Document:

EXHIBIT 10.1

                                CREDIT AGREEMENT

                                   dated as of

                                  June 29, 1999

                                      among

                            The Lenders Party Hereto

                                       and

                  CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
                             as Administrative Agent

                                       and

                 UNITED SURGICAL PARTNERS INTERNATIONAL, INC.,
                                   as Borrower

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                             TABLE OF CONTENTS

ARTICLE I.
       Definitions..........................................................   1
             SECTION 1.01.    Defined Terms.................................   1
             SECTION 1.02.    Classification of Loans and Borrowings........  13
             SECTION 1.03.    Terms Generally...............................  13
             SECTION 1.04.    Accounting Terms; GAAP........................  13

ARTICLE II.
       The Credits..........................................................  14
             SECTION 2.01.    Commitments ..................................  14
             SECTION 2.02.    Loans and Borrowings .........................  14
             SECTION 2.03.    Requests for Borrowings ......................  15
             SECTION 2.04.    Intentionally Deleted ........................  15
             SECTION 2.05.    Intentionally Deleted ........................  15
             SECTION 2.06.    Intentionally Deleted ........................  15
             SECTION 2.07.    Funding of Loans .............................  16
             SECTION 2.08.    Interest Elections ...........................  16
             SECTION 2.09.    Termination of Commitments ...................  17
             SECTION 2.10.    Repayment of Loans, Evidence of Debt .........  18
             SECTION 2.11.    Prepayment of Loans ..........................  18
             SECTION 2.12.    Fees .........................................  19
             SECTION 2.13.    Interest .....................................  19
             SECTION 2.14.    Alternate Rate of Interest ...................  20
             SECTION 2.15.    Increased Costs ..............................  21
             SECTION 2.16.    Break Funding Payments .......................  22
             SECTION 2.17.    Taxes ........................................  22
             SECTION 2.18.    Payments Generally, Pro Rata Treatment,
                                 Sharing of Set-offs........................  23
             SECTION 2.19.    Mitigation Obligations, Replacement of Lenders  25

ARTICLE III.
       Representations and Warranties ......................................  25
             SECTION 3.01.     Organization, Powers ........................  25
             SECTION 3.02.     Authorization, Enforceability ...............  26
             SECTION 3.03.     Governmental Approvals; No Conflicts ........  26
             SECTION 3.04.     Financial Condition; No Material Adverse
                                  Change ...................................  26
             SECTION 3.05.     Properties ..................................  26
             SECTION 3.06.     Litigation and Environmental Matters ........  27
             SECTION 3.07.     Compliance with Laws and Agreements .........  27
             SECTION 3.08.     Investment and Holding Company Status .......  28
             SECTION 3.09.     Taxes .......................................  28
             SECTION 3.10.     ERISA .......................................  28
             SECTION 3.11.     Disclosure ..................................  28
             SECTION 3.12.     Year 2000 ...................................  28

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             SECTION 3.13.     Proprietary Rights ..........................  29
             SECTION 3.14.     Subsidiaries ................................  29

ARTICLE IV.
    Conditions .............................................................  29
             SECTION 4.01.     Effective Date ..............................  29
             SECTION 4.02.     Each Credit Event ...........................  31

ARTICLE V.
    Affirmative Covenants ..................................................  31
             SECTION 5.01.    Financial Statements, and Other Information ..  31
             SECTION 5.02.    Notices of Material Events ...................  32
             SECTION 5.03.    Existence, Conduct of Business ...............  33
             SECTION 5.04.    Payment of Obligations .......................  33
             SECTION 5.05.    Maintenance of Properties; Insurance .........  33
             SECTION 5.06.    Books and Records; Inspection Rights .........  33
             SECTION 5.07.    Compliance with Laws .........................  34
             SECTION 5.08.    Use of Proceeds ..............................  34
             SECTION 5.09.    Business Loans ...............................  34
             SECTION 5.10.    Compliance with ERISA ........................  34
             SECTION 5.11.    Intentionally Deleted ........................  34
             SECTION 5.12.    Cooperation with Syndicator ..................  34

ARTICLE VI.
    Negative Covenants .....................................................  35
             SECTION 6.01.     Indebtedness ................................  35
             SECTION 6.02.     Liens .......................................  36
             SECTION 6.03.     Fundamental Changes .........................  36
             SECTION 6.04.     Investments, Loans, Advances,
                                 Guarantees and Acquisitions ...............  37
             SECTION 6.05.     Hedging Agreements ..........................  37
             SECTION 6.06.     Intentionally Deleted .......................  37
             SECTION 6.07.     Transactions with Affiliates ................  37
             SECTION 6.08.     Restrictive Agreements ......................  38
             SECTION 6.09.     Intentionally Deleted .......................  38
             SECTION 6.10.     Intentionally Deleted .......................  38
             SECTION 6.11.     Intentionally Deleted .......................  38
             SECTION 6.12.     Nature of Business ..........................  38
             SECTION 6.13.     No Amendment ................................  38
             SECTION 6.14.     Fiscal Year .................................  38

ARTICLE VII.
     Events of Default  ....................................................  38

ARTICLE VIII.
     The Administrative Agent ..............................................  41

ARTICLE IX.
  Miscellaneous ............................................................  43
             SECTION 9.01.     Notices .....................................  43
             SECTION 9.02.     Waivers, Amendments .........................  45
             SECTION 9.03.     Expenses, Indemnity, Damage Waiver ..........  45

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            SECTION 9.04.     Successors and Assigns .......................  47
            SECTION 9.05.     Survival .....................................  49
            SECTION 9.06.     Counterparts: Integration, Effectiveness .....  50
            SECTION 9.07.     Severability .................................  50
            SECTION 9.08.     Right of Setoff ..............................  50
            SECTION 9.09.     Governing Law, Jurisdiction,
                                 Consent to Service of Process .............  50
            SECTION 9.10.     WAIVER OF JURY TRIAL .........................  51
            SECTION 9.11.     Headings .....................................  51
            SECTION 9.12.     Confidentiality ..............................  51

SCHEDULES:

Schedule 2.01     Commitment
Schedule 3.06     Disclosed Matters
Schedule 3.13     Proprietary Rights
Schedule 3.14     Subsidiaries
Schedule 6.01     Existing Indebtedness
Schedule 6.02     Existing Liens
Schedule 6.08     Existing Restrictions

EXHIBITS:

Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Opinion of Borrower's Counsel
Exhibit C - Form of Confidentiality Agreement
Exhibit D - Form of Promissory Note
Exhibit E - Form of Compliance Certificate

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<PAGE>
                                CREDIT AGREEMENT

      CREDIT AGREEMENT dated as of June 29, 1999, among United Surgical Partners
International, Inc., the LENDERS party hereto, and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent.

The parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:

      "ABR" when used in reference to any Loan, refers to whether such Loan is
bearing interest at a rate determined by reference to the Alternate Base Rate.

      "ADJUSTED LIBO RATE" means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

      "ADMINISTRATIVE AGENT" means Chase Bank of Texas, National Association, in
its capacity as administrative agent for the Lenders hereunder.

      "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.

      "AFFILIATE" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

      "AGREEMENT" means this Credit Agreement, as the same may be amended,
restated or otherwise modified from time to time.

      "ALTERNATE BASE RATE" means for any day a rate per annum equal to the
lesser of (a) the greater of (1) the Prime Rate for that day and (2) the Federal
Funds Effective Rate for that day plus 1/2 of 1 % or (b) the Ceiling Rate. The
Alternate Base Rate shall be computed on the basis of the actual number of days
elapsed in a year consisting of 365 (366 for a leap year) days. If for any
reason Administrative Agent shall have determined (which determination shall be
conclusive and binding, absent manifest or demonstrated error) that it is unable
to ascertain the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, then the Alternate
Base Rate shall, until the circumstances giving rise to such inability no longer
exists, be the lesser of (a) the Prime Rate from time to time in effect or (b)
the Ceiling Rate. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from

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and including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

      "APPLICABLE PERCENTAGE" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the unpaid principal of the Loans, giving effect to any
assignments.

      "APPLICABLE RATE" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, as the case may be, the applicable rate per annum set forth
below under the caption "ABR Spread" or "Eurodollar Spread," as the case may be:

                               ABR Spread      Eurodollar Spread
                               ----------      -----------------
              Borrowing            0%                1.00%

      "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of EXHIBIT A or any other form approved by the Administrative Agent.

      "AVAILABILITY PERIOD" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

      "BOARD" means the Board of Governors of the Federal Reserve System of the
United States of America.

      "BORROWER" means United Surgical Partners International, Inc., a Delaware
corporation.

      "BORROWING" means Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

      "BORROWING REQUEST" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

      "BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which commercial banks in Dallas, Texas are authorized or required by law to
remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

      "CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

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      "CEILING RATE" means, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or Texas laws permits
the higher interest rate, stated as a rate per annum. On each day, if any, that
Chapter 1D establishes the Ceiling Rate, the Ceiling Rate shall be the
"indicated rate ceiling" (as defined in Chapter 1D) for that day. Administrative
Agent may from time to time, as to current and future balances, implement any
other ceiling under Chapter 1D by notice to Borrower, if and to the extent
permitted by Chapter 1D. Without notice to Borrower or any other Person, the
Ceiling Rate shall automatically fluctuate upward and downward as and in the
amount by which such maximum nonusurious rate of interest permitted by
applicable law fluctuates.

      "CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than thirty percent (30%) of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower
(other than any such Person or group that owns such shares on the date hereof);
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Borrower by Persons who were neither (i) directors on the
date hereof, (ii) nominated by the board of directors of the Borrower nor (iii)
appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of the Borrower by any Person or group.

      "CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.

      "CHAPTER 1D" means Chapter 1D of Title 79, Texas Revised Civil Statutes,
1925, as amended.

      "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

      "COMMITMENT" means, with respect to each Lender, the commitment of such
Lender to make Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Credit Exposure hereunder, as such commitment
may be reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $25,000,000.00.

      "COMPLIANCE CERTIFICATE" means the Compliance Certificate in substantially
the form attached hereto as EXHIBIT E with such modifications and additions
thereto as shall be in accordance' with this Agreement and reasonably
satisfactory to Administrative Agent.

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      "CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement in the
form attached hereto as EXHIBIT C.

      "CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

      "CREDIT EXPOSURE" means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender's Loans at such time.

      "DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

      "DEFAULT RATE" means, on any day, a rate per annum equal to two percent
(2%) plus the greater of (i) the Alternate Base Rate plus the Applicable Rate or
(ii) the Adjusted LIBO Rate plus the Applicable Rate; provided in no event shall
the Default Rate be in excess of the Ceiling Rate.

      "DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

      "DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property. (whether now owned or hereafter acquired) by
Borrower or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition (w) of any Property sold or disposed
of in the ordinary course of business and on ordinary business terms, (x) of any
Investment permitted under Section 6.04, (y) to the Borrower or any of its
wholly-owned Subsidiaries or (z) of any stock (including, without limitation,
Preferred Stock), interests, participations, rights in or other equivalents in
the equity interests (however designated) in Borrower or any of its
Subsidiaries, warrants, or options exercisable for, exchangeable for or
convertible into such an equity interest; provided that a sale, assignment,
transfer or other disposition under this clause (z) does not constitute a Change
in Control.

      "DOLLARS" or "$" refers to lawful money of the United States of America.

      "EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

      "ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

      "ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal

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of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

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

      "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

      "ERISA EVENT" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

      "EURODOLLAR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

      "EVENT OF DEFAULT" has the meaning assigned to such term in Article VII.

      "EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such Foreign

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Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.17(a).

       "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

      "FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.

      "FINANCIAL STATEMENTS" shall mean all balance sheets, income statements
and other financial data, statements and reports (whether of Borrower or any of
its Subsidiaries), which are required to, have been, or may from time to time
hereafter, be required to be furnished to Administrative Agent.

      "FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

      "GAAP" means generally accepted accounting principles in the United States
of America.

      "GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

      "GUARANTEE" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

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      "GUARANTOR" means Welsh, Carson, Anderson & Stowe VII, L.P., a Delaware
limited partnership, its successors and assigns.

      "GUARANTY" shall mean that certain guaranty of this Agreement executed by
Guarantor dated June 18, 1999, and referenced in Section 4.01 of this Agreement,
as the same may be amended and modified from time to time.

      "HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

      "HEDGING AGREEMENT" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

      "INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (including, without limitation, an
obligation in favor of a stockholder or future stockholder of a Person in
connection with the redemption by such Person of capital stock of such Person
from such stockholder or future stockholder), (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
Property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of Property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
Property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, to the extent of the fair market value of such
Property, (g) all Guarantees by such Person of Indebtedness of others, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

      "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.

      "INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the last
day of each fiscal quarter and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Borrowing
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period.

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      "INTEREST PERIOD" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, three, six months or, with
the consent of each Lender, twelve months thereafter, as the Borrower may elect;
PROVIDED , that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

      "INTEREST ELECTION REQUEST" means a request by the Borrower to convert or
continue a Borrowing or a portion thereof in accordance with Section 2.08.

      "INVESTMENT" shall mean, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock of such
Person or any other Person; (b) the acquisition (whether for cash, Property,
services or securities or otherwise) of bonds, notes, debentures, partnership or
other ownership interests or other securities of any other Person or any
agreement to make any such acquisition (including any "short sale" or any sale
of any securities at a time when such securities are not owned by the Person
entering into such sale); (c) the making of any deposit with, or advance, loan
or other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person); or (d) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent, or extended to such
Person.

      "LENDERS" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.

      "LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on the Reuter Money Rates Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 am., Dallas, Texas time, three Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity comparable
to such Interest Period. If such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate at which dollar deposits of an amount similar
to such Eurodollar Borrowing and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at

                                       8
<PAGE>
approximately 11:00 a.m., Dallas, Texas time, three Business Days prior to the
commencement of such Interest Period.

      "LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

      "LOAN DOCUMENTS" shall mean, collectively, this Agreement, all promissory
notes, guaranties, all Uniform Commercial Code financing statements, and all
other documents executed in connection with this Agreement.

      "LOANS" means the revolving loans made by the Lenders to the Borrower
pursuant to this Agreement.

      "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects, or condition, financial or otherwise,
of the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or the Note, (c)
the ability of the Guarantor to perform any of its obligations under the
Guaranty, or (d) the rights of or benefits available to the Lenders under this
Agreement, the Note or any of the documents referenced in Section 4.01(a), (b),
(c), (d) or (f) of this Agreement.

      "MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.

      "MATURITY DATE" means June 30, 2001.

      "MOODY'S" means Moody's Investors Service, Inc.

      "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

      "NOTES" shall mean the promissory notes provided for by Section 2.02 and
all promissory notes delivered in substitution or exchange therefor, in each
case as the same shall be modified and supplemented and in effect from time to
time.

      "OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.

                                       9
<PAGE>
      "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

      "PERMITTED ENCUMBRANCES" means:

      (a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

      (b) landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens (i) arising in the ordinary course of business,
(ii) securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04 and (iii) (A) imposed by law or (B) if
the same (1) are usual and customary, including as to scope of collateral, and
(2) do not secure obligations for borrowed money, created by contract.

      (c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;

      (d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

      (e) judgment liens in respect of judgments that do not constitute an Event
of Default under clause (k) of Article VII;

      (f) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary; PROVIDED that the term "Permitted
Encumbrances" as used in this clause (f) shall not include any Lien securing
Indebtedness; and

      (g) Liens in favor of Administrative Agent and Lenders.

      "PERMITTED INVESTMENTS" means:

      (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

      (b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;

      (c) investments in certificates of deposit, banker's acceptances, demand
deposits and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or

                                       10
<PAGE>
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000; and

      (d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.

      "PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

      "PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

      "PREFERRED STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of Borrower's preferred or preference
stock, whether outstanding on or issued after the Effective Date, including,
without limitation, the Series A Redeemable Preferred Stock, $.O1 par value per
share, and the Series B Convertible Preferred Stock $.O1 par value per share, of
Borrower.

      "PRIME RATE" means the rate of interest per annum publicly announced from
time to time by Chase Bank of Texas, National Association as its prime rate in
effect at its principal office in Houston, Texas; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

      "PROPERTY" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

      "PROPRIETARY RIGHTS" shall mean any patents, registered and common law
trademarks, service marks, trade names, copyrights, licenses and other similar
rights (including know-how, trade secrets and other confidential information)
and applications for each of the foregoing, if any.

      "REGISTER" has the meaning set forth in Section 9.04.

      "RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

      "REQUIRED LENDERS" means, at any time, Lenders having Credit Exposures and
unused Commitments representing 66 2/3% of the sum of the total Credit Exposures
and unused Commitments at such time.

      "S&P" means Standard & Poor's Ratings Group.

                                       11

<PAGE>
      "STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for probation,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

      "SUBSIDIARY" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, directly or indirectly owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent;
provided, that for purposes of this clause (b) only, the Borrower shall Control
another Person only if Borrower (x) directly or indirectly owns securities or
other ownership interests representing more than 30% of the equity or more than
30% of the ordinary voting power, or in the case of a partnership, more than 30%
of the general partnership interests of such Person AND (y) has a management
agreement or arrangement with, or with respect to, such Person.

      "SUBSIDIARY" means any subsidiary of the Borrower.

      "TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

      "TOPS LOAN DOCUMENTS" means that certain Credit Agreement dated on or
about the date hereof by and among TOPS Specialty Hospital, Ltd., the lenders
party thereto and Chase Bank of Texas, National Association, as Administrative
Agent (as the same may be amended, restated or otherwise modified from time to
time) and all promissory notes, guarantees, Uniform Commercial Code financing
statements and all other documents executed in connection therewith.

      "TRANSACTIONS" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.

      "TYPE" when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan or on the Loans comprising such Borrowing is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

                                       12
<PAGE>
      "WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

      SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans or Borrowings may be classified and referred to by Type (e.g. a
"Eurodollar Loan" or "Eurodollar Borrowing").

      SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof' and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "Property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

      SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                   ARTICLE II.
                                   THE CREDITS

      SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in such Lender's Credit Exposure exceeding such Lender's Commitment:
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.

                                       13
<PAGE>
      Upon the occurrence of an event that, with notice or the passage of time,
or both, would constitute an Event of Default (as defined in Article VII), and
at any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower suspend the Commitments (and thereupon the Commitments shall
immediately be suspended). During the period of any such suspension: (i) no
Lender shall be obligated in respect of its Commitment (provided, however, that
the Borrower may convert a Borrowing to a different Type or continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in, including the limitations in, Section 2.08) and
(ii) any fees due to any one or more of Administrative Agent and the Lenders
(including the fees provided for in Section 2.12) shall be calculated without
regard to such suspension. Without limiting the first sentence of this
paragraph, (x) a grace or cure period in an agreement between the Borrower (or a
Subsidiary) and a third party (i.e., a Person that is not the Administrative
Agent or a Lender) is included as a passage of time within the contemplation of
such first sentence and (y) a notice given by a third party (i.e., a Person not
the Administrative Agent or a Lender) to the Borrower or a Subsidiary is
included as a notice within the contemplation of such first sentence. This
paragraph shall apply notwithstanding anything to the contrary in this Agreement
or any of the other Loan Documents.

      SECTION 2.02. LOANS AND BORROWINGS.

      (a) Each Loan shall be made as a part of a Borrowing consisting of Loans
made by ther Lenders ratably in accordance with their respective Commitments.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.

      (b) All Loans made by each Lender shall be evidenced by a single
promissory note of the Borrower, substantially in the form of EXHIBIT D, payable
to such Lender in a principal amount equal to the amount of its Commitment as in
effect and otherwise duly completed.

      (c) Subject to Section 2.14, each Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.

      (d) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $100,000. At the time each ABR Borrowing
is made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $10,000 and not less than $50,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
Commitments. Borrowings of more than one Type may be outstanding at the same
time; provided that there shall not at any time be more than a total of five (5)
Eurodollar Borrowings outstanding.

                                       14
<PAGE>
      (e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.

      SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request in writing (a) in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., Dallas, Texas
time, three Business Days before the date of the proposed Borrowing, or (b) in
the case of an ABR Borrowing, not later than 10:00 a.m., Dallas, Texas time, the
date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable
and shall be evidenced by a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such written Borrowing
Request shall specify the following information in compliance with Section 2.02:

      (i)   the aggregate amount of the requested Borrowing;

      (ii)  the date of such Borrowing, which shall be a Business Day;

      (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
            Borrowing;

      (iv)  in the case of a Eurodollar Borrowing, the initial Interest Period
            to be applicable thereto, which shall be a period contemplated by
            the definition of the term "Interest Period"; and

      (v)   the location and number of the Borrower's account to which funds are
            to be disbursed, which shall comply with the requirements of Section
            2.07.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.

      SECTION 2.04. INTENTIONALLY DELETED.

      SECTION 2.05. INTENTIONALLY DELETED.

      SECTION 2.06. INTENTIONALLY DELETED.

      SECTION 2.07. FUNDING OF LOANS.

      (a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Dallas, Texas time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the

                                       15
<PAGE>
Administrative Agent in Dallas, Texas and designated by the Borrower in the
applicable Borrowing Request.

      (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing to the Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation but in no event in excess of the Ceiling Rate or (ii)
in the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Borrowing.

      (c) The entire unpaid principal balance of each Loan shall be finally due
and payable on the Maturity Date.

      SECTION 2.08. INTEREST ELECTIONS.

      (a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.

      (b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election in writing by the time that a
Borrowing Request would be required under Section 2.03 if Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such Interest Election Request shall
be irrevocable and shall be evidenced by a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower.

      (c) Each written Interest Election Request shall specify the following
information in compliance with Section 2.02:

            (i) the Borrowing to which such Interest Election Request applies
      and, if different options are being elected with respect to different
      portions thereof, the portions thereof to be allocated to each resulting
      Borrowing (in which case the information to be

                                       16
<PAGE>
      specified pursuant to clauses (iii) and (iv) below shall be specified for
      each resulting Borrowing);

            (ii) the effective date of the election made pursuant to such
      Interest Election Request, which shall be a Business Day;

            (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
      Eurodollar Borrowing; and

            (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
      Interest Period to be applicable thereto after giving effect to such
      election, which shall be a period contemplated by the definition of the
      term "Interest Period."

 If any such Interest Election Request requests a Eurodollar Borrowing but does
 not specify an Interest Period, then the Borrower shall be deemed to have
 selected an Interest Period of one month's duration.

      (d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.

      (e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

      SECTION 2.09. TERMINATION OF COMMITMENTS.

      (a) Unless previously terminated, the Commitments terminate on the
Maturity Date.

      (b) The Borrower may at any time terminate, or from time to time reduce,
the Commitments; PROVIDED that (i) each reduction of the Commitments shall be in
an amount that is (A) $250,000, or (B) the sum of an integral multiple of
$100,000 plus $250,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the sum of the Credit Exposures would exceed the
total Commitments.

      (c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
five Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders

                                       17
<PAGE>
of the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; PROVIDED that a notice of termination of the
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.

      SECTION 2.10. REPAYMENT OF LOANS, EVIDENCE OF DEBT.

      (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date.

      (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

      (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.

      (d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

      SECTION 2.11. PREPAYMENT OF LOANS.

      (a) The Borrower shall have the right at any time and from time to time to
prepay the Loans in whole or in part without premium or penalty except as may be
contemplated by this Agreement (including Section 2.16), subject to prior notice
in accordance with paragraph (b) of this Section; provided each partial
prepayment shall be in an aggregate amount that is an integral multiple of
$100,000 and shall not be less than $100,000.

      (b) The Borrower shall notify the Administrative Agent by telecopy or
other written notice of any prepayment hereunder not later than five (5)
Business Days before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing, to be prepaid. Promptly following receipt of any such notice
relating to any Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each prepayment of any Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13.

                                       18
<PAGE>
      SECTION 2.12. FEES.

      (a) Borrower shall pay to the Administrative Agent for account of each
Lender a commitment fee on the daily average unused amount of such Lender's
Commitment, for the period from and including the Effective Date to but not
including the earlier of the date such Commitment is terminated and the Maturity
Date, at a rate per annum equal to 3/8ths of 1%. Accrued commitment fees shall
be payable in arrears on the last day of October, January, April and July of
each year and on the date on which the Commitments terminate, commencing on the
first such date to occur after the date hereof; PROVIDED that any commitment
fees accruing after the date on which the Commitments terminate shall be payable
on demand. All commitment fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).

      (b) The Borrower agrees to pay to the Administrative Agent, for its own
account, and, if provided therein, for the account of any other Lenders, fees
payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

      (c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.

      SECTION 2.13. INTEREST.

      (a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Rate.

      (b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.

      (c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, then such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to the Default Rate; provided, that for the full term of the
debt evidenced hereby the interest rate produced by the aggregate of all sums
paid or agreed to be paid hereunder for the use, forbearance or detention of the
debt evidenced hereby (including, but not limited to, all interest contemplated
by this Section 2.13) shall not exceed the Ceiling Rate.

      (d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
PROVIDED that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand; (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.

                                       19
<PAGE>
      (e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted
LIBO Rate and/or LIBO Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error.

      (f) Notwithstanding any provision to the contrary contained in this
Agreement or any of the other Loan Documents, in no case or event shall the
aggregate of (i) all interest on the unpaid balance of any of the debt evidenced
hereby, accrued or paid from the date hereof, and (ii) the aggregate of any
other amounts accrued or paid pursuant to this Agreement or any of the other
Loan Documents, which in either case, under applicable laws are or may be deemed
to constitute interest upon the debt evidenced hereby from the date hereof, ever
exceed the Ceiling Rate. In this connection, Borrower, Administrative Agent and
Lenders stipulate and agree that it is their common and overriding intent to
contract in strict compliance with applicable usury laws (including Chapter 1D).
In furtherance thereof, none of the terms of this Agreement or any of the other
Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Ceiling Rate. Borrower or other parties now or hereafter
becoming liable for payment of the debt evidenced hereby shall never be liable
for interest in excess of the Ceiling Rate. If, for any reason whatever, the
interest paid or received on any debt evidenced hereby during its full term
produces a rate that exceeds the Ceiling Rate, the holder of the instrument
evidencing such debt shall credit against the principal of such debt evidenced
hereby (or, if such debt evidenced hereby shall have been paid in full, shall
refund to the payor of such interest) such portion of said interest as shall be
necessary to cause the interest paid to produce a rate equal to the Ceiling
Rate. All sums paid or agreed to be paid for the use, forbearance or detention
of the debt evidenced hereby shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread in equal parts throughout the full
term of this Agreement, so that the interest rate is uniform throughout the full
term of this Agreement. The provisions of this paragraph shall control all
agreements, whether now or hereafter existing and whether written or oral, among
Borrower and Lenders.

      SECTION 2.14. ALTERNATE RATE OF INTEREST. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

      (a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or

      (b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the

                                       20
<PAGE>
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, (i) any Interest Election Request that requests the conversion of
any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing
shall be ineffective and such Borrowing shall be made as an ABR Borrowing and
(ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing.

      SECTION 2.15. INCREASED COSTS.

      (a)   If any Change in Law shall:

            (i) impose, modify or deem applicable any reserve, special deposit
      or similar requirement against assets of, deposits with or for the account
      of, or credit extended by, any Lender (except any such reserve requirement
      reflected in the Adjusted LIBO Rate); or

            (ii) impose on any Lender or the London interbank market any other
      condition affecting this Agreement or Eurodollar Loans made by such
      Lender;

      and the result of any of the foregoing shall be to increase the cost to
      such Lender of making or maintaining any Eurodollar Loan (or of
      maintaining its obligation to make any such Loan) or to reduce the amount
      of any sum received or receivable by such Lender hereunder (whether of
      principal, interest or otherwise), then the Borrower will pay to such
      Lender such additional amount or amounts as will compensate such Lender
      for such additional costs incurred or reduction suffered.

      (b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.

      (c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

      (d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than two hundred seventy (270) days prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; PROVIDED further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the two

                                       21
<PAGE>
hundred seventy (270) day period referred to above shall be extended to include
the period of retroactive effect thereof.

      SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked (and the foregoing reference
shall not imply any rights of revocation)), (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.19, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate (in the case of a Eurodollar Loan) that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

      SECTION 2.17. TAXES.

      (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; PROVIDED that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.17) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

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

      (c) The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.17) and any

                                       22
<PAGE>
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender shall be conclusive absent manifest error.

      (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

      (e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

      SECTION 2.18. PAYMENTS GENERALLY, PRO RATA TREATMENT SHARING OF SET-OFFS.

      (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, Dallas, Texas
time, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 712
Main Street, Houston, Texas 77002, except that payments pursuant to Sections
2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.

      (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of interest and fees then due to such parties,
and (ii) second, towards payment of principal then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.

      (c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest

                                       23
<PAGE>
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

      (d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation, provided, that for the
full term of the loan the interest rate produced by the aggregate of all sums
paid or agreed to be paid hereunder for the use, forbearance or detention of the
debt evidenced hereby (including, but not limited to, all interest contemplated
by this Section 2.18) shall not exceed the Ceiling Rate.

      (e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.07(b) or 2.18(d), then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.

      SECTION 2.19. MITIGATION OBLIGATIONS, REPLACEMENT OF LENDERS.

      (a) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to

                                       24
<PAGE>
Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. Such Lender's obligations set forth in this
paragraph are in all respects subject to Borrower's agreement to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

      (b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Lenders that:

      SECTION 3.01. ORGANIZATION, POWERS. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

      SECTION 3.02. AUTHORIZATION, ENFORCEABILITY. The Transactions are within
the Borrower's corporate powers and have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by the
Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

                                       25
<PAGE>
      SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.

      SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.

      (a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows (i)
as of and for the fiscal year ended December 31, 1998, and (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended March 31, 1999, in
each case certified by its chief financial officer. All such financial
statements fairly present, in all material respects, the respective financial
condition of the respective entities as at the respective dates, and the
respective results, as the case may be, of operations for the respective periods
ended on said respective dates, all in accordance with GAAP and practices
applied on a consistent basis, subject, in the case of interim statements, to
year-end audit adjustments and the omission of footnote disclosure. Borrower and
its Subsidiaries do not have on the date of this Agreement any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the most
recent of such balance sheets as at said respective dates.

      (b) As of the Effective Date, there has been no Material Adverse Effect
since March 31, 1999.

      SECTION 3.05. PROPERTIES. Each of the Borrower and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.

      SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.

      (a) There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.

      (b) Except for the Disclosed Matters, each of Borrower and its
Subsidiaries has obtained all environmental, health and safety permits, licenses
and other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except

                                       26
<PAGE>
to the extent failure to have any such permit, license or authorization would
not (either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect. Each of such permits, licenses and authorizations is in
full force and effect and each of Borrower and its Subsidiaries is in material
compliance with the terms and conditions thereof, and is also in material
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.

      In addition, except for the Disclosed Matters, no notice, notification,
demand, request for information, citation, summons or order has been issued, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or to Borrower's knowledge, threatened by any Governmental
Authority or other Person with respect to any alleged failure by a Borrower or
any of its Subsidiaries to have any environmental, health or safety permit,
license or other authorization required under any Environmental Law in
connection with the conduct of the business of the Borrower or any of its
Subsidiaries or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any release of any Hazardous Materials
generated by Borrower or any of its Subsidiaries, except to the extent that
failure to have any such environmental, health or safety permit, license, or
other authorization could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect. All environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or that are in the possession of Borrower or any of its Subsidiaries in relation
to facts, circumstances or conditions at or affecting any site or facility now
or previously owned, operated or leased by Borrower or any of its Subsidiaries
and that could reasonably be expected to result in a Material Adverse Effect
have been made available to the Lenders.

      (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of a Material Adverse
Effect.

      SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

      SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.

      SECTION 3.09. TAXES. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except Taxes that are being contested in good faith

                                       27
<PAGE>
by appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves.

      SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Plans.

      SECTION 3.11. DISCLOSURE. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Confidentiality Agreement nor any of the
other reports, financial statements, certificates or other information furnished
by or on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

      SECTION 3.12. YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) the Borrower's computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Borrower's systems interface) and the
testing of all such systems and equipment, as so reprogrammed, will be completed
by September 30, 1999. The cost to the Borrower of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Borrower (including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a Material Adverse
Effect.

      SECTION 3.13. PROPRIETARY RIGHTS. Schedule 3.13 lists all of the
Borrower's and its Subsidiaries' material Proprietary Rights, including the name
and mark "United Surgical Partners International, Inc" and all such other
Proprietary Rights as have been registered, as of the Effective Date. As of the
Effective Date, each of the Borrower and its Subsidiaries possesses all material
Proprietary Rights necessary to the conduct of its business, and the loss or
expiration of any Proprietary Right or group of Proprietary Rights, other than
"United Surgical Partners International, Inc, "would not have a Material Adverse
Effect. As of the Effective Date, no such loss or expiration is pending or, to
Borrower's knowledge threatened, with respect to any Proprietary Rights,
including "United Surgical Partners International, Inc." Except as indicated on
Schedule 3.13, as of the Effective Date (a) Borrower and its Subsidiaries own
all right, title and interest in and to all of their Proprietary Rights, (b)
there have been no claims made against Borrower or any Subsidiary thereof for
the assertion of the invalidity, abuse, misuse, or unenforceability of any of
such rights, and there

                                       28
<PAGE>
are no grounds for the same, (c) neither Borrower nor any Subsidiary thereof
have received a notice of conflict with the asserted rights of others within the
last five years, and (d) the conduct of Borrower's and its Subsidiaries'
business has not infringed any Proprietary Rights of others and, Borrower's and
its Subsidiaries' Proprietary Rights have not been infringed by other Persons.
To the best of Borrower's knowledge after reasonable inquiry, its use of the
name "United Surgical Partners International, Inc." would not infringe upon or
otherwise adversely affect the right or-claimed right of any person with respect
to the use of such name and Borrower and each of its Subsidiaries is not
obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
the "United Surgical Partners International, Inc." name with respect to the use
thereof or otherwise.

      SECTION 3.14. SUBSIDIARIES. As of the date of this Agreement, all of
Borrower's Subsidiaries, including Borrower's current ownership interests in
such Subsidiaries, and, separately, all of Borrower's wholly-owned Subsidiaries,
are listed on Schedule 3.14 attached hereto.

                                   ARTICLE IV.
                                   CONDITIONS

      SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):

      (a) The Administrative Agent (or its counsel) shall have received from
each party hereto (i) either (A) a counterpart of this Agreement and all other
Loan Documents required to be executed by the Lenders signed on behalf of such
party or (B) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and (ii) all other
Loan Documents required to be signed by Administrative Agent including the
following:

                          1.   $25,000,000.00 Note
                          2.   Guaranty-Welsh, Carson, Anderson & Stowe
                               VII, L.P.
                          3.   Compliance Certificate
                          4.   Any other document required by
                               Administrative Agent

      (b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for the
Borrower, and of Reboul, MacMurray, Hewitt, Maynard & Kristol, counsel for
Guarantor, substantially in the form of EXHIBIT B and covering such other
matters relating to the Borrower, this Agreement or the Transactions as the
Administrative Agent shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.

        (c) The Administrative Agent shall have received such documents and
 certificates as the Administrative Agent or its counsel may reasonably request
 relating to the organization, existence and good standing of the Borrower, the
 authorization of the Transactions and any other legal matters relating to the
 Borrower, this Agreement or the Transactions, all in form and substance
 satisfactory to the Administrative Agent and its counsel.

                                       29
<PAGE>
      (d) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the president, a vice president or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.

      (e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.

      (f) The Administrative Agent shall have received certificates of insurance
evidencing the existence of all insurance (other than workers' compensation)
required to be maintained by Borrower and its Subsidiaries pursuant to Section
5.05 and the designation of the Administrative Agent as the loss payee or
additional named insured, as the case may be, thereunder to the extent required
by Section 5.05, such certificates to be in such form and contain such
information as is specified in Section 5.05.

      In addition, Borrower shall have delivered to the Administrative Agent a
certificate of the chief executive officer or the chief financial officer of
Borrower setting forth the insurance obtained by it in accordance with the
requirements of Section 5.05 and stating that such insurance is in full force
and effect and that all premiums then due and payable thereon have been paid.

      (g) The Administrative Agent shall have received evidence that the
principal of and interest on, and all other amounts owing in respect of, the
Indebtedness (including any contingent or other amounts payable in respect of
letters of credit) indicated on Schedule 6.01 that is to be repaid on or before
the Effective Date, shall have been (or shall be simultaneously) paid in full,
that any commitments to extend credit under the agreements or instruments
relating to such Indebtedness shall have been canceled or terminated and that
all Guarantees in respect of, and all Liens securing, any such Indebtedness
shall have been released (or arrangements for such release satisfactory to the
Administrative Agent shall have been made); in addition, the Administrative
Agent shall have received from any Person holding any Lien securing any such
Indebtedness, such Uniform Commercial Code termination statements, mortgage
releases and other instruments, in each case in proper form for recording or
filing, as the Administrative Agent shall have requested to release and
terminate of record the Liens securing such Indebtedness (or arrangements for
such release and termination satisfactory to the Administrative Agent shall have
been made).

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., Dallas, Texas time, on June
30, 1999 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).

      SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:

      (a) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing.

                                       30
<PAGE>
      (b) At the time of and immediately after giving effect to such Borrowing,
no Default shall have occurred and be continuing.

Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.

                                   ARTICLE V.
                              AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full, the Borrower covenants and agrees with the Lenders that:

      SECTION 5.01. FINANCIAL STATEMENTS, AND OTHER INFORMATION. The Borrower
will furnish to the Administrative Agent and each Lender:

      (a) within 120 days after the end of the fiscal year of the Borrower
ending December 31, 1999, and within 90 days after the end of each fiscal year
of Borrower thereafter, its audited consolidated balance sheet and related
statements of operations, stockholders equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by KPMG Peat Marwick, L.L.P. or
other independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;

      (b) within 45 days after the end of each fiscal quarter of each fiscal
year of the Borrower, its consolidated balance sheet and related statements of
operations, stockholders equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, all certified by
one of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

      (c) concurrently with any delivery of financial statements under clause
(a) or (b) above, a fully executed Compliance Certificate, certified by a
Financial Officer of the Borrower as representing fairly in all material
respects the information contained therein;

      (d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default;

      (e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the

                                       31
<PAGE>
Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national securities
exchange, or distributed by the Borrower to its stockholders generally, as the
case may be;

      (f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request; and

      (g) as soon as available and in any event on or before sixty (60) days
after the beginning of each fiscal year of Borrower, a budget for such fiscal
year setting forth anticipated revenues, income, expenses and capital
expenditure items for such fiscal year.

      SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

      (a) the occurrence of any Default;

      (b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

      (c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$100,000;

      (d) as soon as Borrower becomes aware any condition or circumstance which
makes any of the environmental representations or warranties set forth in this
Agreement incomplete, incorrect or inaccurate in any material respect as of any
date; and immediately upon receipt thereof, copies of any material
correspondence, notice, pleading, citation, indictment, complaint, order,
decree, or other document from any source asserting or alleging a violation of
any Environmental Laws by either Borrower, or any of its Subsidiaries, or of any
circumstance or condition which requires or may require, a financial
contribution by Borrower, or any of its Subsidiaries, or a clean-up, removal,
remedial action or other response by or on behalf of Borrower, or any of its
Subsidiaries, under applicable Environmental Law(s), or which seeks damages or
civil, criminal, or punitive penalties from Borrower, or any of its
Subsidiaries, or any violation or alleged violation of Environmental Law(s).

      (e) any Disposition in excess of $500,000 in the aggregate in any twelve
month period;

      (f) any attempt by a third party to collect or enforce accounts payable
against Borrower or any of its Subsidiaries in excess of $250,000; and

      (g) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.

                                       32
<PAGE>
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

      SECTION 5.03. EXISTENCE, CONDUCT OF BUSINESS. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, patents, trademarks and franchises
material to the conduct of its business; that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.

      SECTION 5.04. PAYMENT OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

      SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all Property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations, provided that Borrower
will in any event maintain (with respect to itself and each of its Subsidiaries)
casualty, liability and business interruption insurance in such limits (together
with related retention and/or deductible amounts) as are then customary for
Persons engaged in the same or similar business similarly situated, and shall
designate the Administrative Agent as loss payee with respect to any such
casualty insurance.

      SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.

      SECTION 5.07. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its Property (including, but not
limited to, the issuance or sale of any common stock or other securities),
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

      SECTION 5.08. USE OF PROCEEDS. The proceeds of the Loans will be used to
finance the Borrower's general corporate purposes. No part of any Loan will be
used, whether directly or

                                       33
<PAGE>
indirectly, (a) for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X or (b) for the payment
of any dividends, except for dividends payable on Preferred Stock.

      SECTION 5.09. BUSINESS LOANS. Borrower warrants and represents to
Administrative Agent and Lenders that all Loans are and will be for business,
commercial, Investment or other similar purpose and not primarily for personal,
family, household or agricultural use, as such terms are used in Chapter 1D.

      SECTION 5.10. COMPLIANCE WITH ERISA. If Borrower or any of its
Subsidiaries maintain(s) or establish(es) a Plan subject to ERISA, (a) comply in
all material respects with all requirements imposed by ERISA as presently in
effect or hereafter promulgated, including, but not limited to, the minimum
funding requirements thereof and (b) furnish to Administrative Agent and each
Lender (or cause the plan administrator to so furnish) a copy of the annual
return (including all schedules and attachments) for each Plan covered by ERISA,
and filed with the Internal Revenue Service by Borrower, or any of its
Subsidiaries, not later than thirty (30) days after such report has been so
filed.

      SECTION 5.11. INTENTIONALLY DELETED.

      SECTION 5.12. COOPERATION WITH SYNDICATOR. Borrower agrees actively to
assist Chase Securities Inc. and the Administrative Agent in completing a
syndication of the credit facilities evidenced hereby in a manner satisfactory
to them. Such assistance shall include (a) the Borrower's use of commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from Chase Securities Inc's and the Administrative Agent's existing lending
relationships, (b) direct contact between senior management and advisors of the
Borrower and its Affiliates (including Guarantor) and the proposed Lenders, (c)
assistance in the preparation of a confidential information memorandum and other
marketing materials to be used in connection with the syndication and (d) the
hosting, with Chase Securities Inc., of one or more meetings of prospective
Lenders.

      The Borrower acknowledges and agrees that Chase Securities Inc. will
manage all aspects of any syndication, including decisions as to the selection
of institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocations of the commitments among the Lenders and the amount and distribution
of fees among the Lenders. The Borrower also acknowledges and agrees that in
connection with any proposed syndication Chase Securities Inc. will have no
responsibility other than to arrange the proposed syndication, and that such
responsibility is solely to the Administrative Agent. To assist Chase Securities
Inc. in any syndication efforts, the Borrower agrees promptly to prepare and
provide to Chase Securities Inc. and the Administrative Agent all information
with respect to the Borrower and the transactions evidenced hereby, including
all financial information and budgets, as Chase Securities Inc. may reasonably
request in connection with any arrangement and syndication of the credit
facilities evidenced hereby; provided, however, that such budgets need not be
with respect to time periods more prospective than as set forth in Section
5.01(g). The Borrower acknowledges and agrees that in arranging and syndicating
the credit facilities evidenced hereby Chase Securities Inc. may use and rely on
the financial information and budgets provided by Borrower without independent
verification thereof.

                                       34
<PAGE>
      Any syndication shall be in accordance with Section 9.04(b).

                                   ARTICLE VI.
                               NEGATIVE COVENANTS

      Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Lenders that:

      SECTION 6.01. INDEBTEDNESS. The Borrower will not create, incur, assume or
permit to exist any Indebtedness, except:

      (a) Indebtedness created hereunder,

      (b) Indebtedness existing on the date hereof and set forth in Schedule
6.01 and extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof;

      (c) Guarantees by the Borrower of Indebtedness or other obligations of any
Subsidiary;

      (d) Indebtedness of the Borrower incurred to finance the acquisition,
construction; improvement of any Person, securities of any Person or fixed or
capital assets, including Capital Lease Obligations and any Indebtedness assumed
in connection with the acquisition of any such assets or secured by a Lien on
any such assets and all improvements, additions and accessions thereto prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(except to the extent of the reasonable out-of-pocket cost of such extension,
renewal or replacement); provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (d) shall not exceed $1,000,000 at any
time outstanding;

      (e) Indebtedness of Borrower to third parties that has been subordinated
to the Indebtedness created hereunder pursuant to a subordination agreement in
form and content satisfactory to Administrative Agent; and

      (f) Indebtedness of Borrower to Baylor Health Services, a Texas non-profit
corporation, under that certain Convertible Subordinated Promissory Note dated
as of June 1, 1999, in an aggregate principal amount not in excess of
$3,287,234.00.

      SECTION 6.02. LIENS. The Borrower will not create, incur, assume or permit
to exist any Lien on any Property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

      (a) Permitted Encumbrances;

                                       35
<PAGE>
      (b) (i) any Lien on any Property or asset of the Borrower existing on the
date hereof and set forth in SCHEDULE 6.02; provided that (A) such Lien shall
not apply to any other Property or asset of the Borrower and (B) such Lien shall
secure only those obligations which it secures on the date hereof and (ii)
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof (except to the extent of the reasonable
out-of-pocket cost of such extension, renewal or replacement);

      (c) any Lien existing on any Property or asset prior to the acquisition
thereof by the Borrower, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition, (ii) such Lien shall
not apply to any other Property or assets of the Borrower and all improvements,
additions and accessions thereto and identifiable proceeds thereof, and (iii)
such Lien shall secure only those obligations which it secures on the date of
such acquisition and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof (except to the extent of the
reasonable out-of-pocket cost of such extension, renewal or replacement); and

      (d) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower; provided that (i) such Liens secure Indebtedness permitted by
clause (d) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby
are incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring, constructing or improving such fixed
or capital assets and (iv) such Liens shall not apply to any other Property or
assets of the Borrower and all improvements, additions and accessions thereto
and identifiable proceeds thereof.

      SECTION 6.03. FUNDAMENTAL CHANGES. Except for transactions permitted by
Section 6.04 (whether by merger, consolidation, purchase of securities or
otherwise), the Borrower will not merge into, acquire or consolidate with any
other Person, or permit any other Person (including but not limited to any
professional association) to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.04.

      SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Borrower will not purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any Investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:

      (a) Permitted Investments;

                                       36
<PAGE>
      (b) Investments by the Borrower existing on the date hereof in the capital
stock, partnership or other ownership interests of its Subsidiaries;

      (c) Investments made by the Borrower in any Subsidiary and made by any
Subsidiary in the Borrower or any other Subsidiary;

      (d) Guarantees constituting Indebtedness permitted by Section 6.01;

      (e) the redemption by Borrower of its issued and outstanding capital stock
for (i) cash consideration of up to $2,000,000 in the aggregate during the term
of this Agreement and/or (ii) the cancellation by Borrower of certain promissory
notes held by Borrower representing Indebtedness owed to Borrower by its current
or former employees, directors and consultants;

      (f) acquisition of assets, stock or other securities or similar interests
(whether by merger, consolidation or otherwise) of any other Person in
Borrower's line of business; and

      (g) Investments in promissory notes that represent Indebtedness owed to
Borrower by employees, directors and consultants of Borrower, which promissory
notes were executed and delivered in consideration of the issuance of capital
stock of Borrower.

      SECTION 6.05. HEDGING AGREEMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.

      SECTION 6.06. INTENTIONALLY DELETED.

      SECTION 6.07. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any Property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) at prices and on terms and conditions not less favorable
to the Borrower or such Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties or (b) transactions between or among the
Borrower and its wholly-owned Subsidiaries not involving any other Affiliate.

      SECTION 6.08. RESTRICTIVE AGREEMENTS. The Borrower will not, directly or
indirectly enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower to create, incur or permit to exist any Lien upon any of
its material Property or assets, or (b) the ability of Borrower to pay dividends
or other distributions with respect to any shares of its capital stock or to
make loans or advances to any Subsidiary or to Guarantee Indebtedness of any
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document or TOPS Loan Document, (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof identified on SCHEDULE 6.08 or any extension, renewal, amendment or
modification thereof which does not expand the scope of any such restriction or
condition (but the foregoing shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such

                                       37
<PAGE>
restriction or condition), (iii) clause (a) of the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary or an asset pending such sale, provided such restrictions
and conditions apply only to the Subsidiary or asset that is to be sold and such
sale is permitted hereunder, and (iv) clause (a) of the foregoing shall not
apply to customary provisions in leases, licenses and other contracts
restricting the assignment thereof.

       SECTION 6.09. INTENTIONALLY DELETED.

       SECTION 6.10. INTENTIONALLY DELETED.

       SECTION 6.11. INTENTIONALLY DELETED.

      SECTION 6.12. NATURE OF BUSINESS. Borrower and its Subsidiaries presently
engaged in such business will not discontinue as their principal business
activity the ownership and operation of hospitals, surgical centers and other
medical facilities; nor will Borrower or any Subsidiary change the conduct of
their businesses as presently being conducted or engage in any new or different
business if the result thereof would be to materially and substantially change
the business of Borrower and its Subsidiaries taken as a whole.

      SECTION 6.13. NO AMENDMENT. Borrower will not alter, modify or otherwise
amend any contract or agreement including, without limitation, the Management
Agreement with respect to TOPS Specialty Hospital) currently or hereafter in
existence, the effect of which could reasonably be expected to cause a Material
Adverse Effect.

      SECTION 6.14. FISCAL YEAR. Borrower shall not, and shall cause its
Subsidiaries not to, change Borrower's or any of its Subsidiaries' fiscal year
without Administrative Agent's prior written approval.

                                  ARTICLE VII.
                                EVENTS OF DEFAULT

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

      (a) the Borrower shall fail to pay any principal of any Loan when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;

      (b) the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such default shall continue for a period ending on the earlier of
five (5) calendar days or three (3) Business Days thereafter;

      (c) any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished

                                       38
<PAGE>
pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect when
made or deemed made;

      (d) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement or any of the other Loan Documents and
such Default shall continue for a period of ten (10) Business Days thereafter;
provided that such cure period shafl not apply to any failure to observe or
perform the covenants set forth in Sections 5.02, 5.03, 5.08 and Article VI of
this Agreement;

      (e) the Borrower or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable subject to any
applicable grace or cure period;

      (f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (f) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer, in either case
not prohibited by this Agreement, of the Property or assets securing such
Indebtedness;

      (g) any event or condition occurs resulting in a default or event of
default in respect of any Material Indebtedness in excess of $1,000,000, subject
to any applicable grace or cure period;

      (h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

      (i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of;
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;

      (j) the Borrower or any Subsidiary shall become unable, admit in writing
its inability or fail generally to pay its debts as they become due;

                                       39
<PAGE>
      (k) one or more judgments for the payment of money in an aggregate amount
in excess of $250,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment;

      (1) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;

      (m) a Change in Control shall occur;

      (n) if any of this Agreement, the Notes, the Guaranty or the documents
referenced in Sections 4.01(b), (c), (d) or (f) of this Agreement, including any
and all amendments, modifications, renewals or extensions thereto, shall be
terminated, revoked (including any revocation of the Guaranty, as to
Indebtedness of Borrower incurred after the effectiveness of such revocation),
or otherwise rendered void or unenforceable, in any case, without Lender's prior
written consent;

      (o) any Event of Default shall occur under that certain Credit Agreement
dated on or about the date hereof by and among TOPS Specialty Hospital, Ltd., as
Borrower, and Chase Bank of Texas, National Association, as Administrative Agent
and all lender parties thereto; or

      (p) Borrower or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in any contract or other agreement
(including any hospital or surgical center management agreement and any limited
partnership agreement (or similar agreement) pertaining to a hospital or a
surgical center), subject to applicable grace or cure period, which failure
shall result in a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately and in case of any event with respect to the Borrower
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable. Except
to the extent, if any, that notice of Default is expressly required herein or in
any of the other Loan Documents, Borrower and any and all co-makers, endorsers,
guarantors and sureties severally waive notice (including, but not limited to,
notice of intent to accelerate and notice of acceleration, notice of protest and
notice of dishonor), demand, presentment for payment, protest, diligence in
collecting and the filing of suit for the purpose of fixing liability and
consent that the time of payment of any and all Indebtedness

                                       40
<PAGE>
evidenced by the Loan Documents may be extended and re-extended from time to
time without notice to any of them. Each such person agrees that his, her or its
liability on or with respect to this Agreement and the other Loan Documents
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or to maintain perfection of any
Lien against or security interest in any such security or the partial or
complete unenforceability of any guaranty or other surety obligation, in each
case in whole or in part, with or without notice and before or after maturity.

                                  ARTICLE VIII.
                            THE ADMINISTRATIVE AGENT

      Each of the Lenders hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.

      The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

      The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

                                       41
<PAGE>
      The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

      The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

      Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, with the consent (not to be unreasonably
withheld) of the Borrower, to appoint a successor. If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank with an
office in Dallas, Texas or an Affiliate of any such bank. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

      Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

                                       42
<PAGE>
                                   ARTICLE IX.
                                  MISCELLANEOUS

      SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

       (a)   if to the Borrower:

             United Surgical Partners International, Inc.
             17103 Preston Road, Suite 200 North
             Dallas, Texas 75248
             Attention: James K. Lines
             Tel: 972-713-3519
             Fax: 972-713-3550

             with a copy to:

             Akin, Gump, Strauss, Hauer & Feld, L.L.P.
             1700 Pacific Avenue
             Suite 4100
             Dallas, Texas 75201
             Attention: Alan L. Laves, P.C.
             Tel: (214) 969-2800
             Fax: (214) 969-4343

       (b)   if to the Administrative Agent:

             Chase Bank of Texas, National Association
             100 North Central Expressway
             Richardson, Texas 75080
             Attention: Ellen W. Smith
             Tel: 972-680-7348
             Fax: 972-680-7377

             and

             Chase Securities Inc.
             707 Travis Street, 8th Floor
             Houston, Texas 77002
             Attention: Troy Taylor
             Tel: 713-216-1267
             Fax: 713-216-4583
             and

                                       43
<PAGE>
             Agency Services
             Chase Bank of Texas, N.A.
             One Chase Manhattan Plaza, 8th Floor
             New York, New York 10081
             Tel: 212-552-7943
             Fax: 212-522-7490
             Attention: Muniram Appanna

             with a copy to:

             Locke Liddell & Sapp LLP
             2200 Ross Avenue, Suite 2200
             Dallas, Texas 75201
             Attention: Russell F. Coleman, P.C.
             Tel: (214) 740-8686
             Fax: (214) 740-8800

      (c) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

      SECTION 9.02. WAIVERS, AMENDMENTS.

      (a) No failure or delay by the Administrative Agent or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.

      (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each

                                       44
<PAGE>
Lender affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, or (v) change any of the provisions
of this Section 9.02 or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent.

       SECTION 9.03. EXPENSES, INDEMNITY, DAMAGE WAIVER.

      (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facility provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any "workout," restructuring or
negotiations in respect of such Loans.

      (b) If Administrative Agent or any of the Lenders, their successors or
assigns retains an attorney in connection with any default or to collect,
enforce or defend this Agreement or any of the Loan Documents in any lawsuit or
in any reorganization, bankruptcy or other proceeding, or if Borrower sues
Administrative Agent or any Lender in connection with this Agreement or any of
the Loan Documents and does not prevail, then Borrower agrees to pay to
Administrative Agent or any Lender, in addition to principal and interest; all
reasonable costs and expenses incurred by such Lender in trying to collect the
Indebtedness or in any such suit or proceeding, including reasonable attorneys'
fees. To the extent not prohibited by applicable law, Borrower will pay all
costs and expenses and reimburse Administrative Agent or any Lenders for any and
all expenditures of every character incurred or expended from time to time,
regardless of whether or not a default has occurred, in connection with (a)
the preparation, negotiation, documentation, closing, renewal, revision,
modification, increase, review or restructuring of this Agreement or any of the
Loan Documents, including legal, accounting, auditing, architectural engineering
and inspection services and disbursements, or in connection with collecting or
attempting to enforce or collect this Agreement or any of the other Loan
Documents, (b) Administrative Agent's or Lenders' evaluating, monitoring,
administrating and protecting any collateral ("Collateral") now or hereafter
securing payment of any part of this Agreement or any of the Loan Documents and
(c) Administrative Agent's or Lenders' creating, perfecting and realizing upon
Administrative Agent's or Lenders' security interests in and Liens on any
Collateral, and all costs and expenses relating to Administrative Agent's or
Lenders' exercising any of its rights and remedies hereunder or under any other
Loan Document

                                       45
<PAGE>
or at law, including, without limitation, all appraisal fees, consulting fees,
filing fees, taxes, (other than Excluded Taxes) brokerage fees and commissions,
title review and abstract fees, Uniform Commercial Code search fees, other fees
and expenses incident to title searches, reports and security interests, escrow
fees, attorneys' fees, legal expenses, court costs, other fees and expenses
incurred in connection with any complete or partial liquidation of any
Collateral and all fees and expenses for any professional services relating to
the Collateral or any operations conducted in connection with it; provided, that
no right or option granted by Borrower to Administrative Agent or any Lender or
otherwise arising pursuant to any provision of this or any other instrument
shall be deemed to impose or admit a duty on Administrative Agent or any Lender
to supervise, monitor or control any aspect of the character or condition of the
Collateral or any operations conducted in connection with it for the benefit of
Borrower or any other person or entity other than Administrative Agent or any
Lender. BORROWER AGREES TO INDEMNIFY, DEFEND AND HOLD ADMINISTRATIVE AGENT AND
ANY LENDER, ITS SHAREHOLDERS, DIRECTORS, OFFICERS, AGENTS, ATTORNEYS, ADVISORS
AND EMPLOYEES (COLLECTIVELY "INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST ANY
AND ALL LOSS, LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM,
DEFICIENCY, EXPENSE, ACTION, SUIT, COST AND DISBURSEMENT OF ANY KIND OR NATURE
WHATSOEVER (INCLUDING INTEREST, PENALTIES, ATTORNEYS' FEES AND AMOUNTS PAID IN
SETTLEMENT), REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE
OF ANY OF THE INDEMNIFIED PARTIES, IMPOSED ON, INCURRED BY OR ASSERTED AGAINST
THE INDEMNIFIED PARTIES GROWING OUT OF OR RESULTING FROM THIS AGREEMENT, ANY
LOAN DOCUMENT OR ANY TRANSACTION OR EVENT CONTEMPLATED HEREIN OR THEREIN (EXCEPT
THAT SUCH INDEMNITY SHALL NOT BE PAID TO ANY INDEMNIFIED PARTY TO THE EXTENT
THAT SUCH LOSS, ETC. DIRECTLY RESULTS FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF AN INDEMNIFIED PARTY). If any person or entity (including, without
limitation, Borrower or any of its affiliates) ever alleges gross negligence or
willful misconduct by an Indemnified Party, the full amount of indemnification
provided for in this Agreement shall nonetheless be paid upon demand, subject to
later adjustment or reimbursement at such time--if any--as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. Any amount to be paid under this Section
by Borrower to Administrative Agent or any Lender shall be a demand obligation
owing by Borrower to Administrative Agent or any Lender and shall bear interest
from the date of expenditure until paid at the Alternate Base Rate until demand,
and thereafter at the Default Rate.

      (c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, as the
case may be, such Lender's Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.

      (d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnified Party, on any
theory of liability (including, without limitation, strict liability), for
special, indirect, consequential or punitive damages (as opposed to

                                       46
<PAGE>
direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement or any agreement or instrument contemplated hereby, the
Transactions or any Loan.

      (e) All amounts due under this Section shall be payable promptly after
written demand therefor.

      SECTION 9.04. SUCCESSORS AND ASSIGNS.

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

      (b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender or an Affiliate of a Lender, each of the
Borrower and the Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,000, (v) the assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, and (vi) if the Commitments are then in an amount equal to or
less than the amount of the Commitments on the Effective Date, the Guaranty is
in full force and effect and this Agreement shall not have been amended or
otherwise modified in any material respect (and for purposes of this clause (vi)
any amendment of a covenant in Article VI or a provision in Article VII shall be
deemed material), then not more than three (3) Lenders at any one time shall be
parties to this Agreement and provided further that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of
Default under clause (h) or (i) of Article VII has occurred and is continuing.
Subject to acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and

                                       47
<PAGE>
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17
and 9.03 and shall continue to be bound by its obligations under Section 9.12).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.

      (c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in the United States a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

      (d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

      (e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower or the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; PROVIDED
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.

      (f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the

                                       48
<PAGE>
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.

      (g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto or be
used as a device to avoid compliance with Section 9.04(b).

      SECTION 9.05. SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17, 9.03 and 9.12 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Commitments or the termination of this Agreement or any
provision hereof.

      SECTION 9.06. COUNTERPARTS: INTEGRATION EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements end understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

      SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of

                                       49
<PAGE>
the remaining provisions hereof, and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

      SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final, but excluding deposits that such Lender knows are held in
a fiduciary capacity for the benefit of others) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

      SECTION 9.09. GOVERNING LAW, JURISDICTION, CONSENT TO SERVICE OF PROCESS.

      (a) VENUE; CHOICE OF LAW. This Agreement is performable in Dallas County,
Texas, which shall be a proper place of venue for suit on or in respect of this
Agreement. Borrower hereby irrevocably agrees that any legal proceeding in
respect of this Agreement shall be brought in the district courts of Dallas
County, Texas, or in the United States District Court for the Northern District
of Texas, Dallas Division (collectively, the "SPECIFIED COURTS"). Borrower
hereby irrevocably submits to the nonexclusive jurisdiction of the state and
federal courts of the State of Texas. Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the Loan Documents brought in any Specified
Court, and hereby further irrevocably waives any claims that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Borrower further (1) agrees to designate and maintain an
agent for service of process in the City of Dallas in connection with any such
suit, action or proceeding and to deliver to Lenders evidence thereof and (2)
irrevocably consents to the service of process out of any of the Specified
Courts in any such suit, action or proceeding by the mailing of copies thereof
by certified mail, return receipt requested, postage prepaid, to Borrower.
Nothing herein shall affect the right of Administrative Agent or any Lender to
commence legal proceedings or otherwise proceed against Borrower in any
jurisdiction or to serve process in any manner permitted by applicable law.
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS, WITHOUT
REFERENCE TO ITS CHOICE OF LAW PRINCIPLES, AND THE UNITED STATES OF AMERICA FROM
TIME TO TIME IN EFFECT.

      (b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

                                       50
<PAGE>
      SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      SECTION 9.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

      SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any Governmental Authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower; PROVIDED, that with respect to clauses (b) and (c)
above, that unless specifically prohibited by applicable law or court order, the
party to whom such applicable request is made agrees, prior to disclosure
thereof, to notify Borrower of any request for disclosure of any such non-public
information (A) by any Governmental Authority or representative thereof (other
than any such request in connection with an examination of such party's
financial condition by such Governmental Authority) or (B) pursuant to legal
process. For the purposes of this Section, "INFORMATION" means all information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent or any Lender
on a nonconfidential basis prior to disclosure by the Borrower; PROVIDED that,
in the case of information received from the Borrower after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

                                       51
<PAGE>
            NOTICE PURSUANT TO TEX. BUS. & COMM. CODE ss.26.02:

       THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY OF THE
 PARTIES SUBSTANTIALLY CONCURRENTLY HEREWITH TOGETHER CONSTITUTE A WRITTEN LOAN
 AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
 BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
 AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
 PARTIES.

                          [REMAINDER OF THIS PAGE
                        INTENTIONALLY LEFT BLANK]

                                       52
<PAGE>
       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
 duly executed by their respective authorized officers as of the day and year
 first above written.

                                     UNITED SURGICAL PARTNERS
                                     INTERNATIONAL, INC.

                                     By: /s/ JAMES K. LINES
                                     Name:   James K. Lines
                                     Title:  Chief Financial Officer

                                     CHASE BANK OF TEXAS, NATIONAL
                                     ASSOCIATION, individually and
                                     as Administrative Agent

                                     By: /s/ ELLEN W. SMITH
                                     Name:   Ellen W. Smith
                                     Title:  Vice President

                                       53EXHIBIT 10.3

                              DATED 6th APRIL 2000

                       GLOBAL HEALTHCARE PARTNERS LIMITED

                                     - and -

                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                                     as Bank

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

                                CREDIT AGREEMENT
                                   relating to
                 (i) a sterling term loan and guarantee facility
                         of pounds sterling 34,000,000;
             (ii) a sterling revolving capital expenditure facility
                        of pounds sterling 7,000,000; and
            (iii) an overdraft facility of pounds sterling 1,000,000

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

                            [DENTON WILDE SAPTE LOGO]
<PAGE>
                                TABLE OF CONTENTS
                                                                           PAGE
CLAUSE    HEADING                                                         NUMBER

1.     DEFINITIONS AND INTERPRETATION ....................................   1
1.1    Definitions .......................................................   1
1.2    Headings ..........................................................  13
1.3    Interpretation ....................................................  13

2.     FACILITIES ........................................................  14

3.     PURPOSE............................................................  15
3.1    Purpose of the Term Loan and Guarantee Facility ...................  15
3.2    Purpose of the Capex Facility .....................................  15
3.3    Purpose of the Overdraft Facility .................................  15
3.4    Undertaking by Newco ..............................................  16
3.5    No liability ......................................................  16

4.     CONDITIONS PRECEDENT ..............................................  16
4.1    Conditions precedent ..............................................  16
4.2    Confirmation of satisfaction ......................................  16

5.     DRAWDOWN ..........................................................  16
5.1    Utilisation of Term Loan and Guarantee Facility ...................  16
5.3    Drawdown of Capex Facility ........................................  17
5.4    Conditions to each Advance ........................................  17
5.5    Drawdown Notice ...................................................  18
5.6    Limitations on the Loan Notes Guarantee ...........................  18
5.7    Conditions of the Loan Notes Guarantee ............................  18
5.8    Loan Notes Guarantee Utilisation Notice ...........................  18
5.9    Counter Indemnity from Newco ......................................  19
5.10   Interest on Payments ..............................................  19

6.     THE OVERDRAFT FACILITY ............................................  19
6.1    Nature of Facility ................................................  19
6.2    Utilisation .......................................................  20

7.     INTEREST ..........................................................  20
7.1    Interest rates ....................................................  20
7.2    Interest Periods ..................................................  20
7.3    Default Interest ..................................................  21
7.4    Fixed Rate Option .................................................  22
7.5    Guarantee Commission ..............................................  23
7.6    Interest, Commission and Fees under the Overdraft Facility ........  23
7.7    Calculation and Payment of Interest ...............................  23
7.8    Bank's Determination ..............................................  24

8.     REPAYMENT OF THE TERM LOAN AND THE CAPEX LOAN .....................  24
8.1    Reduction of the Term Loan Utilised Amount ........................  24
8.2    Repayment of the Capex Advances ...................................  24

9.     PREPAYMENT ........................................................  25
9.1    Mandatory, prepayment on Sale or Listing ..........................  25
9.2    Voluntary, prepayment of Term Loan and Capex Loan .................  25
9.3    No re-borrowing of Term Loan ......................................  26
<PAGE>
10.    CANCELLATION OF CAPEX FACILITY ....................................  26
10.1   Cancellation ......................................................  26
10.2   Notice ............................................................  26
10.3   Effect of cancellation ............................................  26
10.    Limitation.........................................................  26

11.    CHANGES 1N CIRCUMSTANCES ..........................................  26
11.1   Illegality ........................................................  26
11.2   Increased Costs ...................................................  27
11.3   Market disruption .................................................  28
11.4   Mitigation ........................................................  29
11.5   Certificates ......................................................  30

12.    PAYMENTS ..........................................................  30
12.1   Funds .............................................................  30
12.2   Payments ..........................................................  30
12.3   Change Of account .................................................  30
12.4   Business Days .....................................................  30
12.5   Currency ..........................................................  30
12.6   Accounts as evidence ..............................................  30
12.7   Partial payments ..................................................  31
12.8   Set-off and counterclaim ..........................................  31
12.9   Grossing-up .......................................................  31

13.    SECURITY ..........................................................  33
13.1   Security Documents ................................................  33
13.2   Interest Rate Protection Agreements ...............................  33

14.    REPRESENTATIONS AND WARRANTIES ....................................  33
14.1   Representations and warranties ....................................  33
14.2   Repetition ........................................................  36

15.    UNDERTAKINGS ......................................................  36
15.1   Information undertakings ..........................................  36
15.2   Positive undertakings .............................................  39
15.3   Negative undertakings .............................................  40
15.4   Financial undertakings ............................................  42

16.    DEFAULT ...........................................................  44
16.1   Default ...........................................................  44
16.2   Acceleration ......................................................  46

17.    SET-OFF ...........................................................  47

18.    FEES AND EXPENSES .................................................  47
18.1   Expenses ..........................................................  47
18.2   Arrangement fee ...................................................  47
18.3   Management Fee ....................................................  47
18.4   Commitment Fee ....................................................  47
18.5   Documentary Taxes indemnity .......................................  48

18.6   VAT ...............................................................  48
18.7   Indemnity payments ................................................  48
18.8   Valuations and appointments .......................................  48

19.    WAIVERS; REMEDIES CUMULATIVE ......................................  48
19.1   No implied waivers: remedies cumulative ...........................  48
19.2   Euro conventions ..................................................  49
<PAGE>
20.      MISCELLANEOUS ...................................................  49
20.1     Severance .......................................................  49
20.2     Counterparts ....................................................  49
20.3     Third Parties ...................................................  49

21.      NOTICES..........................................................  49
21.1     Method ..........................................................  49
21.2     Delivery ........................................................  50
21.3     Addresses........................................................  50
21.4     Deemed receipt ..................................................  50

22.      ASSIGNMENTS AND TRANSFERS .......................................  51
22.1     Benefit of Agreement ............................................  51
22.2     Assignments and transfers by Newco ..............................  51
22.3     Assignments and Transfers by Bank ...............................  51
22.4     Consequences of transfer ........................................  51
22.5     Disclosure of information .......................................  51

23.      INDEMNITIES .....................................................  52
23.1     Breakage costs indemnity.........................................  52
23.2     Currency indemnity ..............................................  52
23.3     General .........................................................  52

24.      LAW..............................................................  53

SCHEDULE I - CONDITIONS PRECEDENT ........................................  54
SCHEDULE 2 - PART I DRAWDOWN NOTICE ......................................  57
             PART II LOAN NOTES GUARANTEE UTILISATION NOTICE .............  58
SCHEDULE 3 - GROUP COMPANIES .............................................  59
SCHEDULE 4 - MANDATORY COST RATE .........................................  60
SCHEDULE 5 - THE PROPERTIES ..............................................  61
SCHEDULE 6 - FIXED RATE CONFIRMATION NOTICE...............................  62
<PAGE>
THIS AGREEMENT is made on 6th April 2000

BY:

(1)    GLOBAL HEALTHCARE PARTNERS LIMITED, a company incorporated in England and
       Wales with registered number 3952340 (Newco); and

(2)    THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as the Bank (as that
       term is more particularly defined below).

IT IS AGREED as follows:

1.     DEFINITIONS AND INTERPRETATION

1.1    DEFINITIONS

       In this Agreement:

       ACCOUNTING PRINCIPLES means the GAAP used in the preparation of the
       Accounts of Aspen for the Financial Year ended 31st December 1999.

       ACCOUNTS means:

       (a)    in relation to Newco, its audited consolidated accounts (including
              all additional information and notes to the accounts) together
              with the relevant directors' report and auditors' report; and

       (b)    in relation to any other Charging Group Company from time to time,
              its audited accounts (including all additional information and
              notes to the accounts) together with the relevant directors'
              report and auditors' report.

       ACQUISITION AGREEMENT means the sale and purchase agreement dated on or
       before the date of this Agreement relating to the sale and purchase of
       Aspen Shares and made between the Vendors (as described therein) as
       vendors and Newco as purchaser.

       ACQUISITION COSTS means those fees, commissions. costs and expenses
       properly incurred by Newco in relation to its acquisition of Aspen
       Shares.

       ACQUISITION DOCUMENTS means:

       (a)    the Acquisition Agreement;

       (b)    the Optionholders Agreement;

       (c)    the Warranty Deed;

       (d)    the Loan Notes; and

       (e)    the Termination Agreement

       but, for the avoidance of doubt. shall not include the Disclosure Letter.

                                       -1-
<PAGE>
       ACQUISITION GOODWILL means the net goodwill arising on the acquisition of
       Aspen Shares.

       ACT means the Companies Act 1985.

       ADVANCES means all and each of the Terns Advances and the Capex Advances
       and ADVANCE shall be construed accordingly.

       ASPEN means Aspen Healthcare Holdings Limited, a company incorporated in
       England and Wales with registered number 3471084.

       ASPEN SHARES means all the issued share capital in Aspen.

       AUDITORS means, in relation to each Group Company, Arthur Andersen or any
       other fine of chartered accountants of internationally recognised
       standing that has been appointed as auditors of such Group Company.

       BANK means The Governor and Company of the Bank of Scotland and its
       successors in title, assignees and transferees.

       BUSINESS DAY means a day (other than a Saturday or Sunday) on which banks
       and foreign exchange markets are open for business in London.

       CAPEX ADVANCE means the advance made or to be made to Newco under the
       Capex Facility or, as the case may be, the outstanding principal amount
       of that advance.

       CAPEX COMMITMENT PERIOD means the period ending on the last Business Day
       of the period of 24 months from the date of this Agreement or such longer
       period as the Bank may in its absolute discretion agree.

       CAPEX FACILITY LIMIT means subject to Clauses 8, 9 and l0, pounds
       sterling 7,000,000.

       CAPEX LOAN means, at any time, the aggregate of all Capex Advances
       outstanding at that time.

       CAPEX FACILITY means the revolving capital expenditure facility referred
       to in Clause 2.1(b).

       CAPITAL EXPENDITURE has the meaning given to that term by GAAP but shall
       exclude those fixed asset additions qualifying as Finance Lease
       Expenditure.

       "CASHFLOW" means, in respect of the Group in relation to any period, the
       aggregate of PBITD and Depreciation charged to the profit and loss
       account for that period:

       (a)    plus the net proceeds of fixed assets disposed of during that
              period to the extent included in the Operating Budget for that
              period;

       (b)    plus any decrease, or minus any increase, in Net Working Capital
              during that period;

       (c)    plus any receipts by way of Extraordinary Items and minus any
              payments by way of Extraordinary Items, in each case, received or
              made during that period;

                                       -2-
<PAGE>
       (d)    minus any dividends declared to respect of minority interests for
              that period;

       (e)    plus any dividends received from other fixed assets investment
              during that period;

       (f)    plus income from participating interests in associated
              undertakings to the extent received in cash and minus any payment
              made to associated undertakings during that period;

       (g)    plus any increase or minus any decrease in provisions for
              liabilities and charges made in respect of that period;

       (h)    minus Capital Expenditure in respect of that period paid or
              contractually required to be paid during that period which is not
              funded by any of the Facilities or the proceeds of any further
              subscription of any shares in Newco;

       (i)    plus realised exchange gains and minus realised exchange losses
              charged during that period to the extent not already taken account
              of in PBITD for that period; and

       (j)    minus the aggregate of all corporation or other similar Taxes paid
              during that period.

       (For the purposes of this definition: "NET WORKING CAPITAL" means the
       aggregate of Current Assets, (excluding all of cash at bank and cash in
       hand, all assets in relation to Tax and accrued interest receivable)
       less the aggregate of Current Liabilities (excluding moneys due in
       relation to the Facilities and the Loan Notes and liabilities in relation
       to Tax. Extraordinary Items and dividends payable): "CURRENT ASSETS"
       means, in relation to the Group, the aggregate value of its assets which
       are treated as current assets in accordance with GAAP; and "CURRENT
       LIABILITIES" means, in relation to the Group, the aggregate value of its
       liabilities which are treated as current liabilities in accordance with
       GAAP).

       CERTIFIED COPY means, in relation to a document, a copy of that document
       bearing the endorsement "Certified a true, complete and accurate copy of
       the original, which has not been amended otherwise than by a document, a
       Certified Copy of which is attached hereto", which has been signed and
       dated by a duly authorized officer of the relevant company and which
       complies with that endorsement.

       CHANGE means, in relation to the Bank (or any company of which the Bank
       is a Subsidiary), the introduction, implementation, repeal, withdrawal or
       change in, or in the interpretation or application of, (a) any law,
       regulation, practice or concession, or (b) any directive, requirement,
       request or guidance (whether or not having the force of law but if not
       having the force of law, one which applies generally to a class or
       category of financial institutions of which the Bank (or that company)
       forms part and compliance with which is in accordance with the general
       practice of those financial institutions) of the European Community, any
       central bank including the European Central Bank, the Financial Services
       Authority or any other fiscal, monetary, regulatory or other authority.

       CHARGING GROUP COMPANIES means the Group Companies which have granted, or
       are by the terms of this Agreement to grant, a Guarantee and Debenture;
       and CHARGING GROUP COMPANY shall be construed accordingly.

                                       -3-
<PAGE>
       COMPLETION means the completion of the sale and purchase of Aspen Shares
       pursuant to the Acquisition Agreement.

       COMPLIANCE CERTIFICATE has the meaning given to that term in Clause
       15.1(c).

       DANGEROUS MATERIALS means any element or substance, whether consisting
       of gas, liquid, solid or vapour, identified by any Environmental Law to
       be, to have been, or to be capable of being or becoming, harmful to
       mankind or any living organism or damaging to the Environment.

       DEFAULT means any event specified as such in Clause 16.1.

       DEFAULT NOTICE has the meaning given to that term in Clause 16.2.

       DEPRECIATION has the meaning given to that term by GAAP.

       DISCLOSURE LETTER has the meaning given to that term in the Acquisition
       Agreement.

       DISPOSAL means a sale, transfer or other disposal (including by way of
       lease or loan) by a person of all or part of its assets, whether by one
       transaction or a series of transactions and whether at the same time or
       over a period of time.

       DORMANT SUBSIDIARY means, on any given date, a Group Company (a) which
       has been dormant within the meaning of section 250(3) of the Act for the
       period of 12 months ending on that date and (b) the value of whose assets
       does not exceed in aggregate pounds sterling 5,000.

       DRAWDOWN DATE means the date on which an Advance is made, or is proposed
       to be made.

       DRAWDOWN NOTICE means a notice substantially in the form set out in Part
       I of Schedule 2.

       EMPLOYMENT CONTRACT means the service agreement of even date herewith
       made between J.M. Wotherspoon and Newco.

       ENCUMBRANCE means any mortgage, charge, assignment by way of security,
       pledge, hypothecation, lien, right of set-off retention of title
       provision, trust or flawed asset arrangement (for the purpose of, or
       which has the effect of granting security) or any other security interest
       of any kind whatsoever, or any agreement, whether conditional or
       otherwise, to create any of the same, or any agreement to sell or
       otherwise dispose of any asset on terms whereby such asset is or may be
       leased to or re-acquired or acquired by any Group Company.

       ENVIRONMENT means all or any of the following media: air (including air
       within buildings or other structures and whether above or below ground);
       land (including buildings and any other structures or erections in, on or
       under it and any soil and anything below the surface of land); land
       covered with water; and water (including sea, ground and surface water).

       ENVIRONMENTAL LAW means any statutory or common law, treaty, convention,
       directive or regulation having legal or judicial effect whether of a
       criminal or civil nature, concerning:

       (a)    pollution or contamination of the Environment:

                                       -4-
<PAGE>
       (b)    harm, whether actual or potential, to mankind and human senses,
              living organisms and ecological systems;

       (c)    tile generation, manufacture, processing, distribution, use
              (including abuse), treatment, storage, disposal, transport or
              handling of Dangerous Materials; or

       (d)    the emission, leak, release or discharge into the Environment of
              noise, vibration, dust, fumes, gas, odours, smoke, steam,
              effluvia, heat, light, radiation (of any kind), infection,
              electricity or any Dangerous Material and any matter or thing
              capable of constituting a nuisance or an actionable tort of any
              kind in respect of such matters.

       Euro or E means the single currency of Participating Member States.

       EXISTING FACILITIES means:

       (a)    a credit agreement dated 4 March 1998 made between (1) Aspen (2)
              Paracelsus U.K. Limited (which has subsequently changed its name
              to Aspen Healthcare Limited) and (3) The British Linen Bank
              Limited, as amended and restated by an amendment and restatement
              agreement dated 20 April 1999 and made between (1) Aspen (2) Aspen
              Healthcare Limited and (3) The British Linen Bank Limited; and

       (b)    a credit agreement dated 19 November 1999 made between (1) Aspen
              (2) Aspen Healthcare Limited and (3) the Bank.

       EXPIRY DATE means the earlier to occur of:

       (a)    5 Business Days after 30 September 2003; and

       (b)    the repayment in full of the Loan Notes.

       FACILITIES means the Term Loan and Guarantee Facility, the Capex
       Facility and the Overdraft Facility; and Facility means any one of them.

       FEES LETTER means the letter dated the same date as this Agreement from
       the Bank to Newco relating to certain fees payable to the Bank in
       relation to this Agreement, being described on its face as the "Fees
       Letter".

       FINAL REPAYMENT DATE means the tenth anniversary of the date of this
       Agreement.

       FINANCE LEASE means any lease, hire agreement, credit sale agreement,
       hire purchase agreement, conditional sale agreement or instalment sale,
       and purchase agreement which should be treated in accordance with SSAP 21
       (or any successor to SSAP 21) as a finance lease or in the same way as a
       finance lease.

       FINANCE LEASE EXPENDITURE means the capital value of any asset the
       subject of a Finance Lease to which a Group Company is a party.

       FINANCIAL YEAR, in relation to a company, has the meaning given to that
       expression in section 223 of the Act.

                                      - 5 -
<PAGE>
       FINANCING DOCUMENTS means this Agreement, the Interest Rate Protection
       Agreements and the Security Documents.

       FIXED FUNDS RATE means, in relation to a Fixed Rate Tranche, the fixed
       rate of interest quoted to Newco by the Bank in accordance with Clause
       7.4.

       FIXED RATE CONFIRMATION NOTICE means a notice in substantially the form
       set out in Schedule 6.

       FIXED RATE PERIOD means, in relation to a Fixed Rate Tranche, the period
       selected by Newco pursuant to clause 7.4 provided always that no Fixed
       Rate Period shall be of less than 3 months' duration or extend beyond the
       Final Repayment Date.

       FIXED RATE TRANCHE means the outstanding amount of the Term Loan in
       respect of which interest is payable by reference to a Fixed Funds Rate
       for the duration of a Fixed Rate Period.

       FRS together with a number means the financial reporting standard issued
       by the Accounting Standards Board for application in England and Wales
       and identified by reference to that number.

       GAAP means, in relation to a company, accounting principles, concepts,
       bases and policies generally accepted in the jurisdiction of its
       incorporation.

       GROUP means Newco, Aspen and each of their respective Subsidiaries, and
       Group Company means any one of them.

       GUARANTEE AND DEBENTURE means a guarantee and debenture in the agreed
       form executed or to be executed in favour of the Bank.

       GUARANTEE DEMAND has the meaning given to it in the Loan Notes Guarantee.

       INDEBTEDNESS means, in relation to a person, its obligation (whether
       present or future, actual or contingent, as principal or surety) for the
       payment or repayment of money (whether in respect of interest, principal
       or otherwise) incurred in respect of:

       (a)    moneys borrowed or raised (and, for the avoidance of doubt,
              excluding any equity share capital);

       (b)    any bond, note, loan stock, debenture or similar instrument;

       (c)    any acceptance credit, bill discounting, note purchase, factoring
              or documentary credit facility;

       (d)    the supply of any goods or services which is more than 90 days
              past the expiry of the period customarily allowed by the relative
              supplier after the due date;

       (e)    any Finance Lease;

       (f)    any guarantee, bond, stand-by letter of credit or other similar
              instrument issued in connection with the performance of contracts;

                                      - 6 -
<PAGE>
       (g)    any interest rate or currency swap agreement or any other hedging
              or derivatives instrument or agreement and the amount of such
              indebtedness in relation to such a transaction shall be calculated
              by reference to the mark to market value of the same at the
              relevant time;

       (h)    any arrangement pursuant to which any asset sold or otherwise
              disposed of by that person is or may be leased to or re-acquired
              by a Group Company (whether following the exercise of an option or
              otherwise); or

       (i)    any guarantee, indemnity or similar insurance against financial
              loss given in respect of the obligation of any person falling
              within any of paragraphs (a) to (h) above.

       INSTALMENT has the meaning given to that term in Clause 8.1.

       INSTALMENT REPAYMENT DATE has the meaning given to that term in Clause
       8.1.

       INTERCREDITOR AGREEMENT means the intercreditor agreement executed on or
       about the date of this Agreement made or to be made between Newco, Aspen,
       the Bank and the holders of the Loan Notes.

       INTEREST DATE means the last day of an Interest Period.

       INTEREST PERIOD means each period determined in accordance with Clause 7
       for the purpose of calculating interest on Advances or overdue amounts.

       INTEREST RATE PROTECTION AGREEMENTS means each agreement entered into or
       to be entered into for the purpose of hedging at least 50 per cent. of
       Newco's interest rate liabilities in relation to all or any part of the
       Term Loan.

       ISSUE DATE means the date on which the Loan Notes Guarantee is issued or
       is proposed to be issued by the Bank.

       LENDING OFFICE means the office set out under the Bank's name in Clause
       21.3, or such other office in the United Kingdom through which the Bank
       maintains the Facilities under this Agreement.

       LIBOR means, in relation to an Advance or overdue amount and in relation
       to a particular Interest Period:

       (a)    the interest rate for Sterling deposits for a period equal to that
              Interest Period which appears on the screen display designated as
              "Page 3750" on the Telerate Service (or such other screen display
              or service as may replace it for the purpose of displaying British
              Bankers' Association LIBOR Rates for Sterling deposits in the
              London interbank market) at or about 11.00 a.m. on the first day
              of that Interest Period; and

       (b)    if no such interest rate appears on the Telerate Service (or such
              replacement), the rate per annum (rounded upwards to 4 decimal
              places) at which the Bank was offering Sterling deposits in an
              amount comparable with that Advance or overdue amount, as the case
              may be, to leading banks in the London interbank market for

                                      - 7 -
<PAGE>
              a period equal to that Interest Period at or about 11.00 a.m. on
              the first day of that Interest Period.

       LISTING means:

       (a)    the admission of all or any of the share capital of Newco to the
              Official List of the Stock Exchange becoming effective; or

       (b)    the granting of an application by Newco for permission to deal in
              all or any of the share capital of Newco on the Alternative
              Investment Market of the Stock Exchange or any other recognised
              investment exchange (as defined in section 207 of the Financial
              Services Act 1986) becoming effective.

       LOAN means, at any time, the aggregate of the Term Loan, the Capex Loan
       and the Overdraft Outstandings.

       LOAN NOTES means the pounds sterling 7,000,000 guaranteed floating rate
       loan notes due 30th September 2003 of Newco.

       LOAN NOTES DOCUMENTS means the Loan Notes and the Loan Notes Instrument.

       LOAN NOTES GUARANTEE means the guarantee issued or to be issued by the
       Bank in favour of certain Vendors in respect of the Loan Notes in the
       agreed form.

       LOAN NOTES GUARANTEED AMOUNT means the maximum original liability of the
       Bank under the Loan Notes Guarantee.

       LOAN NOTES GUARANTEE UTILISATION means a utilisation of the Term Loan and
       Guarantee Facility by way of the issue of the Loan Notes Guarantees under
       Clause 5.8.

       LOAN NOTES GUARANTEE UTILISATION NOTICE means a notice substantially in
       the form set out in Part 11 of Schedule 2.

       LOAN NOTES INSTRUMENT means the loan notes instrument in the agreed form
       pursuant to which the Loan Notes are, or are to be, constituted.

       MANAGEMENT means the board of directors of Newco from time to time.

       MANAGEMENT ACCOUNTS has the meaning given to that term in Clause
       15.1(b).

       MANDATORY COST RATE means the rate determined in accordance with
       Schedule 4.

       MARGIN means:

       (a)    in respect of the Term Loan and the Guarantee Facility, 1.50 per
              cent per annum; and

       (b)    in respect of the Capex Facility, 2.00 per cent per annum.

       MATERIAL ADVERSE EFFECT means any effect, event, circumstance or change
       which is materially adverse to:

                                      - 8 -
<PAGE>
       (a)    the ability of any Group Company to comply its payment obligations
              under any Financing Document.

       (b)    the ability of Newco to satisfy the financial undertakings in
              Clause 15.4.1 or

       (c)    the assets of the Group taken as a whole.

       MRI SCANNER means a Magnetic Resonance Imager.

       NET LOAN NOTES GUARANTEED AMOUNT means, at any time, the Loan Notes
       Guaranteed Amount less the aggregate principal amount of all Loan Notes
       redeemed or released.

       NEWCO INDEMNITY means the indemnity given by Newco to the Bank under
       Clause 5.8.

       OPERATING BUDGET means, in relation to the Group and the period starting
       not later than the date of this Agreement and ending on 31 December 2000,
       the financial information required by and as set out in Clause 2(b) of
       Schedule 1 to this Agreement and in relation to each successive 12 month
       period after 31 December 2000 during the Security Period:

       (a)    a projected balance sheet;

       (b)    a projected profit and loss account;

       (c)    a projected cash flow statement; and

       (d)    projected covenant calculations relating to each financial
              undertaking contained in Clause 15.4.

       relative to each such period and on a month by month basis and with
       Management's commentary drawing on the previous period's performance and
       forecast market conditions.

       OPTIONHOLDERS AGREEMENT means the agreement dated on or before the date
       of this Agreement relating to the surrender of certain options and made
       between the Optionholders (as defined therein) and Aspen.

       OVERDRAFT FACILITY means the overdraft facility referred to in Clause
       2.1 (c) under which overdrafts may be made available to Newco.

       OVERDRAFT LIMIT means, subject to Clause 6.2.2. pounds sterling
       l,000,000.

       OVERDRAFT OUTSTANDINGS means the aggregate of all amounts outstanding by
       way of overdraft under the Overdraft Facility.

       PARKSIDE means the freehold property known as 49 Parkside, Wimbledon, as
       the same is registered at H M Land Registry under title number SGL
       345299.

       PARTICIPATING MEMBER STATE means a member state of the European Union
       which has adopted or adopts the single currency in accordance with the
       Treaty establishing the European Community (as that Treaty is amended
       from time to time).

       PARTY means a party to this Agreement.

                                      - 9-
<PAGE>
       PBIDT means, in relation to any period, the consolidated profit of the
       Group for that period (including, for the avoidance of doubt, Exceptional
       Items) before Taxation and Total Debt Costs, but excluding:

       (a)    profit attributable to minority interests;

       (b)    Extraordinary Items;

       (c)    any profit or loss arising on the disposal of fixed assets;

       (d)    any amount amortised or charged in respect of Acquisition Costs;

       (e)    amounts written off the value of investments;

       (f)    amounts written off the value attributed to Acquisition Goodwill;

       (g)    income from participating interests in associated undertakings and
              income from any other fixed asset investment;

       (h)    realised and unrealised exchange gains and losses; and

       (i)    Depreciation charged to the Group's profit and loss account in
              respect of such period.

       PERMITTED ENCUMBRANCE means:

       (a)    any Encumbrance created under the Financing Documents:

       (b)    any right of set-off or lien, in each case arising by operation of
              law or in the ordinary course under any banking arrangements;

       (c)    any retention of title to goods supplied to a Group Company in the
              ordinary course of its trading activities; and

       (d)    any Encumbrance existing at the date of this Agreement disclosed
              in writing to the Bank before the date of this Agreement.

       PERMITTED INDEBTEDNESS means:

       (a)    Indebtedness under any Financing Document;

       (b)    Indebtedness under the Loan Notes Documents;

       (c)    Indebtedness existing at the date of this Agreement between Group
              Companies;

       (d)    Indebtedness under any Finance Lease permitted under Clause
              15.4.1(d);

       (e)    Indebtedness of any Charging Group Company to another Charging
              Group Company;

       (f)    Indebtedness of a Group Company permitted under Clause 15.3(f);

                                     - 10 -
<PAGE>
       (g)    Indebtedness of Newco to USPI existing at the date of this
              Agreement to a maximum aggregate amount of pounds sterling
              22,000,000 or such other amount as the Bank may agree, and

       (h)    Indebtedness set out in paragraph (d) of the definition thereof
              which is being disputed reasonably and in good faith Newco.

       POTENTIAL DEFAULT means an event or omission which, with the giving of
       any notice, the lapse of time, the determination of materiality or the
       satisfaction of any other condition, in each case, under Clause 16.1,
       would be a Default.

       PROPERTIES means all freehold and leasehold properties listed in
       Schedule 5; and Property means any one of them.

       QUALIFYING BANK means an institution which is a bank within the meaning
       of section 840A of the Income and Corporation Taxes Act 1988.

       QUARTER DATE means each 31st March, 30th June, 30th September, 31st
       December.

       RESERVATIONS means the principle that equitable remedies are remedies
       which may be granted or refused at the discretion of the court, the
       limitation of enforcement by laws relating to bankruptcy, insolvency,
       liquidation, reorganisation, court schemes, moratoria, administration and
       other laws generally affecting the rights of creditors, the time barring
       of claims under the Limitation Act 1980, the possibility that an
       undertaking to assume liability for or to indemnify against non-payment
       of United Kingdom stamp duty may be void, defences of set-off or
       counterclaim and similar principles.

       RETAINED PROFITS means, in relation to any period, the consolidated net
       after-tax earnings of the Group for that period after deducting (if not
       already deducted in the computation of such net earnings) amounts
       attributable to minorities and extraordinary items.

       SALE means completion of the sale and transfer to any person or group of
       persons acting in concert (as defined in the City Code on Takeovers and
       Mergers) which results in such person or persons together acquiring
       control of 51 per cent or more of the voting rights attaching to the
       equity share capital of Newco.

       Security Documents means:

       (a)    Any Guarantee and Debenture executed by a Group Company;

       (b)    The Intercreditor Agreement;

       (c)    The USPI Guarantee; and

       (d)    any guarantee and any document creating security executed and
              delivered after the date of this Agreement as security for any of
              the obligations and liabilities of Newco and the other Group
              Companies under any Financing Document.

       SECURITY PERIOD means the period starting on the date of this Agreement
       and ending on the date on which all of the obligations and liabilities of
       the Group Companies under each Financing Document are discharged in full
       and the Bank has no continuing obligation in relation to the Facilities.

                                      -11-
<PAGE>
       SSAP together with a number means the statement of standard accounting
       practice issued by the Institute of Chartered Accountants for application
       in England and Wales and identified by reference to that number.

       STERLING and POUNDS STERLING mean the lawful currency for the time being
       of the United Kingdom.

       SUBSIDIARY means a subsidiary within the meaning of section 736 of the
       Act.

       TAXES means all present and future taxes, charges, imposts, duties,
       levies, deductions, withholdings or fees in the nature of taxes of any
       kind whatsoever, or any amount payable on account of or as security for
       any of the foregoing, by whomsoever on whomsoever and wherever imposed,
       levied, collected, withheld or assessed, together with any penalties,
       additions, fines, surcharges or interest relating thereto save to the
       extent that such penalties, fines, surcharges or interest arise from a
       delay or default on the part of the Bank or any subsidiary of the Bank in
       paying taxes to the relevant taxing authority; and TAX and TAXATION shall
       be construed accordingly.

       TERM ADVANCE means the advance made or to be made to Newco under the Term
       Loan and Guarantee Facility or, as the case may be, the outstanding
       principal amount of that advance, and each advance into which a Term
       Advance is split after a Drawdown Date pursuant to Clause 7.2.4.

       TERM LOAN means, at any time, the aggregate of all Term Advances
       outstanding at that time.

       TERM LOAN COMMITMENT PERIOD means the period from, and including, the
       date of this Agreement to and including the Expiry Date.

       TERM LOAN AND GUARANTEE FACILITY means the term loan and guarantee
       facility referred to in Clause 2.1(a).

       TERM LOAN AND GUARANTEE FACILITY LIMIT means, subject to Clause 8. pounds
       sterling 34,000,000.

       TERM LOAN UTILISED AMOUNT means, at any time, an amount equal to the
       aggregate at that time of (a) the Term Loan and (b) the Net Loan Notes
       Guaranteed Amount.

       TERMINATION AGREEMENT means the termination agreement dated on or before
       the date of this Agreement relating to the termination of an investment
       agreement and made between (1) The Efpep Funds and others (2) John
       McMurdo Wotherspoon (3) Michael H.A. Broke and (4) Aspen.

       TOTAL DEBT COSTS means, in relation to any period, all interest,
       commissions, periodic fees and other periodic financing charges relating
       to Indebtedness payable on a consolidated basis by the Group Companies
       during that period (including the interest element payable under any
       Finance Lease) less any interest receivable in respect of cash balances,
       less any sums receivable or plus any sums payable by Newco under any
       interest rate protection agreement of whatever description during that
       period, and for the avoidance of doubt excluding (i) any fees and
       commission paid in relation to the acquisition of Aspen Shares, (ii) any,
       interest payable on the Loan Notes and (iii) any amounts amortised on
       finance costs and issue costs arising from the acquisition of Aspen
       Shares.

                                     - 12 -
<PAGE>
       TOTAL FUNDING COSTS means, in relation to any period, the aggregate of:

       (a)    Total Debt Costs for that period;

       (b)    all scheduled repayments of the Term Loan and reductions to the
              Capex Facility falling due during that period;

       (c)    any dividends declared payable in respect of that period;

       (d)    all interest payable on the Loan Notes in respect of that period;
              and

       (e)    the capital element of all rentals or, as the case may be, other
              payments payable in that period under any Finance Lease entered
              into by any Group Company.

       TRANSACTION DOCUMENTS means, in relation to a Group Company, each of the
       following documents to which it is a party; the Financing Documents, the
       Acquisition Documents and the Loan Notes Documents.

       USPI means United Surgical Partners International, Inc., a corporation
       incorporated under the laws of the State of Delaware having its principal
       office at 17103 Preston Road, Suite 200 North, Dallas, Texas 75248 U.S.A.

       USPI GUARANTEE means the guarantee in the agreed form executed or to be
       executed by USPI in favour of the Bank.

       VAT means value added tax as provided for in the Value Added Tax Act 1994
       and legislation (or purported legislation and whether delegated or
       otherwise) supplemental to that Act or in any primary or secondary
       legislation promulgated by the European Community or any official body
       or agency of the European Community, and any tax similar or equivalent to
       value added tax imposed by any country other than the United Kingdom and
       any similar or turnover Tax replacing or introduced in addition to any of
       the same.

       WARRANTY DEED means the deed of warranty dated on or before the date of
       this Agreement and made between Newco and John McMurdo Wotherspoon.

1.2    HEADINGS

       The headings in this Agreement are for convenience only and shall be
       ignored in construing this Agreement.

1.3    INTERPRETATION

       In this Agreement (unless otherwise provided):

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

       (b)    references to Clauses and Schedules are to be construed as
              references to the clauses of, and schedules to, this Agreement;

                                      -13-
<PAGE>
       (c)    references to any Financing Document or any other document shall
              be construed as references to that Financing Document or that
              other document, as amended, varied, novated or supplemented, as
              the case may be;

       (d)    references to any statute or statutory provision include any
              statute or statutory provision which amends, extends, consolidates
              or replaces the same, or which has been amended, extended,
              consolidated or replaced by the same, and shall include any
              orders, regulations, instruments or other subordinate legislation
              made under the relevant statute;

       (e)    references to a document being IN THE AGREED FORM means that
              document the form and content of which has been approved by the
              Bank and which has endorsed on it the words "in the agreed form"
              and which is initialed by or on behalf of the Bank and Newco;

       (f)    references to ASSETS shall include revenues and property and the
              right to revenues and property and rights of every kind, present,
              future and contingent and whether tangible or intangible
              (including uncalled share capital);

       (g)    the words INCLUDING and IN PARTICULAR shall be construed as being
              by way of illustration or emphasis only and shall not be construed
              as, nor shall they take effect as, limiting the generality of any
              preceding words;

       (h)    the words OTHER and OTHERWISE shall not be construed ejusdem
              generis with any foregoing words where a wider construction is
              possible;

       (i)    references to a PERSON shall be construed so as to include that
              person's assigns, transferees or successors in title and shall be
              construed as including references to an individual, firm,
              partnership, joint venture, company, corporation, body corporate,
              unincorporated body of persons or any state or any agency of a
              state;

       (j)    Where there is a reference in this Agreement to any amount, limit
              or threshold specified in Sterling, in ascertaining whether or not
              that amount, limit or threshold has been attained, broken or
              achieved, as the case may be, a non-Sterling amount shall be
              counted on the basis of the equivalent in Sterling of that amount
              using the Bank's relevant spot rate of exchange:

       (k)    accounting terms shall be construed so as to be consistent with
              GAAP; and

       (1)    References to time are to London time.

2.     FACILITIES

2.1    Subject to the Terms of This Agreement:

       (a)    The Bank agrees to make available to Newco a Sterling term loan
              and guarantee facility in the maximum principal amount of pounds
              sterling 34,000,000;

       (b)    The Bank agrees to make available to Newco a Sterling revolving
              capital expenditure facility in the maximum principal amount of
              pounds sterling 7,000,000; and

                                     - 14 -
<PAGE>
       (c)    The Bank agrees to make available to Newco an overdraft facility
              in the maximum amount of pounds sterling 11,000,000.

2.2    Notwithstanding Any Other Term of This Agreement:

       (a)    the Term Loan Utilised Amount shall not, at any time, exceed the
              Term Loan and Guarantee Facility Limit;

       (b)    the Capex Loan shall not, at any time, exceed the Capex Facility
              Limit; and

       (c)    the Overdraft Outstanding shall not, at any time, exceed the
              Overdraft Limit.

3.     PURPOSE

3.1    PURPOSE OF THE TERM LOAN AND GUARANTEE FACILITY

3.1.1  Subject to the other terms of this Agreement, the Term Loan and Guarantee
       Facility is available for utilisation by way of Term Advances and Loan
       Notes Guarantee Utilisations.

3.1.2  The proceeds of Term Advances shall only be used:

       (a)    to pay the consideration payable to the Vendors by Newco for the
              Aspen Shares purchased by it pursuant to the Acquisition
              Agreement;

       (b)    to pay the Acquisition Costs;

       (c)    to repay the existing indebtedness outstanding under the Existing
              Facilities; and

       (d)    for paying amounts due in respect of the Loan Notes in accordance
              with Clause 5.1.3.

3.2    PURPOSE OF THE CAPEX FACILITY

       The proceeds of Capex Advances shall only be used:

       (a)    to finance the Capital Expenditure requirements of Newco including
              those in respect of:

              (i)    The construction and development of a cancer center at
                     Paradise; and

              (ii)   the purchase of an MRI Scanner and

       (b)    to repay maturing Capex Advances.

3.3    PURPOSE OF THE OVERDRAFT FACILITY

       The Overdraft Facility shall only be used for the general corporate
       purposes of the Group (but not to make prepayments of the Term Loan).

                                     - 15 -
<PAGE>
3.4    UNDERTAKING BY NEWCO

       Newco undertakes that it will only utilise the Facilities as permitted by
       this Clause 3.

3.5    NO LIABILITY

       The Bank shall not be concerned as to the use or application of the
       proceeds of the Facilities.

4.     CONDITIONS PRECEDENT

4.1    CONDITIONS PRECEDENT

       Notwithstanding any other term of this Agreement, the Bank shall not be
       under any obligation to make the Facilities available to Newco unless the
       Bank has notified Newco that all the conditions set out in Schedule 1
       have been satisfied on or prior to 7th April 2000.

4.2    CONFIRMATION OF SATISFACTION

       The Bank shall, at the request of Newco, certify whether or not any one
       or more of the conditions set out in Schedule 1 have been satisfied or,
       as the case may be, waived.

5.     DRAWDOWN

5.1    UTILISATION OF TERM LOAN AND GUARANTEE FACILITY

5.1.1  Subject to the other terms of this Agreement, the Term Loan and Guarantee
       Facility shall be utilised by the drawdown of Term Advances and/or the
       issue of the Loan Notes Guarantee at any time during the Term Loan
       Commitment Period when requested by Newco by means of a Drawdown Notice
       in accordance with Clause 5.4 and/or a Loan Notes Guarantee Utilisation
       Notice in accordance with Clause 5.7. At close of business on the last
       day of the Term Loan Commitment Period any part of the Term Loan and
       Guarantee Facility not drawn down will be cancelled and the Term Loan and
       Guarantee Facility Limit shall be reduced accordingly.

5.1.2  The following limitations apply to Term Advances:

       (a)    the first Drawdown Date of a Term Advance shall be no later than
              14 April 2000;

       (b)    the first Term Advance shall be the sum of pounds sterling
              34,000,000;

       (c)    no Term Advance shall be made if the making of that Term Advance
              would result in the Term Loan Utilised Amount exceeding the Term
              Loan and Guarantee Facility Limit;

       (d)    no Term Advance will be made to pay amounts of principal due under
              the Loan Notes unless simultaneously with the making of that Term
              Advance the obligations of the Bank to the holder of the relevant
              Loan Notes are reduced by at least the same amount.

                                      -16-
<PAGE>
5.1.3  If the Bank makes a demand under the Newco Indemnity under Clause 5.8 in
       respect of the Loan Notes Guarantee. Newco shall automatically be deemed
       to have issued a Drawdown Notice for a Term Advance for an amount equal
       to the amount so claimed by the Bank. The provisions of this Agreement
       shall apply as if such Drawdown Notice had been duly served by Newco.

5.1.4  A Term Advance may be made under Clause 5.1.3 notwithstanding the
       occurrence and continuation of a Default or a Potential Default or any of
       the representations and warranties to be repeated on the relevant
       Drawdown Date not being correct.

5.2    UTILISATION OF THE CAPEX FACILITY

       Subject to the other terns of this Agreement, Capex Advances shall be
       made to Newco at any time during the Capex Commitment Period when
       requested by Newco by means of a Drawdown Notice in accordance with
       Clause 5.5.

5.3    DRAWDOWN OF CAPEX FACILITY

5.3.1  The following limitations apply to Capex Advances;

       (a)    the Drawdown Date of a Capex Advance shall be a Business Day
              during the Capex Commitment Period:

       (b)    the principal amount of a Capex Advance shall be a minimum amount
              of pounds sterling 100,000 and in an integral multiple of pounds
              sterling 50,000;

       (c)    no Capex Advance shall be made if the making of that Capex
              Advance would result in the aggregate of all Capex Advances
              exceeding the Capex Facility Limit;

       (d)    no more than 15 Capex Advances may be outstanding at any one time;
              and

       (e)    no Capex Advance shall be made unless the Bank shall have received
              from Newco evidence in form and substance satisfactory to the
              Bank that the requested Capex Advance is to be used in accordance
              with Clause 3.2.

5.3.2  At close of business on the last day of the Capex Commitment Period the
       Capex Facility shall cease to be available for utilisation.

5.4    CONDITIONS TO EACH ADVANCE

       The obligation of the Bank to make available an Advance is subject to
       the conditions that on the date on which the relevant Drawdown Notice is
       given and on the relevant Drawdown Date:

       (a)    the representations and warranties in Clause 14 to be repeated on
              those dates are correct and will be correct immediately after the
              Advance is made; and

       (b)    no Default or Potential Default has occurred and is continuing or
              would occur on the making of the Advance.

                                      -17-
<PAGE>
5.5    DRAWDOWN NOTICE

5.5.1  Whenever Newco wishes to draw down an Advance. it shall give a duly
       completed Drawdown Notice to tile Bank to be received not later than
       11.00 a.m. on the first Business Day before such Drawdown Date.

5.5.2  A Drawdown Notice shall be irrevocable and Newco shall be obliged to
       borrow iii accordance with its terms.

5.6    Limitations on the Loan Notes Guarantee

       The following limitations apply to the Loan Notes Guarantee:

       (a)    the Issue Date shall be a Business Day falling not later than 7
              April 2000:

       (b)    it shall be issued by the Bank in tile agreed form:

       (c)    without prejudice to paragraph (b) above, the Loan Notes Guarantee
              shall. unless the Bank otherwise agrees:

              (i)    be denominated in Sterling: and

              (ii)   state on its face the maximum amount payable under it, not
                     exceeding pounds sterling 7,000,000 and its expire date:

       (d)    the Loan Notes Guarantee shall not be issued if the issuing of it
              would cause the Term Loan Utilised Amount to exceed the Term Loan
              and Guarantee Facility Limit; and

       (e)    no Loan Note Guarantees shall be issued under which a claim could
              be made at any time after the Expiry Date.

5.7    CONDITIONS TO THE LOAN NOTES GUARANTEE

       No Loan Notes Guarantee Utilisation Notice may be served and the Bank
       shall not be under any obligation to issue the Loan Notes Guarantee:

       (a)    if a Default or Potential Default has occurred and is continuing
              or would occur on the issuing of the Loan Notes Guarantee; or

       (b)    unless the representations and warranties deemed to be repeated
              pursuant to Clause 14.2 are, or will be, true and accurate on the
              date on which the relative Loan Notes Guarantee Utilisation Notice
              is served.

5.8    LOAN NOTES GUARANTEE UTILISATION NOTICE

5.8.1  If Newco wishes the Loan Notes Guarantee to be issued, it shall give a
       duly completed Loan Notes Guarantee Utilisation Notice to the Bank to be
       received not later than 11.00 a.m. on the first Business Days prior to
       the Issue Date (or such shorter period as the Bank may allow).

                                      -18-
<PAGE>
5.8.2  Subject always to the other terms of this Agreement, a Loan Notes
       Guarantee Utilisation Notice shall be a irrevocable.

5.9    COUNTER INDEMNITY FROM NEWCO

5.9.1  Newco shall:

       (a)    indemnify and keep indemnified the Bank from and against all
              actions, suits, proceedings, claims, demands, liabilities,
              damages, costs, expenses, losses and charges in relation to or
              arising out of the Loan Notes Guarantee; and

       (b)    pay to the Bank on demand the amount of all payments made (whether
              directly or by way of set-off. counterclaim or otherwise) and all
              losses, costs and expenses suffered or incurred by the Bank under
              or by reason of the Loan Notes Guarantee.

5.9.2  The Bank is irrevocably authorised by Newco to comply with the terms of
       any demand served or purporting to be served on the Bank under the Loan
       Notes Guarantee without any reference to, or further authority from,
       Newco and without any enquiry into the justification for that demand or
       its validity. Any payment which the Bank shall make in accordance or
       purporting to be in accordance with such a demand shall be binding on
       Newco and be accepted by Newco as conclusive and binding evidence that
       the Bank was liable to comply with the terms of such demand and was
       liable to do so in the manner and for the amount in which the Bank
       effected such compliance.

5.9.3  The liability of Newco under this Clause 5.9 shall not be discharged,
       lessened or impaired by any time being given or by any thing being done
       or other circumstance whatsoever which, but for this provision, would
       or might operate to exonerate or discharge Newco.

5.9.4  The Newco Indemnity shall constitute and be a continuing security to the
       Bank: and shall extend to the Loan Notes Guarantee as it may be varied,
       modified, amended or extended.

5.10   INTEREST ON PAYMENTS

       Newco shall pay to the Bank interest on the amount of each payment, loss,
       cost and expense made, suffered or incurred by the Bank under or by
       reason of the Loan Notes Guarantee from and including the date upon which
       such payment, loss, cost or expense is made, suffered or incurred up to
       and including the date upon which payment or reimbursement of such amount
       is demanded from Newco. The amount of such interest shall be calculated
       in accordance with Clause 9.3.

5.11   Subject to the terns of this Agreement, the Bank acting through its
       Lending Office shall make an Advance available to Newco on the relevant
       Drawdown Date.

6      THE OVERDRAFT FACILITY

6.1    NATURE OF FACILITY

6.1.1  Subject to the terms of this Agreement, the Overdraft Facility shall be
       available for utilisation by Newco, provided that yhe Overdraft Facility
       may be terminated and cancelled.

                                     - 19 -
<PAGE>
       (in whole or in part) by the Bank at any time and the Overdraft Limit
       shall be reduced by the amount so cancelled.

6.1.2  The Overdraft Facility shall be made available by the Bank in a maximum
       amount equal to the Overdraft Limit.

6.1.3  The Overdraft Facility shall cease to be available on the Final Repayment
       Date or such earlier date on which it is cancelled in accordance with the
       terms of this Agreement.

6.1.4  Newco shall complete such mandate and other like documents in respect of
       the Overdraft Facility as the Bank may reasonably require.

6.1.5  Notwithstanding the terms of this Agreement, the Bank: may review the
       Overdraft Facility and the Overdraft Limit on an annual basis.

6.2    UTILISATION

6.2.1  Subject to the terms of this Agreement, the Bank agrees to make the
       Overdraft Facility available on a revolving basis to Newco to be utilised
       on any, Business Day by way of overdraft on usual banking terms including
       a term that amounts outstanding by way of overdraft are repayable on
       demand.

6.2.2  Subject to Clause 6.2.4. no utilisation of the Overdraft Facility under
       Clause 6.2.1 shall be made if it would result in the Overdraft
       Outstandings exceeding the Overdraft Limit.

6.2.3  For the avoidance of doubt, the Bank may, without liability, return
       cheques unpaid if the payment of those cheques would result in a breach
       of Clause 6.2.2.

6.2.4  The Overdraft Limit may only be increased with the prior consent of the
       Bank.

7.     INTEREST

7.1    INTEREST RATES

       Interest shall accrue on each Advance from and including the relevant
       Drawdown Date to but excluding the date the Advance is repaid at the rate
       determined by the Bank to be the aggregate of:

       (a)    the Margin;

       (b)    LIBOR (or, in the case of a Fixed Funds Tranche, the Fixed Funds
              Rate); and

       (c)    the Mandatory Cost Rate.

7.2    INTEREST PERIODS

7.2.1  Interest payable on each Advance shall be calculated by reference to
       Interest Periods of 3, 6 or 12 months duration (or such other Interest
       Period as the Bank may allow) as selected by Newco in accordance with
       this Clause 7.2.

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<PAGE>
7.2.2  Newco shall select an Interest Period for a Capex Advance in the relevant
       Drawdown Notice save in the case of a Capex Advance outstanding after the
       expiry of the Capex Commitment Period where Newco shall select an
       Interest Period in the case of any Interest Period subsequent to the
       Capex Commitment Period by notice received by the Bank no later than 1
       Business Day before the commencement of that Interest Period. Newco may
       select an Interest Period for a Term Advance in either the Drawdown
       Notice (in the case of the first Interest Period for that Advance) or (in
       the case of any subsequent Interest Period for that Advance) by notice
       received by the Bank no later than 1 Business Day before the commencement
       of that Interest Period.

7.2.3  In respect of Term Advances and, after the last day of the Capex
       Commitment Period, Capex Advances, interest shall be calculated by
       reference to successive Interest Periods. The first Interest Period for a
       Term Advance shall begin on the Drawdown Date relating to that Term
       Advance. Each succeeding Interest Period for that Term Advance shall
       begin on the Interest Date of the previous Interest Period.

7.2.4  Newco may, by notice to the Bank at least 2 Business Days before an
       Interest Date relating to a Term Advance, elect that that Term Advance be
       split into two or more Term Advances of at least pounds sterling
       2,000,000 each (and being multiples of pounds sterling 1,000,000) or such
       lesser amount equal to the amount of the Instalment falling due on the
       next Instalment Repayment Date. Any such notice shall specify the
       Interest Periods applicable to those Term Advances and shall take effect
       in accordance with its terms from that Interest Date provided that there
       shall not be more than 3 Term Advances outstanding at any one time.

7.2.5  Subject to the other terms of this Agreement, if the Interest Periods for
       two or more Term Advances end on the same day those Term Advances shall
       be deemed to be a single Term Advance from that day.

7.2.6  If Newco fails to select an Interest Period for an Advance in accordance
       with Clause 7.2.2, that Interest Period shall, subject to the other
       provisions of this Clause 7, be 3 months.

7.2.7  If an Interest Period would otherwise end on a day which is not a
       Business Day, that Interest Period shall instead end on the next Business
       Day in the same calendar month (if there is one) or the preceding
       Business Day (if there is not).

7.2.8  If an Interest Period begins on the last Business Day in a calendar month
       or on a Business Day for which there is no numerically corresponding day
       in the calendar month in which that Interest Period is to end, it shall
       end on the last Business Day in that later calendar month.

7.2.9  In respect of Term Advances, Newco shall select such Interest Periods to
       ensure that, on each Instalment Repayment Date, there are Term Advances
       with an Interest Period ending on that Instalment Repayment Date which
       are, in aggregate, at least equal to the Instalment due on that
       Instalment Repayment Date.

7.2.10 If an Interest Period for an Advance would otherwise extend beyond the
       Final Repayment Date for the Facility under which such Advance is made
       it shall be shortened so that it ends on the Final Repayment Date
       relating to that Facility.

7.3    DEFAULT INTEREST

7.3.1  If Newco fails to pay any amount payable under any Financing Document on
       the due date, it shall (unless otherwise provided in such Financing
       Document) pay default interest on the overdue amount from the due date to
       the date of actual payment calculated by reference to

                                     - 21 -
<PAGE>
       successive Interest Periods (each of such duration as the Bank may
       reasonably select and the first beginning on the relevant due date) at
       the rate per annum being the aggregate of (a) 1 per cent. per annum, (b)
       the Margin, (c) LIBOR and (d) the Mandatory Cost Rate.

7.3.2  So long as the overdue amount remains unpaid, the default interest rate
       shall be recalculated in accordance with the provisions of this Clause
       7.3 on the last day of each such Interest Period and any unpaid interest
       shall be compounded at the end of each Interest Period.

7.4    FIXED RATE OPTION

7.4.1  Newco may, on at least two Business Days, notice prior to any Interest
       Date, request the Bank in writing to quote a Fixed Funds Rate in respect
       of a Term Advance or Term Advances to which such Interest Date relates
       for a Fixed Rate Period commencing on the expiry of the relevant Interest
       Period. Any such request shall state the amount and the duration of the
       proposed Fixed Rate Period. The Bank shall have no obligation to quote
       any such Fixed Funds Rate, but if it does so it shall contemporaneously
       specify the method of and latest time for acceptance of such quote.

7.4.2  If Newco accepts a quote made by the Bank under Clause 7.4.1 by the
       required method and prior to the latest time for acceptance, the Bank
       shall as soon as reasonably practicable issue a Fixed Rate Confirmation
       Notice and the proposed conversion shall occur as agreed.

7.4.3  At all times during the relevant Fixed Rate Period, interest shall accrue
       on the Fixed Rate Tranche at the Fixed Funds Rate and the Mandatory Costs
       agreed in respect of that Fixed Rate Tranche under this Clause 7.4 and
       shall be payable 3 monthly in arrears.

7.4.4  The Term Advance or Term Advances to which the Fixed Funds Rate applied
       shall, upon expiry of the Fixed Rate Period applicable to it, immediately
       accrue interest in accordance with Clause 7.2.

7.4.5  (a)    Newco expressly acknowledges that the Bank may enter into or may
              have entered into one or more other arrangements in connection
              with or by reference to this Agreement on the assumption that its
              source of funds for payments to be made by it under such other
              arrangements will be, in whole or in part, payments to be received
              by it pursuant to this Agreement in respect of each Fixed Rate
              Tranche during the relevant Fixed Rate Period.

       (b)    Accordingly, Newco agrees that in the event of:

              (i)    any default in payment by Newco of any sum under this
                     Agreement when due in connection with a Fixed Rate Tranche
                     during the applicable Fixed Rate Period; or

              (ii)   the occurrence of any Event of Default and acceleration of
                     repayment of the Fixed Rate Tranche under Clause 16; or

              (iii)  any repayment, prepayment or recovery in whole or in part
                     of a Fixed Rate Tranche prior to the last day of the
                     applicable Fixed Rate Period,

              it shall on demand indemnify the Bank without prejudice to any of
              its other rights under the Security Documents against any cost,
              loss (including without limitation loss of Margin) expense or
              liability which the Bank has sustained or incurred.

                                     - 22 -
<PAGE>
7.5    GUARANTEE COMMISSION

       Commission in respect of the Net Loan Notes Guaranteed Amount shall:

       (a)    accrue from day to day on an amount equal to the Net Loan Note
              Guaranteed Amount at a rate of 1.00 per cent per annum;

       (b)    be calculated on the basis of actual days elapsed and a 365 day
              year; and

       (c)    be paid by Newco to the Bank in arrear on each Quarter Date.

7.6    INTEREST, COMMISSION AND FEES UNDER THE OVERDRAFT FACILITY

7.6.1  Interest on all amounts outstanding by way of overdraft under the
       Overdraft Facility shall accrue at the rate of 1.50 per cent per annum
       over the published base rate of the Bank from time to time.

7.6.2  Interest under Clause 7.6.1 on amounts outstanding by way of overdraft
       shall be paid by Newco to the Bank on the Bank's usual quarterly charging
       days.

7.6.3  The Bank may debit all interest, fees and commissions payable by Newco
       under this Clause 7.6 to any account held by Newco with the Bank.

7.7    CALCULATION AND PAYMENT OF INTEREST

7.7.1  At the beginning of each Interest Period (other than in relation to a
       Fixed Rate Tranche), the Bank shall notify Newco of the rate and amount
       of interest payable for the Interest Period (but in the case of any
       default interest calculated under Clause 7.3, any such notification need
       not be made more frequently than weekly). Each notification shall set out
       in reasonable detail the basis of computation of the amount of interest
       payable.

7.7.2. Interest due from Newco under this Agreement shall:

       (a)    accrue from day to day at the rate calculated under this Clause 7;

       (b)    except as otherwise provided in this Agreement be paid by Newco
              to the Bank in arrear on the last day of each Interest Period,
              provided that: (i) for any Interest Period which is for longer
              than 3 months, Newco shall pay interest 3 monthly in arrear
              during that Interest Period; and (ii) the first Interest Period in
              relation to a Term Advance drawdown pursuant to Clause 5.1.3 shall
              be shortened so that it shall expire on the Interest Date which
              most immediately succeeds that drawdown unless the Bank otherwise
              agrees;

       (c)    be calculated on the basis of the actual number of days elapsed
              and a 365 day year; and

       (d)    be payable both before and after judgement.

                                     - 23 -
<PAGE>
7.8    BANK'S DETERMINATION

       The determination by the Bank of any interest payable under this Clause 7
       shall be conclusive and binding on Newco except for any manifest error.

8.     REPAYMENT OF THE TERM LOAN AND THE CAPEX LOAN

8.1    REDUCTION OF THE TERM LOAN UTILISED AMOUNT

       Newco shall reduce the aggregate of the Term Loan Utilised Amount and the
       Capex Loan by payment to the Bank on each date set out in Column 1 below
       (each date being an INSTALMENT REPAYMENT DATE) of the amount (each an
       INSTALMENT) set out in Column 2 below opposite the relevant Instalment
       Repayment Date (so that the aggregate Term Loan Utilised Amount and the
       Capex Loan is reduced to zero on or before the Final Repayment Date):

       COLUMN I                               COLUMN 2
       Instalment Repayment Date             Instalment (pounds sterling)

       30th September 2000                     500,000
       31st March 2001                         500,000
       30th September 2001                     500,000
       31st March 2002                         500,000
       30th September 2002                     750,000
       31st March 2003                         750,000
       30th September 2003                     750,000
       31st March 2004                         750,000
       30th September 2004                     750,000
       31st March 2005                         750,000
       30th September 2005                   1,500,000
       31st March 2006                       1,500,000
       30th September 2006                   1,500,000
       31st March 2007                       1,500,000
       30th September 2007                   2,200,000
       31st March 2008                       2,200,000
       30th September 2008                   2,200,000
       31st March 2009                       2,200,000
       30th September 2009                   2,200,000
       Final Repayment Date                 17,500,000

8.1.2  Reductions of the Term Loan Utilised Amount under Clause 8.1 shall be
       made:

       (a)    first, in repayment of any Term Advances; and

       (b)    second in repayment of any Capex Advances.

8.2    REPAYMENT OF THE CAPEX ADVANCES

8.2.1  Subject to Clauses 8.1 and 8.2.3. each Capex Advance shall be repaid in
       full on the Interest Date of the Interest Period relating to that Capex
       Advance.

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<PAGE>
8.2.2  Subject to the terms of this Agreement, any amounts repaid under Clause
       8.2.1 may be re-borrowed.

8.2.3  If all or part of an existing Capex Advance made to Newco is to be repaid
       from the proceeds of all or part of a new Capex Advance then, as between
       the Bank and Newco, the amount to be repaid by Newco shall be set off
       against the amount to be advanced by the Bank in relation to the new
       Capex Advance and the party to whom the smaller amount is to be paid
       shall pay to the other party a sum equal to the difference between the
       two amounts.

9.     PREPAYMENT

9.1    MANDATORY PREPAYMENT ON SALE OR LISTING

9.1.1  Notwithstanding Clause 8, if so required by the Bank, on any date on
       which a Sale or a Listing occurs (a PREPAYMENT DATE):

       (a)    the Term Loan shall be repaid in full;

       (b)    all Capex Advances shall be repaid in full;

       (c)    all Overdraft Outstandings shall be repaid in full; and

       (d)    the Bank's obligations under this Agreement shall be terminated
              and the Term Loan and Guarantee Facility Limit, the Capex
              Facility Limit and the Overdraft Limit shall each be reduced to
              zero.

9.1.2  On a Prepayment Date, Newco shall in respect of the Loan Notes Guarantee:

       (a)    use its reasonable endeavours to procure the release of the Bank
              from the Loan Notes Guarantee;

       (b)    without prejudice to paragraph (a) above, pay to the credit of
              such account as the Bank shall stipulate an amount in Sterling
              equal to the Loan Notes Guaranteed Amount and charge such account
              in favour of the Bank on terms satisfactory to the Bank.

9.1.3  Newco shall give the Bank at least 30 days' (or, in the case of a Sale
       only. such shorter period as is practicable not being less than 5 days)
       prior notice of the date upon which a Sale or Listing is proposed to
       occur.

9.2    VOLUNTARY PREPAYMENT OF TERM LOAN AND CAPEX LOAN

9.2.1  Newco may, by giving the Bank not less than 5 Business Days' prior
       notice, prepay the whole or part (but if in part, in a minimum amount of
       pounds sterling 500,000 and an integral multiple of pounds
       sterling 500,000) of any Term Advance or any Capex Advances on any date
       subject to the payment of any sums payable pursuant to Clause 23.

9.2.2  Any notice of prepayment shall be irrevocable, shall specify the date on
       which the prepayment is to be made and the amount of the prepayment, and
       shall oblige the relevant Borrower to make that prepayment.

                                     - 25 -
<PAGE>
9.2.3  Any prepayment shall be made together with accrued interest on the amount
       prepaid and any amounts payable under Clause 23.1

9.2.4  Each prepayment of the Term Loan under this Clause 9.2 shall be applied
       against the relevant unpaid Instalments in inverse order of maturity.

9.3    NO RE-BORROWING OF TERM LOAN

       Any amount repaid or prepaid in relation to the Term Loan or, after tile
       last day of tile Capex Commitment Period, the Capex Loan, may not be
       re-borrowed and shall reduce the Term Loan and Guarantee Facility Limit
       or, as the case may be, the Capex Facility Limit by the amount so repaid
       or prepaid.

10.    CANCELLATION OF CAPEX FACILITY

10.1   CANCELLATION

       Newco may, by giving the Bank not less than 5 Business Days' prior
       notice, cancel all or part of the unutilised part of the Capex Facility
       (but if in part, in a minimum amount of pounds sterling 500,000 and an
       integral multiple of pounds sterling 100,000).

10.2   NOTICE

       Any notice of cancellation shall be irrevocable and shall specify the
       date on which the cancellation shall take effect and the amount of the
       cancellation.

10.3   EFFECT OF CANCELLATION

       Newco may not utilise any part of the Capex Facility which has been
       cancelled. Any cancellation of the Capex Facility shall reduce the Capex
       Facility Limit by the aggregate amount so cancelled.

10.4   LIMITATION

       Newco may not cancel all or part of the Capex Facility except as
       expressly provided in this Agreement.

11.    CHANGES IN CIRCUMSTANCES

11.1   ILLEGALITY

       If it is or becomes illegal for the Bank to maintain all or part of the
       Facilities or to continue to make available or fund any Advance or to
       issue or leave outstanding any guarantee obligation under the Loan Notes
       Guarantee, then:

       (a)    the Bank; shall notify Newco; and

       (b)    (i) the Facilities shall be cancelled immediately;

                                     - 26 -
<PAGE>
              (ii)   the Term Loan and Guarantee Facility shall cease to be
                     available for the issue of the Loan Notes Guarantee.

              (iii)  Newco shall use its best endeavours to procure the release
                     of the Bank from any obligation under the Loan Notes
                     Guarantee if outstanding at that time; and

              (iv)   Newco shall prepay to the Bank all the Advances (together
                     with accrued interest on the amount prepaid and all other
                     amounts owing to the Bank under this Agreement) within 5
                     Business Days of demand by the Bank (or, if permitted by
                     the relevant law, on the last day of the Interest Period of
                     the relevant Advances).

       Any such prepayment under paragraph (ii) above shall be subject to Clause
       23.1.

11.2   INCREASED COSTS

11.2.1 If, after the date of this Agreement, a Change occurs which causes an
       Increased Cost (as defined in Clause 11.2.3) to the Bank (or any company
       of which the Bank is a Subsidiary) then Newco shall pay (as additional
       interest) to the Bank within 5 Business Days of demand all amounts which
       the Bank certifies to be necessary to compensate the Bank (or any company
       of which the Bank is a Subsidiary) for the Increased Cost.

11.2.2 Any demand made under Clause 11.2.1 shall set out in reasonable detail
       so far as is practicable the nature of the Change and the basis of
       computation of the Increased Cost.

11.2.3 In this Clause 11.2:

       INCREASED COST means any cost to, or reduction in the amount payable to,
       or reduction in the return on capital or regulatory capital achieved by,
       the Bank (or any company of which the Bank is a Subsidiary) to the extent
       that it arises, directly or indirectly, as a result of the Change and is
       attributable to all or part of a Facility or any Advance or the funding
       of any Advance including:

       (a)    any Tax Liability (other than Tax on Overall Net Income) incurred
              by the Bank;

       (b)    any changes in the basis or timing of Taxation of the Bank in
              relation to all or part of a Facility or any Advance or the
              funding of any Advance;

       (c)    the cost to the Bank (or any company of which the Bank is a
              Subsidiary) of complying with, or the reduction in the amount
              payable to or reduction in the return on capital or regulatory
              capital achieved by the Bank (or any company of which the Bank is
              a Subsidiary) as a result of complying with, any capital adequacy
              or similar requirements howsoever arising, including as a result
              of an increase in the amount of capital to be allocated to a
              Facility or of a change to the weighting of the commitment under a
              Facility or any Advance;

       (d)    the cost to the Bank of complying with any reserve, cash ratio,
              special deposit or liquidity requirements (or any other similar
              requirements); and

       (e)    the amount of any fees payable by the Bank to any supervisory or
              regulatory authority.

                                     - 27 -
<PAGE>
        TAX LIABILITY means, in respect of any person:

       (a)    any liability or any increase in the liability of that person to
              make any payment of or in respect of Tax;

       (b)    the loss of any relief, allowance, deduction or credit in respect
              of Tax which would otherwise have been available to that person;

       (c)    the setting off against income, profits or gains or against any
              Tax liability of any relief, allowance, deduction or credit in
              respect of Tax which would otherwise have been available to that
              person; and

       (d)    the loss or setting off against any Tax liability of a right to
              repayment of Tax which would otherwise have been available to that
              person.

       For the purposes of this definition of "Tax Liability", any question of
       whether or not any relief, allowance, deduction, credit or right to
       repayment of Tax has been lost or set off, and if so, the date on which
       that loss or set-off took place, shall be conclusively determined by the
       relevant person.

       TAX ON OVERALL NET INCOME means, in relation to the Bank, Tax (other than
       Tax deducted or withheld from any payment) imposed on the net profits of
       the Bank by the jurisdiction in which its Lending Office or its head
       office is situated.

11.2.4 Newco shall not be obliged to make a payment in respect of an Increased
       Cost under this Clause 11.2 if and to the extent that the Increased Cost
       has been compensated for by the payment of Mandatory Cost Rate or the
       operation of Clause 12.9.

11.2.5 If Newco is required to pay any amount to the Bank under this Clause
       11.2. then, without prejudice to that obligation and so long as the
       circumstances giving rise to the relevant Increased Cost are continuing
       and subject to Newco giving the Bank not less than 10 days' prior notice
       (which shall be irrevocable), Newco may prepay all or part (but if in
       part in a minimum amount of pounds sterling 500,000 and an integral
       multiple of pounds sterling 500,000) of the Advances together with
       accrued interest on the amount prepaid. Any such prepayment shall be
       subject to Clause 23.1. On any such prepayment the Term Loan and
       Guarantee Facility Limit and the Capex Facility Limited shall be reduced
       accordingly.

11.3   MARKET DISRUPTION

11.3.1 If in relation to an Advance and a particular Interest Period:

       (a)    the Bank determines that, because of circumstances affecting the
              London interbank market generally, reasonable and adequate means
              do not exist for ascertaining LIBOR for that Advance for that
              Interest Period: or

       (b)    the Bank is of the opinion that:

              (i)    matching deposits may not be available to it in the London
                     interbank market in the ordinary course of business to fund
                     that Advance for that Interest Period; or

              (ii)   the cost to it of obtaining matching deposits in the London
                     interbank market would be in excess of LIBOR for that
                     Interest Period.

                                     - 28 -
<PAGE>
        the Bank shall promptly notify Newco of that event (such notice being a
        MARKET DISRUPTION NOTICE).

11.3.2 If a Market Disruption Notice applies to a proposed Advance, that Advance
       shall not be made. Instead, the Bank and Newco shall immediately enter
       into negotiations for a period of not more than 30 days with a view to
       agreeing a substitute basis for calculating tile interest rate for the
       Advance or for funding the Advance. Any substitute basis agreed by the
       Bank and Newco shall take effect in accordance with its terms.

11.3.3 If a Market Disruption Notice applies to an outstanding Advance. then:

       (a)    the Bank and Newco shall immediately enter into negotiations for a
              period of not more that 30 days with a view to agreeing a
              substitute basis for calculating the rate of interest for the
              Advance or for funding the Advance;

       (b)    any substitute basis agreed under Clause 1 1.3.3(a) by the Bank
              and Newco shall take effect in accordance with its terms;

       (c)    if no substitute basis is agreed under Clause 11.3.3(a), then,
              subject to Clause 11.3.4, the Bank shall certify before the last
              day of the Interest Period to which the Market Disruption Notice
              relates a substitute basis for maintaining the Advance which shall
              reflect the cost to the Bank of funding the Advance from whatever
              sources it reasonably selects plus the Margin and Mandatory Cost
              Rate; and

       (d)    each substitute basis so certified shall be binding on Newco and
              the Bank; and treated as part of this Agreement.

11.3.4 If no substitute basis is agreed under Clause 11.3.3(a), then, so long as
       the circumstances giving rise to the Market Disruption Notice continue
       and subject to Newco giving the Bank not less than 5 Business Days'
       prior notice (which shall be irrevocable). Newco may prepay the Advance
       to which the Market Disruption Notice applies together with accrued
       interest on the amount prepaid. Any such prepayment shall be subject to
       Clause 23.1.

11.4   MITIGATION

11.4.1 If any circumstances arise in respect of the Bank which would or upon
       the giving of notice would, result in the operation of Clause 11.1, 11.2,
       11.3 or 12.9 to the detriment of Newco, then the Bank shall:

       (a)    promptly upon becoming aware of those circumstances and their
              results, notify Newco; and

       (b)    in consultation with Newco, take all such steps as it determines
              are reasonably open to it to mitigate the effects of those
              circumstances (including changing its Lending Office or consulting
              with Newco with a view to transferring some or all of its rights
              and obligations under this Agreement to another bank or other
              financial institution acceptable to Newco) in a manner which will
              avoid the circumstances in question and on terms acceptable to
              Newco and the Bank.

                                     - 29 -
<PAGE>
       provided that the Bank shall not be obliged to take any steps which in
       its opinion would or would reasonably be expected to have an adverse
       effect on its business or financial condition or the management of its
       Tax affairs or cause it to incur any material costs or expenses.

11.4.2 Nothing in this Clause 11.4 shall limit. reduce, affect or otherwise
       qualify the rights of the Bank or the obligations of Newco under Clauses
       11.1, 11.2, 11.3 and 12.9.

11.5   CERTIFICATES

       The certificate or notification of the Bank as to any of the matters
       referred to in this Clause 11 shall be in reasonable detail and shall be
       conclusive and binding on Newco except for any manifest error.

12.    PAYMENTS

12.1   FUNDS

       All payments under this Agreement shall be made for value on the due date
       in freely transferable and readily available funds.

12.2   PAYMENTS

12.2.1 Each payment to Newco shall be made to its account at such office or bank
       as it may notify to the Bank for this purpose by not less than 5
       Business Days' prior notice.

12.2.2 Each payment to the Bank shall be made to The Governor and Company of the
       Bank of Scotland of 38 Threadneedle Street, London EC2P 2EH for the
       account of the Bank, account number 85725.

       CHANGE OF ACCOUNT

       Newco or the Bank may change its receiving account by not less than 5
       Business Days' notice to the other.

12.4   BUSINESS DAYS

       If a payment under this Agreement is due on a day which is not a Business
       Day, the due date for that payment shall instead be the next Business Day
       in the same calendar month (if there is one) or the preceding Business
       Day (if there is not).

       CURRENCY

       All payments relating to costs, losses, expenses or Taxes shall be made
       in the currency in which the relative costs, losses, expenses or Taxes
       were incurred. Any other amount payable under this Agreement shall,
       except as otherwise provided, be made in Sterling.

12.6   ACCOUNTS AS EVIDENCE

       The Bank shall maintain in accordance with its usual practice an account
       which shall, as between Newco and the Bank, be prima facie evidence of
       the amounts from time to time advanced by, owing to, paid and repaid to
       the Bank under this Agreement.

                                     - 30 -
<PAGE>
12.7   PARTIAL PAYMENTS

12.7.1 If the Bank receives a payment insufficient to discharge all the amounts
       then due and payable by Newco under this Agreement. the Bank: shall
       apply that payment towards the obligations of Newco in the following
       order:

       (a)    first, in or towards payment of any unpaid costs and expenses of
              the Bank under this Agreement;

       (b)    second, in or towards payment pro rata of any accrued interest due
              by Newco but unpaid under this Agreement;

       (c)    third, in or towards payment pro rata of any principal due by
              Newco but unpaid under this Agreement; and

       (d)    fourth, in or towards payment pro rata of any other sum due by
              Newco but unpaid under the Financing Documents.

12.7.2 The Bank may vary the order set out in Clauses 12.7.1(a) to (d).

12.7.3 Clauses 12.7.1 and 12.7.2 shall override any appropriation made by Newco.

12.8   SET-OFF AND COUNTERCLAIM

       All payments by Newco under this Agreement shall be made without set-off
       or counterclaim.

12.9   GROSSING-UP

12.9.1 Subject to Clause 12.9.2, all sums payable to the Bank pursuant to or in
       connection with any Financing Document shall be paid in full free and
       clear of all deductions or withholdings whatsoever except only as may be
       required by law.

12.9.2 If any deduction or withholding is required by law in respect of any
       payment due from Newco to the Bank pursuant to or in connection with any
       Financing Document, Newco shall:

       (a)    ensure or procure that the deduction or withholding is made and
              that it does not exceed the minimum legal requirement therefor;

       (b)    pay, or procure the payment of, the full amount deducted or
              withheld to the relevant Taxation or other authority in accordance
              with the applicable law;

       (c)    increase the payment in respect of which the deduction or
              withholding is required so that the net amount received by the
              Bank after the deduction or withholding (and after taking account
              of any further deduction or withholding which is required to be
              made as a consequence of the increase) shall be equal to the
              amount which the Bank would have been entitled to receive in the
              absence of any requirement to make any deduction or withholding;
              and

       (d)    promptly deliver or procure the delivery to the Bank of receipts
              evidencing each deduction or withholding which has been made.

                                     - 31 -
<PAGE>
12.9.3 Newco shall not be required to pay an additional amount under this Clause
       12.9 if the payment in respect of which the deduction or withholding is
       required is a payment of interest on an Advance and:

       (a)    at the time that Advance was made, the Bank was not a Qualifying
              Bank otherwise than as a consequence of a Change occurring after
              the date of this Agreement (and the obligation to deduct or
              withhold would not have arisen if that Advance had been made by a
              Qualifying Bank); or

       (b)    at the time when the interest is paid, the Bank is not
              beneficially entitled to it or, being beneficially entitled to it,
              the Bank is not within the charge to United Kingdom corporation
              tax as respects it otherwise than as a consequence of a Change
              occurring after the date of this Agreement (and the obligation to
              deduct or withhold would not have arisen if the Bank had been
              beneficially entitled to the interest and had been within the
              charge to United Kingdom corporation tax as respects it).

12.9.4 If the Bank determines, in its absolute discretion, that it has received,
       realised, utilised and retained a Tax benefit by reason of any deduction
       or withholding in respect of which Newco has made an increased payment
       under this Clause 12.9. the Bank shall, provided that it has received
       all amounts which are then due and payable by the obligors under any
       Financing Document, pay to Newco (to the extent that the Bank can do so
       without prejudicing the amount of the benefit or repayment and the right
       of the Bank to obtain any other benefit, relief or allowance which may be
       available to it) such amount, if any, as the Bank, in its absolute
       discretion shall determine, will leave the Bank in no worse position than
       it would have been in if the deduction or withholding had not been
       required, provided that:

       (a)    the Bank shall have an absolute discretion as to the time at which
              and the order and manner in which it realises or utilizes any Tax
              benefit and shall not be obliged to arrange its business or its
              Tax affairs in any particular way in order to be eligible for any
              credit or refund or similar benefit;

       (b)    the Bank shall not be obliged to disclose any information
              regarding its business Tax affairs or Tax computations;

       (c)    if the Bank has made a payment to Newco pursuant to this Clause
              12.9.4 on account of any Tax benefit and it subsequently
              transpires that the Bank did not receive that Tax benefit, or
              received a lesser Tax benefit, Newco shall, on demand, pay to the
              Bank such sum as the Bank may determine as being necessary to
              restore its after-tax position to that which it would have been
              had no adjustment under this Clause 12.9.4 been made. Any sums
              payable by Newco to the Bank under this Clause 12.9.4 shall be
              subject to Clause 18.7.

12.9.5 The Bank shall not be obliged to make any payment under Clause 12.9.4
       if, by doing so, it would contravene the terms of any applicable law or
       any notice, direction or requirement of any governmental or regulatory
       authority (whether or not having the force of law).

12.9.6 If Newco is required to make an increased payment for the account of the
       Bank under Clause 12.9.2. then, without prejudice to that obligation and
       so long as such requirement exists and subject to Newco giving the Bank
       not less than 10 days' prior notice (which shall be irrevocable). Newco
       may prepay all or part (but if in part in a minimum amount of pounds
       sterling 500,000 and an integral multiple of pounds sterling 500,000) of
       the Advances together with accrued interest on the amount prepaid. Any
       such prepayment shall be subject to Clause 23.1. On

                                       32
<PAGE>
       any such prepayment the Term Loan and Guarantee Facility Limit and the
       Capex Facility Limit shall be reduced accordingly.

13.    SECURITY

13.1   SECURITY DOCUMENTS

       The obligations and liabilities of Newco to the Bank under the Financing
       Documents shall be secured by the interests and rights granted in favour
       of the Bank under the Security Documents.

13.2   INTEREST RATE PROTECTION AGREEMENTS

       All obligations and liabilities of Newco to the Bank under or in
       connection with any Interest Rate Protection Agreement shall be treated,
       for all purposes (other than Clauses 12.7 and 18.1), as obligations and
       liabilities incurred under this Agreement and, for the avoidance of
       doubt, Newco's obligations and liabilities under any Interest Rate
       Protection Agreement shall be secured obligations and liabilities under
       the Security Documents and for such purposes any reference in any
       Security Document to the Bank shall be deemed to include the Bank as a
       party to the relevant Interest Rate Protection Agreements.

14.    REPRESENTATIONS AND WARRANTIES

14.1   REPRESENTATIONS AND WARRANTIES

       Newco represents and warrants to the Bank that:

       (a)    STATUS: each Group Company is a limited company duly incorporated
              under the laws of England and Wales, and it possesses the capacity
              to sue and be sued in its own name and has the power to carry on
              its business and to own its property and other assets;

       (b)    POWERS AND AUTHORITY: each Charging Group Company has power to
              execute, deliver and perform its obligations under the Transaction
              Documents to which it is a party and to carry out the transactions
              contemplated by those documents and all necessary corporate,
              shareholder and other action has been or will be taken to
              authorise the execution, delivery, and performance of the same;

       (c)    BINDING OBLIGATIONS: subject to the Reservations, the obligations
              of each Charging Group Company under the Transaction Documents
              constitute its legal, valid, binding and enforceable obligations;

       (d)    CONTRAVENTIONS: the execution, delivery, and performance by each
              Charging Group Company of the Transaction Documents does not:

              (i)    contravene any applicable law or regulation or any order of
                     any governmental or other official authority, body or
                     agency or any judgment, order or decree of any court having
                     jurisdiction over it;

                                      -33 -
<PAGE>
              (ii)   conflict in any material respect with, or result in any
                     breach of any of the terms of, or constitute a default
                     under, any agreement or other instrument to which it is a
                     party or any licence or other authorisation to which it is
                     subject or by which it or any of its property is bound; or

              (iii)  contravene or conflict with the provisions of its
                     memorandum and articles of association;

       (e)    INSOLVENCY: no Group Company has taken any action nor have any
              steps been taken or legal proceedings been started or threatened
              against it for winding-up, dissolution or re-organisation, the
              enforcement of any Encumbrance over its assets or for the
              appointment of a receiver, administrative receiver, or
              administrator, trustee or similar officer of it or of any of its
              assets;

       (f)    NO DEFAULT: no Group Company is (nor would be with any of the
              giving of notice, the lapse of time, the determination of
              materiality, or the satisfaction of any other condition) in breach
              of or in default under any agreement to which it is a party or
              which is binding on it or any of its assets in a manner or to an
              extent which would reasonably be expected to have a Material
              Adverse Effect;

       (g)    LITIGATION: no action, litigation. arbitration or administrative
              proceeding has been commenced, or, to the best of Newco's
              information, knowledge and belief, is pending or threatened,
              against any Group Company which, if decided adversely, would
              reasonably be expected to have a Material Adverse Effect nor is
              there subsisting any unsatisfied judgment or award given against
              any of them by any court, arbitrator or other body which would
              reasonably be expected to have a Material Adverse Effect;

       (H)    ACCOUNTS:

              (i)    each of the latest Accounts is prepared in accordance with
                     GAAP and gives a true and fair view of the financial
                     position of the relevant Charging Group Company as at the
                     date to which they were prepared and for the Financial Year
                     of that company then ended; and

              (ii)   each of the latest set of Management Accounts shows with
                     reasonable accuracy the financial position of the Group or
                     as the case may be, the relevant Charging Group Company
                     during the period to which it relates;

       (i)    ENCUMBRANCES: no Encumbrance other than a Permitted Encumbrance
              exists over all or any part of the assets of any Group Company;

       (j)    NO ENCUMBRANCES CREATED: the execution of the Financing Documents
              by the Charging Group Companies and the exercise of each of their
              respective rights and the performance of each of their respective
              obligations under the Financing Documents will not result in the
              creation of, or any obligation to create, any Encumbrance (other
              than under the Security Documents) over or in respect of any of
              their assets;

       (k)    AUTHORISATIONS: other than the registration of particulars of the
              Security Documents at the Companies Registration Office pursuant
              to section 395 of the

                                      -34-
<PAGE>
              Act, registrations of particulars of the Security Documents at the
              Land Registry, the giving of notice in respect of any contracts
              being assigned, the stamping of the Acquisition Agreement, all
              authorisations, approvals, licences, consents, filings,
              registrations, payment of duties or taxes and notarisations
              required.

              (i)    for the conduct of the business, trade and ordinary
                     activities of each Group Company except to the extent that
                     failure to make, pay or obtain the same would not have a
                     Material Adverse Effect;

              (ii)   for the performance and discharge of the obligations of
                     each Group Company under the Financing Documents to which
                     it is a party; and

              (iii)  in connection with the execution, delivery, validity,
                     enforceability or admissibility in evidence of the
                     Financing Documents,

        are in full force and effect:

       (1)    TAXES: each Group Company has complied with all Taxation laws in
              all jurisdictions in which it is subject to Taxation and has paid
              all Taxes due and payable by it and no claims are being asserted
              against it in respect of Taxes except for assessments in relation
              to the ordinary course of its business or claims contested in good
              faith and in respect of which adequate provision has been made and
              disclosed in the latest Accounts or other information delivered to
              the Bank under this Agreement;

       (m)    ACCOUNTING REFERENCE DATE: the accounting reference date of each
              Group Company is 31st December;

       (n)    CORPORATE STRUCTURE: immediately prior to Completion, Newco has
              had no Subsidiaries and:

              (i)    the details of Aspen and its Subsidiaries set out in
                     Schedule 3 are accurate and complete in all respects;

              (ii)   Aspen has no Subsidiaries other than those companies,
                     relevant details of which arc set out in Part 11 of
                     Schedule 3: and

              (iii)  each company (if any) listed in Part 11 of Schedule 3 is a
                     Dormant Subsidiary;

       (o)    NEWCO: prior to the date of this Agreement, Newco has not traded
              nor undertaken any commercial activities of any kind and (except
              as contemplated by, or otherwise in connection with, this
              Agreement and the other Transaction Documents and the transactions
              contemplated by this Agreement or by the other Transaction
              Documents) has no liabilities or obligations, actual or
              contingent;

       (p)    STATUTORY DECLARATIONS: each of the directors of each company
              listed in Part 1 of Schedule 3 has properly made the statutory
              declarations required to be made by him under section 155 of the
              Act and has otherwise procured compliance with all the relevant
              provisions of the Act in relation to the lawful giving of
              financial assistance directly or indirectly for the purpose of
              reducing or discharging Newco's liability incurred in connection
              with its acquisition of Aspen Shares;

                                     - 35 -
<PAGE>
       (q)    ENVIRONMENTAL: each Group Company has and has at all times
              complied with all applicable Environmental Law, non-compliance
              with which would reasonably be expected to have a Material Adverse
              Effect, Every consent, authorisation, licence or approval required
              under or pursuant to any Environmental Law by each Group Company
              in connection with the conduct of its business and the ownership,
              use, exploitation or occupation of its assets the absence or lack
              of which would reasonably be expected to have a Material Adverse
              Effect, has been obtained and is in full force and effect, there
              had been no default in the observance of the conditions and
              restrictions (if any) imposed in, or in connection with, and, of
              the same and, to the best of Newco's information, knowledge and
              belief, no circumstances have arisen (i) which would entitle any
              person to revoke, suspend, amend, vary, withdraw or refuse to
              amend any of the same or (ii) which might give rise to a claim
              against any Group Company which would reasonably be expected to
              have a Material Adverse Effect having regard to the cost to that
              Group Company of meeting such a claim; and

       (r)    NO MATERIAL ADVERSE CHANGE: since 31st December 1998 no event has
              occurred which has had or would be reasonably expected to have a
              Material Adverse Effect.

14.2   REPETITION

       The representations and warranties set out in Clause 14.1 shall survive
       the execution of this Agreement and shall be deemed to be repeated as
       follows:

       (a)    each of the said representations and warranties shall be deemed to
              be repeated on the first Drawdown Date; and

       (b)    each of the said representations and warranties (other than those
              made under Clauses 14.1(c), (f), (g), (i), (j), (k), (1), (m),
              (n), (o), (p), (q), (r) and (s) inclusive) shall be repeated on
              each Interest Date,

       in each case, as if made with reference to the facts existing at the time
       of repetition.

15.    UNDERTAKINGS

15.1   INFORMATION UNDERTAKINGS

       Newco undertakes that during the Security Period it shall, unless the
       Bank otherwise agrees:

       (a)    ACCOUNTS: as soon as the same become available (and in any event
              within 180 days after the end of each of its Financial Years),
              deliver to the Bank the Accounts for each such Financial Year of
              Newco, Aspen and each other Charging Group Company together with:

              (i)    the unconsolidated profit and loss account for Newco for
                     each such Financial Year; and

              (ii)   a copy of the management letter (if any) addressed by the
                     auditors to the directors of each such company in
                     connection with its auditing of

                                     - 36 -
<PAGE>
              the relevant Accounts as soon as reasonably practicable after
              receipt of the letter by such company:

       (b)    Management accounts: as soon as the same become available (and in
              any event within 45 days after each Quarter Date, deliver to the
              Bank the management accounts (the MANAGEMENT ACCOUNTS) of Newco
              (in which case such management accounts shall be consolidated
              management accounts relating to the Group) and of Aspen and each
              other Charging Group Company for each such Accounting Period and
              in such a form as to disclose with reasonable accuracy the
              financial position of the Group or, as the case may be, the
              relevant company and which shall include the following information
              in respect of each such quarter:

              (i)    a statement of profit and loss:

              (ii)   a balance sheet;

              (iii)  a cashfow statement: and

              (iv)   a commentary prepared by the Management of the Group's
                     activities during such quarter,

       together with a comparison, where appropriate, of all such information
       with the estimates, forecasts and projections in the relevant Operating
       Budget (or any replacement or substitution made therefor) in relation to
       each such quarter including an analysis justifying any variations
       therefrom and, if necessary, revised estimates, forecasts and
       projections:

(c)    OPERATING BUDGETS:

              (i)    in the case of Newco only, provide to the Bank (in a format
                     agreed by the Bank prior to tile date of this Agreement) an
                     Operating Budget for each of its Financial Years during
                     the Security Period, within 45 days after the start of
                     each such Financial Year, together with a comparison of the
                     information, estimates, forecasts and projections contained
                     therein with any relevant information, estimates, forecasts
                     and projections provided to the Bank pursuant to Clause
                     2(b) of Schedule 1 to this Agreement including an analysis
                     justifying any variations therefrom; and

              (ii)   if any Group Company shall determine that any of the
                     estimates, forecasts or projections made in relation to any
                     of its Financial Years should be different from those set
                     out in the then current Operating Budget (or any
                     substitution therefor subsequently made and agreed by the
                     Bank), provide to the Bank revised estimates, forecasts or
                     projections in respect of any part of each such Financial
                     Year and such revised estimates, forecasts or projections
                     shall apply immediately following their approval by the
                     boards of directors of the relevant company:

       (d)    INFORMATION ON REQUEST: promptly following the Bank's request,
              provide to the Bank such other information. estimates, forecasts
              or projections in relation to any

                                     - 37 -
<PAGE>
              Group Company and any of their respective businesses, assets,
              financial condition, ownership or prospects as the Bank may
              reasonably require:

       (e)    COMPLIANCE CERTIFICATES: in the case of Newco only, provide to the
              Bank within 45 days of each Quarter Date a certificate (a
              COMPLIANCE CERTIFICATE) executed under the authority of the board
              of directors of Newco certifying that in relation to the 3 month
              period ending on each such Quarter Date all the financial
              undertakings under Clause 15.4 of this Agreement are for the time
              being complied with and including calculations relating to the
              financial undertakings set out in Clause 15.4: (For the purpose of
              this Clause 15.1(e) the calculations shall be made by reference
              the Management Accounts prepared for the 3 month period in
              relation to which the relevant Compliance Certificate is to be
              given and, in relation to a Compliance Certificate given in
              relation to the last 3 months in any Financial Year of Newco,
              Newco shall procure that the Auditors shall, if they are so
              satisfied, confirm when delivering the relevant Accounts, in a
              confirmation addressed to the Bank, that the calculations
              contained in the relevant certificate arc in their opinion, based
              on the Accounts, fair and reasonable provided that if there have
              been any breaches of those undertakings at any time during the
              period to which that certificate relates then Newco shall include
              in that certificate relevant details of all those breaches);

       (f)    GAAP: ensure that all Accounts and the Management Accounts
              submitted to the Bank have been prepared in accordance with GAAP;
              and

       (g)    NOTIFICATION: promptly, upon becoming aware of the same, notify
              the Bank of:

              (i)    any Default or Potential Default:

              (ii)   any litigation, arbitration or administrative proceeding
                     commenced against any Group Company which would reasonably
                     be expected to have a Material Adverse Effect;

              (iii)  any Encumbrance (other than a Permitted Encumbrance)
                     attaching to any of the assets of any Group Company;

              (iv)   any other occurrence relating to a Group Company (including
                     any third party claim or liability) which would reasonably
                     be expected to have a Material Adverse Effect;

              (v)    any individual item of Capital Expenditure incurred by the
                     Group in excess of pounds sterling 250,000; and

              (vi)   any Capital Expenditure incurred by the Group in relation
                     to an item which, in relation to such item, exceeds the
                     amount set out in the financial projections provided by
                     Newco to the Bank.

                                     - 38 -
<PAGE>
15.2   POSITIVE UNDERTAKINGS

       Newco undertakes that during the Security Period it shall. and it shall
       procure that each Group Company shall. unless the Bank otherwise agrees

       (a)    PAY TAXES: pay and discharge all Taxes and governmental charges
              payable by or assessed upon it prior to the date on which the same
              become overdue unless, and only to the extent that. such Taxes and
              charges shall be contested in good faith by appropriate
              proceedings. pending determination of which payment may lawfully
              be withheld, and there shall (if the Auditors so advise) be set
              aside adequate reserves with respect to any such Taxes or charges
              so contested in accordance with GAAP.

       (b)    INSURANCE: ensure that insurance is maintained in accordance with
              the Security Documents and, in the case of Aspen Healthcare
              Limited only, maintain medical mal-practice insurance with an
              insurance company approved by the Bank (acting reasonably) and
              Newco will ensure that at all times the aggregate cover for the
              Group Companies shall not fall below pounds sterling3.000.000 and
              will. on an annual basis, take proper advice as to whether such
              cover should be increased (communicating the substance of such
              advice to the Bank) and will, at the Bank's request, increase the
              cover in accordance with such advice:

       (c)    AUTHORISATIONS: obtain, maintain and comply with the terms of any
              authorisation, approval, licence, operating certificates, consent,
              exemption, clearance, filing or registration required:

              (i)    for the conduct of its business, trade and ordinary
                     activities. save to the extent that failure to obtain,
                     maintain or comply with the same would reasonably be
                     expected not to have a Material Adverse Effect; and

              (ii)   to enable it to perform its obligations under. or for the
                     validity, enforceability or admissibility in evidence of.
                     any Financing . Document;

       (d)    ACCESS: upon reasonable notice being given to Aspen by the Bank.
              permit the Bank and any person (being an accountant, auditor.
              Solicitor, valuer or other professional adviser of the Bank)
              authorised by the Bank to have, at all reasonable times during
              normal business hours. access to the property (including the
              Properties), premises and accounting books and records of any
              Group Company and to the Management:

       (e)    FURTHER DOCUMENTS: at the request of the Bank. do or procure the
              doing of all such things and execute or procure the execution of
              all such documents as are, in the opinion of the Bank, necessary
              or desirable to ensure that the Bank obtains all its rights and
              benefits under the Financing Documents:

       (f)    DELIVERY OF DECLARATIONS, ETC: within any relevant period laid
              down in any statute, law or regulation applicable in the United
              Kingdom make all necessary declarations and deliver all necessary
              forms and documents required to be delivered to, filed with or
              registered with any United Kingdom governmental, statutory or
              other body or agency by it in connection with the Transaction

                                      -39-
<PAGE>
       Documents and any of the transactions contemplated under the Transaction
       Documents:

       (g)    COMPLIANCE WITH ENVIRONMENTAL LAW: comply in all material respects
              with Environmental Law.

       (h)    DANGEROUS MATERIALS: ensure that all Dangerous Materials treated,
              kept and stored, produced, manufactured, generated, refined or
              used from, in, upon. or under any of the real property owned by a
              Group Company are held and kept upon such real property in such a
              manner and up to such standards as they would be kept by a prudent
              company carrying on the same trade as that Group Company;

       (i)    COMPLIANCE WITH SECTION 151 OF THE ACT: comply in all respects
              with sections 151 to 158 inclusive of the Act, including in
              relation to the execution of the Security Documents and the
              payment of amounts due under this Agreement;

       (j)    AUDITORS' CONFIRMATION: use all reasonable endeavours to procure
              that, within 10 Business Days of the date of appointment as
              auditors of any Charging Group Company, the relevant accountants
              deliver to the Bank a letter from such newly appointed auditors
              confirming that they arc aware of the provisions of Clauses 1 and
              15.4.1 of this Agreement;

       (k)    DORMANT COMPANIES: procure that none of the companies set out in
              Part ll of Schedule 3 cease being a Dormant Subsidiary, other than
              as a result of a liquidation of any such company which would not
              be a Default, and do not acquire any assets and do not assume any
              liabilities or if any such company ceases to be a Dormant
              Subsidiary, procure that such company delivers a duly executed
              Guarantee and Debenture to the Bank within 10 Business Days of
              ceasing to be a Dormant Subsidiary: and

       (l)    HEDGING: within 3 months of Completion procure that Newco enter
              into interest rate protection agreements in accordance with the
              interest rate management strategy agreed with the Bank before the
              date of this Agreement in relation to at least 50 percent of the
              Term Loan and complies with and discharges its obligations and
              liabilities under those agreements.

15.3   NEGATIVE UNDERTAKINGS

       Newco undertakes that during the Security Period it shall not, and it
       shall procure that none of the Group Companies shall, unless the Bank:
       otherwise agrees:

       (a)    NEGATIVE PLEDGE: create or permit to subsist any Encumbrance over
              any of its assets other than Permitted Encumbrances:

       (b)    DISPOSAL OF ASSETS: make a Disposal without the prior consent of
              the Bank other than:

              (i)    in the ordinary course of its trading activities: or

              (ii)   a Disposal to a Charging Group Company; or

                                     - 40 -
<PAGE>
              (iii)  a Disposal of an asset (not being a Disposal of real
                     property) which is obsolete for the purpose for which such
                     an asset is normally utilised: or

              (iv)   a Disposal of cash on terns not otherwise prohibited by
                     this Agreement: or

              (v)    a Disposal on arm's length terms where the aggregate
                     value of the assets the subject of a Disposal by Group
                     Companies other than in accordance with paragraphs (i) to
                     (iv) above in any Financial Year of Newco does not exceed
                     pounds sterling 50.000 (for the purposes of this paragraph,
                     the value of any asset shall be the greater of its book
                     value and the consideration received for it):

       (c)    CHANGE OF BUSINESS: make any substantial change to the general
              nature or scope of the business of the Group as a whole from that
              carried on at the date of this Agrecmcnt;

       (d)    MERGERS: enter into (a) any amalgamation, demerger, merger or
              reconstruction or (b) any joint venture or partnership agreement
              which relates to a material part of the assets or revenues of the
              Group taken as a whole:

       (e)    FEES: pay any fees or commissions to any person other than (i) on
              open market terms and for the purpose of and in the ordinary
              course of its trade or (ii) fees incurred under or in connection
              with any Transaction Document;

       (f)    LOANS: make any loans or grant any credit to or for the benefit of
              any person. other than:

              (i)    amounts of credit allowed by the relevant company in the
                     normal course of its trading activities: or

              (II)   loans made by one Charging Group Company to another
                     Charging Group Company: or

              (iii)  loans made by a Group Company which is not a Charging Group
                     Company to another such Group Company: or

              (iv)   loans made by a Group Company to its employees where such
                     loans do not, when aggregated with all such loans made by
                     all Group Companies, exceed pounds sterling 50,000 at any
                     time:

       (g)    INDEBTEDNESS: incur or permit to subsist any Indebtedness other
              than Permitted Indebtedness:

       (h)    INCORPORATION OF SUBSIDIARIES: incorporate any company as its
              Subsidiary (except where such company upon its incorporation
              executes, subject to, and to the extent permitted under, all
              applicable laws, a Guarantee and Debenture (or the equivalent
              documents (in a form approved by the Bank) under the laws of the
              jurisdiction of that company's incorporation) and delivers the
              same to the Bank together with, in the latter case, a legal
              opinion (in a form and content satisfactory to the Bank) from
              lawyers appointed by the Bank:

                                      -41 -
<PAGE>
       (i)    ACQUISITIONS: acquire any business of, or shares or securities of,
              any company (other than a Charging Group Company).

       (j)    DIVIDENDS: in respect of Newco only, make, pay or declare any
              dividend or other distribution in relation to any, shares forming
              part of its issued share capital unless:

              (i)    no Default or Potential Default has occurred and is
                     continuing or would occur as a result; and

              (ii)   either the aggregate of all such dividends and
                     distributions in any Financial Year of Newco does not
                     exceed 25 per cent. of the retained earnings of Newco in
                     that Financial Year or the amount of any further such
                     dividend or distribution has previously been agreed in
                     writing by the Bank.

       (k)    LOAN NOTES: in respect of Newco only pay any interest in respect
              of the Loan Notes provided that Newco shall pay interest on the
              Loan Notes in accordance with the terns of the Loan Note
              Instrument, so long as:

                     (A)    no sum is due and unpaid under this Agreement;

                     (B)    no Default or Potential Default has occurred and is
                            continuing;

                     (C)    the payment of such interest will not in the period
                            of 6 months immediately following the payment of
                            such interest result in a breach of any of the
                            financial undertakings contained in Clause 15.4.1
                            and the directors of Newco issue a certificate to
                            the Bank to that effect; and

                     (D)    Newco shall have delivered to the Bank one or more
                            Compliance Certificates in relation to the period in
                            respect of which such interest is to be paid
                            (including the provision of any applicable Auditor's
                            confirmation) at least 5 Business Days prior to the
                            date on which such interest on the Loan Notes is to
                            be paid.

       (1)    VARIATION OF TRANSACTION DOCUMENTS: permit or effect any
              variations, novations or amendments to the Loan Note Instrument
              and the Loan Notes; nor

       (m)    OPERATING LEASE PAYMENTS: other than under leases of real
              property, make a payment under any hire agreement, credit sale
              agreement, hire purchase agreement, conditional sale agreement or
              instalment sale and purchase agreement which is not a Finance
              Lease if the aggregate of all such payments made by the Group
              Companies will exceed, in any Financial Year of Newco, pounds
              sterling 200,000

15.4   FINANCIAL UNDERTAKINGS

15.4.1 Newco undertakes to ensure that during the Security Period. unless the
       Bank otherwise agrees:

                                      -42-
<PAGE>
       (a)    PBIDT TO TOTAL DEBT COSTS

              PBIDT shall not be less than 200 per cent of Total Debt Costs for
              each period of 12 months ending on each Quarter Date on or prior
              to the 31st March 2002 and PBITD shall not be less than 250 per
              cent of Total Debt Costs for each period of 12 months ending on
              each Quarter Date after 31st March 2002, the first such 12 month
              period ending on 30 June 2000:

       (b)    LOAN TO PBIDT

              During the periods set out below. the Loan (which, for the purpose
              of this Clause 15.4.1(b), prior to the earlier of (i) practical
              completion of the construction of the cancer centre at Parkside
              and (ii) the opening of the cancer centre at Parkside, shall be
              deemed to exclude the Capex Loan) shall not exceed the following
              percentages of PBIDT:

              (i)    for the period of 3 months ending on 30 June 2000, 550 per
                     cent. (calculated on an annualised basis);

              (ii)   for the period of 6 months ending on 30 September 2000, 550
                     per cent. (calculated on an annualised basis);

              (iii)  for the period of 9 months ending on 31 December 2000. 550
                     per cent. (calculated on an annualised basis);

              (iv)   for each period of 12 months ending on each Quarter Date
                     after 31 December 2000 but on or prior to 31 March 2002,
                     550 per cent.;

              (v)    for each period of 12 months ending on each Quarter Date
                     after 31 March 2002 but on or prior to 31 March 2004, 500
                     per cent.; and

              (vi)   for each period of 12 months ending on each Quarter Date
                     after 31 March 2004, 450 per cent.

       (c)    FINANCE LEASE EXPENDITURE

              no Group Company shall incur any Finance Lease Expenditure if it
              would result in the aggregate Finance Lease Expenditure incurred
              by the Group Companies at any time exceeding pounds sterling
              2,500,000; and

       (d)    CASHFLOW TO TOTAL FUNDING COSTS

              the ratio of Cashflow to Total Funding Costs for each period of 12
              months ending on the 31st December in each year in each year
              shall not be less than 1.25:1.

15.4.2 (a)    If the directors of any Group Company determine at any time during
              the Security Period that the accounting reference date of that
              Group Company has or should be changed or any of the accounting
              principles applied in the preparation of any of the Accounts and
              the Management Accounts shall be different from the Accounting
              Principles, or if as a result of the introduction or
              implementation of

                                     - 43 -
<PAGE>
              any SSAP or FRS or any change in any of them or in any applicable
              law such accounting principles are required to be changed. Newco
              shall promptly give notice to the Bank of that change,
              determination or requirement.

       (b)    If the Bank believes that the financial undertakings set out in
              this Clause 15.4 need to be amended as a result of any such
              change, determination or requirement, Newco shall negotiate with
              the Bank in good faith to amend the existing financial
              undertakings so as to provide the Bank with substantially the same
              protections as the financial undertakings set out in this Clause
              15.4 (but which are not materially more onerous).

       (c)    If Newco and the Bank cannot agree such amended financial
              undertakings within 30 days of that notice, Newco and the Bank
              shall jointly nominate a firm of chartered accountants to settle
              the amended financial undertakings, or in default of such
              nomination the Bank shall request the President for the time being
              of the Institute of Chartered Accountants in England and Wales to
              nominate a firm of chartered accountants for that purpose. Such
              accountants shall act as experts and not arbitrators and their
              decision shall be final and binding on the Parties. The costs of
              such accountants shall be paid by Newco.

15.4.3 The calculation of ratios and other amounts under this Clause 15.4 shall
       be made by the Bank by reference to the latest Accounts and Management
       Accounts of the Group Companies for the Financial Year of Newco. or other
       period in relation to which the calculation falls to be made. Each
       determination of the Bank under this Clause 15.4 shall be conclusive and
       binding on Newco except for any manifest error.

16.    DEFAULT

16.1   DEFAULT

       Each of the following shall be a Default:

       (a)    NON-PAYMENT: Newco does not pay on the due date any amount
              payable by it under this Agreement at the place at and in the
              currency and funds in which it is expressed to be payable unless
              the failure to pay such amount is due solely to administrative or
              technical delays in the transmission of funds and such amount is
              paid within 3 Business Days after its due date for payment; or

       (b)    OTHER DEFAULTS: any Charging Group Company breaches any of its
              obligations under any Financing Document (other than the
              obligations referred to in Clause 16.1(a)) and, if that breach is
              capable of remedy, it is not remedied to the satisfaction of the
              Bank within 7 Business Days after any Charging Group Company
              becomes aware of such breach; or

       (c)    BREACH OF REPRESENTATION OR WARRANTY: any representation, warranty
              or statement made or deemed to be repeated by any Charging Group
              Company under any Financing Document is incorrect when made or
              deemed to have been repeated; or

                                      -44-
<PAGE>
       (d)    UNLAWFULNESS OR REPUDIATION: it is unlawful for any Charging Group
              Company to perform or comply with, or any Charging Group Company
              repudiates, any of its obligations under any Financing Document:
              or

       (e)    CROSS-DEFAULT: any Indebtedness of all or any of the Group
              Companies in excess of, in aggregate, sterling pounds 150,000:

              (i)    is not paid when due or within any originally applicable
                     grace period; or

              (ii)   is declared to be or otherwise becomes due and payable
                     prior to its specified maturity,

                     or any creditor of all or any of the Group Companies
                     becomes entitled to declare any such Indebtedness due and
                     payable prior to its specified maturity due to a default or
                     similar culpable occurrence; or

       (f)    ATTACHMENT OR DISTRESS: a creditor or encumbrancer attaches or
              takes possession of, or a distress, execution, sequestration or
              other process is levied or enforced upon or sued out against, any
              of the assets of any Group Company (having a value of at least
              pounds sterling 20,000) and such process is not discharged within
              7 days save where the same is being contested in good faith and by
              appropriate action and in a manner consistent with legal advice
              (Counsel having advised there is a good prospect of success); or

       (g)    ENFORCEMENT OF SECURITY: any Encumbrance (which in the case of any
              right of set-off, lien or retention of title provision is securing
              Indebtedness in excess of pounds sterling 50,000) over any of the
              assets of any Group Company becomes enforceable: or

       (h)    INABILITY TO PAY DEBTS: any Group Company (other than a Dormant
              Subsidiary):

              (i)    suspends payment of its debts or is unable or admits its
                     inability to pay its debts as they fall due; or

              (ii)   begins negotiations with any class of creditors with a view
                     to the readjustment or rescheduling of any of its
                     Indebtedness which it would not otherwise be able to pay
                     when due; or

              (iii)  proposes or enters into any composition or other
                     arrangement for the benefit of its creditors generally or
                     any class of creditors; or

       (i)    INSOLVENCY PROCEEDINGS: any person takes am action or any legal
              proceedings are started or other steps taken (including the
              presentation of a petition) for:

              (i)    any Group Company (other than a Dormant Subsidiary) to be
                     adjudicated or found insolvent; or

              (ii)   the winding-up or dissolution of any Group Company other
                     than (A) in respect of a Dormant Subsidiary, (B) in
                     connection with a solvent reconstruction, the terms of
                     which have been previously approved in writing by the Bank,
                     or (C) a winding-up petition which

                                     - 45 -
<PAGE>
                     is proved to the satisfaction of the Bank to be frivolous
                     or vexatious and which is, in any event, discharged within
                     14 days of its presentation and before it is advertised, or

              (iii)  the appointment of a trustee, receiver, administrative
                     receiver or similar officer in respect of any Group Company
                     or any of its assets; or

       (j)    ADJUDICATION OR APPOINTMENT: any adjudication is made or in
              relation to any proceeding under Clause 16.1(i)(i) or any order or
              appointment is made under or in relation to any of the proceedings
              referred to in Clause 16.1(ii) or (iii); or

       (k)    ADMINISTRATION ORDER: an application is made to the court for an
              administration order under the Insolvency Act 1986 with respect to
              any Group Company (other than a Dormant Subsidiary); or

       (1)    ANALOGOUS PROCEEDINGS: any event occurs or proceeding is taken
              with respect to any Group Company (other than a Dormant
              Subsidiary) in any jurisdiction to which it is subject which has
              an effect equivalent or similar to any of the events mentioned in
              Clause 16.1(f), (h), (i), (j) or (k); or

       (m)    CESSATION OF BUSINESS: any Group Company (other than a Dormant
              Subsidiary) suspends, ceases or threatens to suspend or cease to
              earn, on all or a substantial part of its business; or

       (n)    CHANGE OF CONTROL: a person (whether alone or together with any
              associated person or persons) becomes the beneficial owner of
              shares in the issued share capital of Newco carrying the right to
              exercise more than 50 per cent. of the votes exercisable at a
              general meeting of Newco (for the purposes of this Clause 16.1(n),
              ASSOCIATED PERSON means, in relation to any person, a person who
              is (i) "acting in concert" (as defined in the City Code on
              Takeovers and Mergers) with that person or (ii) a "connected
              person" (as defined in section 839 of the Income and Corporation
              Taxes Act 1988) of that person), without the prior written consent
              of the Bank; or

       (o)    MATERIAL ADVERSE CHANGE: any event or series of events occur which
              has or would reasonably be expected to have a Material Adverse
              Effect; or

       (p)    REDEMPTION OF SHARES BY NEWCO: Newco, without the prior written
              consent of the Bank, makes any redemption of any of its shares,
              purchases any of its shares or otherwise reduces its issued share
              capital.

16.2   ACCELERATION

       If a Default occurs and remains unremedied the Bank may by notice (a
       DEFAULT NOTICE) to Newco cancel the Facilities and require Newco
       immediately to repay each Loan (including any Fixed Funds Tranche)
       together with accrued interest and all other sums payable under this
       Agreement, whereupon they, shall become immediately due and payable. Upon
       the service of any Default Notice the Bank's obligations to Newco under
       this Agreement shall be terminated and the Term Loan and Guarantee
       Facility Limit, the Capex Facility Limit and the Overdraft Limit shall
       each be reduced to zero.

                                      -46-
<PAGE>
16.3   Immediately upon the Bank serving a Default Notice, Newco shall use its
       reasonable endeavours to procure the release of the Bank from its
       obligations under the Loan Notes Guarantee.

17.    SET-OFF

       The Bank may set off any matured obligation owed by Newco under any
       Financing Document against any obligation (whether or not matured) owed
       by the Bank to Newco, regardless of the place of payment, booking branch
       or currency of either obligation. If the obligations are in different
       currencies, the Bank may convert either obligation at the relevant spot
       rate of exchange of the Bank for the purpose of the set-off.

18.    FEES AND EXPENSES

18.1   EXPENSES

       Newco shall on demand pay all expenses incurred (including legal,
       valuation and accounting fees but, in relation to paragraphs (a) and (b)
       below, only to the extent the same arc reasonable in amount), and any VAT
       on those expenses:

       (a)    by the Bank in connection with the negotiation, preparation and
              execution of the Financing Documents and the other documents
              contemplated by the Financing Documents;

       (b)    by the Bank in connection with the granting of any release, waiver
              or consent or in connection with any amendment or variation of any
              Financing Document; and

       (c)    by the Bank in enforcing, perfecting, protecting or preserving
              (or attempting so to do) any of its rights, or in suing for or
              recovering any sum due from Newco or any other person under any
              Financing Document, or in investigating any possible Default or
              Potential Default.

18.2   ARRANGEMENT FEE

       Newco shall pay to the Bank any arrangement fee in accordance with the
       terms of the Fees Letter. For the avoidance of doubt, all liabilities and
       obligations of Newco under the Fees Letter shall be deemed to be incurred
       under this Agreement and shall be secured by the Security Documents.

18.3   MANAGEMENT FEE

       Newco shall pay to the Bank any annual management fee of pounds sterling
       15,000 per annum the first of such fees to be payable on the first
       anniversary of the date of this Agreement and thereafter on each
       subsequent anniversary of the date of this Agreement.

18.4   COMMITMENT FEE

       Newco shall pay a commitment fee in Sterling to the Bank at the rate of
       1.00 per cent. per annum on the Capex Facility Limit less the aggregate
       of all Capex Advances. The commitment fee shall be calculated on a day to
       day basis and a 365 day year in respect of

                                     - 47 -
<PAGE>
       the Capex Commitment Period and shall be payable in arrear on each
       Quarter Date and also on the last day of the Capex Commitment Period or
       any earlier date on which the Capex Facility Limit equals zero.

18.5   DOCUMENTARY TAXES INDEMNITY

       All stamp, documentary, registration or other like duties or Taxes.
       including any penalties, additions, fines, surcharges or interest
       relating to those duties and Taxes, which are imposed or chargeable on or
       in connection with any Financing Document shall be paid by Newco. The
       Bank shall be entitled but not obliged to pay any such duties or Taxes
       (whether or not they are its primary responsibility). If the Bank does so
       Newco shall on demand indemnify the Bank against those duties and Taxes
       and against any costs and expenses incurred by the Bank in discharging
       them.

18.6   VAT

18.6.1 All payments made by Newco under the Financing Documents are calculated
       without regard to VAT. If any such payment constitutes the whole or any
       part of the consideration for a taxable or deemed taxable supply (whether
       that supply is taxable pursuant to the exercise of an option or
       otherwise) by the Bank, the amount of that payment shall be increased by
       an amount equal to the amount of VAT which is chargeable in respect of
       the taxable supply in question.

18.6.2 No payment or other consideration to be made or furnished to Newco by the
       Bank pursuant to or in connection with any Financing Document or any
       transaction or document contemplated in any Financing Document may be
       increased or added to by reference to (or as a result of any increase in
       the rate of) any VAT which shall be or may become chargeable in respect
       of any taxable supply.

18.7   INDEMNITY PAYMENTS

       Where in any Financing Document Newco has an obligation to indemnify or
       reimburse the Bank in respect of any loss or payment, the calculation of
       the amount payable by way of indemnity or reimbursement shall take
       account of the likely Tax treatment in the hands of the Bank (as
       conclusively determined by the Bank) of the amount payable by way of
       indemnity or reimbursement and of the loss or payment in respect of which
       that amount is payable.

18.8   VALUATIONS AND APPOINTMENTS

18.8.1 The Bank may not more than once in any 12 month period (unless a Default
       is outstanding then it may at any time and from time to time) instruct
       valuers to undertake a valuation of the Properties or any of them and
       Newco shall forthwith on demand pay all reasonable fees, costs and
       expenses of each valuation and shall give to the valuer all such
       assistance as he may reasonably require to carry out any such valuation
       including allowing the valuer free access to the Properties on the valuer
       giving reasonable prior notice that such valuation is to be carried out.

18.8.2 The Bank may at any time and from time to time instruct such independent
       professional advisers as it may deem necessary for the protection of its
       interests under the Financing Documents and Newco shall forthwith on
       demand pay all reasonable fees, costs and expenses of each such
       appointment.

                                     - 48 -
<PAGE>
19     WAIVERS; REMEDIES CUMULATIVE

19.1   NO IMPLIED WAIVERS; REMEDIES CUMULATIVE

       The rights of the Bank: under the Financing Documents

       (a)    may be exercised as often as necessary;

       (b)    are cumulative and not exclusive of its rights under the general
              law; and

       (c)    may be waived only in writing and specifically.

       Delay in exercising or non-exercise of any such right is not a waiver of
       that right.

19.2   EURO CONVENTIONS

       if Sterling is, or is to be, replaced by the euro, the Bank may notify
       Newco that any references in this Agreement to a Business Day, day-count
       fraction or other convention (whether for the calculation of interest,
       determination of payment dates or otherwise) shall, if different, be
       amended to comply with any generally accepted conventions and market
       practice from time to time applicable to euro denominated obligations in
       the London interbank market. Upon such notification, this Agreement shall
       be deemed to be amended accordingly.

20.    MISCELLANEOUS

20.1   SEVERANCE

       if any provision of this Agreement is or becomes illegal, invalid or
       unenforceable in any jurisdiction, that shall not effect:

       (a)    the legality, validity or enforceability in that jurisdiction of
              any other provision of this Agreement; or

       (b)    the legality, validity or enforceability in any other jurisdiction
              of that or any other provision of this Agreement.

20.2   COUNTERPARTS

       This Agreement may be executed in any number of counterparts and this
       shall have the same effect as if the signatures on the counterparts were
       on a single copy of this Agreement.

20.3   THIRD PARTIES

       The parties to this Agreement do not intend that any term of this
       Agreement should be enforceable pursuant to the Contracts (Rights of
       Third Parties) Act 1999.

                                      -49-
<PAGE>
21.    NOTICES

21.1   METHOD

       Each notice or other communication to be given under this Agreement shall
       be given in writing in English and, unless otherwise provided, shall be
       made by fax or letter.

21.2   DELIVERY

       Any notice or other communication to be given by one Party to the other
       under this Agreement shall (unless one Party has by 15 days' notice to
       the other Party specified another address) be given to that other Party
       at the respective addresses given in Clause 21.3.

21.3   ADDRESSES

       The address and fax number of Newco and the Bank are:

       (A)    Newco:

              Global Healthcare Partners Limited
              Nicon House
              2nd Floor
              21 Worship Street
              London EC2A 2DW

              Attention: The Company Secretary
              Fax:       0207 353 7590

       (B)    the Bank:

              The Governor and Company of the Bank of Scotland
              38 Threadneedle Street
              London
              EC2P 2EH

              Attention: Ian Mitchelmore/Brian Gatward
              Fax:       020 7601 6317

21.4   DEEMED RECEIPT

21.4.1 Any notice or other communication given by the Bank shall be deemed to
       have been received:

       (a)    if sent by fax, with a confirmed receipt of transmission from the
              receiving machine, on the day on which transmitted;

       (b)    in the case of a notice given by hand, on the day of actual
              delivery; and

       (c)    if posted, on the second Business Day following the day on which
              it was despatched by first class mail postage prepaid.

                                     - 50 -
<PAGE>
              provided that a notice given in accordance with the above but
              received on a day which is not a Business Day or after normal
              business hours in the place of receipt shall be deemed to have
              been received on the next Business Day.

21.4.2 Any notice or other communication given to the Bank shall be deemed to
       have been given only on actual receipt.

22     ASSIGNMENTS AND TRANSFERS

22.1   BENEFIT OF AGREEMENT

       This Agreement shall be binding upon and enure to the benefit of each
       Party and its successors and assigns.

22.2   ASSIGNMENTS AND TRANSFERS BY NEWCO

       Newco shall not be entitled to assign or transfer any of its rights or
       obligations under this Agreement.

22.3   ASSIGNMENTS AND TRANSFERS BY BANK

22.3.1 Subject to Clause 22.3.2. the Bank may at any time, with the prior
       written consent of Newco (such consent not to be unreasonably withheld or
       delayed), assign any of its rights and benefits under the Financing
       Documents, or transfer any of its rights and obligations under the
       Financing Documents to another Bank; or other financial institution which
       is a Qualifying Bank provided that:

       (a)    the Bank or any other member of the Bank of Scotland Group (as
              defined in Clause 22.3.2 below) shall not assign or transfer to
              more than 3 banks or other financial institutions;

       (b)    the Bank or any other member of the Bank of Scotland Group shall
              retain not less than 50 per cent. of the Loan following any such
              assignment or transfer; and

       (c)    the amount that is assigned or transferred is not less than pounds
              sterling 2,000,000.

22.3.2 Notwithstanding Clause 22.3.1, no consent of Newco shall be required if
       the Bank assigns any of its rights and benefits under the Financing
       Documents or transfers any of its rights and obligations under the
       Financing Documents to any member of the Bank of Scotland Group. For the
       purposes of this Clause 22 BANK OF SCOTLAND Group means The Governor and
       Company of the Bank of Scotland and any of its Subsidiaries from time to
       time.

22.4   CONSEQUENCES OF TRANSFER

       Newco shall be under no obligation to pay any greater amount under this
       Agreement following an assignment or transfer by the Bank of any of its
       rights or obligations pursuant to this Clause 22 if, in the circumstances
       existing at the time of such assignment or transfer, such greater amount
       would not have been payable but for the assignment or transfer.

                                      -51-
<PAGE>
22.5   DISCLOSURE OF INFORMATION

       The Bank may disclose to its professional advisors, any member of the
       Bank of Scotland Group, and to any person with whom it is proposing to
       enter, or has entered into, any kind of assignment, transfer, novation or
       participation in relation to this Agreement, any information which the
       Bank has acquired, under or in connection with any financing Document.
       provided that such assignee, transferee or sub-participant agrees to keep
       such information confidential.

23.    INDEMNITIES

23.1   BREAKAGE COSTS INDEMNITY

       Newco shall indemnify the Bank on demand against any loss or expense
       (including any loss or expense on account of funds borrowed, contracted
       for or utilised to fund any amount payable under this Agreement, any
       amount repaid or prepaid under this Agreement or any Advance but
       excluding loss of Margin) which the Bank; has sustained or incurred as a
       consequence of:

       (a)    an Advance not being made following the service of a Drawdown
              Notice (except as a result of the failure of the Bank to comply
              with its obligations under this Agreement);

       (b)    the failure of Newco to make payment on the due date of any sum
              due under this Agreement;

       (c)    the occurrence of any Default or the operation of Clause 16.2, or

       (d)    any prepayment or repayment of an Advance otherwise than on an
              Interest Date relative to that Advance.

23.2   CURRENCY INDEMNITY

23.2.1 Any payment made to or for the account of or received by the Bank in
       respect of any moneys or liabilities due, arising or incurred by Newco to
       the Bank in a currency (the CURRENCY OF PAYMENT) other than the currency
       in which the payment should have been made under this Agreement (the
       CURRENCY OF OBLIGATION) in whatever circumstances (including as a result
       of a judgment against Newco) and for whatever reason shall constitute a
       discharge to Newco only to the extent of the Currency of Obligation
       amount which the Bank is able on the date of receipt of such payment (or
       if such date of receipt is not a Business Day, on the next succeeding
       Business Day) to purchase with the Currency of Payment amount at its spot
       rate of exchange (as conclusively determined by the Bank) in the London
       foreign exchange market.

23.2.2 If the amount of the Currency of Obligation which the Bank is so able to
       purchase falls short of the amount originally due to the Bank under this
       Agreement, then Newco shall immediately on demand indemnify the Bank
       against any loss or damage arising as a result of that shortfall by
       paying to the Bank that amount in the Currency of Obligation certified by
       the Bank: as necessary so to indemnify it.

                                     - 52 -
<PAGE>
23.3   GENERAL

23.3.1 Each indemnity in this Clause 23 shall constitute a separate and
       independent obligation from the other obligations contained to this
       Agreement, shall give rise to a separate and independent cause of action,
       shall apply irrespective of any indulgence granted from time to time and
       shall continue in full force and effect notwithstanding any judgment or
       order for a liquidated sum or sums in respect of amounts due under this
       Agreement or under any such judgment or order.

23.3.2 The certificate of the Bank; as to the amount of any loss or damage
       sustained or incurred by it shall be conclusive and binding on Newco
       except for any manifest error.

24.    LAW

       This Agreement is governed by and shall be construed in accordance with
       English law.

IN WITNESS whereof the Parties have caused this Agreement to be duly executed on
the date set out above.

                                      -53-
<PAGE>
                                   SCHEDULE 1

                              CONDITIONS PRECEDENT

The conditions referred to in Clause 4.1 are as follows:

1.     DELIVERY OF CERTIFIED COPIES

       The Bank shall have received a Certified Copy of each of the following
       in form and substance satisfactory to it:

       (a)    the certificate of incorporation (and any relative certificate of
              incorporation on change of name) of USPI and each of the companies
              listed in Part I of Schedule 3;

       (b)    the memorandum and articles of association of each of USPI and the
              companies listed in Part I of Schedule 3;

       (c)    the minutes of a meeting of the board of directors of USPI and
              each of the companies listed in Part I of Schedule 3:

              (i)    approving and authorising the execution, delivery and
                     performance of each Transaction Document to which it is to
                     be a party on the terms and conditions of those documents
                     subject always, where appropriate, to the provisions of
                     sections 151 to 158 (inclusive) of the Act:

              (ii)   showing that the relevant board meeting was quorate, that
                     due consideration was given by all the relevant directors
                     present of the relevant company's obligations and
                     liabilities arising under those documents and that all
                     declarations of interests required in connection with any
                     Transaction Document to which it is to be a party were
                     made; and

              (iii)  authorising any director whose name and specimen signature
                     is set out in those minutes or in a separate certificate to
                     sign or otherwise attest the execution of those documents
                     and any other documents to be executed or delivered
                     pursuant to those documents; and

       (d)    the statutory declarations made for the purpose of section 155 of
              the Act in the prescribed form by all of the directors of each of
              the companies listed in Part I of Schedule 3 (with the exception
              of Newco) together with a Certified Copy of each statutory report
              by the auditors of each of those companies required under section
              156(4) of the Act and a special resolution of the members of
              Aspen; and

       (e)    the register of directors of each of the companies listed in
              Part I of Schedule 3 and the register of members of Aspen;

       (f)    each of the following documents duly executed by the parties
              thereto:

              (i)    the Acquisition Documents;

              (ii)   the Disclosure Letter;

              (iii)  Employment Contract; and

              (iii)  the Loan Notes Instrument;

                                     - 54 -
<PAGE>
       (g)    a special resolution of the members of Aspen amending the articles
              of association of Aspen so as to remove the pre-emption rights on
              transfer of shares; and

       (h)    a special resolution of the members of Aspen Healthcare Limited
              amending the memorandum of association of Aspen Healthcare Limited
              so as to include a power to charge in support of guarantee.

2.     DELIVERY OF ORIGINAL NON-SECURITY DOCUMENTATION, ETC.

       The Bank shall have received each of the following in form and substance
       satisfactory to it:

       (a)    in relation to Aspen, the Management Accounts for the two month
              period ending on 28 February 2000 and its Accounts for the
              Financial Year ending 31st December 1999;

       (b)    written details of Newco's working capital arrangements and its
              proposals for funding the cancer centre at Parkside together with
              details of Newco's base capital expenditure programme for the
              period to 31st December 2001 and written details of the Group's
              businesses and operations for the 2 Financial Years of the Group
              up to (and including) the Financial Year ending 31 December 2002;

       (c)    a pro forma balance sheet of Newco showing its balance sheet after
              its acquisition of the Aspen Shares;

       (d)    evidence that an interest rate management strategy has been
              agreed;

       (e)    evidence that Newco has contributed a minimum of pounds sterling
              21,351,000 from its own resources (obtained by way of subordinated
              debt and/or the proceeds of the subscription for shares in Newco)
              towards the acquisition of the Aspen Shares;

       (f)    a letter from the Auditors addressed to the Bank, confirming that
              they are aware of the provisions of Clauses 1 and 15.4.1 of this
              Agreement;

       (g)    the arrangement fee and initial management fee payable on the date
              of this Agreement in accordance with Clauses 18.2 and 18.3;

       (h)    a legal opinion from Messrs Akin, Gump, Strauss, Hauer & Feld in
              relation to USPI and matters of Delaware and Texas law;

       (i)    evidence of the appointment by USPI of agents for service of
              process in relation to the USPI Guarantee;

       (j)    evidence of the effective release and discharge of all mortgages,
              charges and liens affecting Newco's interests in the Properties;

       (k)    appropriate land registry application forms duly completed and
              accompanied by all necessary Land Registry fees;

       (l)    the results of H.M. Land Registry Searches in favour of the Bank,
              on the appropriate forms against all of the registered titles
              comprising Newco's interests in the Properties giving not less
              than ten Business Days' priority beyond the date of the Guarantee
              and Debenture and showing no adverse entries; and

                                      -55-
<PAGE>
       (m)    all necessary P.D. Forms in relation to any stamp duty (including
              any denoting fees) payable in connection with the transfer of the
              Properties to Newco duly completed accompanied by that stamp duty

3.     DELIVERY OF SECURITY DOCUMENTS

       The Bank shall have received each of the following in form and substance
       satisfactory to it:

       (a)    a Guarantee and Debenture duly executed by each of the companies
              listed in Part 1 of Schedule 4:

       (b)    the USPI Guarantee; and

       (c)    the Intercreditor Agreement duly executed by the parties thereto,

       together with, in each case, all documents deliverable with them.

                                      -56-
<PAGE>
                                   SCHEDULE 2

                                     PART 1

                                 DRAWDOWN NOTICE

To:   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
From: GLOBAL HEALTHCARE PARTNERS LIMITED

                                                                         *[date]

Dear Sirs,

CREDIT AGREEMENT DATED *(THE CREDIT AGREEMENT)

Terms defined in the Credit Agreement have the same meaning in this notice.

We request the Advance to be drawn down under the Credit Agreement as follows:

1.     Advance: Term Advance/Capex Advance

2.     Amount of Advance:

3.     Drawdown Date:

4.     Duration of Interest Period:

5.     Payment instructions:
       (if applicable)

We confirm that today and on the Drawdown Date:

(a)    the representations and warranties in Clause 14 to be repeated are and
       will be correct; and

(b)    no Default or Potential Default has occurred and is continuing or will
       occur on the making of the Advance.

SIGNED

For and on behalf of
GLOBAL HEALTHCARE PARTNERS LIMITED

(a company incorporated in England and Wales under number 3952340)

                                     - 57 -
<PAGE>
                                   SCHEDULE 2

                                     PART II

                     LOAN NOTES GUARANTEE UTILISATION NOTICE

To:   THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
From: GLOBAL HEALTHCARE PARTNERS LIMITED

                                                                         *[date]

Dear Sirs,

CREDIT AGREEMENT DATED *(THE CREDIT AGREEMENT)

Terms defined in the Credit Agreement have the same meaning in this notice.

We hereby request the Loan Notes Guarantee to be issued under the Term Loan and
Guarantee Facility in the agreed form:

(a)    Issue Date:

(b)    Amount of Loan Notes Guarantee:

(c)    Expiry date of Loan Notes Guarantee: 30th September 2003

We confirm that today and on the Issue Date:

(i)    the representations and warranties in Clause l4 to be repeated are and
       will be correct; and

(ii)   no Default or Potential Default has occurred and is continuing or will
       occur on the issue of the Loan Notes Guarantee

SIGNED

For and on behalf of
GLOBAL HEALTHCARE PARTNERS LIMITED

(a company incorporated in England and Wales under number 3952340)

                                     - 58 -
<PAGE>
                                   SCHEDULE 3

                                    THE GROUP

                        PART I - CHARGING GROUP COMPANIES

NAME                       JURISDICTION OF INCORPORATION         SHARES OWNED BY
                           AND REGISTERED NUMBER

Newco                      England and Wales                     USPI
                           Registered Number 3952340

Aspen                      England & Wales                       Newco
                           Registered number 3471084

Aspen Healthcare Limited   England & Wales                       Aspen
                           Registered number 2140182

                         PART II - DORMANT SUBSIDIARIES
<TABLE>
<CAPTION>

<S>                          <C>                             <C>
NAME                         JURISDICTION OF INCORPORATION   SHARES OWNED BY
                             AND REGISTERED NUMBER

Paracelsus England Limited   England and Wales               Aspen Healthcare Limited
                             Registered number 1913617

Parkside Hospital Limited    England and Wales               Aspen Healthcare Limited
                             Registered number 1328198

Holly House Hospital         England and Wales               Aspen Healthcare Limited
Limited                      Registered number 1340973

Hillside Holdings Limited    England and Wales               Aspen Healthcare Limited
                             Registered number 2320361

Hillside Hospital Limited    England and Wales               Aspen Healthcare Limited
                             Registered number 2292605
</TABLE>

                                      -59-
<PAGE>
                                   SCHEDULE 4

                               MANDATORY COST RATE

(a)    The Mandatory Cost Rate for an Advance for each Interest Period shall be
       the rate calculated by the Bank in accordance with the following formula:

       Mandatory Cost Rate = BY + S(Y- Z) + F x 0.01% per annum
                             -----------------------
                                    100-(B+S)

       where on the day of application of the formula:

       B      is the percentage of the Bank's eligible liabilities (in excess
              of any stated minimum) which the Bank of England requires the
              Bank to hold on a non-interest-bearing deposit account in
              accordance with its cash ratio requirements;

       Y      is LIBOR for the relevant Interest Period;

       S      is the percentage of the Bank's eligible liabilities which the
              Bank of England requires the Bank to place as a special deposit;

       Z      is the interest rate per annum allowed by the Bank of England on
              special deposits; and

       F      is the charge payable by the Bank to the Financial Services
              Authority under the Fees Regulations expressed in pounds per
              pounds sterling 1 million of the fee base of the Bank.

(b)    For the purposes of this Schedule:

       (i)    ELIGIBLE LIABILITIES and SPECIAL DEPOSITS have the meanings given
              to them at the time of application of the formula by the Bank of
              England;

       (ii)   FEE BASE has the meaning given to it in the Fees Regulations; and

       (iii)  FEES REGULATIONS means any regulations governing the payment of
              fees for banking supervision.

(c)    In the application of the formula, B, Y, S and Z shall be included in the
       formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%.
       BY is calculated as 0.5 x 15.

(d)    (i)    The formula shall be calculated on the first day of the relevant
              Interest Period.

       (ii)   Each rate calculated in accordance with the formula shall, if
              necessary, be rounded upward to 4 decimal places.

(e)    If the Bank determines that a change in circumstances has rendered, or
       will render, the formula inappropriate, the Bank shall notify Newco of
       the manner in which the Mandatory Cost Rate will subsequently be
       calculated. The manner of calculation so notified by the Bank shall, in
       the absence of manifest error, be binding on the Parties.

                                     - 60 -
<PAGE>
                                   SCHEDULE 5

                                 THE PROPERTIES

1.     All freehold land known as Holly House Hospital, High Road, Buckhurst
       Hill, registered at H.M. Land Registry under title number EX193541.

2.     All freehold land known as 25 High Road, Buckhurst Hill, registered at
       H.M. Land Registry under title number EX508759.

3.     All freehold land lying to the east of Parkside, Wimbledon. registered at
       H.M. Land Registry under title number TGL111982.

4.     All freehold land known as 53 Parkside, Wimbledon, registered at
       H.M. Land Registry under title number SY135685.

5.     All freehold land known as 49 Parkside, Wimbledon, registered at
       H.M. Land Registry under title number SGL345299.

                                     - 61 -
<PAGE>
                                   SCHEDULE 6

                         FIXED RATE CONFIRMATION NOTICE

To:  Global Healthcare Partners Limited
     Nicon House
     2nd Floor
     21 Worhip Street
     London EC2A 2DW

                                                                  Date:

                     FIXED RATE OPTION - CONFIRMATION NOTICE

We refer to our credit agreement dated [ ] (the AGREEMENT). Terms defined
therein shall have the same meanings in this Fixed Rate Confirmation Notice.

We refer to the Term Advance(s) to be converted and confirm that, as agreed
between us, the interest rate applicable to such Fixed Rate Funds will be [ ]
per cent per annum for the Fixed Rate Period of [ ] months.

Please countersign, date and return to us the duplicate of this Fixed Rate
Confirmation Notice to record the terms of the agreed interest rate and Fixed
Rate Period.

Any failure to countersign shall not in any way affect the operation of the
provision of clause 7.4 of the Agreement and the fixed rate referred to above
shall apply notwithstanding any such failures.

Yours faithfully,

_________________________
For and on behalf of
THE GOVERNOR AND COMPANY
OF THE BANK OF SCOTLAND

Countersigned and acknowledged for and on behalf of Global Healthcare Partners
Limited

_________________________                       Date ___________________________
Director/Secretary

                                     - 62 -
<PAGE>
NEWCO

SIGNED by                      )
/s/ ILLEGIBLE                  )
for and on behalf of           )
GLOBAL HEALTHCARE              )
PARTNERS LIMITED               )

THE BANK

SIGNED by                      )
/s/ BRIAN EDWARD GATWARD       )
for and on behalf of           )
THE GOVERNOR AND COMPANY       )
OF THE BANK OF SCOTLAND        )

                                     - 63 -

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