1
EXHIBIT 10.11

CONFORMED COPY

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CREDIT AGREEMENT

dated as of

June 30, 1999

among

DJ ORTHOPEDICS, LLC
as Borrower

DONJOY, L.L.C.,
as Parent

The Lenders Party Hereto,

FIRST UNION NATIONAL BANK,
as Administrative Agent and Collateral Agent

and

THE CHASE MANHATTAN BANK,
as Syndication Agent, Issuing Bank and Swingline Lender

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

CHASE SECURITIES INC.,
as Arranger and Book Manager

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TABLE OF CONTENTS

Page
----

ARTICLE I Definitions
-----------

SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Classification of Loans and Borrowings . . . . . . . . . . . . 28
SECTION 1.03. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 1.04. Accounting Terms; GAAP . . . . . . . . . . . . . . . . . . . . 28

ARTICLE II The Credits
-----------

SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.02. Loans and Borrowings . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.03. Requests for Borrowings . . . . . . . . . . . . . . . . . . . 29
SECTION 2.04. Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.05. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.06. Funding of Borrowings . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.07. Interest Elections . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.08. Termination and Reduction of Commitments . . . . . . . . . . . 37
SECTION 2.09. Repayment of Loans, Evidence of Debt . . . . . . . . . . . . . 38
SECTION 2.10. Amortization of Term Loans . . . . . . . . . . . . . . . . . . 39
SECTION 2.11. Prepayment of Loans . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.12. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.13. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.14. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . 43
SECTION 2.15. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 2.16. Break Funding Payments . . . . . . . . . . . . . . . . . . . . 44
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs . 46
SECTION 2.19. Mitigation Obligations; Replacement of Lenders . . . . . . . . 48

ARTICLE III Representations and Warranties
------------------------------

SECTION 3.01. Organization; Powers . . . . . . . . . . . . . . . . . . . . . 49

SECTION 3.02. Authorization; Enforceability . . . . . . . . . . . . . . . . 49
SECTION 3.03. Governmental Approvals; No Conflicts . . . . . . . . . . . . . 49
SECTION 3.04. Financial Condition; No Material Adverse Change . . . . . . . 50
SECTION 3.05. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3.06. Litigation and Environmental Matters . . . . . . . . . . . . . 51
SECTION 3.07. Compliance with Laws and Agreements . . . . . . . . . . . . . 51
SECTION 3.08. Investment and Holding Company Status . . . . . . . . . . . . 51
SECTION 3.09. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.10. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.11. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.12. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.14. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.15. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.16. Security Documents . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.17. Federal Reserve Regulations . . . . . . . . . . . . . . . . . 54
SECTION 3.18. Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . . 54

ARTICLE IV Conditions
----------

SECTION 4.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 4.02. Each Credit Event . . . . . . . . . . . . . . . . . . . . . . 58

ARTICLE V Affirmative Covenants
---------------------

SECTION 5.01. Financial Statements and Other Information . . . . . . . . . . 58
SECTION 5.02. Notices of Material Events . . . . . . . . . . . . . . . . . . 60
SECTION 5.03. Information Regarding Collateral . . . . . . . . . . . . . . . 60
SECTION 5.04. Existence; Conduct of Business . . . . . . . . . . . . . . . . 61
SECTION 5.05. Payment of Obligations . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.06. Maintenance of Properties . . . . . . . . . . . . . . . . . . 61
SECTION 5.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 5.08. Casualty and Condemnation . . . . . . . . . . . . . . . . . . 62
SECTION 5.09. Books and Records; Inspection and Audit Rights . . . . . . . . 62
SECTION 5.10. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.11. Use of Proceeds and Letters of Credit . . . . . . . . . . . . 62
SECTION 5.12. Additional Subsidiaries . . . . . . . . . . . . . . . . . . . 63
SECTION 5.13. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 63

ARTICLE VI Negative Covenants
------------------

SECTION 6.01. Indebtedness; Certain Equity Securities . . . . . . . . . . . 64
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 6.03. Fundamental Changes . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions . . 68
SECTION 6.05. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.06. Sale and Lease-Back Transactions . . . . . . . . . . . . . . . 71
SECTION 6.07. Hedging Agreements . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness . . . . 71
SECTION 6.09. Transactions with Affiliates . . . . . . . . . . . . . . . . . 73
SECTION 6.10. Restrictive Agreements . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.11. Amendment of Material Documents . . . . . . . . . . . . . . . 75
SECTION 6.12. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 75
SECTION 6.13. Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 6.14. Consolidated Interest Coverage Ratio . . . . . . . . . . . . . 77
SECTION 6.15. Changes in Fiscal Periods . . . . . . . . . . . . . . . . . . 77

ARTICLE VII Events of Default
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ARTICLE VIII The Administrative Agent
------------------------

ARTICLE IX Miscellaneous
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SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.02. Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.03. Expenses; Indemnity; Damage Waiver . . . . . . . . . . . . . . 83
SECTION 9.04. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.05. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 9.06. Counterparts; Integration; Effectiveness . . . . . . . . . . . 88
SECTION 9.07. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.08. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process . . 88
SECTION 9.10. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.13. Interest Rate Limitation . . . . . . . . . . . . . . . . . . . 90

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6

SCHEDULES:

Schedule 1.01(a) -- Mortgaged Properties
Schedule 2.01 -- Commitments
Schedule 3.05 -- Properties
Schedule 3.06 -- Disclosed Matters
Schedule 3.07 -- Compliance with Laws and Agreements
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.09 -- Transactions with Affiliates
Schedule 6.10 -- Existing Restrictions
EXHIBITS:

Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Borrower's Counsel
Exhibit C -- Form of Opinion of Local Counsel
Exhibit D -- Form of Parent Guarantee Agreement
Exhibit E -- Form of Subsidiary Guarantee Agreement
Exhibit F -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit G -- Form of Pledge Agreement
Exhibit H -- Form of Security Agreement
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CREDIT AGREEMENT dated as of June 30, 1999, among DJ
ORTHOPEDICS, LLC (the "Borrower"), a Delaware limited
liability company, DONJOY, L.L.C. ("Holdings"), a Delaware
limited liability company, the Lenders party hereto, FIRST
UNION NATIONAL BANK ("First Union"), as Administrative
Agent (such term and each other capitalized term used but
not defined herein having the meaning provided in Article
I) and Collateral Agent, and THE CHASE MANHATTAN BANK, as
Syndication Agent, Issuing Bank and Swingline Lender.

Pursuant to a Recapitalization Agreement (the "Recapitalization
Agreement") dated as of April 29, 1999, among Chase DJ Partners, LLC
("Investor"), a Delaware limited liability company of which a majority indirect
equity interest is owned by Chase Capital Partners ("Sponsor"), Holdings and
Smith & Nephew, Inc., a Delaware corporation (the "Existing Shareholder"), (a)
Investor will contribute, directly or indirectly, an aggregate amount of
$64,550,000 in cash (the "Equity Contribution") to Holdings in exchange for the
issuance to Investor of membership interests representing 645,500 common units
in Holdings ("Common Units"), (b) certain members of the management of Holdings
will contribute an aggregate amount of $1,850,000 in cash (the "Management
Equity Contribution") to Holdings (of which $1,400,000 will be financed by
loans from Holdings) in exchange for the issuance to such members of management
of an aggregate of 18,500 Common Units, (c) the Existing Shareholder will
continue to hold 54,000 Common Units (the "Roll-Over Equity"), (d) Affiliates
of Sponsor and First Union will purchase in a private placement not less than
$31,415,000 in aggregate principal amount of senior redeemable participating
preferred units of Holdings (the "Preferred Units"), (e) the Borrower will
obtain Loans hereunder, (f) the Borrower will issue not less than $100,000,000
in aggregate principal amount of its senior subordinated notes (the "Senior
Subordinated Notes") in a public offering or in a Rule 144A or other private
placement, (g) Holdings, the Existing Shareholder and its Affiliates will sell
or otherwise transfer to the Borrower (the "Asset Transfer") substantially all
the assets and liabilities of the bracing and support system business of the
Existing Shareholder and its Affiliates (the "Business") for an aggregate cash
amount equal to the sum of (i) the initial aggregate amount of the Lenders'
Term Commitments of $15,500,000 and (ii) the net cash proceeds from the
issuance of the Senior Subordinated Notes (with any excess in the fair market
value of the Business over such purchase price being treated as a capital
contribution by Holdings to the Borrower), (h) Holdings will pay to the
Existing Shareholder $200,000,000 (the "Cash Payment") in connection with the
redemption of the Common Units owned by the Existing Shareholder and (i) fees
and expenses incurred in connection with the Transactions (as defined below) in
an aggregate amount not to exceed $9,915,000 will be paid (the "Transactions
Costs"). The transactions described in clauses (a) through (h) in this
paragraph, including the recapitalization of Holdings on the
8

terms set forth in the Recapitalization Agreement (the "Recapitalization") and
the Asset Transfer, are collectively referred to herein as the "Transactions".

The Borrower has requested (a) the Lenders to extend credit in the
form of Term Loans to the Borrower on the Effective Date in an aggregate
principal amount of $15,500,000, (b) the Lenders to extend credit in the form
of Revolving Loans to the Borrower at any time and from time to time prior to
the Revolving Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of the difference between $25,000,000 and the
Revolving Exposure at such time, (c) the Issuing Bank to issue Letters of
Credit at any time and from time to time prior to the Revolving Maturity Date,
in an aggregate stated amount at any time outstanding not in excess of the
lesser of (i) $5,000,000 and (ii) the difference between $25,000,000 and the
Revolving Exposure at such time and (d) the Swingline Lender to make Swingline
Loans to the Borrower at any time and from time to time prior to the Revolving
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of the lesser of (i) $2,500,000 and (ii) the difference between
$25,000,000 and the Revolving Exposure at such time.

The proceeds of the Term Facility will be used, together with the net
proceeds of the issuance of the Senior Subordinated Notes, solely (a) to
purchase the Business in the Asset Transfer and (b) to pay a portion of the
Transaction Costs, and the proceeds paid to Holdings in connection with the
Asset Transfer will be used, together with the proceeds from the Equity
Contribution, the Management Equity Contribution and the issuance of the
Preferred Units, solely (i) to make the Cash Payment and (ii) to pay the
remaining portion of the Transaction Costs. The proceeds of loans under the
Revolving Facility will be used by the Borrower for general corporate purposes,
including financing in connection with Permitted Acquisitions. Letters of
Credit and Swingline Loans will be used by the Borrower for general corporate
purposes.

The Lenders and the Swingline Lender are willing to extend such
credit to the Borrower and the Issuing Bank is willing to issue Letters of
Credit for the account of the Borrower, in each case on the terms and subject
to the conditions set forth herein. Accordingly, 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 or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
9

"Act" means the Limited Liability Company Act of the State of
Delaware, 6 Del. C. Section 18-01 et seq., as in effect and amended from time
to time, or any successor statute.

"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

"Administrative Agent" means First Union National Bank in its
capacity as Administrative Agent with respect to this Agreement and any
successor appointed pursuant hereto.

"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.

"Agents" means the collective reference to the Administrative Agent,
the Collateral Agent and the Syndication Agent.

"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively, without notice to the Borrower.

"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.

"Applicable Rate" means, for any day with respect to any ABR
Revolving Loan, Eurodollar Revolving Loan, ABR Term Loan, Eurodollar Term Loan,
or with respect to the commitment fees payable hereunder, as the case may be,
the applicable rate per annum set forth below under the caption "ABR Revolving
Spread", "Eurodollar Revolving Spread", "ABR Term Spread", "Eurodollar Term
Spread" or "Commitment
10

Fee Rate", as applicable, based upon the Leverage Ratio as of the relevant
determination date, provided that until the delivery to the Administrative
Agent pursuant to Section 5.01(a) of Holdings's consolidated financial
statements for the fiscal year ending December 31, 1999, the "Applicable Rate"
shall be the applicable rate per annum set forth below in Category 1:

====================================================================================================
Leverage ABR Revolving Eurodollar Revolving ABR Term Eurodollar Commitment
-------- --------------- --------------------- -------- ---------- ----------
Ratio: Spread Spread Spread Term Spread Fee Rate
------ ------ ------ ------ ----------- --------

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

Category 1
----------

Greater than or equal to
5.00 to 1.00 1.75% 2.75% 2.25% 3.25% 0.50%

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

Category 2
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Greater than or equal to
4.50 to 1.00 and less
than 5.00 to 1.00 1.50% 2.50% 2.00% 3.00% 0.50%

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

Category 3
----------

Greater than or equal to
4.00 to 1.00 and less
than 4.50 to 1.00 1.25% 2.25% 1.75% 2.75% 0.50%

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

Category 4
----------

Greater than or equal to
3.50 to 1.00 and less
than 4.00 to 1.00 1.00% 2.00% 1.50% 2.50% 0.425%

Category 5
----------

Less than 3.50 to 1.00 0.75% 1.75% 1.25% 2.25% 0.425%
- ----------------------------------------------------------------------------------------------------

For purposes of the foregoing, (a) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of Holdings's fiscal year based
upon Holdings's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (b) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change, provided that
the Leverage Ratio shall be deemed to be in Category 1 (i) at any time that an
Event of Default has occurred and is continuing or (ii) if the Borrower fails
to deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period from the expiration of
the time for delivery thereof until such consolidated financial statements are
delivered.
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"Assessment Rate" means, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States of America, provided that if, as a
result of any change in any law, rule or regulation, it is no longer possible
to determine the Assessment Rate as aforesaid, then the Assessment Rate shall
be such annual rate as shall be reasonably determined by the Administrative
Agent to be representative of the cost of such insurance to the Lenders.

"Asset Transfer" has the meaning assigned to such term in the
preamble of this Agreement.

"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.

"Base Capex Amount" has the meaning set forth in Section
6.12(a).

"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

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

"Board of Managers" means the Board of Managers of Holdings
contemplated by, and as appointed in accordance, with the Members' Agreement
and any other governing board or body of Holdings exercising rights or powers
that under the Act may ordinarily be exercised by a limited liability company's
"managers" or "members" (within the meaning of the Act).

"Borrower" has the meaning assigned to such term in the
introductory paragraph of this Agreement.

"Borrower Operating Agreement" means collectively, the Operating
Agreement of the Borrower dated as of June 30, 1999, and the By-laws of the
Borrower, which are collectively the sole "limited liability company
agreements" of the Borrower within the meaning of the Act.
12

"Borrowing" means (a) Loans of the same Class and 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, or (b) a Swingline Loan.

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

"Business" has the meaning assigned to such term in the preamble
of this Agreement.

"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City or Charlotte, North
Carolina, 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 Expenditures" means, for any period, without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and its consolidated Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the
Borrower for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period, provided that the term "Capital Expenditures" shall not include,
for purposes of Section 6.12, expenditures set forth in clauses (i) through
(iii) below, and for purposes of the definition of the term "Excess Cash Flow",
expenditures set forth in clauses (i) and (ii) below and non-cash expenditures
set forth in clause (iii) below: (i) expenditures made in connection with the
repair, replacement or restoration of assets (A) to the extent financed from
insurance proceeds paid on account of the loss of or damage to the assets being
repaired, replaced or restored or (B) with awards of compensation arising from
the taking by eminent domain or condemnation of the assets being replaced, (ii)
expenditures in connection with the reinvestment of Net Proceeds of any asset
sale within 300 days after receipt thereof as contemplated by the definition of
the term "Net Proceeds" and (iii) expenditures that constitute a Permitted
Acquisition.

"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.

"Cash Payment" has the meaning ascribed to such term in the
preamble of this Agreement.
13

"CB Capital" means CB Capital Investors, L.P., a Delaware
limited partnership and an Affiliate of Sponsor.

"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq.

"Change of Control" means an event or series of events by which

(a) prior to any initial public offering of Equity Interests in Holdings:

(i) Investor or an entity controlled by Sponsor or Investor
ceases to be the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
under the Securities Exchange Act), directly or indirectly, of at least
40% (or 33% if the reduction below 40% is attributable solely to dilution
as a result of the issuance of stock in connection with a Permitted
Acquisition) of the Equity Interests of Holdings ordinarily having the
right to vote on any matters relating to the management of Holdings,
including the election of its "managers" within the meaning of the Act;

(ii) Holdings ceases to be the "beneficial owner" (as defined in
Rule 13d-3 and 13d-5 under the Securities Exchange Act), directly or
indirectly, of 100% of the combined voting power of the Equity Interests
of the Borrower ordinarily having the right to vote on any matters
relating to the management of Holdings, including the election of its
"managers" within the meaning of the Act;

(iii) Investor or an entity controlled by Sponsor or Investor,
together with members of management of Holdings and its subsidiaries,
cease to be the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
under the Securities Exchange Act), directly or indirectly, of at least
51% on a fully diluted basis of the Equity Interests of Holdings
ordinarily having the right to vote on any matters relating to the
management of Holdings, including the election of its "managers" within
the meaning of the Act;

"group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act but in each case excluding Sponsor and its
Affiliates) acquires the right, directly or indirectly, (I) to elect,
appoint or nominate members of the Board of Managers with aggregate voting
power greater than that held by the members of the Board of Managers
nominated by CB Capital and the managing member of Investor, (II) to
elect, appoint or nominate any managing member or "manager" within the
meaning of the Act of, or otherwise to Control, Investor (provided that
Chase Fairfield may serve as the initial managing member of Investor in
accordance with the terms of its limited liability company agreement) or
(III) to elect, appoint or nominate any general or managing partner of, or
otherwise to Control, CB Capital;

(v) Continuing Managers shall not constitute the members of the
Board of Managers with a majority of the voting power of the Board of
Managers; or

(vi) there shall occur a Change of Control (as defined in the
Senior Subordinated Notes Indenture) or a Change of Control (as defined in
the Holdings Operating Agreement); and

(b) after any initial public offering of Equity Interests in Holdings:

(i) Investor or an entity controlled by Sponsor or Investor
ceases to be the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
under the Securities Exchange Act), directly or indirectly, of at least
30% (or 25% if the reduction below 30% is attributable solely to dilution
as a result of the issuance of stock in connection with a Permitted
Acquisition) of (A) the Equity Interests of Holdings ordinarily having the
right to vote on any matters relating to the management of Holdings,
including the election of its "managers" within the meaning of the Act, or
(B) if Holdings is then a corporation, the capital stock or other Equity
Interests of Holdings ordinarily having the right to vote at an election
of directors;

(iii) Investor or an entity controlled by Sponsor or Investor,
together with members of management of Holdings and its Subsidiaries,
cease to be the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
under the Securities Exchange Act), directly or indirectly, of at least
35% on a fully diluted basis of (A) the Equity Interests of Holdings
ordinarily having the right to vote on any
15

matters relating to the management of Holdings, including the election of
its "managers" within the meaning of the Act or (B) if Holdings is then a
corporation, the capital stock or other Equity Interests of Holdings
ordinarily having the right to vote at an election of directors;

(iv) (A) any "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act but excluding Investor)
becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5 under
the Securities Exchange Act, except that for purposes of this clause (iv),
such Person or group shall be deemed to have "beneficial ownership" of all
Equity Interests that it has the right to acquire whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of an equal or greater percentage of (I) the Equity Interests
of Holdings, or (II) if Holdings is then a corporation, the capital stock
or other Equity Interests of Holdings ordinarily having the right to vote
at an election of directors than that percentage beneficially owned by
Sponsor or an entity Controlled by Sponsor or (B) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act but in each case excluding Sponsor and its Affiliates)
acquires the right, directly or indirectly, (I) to elect, appoint or
nominate members of the Board of Managers with aggregate voting power
greater than that held by the members of the Board of Managers nominated
by CB Capital and the managing member of Investor, (II) to elect, appoint
or nominate any managing member or "manager" within the meaning of the Act
of, or otherwise to Control, Investor (provided that Chase Fairfield may
serve as the initial managing member of Investor in accordance with the
terms of its limited liability company agreement) or (III) to elect,
appoint or nominate any general or managing partner of, or otherwise to
Control, CB Capital;

(v) (A) Continuing Managers shall not constitute the members of
the Board of Managers with a majority of the voting power of the Board of
Managers or (B) if Holdings is then a corporation, Continuing Directors
shall not constitute the members of the Board of Directors of Holdings
with a majority of the voting power of the Board of Directors of Holdings;
or

(vi) there shall occur a Change of Control (as defined in the
Senior Subordinated Notes Indenture) or a Change of Control (as defined in
the Holdings Operating Agreement).

"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
the Issuing Bank (or, for purposes of
16

Section 2.15(b), by any lending office of such Lender or by such Lender's or
the Issuing Bank'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.

"Charges" has the meaning assigned to such term in Section 9.13.

"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Term Loans or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Commitment or Term
Commitment.

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

"Collateral" means any and all "Collateral" as defined in any
applicable Security Document.

"Collateral Agent" means the "Collateral Agent" as defined in
the Security Agreement.

"Commitment" means a Revolving Commitment or Term Commitment, or
any combination thereof (as the context requires).

"Common Units" has the meaning assigned to such term in the
preamble of this Agreement.

"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income for such period, the sum
of (a) the aggregate amount of Consolidated Interest Expense for such period,
(b) the aggregate amount of letter of credit fees paid during such period, (c)
the aggregate amount of income Tax expense for such period, (d) all amounts
attributable to depreciation, amortization and other non-cash charges or losses
for such period, (e) non-cash expenses resulting from the grant of stock
options to any director, officer or employee or Holdings, the Borrower or any
Subsidiary pursuant to a written plan or agreement, (f) all amounts
attributable to compensation expense related to transaction bonuses incurred in
connection with the Transactions, (g) all extraordinary charges during such
period and (h) all non-recurring transaction and financing expenses resulting
from the Transactions and Permitted Acquisitions, and minus, without
duplication and to the extent added to revenues in determining Consolidated Net
Income for such period, all extraordinary gains during such period, all as
determined on a consolidated basis with respect to Holdings, the Borrower and
the Subsidiaries in accordance with GAAP. If the Borrower or any consolidated
17

Subsidiary has made any Permitted Acquisition or any sale, transfer, lease or
other disposition of assets outside of the ordinary course of business
permitted by Section 6.05 during the relevant period for determining
Consolidated EBITDA, Consolidated EBITDA for the relevant period shall be
calculated after giving pro forma effect thereto, as if such Permitted
Acquisition or sale, transfer, lease or other disposition of assets (and any
related incurrence, repayment or assumption of Indebtedness, with any new
Indebtedness being deemed to be amortized over the relevant period in
accordance with its terms, and assuming that any Revolving Loans borrowed in
connection with such acquisition are repaid with excess cash balances when
available) had occurred on the first day of the relevant period for determining
Consolidated EBITDA. Any such pro forma calculations may include operating
expense reductions for such period resulting from any Permitted Acquisition
that is being given pro forma effect to the extent that such operating expense
reductions (a) would be permitted pursuant to Article XI of Regulation S-X
under the Securities Act of 1933, as amended or (b) have been approved by the
Required Lenders.

"Consolidated Interest Coverage Ratio" means, with respect to
any period, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period.

"Consolidated Interest Expense" means, for any period, (a) the
interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations), accrued by Holdings, the
Borrower and the Subsidiaries during such period and payable in cash (b) net of
interest income, in each case determined on a consolidated basis in accordance
with GAAP.

"Consolidated Net Income" means, for any period, net income or
loss of Holdings, the Borrower and the Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income or loss the income of any Person in which any
other Person (other than the Borrower or any of the Subsidiaries or any
director holding qualifying shares in compliance with applicable law) has a
majority interest, except to the extent of the amount of dividends or other
distributions actually paid to Holdings, the Borrower or any of the
Subsidiaries by such Person during such period.

"Continuing Director" means, at any date, an individual (a) who,
as at such date, has been a member of such Board of Directors for at least the
12 preceding months (or was a member of the board of managers of a predecessor
limited liability company during any portion of such period before such entity
was converted in some manner into a corporation), (b) who has been nominated to
be a member of such Board of Directors, directly or indirectly, by Sponsor or
Persons nominated by Sponsor, (c) who has been nominated to be a member of such
Board of Directors by a majority of the other Continuing Directors then in
office or (d) in the case of Holdings, who has been
18

nominated to be a member of the Board of Directors of Holdings pursuant to the
terms of the Members' Agreement or any similar successor agreement.

"Continuing Manager" means, at any date, an individual (a) who,
as at such date, has been a member of the Board of Managers for at least the 12
preceding months, (b) who has been nominated to be a member of the Board of
Managers, directly or indirectly, by Sponsor or Persons nominated by Sponsor,
(c) who has been nominated to be a member of the Board of Managers by a
majority of the other Continuing Managers then in office or (d) who has been
nominated to be a member of the Board of Managers pursuant to the terms of the
Members' Agreement.

"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. The terms "Controlling" and "Controlled" have meanings correlative
thereto.

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

"Disclosed Matters" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.

"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 or binding agreements
issued, promulgated or entered into by or with any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, handling, treatment, storage, disposal, 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, natural resource damage, costs
of environmental investigation or remediation, administrative oversight costs,
fines, penalties or indemnities), of Holdings, 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 of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any
19

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.

"Equity Contribution" has the meaning assigned to such term in
the preamble of this Agreement.

"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.

"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.
20

"Event of Default" has the meaning assigned to such term in
Article VII.

"Excess Cash Flow" means, for any period, the sum (without
duplication) of:

(a) the Consolidated Net Income for such period, adjusted to
exclude any gains or losses attributable to Prepayment Events or
dispositions that would constitute Prepayment Events but for clauses
(a)(i) through (a)(iii) and clause (b) of the definition of the term
"Prepayment Event"; plus

(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such Consolidated Net Income for such
period; plus

(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if any, by
which the consolidated deferred revenues of Holdings and its consolidated
subsidiaries (not recorded as a current liability) increased during such
period plus (iii) the aggregate principal amount of Capital Lease
Obligations and other Indebtedness incurred during such period to finance
Capital Expenditures and Permitted Acquisitions, to the extent that
mandatory principal payments in respect of such Indebtedness would not be
excluded from clause (f) below when made; minus

(d) the sum of (i) any non-cash income or gains included in
determining such consolidated net income (or loss) for such period plus
(ii) the amount, if any, by which Net Working Capital increased during
such period plus (iii) the amount, if any, by which the consolidated
deferred revenues of Holdings and its consolidated subsidiaries (not
recorded as a current liability) decreased during such period; minus

(e) Capital Expenditures for such period (other than Capital
Expenditures made pursuant to Section 6.12(c) or (d)); minus

(f) the aggregate principal amount of Indebtedness repaid or
prepaid by Holdings and its consolidated subsidiaries during such period,
excluding (i) Indebtedness in respect of Revolving Loans and Letters of
Credit, (ii) Term Loans prepaid pursuant to Section 2.11(a), (b) or (c),
(iii) repayments or prepayments of Indebtedness financed by incurring
other Indebtedness, to the extent that mandatory principal payments in
respect of such other Indebtedness would, pursuant to this clause (f), be
deducted in determining Excess Cash Flow when made and (iv) Indebtedness
referred to in clauses (iv) and (v) of Section 6.01(a) and Indebtedness
(other than term Indebtedness) referred to in clause (viii) of Section
6.01(a).
21

"Excluded Taxes" means, with respect to the Administrative
Agent, the Swingline Lender, any Lender, the Issuing Bank 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 net 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 Foreign Lender, in which its applicable
lending office is located (provided, however, that no Foreign Lender shall be
deemed to be located in any jurisdiction solely as a result of taking any
action related to this loan), (b) any branch profits Taxes imposed by the
United States of America or any similar Tax imposed by any other jurisdiction
described in clause (a) above 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 (i) that is in effect and would apply to amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office), except to the extent that such
Foreign Lender (or its assignor, if any) would have been entitled, at the time
of designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to any withholding Tax pursuant to
Section 2.17(a) or (ii) that is attributable to such Foreign Lender's failure
to comply with Section 2.17(e).

"Existing Shareholder" has the meaning assigned to such term in
the preamble of this Agreement.

"Fairfield Chase" means Fairfield Chase Medical Partners, LLC, a
Delaware limited liability company.

"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.

"First Union" has the meaning assigned to such term in the
preamble of this Agreement.

"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
22

definition, the United States of America, each State thereof and the District
of Columbia shall be deemed to constitute a single jurisdiction.

"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.

"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.

"Guarantee Agreements" means, collectively, the Parent Guarantee
Agreement and the Subsidiary Guarantee Agreement.

"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, including any material listed as a hazardous
substance under Section 101(14) of CERCLA.
23

"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.

"Holdings" has the meaning assigned to such term in the
introductory paragraph of this Agreement.

"Holdings Operating Agreement" means collectively, the Operating
Agreement of Holdings and the By-laws of Holdings, each dated as of June 30,
1999, which collectively are the sole "limited liability company agreements" of
Holdings within the meaning of the Act.

"Income Tax Liabilities" means an amount determined by
multiplying (a) (i) all taxable income and gains of Holdings (in the case of
Holdings) and the Borrower (in the case of the Borrower) for such calendar year
(the "Taxable Amount") minus (ii) an amount (not to exceed the Taxable Amount
for such calendar year) equal to all losses of Holdings (in the case of
Holdings) or the Borrower (in the case of the Borrower) in any of the three
prior calendar years that have not been previously subtracted pursuant to this
clause (ii) from the Taxable Amount of Holdings or the Borrower, respectively,
for any prior year by (b) 44%.

"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) 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) (it being understood that "deferred purchase price" in connection
with any purchase of property or assets shall include only that portion of the
purchase price which shall be deferred beyond the date on which the purchase is
actually consummated), (e) 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, (f) all
Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (i) 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
24

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.

"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit F, among Holdings, the Borrower, the Subsidiary Loan Parties and the
Administrative Agent.

"Information Memorandum" means the Confidential Information
Memorandum dated May 1999 relating to the Borrower and the Transactions.

"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.

"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each June, September, December
and March, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan 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 and (c) with respect to any Swingline Loan, the day that such
Loan is required to be repaid.

"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, two, three
or six months thereafter, as the Borrower may elect, provided that (a) 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 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 (b) any
Interest Period 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.

"Investor" has the meaning assigned to such term in the preamble
of this Agreement.
25

"Issuing Bank" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

"Joint Venture" means, as to a Person, any corporation,
partnership or other legal entity or arrangement in which such Person has any
direct or indirect Equity Interest and that is not a subsidiary of such Person.

"LC Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (a) the date that is five
Business Days prior to the Revolving Maturity Date and (b) the date of
termination of the Revolving Commitments.

"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.

"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Borrower at such time. The LC Exposure of any Revolving
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.

"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. Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender.

"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.

"Leverage Ratio" means, on any date, the ratio of (a) Total Debt
as of such date to (b) Consolidated EBITDA for the four-fiscal-quarter period
of the Borrower ended on such date (or, if such date is not the last day of a
fiscal quarter, ended on the last day of the fiscal quarter of the Borrower
most recently ended prior to such date), all determined on a consolidated basis
in accordance with GAAP.

"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any
26

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 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that 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 $5,000,000 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 approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period (and if the Administrative Agent shall not have a London office, then
the principal London office of the Syndication Agent).

"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" means this Agreement, the Letters of Credit,
the Guarantee Agreements, the Indemnity, Subrogation and Contribution Agreement
and the Security Documents.

"Loan Parties" means Holdings, the Borrower and the Subsidiary
Loan Parties.

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

"Location" means any facility of the Business, now or
hereinafter owned, leased or operated by the Borrower or any of its
Subsidiaries, in each case including the land on which such facility is located
and all buildings and other improvements thereon, including leasehold
improvements and all assets related thereto, the construction, acquisition or
installation of which would constitute Capital Expenditures.

"Management Agreement" means a financial advisory agreement or
other similar agreement between the Borrower or Holdings and the Investor or
Fairfield Chase
27

(or any Affiliate of either of them) providing for customary expense
reimbursement and such other terms as are reasonably acceptable to the Agents.

"Management Equity Contribution" has the meaning assigned to
such term in the preamble of this Agreement.

"Margin Stock" has the meaning assigned to such term in
Regulation U.

"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, properties, assets, liabilities or financial
condition of Holdings, the Borrower and the Subsidiaries taken as a whole, (b)
the ability of the Loan Parties to perform any material obligations under any
Loan Document or (c) the rights of or benefits available to the Lenders under
any Loan Document.

"Material Indebtedness" means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries
in an aggregate principal amount exceeding $2,500,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
Holdings, 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 Holdings, the Borrower or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.

"Maximum Rate" has the meaning assigned to such term in Section
9.13.

"Members' Agreement" means the Members' Agreement dated as of
June 30, 1999, among Holdings, the Investor and the other members of Holdings
named therein.

"Merger Subsidiary" has the meaning assigned to such term in
Section 6.03(b).

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

"Mortgage" means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
reasonably satisfactory in form and substance to the Collateral Agent.

"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned or leased by a Loan Party and
identified on Schedule
28

1.01(a), and includes each other parcel of real property and improvements
thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or
5.13.

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

"Net Proceeds" means, with respect to any event, (a) the cash
proceeds received in respect of such event, including (i) any cash (other than
amounts representing interest) received in respect of any non-cash proceeds,
but only as and when received, (ii) in the case of a casualty, insurance
proceeds, and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by Holdings, the Borrower and
the Subsidiaries to third parties in connection with such event, (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant
to a sale and lease-back transaction or a casualty or other insured damage or
condemnation or similar proceeding), the amount of all payments required to be
made by Holdings, the Borrower and the Subsidiaries as a result of such event
to repay Indebtedness (other than Loans) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event (including in order
to obtain consent required therefor), (iii) the amount of all Taxes paid (or
reasonably estimated to be payable) by Holdings, the Borrower and the
Subsidiaries, and the amount of any reserves established by Holdings, the
Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower) and (iv) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or Joint Ventures as a result of such
event (provided that such distribution or payment is proportionate to such
minority interest holders' share of net income (or dividends and distribution
made in respect of the Equity Interests) of such Subsidiary or Joint Venture as
provided in the certificate of incorporation or other governing documents of
such Subsidiary or Joint Venture); provided, however, that with respect to any
sale, transfer or other disposition of an asset (including, pursuant to a sale
and lease-back transaction or, subject to Section 5.08, a casualty or other
insured damage or condemnation or similar proceeding), if the Borrower shall
deliver a certificate (a "Reinvestment Certificate") of a Financial Officer to
the Administrative Agent at the time of such sale, transfer or other
disposition setting forth the Borrower's intent to use the proceeds of such
sale, transfer or other disposition to fund expenditures for (A) other assets
to be used in a Permitted Business or (B) the acquisition in a Permitted
Acquisition of voting Equity Interests of one or more Persons engaged in a
Permitted Business that is or thereby becomes a Subsidiary, in each case prior
to the date that is 300 days after receipt of such proceeds and no Default or
Event of Default shall have occurred and shall be continuing at the time of
such certificate or at the proposed time of the application of such proceeds,
such proceeds shall not constitute Net
29

Proceeds except to the extent not so used at the end of such 300-day period, at
which time such proceeds shall be deemed to be Net Proceeds.

"Net Working Capital" means, at any date, (a) the consolidated
current assets and non-current deferred income tax assets of Holdings and its
consolidated subsidiaries as of such date (excluding cash and Permitted
Investments) minus (b) the consolidated current liabilities and non-current
deferred income tax liabilities of Holdings and its consolidated subsidiaries
as of such date (excluding current liabilities in respect of checks issued but
not yet paid and Indebtedness). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes
more positive or less negative and decreases when it becomes less positive or
more negative.

"Obligations" has the meaning assigned to such term in the
Security Agreement.

"Other Taxes" means any and all current or future recording,
stamp, documentary, excise, transfer, sales or property or similar Taxes,
charges or levies arising from any payment made under any Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, any
Loan Document.

"Parent Guarantee Agreement" means the Parent Guarantee
Agreement, substantially in the form of Exhibit D, made by Holdings in favor of
the Collateral Agent for the benefit of the Secured Parties.

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

"Perfection Certificate" means a certificate in the form of
Annex 1 to the Security Agreement or any other form approved by the Collateral
Agent.

"Permitted Acquisition" means the acquisition, by merger or
otherwise, by the Borrower or any Subsidiary of assets or Equity Interests so
long as (a) immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing or would result therefrom, (b)
all transactions related thereto shall be consummated in accordance in all
material respects with applicable laws, (c) in the case of any acquisition of
Equity Interests in any Person, such acquisition is an acquisition of 100% of
the Equity Interests of such Person, (d) in case of an acquisition of assets,
such assets (other than assets to be retired or disposed of) are to be used,
and in the case of an acquisition of Equity Interests, the Person so acquired
is engaged, in the same line of business or a Related Business, (e) (i) the
Borrower shall be in compliance, on a pro forma basis after giving effect to
such acquisition (including any operating expense reductions that would be
permitted pursuant to Article XI of Regulation S-X under the
30

Securities Act of 1933, as amended, or that have been approved by the Required
Lenders and Indebtedness assumed or permitted to exist in connection with such
acquisition), with the covenants set forth in Sections 6.13 and 6.14 (provided
that (A) if the maximum Leverage Ratio then permitted under Section 6.13 is
equal to or greater then 5.00 to 1.00, then for purposes of determining such
compliance the maximum Leverage Ratio shall be equal to the remainder of (I)
the then applicable maximum Leverage Ratio minus (II) 0.25 to 1.00 and (B) if
the date of consummation of such acquisition is not the last day of a fiscal
quarter, the Consolidated Interest Coverage Ratio shall be calculated, on the
pro forma basis set forth above, with respect to the four fiscal quarters of
the Borrower most recently ended prior to such date), and shall deliver to the
Administrative Agent a certificate of a Financial Officer to such effect and
(ii) if any acquisition is consummated prior to December 31, 1999, (A) the
Leverage Ratio as of the date of the consummation of such acquisition shall be
equal, on a pro forma basis after giving effect to such acquisition (including
any operating expense reductions that would be permitted pursuant to Article XI
of Regulation S-X under the Securities Act of 1933, as amended, or that have
been approved by the Required Lenders and Indebtedness assumed or permitted to
exist in connection with such acquisition), to 5.75 to 1.00 and (B) the
Consolidated Interest Coverage Ratio for the period of the four fiscal quarters
of the Borrower ended on the date of consummation of such acquisition (or, if
such date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter of the Borrower most recently ended prior to such date) shall be
equal, on a pro forma basis after giving effect to such acquisition (including
any cost savings to the extent approved by the Required Lenders and
Indebtedness assumed or permitted to exist in connection with such
acquisition), to 1.50 to 1.00 and the Borrower shall deliver a certificate of a
Financial Officer to the effect of each of the foregoing clauses (A) and (B),
(f) on a pro forma basis after giving effect to such acquisition, the sum of
(i) the unused Revolving Commitments and (ii) the dollar cash and cash
equivalents of the Borrower and the Subsidiaries not subject to any Lien or
other restriction (other than Permitted Liens and Liens and restrictions
arising under the Loan Documents) shall be equal to at least $5,000,000 and (g)
simultaneously with any such acquisition, the Administrative Agent for the
benefit of the Secured Parties shall be granted a first-priority security
interest in all real and personal property (including capital stock and other
securities or interests but excluding leasehold interests), subject to
customary and reasonable exceptions and permitted encumbrances, acquired by the
Borrower as part as such acquisition, and the Borrower shall, and shall cause
any applicable Subsidiary to, execute any documents (including supplements to
the Subsidiary Guarantee Agreement, the Security Agreement, the Pledge
Agreement and the Indemnity, Subrogation and Contribution Agreement, if
applicable), financing statements, agreements and instruments, and take all
action (including filing financing statements and obtaining and providing
consents, title insurance, surveys and legal opinions) that may be required
under applicable law or as the Administrative Agent may request, in order to
grant, preserve, protect and perfect such security interest; provided, however,
that the aggregate amount paid (including any Indebtedness assumed in
31

connection therewith) in connection with (i) any such Permitted Acquisition
shall not exceed $30,000,000 (provided, that if the aggregate amount paid with
respect to any Permitted Acquisition, including any Indebtedness assumed in
connection therewith, is in excess of $25,000,000, at least $5,000,000 of the
consideration paid shall consist of Equity Interests of Holdings), (ii) all
such Permitted Acquisitions shall not exceed $50,000,000 during the term of
this Agreement and (iii) all Permitted Acquisitions involving assets located
outside the United States of America or the Equity Interests of entities
organized outside the United States of America shall not exceed $10,000,000 in
each case during the term of this Agreement.

"Permitted Business" means the Business and any business
providing for the design, manufacture or marketing of orthopedic products,
devices, accessories or services, other medical products, devices, accessories
or services or any businesses that are reasonably related, ancillary or
complementary thereto.

"Permitted Encumbrances" means:

(a) Liens imposed by law for Taxes or other governmental charges
that are not yet due or are being contested in compliance with Section
5.05;

(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law,arising in the ordinary
course of business and securing obligations that are not overdue by more
than 60 days or are being contested in compliance with Section 5.05;

(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;
32

(g) any interest of a landlord in or to property of the tenant
imposed by law, arising in the ordinary course of business and securing
lease obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.05, or any possessory rights of a
lessee to the leased property under the provisions of any lease permitted
by the terms of this Agreement; and

(h) Liens of a collection bank arising in the ordinary course of
business under Section 4-208 of the Uniform Commercial Code in effect in
the relevant jurisdiction,

provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.

"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
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or 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 that has a combined capital and surplus and undivided profits of
not less than $500,000,000;

(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; and

(e) shares of funds registered under the Investment Company Act
of 1940, as amended, that have assets of at least $500,000,000 and invest
substantially all their assets in obligations described in clauses (a)
through (d) above to the extent that such shares are rated by Moody's or
S&P in one of the two highest rating categories assigned by such agency
for shares of such nature.
33

"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.

"Pledge Agreement" means the Pledge Agreement, substantially in
the form of Exhibit G, among Holdings, the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.

"Preferred Units" has the meaning assigned to such term in the
preamble of this Agreement.

"Prepayment Event" means:

(a) any sale, transfer or other disposition (including pursuant
to a sale and lease-back transaction) of any property or asset of
Holdings, the Borrower or any Subsidiary, other than (i) dispositions
described in clauses (a), (b) and (c) of Section 6.05, (ii) dispositions
to which clause (b) of this definition applies and (iii) other
dispositions resulting in aggregate Net Proceeds not exceeding $250,000
during any fiscal year of the Borrower;

(b) subject to Section 5.08, any casualty or other insured
damage to, or any taking under power of eminent domain or by condemnation
or similar proceeding of, any property or asset of Holdings, the Borrower
or any Subsidiary, other than casualties, insured damage or takings
resulting in aggregate Net Proceeds not exceeding $250,000 during any
fiscal year of the Borrower;

(c) (i) the issuance by Holdings, the Borrower or any Subsidiary
of any Equity Interests, or (ii) without duplication of clause (i) of this
paragraph (c), the receipt by Holdings, the Borrower or any Subsidiary of
any capital contribution, other than in each case (A) any such issuance of
Equity Interests by or to, or receipt of any such capital contribution
from, Holdings, the Borrower or a Subsidiary for the sole purpose of
financing a Permitted Acquisition (including any issuance to one or more
sellers in a Permitted Acquisition) or Capital Expenditures, (B) the
issuance of Equity Interests of Holdings to employees of the Borrower or
any of the Subsidiaries in their capacity as such pursuant to employee
benefit plans, employment agreements or other written employment-related
34

arrangements or (C) the purchase of Equity Interests of a Subsidiary, or
the contribution of capital to a Subsidiary, by the Borrower from funds
obtained in a manner not otherwise constituting a Prepayment Event; and

(d) the incurrence by Holdings, the Borrower or any Subsidiary
of any Indebtedness, other than Indebtedness permitted by clauses (a) and
(b) of Section 6.01.

"Prime Rate" means the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in Charlotte, North Carolina; each change in the
Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

"Pro Forma Capex Amount" has the meaning set forth in Section
6.12(a).

"Recapitalization" has the meaning assigned to such term in the
preamble of this agreement

"Recapitalization Agreement" has the meaning assigned to such
term in the preamble of this Agreement.

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

"Regulation T" means Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.

"Regulation U" means Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.

"Regulation X" means Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.

"Reinvestment Certificate" has the meaning set forth in the
definition of the term "Net Proceeds".

"Reinvestment Temporary Repayment" has the meaning set forth in
Section 2.11(f).

"Related Parties" means, with respect to any specified Person,
such Person's Affiliates (other than Sponsor and Persons Controlled by Sponsor
in the case of The Chase Manhattan Bank) and the respective directors,
officers, employees, agents and
35

advisors of such Person and such Person's Affiliates (other than Sponsor and
Persons Controlled by Sponsor in the case of The Chase Manhattan Bank).

"Release" has the meaning set forth in Section 101(22) of
CERCLA.

"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.

"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any class of
Equity Interests of Holdings, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any Equity Interests of Holdings,
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any Equity Interests of Holdings, the Borrower or any Subsidiary.

"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.

"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed
as an amount representing the maximum aggregate amount of such Lender's
Revolving Exposure hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.08 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 Revolving Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment, as applicable. The initial aggregate
amount of the Lenders' Revolving Commitments is $25,000,000.

"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.

"Revolving Lender" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
36

"Revolving Loan" means a Loan made pursuant to clause (b) of
Section 2.01.

"Revolving Maturity Date" means June 30, 2004, or if such day is
not a Business Day, the next preceding Business Day.

"Roll-Over Equity" has the meaning assigned to such term in the
preamble of this Agreement.

"S&P" means Standard & Poor's Rating Service.

"Secured Parties" has the meaning assigned to such term in the
Security Agreement.

"Security Agreement" means the Security Agreement, substantially
in the form of Exhibit H, among Holdings, the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.

"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement, mortgage or other
instrument or document executed and delivered pursuant to Section 5.12 or 5.13
to secure any of the Obligations.

"Senior Subordinated Notes" has the meaning assigned to such
term in the preamble of this Agreement.

"Senior Subordinated Notes Indenture" means the indenture to be
entered into by Holdings, the Borrower and DJ Orthopedics Capital Corporation,
a Delaware corporation and a wholly owned Subsidiary, in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by Holdings, the Borrower and such Subsidiary in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 6.11.

"Sponsor" has the meaning assigned to such term in the preamble
of this Agreement.

"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 (a) with respect to the Base CD Rate,
37

for new negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) 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
proration, 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 Equity 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, 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.

"Subsidiary" means any subsidiary of the Borrower.

"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit E, made by the Subsidiary Loan
Parties in favor of the Collateral Agent for the benefit of the Secured
Parties.

"Subsidiary Loan Party" means any Subsidiary other than a
Foreign Subsidiary that, if it were to Guarantee the Obligations, would result
in adverse Tax consequences to Holdings or the Borrower.

"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.

"Swingline Lender" means The Chase Manhattan Bank or any of its
Affiliates, in its capacity as lender of Swingline Loans hereunder.

"Swingline Loan" means a Loan made pursuant to Section 2.04.
38

"Syndication Agent" means The Chase Manhattan Bank in its
capacity as Syndication Agent with respect to this Agreement.

"Tax Distribution" means as of the time of determination
thereof, any distribution by the Borrower or Holdings, to (a) in the case of
the Borrower, Holdings or (b) in the case of Holdings, its members pursuant to
the provisions of Section 6.08(a)(i), which distribution shall be equal to (i)
with respect to quarterly estimated Tax payments due in each calendar year, 25%
of the Income Tax Liabilities for such calendar year as estimated in writing by
the chief financial officer of the Borrower in good faith and (ii) with respect
to Tax payments to be made with income Tax returns filed for a full calendar
year or with respect to adjustments to such returns imposed by the Internal
Revenue Service or other taxing authority, the Income Tax Liabilities for such
calendar year minus the aggregate amount distributed for such year as provided
in the preceding clause (i). In the event the amount determined under clause
(ii) of the immediately preceding sentence is a negative amount, the amount of
any Tax Distributions in the succeeding calendar year (or if necessary, any
next succeeding calendar years) shall be reduced by an aggregate amount equal
to such amount.

"Taxable Amount" has the meaning assigned to such term in the
definition of the term "Income Tax Liabilities".

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

"Term Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Effective Date, expressed as an amount representing the maximum principal
amount of the Term Loan to be made by such Lender hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.08 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 Term Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Term Commitment, as applicable. The
initial aggregate amount of the Lenders' Term Commitments is $15,500,000.

"Term Loans" means Loans made pursuant to clause (a) of Section
2.01.

"Term Maturity Date" means June 30, 2005, or if such day is not
a Business Day, the next preceding Business Day.

"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day
39

(or, if such day is not a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day (or,
if such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.

"Total Debt" means, as of any date of determination, without
duplication, (a) the aggregate principal amount of Indebtedness of Holdings,
the Borrower and the Subsidiaries as of such date, determined on a consolidated
basis in accordance with GAAP (other than (i) Indebtedness of the type referred
to in clause (h) of the definition of the term "Indebtedness", except to the
extent of any unreimbursed drawings thereunder and Indebtedness of the type
referred to in Section 6.01(a)(x), and (ii) the aggregate principal amount of
Revolving Loans and Swingline Loans outstanding as of such date), plus (b) the
average daily principal amount of Revolving Loans and Swingline Loans
outstanding during the four-fiscal-quarter period immediately preceding such
date.

"Term Lender" means a Lender with a Term Commitment or an
outstanding Term Loan.

"Transaction Costs" has the meaning assigned to such term in the
preamble of this Agreement.

"Transactions" has the meaning assigned to such term in the
preamble of this Agreement.

"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.
"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 may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a
40

"Revolving Borrowing") or by Type (e.g., a "Eurodollar Borrowing") or by Class
and Type (e.g., a "Eurodollar Revolving 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
41

SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees (a) to make a Term Loan to the Borrower on
the Effective Date in a principal amount not exceeding its Term Commitment, and
(b) to make Revolving Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not be
reborrowed.

SECTION 2.02. Loans and Borrowings. (a) Each Loan (other
than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans
of the same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. 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) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Notwithstanding anything to the
contrary contained herein, all Borrowings made on the Effective Date shall be
ABR Borrowings. Each Swingline Loan shall be an ABR Loan. 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.

(c) 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 $2,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $2,000,000,
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e). Each Swingline Loan shall be in an amount that is an
integral multiple of $50,000 and not less than $250,000. Borrowings of more
than one Type and Class may be outstanding at the same time, provided that
there shall not at any time be more than a total of eight Eurodollar Borrowings
outstanding.

(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue
(i) any Revolving Borrowing or Swingline Loan if the Interest Period requested
with respect thereto would
42

end after the Revolving Maturity Date or (ii) any Term Borrowing if the
Interest Period requested with respect thereto would end after the Term
Maturity Date.

SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing, provided that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

(i) whether the requested Borrowing is to be a Revolving
Borrowing or Term Borrowing;

(ii) the aggregate amount of such Borrowing;

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

(iv) subject to the second sentence of Section 2.02(b), whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(v) 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

(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.

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.
43

SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower from time to time during the Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $2,500,000 or (ii) the sum of the total Revolving Exposures exceeding
the total Revolving Commitments, provided that the Swingline Lender shall not
be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent and the Swingline Lender of such request by telephone
(confirmed by telecopy), not later than 1:00 p.m., New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan. The Swingline Lender shall make each Swingline
Loan available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the
Administrative Agent require the Revolving Lenders to acquire participations on
any Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall be given to the Administrative Agent not later than 11:00 a.m.,
New York City time, on the Business Day immediately preceeding the Business Day
on which the Revolving Lenders are required to acquire such participations and
shall specify the aggregate amount of Swingline Loans in which Revolving
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender's Applicable
Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as
44

provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving
Lenders), and the Administrative Agent shall promptly pay to the Swingline
Lender the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender. Any amounts received by the Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made their payments pursuant to this paragraph and to the Swingline Lender, as
their interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.

SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account or for the account of any Subsidiary
(subject, in the case of any Subsidiary which is not a Subsidiary Loan Party,
to the limitations set forth in Section 6.04), in a form reasonably acceptable
to the Administrative Agent and the Issuing Bank, at any time and from time to
time during the LC Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended
45

only if (and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrower shall be deemed to represent and warrant that), after
giving effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $5,000,000 and (ii) the total Revolving Exposures
shall not exceed the total Revolving Commitments.

(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after
the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is five Business Days prior to the Revolving Maturity Date.

(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 1:00 p.m., New York City time, on the date
that such LC Disbursement is made, if the Borrower shall have received notice
of such LC Disbursement prior to 10:00 a.m., New York City time, on such date,
or, if such notice has not been received by the Borrower prior to such time on
such date, then not later than 12:00 noon, New York City time, on (i) the
Business Day that the Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of
receipt, provided that the
46

Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.04 that such payment be financed with an
ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Revolving
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Revolving Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant
to this paragraph, the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
47

(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of set-off against, the Borrower's obligations
hereunder. None of the Administrative Agent, the Lenders, the Issuing Bank or
any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank, provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented that appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such
48

demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder, provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans,
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the Lenders of any such replacement of
the Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the
term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this Agreement
with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure
as of such date plus any accrued and unpaid interest thereon, provided that the
obligation to deposit such cash collateral shall become effective
49

immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII.
Each such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments (if
requested by the Borrower) shall be made at the option and sole discretion of
the Administrative Agent and at the Borrower's risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall be applied by
the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

SECTION 2.06. Funding of Borrowings. (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, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders, provided that Swingline Loans shall be made
as provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in
like funds, to an account designated by the Borrower in the applicable
Borrowing Request, provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.

(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, the 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 available 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
50

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 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 Lender's Loan included in such Borrowing.

SECTION 2.07. Interest Elections. (a) Each Revolving
Borrowing and Term 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. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.

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

(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:

(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 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;
51

(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.

(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which
any principal of the Loans of such Class is scheduled to be repaid and (ii) the
sum of the aggregate principal amount of outstanding Eurodollar Borrowings of
such Class with Interest Periods ending on or prior to such scheduled repayment
date plus the aggregate principal amount of outstanding ABR Borrowings of such
Class would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.

SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless previously terminated, (i) the Term Commitments shall terminate at 5:00
p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.

(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class, provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less
52

than $2,000,000 and (ii) the Borrower shall not terminate or reduce the
Revolving Commitments if, after giving effect to any concurrent prepayment of
the Revolving Loans in accordance with Section 2.11, the sum of the Revolving
Exposures would exceed the total Revolving 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 three 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 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 Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, an initial public offering of Equity Interests in Holdings or the
Borrower or a sale of all or substantially all the assets or Equity Interests
of the Borrower or Holdings (whether by merger or otherwise), 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 of any Class shall
be permanent. Each reduction of the Commitments of any Class shall be made
ratably among the Lenders in accordance with their respective Commitments of
such Class.

SECTION 2.09. Repayment of Loans, Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.10 and (iii)
to the Swingline Lender the then unpaid principal amount of each Swingline Loan
on the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made, provided that on
each date that a Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding.

(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 Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and
53

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.

(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a customary form reasonably satisfactory to the Administrative
Agent and the Borrower. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered
assigns).

SECTION 2.10. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (c) of this Section, the Borrower shall repay
Term Borrowings on the last Business Day of each month set forth below (or, in
the case of the last repayment, on the Term Maturity Date) in the aggregate
principal amount set forth opposite such month:

Date Amount
- ---- ------

September, 1999 $125,000

December, 1999 $125,000

March, 2000 $125,000

June, 2000 $125,000

September, 2000 $125,000

December, 2000 $125,000

March, 2001 $125,000

June, 2001 $125,000

September, 2001 $125,000

December, 2001 $125,000

Date Amount
- ---- ------

March, 2002 $125,000

June, 2002 $125,000

September, 2002 $125,000

December, 2002 $125,000

March, 2003 $125,000

June, 2003 $125,000

September, 2003 $125,000

December, 2003 $125,000

March, 2004 $125,000

June, 2004 $125,000

September, 2004 $3,250,000

December, 2004 $3,250,000

March, 2005 $3,250,000

Term Maturity Date $3,250,000
----------

$15,500,000
==========

(b) To the extent not previously paid, all Term Loans shall be
due and payable on the Term Maturity Date.

(c) If the initial aggregate amount of the Lenders' Term
Commitments exceeds the aggregate principal amount of Term Loans that are made
on the Effective Date, then the scheduled repayments of Term Borrowings to be
made pursuant to this Section shall be reduced ratably by an aggregate amount
equal to such excess. Any prepayment of a Term Borrowing shall be applied to
reduce the subsequent scheduled repayments of the Term Borrowings to be made
pursuant to this Section ratably.

(d) Prior to any repayment of any Term Borrowings hereunder,
the Borrower shall select the Borrowing or Borrowings to be repaid and shall
notify the Administrative Agent by telephone (confirmed by telecopy) of such
selection not later than 11:00 a.m., New York City time, three Business Days
before the scheduled date of such repayment, provided that each repayment of
Term Borrowings shall be applied to repay any outstanding ABR Borrowings before
any Eurodollar Borrowings. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.
55

SECTION 2.11. Prepayment of Loans. (a) The Borrower shall
have the right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to the requirements of this Section.

(b) Subject to the provisions of Section 5.08(b), in the event
and on each occasion that any Net Proceeds are received by or on behalf of
Holdings, the Borrower or any Subsidiary in respect of any Prepayment Event,
the Borrower shall, promptly after such Net Proceeds are received, prepay Term
Borrowings in an aggregate amount equal to 100% of such Net Proceeds.

(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 1999, the Borrower shall prepay
Term Borrowings in an aggregate amount equal to the amount by which (i) 50% of
Excess Cash Flow for such fiscal year (provided that such percentage shall be
increased from 50% to 75% in respect of any fiscal year if the Leverage Ratio
as of the last day of such fiscal year is equal to or exceeds 4.00 to 1.00)
exceeds (ii) the aggregate amount of all prepayments actually made pursuant to
Section 2.11(a) since the date a prepayment was made pursuant to this paragraph
in respect of the immediately preceding fiscal year of the Borrower (or would
have been required to be made pursuant to this paragraph if so required with
respect to such immediately preceding fiscal year). Each prepayment pursuant
to this paragraph shall be made on or before the date that is three days after
the date on which financial statements are delivered pursuant to Section 5.01
with respect to the fiscal year for which Excess Cash Flow is being calculated
(and in any event within 100 days after the end of such fiscal year).

(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section, provided that each prepayment shall be applied
to prepay ABR Borrowings before any Eurodollar Borrowings.

(e) The Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment, provided that, if a
notice of optional
56

prepayment is given in connection with a conditional notice of termination of
the Revolving Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such notice
(other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided in Section
2.02, except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a 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.

(f) In the event the Borrower specifies in the applicable
Reinvestment Certificate that the Borrower will apply the Net Proceeds of any
asset sale or other disposition to the temporary repayment of Revolving Loans
pursuant to this Section 2.11(f), the Borrower shall apply such Net Proceeds to
the repayment of Revolving Loans as provided in this Section, without giving
effect to any minimum repayment amounts set forth herein. Any such repayment
is referred to herein as a "Reinvestment Temporary Repayment". The Borrower
may from time to time reborrow all or a portion of the amount repaid pursuant
to any Reinvestment Temporary Repayment if (i) such borrowing complies with all
the procedures for a Revolving Borrowing set forth in Section 2.03 and (ii)
promptly upon the receipt of the proceeds of such Revolving Borrowing, the
Borrower (A) reinvests such proceeds in accordance with the terms of the
proviso in the definition of the term "Net Proceeds" or (B) applies such
proceeds to the prepayment of Term Loans as provided in Section 2.11(b). So
long as any portion of any Reinvestment Temporary Repayment has not been
reborrowed, the Borrower shall not be entitled to borrow, and no Lender shall
be entitled to make, Revolving Loans or Swingline Loans if after giving effect
thereto the aggregate Revolving Exposure at such time would exceed an amount
equal to (i) the aggregate amount of the Revolving Commitments at such time
minus (ii) the aggregate amount of all Reinvestment Temporary Repayments that
have not been reborrowed at such time.

SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including
the Effective Date to but excluding the date on which such Revolving Commitment
terminates. Accrued commitment fees shall be payable in arrears on the last
day of June, September, December and March of each year and on the date on
which the Revolving Commitments terminate, commencing on the first such date to
occur after the date hereof. 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
57

last day). For purposes of computing commitment fees with respect to Revolving
Commitments, a Revolving Commitment of a Lender shall be deemed to be used to
the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).

(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to
its participations in Letters of Credit, which shall accrue at the same
Applicable Rate as interest on Eurodollar Revolving Loans on the average daily
amount of such Lender's LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 3 of 1% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Accrued participation fees and fronting fees shall be payable on the last day
of June, September, December and March of each year, commencing on the first
such date to occur after the Effective Date, provided that all such fees shall
be payable on the date on which the Revolving Commitments terminate and any
such fees accruing after the date on which the Revolving Commitments terminate
shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting 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).

(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Borrower and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.

SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.
58

(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, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount,
2% plus the rate applicable to ABR Revolving Loans as provided in paragraph (a)
of this Section.

(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving
Loans, upon termination of the Revolving Commitments, provided that (A)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (B) in the event of any repayment or prepayment of any Loan (other than
a prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (C) 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.

(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 or Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.

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 for such
Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect
59

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 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 (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 the Issuing Bank; or

(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;

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 increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank in respect thereof (whether of principal, interest or otherwise),
then the Borrower will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

(b) If any Lender or the Issuing Bank 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 or the Issuing Bank's capital or
on the capital of such Lender's or the Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay
60

to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section (and setting forth the underlying calculations) shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, 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 or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such
compensation, provided that the Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
the Issuing Bank's intention to claim compensation therefor; and, provided
further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-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 Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(e) and is revoked in accordance therewith), or (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 incurred by such Lender
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 that would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted LIBO Rate 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 that would accrue on
61

such principal amount for such period at the interest rate that 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 (and setting forth
the underlying calculations) 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 or under any other Loan
Document 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) the Administrative Agent, Lender or Issuing Bank
(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, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any 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 (and setting forth the underlying calculations) delivered to the
Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, 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
62

payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.

(e) Any Foreign Lender and any Issuing Bank that is not a
"United States person" within the meaning of Section 7701(a)(30) of the Code
(together with the Foreign Lenders, the "Non-U.S. Lenders") shall, if such
Non-U.S. Lender is entitled to an exemption from or reduction of withholding
Tax under the laws 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, 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. Notwithstanding any other provision of this
Section 2.17, a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.17(e) that such Non-U.S. Lender is not legally able
to deliver.

(f) If the Administrative Agent or a Lender (or transferee)
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.17 with respect to the Taxes or Other Taxes giving rise of
such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender (or transferee) and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund); provided,
however, that the Borrower, upon the request of the Administrative Agent or
such Lender (or transferee), agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender (or
transferee) in the event the Administrative Agent or such Lender (or
transferee) is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.17(f) shall require the Administrative
Agent or any Lender to make available its Tax returns (or any other information
relating to its Taxes which it deems confidential) to the Borrower or any other
Person.

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 or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City 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
63

the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices set
forth in Section 9.01 except payments to be made directly to the Issuing Bank
or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the Persons specified therein. 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 under any Loan Document 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 under each Loan
Document 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,
unreimbursed LC Disbursements, 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 and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements 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 Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans or any other payment due hereunder resulting
in such Lender receiving payment of a greater proportion of the aggregate
amount of its Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans and accrued interest 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
Revolving Loans, Term Loans and participations in LC Disbursements and
Swingline 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
Revolving Loans, Term Loans and participations in LC Disbursements and
Swingline 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 (A) any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or (B)
any payment obtained by a Lender as consideration for the assignment of or sale
of a participation in any of its Loans or
64

participations in LC Disbursements 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), provided that The Chase Manhattan
Bank and its Affiliates (other than Sponsor and Persons Controlled by Sponsor)
shall not be deemed to be Affiliates of Sponsor or any Person Controlled by
Sponsor. 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 or the Issuing Bank
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 or the Issuing Bank, as the case may be, the amount due. In such
event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank 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.

(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), 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
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to 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. The Borrower hereby
65

agrees 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 (and, if a Revolving Commitment is being assigned, the Issuing Bank and
Swingline Lender), 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 and participations in LC Disbursements and Swingline
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 material 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

Each of Holdings and the Borrower represents and warrants to the
Lenders that (it being understood that for purposes of the representations and
warranties set forth in this Article III made on the Effective Date (and of all
defined terms used in conjunction therewith), the Transactions shall be deemed
to have been consummated immediately prior to the making of such
representations and warranties):

SECTION 3.01. Organization; Powers. Each of Holdings, the
Borrower and the 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
66

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
to be entered into by (and any payment of Transaction Costs to be made by) each
Loan Party are within such Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder or member
action. This Agreement has been duly executed and delivered by each of
Holdings and the Borrower and constitutes, and each other Loan Document to
which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of Holdings, the
Borrower or such Loan Party (as the case may be), 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.

SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions and the payment of the Transaction Costs (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 or, if not obtained or made, would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect and
except filings necessary to perfect Liens created under the Loan Documents, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of Holdings, the Borrower or any of the
Subsidiaries or any order of any Governmental Authority, except, with respect
to any violation of applicable law or regulation or any order of any
Governmental Authority, to the extent any such violation would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon Holdings, the Borrower or
any of the Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by Holdings, the Borrower or any of the
Subsidiaries, except to the extent any such violation, default or right would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect, and (d) will not result in the creation or imposition of any
Lien (other than any Lien expressly permitted by Section 6.02) on any asset of
Holdings, the Borrower or any of the Subsidiaries, except Liens created under
the Loan Documents.

SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statement of income, members' equity and cash flows (i) as of
and for the year ending December 31, 1998, reported on by Ernst & Young,
independent public accountants, and (ii) as of and for the period and the
portion of the fiscal year ending April 3, 1999, certified by its chief
financial officer. Such financial statements present
67

fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.

(b) The Borrower has heretofore furnished to the Lenders its
pro forma consolidated balance sheet as of April 3, 1999, prepared giving
effect to the Transactions (and payment of the Transaction Costs) as if the
Transactions (and payment of the Transaction Costs) had occurred on such date.
Such pro forma consolidated balance sheet (i) has been prepared in good faith
based on the same assumptions used to prepare the pro forma financial
statements included in the Offering Memorandum for the Senior Subordinated
Notes (which assumptions are believed by Holdings and the Borrower to be
reasonable), (ii) is based on the best information available to Holdings and
the Borrower after due inquiry, (iii) accurately reflects all adjustments
necessary to give effect to the Transactions (and payment of the Transaction
Costs) and (iv) presents fairly, in all material respects, the pro forma
financial position of the Borrower and its consolidated Subsidiaries as of
April 3, 1999 as if the Transactions (and payment of the Transaction Costs) had
occurred on such date.

(c) Except as disclosed in the financial statements referred to
above or the notes thereto or in the Information Memorandum and except for the
Disclosed Matters, after giving effect to the Transactions (and payment of the
Transaction Costs), none of Holdings, the Borrower or any of the Subsidiaries
has, as of the Effective Date, any contingent liabilities, unusual long-term
commitments or unrealized losses, which contingent liabilities, unusual
long-term commitments or unrealized losses could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

(d) Since December 31, 1998, there has not occurred any event,
condition or circumstance that has had or could reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.05. Properties. (a) Each of Holdings, the Borrower
and the Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its
Mortgaged Properties), 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.

(b) Each of the Borrower and the Subsidiaries has complied with
all material obligations under all leases to which it is a party and that are
material to the Borrower and the Subsidiaries taken as a whole and all such
leases are in full force and
68

effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
undisturbed possession under all such material leases in which a Borrower or a
Subsidiary is a lessee.

(c) Each of Holdings, the Borrower and the Subsidiaries owns,
or is licensed or otherwise permitted to use, all trademarks, trade names,
copyrights, patents and other intellectual property material to its business,
and the use thereof by Holdings, the Borrower and the Subsidiaries does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

(d) Schedule 3.05 sets forth the address of each real property
that is owned or leased by the Borrower or any of the Subsidiaries as of the
Effective Date after giving effect to the Transactions.

(e) As of the Effective Date, neither Holdings, the Borrower
nor any of the Subsidiaries has received notice of, or has knowledge of, any
pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation. Neither
any Mortgaged Property nor any interest therein is subject to any right of
first refusal, option or other contractual right to purchase such Mortgaged
Property or interest therein.

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 Holdings or the
Borrower, threatened against or affecting Holdings, the Borrower or any of the
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 any of the Loan Documents or
the Transactions.

(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, none of Holdings, the
Borrower or any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability, including any on-site (at any current or former
facilities) or off-site releases of Hazardous Materials.
69

(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 caused there to be a reasonable likelihood of, a Material
Adverse Effect.

SECTION 3.07. Compliance with Laws and Agreements. Except as
set forth in Schedule 3.07, each of Holdings, the Borrower and each of the
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. None of
Holdings, the Borrower or any of the 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 Holdings, the Borrower and each
of the 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 (a) any Taxes that are being contested
in good faith by appropriate proceedings and for which Holdings, the Borrower
or such Subsidiary, as applicable, has set aside on its books adequate reserves
or (b) to the extent that the failure to do so could not reasonably be expected
to result in a Material Adverse Effect.

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 the fair market value of the assets of all such underfunded Plans by an
amount that would be reasonably likely to result in a Material Adverse Effect.

SECTION 3.11. Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which Holdings, the
70

Borrower or any of the Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the Agents or
any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (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,
provided that, with respect to projected financial information, Holdings and
the Borrower represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.

SECTION 3.12. Subsidiaries. Holdings does not have any
subsidiaries other than the Borrower and the Subsidiaries. Schedule 3.12 sets
forth the name of, and the ownership interest of the Borrower in, each
Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Effective Date.

SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Borrower and the
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums
in respect of such insurance that are due and payable have been paid.

SECTION 3.14. Labor Matters. As of the Effective Date, there
are no strikes, lockouts or slowdowns against Holdings, the Borrower or any
Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. The hours worked by and payments made to employees of Holdings,
the Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where any such violations, individually or in
the aggregate, would not be reasonably likely to result in a Material Adverse
Effect. All material payments due from Holdings, the Borrower or any
Subsidiary, or for which any claim may be made against Holdings, the Borrower
or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of Holdings, the Borrower or such Subsidiary. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining
agreement to which Holdings, the Borrower or any Subsidiary is bound.

SECTION 3.15. Solvency. Immediately after the consummation of
the Transactions to occur on the Effective Date (including immediately
following the making of each Loan made on the Effective Date and the giving of
effect to the application of the proceeds of such Loans) and payment of the
Transaction Costs to be paid on the Effective
71

Date, (a) the fair value of the assets of each Loan Party, at a fair valuation,
will exceed its debts and liabilities, unsecured, contingent or otherwise; (b)
the present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, unsecured, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, unsecured, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date.

SECTION 3.16. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent or financing statements are filed (covering
certificated securities), the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title
and interest of the pledgor thereunder in such Collateral, in each case prior
and superior in right to any other Person.

(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are
filed in the offices specified on Schedule 6 to the Perfection Certificate, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral (other than the Intellectual Property (as defined in the Security
Agreement), in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by Section 6.02.

(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the Security Agreement) in which a
security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person other
than Liens expressly permitted by Section 6.02 (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the
United States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof).
72

(d) The Mortgages are effective to create, subject to the
exceptions listed in each title insurance policy covering such Mortgage, in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
a legal, valid and enforceable Lien on all of the Loan Parties' right, title
and interest in and to the Mortgaged Properties thereunder and the proceeds
thereof, and when the Mortgages are filed in the appropriate offices, the
Mortgages shall constitute a Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Mortgaged Properties and the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to the rights of Persons pursuant to Liens expressly
permitted by Section 6.02.

SECTION 3.17. Federal Reserve Regulations. (a) Neither
Holdings, the Borrower nor any of the Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock.

(b) No part of the proceeds of any Loan or any Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or
that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation T, U or X.

SECTION 3.18. Year 2000 Compliance. To the best of Holdings's
and the Borrower's knowledge, any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the computer systems of the
Borrower and its Subsidiaries and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which systems of
the Borrower and its Subsidiaries interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed in all material
respects by September 30, 1999. To the best of Holdings's and the Borrower's
knowledge, the cost to the Borrower and its Subsidiaries of such reprogramming
and testing and of the reasonably foreseeable consequences of year 2000 to the
Borrower and its Subsidiaries (including reprogramming errors and the failure
of others' systems or equipment) will not result in a Default or a Material
Adverse Effect.
73

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans, of the Swingline Lender to make Swingline Loans and of the
Issuing Bank to issue Letters of Credit 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 Agents (or their counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf
of such party or (ii) written evidence satisfactory to the Agents (which
may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.

(b) The Agents shall have received a favorable written opinion
(addressed to the Agents and the Lenders and dated the Effective Date) of
each of (i) O'Sullivan Graev & Karabell, LLP, counsel for the Borrower,
substantially in the form of Exhibit B, and (ii) local counsel in each
jurisdiction where a Mortgaged Property is located, substantially in the
form of Exhibit C, and, in the case of each such opinion required by this
paragraph, covering such other matters relating to the Loan Parties, the
Loan Documents or the Transactions as the Required Lenders shall
reasonably request. The Borrower hereby requests such counsel to deliver
such opinions.

(c) The Agents shall have received such documents and
certificates as the Agents or their counsel may reasonably request
relating to the organization, existence and good standing of each Loan
Party, the authorization of the Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents or the Transactions, all
in form and substance satisfactory to the Agents and their counsel.

(d) The Agents 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 Agents 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 any Loan Party hereunder or under any
other Loan Document.
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(f) The Agents shall have received counterparts of the Pledge
Agreement signed on behalf of Holdings, the Borrower and each Subsidiary
Loan Party which is a party thereto, and the Collateral Agent shall have
received certificates representing all the outstanding Equity Interests of
the Borrower and each Subsidiary or Joint Venture owned by or on behalf of
any Loan Party as of the Effective Date after giving effect to the
Transactions (except that stock certificates representing shares of common
stock of a Foreign Subsidiary may be limited to 65% of the outstanding
shares of common stock of such Foreign Subsidiary), promissory notes
evidencing all intercompany Indebtedness owed to any Loan Party by the
Borrower or any Subsidiary as of the Effective Date after giving effect to
the Transactions and stock powers or other instruments of transfer
reasonably satisfactory to the Agents, endorsed in blank, with respect to
such certificates representing Equity Interests and promissory notes.

(g) The Agents shall have received counterparts of the Security
Agreement signed on behalf of Holdings, the Borrower and each Subsidiary
Loan Party, together with the following:

(i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Agents to be filed, registered or recorded to create
or perfect the Liens intended to be created under the Security
Agreement; and

(ii) a completed Perfection Certificate dated the Effective
Date and signed by an executive officer or Financial Officer of the
Borrower, together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the
jurisdictions contemplated by the Perfection Certificate and copies
of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Agents that the
Liens indicated by such financing statements (or similar documents)
are permitted by Section 6.02 or have been released.

(h) The Agents shall have received (i) counterparts of the
Mortgage with respect to the Mortgaged Property signed on behalf of the
leasehold owner of the Mortgaged Property, (ii) a policy or policies of
title insurance issued by a nationally recognized title insurance company,
insuring the Lien of the Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as permitted by
Section 6.02, in form and substance reasonably acceptable to the
Collateral Agent, together with such endorsements, coinsurance and
reinsurance as the Collateral Agent or the Required Lenders may reasonably
request, (iii) such surveys as may be required pursuant to the Mortgage or
as the
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Administrative Agent or the Required Lenders may reasonably request, (iv)
a copy of the original permanent certificate or temporary certificate of
occupancy as the same may have been amended or issued from time to time,
covering each improvement located upon the Mortgaged Property, that was
required to have been issued by the appropriate Governmental Authority for
such improvement and (v) written confirmation from the applicable zoning
commission or other appropriate Governmental Authority stating that with
respect to the Mortgaged Property its current use complies with existing
land use and zoning ordinances, regulations and restrictions applicable to
the Mortgaged Property.

(i) The Administrative Agent shall have received (i)
counterparts of the Parent Guarantee Agreement signed on behalf of
Holdings, (ii) counterparts of the Subsidiary Guarantee Agreement signed
on behalf of each Subsidiary Loan Party and (iii) counterparts of the
Indemnity, Subrogation and Contribution Agreement signed on behalf of
Holdings, the Borrower and each Subsidiary Loan Party.

(j) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.

(k) The Recapitalization and the other Transactions shall be
consummated simultaneously with the closing under the Loans in accordance
with applicable law, the Recapitalization Agreement and all other related
documentation (in each case without giving effect to any amendment or
waiver not approved by the Agents) and on terms substantially consistent
with those set forth in the preamble of this Agreement, and the Agents
shall be satisfied that the Transaction Costs shall not exceed $9,915,000.

(l) The Borrower shall have received not less than (i)
$100,000,000 in gross cash proceeds from the issuance of the Senior
Subordinated Notes and (ii) $31,415,000 in gross cash proceeds from the
issuance of the Preferred Units. The terms and conditions of the Senior
Subordinated Notes and the Preferred Units (including in each case terms
and conditions relating to the interest rate, fees, amortization,
maturity, covenants, events of default and remedies) and the provisions of
the Senior Subordinated Notes Indenture shall be satisfactory to the
Agents.

(m) After giving effect to the Transactions and the other
transactions contemplated hereby, Holdings, the Borrower and the
Subsidiaries shall have outstanding no Indebtedness or preferred stock
other than (i) the Loans, (ii) the Senior Subordinated Notes, (iii) the
Preferred Units and (iv) the Indebtedness set forth on Schedule 6.01 or
otherwise permitted pursuant to Section 6.01(a).
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(n) There shall be no litigation or administrative proceeding
that has had or is reasonably likely to have a Material Adverse Effect.

(o) The Agents shall have received a solvency letter, in form
and substance and from an independent valuation firm reasonably
satisfactory to the Agents, together with such other evidence reasonably
requested by the Agents, confirming the solvency of Holdings, the Borrower
and the Subsidiaries on a consolidated basis after giving effect to the
Transactions and the other transactions contemplated hereby (including
payment of the Transaction Costs).

(p) The consummation of the Transactions and the other
transactions contemplated hereby (including payment of the Transaction
Costs) shall not (a) violate any applicable material law, statute, rule or
regulation or (b) violate or result in a Default under any material
agreement of Holdings, the Borrower or any Subsidiary, and the Agents
shall have received one or more legal opinions to such effect,
satisfactory to the Agents, from counsel to the Borrower satisfactory to
the Agents.

(q) All requisite material Governmental Authorities and third
parties shall have approved or consented to the Transactions and the other
transactions contemplated hereby (including payment of the Transaction
Costs) to the extent required, and there shall be no governmental or
judicial action, actual or threatened, that could reasonably be expected
to restrain, prevent or impose burdensome conditions on the Transactions
or the other transactions contemplated hereby (including payment of the
Transaction Costs).

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, of
the Swingline Lender to make Swingline Loans and of the Issuing Bank to issue
Letters of Credit 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., New York City 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, of the Swingline Lender to
make a Swingline Loan on the occasion of any Swingline Borrowing and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to the satisfaction of the following conditions:
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(a) The representations and warranties of each Loan Party set
forth in the Loan Documents qualified as to materiality shall be true and
correct and those not so qualified shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent such representations and warranties
expressly relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date.

(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.

The making of a Loan on the occasion of each Borrowing and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by Holdings and 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 and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed, each of
Holdings and the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. Each
of Holdings and the Borrower will furnish to the Administrative Agent and each
Lender:

(a) within 100 days after the end of each fiscal year of
Holdings, its audited consolidated balance sheet and related statements of
operations, members' 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 Ernst & Young 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 Holdings and
its consolidated subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;
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(b) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year of Holdings, its consolidated balance
sheet and related statements of operations, members' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous 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 Holdings 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) within 30 days after the end of each of (i) the five-week
fiscal period ending on the date after the last day of the most recent
fiscal quarter of Holdings then ended and (ii) the four-week fiscal period
ended after such five-week fiscal period, its consolidated balance sheet
and related statements of operations, members' equity and cash flows as of
the end of and for such fiscal month and the then elapsed portion of the
fiscal year, all certified by one of its Financial Officers as presenting
in all material respects the financial condition and results of operations
of Holdings 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;

(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of Holdings
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.12, 6.13 and 6.14
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;

(e) 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 (which certificate may be limited to the extent required by
accounting rules or guidelines);
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(f) not later than 15 days following the commencement of each
fiscal year of the Borrower, a detailed consolidated budget for such
fiscal year (including a projected consolidated balance sheet and related
projected statements of operations and cash flow, including projections of
Consolidated EBITDA detailed on a quarterly basis, as of the end of and
for such fiscal year) and, promptly when available, the final version of
such budget and any significant revisions thereto;

(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed
by Holdings, the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of such Commission, or with any national securities
exchange, as the case may be; and

(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Holdings, the Borrower or any Subsidiary, or compliance with
the terms of any Loan Document, as the Agents or any Lender may reasonably
request.

SECTION 5.02. Notices of Material Events. Holdings and 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, to the
knowledge of an executive officer of Holdings or the Borrower, affecting
Holdings, the Borrower or any Affiliate thereof that 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 Holdings, the Borrower and the
Subsidiaries in an aggregate amount exceeding $1,000,000; and

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

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.
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SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's legal name or in any trade name used to identify
it in the conduct of its business or in the ownership of its properties, (ii)
in the location of any Loan Party's chief executive office, its principal place
of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by
it with an aggregate book value in excess of $250,000 is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure (within the meaning of the Uniform Commercial
Code (as defined in the Security Agreement)) or (iv) in any Loan Party's
Federal Taxpayer Identification Number. Each of Holdings and the Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Administrative Agent to continue
at all times following such change to have a valid, legal and perfected
security interest in all the Collateral. The Borrower also agrees promptly to
notify the Administrative Agent if Collateral with a fair market value in
excess of $250,000 is damaged in any material respect or destroyed.

(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower (i) setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section. Each certificate delivered
pursuant to this Section 5.03(b) shall identify in the format of Schedule II,
III, IV or V of the Security Agreement, all registered Intellectual Property of
any Loan Party in existence on the date thereof and not then listed on such
Schedules or previously so identified.

SECTION 5.04. Existence; Conduct of Business. Each of Holdings
and the Borrower will, and will cause each of the 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,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business, provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.05. Payment of Obligations. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, pay (a) all material
Taxes and other charges of any Governmental Authority imposed on it or any of
its properties or assets or in respect of any of its franchises, business,
income or property before any
81

material penalty or interest accrues thereon and (b) all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien (other than a Lien
permitted under Section 6.02) upon any of the property or assets of Holdings,
the Borrower or any of its Subsidiaries, prior to the time when any penalty or
fine shall be incurred with respect thereto, except where (i) the validity or
amount thereof is being contested in good faith by appropriate proceedings,
(ii) Holdings, the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, (iii) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (iv) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

SECTION 5.06. Maintenance of Properties. Each of Holdings and
the Borrower will, and will cause each of the Subsidiaries to, keep and
maintain all property material to the conduct of its business in reasonable
working order and condition, ordinary wear and tear excepted.

SECTION 5.07. Insurance. (a) Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, at all times
maintain in full force and effect, with financially sound and reputable
insurance companies (i) adequate insurance for its insurable properties, all to
such extent and against such risks, including fire, casualty and other risks
insured against by extended coverage, as is customary with companies of the
same or similar size in the same or similar businesses operating in the same or
similar locations, (ii) such other insurance as is required pursuant to the
terms of any Security Document and (iii) liability and other insurance in at
least such amounts and against at least such risks as are usually insured
against by companies in the same or similar businesses, and in each case, will
furnish to the Lenders, upon written request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried.

SECTION 5.08. Casualty and Condemnation. (a) The Borrower
will furnish to the Administrative Agent and the Lenders prompt written notice
of any casualty or other insured damage to any portion of any Collateral with a
fair market value in excess of $250,000 or the commencement of any action or
proceeding for the taking of any Collateral or any part thereof or interest
therein under power of eminent domain or by condemnation or similar proceeding.

(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Administrative Agent is authorized to
collect such Net Proceeds and, if received by Holdings, the Borrower or any
Subsidiary, such Net Proceeds shall be paid over to the Administrative Agent,
provided that (i) if the aggregate Net Proceeds in respect of such event (other
than proceeds of business income insurance) are less than $250,000, such
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Net Proceeds shall be paid over to the Borrower unless a Default has occurred
and is continuing, and (ii) all proceeds of business income insurance shall be
paid over to the Borrower unless a Default has occurred and is continuing. All
such Net Proceeds retained by or paid over to the Administrative Agent shall be
held by the Administrative Agent and released from time to time to pay the
costs of repairing, restoring or replacing the affected property or funding
expenditures for assets in the same business or any Related Business, in each
case in accordance with the terms of the applicable Security Document, subject
to the provisions of the applicable Security Document regarding application of
such Net Proceeds during a Default.

(c) If any Net Proceeds retained by or paid over to the
Administrative Agent as provided above continue to be held by the
Administrative Agent on the date that is 18 months after the receipt of such
Net Proceeds, then such Net Proceeds shall be applied to prepay Term Borrowings
as provided in Section 2.11(b).

SECTION 5.09. Books and Records; Inspection and Audit Rights.
Each of Holdings and the Borrower will, and will cause each of the Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries in all material respects are made of all dealings and transactions in
relation to its business and activities. Each of Holdings and the Borrower
will, and will cause each of the Subsidiaries to, permit any representatives
designated by the Agents 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 5.10. Compliance with Laws. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
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.

SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Loans and each Letter of Credit will be used only for the
purposes set forth in the preamble of this Agreement. No part of the proceeds
of any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.

SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Administrative Agent and the Lenders thereof and (a) if such
Subsidiary is a Subsidiary Loan Party, the Borrower will cause such Subsidiary
to become a party to the Subsidiary Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement and each applicable
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Security Document in the manner provided therein within three Business Days
after such Subsidiary is formed or acquired and promptly take such actions to
create and perfect Liens on such Subsidiary's assets to secure the Obligations
as the Administrative Agent or the Required Lenders shall reasonably request
and (b) if any Equity Interests or Indebtedness of such Subsidiary are owned by
or on behalf of any Loan Party, the Borrower will cause such Equity Interests
and promissory notes evidencing such Indebtedness to be pledged pursuant to the
Pledge Agreement within three Business Days after such Subsidiary is formed or
acquired (except that, if such Subsidiary is a Foreign Subsidiary, shares of
voting common stock of such Subsidiary to be pledged pursuant to the Pledge
Agreement may be limited to 65% of the outstanding shares of voting common
stock of such Subsidiary).

SECTION 5.13. Further Assurances. (a) Each of Holdings and
the Borrower will, and will cause each Subsidiary Loan Party to, execute any
and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing statements, fixture filings, mortgages, deeds of trust and other
documents), that may be required under any applicable law, or which the
Administrative Agent or the Required Lenders may reasonably request, to
effectuate the transactions contemplated by the Loan Documents or to grant,
preserve, protect or perfect the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Loan Parties. Holdings and the Borrower also agree to provide
to the Administrative Agent, from time to time upon request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.

(b) If any material assets (including any real property or
improvements thereto (other than any individual real property or improvements
with a fair market value not in excess of $250,000, provided that the aggregate
fair market value of all real property or improvements excluded pursuant to
this parenthetical shall in no event exceed $250,000 in the aggregate) or any
interest therein other than leasehold interests in real property) are acquired
by Holdings, the Borrower or any Subsidiary Loan Party after the Effective Date
(other than assets constituting Collateral under the Security Agreement that
become subject to the Lien of the Security Agreement upon acquisition thereof),
the Borrower will notify the Administrative Agent and the Lenders thereof, and,
if requested by the Administrative Agent or the Required Lenders, the Borrower
will cause such assets to be subjected to a Lien securing the Obligations and
will take, and cause the Subsidiary Loan Parties to take, such actions as shall
be necessary or reasonably requested by the Administrative Agent to grant and
perfect such Liens, including actions described in paragraph (a) of this
Section, all at the expense of the Loan Parties.
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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 and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness; Certain Equity Securities. (a)
The Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Indebtedness, except:

(i) Indebtedness created under the Loan Documents;

(ii) the Senior Subordinated Notes and the Guarantees thereof;

(iii) 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
or result in an earlier final maturity date or decreased weighted average
life thereof;

(iv) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary, provided that
Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or
any Subsidiary Loan Party shall be subject to Section 6.04;

(v) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary, provided that Guarantees by the Borrower or any Subsidiary
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party
shall be subject to Section 6.04;

(vi) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any 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 prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an earlier
final maturity date or decreased weighted average life thereof, provided
that (A) such Indebtedness is incurred prior to or within 180 days after
such acquisition or the completion of such construction or improvement and
85

(B) the aggregate principal amount of Indebtedness permitted by this
clause (vi) shall not exceed $7,500,000 at any time outstanding;

(vii) Indebtedness of any Person that becomes a Subsidiary after
the date hereof and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof, provided that (A)
such Indebtedness exists at the time such Person becomes a Subsidiary and
is not created in contemplation of or in connection with such Person
becoming a Subsidiary and (B) the aggregate principal amount of
Indebtedness permitted by this clause (vii) shall not exceed $7,500,000 at
any time outstanding;

(viii) unsecured Indebtedness not otherwise permitted hereunder
in an aggregate principal amount not exceeding $7,500,000 at any time
outstanding;

(ix) Indebtedness under Hedging Agreements entered into in
accordance with Section 6.07;

(x) Indebtedness with respect to letters of credit, surety,
appeal and performance bonds obtained by Holdings, the Borrower or any of
its Subsidiaries in the ordinary course of business;

(xi) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within five Business Days of its
incurrence; and

(xii) unsecured Indebtedness of the Borrower or any Subsidiary,
that is subordinated to the Obligations, assumed or incurred in connection
with any Permitted Acquisition, provided that (A) the provisions
subordinating such Indebtedness to the Obligations are reasonably
satisfactory in all respects to the Agents, (B) the terms of such
Indebtedness shall not provide for any maturity, amortization, sinking
fund payment, mandatory redemption or other required repayment or
repurchase of such Indebtedness (other than any required offer to repay or
repurchase (x) with asset sale proceeds pursuant to customary arrangements
providing that the Borrower or such Subsidiary, as the case may be, may
(in lieu of making such offer) repay Indebtedness under this Agreement or
(y) pursuant to "change of control" provisions that are no more
restrictive than the analogous provisions contained in this Agreement), in
each case prior to the Term Maturity Date (C) the covenants and events of
default relating to such Indebtedness shall be no more restrictive than
those contained in this Agreement and (D) the aggregate principal amount
of such Indebtedness shall not exceed $10,000,000 in the aggregate at any
time outstanding, provided further that,
86

notwithstanding clause (D) above, the aggregate principal amount of such
Indebtedness incurred by the Subsidiaries that are not Subsidiary Loan
Parties shall not exceed $2,500,000 in the aggregate at any time
outstanding;

(b) Holdings will not create, incur, assume or permit to exist
any Indebtedness, except:

(i) Indebtedness created under the Loan Documents;

(ii) unsecured Guarantees by Holdings of Indebtedness of the
Borrower or any Subsidiary permitted by clause (xii) of paragraph (a) of
this Section that are subordinated to the Obligations, provided that (A)
provisions subordinating such Guarantees to the Obligations are reasonably
satisfactory in all respects to the Agents, (B) the terms of such
Guarantees and the related Indebtedness shall not provide for any
maturity, amortization, sinking fund payment, mandatory redemption or
other required repayment or repurchase of such Indebtedness (other than
any required offer to repay or repurchase (x) with asset sale proceeds
pursuant to customary arrangements providing that the Borrower or such
Subsidiary, as the case may be, may (in lieu of making such offer) repay
Indebtedness under this Agreement or (y) pursuant to "change of control"
provisions that are no more restrictive than the analogous provisions
contained in this Agreement), in each case prior to the Term Maturity
Date, (C) the covenants and events of default relating to such Guarantees
and the related Indebtedness shall be no more restrictive than those
contained in this Agreement and (D) the aggregate principal amount of such
Guarantees shall not exceed $10,000,000 in the aggregate at any time
outstanding, provided further that, notwithstanding clause (D) above, the
aggregate principal amount of such Indebtedness incurred by the
Subsidiaries that are not Subsidiary Loan Parties shall not exceed
$2,500,000 in the aggregate at any time outstanding; and

(iii) unsecured Indebtedness of Holdings, that is subordinated
to the Obligations, incurred in connection with the repurchase of Equity
Interests of Holdings or options to acquire Equity Interests of Holdings
to the extent such Restricted Payments are permitted pursuant to Section
6.08(a) (iii) at the time of incurrence of such Indebtedness in an
aggregate principal amount not to exceed in any fiscal year of Holdings
$2,000,000 or $5,000,000 at any time outstanding, provided that (A) the
provisions subordinating such Indebtedness to the Obligations are
reasonably satisfactory in all respects to the Agents, (B) the terms of
such Indebtedness shall not provide for any maturity, amortization,
sinking fund payment, mandatory redemption or other required repayment or
repurchase of such Indebtedness, in each case prior to the Term Maturity
Date and (C) the
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covenants and events of default relating to such Indebtedness shall be no
more restrictive than those contained in this Agreement.

(c) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, issue any preferred Equity Interests (other than the
Preferred Units), or be or become liable in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any
other payment in respect of any Equity Interests of Holdings, the Borrower or
any Subsidiary (provided that Holdings may be required to repurchase or redeem
the Preferred Units to the extent required to do so by the Holdings Operating
Agreement (as in effect on the Effective Date)) or any option, warrant or other
right to acquire any such Equity Interests, except that Holdings may issue
preferred Equity Interests as financing for or otherwise in connection with any
Permitted Acquisition, provided that (A) the terms of such preferred Equity
Interests shall not provide for any amortization, sinking fund payment,
mandatory redemption, other required repayment or repurchase of, or other
Restricted Payment with respect to, such preferred Equity Interests (other than
any required offer to repay or repurchase pursuant to "change of control"
provisions that are no more restrictive than the analogous provisions contained
in this Agreement and Restricted Payments permitted by Section 6.08(a)(ii)), in
each case prior to the Term Maturity Date and (B) any covenants and events of
default relating to such preferred Equity Interests shall be no more
restrictive than those relating to the Preferred Units contained in the Holding
Operating Agreement as in effect on the Effective Date.

SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Subsidiary to, 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:

(i) Liens created under the Loan Documents;

(ii) Permitted Encumbrances;

(iii) any Lien on any property or asset of the Borrower or any
Subsidiary 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 or any Subsidiary except assets then being financed solely
by the same financing source and (B) except as permitted under clause (D)
of clause (v) of this Section, such Lien shall secure only those
obligations that it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof;
88

(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary, provided that
(A) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be,
(B) such Lien shall not apply to any other property or assets of the
Borrower or any Subsidiary except assets then being financed solely by the
same financing source and (C) except as permitted under clause (D) of
clause (v) of this Section, such Lien shall secure only those obligations
that it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

(v) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof, provided that (A) such security interests secure Indebtedness
permitted by clause (vi) of Section 6.01(a), (B) such security interests
and the Indebtedness secured thereby are incurred prior to or within 12
months after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 100% of
the cost of acquiring, constructing or improving such fixed or capital
assets and other fixed or capital assets then being financed solely by the
same financing source and (D) such security interests shall not apply to
any other property or assets of the Borrower or any Subsidiary except
assets then being financed solely by the same financing source;

(vi) Liens (other than those permitted by paragraphs (i) through
(v) above) securing liabilities permitted hereunder in an aggregate amount
not exceeding $1,000,000 at any time outstanding; and

(vii) leases and subleases of real property and tangible
personal property and licenses and sublicenses of intellectual property
rights, in each case granted in the ordinary course of business and not
interfering individually or in the aggregate (with all such licenses and
subleases being taken as a whole) in any material respect with the conduct
of the business of the Borrower and the Subsidiaries.

(b) Holdings 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 thereof, except Liens created under any of the Security Documents
and Permitted Encumbrances.
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SECTION 6.03. Fundamental Changes. (a) Holdings and the
Borrower will not and will not permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, 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 (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary Loan Party in a transaction in which
the surviving entity is a Subsidiary Loan Party, (iii) any Subsidiary that is
not a Loan Party may merge into any Subsidiary that is not a Loan Party, (iv)
any Subsidiary may merge into any other Person that becomes a Subsidiary Loan
Party in connection with a Permitted Acquisition, (v) any Subsidiary may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders and (vi) the Merger Subsidiary may
merge with Holdings if (A) the Merger Subsidiary is a wholly owned subsidiary
of Holdings at the time of such merger, (B) the Merger Subsidiary is the
surviving entity in such merger and (C) the consolidated net worth of the
Merger Subsidiary following such merger is equal to or greater than that of
Holdings immediately prior to such merger; provided, that, in each case, 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.

(b) Holdings will not engage in any business or activity other
than the ownership of all the outstanding Equity Interests of the Borrower and
activities incidental thereto; provided, that Holdings may form immediately
prior to a merger permitted by Section 6.03(a)(vi) a subsidiary (the "Merger
Subsidiary") that is a corporation organized under the laws of the United
States of America, any State thereof or the District of Columbia for the sole
purpose of merging Holdings into such Merger Subsidiary in accordance with, and
to the extent permitted by, Section 6.03(a)(vi). Holdings will not own or
acquire any assets (other than Equity Interests of the Borrower and the Merger
Subsidiary, cash and Permitted Investments and other assets incidental to
maintaining its existence and ownership of the foregoing assets) or incur any
liabilities (other than liabilities under the Loan Documents, liabilities under
certain employment agreements and other written employment arrangements,
liabilities in respect of the Preferred Units, liabilities imposed by law,
including Tax liabilities, and other liabilities incidental to its existence
and permitted business and activities).
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SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. (a) The Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger)
any Equity Interests, 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, subject to clause (b) hereof:

(i) Permitted Investments;

(ii) Permitted Acquisitions;

(iii) investments existing on the date hereof and set forth on
Schedule 6.04, to the extent such investments would not be permitted under
any other clause of this Section;

(iv) investments by the Borrower in the Equity Interests of the
Subsidiaries, provided that (A) any such Equity Interests shall be pledged
pursuant to the Pledge Agreement (subject to the limitations applicable to
voting common stock of a Foreign Subsidiary referred to in Section 5.12)
and (B) the amount of investments by the Borrower in Subsidiaries that are
not Loan Parties shall not exceed $1,500,000 in the aggregate at any time
outstanding;

(v) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to the Borrower or any other Subsidiary, provided
that (A) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement
and (B) the aggregate amount outstanding at any time of all such loans and
advances by Loan Parties to Subsidiaries that are not Loan Parties shall
not exceed the greater of (I) $2,500,000 or (II) the aggregate amount paid
(including any Indebtedness assumed in connection therewith) in connection
with all Permitted Acquisitions involving assets located outside the
United States of America or the Equity Interests of entities organized
outside the United States of America from and after the date hereof (but
not in excess of $10,000,000 during the term of this Agreement);

(vi) Guarantees constituting Indebtedness permitted by Section
6.01, provided that the aggregate amount outstanding at any time of
Indebtedness that is (A) outstanding with respect to Subsidiaries that are
not Loan Parties and
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(B) Guaranteed by any Loan Party shall not exceed the greater of (I)
$2,500,000 or (II) the aggregate amount paid (including any Indebtedness
assumed in connection therewith) in connection with all Permitted
Acquisitions involving assets located outside the United States of America
or the Equity Interests of entities organized outside the United States of
America from and after the date hereof (but not in excess of $10,000,000
during the term of this Agreement);

(vii) loans or advances to employees, officers, directors or
consultants of the Borrower and the Subsidiaries in their capacity as
such, in an aggregate principal amount not to exceed $1,500,000 at any
time outstanding except that loans to employees, officers, directors or
consultants for the purpose of acquiring Equity Interests in Holdings the
Net Proceeds of which Equity Interests are contributed to the capital of
the Borrower or used to acquire Equity Interests in the Borrower shall not
be subject to such limit;

(viii) Hedging Agreements permitted under Section 6.07;

(ix) investments in Joint Ventures in an aggregate amount not
to exceed $3,000,000 at any time outstanding;

(x) investments (including Equity Interests, obligations or
other securities) received in connection with a bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
a debtor, arising in each case in the ordinary course of business;

(xi) extensions of trade credit in the ordinary course of
business;

(xii) investments constituting non-cash proceeds of any sale,
transfer or other disposition permitted by Section 6.05;

(xiii) investments of any Person existing at the time such
Person becomes a Subsidiary or at the time such Person merges or
consolidates with the Borrower or any of its Subsidiaries, in either case
in compliance with the terms of this Agreement, provided that such
investments were not made by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary or
such merger or consolidation;

(xiv) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course
of business; and
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(xv) other investments in an aggregate amount not to exceed
$1,000,000 at any time outstanding.

(b) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower will not, and will not permit any of the Subsidiaries
to, make any investments (by way of any loan, guarantee, capital contribution
to, or purchase of stock, bonds, notes or other securities of or any assets
constituting a business unit of, any Person or otherwise) outside the Permitted
Business in an aggregate amount in excess of $5,000,000 during the term of this
Agreement.

SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose
of any asset, including Equity Interests (other than any such sale, transfer,
lease or other disposition resulting from any casualty or condemnation of any
assets of the Borrower or any of its Subsidiaries), nor will the Borrower
permit any of its Subsidiaries to issue any additional Equity Interests,
except:

(a) sales of inventory, used or surplus tangible personal
property and Permitted Investments in the ordinary course of business;

(b) sales, transfers and dispositions to the Borrower or a
Subsidiary, provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;

(d) sales, transfers and dispositions of assets (other than
Equity Interests of a Subsidiary) that are not permitted by any other
clause of this Section, provided that the aggregate fair market value of
all assets sold, transferred or otherwise disposed of in reliance upon
this clause (d) shall not exceed $5,000,000 during any fiscal year of the
Borrower,

provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value (as determined in good faith by the Board
Managers, or if Holdings is then a corporation, its Board of Directors, in the
case of any such sale, transfer, lease or other disposition in one or more
related transactions for consideration in excess of $500,000) and for
consideration at least 80% of which is (i) cash, (ii) in the form of properties
or assets to be owned by the Borrower or any Subsidiary Loan Party for use in a
Permitted Business or (iii) voting Equity Interests in one or more Persons
engaged in a Permitted Business that are to become Subsidiary Loan Parties in
connection with such transaction (provided that such transaction is a Permitted
Acquisition). For purposes of
93

this Section 6.05, the following shall be deemed to be cash: (a) the
assumption of any liabilities of the Borrower or any Subsidiary Loan Party with
respect to, and the release of the Borrower or such Subsidiary Loan Party from
all liability in respect of, any Indebtedness of the Borrower or the
Subsidiaries permitted hereunder (in the amount of such Indebtedness) in
connection with a sale, transfer, lease or other disposition permitted under
Section 6.05 and (b) securities received by the Borrower or any Subsidiary Loan
Party from the transferee that are immediately convertible into cash without
breach of their terms or the agreement pursuant to which they were purchased
and that are promptly converted by the Borrower or such Subsidiary Loan Party
into cash.

SECTION 6.06. Sale and Lease-Back Transactions. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred except for any
such sale (made in connection with the corresponding lease-back of the relevant
asset) of any fixed or capital assets acquired (or the construction of which is
completed) after the Effective Date that is made for cash consideration in an
amount not less than the cost of such fixed or capital asset and is consummated
within 180 days after the Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset.

SECTION 6.07. Hedging Agreements. The Borrower will not, and
will not permit any of the 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 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) Holdings and the Borrower will not, and will not permit any
Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:

(i) (A) for so long as each of Holdings and the Borrower is
treated as a pass-through entity for United States Federal income Tax
purposes, each of Holdings and the Borrower may make Tax Distributions,
(B) in the event that Holdings is not treated as a pass-through entity for
United States Federal income Tax purposes, the Borrower may make dividends
or distributions to Holdings in amounts equal to amounts required for
Holdings to pay United States Federal, state and local income Taxes to the
extent such income Taxes are attributable to the income of the Borrower
and its consolidated Subsidiaries and (C) in the event that (I) Holdings
is treated as a pass-through entity for United States Federal income Tax
purposes and (II) the Borrower is not treated as a pass-through entity
94

for United States Federal income Tax purposes, Holdings may make Tax
Distributions;

(ii) Holdings may make distributions with respect to its Equity
Interests payable solely in additional Equity Interests of Holdings (other
than preferred Equity Interests except to the extent permitted by
6.01(c));

(iii) to the extent that no Default or Event of Default has
occurred or is continuing or would be continuing after giving effect to
such Restricted Payment, Holdings may repurchase or acquire its Equity
Interests on the terms and subject to the limitations of, and only to the
extent of any payment received under, clause (B) of paragraph (v) (or, to
the extent permitted by Section 6.01(b)(iii), from the proceeds of the
incurrence of subordinated Indebtedness of Holdings on the terms and
subject to the limitations of clause (B) of paragraph (v));

(iv) Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests; and

(v) the Borrower may make Restricted Payments to Holdings (but
with respect to clause (B) below, only if no Default or Event of Default
has occurred and is continuing or would be continuing after giving effect
to such Restricted Payment) with respect to:

(A) payments, the proceeds of which shall be applied by
Holdings directly to pay out-of-pocket expenses, for administrative,
legal and accounting services provided by third parties that are
reasonable and customary and incurred in the ordinary course of
business for such professional services, or to pay franchise fees and
similar costs and other customary costs and expenses of being a
public company; provided, however, any such expenses shall not exceed
an aggregate amount of $500,000 per fiscal year;

(B) payments, the proceeds of which will be used to
repurchase Equity Interests of Holdings owned by former employees of
the Borrower and its Subsidiaries or their assigns, estates and
heirs, at a price not in excess of fair market value determined in
good faith by the Board Managers (or if Holdings is then a
corporation, the Board of Directors of Holdings), in an aggregate
amount not in excess of $2,000,000 per annum, net of the proceeds
received by Holdings as a result of any resales of any such Equity
Interests plus any unused amounts from any immediately preceding
fiscal year, provided that the aggregate amount of all such payments
shall not exceed $5,000,000 during the term of this Agreement,
95

net of the proceeds received by Holdings as a result of any resales
of any such Equity Interests;

(C) payments, the proceeds of which will be used to pay any
purchase price adjustment that the Borrower is required to pay to the
Existing Shareholder in connection with the Recapitalization pursuant
to Article III of the Recapitalization Agreement as in effect on the
Effective Date; and

(D) payments, the proceeds of which will be used to pay fees
in accordance with the terms of the Management Agreement in an
aggregate amount not to exceed $250,000 during any fiscal year of the
Borrower.

(b) Holdings and the Borrower will not, and will not permit any
Subsidiary to, make or agree to pay or make, directly or indirectly,
any payment or other distribution (whether in cash securities or
other property) of or in respect of principal of or interest on any
Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any Indebtedness, except:

(i) payment of Indebtedness created under the Loan Documents;

(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted pursuant
to Section 6.01(a);

(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01; and

(iv) payment of secured Indebtedness that becomes due as a
result of any transfer not prohibited by this Agreement of the property
or assets securing such Indebtedness.

SECTION 6.09. Transactions with Affiliates. Holdings and the
Borrower will not, and will not permit any Subsidiary 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) transactions in the
ordinary course of business that are 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 (as determined in good faith by
members of the Board of Managers having a majority of the voting power held by
all disinterested members of the Board of Managers or if Holdings is then a
corporation, by a majority of the Board of Directors of Holdings having a
majority of the voting power
96

held by all disinterested members of the Board of Directors of Holdings), (b)
transactions between or among the Borrower and the Subsidiary Loan Parties not
involving any other Affiliate, (c) any Restricted Payment permitted by Section
6.08, (d) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers, directors, employees, consultants or agents of Holdings,
the Borrower or any Subsidiary as determined in good faith by the Board of
Managers (or if Holdings is then a corporation, the Board of Directors of
Holdings), (e) any transactions undertaken pursuant to any contractual
obligations in existence on the Effective Date (as in effect on the Effective
Date) and set forth on Schedule 6.09, (f) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, options to purchase Equity Interests of
Holdings and equity ownership or participation plans approved by the Board of
Managers (or if Holdings is then a corporation, its Board of Directors), (g)
the grant of options (and the exercise thereof) to purchase Equity Interests of
Holdings or similar rights to employees and directors of Holdings or the
Borrower pursuant to plans approved by the Board of Managers (or if Holdings is
then a corporation, its Board of Directors), (h) loans or advances to
officers, directors or employees in the ordinary course of business permitted
by Section 6.04(a)(vii), (i) the provision by Persons who may be deemed
Affiliates or stockholders of Holdings or the Borrower (other than Sponsor and
Person Controlled by Sponsor) of investment banking, commercial banking, trust,
lending or financing, investment underwriting, placement agent, financial
advisory or similar services to Holdings, the Borrower or any Subsidiary, (j)
(i) the existence or performance by the Borrower or any Subsidiary under any
agreement as in effect as of the Effective Date or any amendment thereto or
replacement agreement therefor or any transaction contemplated thereby
(including pursuant to any amendment thereto or replacement agreement therefor)
so long as such amendment or replacement is not more disadvantageous to the
interests of the Lender in any material respect than the original agreement as
in effect on the Effective Date and (ii) the execution, delivery and
performance of the consulting agreement dated as of June 30, 1999, among
Holdings, the Borrower and Charles T. Orsatti, provided that the amount payable
to Mr. Orsatti pursuant to such agreement shall not exceed $250,000 during any
fiscal year of the Borrower, (k) any tax sharing agreement or payments pursuant
thereto among the Borrower and any Subsidiary and any other Person with which
the Borrower or any Subsidiary is or could be part of a consolidated group for
tax purposes, which payments are not in excess of the tax liabilities
attributable solely to the Borrower and Subsidiaries (as a consolidated group),
and (l) any contribution to the capital of the Borrower by Holdings or any
purchase of Equity Interests of the Borrower by Holdings.

SECTION 6.10. Restrictive Agreements. Holdings and the
Borrower will not, and will not permit any Subsidiary to, 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 Holdings, the Borrower or any Subsidiary to create, incur
97

or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any class or series of its Equity Interests or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness
of the Borrower or any other Subsidiary, provided that (i) the foregoing shall
not apply to restrictions and conditions imposed by law or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.10 (but shall apply to any
extension or renewal of, or any amendment or modification that, taken as a
whole with any simultaneous amendment or modification of any such restriction
or condition, expands the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary or any property or
assets of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of this Section shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of this Section shall not apply to customary provisions in leases, licenses and
similar contracts restricting the subletting, assignment or transfer thereof,
or any property or asset the subject thereof, (vi) clause (a) of this Section
shall not apply to customary provisions in Joint Venture agreements and other
similar agreements entered into by the Borrower or any Subsidiary in the
ordinary course of business and (vii) clause (a) of this Section shall not
apply to net worth provisions in leases and other agreements entered into by
the Borrower or any Subsidiary in the ordinary course of business.

SECTION 6.11. Amendment of Material Documents. (a) Holdings
and the Borrower will not, and will not permit any Subsidiary to, amend, modify
or waive any of its rights under or with respect to (i) their respective
certificates of formation, limited liability company agreement (including the
Holdings Operating Agreement and the Borrower Operating Agreement),
certificates of incorporation, by-laws or other organizational documents, (ii)
the Management Agreement, (iii) the Recapitalization Agreement, (iv) the
Preferred Units, (v) the Senior Subordinated Notes or the Senior Subordinated
Notes Indenture or (vi) the Members' Agreement, in each case other than
amendments, modifications or waivers that would not reasonably be expected to
adversely affect the interests of the Lenders (it being understood that if any
question should arise as to the possible adverse nature of any such amendment,
modification or waiver, Holdings or the Borrower may consult with the Agents
and the Agents shall be entitled (but shall not be obligated) to determine, on
behalf of the Lenders, whether such amendment, modification or waiver would
violate this Section 6.11). Holdings and the Borrower will deliver to each
Lender a copy of each such permitted amendment, modification or waiver promptly
after the effectiveness thereof.
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SECTION 6.12. Capital Expenditures. (a) The Borrower will not
permit the aggregate amount of Capital Expenditures made by the Borrower and
the Subsidiaries in any fiscal year to exceed the amount set forth below
opposite such year, provided that if the Borrower or any consolidated
Subsidiary has made any Permitted Acquisition or any sale, transfer, lease or
other disposition of assets outside of the ordinary course of business
permitted by Section 6.05 during the period of four consecutive fiscal quarters
ending on any date during any fiscal year set forth below, the amount set forth
below opposite such year shall be adjusted from and after the date of
consummation of such Permitted Acquisition, sale, transfer, lease or other
disposition of assets (i) by multiplying such amount, without giving effect to
any increase thereto pursuant to paragraph (c) below, (the "Base Capex Amount")
by the fraction of which the numerator is equal to Consolidated EBITDA for the
four-fiscal-quarter period of the Borrower ending with the most recent fiscal
quarter then ended (as adjusted in accordance with the second sentence of the
definition of the term "Consolidated EBITDA" to give effect to such Permitted
Acquisition, sale, transfer, lease or other disposition of assets) and the
denominator of which is equal to budgeted Consolidated EBITDA for the same
four-fiscal-quarter period of the Borrower, as set forth in the budgets
delivered pursuant to Section 5.01(f) (other than any revisions delivered after
the delivery of the budget for any year) and (ii) with respect to any Permitted
Acquisition or any sale, transfer, lease or other disposition of assets outside
of the ordinary course of business that is consummated in the same fiscal year
in respect of which any adjustment pursuant to the preceding clause (i) is
being made, subtracting from the amount calculated in accordance with the
preceding clause (i) (the "Pro Forma Capex Amount") (or in the event that the
Pro Forma Capex Amount is less than the Base Capex Amount, adding to the Pro
Forma Capex Amount) an amount equal to (A) the portion of the excess of the Pro
Forma Capex Amount over the Base Capex Amount attributable to such Permitted
Acquisition, sale, transfer, lease or other disposition of assets (or in the
event that the Pro Forma Capex Amount is less than the Base Capex Amount, the
portion of the difference between the Pro Forma Capex Amount and the Base Capex
Amount attributable to such Permitted Acquisition, sale, transfer, lease or
other disposition of assets) multiplied by (B) the fraction of which the
numerator is the number of days from and including the date such Permitted
Acquisition, sale, transfer, lease or other disposition of assets is
consummated to and including December 31 and the numerator of which is 365.

Fiscal Year Ending Amount
------------------ ------

1999 $7,000,000

2000 $5,800,000

2001 $5,800,000

2002 $5,800,000

2003 $5,800,000

2004 $5,800,000

(b) Notwithstanding the foregoing paragraph (a), in the event
that the amount of Capital Expenditures permitted to be made by the Borrower
and its Subsidiaries pursuant to paragraph (a) in any fiscal year is greater
than the amount of Capital Expenditures made by the Borrower and its
Subsidiaries during such fiscal year, 75% of such excess may be carried forward
and utilized in the immediately succeeding fiscal year (it being understood and
agreed that (i) no amount may be carried forward beyond the year immediately
succeeding the fiscal year in which it arose and (ii) no portion of the
carry-forward amount available in any fiscal year may be used until the entire
amount of Capital Expenditures permitted to be made in such fiscal year
(without giving effect to such carry-forward amount) shall have been made).

(c) In the event that the Borrower or any Subsidiary makes any
Capital Expenditures in connection with the construction or acquisition of any
Location and the Borrower or any of its Subsidiaries consummates a sale and
lease-back transaction with respect to such Location within 180 days after the
earlier of (i) completion of the construction of such Location and (ii) receipt
of the certificate of occupancy with respect thereto, the amount of Capital
Expenditures set forth in paragraph (a) for the fiscal year of the Borrower in
which the Borrower or its Subsidiaries receive the Net Proceeds from such sale
and lease-back transaction shall be increased by an amount equal to the lesser
of (A) the amount of such Net Proceeds or (B) the amount of Capital
Expenditures made with respect to such Location during the same and all prior
fiscal years ending on or after December 31, 1999.

(d) In addition to the Capital Expenditures permitted pursuant
to paragraph (a) of this Section 6.12, the Borrower and the Subsidiaries may
make additional Capital Expenditures (which shall not be counted towards the
amounts set forth in paragraph (a) of this Section 6.12) consisting of the
investment of cumulative Excess Cash Flow generated during fiscal years ending
on or after December 31, 1999 and not required to be applied pursuant to
Section 2.11(c), provided that any prepayments required by Section 2.11(c)
shall have been made. No portion of the amounts for Capital Expenditures
available in any fiscal year under this paragraph (d) may be used until the
entire amount of Capital Expenditures permitted to be made in such fiscal year
pursuant to paragraphs (a), (b) and (c) of this Section shall have been made.
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SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of any date during any period set forth below to be in excess
of the ratio set forth below opposite such period:

Period Ratio
------ -----

December 31, 1999 through June 29, 2000 5.75

June 30, 2000 through December 30, 2000 5.50

December 31, 2000 through December 30, 2001 5.00

December 31, 2001 through December 30, 2002 4.50

December 31, 2002 through December 30, 2003 4.00

December 31, 2003 and thereafter 3.50

SECTION 6.14. Consolidated Interest Coverage Ratio. The
Borrower will not permit the Consolidated Interest Coverage Ratio for any
four-fiscal-quarter period ending during any period set forth below to be less
than the ratio set forth below opposite such period:

Period Ratio
------ -----

December 31, 1999 through December 30, 2000 1.50

December 31, 2000 through December 30, 2001 1.60

December 31, 2001 through December 30, 2002 1.80

December 31, 2002 through December 30, 2003 2.10

December 31, 2003 and thereafter 2.50

SECTION 6.15. Changes in Fiscal Periods . Each of Holdings and
the Borrower will not, and will not permit any Subsidiary to, change its fiscal
year or its method of determining fiscal quarters without the prior written
approval of the Agents.
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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 or
any reimbursement obligation in respect of any LC Disbursement 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 or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;

(c) any representation or warranty made or deemed made by or on
behalf of Holdings, the Borrower or any Subsidiary in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect, or in the case of any representation or warranty not
qualified as to materiality, incorrect in any material respect, when made
or deemed made;

(d) Holdings or the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of Holdings or the Borrower) or 5.11 or in
Article VI;

(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and such
failure shall continue unremedied for a period of 30 days after written
notice thereof from the Administrative Agent to the Borrower (which notice
will be given at the request of any Lender);

(f) Holdings, 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, including any applicable grace period;
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(g) 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 (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of, or casualty or condemnation affecting,
the property or assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of Holdings, 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
Holdings, 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) Holdings, 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 Holdings, 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) Holdings, the Borrower or any Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;

(k) one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 shall be rendered against
Holdings, 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
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to attach or levy upon any assets of Holdings, the Borrower or any
Subsidiary to enforce any such judgment;

(l) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in
liability of Holdings, the Borrower or any Subsidiary or any combination
thereof in an aggregate amount exceeding (i) $500,000 in any year or (ii)
$1,000,000 for all periods;

(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral with a fair market value in
excess of $500,000, with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents
or (ii) as a result of the Administrative Agent's failure to maintain
possession of any stock certificates, promissory notes or other
instruments delivered to it under the Pledge Agreement; or

(n) a Change of Control shall occur;

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, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; 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, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
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ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Bank 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 of the Loan
Documents, 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 Holdings, 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 in the Loan Documents. 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 by the Loan Documents 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 in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to Holdings, the
Borrower or any of the 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 wilful misconduct. The Administrative Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by Holdings, the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (a) any statement, warranty or representation made in
or in connection with any Loan Document, (b) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (c)
the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (d) the validity,
enforceability, effectiveness or genuineness of any
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Loan Document or any other agreement, instrument or document or (e) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

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 of 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 each 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 the
Administrative Agent as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the consent of the Borrower (such consent not to be unreasonably
withheld), 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 and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, 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,
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100

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 other Loan Document or related agreement or any document
furnished hereunder or thereunder.

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 Holdings or the Borrower, to it at 2985 Scott Street,
Vista, California 92083, Attention of Chief Financial Officer (Telecopy
No. 760-734-3536) with a copy to Chase Capital Partners, 380 Madison
Avenue - 12th Floor, New York, NY 10017, Attention of John Daileader
(Telecopy No. 212-622-3101);

(b) if to the Administrative Agent or the Collateral Agent, to
First Union National Bank, Syndication Agency Services, One First Union
Center, 4th Floor, 301 South College Street, Charlotte, NC 28288-0680,
Attention of Kevin Stephens (Telecopy No. 704-383-0288) with a copy to
Paul Solitario (Telecopy No. 704-383-9144);

(c) if to the Issuing Bank, to The Chase Manhattan Bank, 55
Water Street, 17th Floor, Room 1708, New York, New York 10041, Attention
of Standby LC Department (Telecopy No. 212-363-5656) with a copy to The
Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention
of Stephen Rochford (Telecopy No. 212-270-3279);
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(d) if to the Swingline Lender, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New
York, New York 10081, Attention of Concetta Prainito (Telecopy No.
212-552-7500) with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Stephen Rochford (Telecopy No.
212-270-3279); and

(e) 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
any Agent, the Issuing Bank, the Swingline Lender or any Lender in exercising
any right or power hereunder or under any other Loan Document 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 Agents, the Issuing Bank,
the Swingline Lender and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party 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 or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether any Agent,
any Lender, the Swingline Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent (or, if applicable, the Collateral
Agent) and the Syndication Agent and the Loan Party or Loan Parties that are
parties thereto, in each case 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 LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
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102

thereby, (iii) postpone the scheduled date of payment of the principal amount
of any Loan or LC Disbursement, 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, (v) change any of the
provisions of this Section or the definition of the term "Required Lenders" or
any other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) release Holdings or any Subsidiary Loan Party from its Guarantee
under the applicable Guarantee Agreement (except as expressly provided in such
Guarantee Agreement), or limit its liability in respect of such Guarantee,
without the written consent of each Lender, (vii) release all or substantially
all of the Collateral from the Liens of the Security Documents, without the
written consent of each Lender, except for any Collateral sold or otherwise
transferred in accordance with the terms of this Agreement, or (viii) change
the allocation among the Lenders of any optional or mandatory prepayments of
the Loans set forth in Sections 2.10(d) and 2.11(e) without the written consent
of each Lender affected thereby and provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Syndication Agent, the
Swingline Lender or the Issuing Bank without the prior written consent of the
Administrative Agent, the Collateral Agent, the Syndication Agent, the
Swingline Lender or the Issuing Bank, as the case may be.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Syndication Agent and their
respective Affiliates (other than Sponsor and Person Controlled by Sponsor),
including the reasonable fees, charges and disbursements of counsel for the
Agents, in connection with the syndication of the credit facilities provided
for herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent, the Syndication
Agent, the Issuing Bank, the Swingline Lender or any Lender, including the
reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, the Collateral Agent, the Syndication Agent, the Issuing
Bank, the Swingline Lender or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
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Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Syndication Agent, the Issuing Bank, the Swingline Lender
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby (including payment of the Transaction Costs),
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by
Holdings, the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to Holdings, the Borrower or any of the
Subsidiaries or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by a final
and non-appealable judgment to have resulted from the gross negligence or
wilful misconduct of such Indemnitee or any Affiliate of such Indemnitee (or of
any officer, director, employee, advisor or agent of such Indemnitee) or to the
extent such damages constitute special, indirect or consequential damages (as
opposed to direct or actual damages), and provided, further, that, for purposes
of the foregoing proviso, The Chase Manhattan Bank and its Affiliates (other
than Sponsor and Persons Controlled by Sponsor) shall not be deemed to be
Affiliates of Sponsor or any Person Controlled by Sponsor.

(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent,
the Syndication Agent, the Issuing Bank or the Swingline Lender under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Syndication Agent, the Collateral Agent, the Issuing
Bank or the Swingline Lender, as the case may be, such Lender's pro rata share
(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
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the case may be, was incurred by or asserted against the Administrative Agent,
the Collateral Agent, the Syndication Agent, the Issuing Bank or the Swingline
Lender in its capacity as such. For purposes hereof, a Lender's "pro rata
share" shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.

(d) To the extent permitted by applicable law, Holdings and the
Borrower shall not assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to 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, payment of the Transaction
Costs, any Loan or Letter of Credit or the use of the proceeds thereof.

(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 (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except
that each of Holdings and 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 Holdings or 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 (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Collateral Agent, the
Syndication Agent, the Issuing Bank, the Swingline Lender 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 (and, in the case of
an assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the Issuing
Bank and the Swingline Lender) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (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 or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to
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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, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of
Commitments or Loans, (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 $3,500, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire, 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 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). 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 Charlotte, North
Carolina 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
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and Holdings, the Borrower,
the Administrative Agent, the Issuing Bank, the Swingline Lender 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, the Issuing Bank, the Swingline Lender 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
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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, the
Administrative Agent, the Issuing Bank or the Swingline Lender, 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, (iii) such Lender shall
be solely responsible for any withholding Taxes or any filing or reporting
requirements relating to such Participant and (iv) Holdings, the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender 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 the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents, 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 (other than
clause (vii) thereof) 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, 2.16 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless this restriction is waived by the Borrower.

(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,
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provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.

SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that any Agent, the
Issuing Bank, the Swingline Lender 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 or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 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 Letters of Credit and 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,
the other Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent or the Syndication Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and 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 the Syndication 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 the remaining provisions hereof; and the
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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) 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) that such Lender may have.

SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto 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. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank, the
Swingline Lender or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against
Holdings, the Borrower or its properties in the courts of any jurisdiction.

(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that 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 other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby
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irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) 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 or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.

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, ANY OTHER LOAN DOCUMENT 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 Agents, the Issuing
Bank, the Swingline Lender 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, and to any
direct or indirect contractual counterparty in swap agreements or to such
contractual counterparty's professional 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 regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, provided that, to the extent reasonably practicable and
not prohibited by applicable laws or regulations or by any judicial or
administrative order, such Person will provide the Borrower with prior notice
of such disclosure, (d) to any other party to this Agreement, (e) in connection
with the exercise of any remedies hereunder or any suit, action or
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proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (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 any Agent, the Issuing Bank, the Swingline Lender or any Lender on
a nonconfidential basis from a source other than Holdings or the Borrower. For
the purposes of this Section, the term "Information" means all information
received from Holdings or the Borrower relating to Holdings or the Borrower or
its business, other than any such information that is available to any Agent,
the Issuing Bank, the Swingline Lender or any Lender on a nonconfidential basis
prior to disclosure by Holdings or the Borrower. 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.

SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.
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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.

DJ ORTHOPEDICS LLC,

by
/ s / Cyril Talbot III
-------------------------------------------------
Name: Cyril Talbot III
Title: VP, CFO, and Secretary

DONJOY, L.L.C.,

by
/ s / Cyril Talbot III
-------------------------------------------------
Name: Cyril Talbot III
Title: VP, CFO, and Secretary

FIRST UNION NATIONAL BANK,
individually and as Administrative Agent and
Collateral Agent,

by
/ s / J. Matt MacIver Jr.
------------------------------------------------
Name: J. Matt MacIver Jr.
Title: Vice President

THE CHASE MANHATTAN BANK,
individually and as Syndication Agent, Issuing Bank
and Swingline Lender,

by
/ s / Stephen P. Rochford
--------------------------------------------
Name: Stephen P. Rochford
Title: Vice President
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AMSOUTH BANK,

by
/ s / Joseph B. Hutson
----------------------------------------
Name: Joseph B. Huston
Title: Attorney-In-Law

BANK AUSTRIA
CREDITANSTALT CORPORATE
FINANCE, INC,

by
/ s / Greg Roux
-------------------------------------------
Name: Greg Roux
Title: Vice President

by
/ s / Jack R. Bertges
--------------------------------------------
Name: Jack R. Bertges
Title: Senior Vice President

BANKBOSTON, N.A.,

by
/ s / Christopher J. Wickles
-------------------------------------------
Name: Christopher J. Wickles
Title: Vice President

BANK LEUMI USA,

by
/ s / Del Lorimer
-----------------------------------------------
Name: Del Lorimer
Title: VP/MGR Corporate Finance

FLEET CAPITAL
CORPORATION,

by
/ s / Mark D. Newlun
------------------------------------------
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Name: Mark D. Newlun
Title: Senior Vice President

FIRST SECURITY BANK, N.A.,

by
/ s / Richard I. Polver
------------------------------------------------
Name: Richard I. Polver
Title: Executive Vice President

THE PROVIDENT BANK,
by
/ s / Thomas W. Doe
------------------------------------------
Name: Thomas W. Doe
Title: Vice President

PROVIDENT BANK OF MARYLAND,

by
/ s / Jennifer D. Patton
-------------------------------------
Name: Jennifer D. Patton
Title: Assistant Vice President