    	
      Canada

	
      Calle 1 Poniente, #20, Ciudad Industrial Nueva, Tijuana

    	
      Mexico

	
      Privada Misiones #110 Parque Industrial Misiones, Tijuana, 22575

    	
      Mexico

	
      Unit 7, 15 Carrington Rd,

      Castle Hill NSW 2154

    	
      Australia

	
      Zone industrielle, Route de Meslay, 37210 Parcay-Meslay

    	
      France

	
      14-16 rue du Parc, 91330 Yerres

    	
      France

	
      Via Riva 20, Montale, 29100 Piacenza

    	
      Italy

	
      Luckhalde 14, CH03074

      Muri b., Bern

    	
      Switzerland

	
      Pascalbaan 3, 3439 MO, Nieuwegein

    	
      The Netherlands

	
      Rehabsenteret, 1450 Nesoddtangen

    	
      Norway

	
      Datavagen 65, S-436 32 Askim

    	
      Sweden

	
      Jarfella, Kavlinge

      (small sales offices)

    	
      Sweden

	
      Various storage/warehouse facilities used by Sunrise UK.

    	
      UK

	
      Unit 7B, Westlands Indsustrial Estates, Blackburn Road

    	
      UK

	
      Poligono Bakiola 48498 Arrankudiaga , Vizcaya (6 units) Main address

    	
      Spain

 

 

 

 

SCHEDULE 5.6

LITIGATION

 

None.

 

 

 

 

 

SCHEDULE 5.11

CERTAIN EMPLOYEE BENEFIT PLANS

 

  	The Company has paid pension benefits to former employees in the past.
      The Company is no longer providing these benefits to former or retired
      employees and all such pension plans have been annuitized as of the
      Closing Date.
	The Company is currently providing a medical plan for less than 75
      retired employees.

 

 

 

 

  

  SCHEDULE 5.13

  ENVIRONMENTAL MATTERS

   

The property that we own in Somerset, Pennsylvania (see schedule 5.5) was put
on an EPA clean-up list in 1999. We are working closely with the EPA to get off
the list by the end of calendar year 2000. All testing that has been conducted
indicates that the site is below the actionable levels established by the EPA.

 

 

 

 

SCHEDULE 7.1

CERTAIN EXISTING INDEBTEDNESS

 

 

 

 

SCHEDULE 7.2

CERTAIN EXISTING LIENS

 

	
      Debt secured by liens
	
      Collateral pledged

	 	 
	
      Barclays ECSC Loan
	
      All real property of Sunrise Medical Ltd. located in Stourbridge, West
      Midlands, England.

	 	 
	
      German mortgage
	
      All real property of Sunrise Medical Germany located in Malsch,
      Germany.

	 	 
	
      Various Capital Leases
	
      Various assets being financed by such Capital Leases including
      vehicles, photocopiers and other fixed assets.

 

Note that a lien exists against domestic receivables to secure the $40
million term loan. This loan will be repaid and these liens terminated using the
proceeds of the Obligations.

 

 

 

 

SCHEDULE 7.3

CERTAIN EXISTING INVESTMENTS

	
      Type of Investment
	
      Borrower/Issuer
	
      Amount

	 	 	 
	
      Installment loans
	
      Various customers of the Company
	
      Less than $15 million

	
      Installment notes
	
      Bentley Forbes Group
	
      $4,245,750

	
      Deferred consideration
	
      Fleet Business Credit Corporation
	
      $922,000*

 

* Represents the net present value as of the date of the investment

 

 

 

 

SCHEDULE 7.4

CERTAIN CONTINGENT OBLIGATIONS

 

	
      Type of Investment
	
      Borrower/Issuer
	
      Amount

	 	 	 
	
      Shared loss agreement
	
      Copelco Capital, Inc.
	
      Less than $2,000,000*

	
      Shared loss agreement
	
      VGM Financial Services
	
      Less than $1,000,000*

	
      Shared loss agreement
	
      DLL Financial Services
	
      Less than $1,000,000*

	 	 	 

 

* The amount of contingent liabilities under shared loss agreements
fluctuates with new fundings in the ordinary course of business.

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