Derby Cycle Corp – ‘10-K’ for 12/31/98 – EX-10.14

As of:  Thursday, 4/1/99   ·   For:  12/31/98   ·   Accession #:  928385-99-1098   ·   File #:  333-61191

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         73    419K 
 2: EX-3.1      Amended and Restated Certificate of Incorporation     25    103K 
 3: EX-10.13    Amended and Restated Agreement                        21     54K 
 4: EX-10.14    Revised Facility Agreement                           231    790K 
 5: EX-10.15    Senior Subordinated Loan Agreement                    63    141K 
 6: EX-10.16    Material Contract                                      6     30K 
 7: EX-10.17    Management Stock Purchase Agreement                   11     46K 
 8: EX-10.18    Agreement                                            177    640K 
 9: EX-10.19    Form of Agreement Evidencing A Grant of Stock          7     31K 
                          Option                                                 
10: EX-10.20    Amended & Restated Shareholders Agreement             34    130K 
11: EX-10.21    Securities Purchase Agreement                          5     15K 
12: EX-21.1     Subsidiaries                                           2     11K 
13: EX-27       Financial Data Schedule                                2      7K 

EX-10.14   —   Revised Facility Agreement
Exhibit Table of Contents

EX-10.14
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                                                                   EXHIBIT 10.14

SCHEDULE 5

FACILITY AGREEMENT

DATED 12 MAY 1998 

MULTICURRENCY CREDIT FACILITY 
up to DM214,000,000 

THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors

CHASE MANHATTAN plc 
as Arranger 

THE FINANCIAL INSTITUTIONS
NAMED HEREIN
as Banks

CHASE MANHATTAN INTERNATIONAL LIMITED 
as Facility Agent 

CHASE MANHATTAN INTERNATIONAL LIMITED 
as Security Agent 

Dibb Lupton Alsop 
125 London Wall 
LONDON
EC2Y 5AE

Tel: 0345 26 27 28
Fax: 0171 600 1650

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CONTENTS

1.   INTERPRETATION..............................................   1           
1.1  Definitions ...........................................   1      
1.2  Financial Terms .......................................  31      
1.3  Construction ..........................................  37      
1.4  Relationship with the Intercreditor Agreements.........  39      

2.   THE FACILITY................................................  39           
2.1  The Facility ..........................................  39      
2.2  Nature of Banks' obligations and rights................  40      
2.3  Nature of Borrowers' rights and obligations hereunder..  40      
2.4  Maximum Total Commitments..............................  41      

3.   PURPOSE OF FACILITIES.......................................  41           

4.   CONDITIONS PRECEDENT TO FIRST UTILISATION...................  42           

5.   CONDITIONS PRECEDENT TO EACH UTILISATION BY WAY OF     ADVANCES AND STANDBY
                                                              L/CS  42
6.   UTILISATION OF THE FACILITIES...............................  43           
6.1   Delivery of a Drawdown Request........................  43      
6.2   Completion of Drawdown Request........................  43      
6.3   Amount of each Bank's participation in an Advance.....  44      
6.4   Delivery of a Standby L/C Request.....................  45      
6.5   Completion of Standby L/C Request.....................  45      
6.6   Issuing of Standby L/Cs ..............................  46      
6.7   Facility Agent's Authority............................  47      
6.8   Copy of Standby L/C ................................... 47      
6.9   No Enquiry ...........................................  47      
6.10  Definitions ..........................................  47      
6.11  Calculation ..........................................  53      
6.12  Determination.........................................  53      
6.13  Undrawn amount........................................  54      

7.  ANCILLARY FACILITIES.........................................  54           
7.1  Ancillary Facilities ...................................  54       
7.2  Operation of Ancillary Facilities.......................  56       

8.  INTEREST.....................................................  59           
8.1  Standby L/C ............................................  59       
8.2  Interest rate ..........................................  59       

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8.3  Due date ...............................................  59       
8.4  Duration ...............................................  60       
8.5  Notification of LIBOR by Facility Agent.................  60       

9.  DEFAULT INTEREST ............................................  60           
9.1  Failure to Pay..........................................  60       
9.2  Rate ...................................................  60       
9.3  Default Interest Period.................................  60       
9.4  Unexpired Portion ......................................  61       

10. MARKET DISRUPTION............................................  61           
10.1  Disruption events .....................................  61       
10.2  Effect ................................................  62       

11. REPAYMENT, PREPAYMENT AND CANCELLATION.......................  62           
11.1  Reduction of the Facility .............................  62       
11.2  Repayment of Advances..................................  63       
11.3  Facility Agent to notify Banks of demand...............  63       
11.4  L/C indemnity..........................................  63       
11.5  Banks' Discretion .....................................  64       
11.6  Voluntary cancellation.................................  64       
11.7  Mandatory Prepayment on Listing........................  64       
11.8  Prepayment Fee.........................................  66       
11.9  Cancellation and Prepayment of a Bank's Revolving                 
Commitment and Standby L/C Commitment..................  66 
11.10 Notices of prepayment and cancellation ................  66       
11.11 Notification of Bank(s) ...............................  67       
11.12 Only method ...........................................  67       
11.13 European Economic and Monetary Union ..................  67       

12. PARTIAL PAYMENTS.............................................  69           

13. PAYMENTS.....................................................  70           
13.1  To Facility Agent .....................................  70       
13.2  Distribution by the Agents ............................  70       
13.3  Currency ..............................................  71       
13.4  Set-off and counterclaim...............................  72       

14. TAXES........................................................  72           
14.1  Payment of Taxes ......................................  72       
14.2  Gross-up ..............................................  73       
14.3  Tax indemnity..........................................  73       
14.4  Notification of claims.................................  73       
14.5  Tax receipts ..........................................  73       
14.6  Tax Saving ............................................  74       
14.7  U.S Taxation-delivery of forms and statements..........  74       
14.8  Double tax-treaties ...................................  76       
14.9  Qualifying Bank .......................................  76       

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15.  INCREASED COSTS ............................................   76          
15.1  Indemnity for increased costs.........................   76     
15.2  Exceptions ...........................................   77     
15.3  Notification by Bank .................................   78     
15.4  Regulation D Compensation.............................   78     

16.  ILLEGALITY..................................................   78          
16.1  Illegality in relation to Advances....................   78     
16.2  Illegality in relation to Standby L/Cs................   79     

17.  MITIGATION..................................................   79          
17.1  Mitigation ...........................................   79     
17.2  Costs and Expenses of Mitigation......................   80     

18.  REPRESENTATIONS AND WARRANTIES..............................   80          
18.1  General representations and warranties................   80     
18.2  Repetition of representations and warranties..........   92     

19.  UNDERTAKINGS................................................   93          
19.1  Information undertakings..............................   93     
19.2  Form of financial statements..........................  100     
19.3  Variation of financial undertakings ..................  100     
19.4  Positive undertakings.................................  101     
19.5  Negative undertakings.................................  111     

20.  FINANCIAL UNDERTAKINGS......................................  125          

21.  EVENTS OF DEFAULT...........................................  133          
21.1  The Events of Default.................................  133     
21.2  Acceleration .........................................  139     

22.  ADDITIONAL BORROWERS........................................  140          

23.  GUARANTEES..................................................  141          
23.1  Guarantee ............................................  141     
23.2  Continuing Guarantee..................................  143     
23.3  Reinstatement ........................................  143     
23.4  Waiver of Defences ...................................  143     
23.5  Immediate Recourse ...................................  144     
23.6  Preservation of Rights................................  144     
23.7  Non-competition ......................................  145     
23.8  Additional Security ..................................  146     
23.9  Certificate ..........................................  146     
23.10 Guarantee Fees                                                  

24.  RELEASE OF GUARANTORS AND SECURITY..........................  146          

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24.1  Guarantors ...........................................  146     
24.2  Assets ...............................................  146     
24.3  Conditions for Release................................  147     
24.4  Release of Group Members..............................  147     

25.  INDEMNITIES.................................................  147          
25.1  Indemnifiable events .................................  147     
25.2  Stamp duty............................................  148     

26.  FEES........................................................  148          
26.1  Commitment fee........................................  148     
26.2  Utilisation Fee ......................................  149     
26.3  Applicable Rate ......................................  149     
26.4  Calculation ..........................................  149     
26.5  Payment of Utilisation Fee ...........................  150     
26.6  Agency fees ..........................................  150     
26.7  Arrangement fee ......................................  150     

27.  COSTS AND EXPENSES..........................................  150          
27.1  Initial Costs ........................................  150     
27.2  Amendments ...........................................  150     
27.3  Protection, enforcement, etc..........................  151     

28.  THE AGENTS AND THE ARRANGER.................................  151          
28.1  Appointment of the Agents ............................  151     
28.2  Duties of the Agents .................................  152     
28.3  Exculpatory provisions................................  153     
28.4  Assumptions ..........................................  153     
28.5  Agents and Arranger not responsible to other Parties..  154     
28.6  Delegation and advisers...............................  154     
28.7  Indemnity ............................................  154     
28.8  Resignation of the Agents ............................  155     
28.9  Separate entity ......................................  156     
28.10 Reliance .............................................  156     
28.11 Credit approval ......................................  156     
28.12 Tax Confirmation .....................................  156     
28.13 Miscellaneous provisions .............................  157     

29.  TRANSFERS...................................................  157          
29.1  Obligors .............................................  157     
29.2  Banks ................................................  157     
29.3  Time of transfer .....................................  158     
29.4  Administration fee ...................................  158     
29.5  Additional amounts payable to transferee..............  159     
29.6  Disclosure of information ............................  159     

30.  REDISTRIBUTION PROVISIONS...................................  159          
30.1  Redistributions ......................................  159     

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30.2  Repayment of a Discharged Amount......................  160     
30.3  Exceptions ...........................................  160     

31.  CALCULATIONS AND EVIDENCE OF DEBT...........................  161          
31.1  Calculations .........................................  161     
31.2  Financial Accounts ...................................  161     
31.3  Control account ......................................  161     
31.4  Standby L/C Accounts..................................  161     
31.5  Actual amount received................................  162     
31.6  Prima facie evidence .................................  162     
31.7  Certificates and determinations.......................  162     
31.8  Reference Banks ......................................  163     
31.9  Unavailability of ECU/ecu ............................  163     

32.  AMENDMENTS AND WAIVERS......................................  163          
32.1  Majority Banks........................................  163     
32.2  All Banks ............................................  164     
32.3  Super Majority Banks..................................  164     
32.5  The Agents ...........................................  165     

33.  NOTICES.....................................................  165          
33.1  Method of delivery ...................................  165     
33.2  Addresses ............................................  165     
33.3  Agents' details ......................................  165     
33.4  Receipt of notices ...................................  166     
33.5  Language .............................................  166     

34.  PARTIAL INVALIDITY..........................................  166          

35.  REMEDIES AND WAIVERS........................................  166          

36.  COUNTERPARTS................................................  167          

37.  SECURITY....................................................  167          

38.  JURISDICTION................................................  167          
38.1  Courts of England ....................................  167     
38.2  Non-exclusivity ......................................  167     
38.3  Service of process agent..............................  167     
38.4  Non-convenience of forum..............................  168     

39.  GOVERNING LAW...............................................  168          

SCHEDULE 1.......................................................  169          
THE BORROWERS...............................................  169     

SCHEDULE 2.......................................................  170          
THE GUARANTORS .............................................  170     

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SCHEDULE 3.......................................................  172          
THE BANKS....................................................  172      

SCHEDULE 4.......................................................  173          
ACCESSION AGREEMENT .........................................  173      

SCHEDULE 5.......................................................  176          
DOCUMENTS TO ACCOMPANY ADDITIONAL ...........................  176      

SCHEDULE 6.......................................................  178          
CONDITIONS PRECEDENT ........................................  178      

SCHEDULE 7.......................................................  185          
Part 1 ......................................................  185      
FORM OF DRAWDOWN REQUEST ....................................  185      
Part 2 ......................................................  186      
FORM OF STANDBY L/C REQUEST .................................  186      
Part 3 ......................................................  188      
FORM OF STANDBY L/C .........................................  188      

SCHEDULE 8.......................................................  196          
NOVATION CERTIFICATE ........................................  196      

SCHEDULE 9.......................................................  200          
ADDITIONAL COSTS ............................................  200      

SCHEDULE 10......................................................  202          
COMPLIANCE CERTIFICATE ......................................  202      

SCHEDULE 11......................................................  204          
MATERIAL GROUP MEMBERS ......................................  204      

SCHEDULE 12......................................................  205          
DESCRIPTION OF ECU ..........................................  205      

SCHEDULE 13......................................................  207          
Nominee Notice ..............................................  207      

SCHEDULE 14......................................................  209          
SECURITY DOCUMENTS ..........................................  209      

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THIS FACILITY AGREEMENT is made the 12th day of May 1998                        

BETWEEN:                                                                        

(1)  THE DERBY CYCLE CORPORATION a company incorporated in Delaware, the United 
    States of America, having its principal office at 22710 72nd Avenue South,
Kent, Washington 98032 (the "Company");                               

(2)  THE COMPANIES identified as Borrowers in Schedule 1;                       

(3)  THE COMPANIES identified as Guarantors in Schedule 2;                      

(4)  CHASE MANHATTAN plc (the "Arranger");                                      

(5)  THE FINANCIAL INSTITUTIONS identified as Banks in Schedule 3;              

(6)  CHASE MANHATTAN INTERNATIONAL LIMITED (the "Facility Agent"); and          

(7)  CHASE MANHATTAN INTERNATIONAL LIMITED (the "Security Agent").              

WHEREAS                                                                         

The Banks have agreed, subject to the terms and conditions of this Agreement, to
provide a revolving credit facility of up to DM214,000,000 (or the equivalent   
thereof in other currencies) of which up to DM65,000,000 may be utilised by way 
of Ancillary Facilities (less amounts utilised by the issuance of Standby L/Cs  
under the Standby L/C Facility) and DM15,000,000 (or the equivalent in other    
currencies) may be utilised by the issuance of Standby L/Cs.                    

PART 1

1.   INTERPRETATION                                                             

1.1  Definitions                                                                

In this Agreement:                                                              

"Accession Agreement" means:                                                    

(a)  when designated "Borrower", an agreement substantially in the form of      
 Schedule 4 made pursuant to Clause 22 (together the "Borrower Accession
Agreements");                                                         

(b)  when designated "Guarantor", an agreement substantially in the form of     
  Schedule 4 made pursuant to Clauses 19.4(d), 19.4(e), 19.4(f) or 19.4(g)
(together the "Guarantor Accession Agreements"); and                  

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(c)  without any such designation, a Borrower Accession Agreement or a Guarantor
Accession Agreement and "Accession Agreements", without any such      
 designation means some or all (as the context requires) of the Borrower
Accession Agreements and the Guarantor Accession Agreements together. 

"Accountant's Report" means                                                     

(i)  each of the reports dated on or before Closing prepared by Arthur Andersen 
  on the Group as a result of separate letters of instruction from each of
the Company and the Arranger in relation thereto; and                 

(ii) the reports prepared by Arthur Andersen dated 31 January 1998 and August   
    1998 and made in relation to Western State Import Inc and Bejka Trading AB
and in connection with the Diamond Back Acquisition.                  

"Accounts" has the meaning given to such term in Clause 6.10.                   

"Accounting Date" means each 31 December regardless of which day it falls upon, 
and each 31 March, 30 June, 30 September, provided that if any such date does   
not fall on a Sunday, then the date which is the Sunday immediately prior to or 
after such date in accordance with the Company's usual accounting practice as   
notified to the Facility Agent prior to the date of this Agreement.             

"Account Debtor" has the meaning given to such term in Clause 6.10.             

"Accounting Period" in relation to any Person means any period of approximately 
one month, three months or one year for which Financial Accounts or, as the case
may be, Pre-Closing Proforma Accounts of such Person are required to be prepared
for the purposes of this Agreement ending, in the case of each quarterly and    
each one year period, on an Accounting Date.                                    

"Acquired Assets" means the shares in the capital of the Subsidiaries of the    
Company immediately following the Recapitalisation.                             

"Additional Borrower" means any entity other than a Group Member incorporated in
South Africa which becomes party to this Agreement as a Borrower pursuant to a  
Borrower Accession Agreement.                                                   

"Additional Cost" in relation to each Advance or Overdue Amount  means, for the 
Term relating to that Advance or, as the case may be, Default Interest Period   
relating to that Overdue Amount, the cost as calculated by the Facility Agent in
accordance with Schedule 9 imputed to each Bank participating in such Advance or
Overdue Amount through a Facility Office in the United Kingdom of compliance    
with the mandatory liquid assets requirements of the Bank of England during that
Term, or as the case may be, that Default Interest Period and/or any charge     
imposed by the Financial Services Authority (or any other authority which       
replaces all or any of its functions) expressed as a percentage rate per annum. 

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"Additional Guarantor" means any entity which becomes a party hereto as a       
Guarantor pursuant to a Guarantor Accession Agreement or otherwise provides a   
Guarantee.                                                                      

"Adjusted Available Amount" has the meaning given to such term in Clause 6.10.  

"Adjusted Borrowing Base" has the meaning given to such term in Clause 6.10.    

"Advance" means the principal amount of each borrowing under this Agreement     
under the Revolving Facility or the principal amount of each such borrowing     
outstanding from time to time, as the context requires.                         

"Affiliate" means, in relation to a body corporate, any of its Holding Companies
or Subsidiaries or any other Subsidiary of any of its Holding Companies.        

"Agent" means:                                                                  

(a)  when designated "Facility", includes any of its successors pursuant to     
Clause 28.8;                                                          

(b)  when designated "Security", includes any of its successors pursuant to     
   Clause 28.8 and any corresponding provision of any Security Document; and

(c)  without any such designation, the Facility Agent or the Security Agent, as 
   the context requires, and "Agents" without any such designation means one
or more of the Facility Agent and the Security Agent, as the context  
requires.                                                             

"Ancillary Bank" means any Bank which becomes an Ancillary Bank by the operation
of Clause 7.                                                                    

"Ancillary Commitment" means in relation to an Ancillary Bank, the maximum      
amount (actual or contingent) from time to time of the Ancillary Facilities to  
be made available by that Ancillary Bank which has been authorised as such under
Clause 7.1(a) to the extent not cancelled under this Agreement.                 

"Ancillary Outstanding" means, at any time, and with respect to any Ancillary   
Bank, the Deutschmark Equivalent of all the following amounts outstanding at    
such time under the Ancillary Facilities of that Ancillary Bank then in force:  

(a)  all amounts of principal then outstanding under any overdraft, BACS, cheque
drawing or other current account facilities;                          

(b)  twenty per cent of the gross amounts payable to that Ancillary Bank under  
     any contracts (for a period not exceeding eighteen months) entered into for
the provision of spot or forward foreign exchange facilities or the   
  purchase of foreign exchange options for a period not exceeding eighteen
months (in each case in accordance with the Approved Hedging          

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    Programme) (or such other amount as such Ancillary Bank may agree with the
 Facility Agent and the Group Member to whom the relevant facilities are
made available in accordance with its usual practice for calculating  
exposure for similar facilities);                                     

(c)  the maximum face amount (excluding amounts stated to be in respect of      
   interest) of all guarantees, bonds and letters of credit then outstanding
under any guarantee, bonding or letter of credit facilities; and      

(d)  in respect of any other facility or financial accommodation such other     
amount as the relevant Ancillary Bank may (acting reasonably and in   
 consultation with the Facility Agent and the Obligors' Agent) determine
     fairly represents the aggregate exposure at such time of the Ancillary Bank
providing the same.                                                   

"AON Insurance Report" means the insurance review of Derby Bicycle Group        
prepared by AON Mergers and Acquisitions Group dated February 1998.             

"AON Pensions Report" means the employee benefits due diligence report on the   
Derby Bicycle Group prepared by AON Consulting dated 4 December 1997.           

"Applicable Accounting Principles" means, for the purposes of the preparation   
and/or audit of the Pre-Closing Proforma Accounts, the Accountant's Report and  
any Financial Accounts (whether combined, consolidated or unconsolidated) of the
Company and/or the Group, to be delivered under this Agreement, the accounting  
principles and practices generally accepted in the United States of America, and
for Group Members other than the Company the accounting principles and practices
generally accepted in their respective country of incorporation and in each     
case, approved by the relevant accounting standards board or other applicable   
authority and which are the same as the accounting principles and practices     
applied in the preparation of the Business Plan and any variation of such       
accounting principles and practices which has been agreed in writing by the     
Majority Banks.                                                                 

"Approved Bank" means a Bank whose long term unsecured unsubordinated debt      
rating is at least A2 (Moody's) or A (Standard & Poors) that has been given and 
has acknowledged all notices reasonably required by the Facility Agent and in   
substantially the agreed form and/or required by the Security Documents and     
through a branch situated in Ireland, England, Germany or the Netherlands (as   
applicable) or through such other branch of a Bank situated in a country not    
specifically mentioned above provided that the Facility Agent has, in respect of
any such other branch, previously given its approval to such arrangement prior  
thereto.                                                                        

"Approved Hedging Programme" means, as at the date of this Agreement, the paper 
so entitled, in the agreed form provided by the Company for the purposes of     
satisfying paragraph 27 of Schedule 6, as the same may be amended from time to  
time with the prior written consent of the Facility Agent.                      

"Approved Provisioning Procedure" means, the paper so entitled in the agreed    
form provided by the Company for the purposes of satisfying paragraph 36 of     
Schedule 6, as the same may be                                                  

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amended from time to time with the prior written consent of the Facility        
Agent.                                                                          

"Articles of Association" means, in relation to any Group Member, its articles  
of association or by-laws (or equivalent in the country of its incorporation) as
the same are amended from time to time.                                         

"Auditors" means Arthur Andersen (or any successor through merger) and/or any   
other firm of independent public accountants of international standing approved 
by the Facility Agent, which is appointed to audit the consolidated annual      
accounts of the Company.                                                        

"Authorised Signatory" in relation to any Obligor and any communication to be   
made or document to be executed or certified by that Obligor means, at any time,
any Person:                                                                     

(a)  who is at such time duly authorised by a resolution of the board of        
   directors of that Obligor or by virtue of his appointment by that Obligor
    to a particular office to make that communication or to execute or certify
     that document on behalf of that Obligor and in respect of whom the Facility
 Agent has received a certificate of a director or the secretary of that
  Obligor setting out the name and signature of that Person and confirming
that Person's authority so to act; and                                

(b)  in respect of whom no notice has been received by the Facility Agent from  
     that Obligor to the effect that Person is no longer an Authorised Signatory
of that Obligor.                                                      

"Availability Period" means:                                                    

(a)  in respect of the Revolving Facility and the Standby L/C Facility, the     
     period from the opening of business in London on the date of this Agreement
  to close of business in London on the day falling one month prior to the
Final Repayment Date or such later date as all the Banks may agree in 
writing on or after the date hereof; and                              

(b)  in respect of an Ancillary Facility, as the same is determined in          
accordance with Clause 7.                                             

"Bank" means each of the following:                                             

(a)  each Bank and each Ancillary Bank;                                         

(b)  each bank or other financial institution to which rights and/or obligations
     under this Agreement are assigned or transferred pursuant to Clause 29.2 or
  which assumes rights and obligations pursuant to a Novation Certificate;
and                                                                   

(c)  any successor or successors in title to any of the foregoing,              

(together the "Banks"), provided that upon (i) termination in full of all the   
Revolving Commitment, the Standby L/C Commitment and the Ancillary Commitment of
any Bank, and (ii) irrevocable                                                  

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payment in full of all amounts which may be or become payable to such Bank under
the Senior Finance Documents, such Bank shall not be regarded as being a Bank   
for the purposes of determining whether any provision of any of the Senior      
Finance Documents requiring consultation with or the consent or approval of or  
instructions from the Banks or the Majority Banks has been complied with.       

"Beneficiary" means, in respect of a Standby L/C, the Person in whose favour    
such Standby L/C is issued provided that Person is not a Group Member           
incorporated in South Africa or a financial institution providing credit to a   
Group Member incorporated in South Africa.                                      

"Blocked Account(s)" means the account(s) denominated in Deutschmarks, Guilders,
Sterling and Dollars held at The Chase Manhattan Bank, Nos. 22782101, 22782102, 
22782103, 22782104 respectively in each case in the name of The Derby Bicycle   
Group-Closing Account or such other account or accounts as the Arranger shall   
nominate for this purpose.                                                      

"Borrower" means each entity identified as a Borrower in Schedule 1 and each    
Additional Borrower (together the "Borrowers").                                 

"Borrowing Base" has the meaning given to such term in Clause 6.10.             

"Borrowing Base Summary" has the meaning given to such term in Clause 6.10.     

"Business Day" means:                                                           

(a)  a day (excluding a Saturday and Sunday) on which banks and foreign exchange
markets are open for business in London and Frankfurt; and            

(b)  (in respect of a day on which a payment or other transaction in an Optional
   Currency is required under this Agreement) a day (not being a Saturday or
Sunday) on which banks and foreign exchange markets are also open for 
    business in the principal financial centre of the country of such Optional
Currency.                                                             

"Business Plan" means the document dated on or about the date hereof in the     
agreed form provided to the Facility Agent pursuant to paragraph 9 of Schedule 6
and identified by the Company and the Facility Agent as being the Business Plan.

"Canadian Borrower" means any Borrower incorporated in Canada.                  

"Canadian Dollars" means the lawful currency for the time being of Canada.      

"Cash" means any credit balances on any deposit, savings or current account with
a Bank and cash in hand.                                                        

"Cash Collateral Amount" has the meaning given to such term in Clause 6.10.     

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"Cash Equivalent Investments" means:                                            

(a)  debt securities denominated in Sterling issued by the Government of the    
    United Kingdom or Dollars issued by the Government of the United States of
 America having not more than six months to final maturity which are not
convertible into any other form of security;                          

(b)  debt securities (denominated in Dollars or an Optional Currency) which have
not more than 180 days to final maturity, are not convertible into any
     other form of security, are rated at least P-1 (Moody's) or A-1 (Standard &
Poors) and are not issued or guaranteed by any Group Member;          

(c)  any cash deposits which have not more than a 90 day term denominated in    
Sterling or Dollars; and                                              

(d)  such other securities (if any) as are approved as such in writing by the   
Facility Agent,                                                       

Provided that in each case the debt securities, cash deposits, or other         
securities (as referred to in paragraphs (a) to (d) inclusive above), are       
beneficially owned by an Obligor and are deposited with an Approved Bank.       

"Certificate of Incorporation" means the amended and restated Certificate of    
Incorporation of the Company.                                                   

"Certified Copy" means, in respect of any document, agreement or communication  
to be delivered in connection with this Agreement, a copy thereof which has been
certified by an Authorised Signatory of the Person providing the document,      
agreement or communication as being a true copy of the original or their duly   
appointed solicitor or other legal counsel.                                     

"Chief Executive Officer" means  Gary S. Matthews or in his absence his deputy  
(being an Authorised Signatory of the Company) and their respective successors  
from time to time.                                                              

"Chief Financial Officer" means the Group Financial Controller of the Company   
or, as the case may be, the Chief Financial Officer of the Company, (being Simon
J. Goddard at Closing) or in his absence his deputy (being an Authorised        
Signatory of the Company).                                                      

"Closing" means the completion of the Recapitalisation.                         

"Completion Accounts" means the accounts that are to be prepared by the Company 
on a proforma basis in respect of the period commencing on 1 January 1998 and   
ending on the date of such accounts containing a proforma balance sheet prepared
on the assumption that the Recapitalisation had taken effect, a profit and loss 
statement and a cash flow of statement of the Group as at 3 May 1998.           

"Compliance Certificate" means a Compliance Certificate in substantially the    
same form as is set out at Schedule 10.                                         

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"Dangerous Substance" means any radioactive, radiowave, electromagnetic,        
microwave emissions and any natural or artificial substance (whether in the form
of a solid, liquid, gas or vapour) the generation, transportation, storage,     
treatment, use or disposal of which (whether alone or in combination with any   
other substance) including (without limitation) any controlled, special         
hazardous, toxic, radioactive or dangerous waste or discharge, gives rise to a  
risk of causing material harm to man or any other living organism or materially 
damaging the Environment or public health or welfare.                           

"Debentures" means each of the debentures governed by the laws of England       
entered into by certain Group Members in favour of the Security Agent and       
forming part of the Security Documents (each a "Debenture").                    

"Default" means an Event of Default or a Potential Event of Default.            

"Default Interest Period" is defined at Clause 9.1.                             

"Derby Cycle Group Combined Budget" means the budget in an agreed form and      
prepared by the Company in respect of the Diamond Back Acquisition and existing 
operations of the Group for the financial year ended 31 December 1999;          

"Derby International" means Derby International Corporation S.A..               

"Derby L.L.C." means DC Cycle L.L.C..                                           

"Deutschmarks" and "DM" means the lawful currency for the time being of the     
Federal Republic of Germany.                                                    

"Deutschmark Amount" in relation to any Advance or Standby L/C means:           

(a)  (if denominated in Deutschmarks) the principal amount thereof; or          

(b)  (if denominated in an Optional Currency) the Deutschmark Equivalent of the 
principal amount thereof calculated, in the case of an Advance not    
   denominated in Sterling, two Business Days prior to its Drawdown Date, in
     the case of an Advance denominated in Sterling on its Drawdown Date and, in
the case of a Standby L/C, on the date that the Standby L/C Request   
    relating thereto was delivered to the Facility Agent under this Agreement.

"Deutschmark Equivalent" in relation to an amount expressed or denominated in a 
currency other than Deutschmarks means the equivalent thereof in Deutschmarks   
converted at the Facility Agent's Spot Rate of Exchange on the date of the      
relevant calculation.                                                           

"DFS" means Derby Finance S.a.r.l..                                             

"Diamond Back Acquired Assets" means the assets acquired by the Company, or as  
the case may                                                                    

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be, the Swedish Obligor pursuant to the Diamond Back Acquisition Agreement.     

"Diamond Back Acquisition" means the proposed acquisition by the Company and    
Derby Sweden AB of certain assets pursuant to the Diamond Back Acquisition      
Agreement;                                                                      

"Diamond Back Acquisition Agreement" means the acquisition agreement dated 8    
December 1998 and made between the Company and Derby Sweden AB as purchasers and
Diamond Back International Limited, Western States Import Company Inc and Bejka 
Trading AB as vendors;                                                          

"Diamond Back Acquisition Legal Due Diligence Report" means each of:            

(i)  the report prepared by Kirkland & Ellis dated 9 December 1998 in respect of
    the Diamond Back Acquisition addressed to the Arranger, the Facility Agent
and the Security Agent; and                                           

(ii) the report dated 17 December 1998 and prepared by Simmons & Simmons and    
 addressed to the Company and Derby Holding BV in respect of the Diamond
Back Acquisition Agreement.                                           

"Directors" means each of Frederic V. Malek, Carl J. Rickertsen, Paul G. Stern, 
Alan J. Finden-Crofts, A. Edward Gottesman and Dr. Thomas H. Thomsen (each a    
"Director").                                                                    

"Disclosure Exhibits" means the disclosure exhibits given in respect of the     
Recapitalisation Agreement on or about the date of the Recapitalisation         
Agreement in the agreed form together with all schedules, annexures and exhibits
thereto forming the "Disclosure Exhibits" referred to in the Recapitalisation   
Agreement.                                                                      

"Disclosure Letter" means the letter accompanying the Disclosure Exhibits.      

"Dollars" and "$" means the lawful currency for the time being of the United    
States of America.                                                              

"Dormant Company" means each Group Member which is not an Obligor, does not     
trade (whether for its own account or for that of another), is not required to  
make entries into its accounting records in accordance with Section 221 of the  
Companies Act 1985 (or any equivalent legislation in the jurisdiction of        
incorporation of such company) or, to the extent that there is no equivalent    
legislation in the jurisdiction of incorporation of such company, would be a    
Dormant Company if the principles enshrined in Section 221 of the Companies Act 
1985 were applied to it and does not hold or own (whether legally or            
beneficially) any assets or property with a book value in excess of $10,000 (or 
its equivalent in other currencies) other than amounts due from other Group     
Members of no more than $50,000; or owe or have outstanding any liabilities with
a book value in excess of $10,000 (or its equivalent in other                   
currencies)(excluding liabilities owed to Obligors) Provided that,              
notwithstanding the foregoing, a Group Member that holds any interest in any    
Material Intellectual Property Right shall not be a Dormant Company.            

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"Drawdown Date" means, in respect of an Advance, the date such Advance is made, 
or is proposed to be made, under this Agreement.                                

"Drawdown Request" means a request substantially in the form set out at Part 1  
of Schedule 7.                                                                  

"Dutch Borrower" means a Borrower incorporated in the Netherlands.              

"Dutch Guilders" and "DFl" means the lawful currency for the time being of the  
Kingdom of the Netherlands.                                                     

"ECU" is defined at Schedule 12.                                                

"Eligible Finished Goods" has the meaning given to such term in Clause 6.10.    

"Eligible Receivables" has the meaning given to such term in Clause 6.10.       

"Eligible Raw Materials" has the meaning given to such term in Clause 6.10.     

"Encumbrance" means any security, assignation in security, bond and floating    
charge, mortgage, pledge, lien, charge, assignment for the purpose of providing 
security, hypothecation, right in security, security interest or trust          
arrangement for the purpose of providing security, and any other security       
agreement or other arrangement having the effect of providing security          
(including, without limitation, the deposit of monies or property with a Person 
with the primary intention of affording such Person a right of set-off or lien).

"Environment" means all, or any of, the following media, the air (including,    
without limitation, the air within buildings and the air within other natural or
man-made structures above or below ground), water (including, without           
limitation, ground and surface water) and land (including, without limitation   
surface and sub-surface soil).                                                  

"Environmental Claim" means any claim by any Person:                            

(a)  in respect of any loss or liability suffered or incurred by that Person as 
a result of or in connection with any violation of Environment Law; or

(b)  that arises as a result of or in connection with Environmental             
  Contamination and that could give rise to any remedy or penalty (whether
 interim or final) that may be enforced or assessed by private or public
legal action or administrative order or proceedings including, without
    limitation, any such claim that arises from injury to Persons, property or
natural resources.                                                    

"Environmental Contamination" means each of the following and their             
consequences:                                                                   

(a)  any material release, emission, leakage or spillage of any Dangerous       
   Substance at or from any site owned, occupied or used by any Group Member
into any part of the Environment; or                                  

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(b)  any material accident, fire, explosion or sudden event at any site owned,  
     occupied or used by any Group Member which is directly or indirectly caused
by or attributable to any Dangerous Substance; or                     

(c)  any other pollution of the Environment.                                    

"Environmental Law" means all laws (including, without limitation, common law), 
regulations, codes of practice, circulars, guidance notices and the like having 
legal effect (whether in the United Kingdom, the United States of America or    
elsewhere) concerning the protection of human health, the Environment, the      
conditions of the work place or the generation, transportation, storage,        
treatment or disposal of Dangerous Substances.                                  

"Environmental Reports" means each of the environmental reports prepared by ERM 
dated December 1997 or January 1998 in relation to the Group and the Kirkland & 
Ellis Memorandum dated 16 December 1997 entitled "Summary of Material           
Environmental Issues" (each an "Environmental Report").                         

"Environmental Licence" means any permit, licence, authorisation, consent or    
other approval required by any Environmental Law.                               

"ERISA" means the Employee Retirement Income Security Act of 1974 of the USA as 
amended from time to time or any successor statute and any regulations          
promulgated thereunder.                                                         

"ERISA Affiliate" means each Person (as defined in Section 3(9) of ERISA whether
or not incorporated, which is a Subsidiary of or under common control or would  
be considered a single employer with any Obligor domiciled in the United States 
within the meaning of section 414(b), (c), (m) or (o) of the IRC and regulations
promulgated under those sections or within the meaning of section 4001(b) of    
ERISA.                                                                          

"Escrow Letter" means the letter from the Facility Agent acknowledged by the    
Company dated on or about the date hereof regarding the various payments to be  
made at or about the Closing in respect of the Closing.                         

"Euro-Dollar Reserve Percentage" means, for any day, that percentage (expressed 
as a decimal) which is in effect on such day, as prescribed by the Board of     
Governors of the Federal Reserve System of the USA (or any successor), for      
determining the maximum reserve requirement for a member bank of the Federal    
Reserve System in New York City with deposits exceeding five billion Dollars in 
respect of "Eurocurrency liabilities" (or in respect of any other category or   
extensions of credit or other assets which includes loans by a non-United States
of America office of any bank to United States of America residents).           

"Event of Default" means any one of the events specified in Clause 21.1.        

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"Exchange Agreement" means the exchange agreement executed and delivered or to  
be executed and delivered (as the case may be) by Derby, L.L.C and Perseus Cycle
L.L.C pursuant to the terms of the Recapitalisation Agreement and in the form   
exhibited thereto.                                                              

"Executive" means any of Klaas Dantuma, William J. Austin Farid Vaiya, Kim      
Roether, Mark Todd, John V. Spon-Smith and Irwin R. Slotar and Peter Miller and 
any replacement for any of them (together the "Executives").                    

"Executive Officer" means any of the Chief Executive Officer and the Chief      
Financial Officer.                                                              

"Existing Financial Indebtedness" means the Financial Indebtedness of the       
Company and its Subsidiaries immediately prior to Closing that is defined as    
such in the Funds Flow Memorandum and which is identified therein as being      
required to be repaid in full, and the commitment in respect thereof (if any) is
to be cancelled and reduced to zero at Closing.                                 

"Expiry Date" means, in relation to a Standby L/C, the date specified as such in
the Standby L/C Request relating thereto.                                       

"Facility" means                                                                

(a)  when designated "Revolving", the revolving credit facility referred to in  
Clause 2.1;                                                           

(b)  when designated "Ancillary", one of the ancillary facilities referred to in
Clause 2.1;                                                           

(c)  when designated "Standby L/C", the standby letter of credit facility       
referred to in Clause 2.1; and                                        

(d)  without any such designation, the Revolving Facility, the Ancillary        
Facilities or the Standby L/C Facility as the context requires;       

and the "Facilities" means the Revolving Facility, the Ancillary Facility and   
the Standby L/C Facility taken together.                                        

"Facility Agent's Spot Rate of Exchange" with respect to any Optional Currency  
on any day means the spot rate of exchange of the Facility Agent (as determined 
by the Facility Agent based on market rates then prevailing and capable of being
obtained by the Facility Agent) for the purchase of the appropriate amount of   
such Optional Currency with Deutschmarks in the London Foreign Exchange Market  
in the ordinary course of business at or about 10.00 a.m. on the day in question
for delivery, if the Optional Currency is Sterling, on such day and, in all     
other cases, two Business Days thereafter.                                      

"Facility Office" means, in respect of any Finance Party, the office through    
which it will perform its obligations under this Agreement as notified to the   
Facility Agent prior to it becoming a Finance Party or (unless otherwise agreed 
by the Facility Agent) by five Business Days' notice.                           

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"Fee Letters" means each of the letters referred to in Clause 26.6 and 26.7 in  
relation to the agency fees and the arrangement fee respectively.               

"Final Repayment Date" means the date falling 84 months after 12 May 1998.      

"Finance Documents" means, the Senior Finance Documents, the Note Documents, the
Recapitalisation Documents, the GSIC Note Documents, and any other document     
notified by the Facility Agent (acting reasonably) to the Company as being a    
"Finance Document" (any such document being a "Finance Document" from the date  
of the notification being given in respect thereof by the Facility Agent) (each 
a "Finance Document").                                                          

"Finance Party" means the Arranger, each Bank, the Security Agent and the       
Facility Agent (together the "Finance Parties").                                

"Financial Accounts" means from time to time:                                   

(a)  the latest audited consolidated annual accounts of the Group;              

(b)  the latest unaudited consolidated quarterly accounts of the Group;         

(c)  the latest unaudited monthly management accounts of the Group;             

(d)  any other audited or unaudited consolidated or unconsolidated accounts or  
management accounts (if any) of the Group or any Group Member; and    

(e)  in respect of any period prior to Closing, the Pre-Closing Proforma        
Accounts of the Group for such period,                                

delivered or required to be delivered to the Facility Agent pursuant to this    
Agreement, or such of those accounts as the context requires.                   

"Funds Flow Memorandum" means the flow of funds memorandum in the agreed form   
prepared on behalf of the Company by Arthur Andersen containing details of the  
flow of funds at Closing.                                                       

"Gazelle" means Koninklijke Gazelle BV.                                         

"General Provisions" is defined in the Approved Provisioning Procedure.         

"Germany" means the Federal Republic of Germany.                                

"Group" means the Company and its Subsidiaries from time to time.               

"Group Member" means, at any time, a member of the Group at such time.          

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"GSIC Loan" means the senior subordinated loan agreement in the agreed form and 
made between the Company and the GSIC Noteholder dated on or around 28 January  
1999 pursuant to which the Company is to issue a series of 19% fixed rate       
subordinated unsecured loan notes due 2009 (with an annual effective rate of    
20.9%) in an aggregate amount of US$20,000,000.                                 

"GSIC Noteholder" means Vencap Holdings (1992) Pte Ltd.                         

"GSIC Note Documents" means the GSIC Loan, the GSIC Notes, the Stockholders'    
Agreement and the Side Letter as at the date of the completion of the Diamond   
Back Acquisition.                                                               

"GSIC Note Issuer" means The Derby Cycle Corporation (in its capacity as the    
issuer of the GSIC Notes).                                                      

"GSIC Notes" means the unsecured, subordinated, payment-in-kind and non-        
guaranteed notes issued or to be issued by the GSIC Note Issuer to the GSIC     
Noteholder, pursuant to the GSIC Loan as at the date of the completion of the   
Diamond Back Acquisition.                                                       

"Guarantee" means:                                                              

(a)  in relation to any UK Obligor or U.S. Obligor the form of guarantee set out
in Clause 23 of this Agreement; and                                   

(b)  in relation to any other Obligor the form of guarantee set out in Clause 23
   of this Agreement or such other form of guarantee as the relevant Obligor
     shall be required to provide in accordance with the terms of this Agreement
so as to give either:                                                 

    (i) at least the same level of support as such Obligor would have provided
had such Obligor been able to become a party to this Agreement as a result of   
having executed and delivered a duly completed Guarantor Accession Agreement if 
to do so would not be contrary to applicable laws; or                           

     (ii) the maximum level of support as such Obligor may provide having regard
to the applicable laws.                                                         

"Guarantor" means each entity identified as a Guarantor in Schedule 2 and each  
Additional Guarantor (together the "Guarantors").                               

"Hedging Counterparty" means any Bank who enters into a Hedging Protection      
Agreement as permitted by and in accordance with the terms of this Agreement and
the Approved Hedging Programme.                                                 

"Hedging Protection Agreements" means any and all interest cap and/or other     
hedging agreements entered into or committed to be entered into by a Group      
Member in relation to the Group's floating rate interest and/or currency        
exposure under the Finance Documents as have been (and/or as may hereafter be)  
agreed in writing between the Company and the Facility Agent to constitute the  

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Hedging Protection Agreements (each a "Hedging Protection Agreement").          

"Holding Company" means, in respect of any Person, any company or corporation   
(or for the purposes of Clause 19.5(aa) only) other legal entity of which such  
Person is a Subsidiary.                                                         

"IGF Liquidation" means the proposed liquidation of the Inter Derby Group       
Finance N.V. in a manner satisfactory to the Facility Agent.                    

"Indemnity Undertaking" means the indemnity undertaking in the agreed form dated
on or about the date of this Agreement pursuant to which, inter alia, Derby     
L.L.C and Perseus Cycle L.L.C agree to make claims arising in respect of Clauses
6 and 9 of the Recapitalisation Agreement and to apply the proceeds of any such 
claim in the manner detailed therein.                                           

"Immediate Subsidiary" means each Group Member that is an immediate Subsidiary  
of the Company or Lyon Investments B.V. being, as at the date of this Agreement 
Lyon Investments B.V., Sturmey Archer Limited, Raleigh Industries of Canada     
Limited, Derby Trading Co. Inc and Derby Holding B.V. and Derby Sweden AB.      

"Information Memoranda" means the information memorandum so entitled dated April
1998 prepared by the Arranger at the Company's request and on its behalf in     
connection with this Agreement as supplemented by all relevant information      
contained in the Senior Notes' Offering Memoranda dated April 1998 and May 1998 
respectively.                                                                   

"Information Package" means the Business Plan, the Information Memorandum, the  
Reports, the Transaction Costs Letter and any other information distributed by  
the Arranger at the Company's request and on its behalf in connection with this 
Agreement.                                                                      

"Initial Note Purchasers" means Chase Securities, Inc., Chase Manhattan Bank AG 
and Chase Manhattan International Limited.                                      

"Intellectual Property Rights" means all know-how, patents, trademarks, service 
marks, designs, business names, topographical or similar rights, copyrights and 
other intellectual property rights and any interests (including by way of       
licence) in any of the foregoing (in each case whether registered or not and    
including all applications for the same) of any Group Member.                   

"Intercreditor Agreements" means:                                               

(i)  the agreement entitled "Intercreditor Agreement" dated 13 May 1998 made    
 between, amongst others, the parties to this Agreement and each Hedging
     Party pursuant to which their respective interests in the Group and amongst
themselves are regulated;                                             

(ii)  the agreement dated on or about [28 January 1999] and made between,       
amongst others, the parties to this Agreement, the Persons described
      therein as the Subordinated Note Holders and the Subordinated Note Issuers
  and pursuant to which the claims of the said Subordinated Note Holders
against the said Subordinated Note Issuers are subordinated to the  
interests                                                           

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     and rights of the Finance Parties under the Senior Finance Documents; and

(iii) the agreement dated on or about [28 January 1999] and made between,       
 amongst others, the parties to this Agreement and the GSIC Noteholder
   pursuant to which the rights of the GSIC Noteholder are subordinated to
    the interests and rights of the Finance Parties under the Senior Finance
Documents;                                                          

(each agreement referred to at (i), (ii) and (iii) above an "Intercreditor      
Agreement").                                                                    

"Intercreditor Agreement Accession Memorandum" means in respect of an           
Intercreditor Agreement an Accession Memorandum as defined in and delivered     
under or pursuant to such Intercreditor Agreement.                              

"Interest Date" means, in relation to any Advance or any Overdue Amount, the    
last day of the Term or, as the case may be, the Default Interest Period        
relating thereto.                                                               

"Intra-Group Loan Memorandum" means the memorandum in the agreed form detailing 
all intra-group loans existing at and which will be in existence immediately    
after Closing prepared by the Company and delivered to the Facility Agent       
hereunder.                                                                      

"Inventory" has the meaning given to such term in Clause 6.10.                  

"Investment" is defined at Clause 19.5(n).                                      

"Investors" means each of those Persons that subscribe for (or agree to         
subscribe for) Shares pursuant to or in connection with the Recapitalisation    
Agreement or are a shareholder of the Company.                                  

"IRC" means the Internal Revenue Code of 1986 (as amended from time to time) of 
the USA.                                                                        

"Irish Debentures" means each of the debentures governed by the laws of Ireland 
entered into by certain Group Members in favour of the Security Agent and       
forming part of the Security Documents (each an "Irish Debenture").             

"Issue Date" means, in relation to any Standby L/C, the date for the issue      
thereof as specified in the Standby L/C Request relating thereto.               

"Joint Venture" means all joint venture entities, whether a company,            
unincorporated firm, undertaking, joint venture, association, partnership or    
other entity in which any Group Member has an interest from time to time.       

"Legal Due Diligence Report" means the report prepared by Kirkland & Ellis dated
18 March 1998 addressed to the Facility Agent for itself and on behalf of the   
Banks.                                                                          

"Letter of Engagement" means, in respect of any Report, the letter of           
instruction pursuant to                                                         

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which person that prepared such Report was engaged to do so.                    

"LIBOR" means in relation to any Advance or Overdue Amount, on any day, the     
London Interbank Offered Rate for deposits in the specified currency, being     
determined by the Facility Agent to be either:                                  

(a)  the offered rate (if any) for the specified term which appears on page 3750
    of the Telerate screen which displays British Bankers Association Interest
    Settlement Rates for deposits in the specified currency for the period for
 which such rate is to determined at 11.00am London time on the relevant
Quotation Date or, if such page or such service shall cease to be     
available, such other page or service displaying the London Interbank 
    Offered Rates in such currency of prime banks as the Facility Agent shall,
 after consultation with the Banks and with the approval of the Company,
such approval not to be unreasonably withheld or delayed, select as at
    11.00am London time on the relevant Quotation Date for the specified term;
or                                                                    

(b)  if no such display rate is then available for such period or currency and, 
     at the time, the Facility Agent has not selected any alternative service as
 contemplated in (a) above, the arithmetic mean (rounded upwards, if not
    already such a multiple, to the nearest whole multiple of one sixteenth of
   one per cent. per annum) of the respective rates notified to the Facility
Agent by each of the Reference bank as the rate at which it is offered
     deposits in an amount approximately equal to the relevant Advance or unpaid
    sum in the specified currency and for the specified term by prime banks in
the London Interbank Market at 11.00am London time on the relevant    
Quotation Date for the specified term,                                

and for the purpose of this definition "specified currency" means the currency  
of such Advance or, as the case may be, Overdue Amount and "specified term"     
means the Term of such Advance or, as the case may be, the period in respect of 
which LIBOR falls to be determined on that day in relation to such unpaid sum.  

"Listing" means a listing of equity on the London Stock Exchange or any other   
stock exchange as the same is determined by the Facility Agent acting reasonably
(and "Listed" shall be construed accordingly).                                  

"Majority Banks" means a Bank or group of Banks whose aggregate Revolving       
Commitments amount to more than sixty-six and two thirds per cent. of the Total 
Commitments or, if each Bank's Commitment has been reduced to zero, would have  
amounted in aggregate to more than sixty-six and two thirds per cent. of the    
Total Commitments, immediately prior to such reduction to zero and, for the     
purposes of this definition, the provisions of Clause 7 and any Ancillary       
Commitment of any Ancillary Bank shall be ignored and be treated as if such     
Bank's Revolving Commitment had not been reduced in accordance with Clause 7.   

"Management Agreement" means the management agreement (if any) in the agreed    
form between Thayer and the Company.                                            

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"Margin" means two per cent. (2.00%) per annum, provided that if at any time any
consolidated Financial Accounts of the Group delivered to the Facility Agent    
pursuant to Clause 19.1(a)(i) for an annual Accounting Period or Clause         
19.1(a)(ii) for a quarterly Accounting Period, disclose that:                   

(a)  Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is  
more than $45,000,000 and the ratio of Consolidated Adjusted EBITDA to
     Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
is greater than 2.35:1 the Margin shall be 1.75 per cent. per annum;  

(b)  Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is  
more than $50,000,000 and the ratio of Consolidated Adjusted EBITDA to
     Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
  is greater than 2.75:1 the Margin shall be 1.50 per cent. per annum; and

(c)  Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is  
more than $55,000,000 and the ratio of Consolidated Adjusted EBITDA to
     Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
is greater than 3.00:1 the Margin shall be 1.25 per cent per annum,   

in each case during (but only during) the period from (and including) the date  
on which the Facility Agent has received the relevant Financial Accounts        
pursuant to Clause 19 and the report and certificate relating thereto pursuant  
to Clause 19 or has received the relevant Financial Accounts for each of those  
four consecutive quarterly Accounting Periods pursuant to Clause 19 and the     
certificates relating thereto pursuant to Clause 19, as the case may be, until  
(but excluding) the earlier of the following dates:                             

(i)   the date on which the Facility Agent next receives the relevant         
   Financial Accounts for an annual Accounting Period pursuant to Clause
 19 and a report and certificate relating thereto pursuant to Clause
19;                                                               

(ii)  the date on which the Facility Agent receives the relevant Financial    
 Accounts for the next succeeding quarterly Accounting Period of the
Group pursuant to Clause 19 and a certificate relating thereto    
pursuant to Clause 19;                                            

(iii)  the latest date (the "Latest Date") by which the Facility Agent          
  should have received any such Financial Accounts and certificates in
accordance with the terms of such Clauses where the Facility Agent
has not received the same by such date.                           

Provided that:                                                                  

(i)   until the first anniversary of Closing the Margin will be two per         
cent. (2.00%) per annum;                                            

(ii)  if the Facility Agent receives any such Financial Accounts, report        
 and/or certificates after the Latest Date and such Financial Accounts
and certificates show that the tests in sub-paragraphs (a), (b) or, 
as the case may be, (c) are met then the Margin shall be adjusted   

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  with effect from the date of such receipt (and without retrospective
effect) to the level provided for above; and                      

(iii)  if a Default has occurred, the Margin will be two per cent. (2.00%)      
 per annum until such time, if any, as no Default is continuing that
  has not been waived or remedied in accordance with the provisions of
  this Agreement, as a different percentage should apply in accordance
with this definition.                                             

"Market Reports" means the reports dated 28 January 1998 prepared by the Coba   
Group entitled "Market Assessment of The Derby Bicycle Group" addressed to,     
inter alios, the Company and the Facility Agent for itself and on behalf of the 
Banks.                                                                          

"Material Adverse Effect" means any effect which could reasonably be expected:  

(a)  to be materially adverse to (i) the ability of the Company or any other    
   Obligor to perform its obligations under any of the Finance Documents, or
     (ii) the business, assets, prospects or financial condition of any Material
Group Member; and/or                                                  

(b)  (where the context so admits) to result in any of the Transaction Documents
 not being legal, valid and binding on, and enforceable substantially in
  accordance with its material terms against any party to that Transaction
  Document and/or (in the case of Security Documents) not providing to the
Security Agent for itself and on behalf of the Banks, perfected,      
enforceable security over the assets expressed to be covered by that  
  Security Document, in a manner and to an extent reasonably considered by
  the Majority Banks to be materially adverse to their interests under the
Senior Finance Documents.                                             

"Material Group Member" means each Obligor and each other Group Member (a) whose
earnings before interest, tax, depreciation and amortisation represent five per 
cent. or any greater percentage, of the Consolidated Adjusted EBITDA of the     
Group, or (b) the book value of whose gross assets is five per cent. or more of 
the consolidated gross assets of the Group, in either case determined in        
accordance with the Applicable Accounting Principles, or (c) whose aggregate    
sales to non-Group Members in any annual Accounting Period, in accordance with  
the Applicable Accounting Principles and excluding VAT and/or sales tax, have   
been, or are budgeted to be, at least five per cent. or more of the aggregate   
sales of the Group to non-Group Members (similarly calculated), and for this    
purpose:                                                                        

(i)  in the case of a company which itself has Subsidiaries, the calculation    
shall be made by using the consolidated earnings before interest, tax,
     depreciation and amortisation, gross assets or aggregate sales, as the case
may be, of it and its Subsidiaries;                                   

(ii) the calculation of consolidated earnings before interest, tax, depreciation
and amortisation or gross assets or aggregate sales shall be made by  
reference to:                                                         

(A)  the latest Financial Accounts of the relevant company (or, as the case may 
    be) (a consolidation of the Financial Accounts of it and its Subsidiaries)
used for the purpose of                                               

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the then latest unaudited quarterly or audited annual consolidated  
 Financial Accounts of the Group delivered to the Facility Agent under
Clause 19.1;                                                        

(B)   those unaudited quarterly or audited annual consolidated Financial        
Accounts (as the case may be) of the Group; and                     

(C)   shall exclude any intra-Group item; and                                   

(iii) any Subsidiary not falling within paragraphs (a), (b) or (c) above but    
which, as a result of any intra-Group transfer re-organisation or   
  acquisition would, adopting any of the tests referred to in paragraphs
      (a), (b) or (c) above and as if the Financial Accounts referred to in such
paragraphs had been drawn up immediately following such transfer,   
   reorganisation or acquisition, be a Material Group Member Provided that
such Subsidiary shall only become a Material Group Member upon the  
completion of such transfer, reorganisation or acquisition.         

"Material Insurances" means the each of those insurances specified as being     
material in the list provided pursuant to paragraph 17 of Schedule 6 and such   
other insurances as are designated material insurances by the Facility Agent    
(acting reasonably) for the purposes of this Agreement from time to time.       

"Material Intellectual Property Right" means, any Intellectual Property Right   
which the Facility Agent has determined to be material for the purposes of the  
Senior Finance Documents whether or not such Intellectual Property Right is     
actively used by any Group Member at the time of such determination or has been 
used by any Group Member previously or otherwise and shall include the          
Intellectual Property Rights specifically listed in the Security Documents.     

"Maximum Amount" means the maximum extent of the obligations of the Swedish     
Obligor under Clause 23 in accordance with the provisions of Clause 23.1(v).    

"Model" means the management case financial model for the Derby Bicycle         
Corporation detailed in the Information Memorandum.                             

"Moody's" means Moody's Investor Services Limited.                              

"MS Group Option" means the right of Robert Holzer to purchase such number of   
shares of Univega Beteiligungen GmbH as shall represent 10% of the beneficial   
ownership of MS Sport Vertriebs GmbH and MS Sport Vertriebs AG. Switzerland     
under Section 8(b) of Part 2 of the notarial deed No. 270/1997 of the Hamburg   
notary Jonetzi dated August 8, 1997).                                           

"month" means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the following calendar month, unless such      
corresponding day is not a Business Day, in which case it shall end on the next 
day which is a Business Day or, if there is not a corresponding day in that     
calendar month, the last Business Day in that calendar month.                   

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

"Netherlands" means the Kingdom of the Netherlands.                             

"New Bank" means a bank or financial institution to which a Bank seeks to       
transfer all or part of such Bank's rights and obligations hereunder.           

"Non-UK Obligor" means any Obligor that is not a UK Obligor.                    

"Note Documents" means (to the extent that the same are entered into by the     
entities expressed to be a party thereto) the Note Indentures, the Senior Notes,
the Note Purchase Agreement and the Registration Rights Agreement, any related  
engagement, fee or indemnity agreements and any ancillary agreements            
contemplated by the foregoing.                                                  

"Note Indentures" means the indentures in the agreed forms dated the date of    
this Agreement among the Note Issuers, and the applicable Note Trustee pursuant 
to which the Senior Notes will be issued.                                       

"Note Issuers" means collectively The Derby Cycle Corporation and Lyon          
Investments B.V. (each a "Note Issuer").                                        

"Note Purchase Agreement" means the note purchase agreement in the agreed form  
dated 12 May 1998 among the Note Issuers and the Initial Purchasers in          
connection with the offering of Senior Notes.                                   

"Note Trustee" means, as of 12 May 1998, the entity described therein as Trustee
under each of the Note Indentures, and any other Person appointed to such       
position from time to time, in accordance with the provisions of the applicable 
Note Indenture.                                                                 

"Noteholder" means a Person who is the beneficial owner of one or more Senior   
Notes (together "the Noteholders").                                             

"Novation Certificate" means a certificate substantially in the form set out at 
Schedule 8.                                                                     

"Obligor" means each Borrower and each Guarantor and any other Group Member     
which has been required to enter into (whether or not it has yet entered into)  
any Accession Agreement and/or Security Document pursuant to Clauses 19.4(d),   
19.4(e), 19.4(f), 19.4(g) or 23 (together the "Obligors").                      

"Obligors' Agent" means the Company, appointed to act on behalf of each Obligor 
in relation to the Finance Documents pursuant to Clause 2.3(c).                 

"Optional Currency" means any currency which is freely transferable and freely  
convertible into Deutschmarks and which is available to banks in the London     
Interbank Market.                                                               

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"Overdue Amount" is defined at Clause 9.                                        

"Party" means any Person party to this Agreement.                               

"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding  
to any or all of its functions under ERISA.                                     

"Permitted Acquisition" is defined at Clause 19.5(d)(v).                        

"Permitted Amount" means, in any annual Accounting Period the aggregate of:     

(i)   to the extent that the Investment or, as the case may be, the Permitted   
   Acquisition, is to be financed by means of funds raised by means of the
     issuance of ordinary shares in the Company or subordinated unsecured debt
on terms acceptable to the Majority Banks (in accordance with the   
      provisions of the Senior Finance Documents), $10,000,000 (or in the annual
    Accounting Period ending 31 December 1999 only $42,800,000 provided such
      amount is used solely for the Diamond Back Acquisition) (or the equivalent
in other currencies); and                                           

(ii)  to the extent that the Investment or, as the case may be, the Permitted   
 Acquisition, is to be financed by means of Financial Indebtedness not
      subordinated on terms satisfactory to the Majority Banks raised from third
party financial institutions;                                       

(i)   if the Margin at the beginning of the relevant annual Accounting Period   
is 2.00 per cent. per annum, $5,000,000 (or its equivalent in other 
currencies);                                                        

(ii)  if the Margin at the beginning of the relevant annual Accounting Period is
1.75 per cent. per annum, $7,500,000 (or its equivalent in other    
currencies); and                                                    

(iii) if the Margin at the beginning of the relevant annual Accounting Period is
     1.50 per cent. per annum or less, $10,000,000 (as its equivalent in other
currencies),                                                        

Provided that, if all or any Investment or, as the case may be, the Permitted   
Acquisition is to be financed (whether in whole or part) or, in the case of a   
contingent liability or exposure of a Group Member in respect of an Investment, 
will be financed (whether in whole or in part) by means of Financial            
Indebtedness raised from third party financial institutions, the Facility Agent 
shall have received at least 5 Business Days' prior notice thereof, together    
with a certificate signed by both of the Executive Officers (without incurring  
personal liability) confirming (i) that the Investment or, as the case may be,  
the Permitted Acquisition will not, immediately thereafter, result in any Group 
Member being responsible for any contingent liabilities as a result of such     
Investment or, as the case may be, such Permitted Acquisition other than (if it 
is the case) as a result of a guarantee given in respect thereof, the maximum   
contingent exposure thereunder of which has been included in determining whether
the Investment or, as the case may be, the Permitted Acquisition is permitted   
pursuant to the provisions of the Senior Finance Agreements; and (ii) that in   
the twelve months immediately following the date of such certificate, together  
with such supporting evidence                                                   

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as the Facility Agent may request (including, without limitation, a report      
prepared by the Auditors addressed to the Facility Agent and the Banks), no     
Default could reasonably be expected to occur as a result of the proposed       
Investment or, as the case may be, the proposed Permitted Acquisition and that  
there will be no breach of Clause 20.                                           

"Permitted Encumbrance" means:                                                  

(a)   Encumbrances constituted or evidenced by the Security Documents;          

(b)   Encumbrances existing as at 12 May 1998, details of which have been       
     disclosed in writing and which are acceptable to the Facility Agent prior
 to the Closing Provided that the Financial Indebtedness to which such
      Encumbrance relates is not owed to a Beneficiary of a Standby L/C that has
been provided in support of such Financial Indebtedness;            

(c)   Encumbrances arising by operation of law provided that the same do not    
   arise as a result of default and any such unpaid fees are discharged as
      soon as is reasonably practicable after the Company (or the relevant Group
Member) becomes aware thereof;                                      

(d)   a lien arising in favour of a warehouseman or shipper that arises under   
      the standard terms and conditions of such warehouseman or, as the case may
     be, such shipper that relates to unpaid fees payable to such warehousemen
    or, as the case may be, such shipper in such capacity only Provided that
     the same do not arise as a result of a default and are discharged as soon
 as is reasonably practicable after the Company (or the relevant Group
  Member) becomes aware thereof and, in any event within 30 days of such
amount becoming payable;                                            

(e)   any Encumbrance over or affecting any assets of any company which becomes 
     a Group Member (that is not an Obligor) after the date hereof, where such
    Encumbrance is created prior to the date on which such company becomes a
Group Member Provided that:                                         

(i)   such Encumbrance was not created at the request of any Group Member in    
contemplation of such company becoming a Group Member;              

(ii)  the amount thereby secured (save any overdrawn amount on the current      
  account of any such company within the terms (in existence on the date
when such company becomes a Group Member) of an overdraft (or other 
     equivalent facility granted to such company prior to its becoming a Group
     Member) has not been increased in contemplation of, or since the date of,
such company becoming a Group Member;                               

(iii) the Person in whose favour the Encumbrance was granted does not have      
   recourse to any Group Member (or any of their respective assets) (other
 than the Group Member that granted the Encumbrance) in respect of the
indebtedness to which such Encumbrance relates; and                 

(iv)  the Encumbrance relates only to assets of the relevant Group Member that  
 were in existence at the time such company became a Group Member; and

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(f)  Encumbrances not referred to at paragraphs (a) - (e) above or (g) or (h)   
   below, provided that the aggregate book value of the asset or assets over
   which all such Encumbrances have been granted by Obligors does not exceed
    (in aggregate) $1,000,000 (or the equivalent in other currencies), and, in
respect of Group Members that are not Obligors, does not exceed (in   
aggregate) $1,000,000 (or the equivalent in other currencies).        

(g)  Encumbrances existing as at 12 May 1998 to secure Financial Indebtedness   
over the assets of a Group Member incorporated in South Africa;       

(h)  Encumbrances granted in favour of an Ancillary Bank arising solely out of  
   arrangements concerning the Ancillary Facility provided by such Ancillary
Bank to Group Members whereby outstanding debit and credit balances   
thereunder may, from time to time, be netted off or consolidated; and 

(i)  For the avoidance of doubt, at no time shall a Group Member grant an       
   Encumbrance in respect of the GSIC Notes in favour of the GSIC Noteholder
and the GSIC Trustee and their permitted successors, assignees or     
transferees.                                                          

(j)  Encumbrances created as at the date of the completion of the Diamond Back  
   Acquisition granted by the Swedish Obligor to the issuing bank in respect
   of the Financial Indebtedness referred to at part (vii) of the definition
 of Permitted Financial Indebtedness provided that such Encumbrances are
    released within 30 days of the completion of the Diamond Back Acquisition.

"Permitted Financial Indebtedness" means (without double-counting):             

(a) in respect of the Company, any indebtedness (i) incurred under the
Finance Documents, (ii) as permitted under Clause 19.5(c) of this Agreement or  
(iii) as contemplated in the definition of Permitted Amount;                    

(b) in respect of Lyon Investments B.V., any indebtedness (i) incurred
under the Note Documents and in respect of the Notes and (ii) as permitted under
Clause 19.5(c) of this Agreement; and                                           

(c) in respect of a Group Member (other than the Company and Lyon     
Investments B.V.), any indebtedness:                                            

(i)   incurred under the Finance Documents other than the GSIC Note   
Documents;                                                

(ii)  as permitted by Clauses 19.5(c) and 19.5(d);                    

    (iii) Financial Indebtedness owed to a Beneficiary of a Standby L/C to the
          extent such Financial Indebtedness is supported by such Standby L/C;

(iv)  in addition to any Financial Indebtedness able to be incurred or
        permitted to subsist pursuant to paragraphs (i), (ii), (iii), (v),
(vi) or (vii) of this definition:                         

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          [members of the South African Group may incur Financial Indebtedness
          (in aggregate) in the aggregate principal amount of DM11,000,000 (or
the equivalent thereof in other currencies); and          

 (B) in respect of the Group as a whole (excluding the South African
        Group) $1,000,000 (or the equivalent thereof in other currencies);

(v)   Financial Indebtedness in respect of finance leases existing as 
           at the date of this Agreement which have been disclosed in writing to
the Facility Agent prior to the date of this Agreement;   

     (vi)  Financial Indebtedness incurred by a Dormant Subsidiary as at Closing
  to the extent disclosed prior to the date of this Agreement;

   (vii) Financial Indebtedness existing as at the date of the completion of
          the Diamond Back Acquisition in respect of  letters of credit or, as
       the case may be, custom guarantees issued at the request of Bejka
       Trading AB in an amount not exceeding in aggregate US$360,000 and
         details of which have been disclosed to the Facility Agent prior to
      such date provided that they are cancelled within 30 days of the
      completion of the Diamond Back Acquisition and an amount in cash
       equal to the aggregate issued amount of such letters of credit is
          credited to the account of the relevant issuing bank  on the date of
the completion of the Diamond Back Acquisition.           

"Permitted Recipient" is defined at Clause 29.6.                                

"Person" shall include any person, firm, company, corporation, Government, State
or agency of a State or any association or partnership (whether or not having a 
separate legal personality) of two or more of the foregoing.                    

"Perseus" means Perseus Capital, a merchant banking venture headquartered in    
Washington DC and managed by Perseus Management L.L.C..                         

"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 Company 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.                

"Potential Event of Default" means:                                             

(a)  an event which, with the passage of time, the giving of notice or the      
    making of any determination (or any combination of those three), would, or
could reasonably be expected to, become an Event of Default; or       

(b)  the making of a Drawdown Request for the purpose of funding or supporting a
    payment due under the Senior Notes which the Facility Agent, acting on the
instructions of the Majority Banks, reasonably considers it likely to 
result in an Event of Default.                                        

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"Pre-Closing Accounts" means the combined balance sheet, income statement and   
cashflow statement of the Group in the agreed form prepared in accordance with  
Applicable Accounting Principles by the Company relating to the period          
commencing 1 January 1997 and ending 31 December 1997.                          

"Proforma Financial Accounts" means a set of proforma quarterly and monthly     
accounts in the agreed form detailing the type and level of information which   
will be provided in each of the Accounts specified in Clauses 19.1(a)(ii) and   
19.1(a)(iii) and the type of issues to be covered in any written report to be   
provided by the Executive Officers as part of such Financial Accounts and       
showing the heading, format and other characterisations of each of such         
Financial Accounts.                                                             

"Qualifying Bank" means:                                                        

(a)  in respect of a Borrower located in the United Kingdom a bank as defined in
 Section 840A Taxes Act 1988 for the purposes of Section 349 of that Act
     which is within the charge to UK Corporation tax in respect of any interest
payable or paid to it under this Agreement;                           

(b)  in respect of a Borrower located in a jurisdiction other than the United   
Kingdom or Canada:                                                    

(i)   a bank for the time being lending through a branch, Affiliate or
agency in that other jurisdiction; or                     

   (ii)  a bank lending through any other branch, Affiliate or agency if, at
      the time the bank becomes a party to this Agreement, the bank or
     Affiliate (as the case may be) is resident or incorporated in a
          country with which that other jurisdiction has an appropriate double
           taxation treaty pursuant to which that bank or Affiliate (as the case
           may be) is entitled to receive interest and fees under this Agreement
      from the Borrower without deduction or withholding of that other
    jurisdiction's income Tax, or is otherwise entitled to receive
           interest and fees without such deduction or withholding and where, at
           such time, there has been no public announcement made by the relevant
           taxing authorities in such jurisdiction of an intention to change the
         entitlement of the bank or Affiliate to receive principal, interest
       and fees under this Agreement from any such Borrower without such
deduction or withholding; or                              

   (iii) any Bank that is a party to this Agreement as at the date hereof or
       becomes a party hereto within thirty days of the date hereof; and

(c)  in respect of a Borrower incorporated in Canada, any Bank.                 

"Quotation Date" means, in relation to any period for which an interest rate is 
to be determined hereunder, the day on which quotations would ordinarily be     
given by prime banks in the London Interbank Market for deposits in the currency
in relation to which such rate is to be determined for delivery on the first day
of that period Provided that, if for any such period quotations would ordinarily
be given on more than one date, the Quotation Date for that period shall be the 
last of those dates.                                                            

"Recapitalisation" means the reorganisation of Derby International and its      
Subsidiaries and the                                                            

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recapitalisation of the Company (in each case) pursuant to the Recapitalisation 
Agreement.                                                                      

"Recapitalisation Agreement" means the agreement dated 11 March 1998, as        
amended, among Derby International, DFS, Derby L.L.C., Perseus Cycle L.L.C. and 
the Company in relation to the Recapitalisation (and includes, inter alia, any  
tax covenants, disclosure letters and all other documents delivered to or by any
party thereto pursuant or in relation to such agreement).                       

"Recapitalisation Documents" means the Recapitalisation Agreement, the Exchange 
Agreement, the Disclosure Exhibits, the Recapitalisation Agreement Assignment,  
the Shareholders Agreement, the Registration Agreement, the Certificate of      
Incorporation together with any other agreement or document relating to, or     
giving effect to, the Recapitalisation.                                         

"Reference Banks" means the principal London office of Chase Manhattan Bank,    
Midland Bank PLC and ABN Amro N.V. and/or such other Banks as may become        
Reference Banks pursuant to Clause 31.8.                                        

"Registration Agreement" means the Agreement so entitled among the Company, DFS,
Perseus Cycle L.L.C and Derby Cycle L.L.C in relation to the Recapitalisation.  

"Registration Rights Agreement" means the Exchange and Registration Rights      
Agreement in the agreed form dated the date of this Agreement among the Note    
Issuers and the Initial Purchasers in connection with the offering of Senior    
Notes.                                                                          

"Relevant Purchaser" means for the purposes of Clause 19.5(aa)(1) only any      
Person, and for the purposes of Clause 19.5(aa)(2) only DC Cycle LLC or Perseus 
Cycle LLC, and for the purposes of Clause 19.5(aa)(3) only, DC Cycle LLC or any 
of its Affiliates (other than a Group Member) or a Person carrying on the       
business of a bicycle manufacturer or/and bicycle distributor which is not an   
existing investor of the Company or, with the prior consent of the Facility     
Agent, any Person.                                                              

"Repayment Date" means, in relation to any Advance, the last day of the Term    
thereof.                                                                        

"Reports" means each of the Accountant's Report, the Diamond Back Acquisition   
Due Diligence Report, the Legal Due Diligence Report, the Market Reports, the   
AON Insurance Report, the AON Pensions Report, the Environmental Reports and the
Property Report.                                                                

"Request" means a Drawdown Request or a Standby L/C Request as the context may  
require.                                                                        

"Requested Amount" means:                                                       

(a)  in respect of a Drawdown Request, the principal amount requested to be     
borrowed under that Drawdown Request; and                             

(b)  in respect of a Standby L/C Request, the amount of the Standby L/C         
requested to be issued under that Standby L/C Request.                

"Revolving Commitment" in relation to a Bank means the amount of the commitment 
set opposite                                                                    

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its name in Schedule 3 under the heading "Revolving Commitment" or in the       
Novation Certificate, or other document by which it became a party to or        
acquired rights under this Agreement as reduced or increased by substitution or 
transfer pursuant to Clause 29 and any Novation Certificate to which such Bank  
is a party and to the extent not cancelled, reduced or terminated under this    
Agreement.                                                                      

"Revolving Facility Available Amount" has the meaning given to such term in     
Clause 6.10.                                                                    

"RIC" means Raleigh Industries of Canada Limited.                               

"Schedule" refers, unless otherwise stated, to a schedule to this Agreement.    

"Security Documents" means the share charges and other security documents       
identified in Schedule 14 in a form and substance satisfactory to the Security  
Agent and such other security documents as may be required by the Security Agent
to be entered into by any Obligor including in relation to the accession of any 
Obligor hereunder at the request of the Facility Agent pursuant to any of the   
Senior Finance Documents.                                                       

"Sellers" means Derby International and DFS.                                    

"Senior Finance Documents" means this Agreement, each Standby L/C, each         
Intercreditor Agreement, the Security Documents, the Accession Agreements, any  
Guarantee, any Novation Certificate, , the Indemnity Undertaking, the Fee       
Letters and any other document determined by the Facility Agent, from time to   
time, as being a "Senior Finance Document".                                     

"Senior Unsecured Notes" means the unsecured, senior notes (including, for the  
avoidance of doubt, the Initial Securities and the Exchange Securities, as      
defined in each of the Note Indentures), issued or to be issued by the Note     
Issuers (or either of them) pursuant to each of the Note Indentures in          
substantially the forms attached as exhibits to the applicable Note Indenture.  

"Service Contracts" means the contracts of service made between (i) each of the 
Executives and a Group Member and (ii) each Director and a Group Member.        

"Shareholders Agreement" means the agreement dated on or about the date of this 
Agreement between the Company, DFS, Derby L.L.C. and Perseus Cycle L.L.C.       
entitled "Shareholders' Agreement" pursuant to which, amongst other things, DFS,
Derby L.L.C. and Perseus Cycle L.L.C. agree to regulate their respective rights 
with respect to the voting and transfer of shares in the Company.               

"Side Letter" means the letter in the agreed form dated on or about the date of 
the completion of the Diamond Back Acquisition made between the GSIC Noteholder,
the Company and DC Cycle LLC in respect of the right to grant the GSIC          
NoteholderPIK C Preferred Shares in lieu of further GSIC Notes pursuant to the  
terms of the GSIC Loan.                                                         

"South Africa" mean the Republic of South Africa.                               

"South African Group" means Derby Investment Holdings (Pty) Limited and each of 
its Subsidiaries.                                                               

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"South African Rand" means the lawful currency for the time being of South      
Africa.                                                                         

"Standard & Poor's" means Standard & Poor's Rating Services, a division of The  
McGraw Hill Companies.                                                          

"Standby L/C" means a letter of credit in the form, or substantially in the     
form, of that set out at Part 3 of Schedule 7, (or such other form as shall be  
agreed by the Facility Agent acting on the instructions of the Majority Banks)  
issued or to be issued to a Beneficiary under this Agreement.                   

"Standby L/C Commitment" in relation to a Bank means the amount of the          
commitment set opposite its name in Schedule 3 under the heading "Standby L/C   
Commitment" or in the Novation Certificate or other document by which it became 
a party to or acquired rights under this Agreement as reduced or increased by   
substitution or transfer pursuant to Clause 29 and any Novation Certificate to  
which such Bank is a party and to the extent not cancelled, reduced or          
terminated under this Agreement, such commitment forming a sub-set of, and not  
being additional to, such Bank's Revolving Commitment.                          

"Standby L/C Request" means a request substantially in the form set out at Part 
2 of Schedule 7.                                                                

"Sterling" and "(Pounds)" mean the lawful currency for the time being of the    
United Kingdom.                                                                 

"Stockholders' Agreement" means the agreement dated on or aboutthe date of the  
completion of the Diamond Back Acquisition and made between DC Cycle LLC,       
Perseus Cycle LLC and the GSIC Noteholder in relation to the GSIC Notes.        

"Structure Memorandum" means the memorandum and charts provided pursuant to     
paragraph 29 of Schedule 6 describing the capital and share ownership of the    
Group (and giving details of any minority shareholdings in any Subsidiary),     
identifying all Group Members and all interests of Group Members in other       
companies, partnerships, Joint Ventures and the like, all as of and immediately 
after Closing, and all reorganisational steps with respect to the Group Members 
to be taken at or shortly prior to Closing or as amended post Closing and agreed
and notified to the Facility Agent.                                             

"Swedish Obligor" means Derby Sweden AB.                                        

"Subsidiary" means (a) a subsidiary as defined in Section 736 of the Companies  
Act 1985 as amended, and/or (b) a subsidiary undertaking as defined in Section  
258 of the Companies Act 1985 as amended, or, in either case, any statutory re- 
enactment or replacement thereof and/or (c), (whether or not falling within (a) 
or (b) above, in relation to any Person, any entity which is controlled directly
or indirectly by that Person and any entity (whether or not so controlled) is   
treated as a subsidiary in the latest financial statements of that Person from  
time to time, and "control" for this purpose means the direct or indirect       
ownership of the majority of the voting share capital of such entity or the     
right or ability to direct management to comply with the type of material       
restrictions and obligations contemplated in this Agreement or to determine the 
composition of a majority of the board of directors (or like board) of such     
entity, in each case                                                            

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whether by virtue of ownership of share capital, contract or otherwise.         

"Tax" shall be construed so as to include all present and future taxes, charges,
imposts, duties, levies, deductions, withholdings or amounts or charges of a    
similar nature, or any amount payable on account of, or as security for, any of 
the foregoing, including any penalties, fines, surcharges or interest payable in
connection with such amounts, and "Taxes" and "Taxation" shall be construed     
accordingly.                                                                    

"Term" means, in relation to an Advance, the period for which such Advance is   
requested to be borrowed, as adjusted under this Agreement.                     

"Thayer" means Thayer Equity Investors III, L.P. .                              

"Total Commitments" means, at any time, the aggregate for the time being of the 
Banks' Revolving Commitments.                                                   

"Transaction Costs" means all fees, out-of-pocket costs and expenses and stamp  
duty, registration, transfer and similar taxes incurred by the Company or any   
Subsidiary thereof in connection with the negotiation, preparation and execution
of the Transaction Documents or otherwise in connection with, or resulting from,
the Recapitalisation each in the aggregate amount as set out in a letter in an  
agreed form from the Company to the Facility Agent entitled "Transaction Costs" 
and provided to the Facility Agent pursuant to paragraph 14 of Schedule 6 (the  
"Transaction Costs Letter").                                                    

"Transaction Documents" means the Recapitalisation Documents, the Finance       
Documents, the Service Contracts, the Escrow Letter, the Structure Memorandum   
and the Diamond Back Acquisition Agreement.                                     

"UK Obligors" means, at any time, each of the Obligors, at such time,           
incorporated in England and Wales, Scotland and Northern Ireland.               

"USA" "United States of America" means the United States of America, any of its 
states or territories and the District of Columbia.                             

"U.S. Obligor" means, at any time, each Group Member at such time incorporated  
in the United States and any other Obligor which is a U.S. Person.              

"U.S. Patent Assignment for Security Purposes" means the assignment for security
purposes dated 13 May 1998 and granted by the Company in favour of the Security 
Agent as the same may be amended from time to time.                             

"U.S. Patent and Trademark Security Agreement" means the patent and trademark   
agreement dated 13 May 1998 and granted by the Company in favour of the Security
Agent as the same may be amended from time to time.                             

"U.S. Person" means a Person who is a citizen or resident of the USA, and any   
corporation of other entity created or organised in or under the laws of the    
USA.                                                                            

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"U.S. Pledge Agreement" means the pledge agreement dated 13 May 1998 granted by 
the Company in favour of the Security Agent as the same may be amended from time
to time;                                                                        

"U.S. Security Agreement" means the security agreement dated 13 May 1998 and    
granted by the Company in favour of the Security Agent as the same may be       
amended from time to time;                                                      

"Utilisation" means:                                                            

(a)  when designated "Standby L/C", a utilisation under this Agreement of the   
Standby L/C Facility;                                                 

(b)  when designated "Revolving", a utilisation under this Agreement of the     
Revolving Facility; and                                               

(c)  without any such designation, a utilisation of the Standby L/C Facility or 
the Revolving Facility as the context requires.                       

"Utilisation Date" means in relation to each Advance, the date specified as such
in the relevant Drawdown Request.                                               

"VAT" means value added tax owed to the United Kingdom Customs & Excise or any  
similar or analogous tax in any jurisdiction owed to an equivalent authority or 
body.                                                                           

"Year 2000 Expenditure" means, in respect of any Person, any expenditure        
incurred relating to the reprogramming required to permit the proper            
functioning, in and following the Year 2000 of such Person's computer systems   
and equipment containing embedded microchips (including systems and equipment   
supplied by others or with which such Person's systems interface) and the       
testing of all such systems and equipment, as so reprogrammed.                  

1.2  Financial Terms                                                            

"A Common Stock" means the voting A Common Stock of the Company authorised by   
the constitutive documents of the Company as at the date hereof.                

"B Common Stock" means the non-voting B Common Stock of the Company authorised  
by the constitutive documents of the Company as at the date hereof.             

"C Common Stock" means the voting C Common Stock of the Company authorised by   
the constitutive documents of the Company as at the date of the completion of   
the Diamond Back Acquisition.                                                   

"Capital Expenditure" means any expenditure which should be treated as capital  
expenditure in the audited consolidated Financial Accounts of the Group in      
accordance with the Applicable Accounting Principles.                           

"Consolidated Adjusted EBITDA"  means for any period comprising an annual       
Accounting Period of the Company or four consecutive quarterly Accounting       
Periods of the Company (taken together as one period) means the operating income
of the Group for such period:                                                   

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before taking into account all Extraordinary Items (whether positive or         
negative) and one-off expenses not exceeding, in aggregate, $2,900,000 incurred 
in the annual Accounting Period ending 31 December 1997;                        

before taking into account any Transaction Costs required to be expensed through
the income statement up to a maximum aggregate amount of $6,200,000 in the      
annual Accounting Period ending 31 December 1998 whether an Extraordinary Item  
or otherwise and any one-off payments of premia or otherwise made by any Group  
Member in connection with Hedging Protection Agreements entered into in         
accordance with the Approved Hedging Programme within 30 days of the date of    
this Agreement;                                                                 

before taking into account to the extent deducted from operating income any     
amounts expended that relate solely to Year 2000 Expenditure to the extent that 
such expenditure, when aggregated with any other Year 2000 Expenditure incurred 
since the date of this Agreement and prior to 31 December 1999 does not exceed  
$2,700,000 (or the equivalent in other currencies);                             

before deducting income tax expense;                                            

before deducting charges to depreciation and amortisation excluding amortisation
attributable to a prepaid cash item arising in the ordinary course of business, 
the amortisation of any goodwill and amortisation of Transaction Costs in an    
amount not exceeding $8,800,000 in aggregate in all Accounting Periods post     
Closing;                                                                        

before deducting Interest (whether accrued, paid, deferred or capitalised) as an
obligation of any Group Member or Interest accrued in favour of, or paid to, any
Group Member;                                                                   

after deducting (to the extent otherwise included in operating income) any gain 
over book value arising in favour of the Group on the sale, lease or other      
disposal of any fixed or intangible asset during such period and any gain       
arising on any revaluation of any fixed or tangible asset during such period;   

after adding back (to the extent otherwise deducted in operating income) any    
loss against book value incurred by the Group on the sale, lease or other       
disposal of any fixed or intangible asset during such period and any loss       
arising on any revaluation of any fixed or intangible assets during such period;

after deducting (to the extent otherwise included) the amount of retained profit
(or adding back the retained loss) of any Group Member (other than the Company) 
which is attributable to the interest of any shareholder of or, as the case may 
be, partner in such Group Member which is not a Group Member other than the     
amount of retained profit or the amount of the retained loss of RIC which is    
attributable to such non-Group Member's interest in RIC Preference Shares for so
long as such shares may be exchanged solely for B Common Stock of the Company   
and carry no rights greater than as at the date of this Agreement and RIC is    
prohibited from redeeming such RIC Preference Shares pursuant to the provisions 
of this Agreement;                                                              

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after deducting items which have not, or are not due to be paid in cash,        
including any amortisation, credit, income or provision release (where such     
provision was not originally increased by reducing operating income) or other   
credit where cash was received in an earlier period.  For the avoidance of      
doubt, any income related to the defined benefit pensions plans of the Group    
recognised in accordance with FAS 87 and FAS 132 shall be deducted when         
calculating Consolidated Adjusted EBITDA and any unrealised income or loss in   
respect of the change in the mark to market value of foreign exchange contracts 
recognised in accordance with FAS 52 and FAS 133 where such contracts are in    
accordance with the Approved Hedging Programme, shall not be included when      
calculating Consolidated Adjusted EBITDA;                                       

and for the purposes of the foregoing no item shall be effectively taken into   
account more than once in this calculation and all items shall be determined on 
a consolidated basis and subject only as may be required in order to reflect the
express inclusion or exclusion of items as specified in this definition) in     
accordance with the Applicable Accounting Principles and as determined from the 
consolidated Financial Accounts of the Group for such annual Accounting Period  
or for the quarterly Accounting Periods falling within such period or, to the   
extent that such period, or part thereof, relates to the period prior to        
Closing, from the Pre-Closing Accounts relating to such period;                 

"Consolidated Net Worth" means the amount (including any additional paid in     
capital) for the time being paid up or credited as paid up on the issued share  
capital of the Company (other than any Excluded Share Capital):                 

    plus an amount (of up to $45,000,000) in respect of the value attributable
to equity retained by on or behalf of DFS;                            

  plus any amount standing to the credit of, or (as the case may be) minus
  any amount standing to the debit of the consolidated income statement of
   the Group before any adjustment made in respect of dividends on any class
    of shares of the Company to the extent that the holder of such share(s) is
     only entitled to receive, in respect thereof, payment in kind, and not cash
or other assets;;                                                     

 minus any amount included in the above which is attributable to (a) the
aggregate of all goodwill (to the extent created or purchased after   
     Closing), titles, trademarks, copyrights, patents, capitalised research and
  development expenditure (other than research and development expenditure
which is capitalised in accordance with the accounting policies of the
Company in force at the date of this Agreement) and other intangible  
     assets, and (b) any upwards revaluation of assets by any Group Member after
Closing; and                                                          

 minus (to the extent otherwise included) the amount attributable to the
    interests (if any) of outside holders of issued share capital in any Group
    Member other than the Company other than RIC Preference Shares for so long
    as the same are exchangeable solely for B Common Stock and carry no rights
  greater than as at the date of this Agreement and RIC is prohibited from
 redeeming such RIC Preference Shares pursuant to the provisions of this
Agreement.                                                            

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For the purposes of the foregoing, no items shall be effectively taken into     
account more than once in this calculation and all items shall be calculated on 
a consolidated basis and (subject only as may be required in order to reflect   
the express inclusion or exclusion of items as specified in this definition) in 
accordance with the Applicable Accounting Principles and, where the calculation 
is being made as at the end of any Accounting Period for which a consolidated   
balance sheet of the Group has been or is required to be delivered to the       
Facility Agent hereunder, shall be as determined from that balance sheet.       

"Consolidated Net Interest Payable" for any period comprising an annual         
Accounting Period of the Company or four consecutive quarterly Accounting       
Periods of the Company or less where such period ends on or before 28 March 1999
(taken together as one period) means, the Interest accrued during such period as
an obligation of any Group Member under or in respect of any Financial          
Indebtedness (whether or not paid, capitalised or accrued during, or deferred   
for payment after, such period) together with interest paid, payable,           
capitalised, accrued or deferred for payment under any interest rate or currency
Hedging Protection Agreement or instruments under which the parties are in      
compliance with their payment obligations or other obligations (excluding for   
the avoidance of doubt interest accrued or payable on the GSIC Notes to the     
extent the same is not payable in cash and any item comprised in Transaction    
Costs amortised in accordance with Applicable Accounting Principles) less       
Interest received in respect of Cash and together with Cash Equivalent          
Investments during such period together with Interest received or receivable by 
any Group Member during such period under any interest rate and/or currency     
hedging agreements or instruments (calculated on an accrual basis) under which  
all parties are in compliance with their payment and other obligations all      
determined on a consolidated basis and avoiding double counting and (subject    
only as may be required in order to reflect the express inclusion or exclusion  
of items as specified in this definition) in accordance with the Applicable     
Accounting Principles and as shown in the consolidated Financial Accounts of the
Group for such annual Accounting Period or for the quarterly Accounting Periods 
falling within such period.                                                     

"Dollar Equivalent" means, in respect of any currency other than Dollars, the   
amount of Dollars able to be purchased with such currency at the rate of        
exchange applied by the Company or, as the case may be, the Auditors, in        
compiling the financial statements to which the calculation relates.            

"Excluded Share Capital" of the Group means shares in the capital including     
associated share premium of any Group Member owned by a Person which is not a   
Group Member which by their terms are or may become redeemable (whether or not  
subject to the occurrence of any contingency) at any time whilst any Advance or 
other amount remains outstanding hereunder (whether or not due and payable) or  
any commitment is in force, without the unanimous prior written consent of the  
Banks Provided that PIK A Preferred Shares, PIK B Preferred Shares  RIC         
Preference Shares, the PIK C Preferred Shares and the "C" Common Stock shall not
constitute Excluded Share Capital for the purposes of this definition Provided  
further in the case of the RIC Preference Shares and PIK B Preferred Shares that
the holders of such shares do not have any greater rights than in existence at  
the date of this Agreement and in the case of the RIC Preference Shares RIC is  
prohibited from redeeming such Preference Shares pursuant to the provisions of  
this Agreement.                                                                 

"Extraordinary Items" shall be determined in accordance with Applicable         
Accounting Principles.                                                          

"Financial Indebtedness" means any indebtedness for, or for interest (or        
dividends in the case of paragraph (c)) or other charges relating to, or        
otherwise in respect of or pursuant to:                                         

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(a)  monies borrowed or monies raised which are in the nature of borrowings or  
   having the commercial effect of borrowing, including, without limitation,
monies raised by the sales of receivables, invoices, bills or notes or
   other financial assets on terms that recourse may be had to the vendor in
   the event of non-payment of such receivables or financial assets when due
 (but only to the maximum extent, actual or contingent, of such right of
    recourse) and monies raised under acceptance credit facilities and through
  the issue of bonds, notes, debentures, bills, loan stocks and other debt
securities (including any debt security convertible, but not at the   
relevant time converted, into share capital);                         

(b)  the acquisition cost of assets or services to the extent payable on        
    deferred payment terms after the time of acquisition or possession thereof
     by the party liable (whether or not evidenced by any bond, note, debenture,
     loan stock or other debt security), excluding (i) retentions of acquisition
   consideration normal in the trade concerned, (ii) any payment relating to
 construction works or the acquisition of fixed assets which will become
 payable only upon completion or commissioning of certain stages in such
  works or in the supply programme for such fixed assets and which has not
     yet become payable by reason of the non-completion or non-commissioning (as
  the case may be) of such stages, (iii) any such cost payable on deferred
 payment terms which are normal in the trade concerned, and which do not
involve any deferral of payment of any sum for more than four months; 

(c)  any outstanding Excluded Share Capital (and notwithstanding anything to the
   contrary contained in this Agreement or in any rule of law or accounting,
such Excluded Share Capital shall be deemed for the purposes of this  
definition to constitute indebtedness of the issuer of it);           

(d)  moneys received in consideration for the supply of goods and/or services to
 the extent received more than three months before the due date for such
supply (but excluding any liability in respect of bona fide progress  
  payments and deposits or annual subscriptions received from customers in
the ordinary course of trade);                                        

(e)  instalments under conditional sale agreements entered into primarily as a  
method of raising finance;                                            

(f)  amounts payable under leases (whether in respect of land, machinery,       
    computers, equipment or otherwise) and amounts payable under hire purchase
    agreements and similar agreements and instruments, in each case where such
leases, agreements or instruments are treated as finance leases in    
accordance with the Applicable Accounting Principles;                 

(g)  (i)   any guarantee, indemnity, letter of credit or other legally binding  
         instrument to assure payment of, or against loss in respect of non-
          payment of, any of the indebtedness specified in this definition and
any counter-indemnity in respect of any thereof; and/or   

 (ii)  any legally binding agreement or other instrument entered into in
          connection with any of the indebtedness specified in this definition
           requiring, or giving any Person the right (contingently or otherwise)
    to require, that any other Person invest in, make advances to,
           purchase assets of or maintain the solvency or financial condition of
any other Person;                                         

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(h)  any interest rate swap, currency swap, currency exchange transaction, cap, 
floor, collar or option arrangement and any other hedging or treasury 
    transaction (or any combination of any such transactions) which is entered
    into with a view to managing exposure to fluctuations in interest rates or
currency exchange rates (the amount of such Financial Indebtedness in 
    relation to any such transaction shall be calculated by the mark-to-market
   valuation of such transaction at the time such valuation is carried out);

(i)  transactions which involve or have the commercial effect of the borrowing  
 of commodities as part of an arrangement for or in substitution for the
  raising of finance, the value of indebtedness concerned for this purpose
 being the sum which must be paid and/or the value in money terms of the
   commodities which must be delivered by the "borrower" to, or to the order
of, the "lender"; and                                                 

(j)  transactions involving an agreement to sell commodities and a related      
     agreement to purchase at a future date, the same or other commodities where
     such transactions are entered into primarily as a means of raising finance.

Whenever an amount of Financial Indebtedness of any Person or Persons is to be  
determined for any purpose, double counting shall be avoided.                   

"Interest" means:                                                               

(a)  interest and amounts in the nature of interest (including, without         
limitation, the interest element of finance leases) accrued;          

(b)  prepayment penalties or premiums incurred in repaying or prepaying any     
Financial Indebtedness;                                               

(c)  discount fees and acceptance fees payable or deducted in respect of any    
   Financial Indebtedness (including all fees payable in connection with any
letter of credit or guarantee);                                       

(d)  any other costs, expenses and deductions of the like effect and any net    
    payment or amount payable or receipt receivable (or, if appropriate in the
   context, receipt) under any interest rate hedging agreement or instrument
(including without limitation under the Hedging Protection Agreements)
taking into account any premiums payable for the same and the interest
 element of any net payment (plus or minus any accrued exchange gains or
     losses) under any currency hedging instrument or arrangement and dividends;
and                                                                   

(e)  any other distribution in respect of Excluded Share Capital.               

For the avoidance of doubt "Interest" includes commitment, utilisation and non- 
utilisation fees (including, without limitation, those payable under this       
Agreement) but excludes agent's and front-end, management, arrangement and      
participation fees with respect to any Financial Indebtedness (including,       
without limitation, those payable under this Agreement) and (other than in      
respect of                                                                      

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paragraph (d) above) any up-front premium or front-end fee payable pursuant to  
any Hedging Protection Agreement.                                               

"Net Average Financial Indebtedness" means, in relation to any period, the      
aggregate of the Dollar Equivalent of the Financial Indebtedness of the Group as
at the end of each of the twelve immediately preceding and consecutive monthly  
Accounting Periods ending on the Accounting Date to which the calculation       
relates, divided by twelve less:                                                

(a)  the aggregate of the Dollar Equivalent of the Cash and Cash Equivalent     
Investments owned by the Group as at the end of each of the twelve    
    immediately preceding and consecutive monthly Accounting Periods ending on
     the Accounting Date to which the calculation relates divided by twelve; and

(b)  the aggregate of the Dollar Equivalent of duty deferment bonds, (including 
letters of credit and guarantees of a similar nature to duty deferment
bonds, as at the end of each of the twelve immediately preceding and  
 consecutive monthly Accounting Periods ending on the Accounting Date to
   which the calculation relates divided by twelve up to a maximum aggregate
amount of $7,000,000,                                                 

provided that, if the Accounting Date is less than twelve months from Closing,  
the "Net Average Financial Indebtedness" shall be determined in accordance with 
the foregoing save that the figure twelve shall, in each case, be replaced by   
the number of monthly Accounting Periods occurring between Closing and the      
Accounting Date to which the calculation relates.                               

"PIK A Preferred Shares" means the Series A Preferred Shares of the Company     
authorised by the constitutive documents of the Company as at the date hereof.  

"PIK B Preferred Shares" means the non-voting Series B Preferred Shares of the  
Company authorised by the constitutive documents of the Company as at the date  
hereof.                                                                         

"PIK C Preferred Shares" means the non-voting Series C Preferred Shares in the  
Company authorised by the constitutive documents of the Company as at the date  
of the completion of the Diamond Back Acquisition.                              

"RIC" means Raleigh Industries of Canada.                                       

"RIC Preference Shares" means the non-voting Preference Shares of RIC authorised
by the constitutive documents of RIC that are exchangeable to A Common Stock    
and/or B Common Stock pursuant to the terms of such constitutive documents as at
the date hereof.                                                                

"Rolling 4 Quarterly basis" refers to the calculation of a ratio or an amount   
made on an Accounting Date based on the sum of the amounts by reference to which
such ratio or amount is determined over the quarterly Accounting Period ending  
on such Accounting Date and the immediately preceding and consecutive 3         
quarterly Accounting Periods.                                                   

"Total Assets" means the sum of fixed and current assets (including, for the    
avoidance of doubt, Cash, Cash Equivalent Investments and amounts falling due   
after more than one year) of the Group                                          

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determined initially by aggregating the fixed and current assets (including, for
the avoidance of doubt, Cash and amounts falling due after more than one year)  
specified in the Pre-Closing Accounts and, following delivery to the Facility   
Agent pursuant to Clause 19.1 of the consolidated Financial Accounts of the     
Group subsequently determined by reference to the consolidated Financial        
Accounts of the Group most recently delivered to the Facility Agent in          
accordance with Clause 19.1 (adjusted as the Facility Agent (after consultation 
with the Company) may reasonably consider appropriate to take account of any    
change in circumstances which occur thereafter).                                

1.3  Construction                                                               

In this Agreement, save where the context otherwise requires:                   

(a)  references to documents being in the "agreed form" means documents in a    
  form previously agreed in writing by or on behalf of the Company and the
Facility Agent;                                                       

(b)  references to "assets" shall include revenues and the right thereto and    
property and rights of every kind, present, future and contingent and 
whether tangible or intangible (including uncalled share capital),    
references to "shares" shall include stock and references to "freehold
  property" shall include heritable property in Scotland and other similar
interests in real property in other jurisdictions;                    

(c)  the expressions "hereof", "herein", "hereunder" and similar expressions    
  shall be construed as references to this Agreement as a whole (including
all Schedules) and shall not be limited to the particular clause or   
     provision in which the relevant expression appears, and references to "this
Agreement" and all like indications shall include references to this  
Agreement as supplemented by the Accession Agreements, the Novation   
Certificates and any other agreement or instrument supplementing or   
amending this Agreement;                                              

(d)  references to "indebtedness" shall be construed so as to include any       
   obligation or liability (whether present or future, actual or contingent)
 for the payment, repayment or redemption of any obligation expressed by
  reference to monetary value or quantity or value of commodities (whether
 such obligation is performable by the payment of money or in some other
way);                                                                 

(e)  references to any of the Transaction Documents and any other agreement,    
 document or instrument shall be construed as a reference to the same as
amended, varied, supplemented or novated from time to time (including,
  where relevant, by any Accession Agreement and/or Novation Certificate);

(f)  references (by whatever term) to the Company, each Obligor, the Arranger,  
each Bank, each Reference Bank, each Agent, each Executive, the Note  
Trustee, each Noteholder or the parties to this Agreement shall, where
    relevant and subject as otherwise provided in this Agreement, be deemed to
be references to or to include, as appropriate, their respective      
     successors, replacements and assigns, transferees and substitutes permitted
by the terms of the Senior Finance Documents;                         

(g)  reference to a time of day is, unless otherwise stated, a reference to     
London time;                                                          

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(h)  the contents page of, and headings in, this Agreement are for convenience  
only and shall be ignored in construing this Agreement;               

(i)  any reference to "certificate", "certifications" (or any like term) in     
  relation to an amount shall be a reference to a certificate containing a
reasonable amount of detail as to how such amount was calculated;     

(j)  reference to a "judgment" shall include a decree;                          

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

(l)  all references to statutes and other legislation include all re-enactments 
and amendments of those statutes and that legislation; and            

(m)  all references to "the date of this Agreement" or "as at the date hereof"  
(or terms or phrases having a similar meaning) shall, unless otherwise
specified, mean 12 May 1998.                                          

1.4  Relationship with the Intercreditor Agreements                             

This Agreement is entered into subject to, and with the benefit of, the terms of
the Intercreditor Agreements.                                                   

PART 2  

2.   THE FACILITY                                                               

2.1  The Facility                                                               

Subject to the terms and conditions of this Agreement (and in the case of an    
Ancillary Facility, the terms and conditions of the documents evidencing the    
same) the Banks grant to the Borrowers facilities of up to DM214,000,000 (or the
equivalent thereof in Optional Currencies); of which:                           

  (a) up to DM170,000,000 may be utilised by the Borrowers listed below in
    Column 1 in the amount and currency set opposite such Borrower in Column 2
on the Closing:                                                       

===========================================================================     
Column 1                                Column 2              Currency          
Borrower                             Deutschmark Amount                         
===========================================================================     

Derby Holding Deutschland GmbH            76,000,000          DM                

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

Gazelle                                   52,000,000          $                 

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

Raleigh Industries of Canada Ltd...       17,000,000          Dfl               

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

Raleigh Industries of Canada Ltd.          5,000,000          C$                

===========================================================================     

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of which up to:                                             

       (i) DM64,000,000 (or the equivalent thereof in Optional Currencies)
      may be made available by the Ancillary Banks to those Borrowers as
       Ancillary Facilities less the Deutschmark Amount of any outstanding
Standby L/Cs at such time; and                              

  (ii) up to DM15,000,000 (or its equivalent thereof in Optional
      Currencies) may be utilised by those Borrowers by means of Standby
L/Cs; and                                                   

   (b) the full amount of the Facilities may be utilised (in accordance with
     the terms and conditions of this Agreement) by the Borrowers on the
Business Day immediately following Closing of which up to:    

   (i)   DM214,000,000 (or its equivalent in Optional Currencies);

       (ii)  DM64,000,000 or the equivalent thereof in Optional Currencies
                may be made available by the Ancillary Banks to the Borrowers as
       Ancillary Facilities less the Deutschmark Amount of any
outstanding Standby L/Cs at such time; and      

   (iii) up to DM15,000,000 (or its equivalent thereof in Optional
     Currencies) may be utilised by means of Standby L/Cs,

         Provided that, subject to the terms and conditions of this Agreement,
    at no time shall the aggregate Deutschmark Amount of outstanding
          Advances, Standby L/Cs, amounts owing and unpaid under Clause 11.3 and
Ancillary Commitments exceed DM214,000,000.                 

2.2  Nature of Banks' obligations and rights                                    

(a)  The obligations of each of the Banks under this Agreement are several. The 
failure of a Bank to perform any of its obligations will not:         

(i)  increase the liability of any other Bank under this Agreement nor
impose any liability on the Facility Agent; or              

   (ii) relieve any other Party from their respective obligations under this
Agreement.                                                  

(b)  The rights of a Finance Party under this Agreement are several.  A Finance 
     Party may, except as otherwise stated in this Agreement, separately enforce
those rights.                                                         

2.3  Nature of Borrowers' rights and obligations hereunder                      

(a)  Rights and Obligations:  The obligations of the Borrowers under this       
     Agreement in their capacities as such shall be separate and independent and
not joint and several, provided that the Company and not the other    
Borrowers (save in their capacity as Guarantors) shall be liable for: 

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     (i)  payment of all amounts becoming due under Clause 15 to the extent that
       such amounts are not referable to Utilisations made by or to monies
      received or receivable from or to Revolving Commitments or, as the
          case may be, Standby L/C Commitments which are only available (subject
          to satisfaction of conditions) for drawing by a particular Borrower or
   Borrowers or are not otherwise in the reasonable opinion of the
       Facility Agent referable to a particular Borrower or Borrowers: and

    (ii) payment of all amounts due under Clause 25, to the extent that in the
 reasonable opinion of the Facility Agent such amounts are not
referable to a particular Borrower or Borrowers.            

(b)  Facility Agent's determination:  The written determination of the Facility 
    Agent with regard to any matter which is to be determined according to its
    reasonable opinion shall, in the absence of manifest error, be conclusive.
    No Person shall have any recourse to the Facility Agent in relation to any
such determination if it proves to be the case that its opinion was   
incorrect.                                                            

(c)  Company as Obligors' Agent:  Each Obligor (other than the Company) by its  
execution of this Agreement or an Accession Agreement irrevocably     
     authorises the Company to act on its behalf as its agent in relation to the
Senior Finance Documents and irrevocably authorises the Company on its
  behalf to give all notices and instructions (including, in the case of a
  Borrower, any Request), to execute on its behalf any Accession Agreement
   and to make such agreements capable of being given or made by any Obligor
     notwithstanding that they may affect such Obligor without further reference
   to or the consent of such Obligor and such Obligor shall be bound thereby
as though such Obligor itself had given such notices and instructions 
(including, without limitation any Request) or executed or made such  
agreements.                                                           

(d)  Company's acts binding: Every act, omission, agreement, undertaking,       
settlement, waiver notice or other communication given or made by the 
Company under this Agreement, or in connection with this Agreement,   
    (whether or not known to any other Obligor and whether occurring before or
   after such other Obligor became an Obligor under this Agreement) shall be
     binding for all purposes on all other Obligors as if the other Obligors had
expressly made, given or concurred with the same.  In the event of any
     conflict between any notices or other communications of the Company and any
  other Obligor, those of the Company shall prevail.  For the avoidance of
doubt, references in this Clause 2.3(d) to "Company" shall include the
Company acting in its capacity as Obligors' Agent.                    

2.4  Maximum Total Commitments                                                  

 The Total Commitment shall not at any time exceed DM214,000,000 (or its
equivalent thereof in Optional Currencies).                           

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3.   PURPOSE OF FACILITIES                                                      

(a)  The proceeds of each Utilisation (if any) made on the date of Closing shall
be applied as follows:                                                

(i)  first in or towards financing repayment in full by the relevant  
          Borrower its portion of the Existing Financial Indebtedness or, in the
        case of any Standby L/C issued on behalf of a Borrower in or towards
       the support of any of its existing Permitted Financial Indebtedness
    and in each case in accordance with the Funds Flow Memorandum at
Closing; and                                                

(ii) second in or towards financing payment by the Company of the     
Transaction Costs.                                          

(b)  The proceeds of each Utilisation hereunder (other than the Utilisations (if
    any) made on the date of Closing) shall be applied in or towards financing
     the general working capital requirements and/or other corporate purposes of
  the relevant Borrower and its Subsidiaries, or, in the case of a Standby
  L/C, such standby L/C shall be issued to support the relevant Borrower's
Permitted Financial Indebtedness provided by the Beneficiary of such  
Standby L/C to such Borrower.                                         

(c)  Without affecting the obligations of any of the Borrowers under (a) or (b) 
above, no Finance Party shall be obliged to concern itself with the   
     application of amounts raised by any of the Borrowers under this Agreement.

(d)  Each Borrower undertakes that no Advance,Standby L/C or Ancillary Facility 
   shall be used in any way which would be illegal under, or would cause the
    invalidity or unenforceability (in whole or in part) of any Senior Finance
Document under any applicable law.                                    

(e)  For the avoidance of doubt no proceeds of any Utilisation shall be used in 
respect of or in connection with the completion of the Diamond Back   
Acquisition.                                                          

4.   CONDITIONS PRECEDENT TO FIRST UTILISATION                                  

The obligations of each Finance Party to the Company and the Borrowers under    
this Agreement are subject to the condition precedent that on or before Closing:

(a)  the Facility Agent shall have received all of the documents and evidence   
    listed in Schedule 6 in each case in the agreed form or, where there is no
agreed form, in form and substance satisfactory to the Facility Agent.
     Each of the documents referred to in Schedule 6 as being certified shall be
certified by an Authorised Signatory of the relevant Obligor as being 
 genuine and in full force and effect (and, if a copy, as being true and
 complete) as at the date such document is required to be delivered; and

(b)  all of the representations and warranties in Clause 18.1 being correct in  
all material respects on Closing and no Default having occurred with  
respect to the Company or any of its Subsidiaries and be continuing   
     immediately before the making of the Utilisations to be made on Closing and
    the refinancing of the Existing Financial Indebtedness by reference to the

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  facts and circumstances subsisting immediately before the making of such
   Utilisation nor will a Default occur if the initial Utilisations are made
as contemplated in this Agreement.                                    

5.   CONDITIONS PRECEDENT TO EACH UTILISATION BY WAY OF ADVANCES AND            
STANDBY L/CS                                                          

 The obligation of each Bank to participate in any Utilisation by way of
Advances or Standby L/Cs is subject to the condition precedent that:            

(a)  on both the date that the relevant Request is delivered to the   
       Facility Agent and the Drawdown Date for that Advance or Issue Date
for that Standby L/C (as the case may be):                  

      (i)  no Default has occurred which is either continuing or has not
             been waived in writing by the Facility Agent pursuant to Clause
32;                                               

     (ii)  the representations in Clause 18.1 which are to be repeated
                pursuant to Clause 18.2 on those dates are true and correct; and

      (iii) no other event is outstanding which constitutes (or with the
             giving of notice, lapse of time, determination of maturity or
       the fulfilment of any other applicable condition or any
     combination of the foregoing, is reasonably likely to
                constitute) a default under any document which is binding on any
         Obligor or any Material Group Member or any asset of such
            Obligor or Material Group Member to an extent or in a matter
           which might have a material adverse effect on the financial
                condition of any Obligor or Material Group Member or the ability
           of any Obligor to perform its obligations under the Finance
Documents; and                                  

(b)  if the information contained in the latest Borrowing Base Summary
  delivered under this Agreement relates, in respect of Eligible
       Finished Goods, Eligible Raw Materials or Trade Payables, to a date
       occurring 50 or more days prior to such Request and, insofar as the
         information relates to Eligible Receivables or Cash, such information
         relates to a date occurring more than 10 days prior to the Request an
     updated Borrowing Base Summary has been delivered to the Facility
   Agent such that the information contained therein in respect of
      Eligible Finished Goods, Eligible Raw Materials and Trade Payables
       does not relate to a date occurring more than 50 days prior to such
        Request and the information contained therein in respect of Eligible
         Receivables and Cash does not relate to a date occurring more than 10
days prior to such Request.                                 

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6.   UTILISATION OF THE FACILITIES                                              

6.1  Delivery of a Drawdown Request                                             

(a)  Subject to the terms and conditions of this Agreement (including, without  
limitation, Clause 6.15) the Obligor's Agent may utilise the Revolving
    Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling three Business Days before the Drawdown Date for that 
Advance, a duly completed Drawdown Request (save in respect of the    
  Utilisation of the Revolving Facility to be made on Closing which may be
  requested by delivery of a duly completed Drawdown Request no later than
     9.00 a.m. on the day falling two Business Days before the Drawdown Date for
    such Advances provided that the Facility Agent has previously confirmed to
the Company that Clause 4 has been satisfied).                        

(b)  Each Drawdown Request delivered to the Facility Agent shall oblige the     
  relevant Borrower to borrow the Requested Amount on its Drawdown Date on
the terms and on the conditions stated in this Agreement              

(c)  No more than 15 Advances may be outstanding at any time.                   

(d)  Lyon Investments B.V. may not utilise or attempt to utilise the Revolving  
Facility.                                                             

(e)  The South African Group may not utilise or attempt to utilise the Revolving
Facility.                                                             

6.2  Completion of Drawdown Request                                             

Each Drawdown Request delivered to the Facility Agent pursuant to Clause 6.1    
shall be irrevocable and shall not be considered to have been duly completed    
unless it specifies:                                                            

(a)  the proposed Drawdown Date, which shall be a Business Day occurring during 
the Availability Period;                                              

(b)  the identity of the Borrower;                                              

(c)  the Requested Amount of the proposed Advance which shall be a Deutschmark  
 Amount which is less than or equal to the Adjusted Available Amount for
    such Utilisation and which, if less than the Adjusted Available Amount for
such Utilisation is a minimum amount of DM5,000,000 and an integral   
     multiple of DM1,000,000 and, in the case of the Company, shall be an amount
    which when aggregated with all its other outstandings hereunder including,
    for the avoidance of doubt, any contingent obligation the Company may have
    in respect of any outstanding Standby L/C (other than in its capacity as a
     Guarantor)) will not exceed the Deutschmark Equivalent of $7,500,000 taking
   into account the Deutschmark Amount of any Advances scheduled to be made,
    repaid or prepaid and any Standby L/Cs scheduled to be issued or to expire
by assuming that the same occurs when due.;                           

(d)  the currency of the Advance (being Deutschmarks or an Optional Currency);  

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(e)  the Term of the Advance being requested, which shall be a period of one,   
two or three months (or such other duration as the Banks may have     
 previously agreed in writing for such Advances) which will begin on the
   proposed Drawdown Date and end on a Business day which is or precedes the
   Final Repayment Date save in respect of any Advance made between the date
 of this Agreement and the date falling three months thereafter, each of
which shall be of such duration as the Facility Agent shall determine 
     (acting reasonably) having regard to the syndication process (provided that
    each such Term shall be at least seven days and not exceed one month); and

(f)  the account to which the proceeds of the proposed Utilisation are to be    
    paid (which, in the case of each of the Advances that are drawndown on the
date of Closing, shall be a Blocked Account).                         

6.3  Amount of each Bank's participation in an Advance                          

(a)  Subject to the terms of this Agreement, each Bank shall, on the date       
 specified in any Drawdown Request for an Advance, make available to the
    Facility Agent in the currency of the Advance concerned for the account of
  the relevant Borrower the amount of its participation in that Advance in
the proportion (applied to the Requested Amount) which its Revolving  
  Commitment bears to the amount of the Total Commitments, the amount of a
     Bank's Revolving Commitment and the Total Commitments being reduced to take
    account of the amount of the Ancillary Commitment of any Ancillary Bank at
     such time).  All such amounts shall be made available to the Facility Agent
   in accordance with Clause 13.1 for disbursement to or to the order of the
relevant Borrower in accordance with the provisions of this Agreement;

(b)  If a Bank's Revolving Commitment is reduced in accordance with this        
  Agreement after the Facility Agent has received a Drawdown Request, then
   such part of the proposed Utilisation as is attributable to that Bank and
exceeds its portion of the Revolving Facility Available Amount (as so 
reduced) shall not be made and the amount of such Utilisation shall be
reduced accordingly.                                                  

6.4  Delivery of a Standby L/C Request                                          

(a)  Subject to the terms and conditions of this Agreement (including, without  
  limitation, Clause 6.15) the Obligors' Agent may utilise the Standby L/C
    Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling five Business Days or, if the Standby L/C requested on
   behalf of a Borrower (the "Requested Standby L/C") has an Issue Date that
coincides with the Expiry Date of an outstanding Standby L/C (the     
"Outstanding Standby L/C") issued on behalf of such Borrower, the     
 Beneficiary of the Requested Standby L/C is the same Beneficiary as the
     Beneficiary of the Outstanding Standby L/C and the Requested Standby L/C is
requested to be in the same currency and for the same amount as the   
     Outstanding Standby L/C, three Business Days before the Issue Date for that
   Standby L/C, a duly completed Standby L/C Request (save in respect of the
    Utilisation of the Standby L/C Facility to be made on Closing which may be
     requested by delivery of a duly completed Standby L/C Request no later than
  9.00 a.m. on the day falling two Business Days before the Issue Date for
    such Standby L/C Provided that the Facility Agent has previously confirmed
to the Company that Clause 4 has been satisfied).                     

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(b)  Each Standby L/C Request delivered to the Facility Agent shall oblige the  
  relevant Borrower to incur liabilities under this Agreement equal to the
Requested Amount on its Issue Date on the terms and on the conditions 
stated in this Agreement.                                             

(c)  No more than 5 Standby L/Cs may be outstanding at any time.                

(d)  Lyon Investments B.V. may not utilise or attempt to utilise the Standby L/C
Facility.                                                             

(e)  The South African Group may not utilise or attempt to utilise the Standby  
L/C Facility.                                                         

6.5  Completion of Standby L/C Request                                          

Each Standby L/C Request delivered to the Facility Agent pursuant to Clause 6.4 
shall be irrevocable and shall not be considered to have been duly completed    
unless it specifies:                                                            

(a)  the proposed Issue Date, which shall be a Business Day occurring during the
Availability Period;                                                  

(b)  the identity of the Borrower;                                              

(c)  the Requested Amount of the proposed Utilisation which shall be a          
 Deutschmark Amount which is less than or equal to the lesser of (i) the
 then Adjusted Available Amount and, (ii) the then Standby L/C Available
    Facility Amount for such Utilisation and which, if less than the lesser of
     the Adjusted Available Amount and the Standby L/C Available Amount for such
    Utilisation is a minimum amount of DM3,000,000 and an integral multiple of
     DM1,000,000, Provided that, without prejudice to the foregoing, in the case
of the Company, the Requested Amount shall be an amount which, when   
  aggregated with all its other outstandings hereunder (including, for the
avoidance of doubt, any contingent obligation the Company may have in 
 respect of any outstanding Standby L/C (other than in its capacity as a
     Guarantor), will not exceed the Deutschmark Equivalent of $7,500,000 taking
   into account the Deutschmark Amount of any Advances scheduled to be made,
    repaid or prepaid and any Standby L/Cs scheduled to be issued or to expire
by assuming that the same occurs when due;                            

(d)  the currency of the Standby L/C (being Deutschmarks or an Optional         
Currency);                                                            

(e)  the Expiry Date of such Standby L/C which shall be no more than twelve     
  months after the Issue Date of such Standby L/C and be no later than the
Final Repayment Date save in respect of a Utilisation of the Standby  
    Facility made between the date of the Agreement and the date falling three
  months thereafter, each of which shall have an Expiry Date determined by
 the Facility Agent (acting reasonably) having regard to the syndication
    process provided that it shall be at least seven days after its respective
Issue Date; and                                                       

(f)  the identity of the Beneficiary, together with such other details relating 
thereto and the liabilities of the Borrower to which the Standby L/C  
relates as the Facility Agent shall consider appropriate.             

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6.6  Issuing of Standby L/Cs                                                    

(a)  If a Borrower requests the issuing of a Standby L/C in accordance with this
   Agreement, then, subject to sub-paragraph (c) below and Clause 16.2, with
     effect from the proposed Issue Date for such Standby L/C the Facility Agent
     on behalf of each of the Banks that are to participate in the issue of such
     Standby L/C shall issue the same to the relevant Beneficiary, the amount of
 each such Banks' participation in that Standby L/C being the proportion
   (applied to the Requested Amount) which its Revolving Commitment bears to
the amount of the Total Commitments (the amount of a Ancillary Banks' 
     Revolving Commitment and the Total Commitments being reduced to take amount
 of the amount of the Ancillary Commitment of any Ancillary Bank at such
time).                                                                

(b)  If a Bank's Standby L/C Commitment is reduced in accordance with this      
     Agreement after the Facility Agent has received a Standby L/C Request, then
   such part of the proposed Utilisation as is attributable to that Bank and
 exceeds its portion of the Standby L/C Available Facility Amount (as so
reduced) shall not be made and the amount of such Utilisation shall be
reduced accordingly.                                                  

(c)  If at any time following delivery of a Standby L/C Request, and prior to   
 the issuance of the Standby L/C requested therein any Bank notifies the
Facility Agent that it does not agree, by reason of, the Beneficiary  
thereof being an institution which appears in the Specially Designated
     National and Blocked Persons List produced by the U.S. Government Office of
  Foreign Assets Control or on any other such Governmental list or list of
 any Supranational authority in any other relevant jurisdiction in which
such Bank is resident, domiciled or has its Facility Office or is an  
institution which is not similarly vetoed by any Government or        
 Supranational entity in relation to such Bank in such jurisdiction that
     such Standby L/C be issued, the Facility Agent shall, promptly upon receipt
of such notification inform each of the other Finance Parties and such
  Standby L/C Request shall be treated, for all purposes, as if it had not
    been delivered and be void ab initio and the Standby L/C requested therein
shall not be made.                                                    

(d)  The maximum amount required to be paid by the Banks under or in respect of 
 a Standby L/C shall not exceed the "Maximum Amount" (as defined in such
   Standby L/C) notwithstanding any payments made in respect of such Standby
L/C by any Group Member, whether pursuant to Clause 11.3 or otherwise.

6.7  Facility Agent's Authority                                                 

For the purposes of Clause 6.6 each Bank hereby authorises the Facility Agent to
complete each Standby L/C in which such Bank is to participate (which it shall  
do through its Facility Office) in the manner contemplated by the relevant      
Standby L/C Request and this Agreement and to sign such Standby L/C on its      
behalf and to issue the same to the relevant Beneficiary.                       

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6.8  Copy of Standby L/C                                                        

The Facility Agent shall, promptly following the issue of a Standby L/C pursuant
to Clause 6.6, forward a copy thereof to the Company, the relevant Borrower on  
whose behalf such Standby L/C was issued and to each Bank participating therein.

6.9  No Enquiry                                                                 

No Finance Party need, before the issue of any Standby L/C, make any enquiry or 
otherwise concern itself as to whether any event has occurred which, under the  
terms hereof, would relieve such Finance party from its obligations to issue or 
to participate in the issue of such Standby L/C and accordingly no Borrower     
shall have any right to resist any claim under Clause 11.3 or otherwise on the  
ground that the relevant event had occurred before the issue of such Standby    
L/C.                                                                            

6.10 Definitions                                                                

For the purposes of determining the Adjusted Available Amount Clause 6.2(c) and 
6.5(c), and the Standby L/C Available Facility Amount in Clause 6.5(c) and      
otherwise in this Agreement:                                                    

"Account Debtor" in relation to any Person means any other Person who is or may 
become obligated to such Person under, with respect to, or on account of, an    
Account;                                                                        

"Accounts" in relation to any Person means all accounts, accounts receivable,   
other receivables, contract rights, instruments, documents, and notes, whether  
now owned or hereafter acquired by such Person arising out of the sale, lease or
disposal of goods or provision of services by such Person in the ordinary course
of its trade which constitute a legal, valid and binding obligation of the      
relevant Account Debtor (each an "Account");                                    

"Adjusted Available Amount" in relation to an Obligor means the lesser of:      

(a)  in respect of the Revolving Facility, the amount of the Revolving Facility 
    Available Amount and in respect of the Standby L/C Facility, the amount of
the Standby L/C Facility Available Amount; and                        

(b)  the Deutschmark Equivalent at or about 11:00 a.m. on the Business Day      
    preceding the date of the relevant Request delivered to the Facility Agent
 in respect to the relevant Advance or, as the case may be, the relevant
Standby L/C of the Adjusted Borrowing Base of the relevant Obligor;   

"Adjusted Borrowing Base" in relation to any Obligor and any Request, means at  
any time:                                                                       

(a)  the amount of the Borrowing Base relating to such Obligor;                 

(b)  less the aggregate Deutschmark Amount of Ancillary Facilities (excluding   
     that portion of Ancillary Facilities which are solely available for foreign
 exchange transactions) and Advances made to, and Standby L/Cs issued on
     behalf of, such Obligor that are, at such time, outstanding and, in respect
of a Utilisation, not scheduled to be repaid or, as the case          

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     may be, expire prior to or at the same time as such Utilisation and, taking
into account any other Utilisations requested by such Obligor that are
scheduled to be made or, as the case may be issued;                   

(c)  less the Deutschmark Amount of such Obligor's Borrowing Base (if any) that 
 has been utilised at such time so as to increase the Adjusted Borrowing
   Base of another Obligor under the provisions of this definition contained
     in paragraph (d) below and taking into account any repayment of any Advance
   scheduled to be made and the amount of any Standby L/C which is scheduled
    to expire on or before the proposed Utilisation in relation to the Request
in question in respect of which such Obligor's Borrowing Base was so  
utilised;                                                             

Provided that for the purposes of this definition, the sum of (a) minus (b)     
minus (c) shall never be less than zero,                                        

(d)  plus (except in the case of the Company) the aggregate of the lesser of (in
     respect of each Obligor (other than such Obligor itself and without double-
counting)):                                                           

 (i)  the Adjusted Borrowing Base at such time of each such Obligor; and

    (ii) the Maximum Guarantee Amount of each such other Obligor at such time,
    as the same is determined by the Facility Agent acting, where it
considers appropriate, on the advice of local counsel;      

"Borrowing Base" means, at any time;                                            

(a) in relation to any Obligor incorporated in Germany or such other  
   country or countries as the Facility Agent may, from time to time specify
for this purpose having regard to applicable laws and current trade   
practices therein the aggregate of:                                   

       (i)   the sum of 40% of the aggregate of its Eligible Raw Materials
               and its Eligible Finished Goods less the Deutschmark Equivalent
of such Obligor's Trade Payables;               

     (ii)  80% of its Eligible Receivables after deducting (A) any VAT
            payable thereon, (B) to the extent that such Obligor's Trade
              Payables exceeds the Deutschmark Equivalent of the sum of such
                Obligor's Eligible Raw Materials and its Eligible Finished Goods
              an amount equal to such excess and (C) General Provisions; and

(iii) 100% of its Cash Collateral Amount,                   

Provided that:                                              

         (iv)  such Obligor's Borrowing Base shall be determined in accordance
with the order stated above; and                

         (vi)  if any amount, determined in accordance with the above shall be
                a negative figure, it shall be deemed to be zero for the purpose
of such determination; and                      

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     (b) in relation to any Obligor not incorporated in Germany or in respect of
        which the Facility Agent has not specified as subject to paragraph (a)
above, the Deutschmark Equivalent of the aggregate of:        

         (i)   80% of its Eligible Receivables after deducting (A) VAT payable
thereon and (B) General Provisions;             

     (ii)  (other than in respect of the Inventory owned, from time to
             time, by the Swedish Obligor which shall not be included) the
                sum of 40% of the aggregate of its Eligible Raw Materials and of
its Eligible Finished Goods; and                

(iii) 100% of the Cash Collateral Amount;                   

     in each case determined by reference to the latest Borrowing Base
Summary.                                                              

"Borrowing Base Summary" means the information required to be prepared by or on 
behalf of each Obligor and the Company pursuant to the terms hereof in the      
agreed form in respect of each Obligor's Eligible Receivables, Eligible Finished
Goods, Eligible Raw Materials, Cash Collateral Amount and, if applicable, Trade 
Payables and delivered on a monthly basis in any event and more frequently if   
required pursuant to the terms hereof and all schedules appendices and other    
documents exhibited or attached thereto;                                        

Cash Collateral Amount" in relation to an Obligor, means the amount from time to
time standing to the credit of each account of such Obligor from time to time   
subject to the terms of a Debenture or an Irish Debenture relating to such      
Obligor;                                                                        

"Eligible Finished Goods" in relation to any Obligor, means an amount equal to  
the lower of cost and the market value of the Inventory of such Obligor which   
consists only of finished goods (as determined by reference to Applicable       
Accounting Principles) and which is:                                            

(a)  subject to the security granted by or pursuant to the Security Documents   
and in compliance therewith and;                                      

(b)  insured in accordance with the requirements of the Senior Finance          
Documents,                                                            

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Provided that, in respect of any Obligor:                                       

(i)  all finished goods:                                                        

     (AA) against which such Obligor has made or should have made a provision or
        reserve in accordance with the Approved Provisioning Procedure shall
not be included:                                            

     (BB) all finished goods which are held by or in the possession of Person(s)
          other than the relevant Obligor in relation to whom "Eligible Finished
          Goods" falls to be determined (unless held by such Person to the order
        of or on trust or as bailee (subject to the trustee or bailee having
  no right or interest thereto or therein other than a Permitted
     Encumbrance) for the relevant Obligor) shall not be included; and

Provided further that this definition may be amended, varied or supplemented by 
the Facility Agent (acting on the advice of local counsel) so as to reflect any 
changes to applicable laws or regulations so as to afford the Finance Parties   
the same level of protection in respect of such Obligor and its "finished goods"
as at the date of this Agreement, or, in the case of an Acceding Borrower or as 
the case may be, an Acceding Guarantor, as the date it became a party to this   
Agreement; and                                                                  

"Eligible Raw Materials" in relation to any Obligor, means an amount equal to   
the lower of cost and the net realisable value of the Inventory of such Obligor 
which consists of raw materials and consumables (as defined by reference to     
Applicable Accounting Principles) which is:                                     

(a)  subject to the security granted by or pursuant to the Security Documents   
and in compliance therewith; and                                      

(b)  insured in accordance with the requirements of the Senior Finance          
Documents;                                                            

Provided that in respect of any Obligor:                                        

(a) all Inventory which consists only of raw materials and consumables as       
 determined by reference to Applicable Accounting Principles against which
the Obligor has made or should have made a provision or reserve in      
    accordance with the Approved Provisioning Procedure shall not be included to
the extent of such provision or reserve shall not be included ; and     

(b) all Inventory which consists only of raw materials and consumables (as      
determined in accordance with Applicable Accounting Principles) which is
    held by or in the possession of Person(s) other than the relevant Obligor in
relation to whom "Eligible Raw Materials" falls to be determined (unless
    held by such Person to the order of or on trust or as bailee (subject to the
   trustee or bailee having no right or interest thereto or therein other than
    pursuant to a Permitted Encumbrance) for such Obligor shall not be included;
and                                                                     

(c) this definition may be amended, varied or supplemented by the Facility      
  Agent (acting on the advice of legal counsel) so as to reflect any changes
 to applicable laws or regulations so as to afford the Finance Parties the
  same level of protection in respect of the Obligor and its Inventory which
   consists only of raw materials and consumables (as determined in accordance
    with Applicable Accounting Principles) as at the date of this Agreement, or,
in                                                                      

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the case of an Acceding Obligor or, as the case may be, an Acceding     
Guarantor the date it became a party to this Agreement:                 

"Eligible Receivables" in relation to any Obligor means the amount of the gross 
outstanding balance, less all finance charges, late fees and other fees which   
are unearned, of Accounts which are:                                            

(a)  subject to the security granted by or pursuant to the Security Documents   
and in compliance therewith and;                                      

(b)  insured in accordance with the requirements of the Senior Finance          
Documents;                                                            

Provided that in respect of any Obligor, Accounts shall not be included:        

    (i)    if the Account Debtor has taken any corporate action or other steps
      have been taken or legal proceedings have been started for its
         winding-up, administration, dissolution or re-organisation or for
    the appointment of a receiver, administrator, administrative
          receiver, trustee or similar officer of it or of any or all of its
       revenues and assets or the Account Debtor is or has been deemed
        unable to pay its debts as they fall due, commenced negotiations
        with any one or more of its creditors with a view to the general
      readjustment or rescheduling of its indebtedness or has made a
       general assignment for the benefit of or a composition with its
           creditors or a moratorium in respect of all or any indebtedness has
been applied for, ordered or declared;                  

  (ii)   if such Account(s) are outstanding for a period exceeding 30 days
           after the due date (provided that if the due date is not specified,
        the due date shall be deemed to be 30 days after the date of the
          relevant invoice) or such other period as the Facility Agent shall
in its discretion deem to be the minimum such period;   

     (iii) if the Account Debtor is a Group Member or an associate or employee
thereof;                                                

     (iv)   if such Account(s) relate to a transaction entered into on a sale or
return or similar basis;                                

    (v)    if such Account(s) are payable more than 270 days after the date of
     the relevant invoice or if less such other ageing basis as is
        specified in the Borrowing Base Summary relating to such Obligor
         and, in any event, such that they do not give rise to a breach of
Clause 20.2(e);                                         

(vi)   if such Account(s) have been prepaid to the extent of such     
prepayment;                                             

(vii)  if such Account(s) are payable otherwise than in cash;         

 (viii) to the extent such Account(s) are subject to Encumbrances (other
    than pursuant to the Security Documents), set off or selling
         arrangements or are the subject of any legal action or dispute by
the Account Debtor;                                     

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  (ix)   if such Account(s) are not evidenced by an invoice or in writing;

     (x)    if such Account(s) arise under any licence and the Account Debtor is
            wholly or partly owned (directly or indirectly) by any Group Member;
and                                                     

     (xi)   if such Account is owed by an Account Debtor to the Swedish Obligor;
and                                                     

(xii)  any Account owed by an Account Debtor in respect of which the  
 Obligor has made a provision as a result of the Obligor's
        determination of such Account Debtors' creditworthiness and such
           Account is not excluded pursuant to one or more of paragraphs (i) -
(xi) above;                                             

Provided further that this definition may be amended, varied or supplemented by 
the Facility Agent (acting on the advice of legal counsel) so as to reflect any 
changes to applicable laws or regulations so as to afford the Finance Parties   
the same level of protection in respect of such Obligor and its "Accounts" as at
the date of this Agreement, or, in the case of an Acceding Borrower or, as the  
case may be, an Acceding Guarantor the date it became a party to this Agreement;

"Inventory" in relation to an Obligor, means any and all inventory and other    
stocks in all of its forms, wherever located, now or hereafter existing and     
whether acquired by purchase, merger or otherwise and all raw materials and     
work-in-progress, all finished goods thereof and all materials used or consumed 
in the manufacture, in each case, determined in accordance with Applicable      
Accounting Principles;                                                          

"Maximum Guarantee Amount" means, in respect of any Obligor and a particular    
Borrower, at any time, the maximum Deutschmark Amount such Obligor would be able
to pay (net of any Tax or other amounts payable (other than to the Facility     
Agent) in connection therewith) to the Facility Agent under its Guarantee if a  
demand was made thereunder at such time in accordance with the terms and        
conditions of its Guarantee in respect of any amounts payable by such Borrower  
under the Senior Finance Documents without contravening any existing applicable 
law, statute, rule or regulation or any judgment, decree, consent  or permit to 
which such Obligor is subject, or conflict with, or result in any breach of any 
of the terms of, or constitute a default under any agreement or other instrument
to which such Obligor is expressed to be party or is subject to or by which it, 
or any of its property is bound;                                                

"Revolving Facility Available Amount" at any time means the aggregate amount of 
the Revolving Commitments (taking into account any reduction in the Revolving   
Commitment of a Bank which is an Ancillary Bank, as provided for in Clause 7 and
the reduction in the Total Commitments, as provided for in Clause 11.1) less the
aggregate of:                                                                   

(a)  the Deutschmark Amount of the outstanding Advances at such time, taking    
    into account, in respect of a proposed Utilisation, any Advances scheduled
  to be made, repaid or prepaid by assuming that the same occurs when due;
and                                                                   

(b)  the undrawn portion of all Standby L/Cs issued under this Agreement that   
are outstanding at such time plus any amounts due and payable by any  
 Borrower under Clause 11.3 in respect of any Standby L/C but unpaid and
  taking into account any Standby L/Cs scheduled to be issued or expire by
assuming that the same occurs when so scheduled;                      

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"Standby L/C Facility Available Amount" at any time in respect of the Standby   
L/C Facility means the lesser of:                                               

(a)  the amount of the Standby L/C Commitments taking into account any reduction
in the Standby L/C Commitment of a Bank which is an Ancillary Bank, as
   provided for at Clause 7 less (i) the aggregate of the undrawn portion of
   all Standby L/Cs issued under this Agreement that are outstanding at such
    time and (ii) any amount due and payable by any Borrower under Clause 11.3
in respect of any Standby L/C but unpaid and taking into account any  
    Standby L/Cs scheduled to be issued or to expire by assuming that the same
occurs when so scheduled; and                                         

(b)  the Revolving Facility Available Amount; and                               

"Trade Payables" means, in relation to an Obligor and at any time, the amount   
owed to trade creditors (other than another Group Member) in respect of the     
supply of Inventory to such Obligor at such time by such Obligor.               

6.11 Calculation                                                                

When calculating the Eligible Receivables, Eligible Finished Goods, the Eligible
Raw Materials or Trade Payables of any Obligor such calculation shall be made in
the Local Currency of such Obligor.                                             

6.12 Determination                                                              

The Facility Agent shall determine from time to time the Adjusted Available     
Amount by reference to each of the then latest relevant Borrowing Base Summaries
delivered to the Facility Agent pursuant to the terms hereof provided that the  
Facility Agent shall not be required to have regard to any Borrowing Base       
Summary which is delivered to it later than two Business Days prior to the date 
of such determination.                                                          

6.13 Undrawn amount                                                             

Any part of the Facilities undrawn or unutilised at the end of its respective   
Availability Period shall be immediately cancelled.                             

6.14 Deutschmarks in lieu of Optional Currency                                  

Notwithstanding that any Borrower has in any Request delivered hereunder made a 
request for a Utilisation in an Optional Currency any Bank may by notification  
to the Facility Agent at any time up to the notification of LIBOR in respect of 
such Utilisation or, in relation to a Utilisation by way of Standby L/C's issue,
confirm that it is unwilling to participate in such Utilisation in such Optional
Currency in which case it shall, if it would otherwise be required to           
participate in such Utilisation in such Optional Currency, not be obliged to do 
so, but instead be required to participate in such Utilisation in Deutschmarks. 

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6.15 Dutch Borrowers                                                            

At all times following the date falling 30 days after the date of this Agreement
the Company shall procure that no Borrower, other than the Company, shall       
utilise the Revolving Facility or the Standby L/C Facility at any time if, at   
such time, the aggregate Deutschmark Amount of Advances drawn down by Gazelle is
less than the Deutschmark equivalent of 75 per cent of the sum of the book value
of the gross assets of Gazelle at such time determined in accordance with       
Applicable Accounting Principles and for this purpose:                          

(a)  If Gazelle has Subsidiaries, the calculation shall be made by using the    
gross assets of it and its Subsidiaries; and                          

(b)  the calculation of gross assets shall be made by reference to the latest   
     Financial Accounts of Gazelle or, as the case may be a consolidation of the
   Financial Accounts of it and its Subsidiaries used for the purpose of the
  then latest unaudited quarterly or audited annual consolidated Financial
  Accounts of the Group delivered to the Facility Agent under Clause 19.1.

7.   ANCILLARY FACILITIES                                                       

7.1  Ancillary Facilities                                                       

(a)  Subject to the terms and conditions of this Agreement the Obligors' Agent  
   may from time to time by notice in writing to the Facility Agent, request
    the establishment of an Ancillary Facility by an Ancillary Bank, each such
Ancillary Facility to become available with effect from the date (the 
"Effective Date") (or such later date as the Obligors' Agent and the  
    Facility Agent may agree from time to time) specified in such notice being
a date not less than seven Business Days after the date such notice is
received by the Facility Agent.  Any such notice shall specify:       

(i)   the proposed Borrower;                                          

(ii)  the proposed Effective Date and expiry date for the Ancillary   
          Facility concerned being, in the case of the expiry date, a Business
Day on or prior to the Final Repayment Date;              

    (iii) the type of the proposed Ancillary Facility which may be a committed
 overdraft facility, BACS, cheque drawing, letter of credit,
 guarantee, foreign exchange, banking and/or such other cash
           management facility as such Ancillary Bank may agree provided that no
           Ancillary Facility shall be made available in respect of any currency
   other than Deutschmarks or an Optional Currency or such other
       currencies as are notified to the Facility Agent by the Borrower;

(iv)  the proposed Ancillary Bank;                                    

     (v)   the Ancillary Commitment under the proposed Ancillary Facility at any
           time (which, when aggregated with the actual and contingent liability
of such Ancillary Bank                                    

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       under all other Facilities made available by it, shall not exceed
such Ancillary Bank's Revolving Commitment); and          

   (vi)  the portion (if any) of the Ancillary Facility that may be utilised
          by way of overdraft, advance, letter of credit or similar facilities
      and the portion (if any) that may be utilised for the purpose of
foreign exchange transactions; and                        

(vii) such other details as to the nature, amount and operation of the
      proposed Ancillary Facility as the Facility Agent may reasonably
require,                                                  

    and the Facility Agent shall promptly notify each Bank upon receipt of any
such notice.                                                          

(b)  Subject to the terms and conditions of this Agreement, any Bank so         
    nominated shall make the proposed Ancillary Facility available with effect
on and from the Effective Date subject to the approval of the Facility
Agent (acting reasonably) and the Facility Agent having received      
notification from such Ancillary Bank that it approves of the proposed
Ancillary Facility.                                                   

(c)  Any material variation in any Ancillary Facility or any proposed increase  
     or reduction in the amount thereof shall be effected on, and subject to the
provisions, mutatis mutandis, of this Clause 7.                       

(d)  The maximum aggregate Ancillary Commitments under all of the Ancillary     
 Facilities at any time shall not exceed the lesser of (i) the Revolving
Facility Available Amount and (ii) DM64,000,000 or (its equivalent in 
Optional Currencies) less (in either case), the sum of the Deutschmark
     Amount of any outstanding Standby L/Cs at such time and any amounts due and
     payable by any Borrower under Clause 11.3 in respect of any Standby L/C but
   unpaid and taking into account any Standby L/Cs scheduled to be issued or
expire by assuming that the same occurs when so scheduled.            

(e)  Without prejudice to paragraph (d) the sum of the portions of the Ancillary
 Facilities that may be utilised by way of overdraft, advance, letter of
    credit or similar facilities may not exceed DM43,000,000 or its equivalent
in Optional Currencies and the sum of the portions of the Ancillary   
Facilities that may be utilised for the purpose of foreign exchange   
transactions may not exceed DM32,000,000 or its equivalent in Optional
Currencies in each case determined by reference to the definition     
"Ancillary Outstanding".                                              

(f)  Any Ancillary Facility provided by an Ancillary Bank shall terminate no    
later than the Final Repayment Date.                                  

(g)  Any amounts owing or outstanding under any Ancillary Facility and all      
     banking facilities provided thereunder on the Final Repayment Date shall be
repaid and/or, as the case may be, cancelled in full by the relevant  
Borrower on the Final Repayment Date.                                 

(h)  Subject to the terms and conditions of this Agreement and without prejudice
   to the proviso contained in Clause 7.2(f), the Revolving Commitment of an
     Ancillary Bank shall be reduced by an amount equal to such Ancillary Bank's
Ancillary Commitment and its                                          

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  Standby L/C Commitment shall be reduced by a proportionate amount, until
    such time as all or part of its Ancillary Facility is cancelled, whereupon
such Bank's Revolving Commitment shall be increased by the amount its 
 Ancillary Facility has been so cancelled and its Standby L/C Commitment
shall be increased by a proportionate amount.                         

(i)  The maximum amount outstanding under Ancillary Facilities made to the      
    Company shall not at any time (when aggregated with all other outstandings
     hereunder (including, for the avoidance of doubt, any contingent obligation
    the Company may have in respect of any outstanding Standby L/C (other than
in its capacity as a Guarantor)) exceed the Deutschmark Equivalent of 
$7,500,000 (determined by reference to the definition "Ancillary      
    Outstanding") taking into account any Advances scheduled to be made to, or
   repaid or prepaid by the Company and Standby L/Cs issued on behalf of the
   Company scheduled to be issued or expire by assuming that the same occurs
when so scheduled.                                                    

(j)  Lyon Investments B.V. may not utilise or attempt to utilise the Ancillary  
Facilities.                                                           

(k)  The South African Group may not utilise or attempt to utilise the Ancillary
Facilities.                                                           

7.2  Operation of Ancillary Facilities                                          

(a)  The rate of interest, fees and other remuneration in respect of each       
   Ancillary Facility shall be determined by agreement between the Ancillary
   Bank and the relevant Borrower concerned and the interest, fees and other
  remuneration for all Ancillary Facilities shall be based upon the normal
  market rates and terms from time to time of the Ancillary Bank and shall
not be more onerous than the corresponding provisions (if any) of this
Agreement.                                                            

(b)  In the case of inconsistency between any term of an Ancillary Facility and 
of this Agreement, the terms of this Agreement shall prevail.         

(c)  Subject to Clause 7.2(a) and (b) above, the terms governing the operation  
 of any Ancillary Facility (including the terms of any counter-indemnity
  required in connection therewith) shall be those determined by agreement
   between the Ancillary Bank and the Borrower concerned, provided that such
     terms are based upon normal commercial terms, save as may be varied by this
     Agreement.  A copy of any such terms shall on request by the Facility Agent
    be provided by the Ancillary Bank to the Facility Agent (and each Borrower
consents to such copies being provided to the Facility Agent and, if  
requested, any Bank).                                                 

(d)  Each Borrower and each Ancillary Bank agrees with and for the benefit of   
each Bank that the Ancillary Outstandings under any Ancillary Facility
   provided by that Ancillary Bank shall not exceed the Revolving Commitment
  of that Ancillary Bank or the amount of the relevant Ancillary Facility.

(e)  Each Borrower and the Ancillary Bank will, promptly upon request by the    
     Facility Agent, supply the Facility Agent with such information relating to
     the operation of each Ancillary Facility provided by such Ancillary Bank to
  such Borrower (including, without limitation, the Ancillary Outstandings
thereunder) as the Facility Agent may from time to time request.  Each
  Borrower consents to all such information being released to the Facility
Agent and each Bank.                                                  

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(f)  No Ancillary Bank may, until notice has been served under Clause 21.2,     
     demand repayment of any moneys made available by it or demand cash cover in
respect of any guarantees, documentary credits or similar contingent  
    liabilities made available by it, under its Ancillary Facility or take any
  action analogous to any of the foregoing under any other type of banking
     arrangements provided by it under its Ancillary Facility unless there is at
    such time an Advance available to be drawn down under this Agreement in an
amount equal to the amount so demanded under the Ancillary Facility   
     (provided that for the purposes of determining whether or not an Advance is
then available for drawdown the Revolving Commitment of the relevant  
     Ancillary Bank shall be deemed to be increased by the amount (not exceeding
 the amount of its Ancillary Commitment) so demanded) such Advance to be
  used to repay or provide cash cover in respect of the amount so demanded
under the Ancillary Facility.  On and subject to the terms of this    
    Agreement, each of the Banks shall participate in any such Advance in such
    amount as will result, after the making of such Advance, in the proportion
which the aggregate amount of its participation in the Advances then  
     outstanding bears to the aggregate amount of the Advances then outstanding,
   being equal to the proportion which its Revolving Commitment bears to the
aggregate of the Revolving Commitments.                               

7.3  Nomination                                                                 

Each of the parties hereto agrees that any Bank that has agreed, in   
   accordance with the terms and conditions of this Agreement, to provide an
    Ancillary Facility may nominate its Affiliate (each such Affiliate being a
    "Nominated Affiliate"), by giving written notice to the Facility Agent, to
discharge such Bank's obligations under this Agreement to provide such
  Ancillary Facility. To the extent that a Nominated Affiliate provides an
Ancillary Facility on behalf of a Bank (the "Nominating Bank"), the   
  Nominating Bank shall be deemed to have discharged such obligations with
respect to such Ancillary Facility.                                   

7.4  Delivery of Nominee Notice                                                 

  Upon a Nominating Bank nominating an Affiliate in accordance with Clause
 7.3, such Nominating Bank shall deliver to the Facility Agent a Nominee
Notice in the form of the document contained in Schedule 13.          

7.5  Date of Accession                                                          

 From the date of delivery of any executed Nominee Notice (the "Delivery
Date") by a Nominating Bank in respect of a nominated Affiliate such  
     Nominated Affiliate shall become an Ancillary Bank for the purposes of this
Agreement and in particular this Clause 7.                            

7.6  Execution of Nominee Notice                                                

     Upon receipt of each Nominee Notice duly executed by the relevant Nominated
   Affiliate the Facility Agent shall execute such Nominee Notice on its own
behalf and on behalf of each other Finance Party.  Each Finance Party 
(other than the Facility Agent) hereby irrevocably                    

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    authorises the Facility Agent to execute such Nominee Notice on its behalf
     and each Obligor (other than the Company) hereby irrevocably authorises the
Company to execute such Nominee Notice on its behalf.                 

7.7  Rights and Obligations of the Parties                                      

    Each of the parties hereto, upon the Delivery Date, shall acquire the same
  rights and assume the same obligations, as between themselves and to the
     Nominated Affiliate, under the Senior Finance Documents, as they would have
     acquired and assumed had such Nominated Affiliate been an original party to
   the Facility Agreement.  Each Nominated Affiliate shall upon the Delivery
Date acquire such rights and assume such obligations under the Senior 
     Finance Documents (including without limitation to be a Secured Beneficiary
as defined therein) to and against the parties hereto as if it were an
Ancillary Bank at the date of this Agreement.                         

7.8  Maximum Ancillary Commitment                                               

    The Ancillary Commitment under an Ancillary Facility, proposed to be given
by a Nominated Affiliate who has become an Ancillary Bank pursuant to 
Clause 7.5, shall not, when aggregated with the actual and contingent 
  liability (calculated without reference to Clause 7.9) of the Nominating
Bank of such Nominated Affiliate, together with any other Ancillary   
  Facilities provided by such Nominating Bank and/or any of it Affiliates,
exceed such Nominating Bank's Revolving Commitment.                   

7.9  Calculations                                                               

For the purpose of this Agreement (including without limitation the   
  calculation of such Bank's Revolving Commitment, Standby L/C Commitment,
Revolving Facility Available Amount and Standby L/C Facility Available
Amount) any Ancillary Facility provided by a Nominated Affiliate of a 
   Nominating Bank, shall be deemed to have been provided by such Nominating
Bank.                                                                 

7.10 Intercreditor                                                              

The parties hereto agree that any Nominated Affiliate that delivers a 
Nominee Notice in accordance with the provisions of Clause 7.5 hereof 
  shall, become a party to each of the Intercreditor Agreements as a Bank.

7.11 Term of Ancillary Facility                                                 

    Subject to the provisions of this Agreement, when an Ancillary Facility is
  provided by a Nominated Affiliate it shall be provided on such terms and
conditions stipulated in this Agreement with respect to Ancillary     
Facilities.                                                           

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PART 3  

8.   INTEREST                                                                   

8.1  Standby L/C Commission                                                     

(a)  The Borrower identified as such in the Standby L/C Request relating to a   
   Standby L/C shall, on the expiry of each period of three months after the
    Issue Date of such Standby L/C and on the Expiry Date of such Standby L/C,
 pay to the Facility Agent for the account of the Banks participating in
   that Standby L/C a commission, such commission calculated by the Facility
 Agent at the rate of the Margin on the amount of the undrawn portion of
    that Standby L/C on each day during the period beginning on the Issue Date
     of that Standby L/C is issued and ending on the Expiry Date of such Standby
L/C.                                                                  

(b)  If a Borrower procures the release of a Bank from its obligations under a  
    Standby L/C pursuant to Clause 16.2 such Bank shall not be entitled to any
commission occurring thereon after the date of such release.          

8.2  Interest rate                                                              

Subject to Clause 9, the rate of interest which shall accrue on each Advance    
during its Term is the rate, per annum, determined by the Facility Agent to be  
the aggregate of:                                                               

(a)  LIBOR relative to such Advance for such Term;                              

(b)  the Margin; and                                                            

(c)  in the case of an Advance denominated in Sterling, the Additional Cost     
applicable thereto from time to time during such Term.                

8.3  Due date                                                                   

Save as otherwise provided in this Agreement, accrued interest on each Advance  
during its Term is payable by the relevant Borrower in arrears on its Repayment 
Date and, if any Term exceeds six months, on the expiry of each period of six   
months during such Term.                                                        

8.4  Duration                                                                   

Interest shall accrue (both before and after judgment) from (and including) the 
Drawdown Date for the relevant Advance to (but excluding) the date that such    
Advance is repaid in full.                                                      

8.5  Notification of LIBOR by Facility Agent                                    

The Facility Agent shall promptly notify each of the other Parties of any       
determination of LIBOR made by it under this Agreement.                         

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9.   DEFAULT INTEREST                                                           

9.1  Failure to Pay                                                             

If any Borrower fails to pay any amount payable by it under this Agreement or   
under the Security Documents on the due date (the unpaid balance being an       
"Overdue Amount"), such Borrower shall, pay default interest on the Overdue     
Amount from (and including) the due date to (but excluding) the date such       
Overdue Amount is repaid in full, both before and after judgment.               

9.2  Rate                                                                       

Subject to Clause 9.4, default interest shall be payable on an Overdue Amount at
a rate, per annum, determined by the Facility Agent to be equal to the aggregate
of two per cent. (2.00%) plus the Margin (which shall be two per cent. (2.00%)  
per annum (and, in the case of an Overdue Amount denominated in Sterling, the   
Additional Cost applicable thereto from time to time) and LIBOR.                

9.3  Default Interest Period                                                    

The period during which an Overdue Amount is outstanding shall be divided into  
successive periods (each a "Default Interest Period"), each of which (apart from
the first) shall start on the last day of the preceding Default Interest Period.
The duration of each Default Interest Period shall (save as provided at Clause  
9.4) be selected by the Facility Agent having regard, where possible, to the    
likely date that the relevant Overdue Amount will be repaid in full.            

9.4  Unexpired Portion                                                          

If any Overdue Amount corresponds to the principal amount payable in respect of 
an Advance which has become repayable prior to its Repayment Date, the first    
Default Interest Period which shall be selected by the Facility Agent shall be  
of a duration equal to the unexpired portion of the Term of such Advance. The   
rate of the default interest payable in respect of such Overdue Amount during   
that unexpired period shall be two per cent. (2.00%) over the rate which would  
have been applicable to such Advance had it not so fallen due provided that the 
Margin applicable thereto shall, in all circumstances, be two per cent. (2.00%) 
per annum.                                                                      

9.5  On Demand                                                                  

Any interest which shall have accrued under this Clause 9 in respect of an      
Overdue Amount shall be payable on demand and, if not paid, compounded at the   
end of its then current Default Interest Period.                                

10.  MARKET DISRUPTION                                                          

10.1 Disruption events                                                          

If, in relation to any Advance and its Term relative thereto:                   

(a)  "LIBOR" is to be determined to pursuant to paragraph (b) of the definition 
thereof and no,                                                       

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 or where there is more than one Reference Bank only one, Reference Bank
supplies an interest rate to the Facility Agent as required by the    
     definition of LIBOR after the Facility Agent has requested such a rate from
the Reference Banks; or                                               

(b)  the Facility Agent shall have received notification from a Bank or Banks   
  whose participations in such Advance constitute at least thirty five per
cent. (35%) by value of such Advance that by reason of circumstances  
affecting the London Interbank Market generally:                      

   (i)  deposits in the currency of such Advance for the same period as such
      Term will not be readily available to them in the London Interbank
      Market in sufficient amounts in the ordinary course of business to
          fund their respective participations in such Advance for such Term; or

(ii) whilst such deposits are so available, the cost of such deposits 
          exceeds LIBOR as determined in relation to such Advance for such Term;
or                                                          

(c)  the Facility Agent shall have received notification from any Bank (an      
"Affected Bank") that by reason of applicable law or regulation it is 
unable to fund its participation in such Advance during such Term by  
     deposit(s) in the currency of such Advance obtained in the London Interbank
Marketing the ordinary course of business;                            

the Facility Agent shall promptly give written notice of such determination or  
notification to the Obligors' Agent and each of the Banks.                      

10.2 Effect                                                                     

After the giving of any notice by the Facility Agent following the occurrence of
any of the events referred to in Clause 10.1 if the requested Advance was to be 
denominated:                                                                    

(a)  in an Optional Currency (other than Sterling or Dollars) such Advance shall
not be made; or                                                       

(b)  in Deutschmarks, Sterling or Dollars, the requested Advance will, subject  
     to the terms and conditions of this Agreement, be made by the Banks, have a
    Term of one month and bear interest during its Term at the rate determined
by the Facility Agent to be the aggregate of the Margin plus the rate 
    determined by each Bank before the Repayment Date of the Advance to be the
     rate which expressed (as a percentage rate per annum) the cost of that Bank
  of funding its portion of the Advance from whatever source it may select
(acting reasonably).                                                  

Within three Business Days of the Facility Agent giving a notice under Clause   
10.1, the Facility Agent and the Company will enter into negotiations with a    
view to agreeing a substitute basis for determining the rate of interest which  
may be applicable to any future Advances.  Any substitute basis that is agreed  
shall be confirmed in writing, be deemed to be a term of this Agreement, take   
effect in accordance with its terms and be binding on the Parties.  The Facility
Agent confirms to the Banks that it will not agree to any substitute basis      
without the prior consent of each Bank.                                         

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PART 4

11.  REPAYMENT, PREPAYMENT AND CANCELLATION                                     

11.1 Reduction of the Facility                                                  

On each date specified in Column 1 below (each such date being a "Reduction     
Date") the Total Commitments shall be reduced such that they are equal to the   
amount set opposite such Reduction Date in Column 2 below less the aggregate    
amount of Commitments that have been previously cancelled under this Agreement  
prior to that Reduction Date otherwise than solely as a result of the operation 
of this Clause 11.1 or Clause 7, whereupon the Revolving Commitment of each Bank
(including, for the avoidance of doubt, the Revolving Commitment of each        
Ancillary Bank disregarding, for this purpose its Ancillary Commitment) shall be
reduced by a proportionate amount and pro rata to their respective Revolving    
Commitments at such time and the Standby L/C Commitments of the Banks shall be  
reduced by a proportionate amount pro rata and the Company shall procure that   
the aggregate Deutschmark Amount of all outstanding Advances, Standby L/Cs      
Ancillary Facilities and amounts owing under Clause 11.3 (if any) shall on such 
date (and at all times thereafter) not exceed the Total Commitments on such     
date.                                                                           

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Column 1                         Column 2                             

Reduction Date                   Total Commitments                    

Fifth anniversary of the date                                         
of this Agreement                DM194,000,000                        

Sixth anniversary of the date                                         
of this Agreement                DM169,000,000                        

Final Repayment Date             Zero                                 

11.2 Repayment of Advances                                                      

(a)  Each Borrower shall repay the full amount of each Advance made to it on the
Repayment Date relating to that Advance, provided always that the full
 amount of each Advance outstanding on the Final Repayment Date shall be
repaid in full on the Final Repayment Date.                           

(b)  Without prejudice to a Borrower's obligation to repay the full amount of   
each Advance made to it on the due date, and without any change to the
    amount of any Advance involved, subject to any contrary legal requirement,
where on the same day as such Borrower is due to repay an Advance such
    Borrower also requests to draw down (and is entitled pursuant to the terms
 of this Agreement to so draw down) an Advance in the same currency, the
amount to be so repaid and the payment by the Facility Agent to such  
 Borrower of the proceeds of the Advance being drawn shall be settled by
   netting off the one against the other so that the amount actually paid in
cash shall be the net amount only.                                    

(c)  Without prejudice to the provisions of Clauses 9 or this Clause, all       
amounts outstanding under this Agreement, whether principal, interest,
     costs and expenses or otherwise, shall be repayable or payable (as the case
may be) in full on the Final Repayment Date.                          

11.3 Facility Agent to notify Banks of demand                                   

As soon as practicable after it receives a demand for payment under a Standby   
L/C, the Facility Agent shall notify the Borrower on whose behalf it was issued 
and the Banks that participated in such Standby L/C of the amount of that demand
and the date on which the amount demanded is required to be paid, whereupon that
Borrower shall be obliged to pay to the Facility Agent for account of such Banks
on such date an amount equal to the amount demanded, as reduced by any sum then 
standing to the credit of the Standby L/C Accounts (as defined in Clause 31.4)  
relating to that Standby L/C.                                                   

11.4 L/C indemnity                                                              

Each Borrower hereby undertakes to indemnify and to hold harmless each Bank from
and against all liabilities, costs, losses, damages and expenses which such Bank
may at any time incur or sustain as a result of its participation in any Standby
L/C requested by such Borrower.                                                 

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11.5 Banks' Discretion                                                          

The Banks that participated in each Standby L/C shall at all times be entitled  
to make any payment under such Standby L/C for which a request, demand or other 
claim has been made thereunder in accordance with the terms thereof without     
further investigation or enquiry and none of them nor the Facility Agent on     
their behalf need in any way concern itself with the propriety of any claim made
or purported to be made under and in the manner required by the terms of such   
Standby L/C accordingly, it shall not be a defence to any demand made of any    
Borrower hereunder, nor shall any of the obligations of any Borrower hereunder  
be impaired by the fact (if it be the case), that any such Bank or the Facility 
Agent on its behalf was or might have been justified in refusing payment, in    
whole or in part, of the amounts so claimed.                                    

11.6 Voluntary cancellation                                                     

The Obligors' Agent may, by giving to the Facility Agent not less than 10       
Business Days' prior notice to that effect, cancel the whole or any part (being 
a minimum amount of DM1,000,000) of the Total Commitments whereupon the         
Revolving Commitment of each Bank (including, for the avoidance of doubt, the   
Revolving Commitment of each Ancillary Bank disregarding, for this purpose its  
Ancillary Commitment) shall be reduced by a proportionate amount and pro rata to
their respective Revolving Commitments at such time and the Standby L/C         
Commitment of each Bank shall be reduced by a proportionate amount pro rata.    
Provided that the Revolving Facility shall not be reduced pursuant to this      
Clause 11.6 to below the Deutschmark Amount of outstanding (or scheduled to be  
outstanding under this Agreement) Advances or the Standby L/C Facility be       
reduced to below the Deutschmark Amount of Standby L/Cs issued that have not    
expired or, in respect of which an amount is due and payable by any Borrower    
under Clause 11.3, or scheduled to be issued (in accordance with this Agreement)
on the relevant date, on the assumption that any Advances due to be repaid, in  
accordance with the provisions of this Agreement are so repaid and that any     
Standby L/Cs due to expire so expire without the Banks party to such Standby    
L/Cs being required to make any (or any further) payment thereunder.            

11.7 Mandatory Prepayment on Listing                                            

(a)  If any steps are taken in or towards the Company or any Group Member being 
Listed the Company shall immediately notify the Facility Agent thereof
specifying the date on which the proposed Listing is to occur.        

(b)  Following receipt of a notice under Clause 11.7(a) above the Facility Agent
    shall consult with the Company during the period of 30 days following such
receipt and shall, if so instructed by the Banks, give a notice of    
continuance notwithstanding the proposed Listing (a "Listing Notice of
    Continuance") of the Facilities.  During such period a Borrower shall only
be permitted to:                                                      

    (i)  serve a Drawdown Request hereunder which specifies that the Repayment
          Date for the Advance requested in such Drawdown Request will fall on a
   date not more than 30 days after the expiration of such period;

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     (ii)  serve a Standby L/C Request hereunder which specifies that the Expiry
         Date for the Standby L/C requested in such Standby L/C request will
           fall on a date not more than 30 days after the expiry of such period;
and                                                       

(iii) utilise an Ancillary Facility such that the obligation of the   
         relevant Borrower thereunder in respect of such utilisation will be
           able to be fulfilled on a date not more than 30 days after the expiry
of such period.                                           

     Upon receipt of a Listing Notice of Continuance, the right of each Borrower
   to serve a Drawdown Request or, as the case may be, a Standby L/C Request
 and to utilise any Ancillary Facility made available to it at such time
without such limitation shall be reinstated.                          

(c)  If at the end of the period referred to in Clause 11.7(b), the Company has 
   not received a Listing Notice of Continuance then the Facility Agent may,
and shall if so instructed by the Majority Banks, declare:            

(i)   that any unutilised portion of the Facilities shall be cancelled
         whereupon the same shall be cancelled and the Revolving Commitment,
           Ancillary Commitment and Standby L/C Commitment of each Bank shall be
reduced to zero;                                          

(ii)  any outstanding Advances with a Repayment Date falling on a date
    later than the relevant Listing, (the "Listing Date") shall be
           prepaid on or before the Listing Date, together with accrued interest
        thereon up to the date of payment and all other amounts payable to
       the Facility Agent and each Bank hereunder (including any amounts
payable under Clause 25.1(b));                            

(iii) each Borrower on whose behalf a Standby L/C was issued with an  
         Expiry Date falling on a date later than the Listing Date shall pay
         to the Facility Agent no later than the Listing Date for the credit
          of each Bank that participated in such Standby L/C an amount in cash
       equal to the undrawn amount of such Standby L/C less any sum then
       standing to the credit of the Standby L/C Accounts (as defined at
         Clause 31.4) relating to that Standby L/C or procure the release of
          each such Bank from its obligations under each such Standby L/C; and

     (iv)  any outstanding amounts under the Ancillary Facility shall be prepaid
   or repaid on or before the Listing Date or, in respect of any
     contingent obligations of the relevant Borrower thereunder cash
       collateralised by the relevant Borrower unless on or prior to the
         Listing Date, the relevant Borrower has procured the release of the
relevant Ancillary Bank from such contingent liability.   

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11.8 Prepayment Fee                                                             

Any prepayment or cash collaterisation of any Utilisation made under any        
provision of this Agreement may be made without any fee or penalty (but without 
prejudice to any amount due pursuant to Clause 25.1(b)).                        

11.9 Cancellation and Prepayment of a Bank's Revolving Commitment and Standby   
L/C Commitment                                                        

(a)  If a Borrower is required to make any additional payment to a Bank pursuant
     to Clause 14 or a Bank claims indemnification under Clause 14 or Clause 15,
     the Obligors' Agent may, provided that the relevant circumstances are still
continuing, serve a notice on such Bank through the Facility Agent,   
   whereupon such Bank's Revolving Commitment, Ancillary Commitment (if any)
and Standby L/C Commitment shall immediately be cancelled.            

(b)  Five Business Days after the date of service of any such notice or on such 
     later date as may be agreed between the Facility Agent, the Obligors' Agent
and such Bank, each Borrower shall:                                   

(i)   repay the relevant Bank's proportion of the outstanding Advances
          together with accrued interest thereon and any other amounts payable
       by each Borrower to such Bank under this Agreement, including any
       amount payable in respect of breakage costs on the amount prepaid
pursuant to Clause 25.1(b); and                           

    (ii)  pay to the Facility Agent for the credit to the relevant Standby L/C
        Account on such Bank's books relating to each Standby L/C in which
     such Bank has participated an amount equal to the amount of its
    participation in that Standby L/C or alternatively procure the
           release of such Bank from its obligations under such Standby L/C; and

   (iii) repay any outstanding amounts under any Ancillary Facility provided
         to it by such Bank and cash collateralise any contingent obligation
         thereunder or, if the contingent liability is that of the Ancillary
          Bank, procure the release of the Ancillary Bank from such contingent
liability.                                                

11.10  Notices of prepayment and cancellation                                   

(a)  Any notice of prepayment and cancellation delivered under this Agreement is
irrevocable.                                                          

(b)  Subject to the provisions of this Agreement each notice shall specify the  
date upon which such prepayment and cancellation is to be made and the
amount of such prepayment and cancellation.                           

11.11  Notification of Bank(s)                                                  

The Facility Agent shall notify the relevant Bank(s) promptly upon receipt of   
any notice of prepayment and cancellation.                                      

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11.12  Only method                                                              

No payment, prepayment or cancellation is permitted other than in accordance    
with the provisions of this Agreement.                                          

11.13  European Economic and Monetary Union                                     

(a)  Definitions  In this Clause 11.13 and in each other provision of this      
Agreement to which reference is made in this Clause 11.13 expressly or
   impliedly (including, without limitation, Clause 15), the following terms
have the meanings given to them is this Clause 11.13:                 

"commencement of the third stage of EMU" means 1 January 1999;        

  "EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Union;                                                       

  "EMU Legislation" means legislative measures of the European Council for
the introduction of, changeover to or operation of a single or unified
     European currency (known as the euro ), being in part the implementation of
the third stage of EMU;                                               

"euro" means the single currency of participating member states of the
European Union;                                                       

"euro unit" means the currency unit of the euro;                      

"national currency unit" means the unit of currency (other than a euro
unit) of a participating member state;                                

"participating member state" means each state so described in any EMU 
legislation; and                                                      

   "Treaty on European Union": means the Treaty of Rome of 25 March 1957, as
  amended by the Single European Act 1986 and the Maastricht Treaty (which
was signed at Maastricht on 7 February 1992 and came into force on 1  
November 1993), as amended from time to time.                         

(b)  Coming into Effect of Provisions:  The provisions of Clauses 11.13(c) to   
     11.13(j) (inclusive) shall come into effect on and from the commencement of
   the third stage of EMU, provided that, if and to the extent that any such
    provision relates to any state (or the currency of such state) which shall
    not be a participating member state on the commencement of the third stage
 of EMU, such provision shall come into effect in relation to such state
    (and the currency of such state) on and with effect from the date on which
such state becomes a participating member state.                      

(c)  Redenomination and Alternative Currencies:  Each obligation under this     
Agreement of a party to this Agreement which has been denominated in a
national currency unit shall be redenominated into the euro unit in   
  accordance with EMU legislation provided that, if and to the extent that
   any EMU legislation provides that following the commencement of the third
  stage of EMU an amount denominated either in the euro or in the national
currency                                                              

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    unit of a participating member state and payable within that participating
 member state by crediting an account of the creditor can be paid by the
debtor either in the euro unit or in that national currency unit, each
   party to this Agreement shall be entitled to pay or repay any such amount
either in the euro unit or in such national currency unit.            

(d)  Utilisations:  Any utilisation in the currency of a participating member   
state shall be made in the euro unit.                                 

(e)  Business Days:  In relation to any amount denominated or to be denominated 
  in the euro or a national currency unit, any reference to a business day
shall be construed as a reference to a day (other than a Saturday or  
Sunday) on which bank are generally open for business in:             

(a)  London; and                                                      

(b)  Frankfurt (or such principal financial centre or centres in such 
       participating member state or states as the Facility Agent may from
time to time nominated for this purpose).                   

(f)  Payments to the Facility Agent:  Clause 13.1 (Payments to the Facility     
     Agent) shall be construed so that, in relation to the payment of any amount
of euro units or national currency units, such amounts shall be made  
available to the Facility Agent in immediately available, freely      
     transferable, cleared funds so such account with such bank in Frankfurt (or
     such other principal financial centre in such participating member state as
the Facility Agent may from time to time nominate for this purpose).  

(g)  Payments by the Facility Agent to the Banks:  Any amount payable by the    
Facility Agent to a Bank under this Agreement in the currency of a    
participating member state shall be paid in the euro unit.            

(h)  Payments by the Facility Agent:  In relation to the payment of any amount  
    denominated in the euro or in a national currency unit, the Facility Agent
  shall not be liable to any Obligor or any Bank in any way whatsoever for
any delay, or the consequences of any delay, in the crediting to any  
     account of any amount required by this Agreement to be paid by the Facility
     Agent if the Facility Agent shall have taken all relevant steps to achieve,
on the date required by this Agreement, the payment of such amount in 
     immediately available, freely transferable, cleared funds (in the euro unit
    or, as the case may be, in a national currency unit) to the account in the
principal financial centre in the participating member state which the
    relevant Obligor or, as the case may be, any Bank shall have specified for
 such purpose. In this Clause 11.13, "all relevant steps" means all such
steps as may be prescribed from time to time by the regulations or    
     operating procedures of such clearing or settlement system as the Agent may
from time to time determine for the purpose of clearing or settling   
payments of the euro.                                                 

(i)  Basis of Accrual:  If, in relation to the currency of any state which      
   becomes a participating member state, the basis of accrual of interest or
commitment commission expressed in this Agreement in respect of that  
currency shall be inconsistent with any convention or practice        

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in the London Interbank Market for the basis of accrual of interest or
     commitment commission in respect of the euro, such expressed basis shall be
  replaced by such convention or practice with effect on the date on which
such state becomes a participating member state provided that, if any 
   Advance in the currency of such state is outstanding immediately prior to
such date, such replacement shall take effect, with respect to such   
Advance, at the end of the then current Term.                         

(j)  Rounding and Other Consequential Changes:  Without prejudice and in        
addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for   
 indebtedness of the Obligors to the Banks and the Banks to the Obligors
under or pursuant to this Agreement:                                  

   (a)  each reference in this Agreement to a minimum amount (or an integral
         multiple thereof) in a national currency unit to be paid to or by the
      Facility Agent shall be replaced by a reference to such reasonably
         comparable and convenient amount (or an integral multiple thereof) in
          the euro unit as the Facility Agent may from time to time specify; and

     (b)  save as expressly provided in this Clause 11.13(j), each provisions of
 this Agreement shall be subject to such reasonable changes of
          construction as the Facility Agent may from time to time specify to be
         necessary or appropriate to reflect the introduction of or changeover
to the euro in participating member states.                 

12.  PARTIAL PAYMENTS                                                           

If the Facility Agent receives a payment which is insufficient to discharge all 
the amounts due and payable by an Obligor under this Agreement on the day such  
payment is received, the Facility Agent shall, subject to the Intercreditor     
Agreements, apply that payment in or towards the discharge of such Obligor's    
obligations under this Agreement in the following order:                        

(a)  firstly (and at its discretion), in or towards payment of any unpaid costs 
and expenses of the Agents incurred by it in connection with this     
Agreement;                                                            

(b)  secondly, in or towards payment (pro rata) of any unpaid fees under Clause 
26;                                                                   

(c)  thirdly, in or towards payment (pro rata) of any unpaid interest (including
default interest) and commission;                                     

(d)  fourthly, in or towards repayment (pro rata) of any unpaid principal; and  

(e)  fifthly, in or towards payment of any other amounts due and payable by such
Obligor under this Agreement.                                         

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13.  PAYMENTS                                                                   

13.1 To Facility Agent                                                          

Subject to the provisions of Clause 13.2, on each date that a Party (other than 
the Facility Agent) is obliged to make a payment under any of the Senior Finance
Documents, that Party shall make the same available to the Facility Agent:      

(a)  if the amount is denominated in Deutschmarks by payment in Deutschmarks and
  in same day funds (or in such funds as may be customary in Frankfurt for
the settlement in Frankfurt of international banking transactions in  
   Deutschmarks) to the Facility Agent at Chase, Frankfurt Manhattan Bank AG
     Account No. 9080002101 in the name of Derby Cycle Corporation or such other
account as the Facility Agent may have stipulated for such purpose;   

(b)  if the amount is denominated in Dollars, by payment in Dollars and in same 
  day funds (or in such funds as may be customary in New York City for the
settlement in New York City of international banking transactions in  
   Dollars) to the Facility Agent at The Chase Manhattan Bank, New York, 270
    Park Avenue New York, NY, 10017 USA, Account No. 544-714108 in the name of
 Derby Cycle Corporation or such other account as the Facility Agent may
have specified for this purpose;                                      

(c)  if the amount is denominated in Sterling, by payment in Sterling in        
  immediately available, freely transferable, cleared funds, by CHAPS Sort
     Code 40-52-06 to the Facility Agent at The Chase Manhattan Bank, 125 London
    Wall, London EC2Y 5AJ or such other account as the Facility Agent may have
specified for this purpose;                                           

(d)  if the amount is denominated in Dutch Guilders by payment in Dutch Guilders
  and in same day funds (or in such funds as may be customary in Amsterdam
  for the settlement in Amsterdam of international banking transactions in
     Dutch Guilders) to the Facility Agent at ING Barings, Amsterdam Account No.
    0051612607 in the name of Derby Cycle Corporation or such other account as
the Facility Agent may have stipulated for such purpose; and          

(e)  if the amount is denominated in an Optional Currency (other than Sterling, 
 Dutch Guilders or Dollars), by payment in such Optional Currency and in
   immediately available, freely transferable, cleared funds to such account
 with such bank in the principal financial centre of the country of such
Optional Currency as the Facility Agent shall have specified for this 
purpose.                                                              

13.2 Distribution by the Agents                                                 

(a)  All payments to be made by any Obligor under any Senior Finance Document   
   shall be paid to or to the order of the Security Agent, provided that the
Security Agent hereby consents to all such payments being made to the 
 Facility Agent in accordance with the terms of this Agreement until the
Security Documents shall become enforceable and the Security Agent    
  withdraws such consent by notice to the Facility Agent and the Obligors.

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(b)  Each payment received by any Agent for the account of another Person       
pursuant to Clause 13.1 shall:                                        

    (i)  in the case of a payment received for the account of any Borrower, be
        made available by that Agent to that Borrower by application, on the
date and in the funds of receipt:                           

         (A)  first, in or towards payment of any amounts then due and payable
           (and unpaid) by that Borrower under any of the Senior Finance
Documents; and                                    

       (B)  second, in payment to such account as that Borrower shall have
          properly designated for the purpose in the relevant Drawdown
Request or otherwise in writing; and              

  (ii) in the case of any other payment, be made available by the Facility
          Agent to the Person for whose account the payment was received (in the
       case of a Bank, for the account of its Facility Office) on the date
          and in the currency and funds of receipt to such account of the Person
       with the office or bank in the country of the currency concerned as
        that Person shall have previously notified to the Facility Agent for
the purposes of this Agreement.                             

(c)  The Facility Agent or the Security Agent (as the case may be) shall        
  promptly distribute payments received for the account of the Banks among
  the Banks pro rata to their respective entitlements and in the funds and
currency of receipt.                                                  

13.3 Currency                                                                   

(a)  Interest and commission accrued under this Agreement shall be payable in   
the currency in which the relevant amount in respect of which it has  
accrued was denominated during the period of accrual.                 

(b)  The principal of each Advance shall be repaid or prepaid in the currency in
which it is denominated.                                              

(c)  Amounts payable to the credit of a Standby L/C Account (as defined in      
    Clause 31.4) relating to a Standby L/C shall be payable in the currency in
which the relevant Standby L/C is denominated.                        

(d)  Any amount (other than of principal and/or interest) calculated on or by   
  reference to or payable in respect of another amount shall be payable in
the currency in which that other amount is denominated at the time of 
payment.                                                              

(e)  Any other amount payable under this Agreement, unless otherwise provided,  
shall be payable in Deutschmarks.                                     

(f)  If the Facility Agent receives a payment for the account of another Party  
in connection with                                                    

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 this Agreement, the Facility Agent shall make that payment available to
     such Party for value the same day by transfer to such account of such Party
with such bank in the principal financial centre of the country of the
  currency of such payment as that Party shall have previously notified to
the Facility Agent in writing for this purpose.                       

(g)  If a sum is paid under this Agreement to the Facility Agent for the account
of another Party, the Facility Agent shall not be obliged to pay that 
amount to that Party until the Facility Agent has established, to its 
satisfaction, that it has actually received and retained that sum.    

(h)  The Facility Agent may, but shall not be obliged to assume that it has     
     received and retained all amounts payable to it under this Agreement on the
due date and, in reliance on that assumption, make available to the   
     relevant Party a corresponding amount. If, however, such a sum has not been
   received and retained by the Facility Agent, the relevant Party shall, on
   demand by the Facility Agent, promptly refund the corresponding amount to
the Facility Agent together with interest on that amount from (and    
     including) the date of payment by the Facility Agent to (but excluding) the
date such amount is repaid to the Facility Agent in full, at a rate   
    calculated by the Facility Agent so as to reflect its cost of funding such
payment.                                                              

13.4 Set-off and counterclaim                                                   

(a)  All payments required to be made by the Obligors' under any of the Senior  
Finance Documents shall be made without reference to any set-off or   
    counterclaim and shall be made free and clear of and without any deduction
for or on account of any set-off or counterclaim.                     

(b)  For so long as an Event of Default has occurred which is still continuing, 
     each Obligor authorises each Bank to apply any credit balance to which such
  Obligor under any of the Finance Documents is entitled on any account of
     such Obligor with that Bank in satisfaction of any sum due and payable from
  such Obligor to that Bank under any of the Finance Documents but unpaid.
   Each Bank is, accordingly, authorised to purchase with any credit balance
 of any such account such other currencies as may be necessary to effect
   such application. No Bank shall be obliged to exercise any right given to
it by this Clause 13.4(b).                                            

PART 5  

14.  TAXES                                                                      

14.1 Payment of Taxes                                                           

All payments to be made by any Obligor under or in respect of any of the Senior 
Finance Documents shall be made free and clear of and without any deduction or  
withholding of Tax unless (but without prejudice to this Clause 14) any such    
Obligor is required by law to make such payment subject to the deduction or     
withholding of Tax.                                                             

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14.2 Gross-up                                                                   

Subject to prompt compliance by the Finance Parties with the provisions of this 
Clause 14.2 and Clauses 14.7, 14.8 and 14.9, if any Taxes or amounts in respect 
thereof must be deducted from any payment by an Obligor under any Senior Finance
Document (other than in respect of any Tax imposed or a payment which would not 
have been imposed on that payment, if the relevant Finance Party to which or for
whose account that payment was made, had been at the date of the payment a      
Qualifying Bank) or must be made from any amounts paid by any Obligor (or from  
any corresponding payment by any Finance Party to any other Finance Party under 
this Agreement), or any such payment shall otherwise be required to be made     
subject to any Tax, such Obligor shall pay such additional amounts as may be    
necessary to ensure that the relevant Finance Party receives a net amount equal 
to the full amount which it would have received had payment not been made       
subject to the relevant Tax.  Each Finance Party shall notify each Obligor      
through the Facility Agent of the application of this Clause 14 to any payment  
then due or to become due to it under any Senior Finance Document promptly upon 
its becoming aware of the same.                                                 

14.3 Tax indemnity                                                              

Without prejudice to the provisions of Clauses 14.1 and 14.2 if any Finance     
Party, or any other Person through which a payment relating to this Agreement or
the Security Documents is made, is required to make any payment on account of   
Tax (other than Tax on its overall net income) on or in relation to any sum     
received or receivable under this Agreement or, as the case may be, the relevant
Security Document by that Finance Party, or any other Person through which such 
a payment is made, the Borrower shall, upon demand by the Facility Agent,       
indemnify the relevant Finance Party against such payment, together with any    
interest, penalties and expenses payable or incurred in connection therewith.   

14.4 Notification of claims                                                     

Without prejudice to Clauses 14.2 or 14.3 if the relevant Borrower so requests, 
the relevant Finance Party shall notify such Borrower of the reason for making a
claim under Clauses 14.2 or 14.3.  This Clause 14.4 shall not oblige any Finance
Party to disclose any information relating to the organisation of its business  
or tax affairs or how the amount requested was calculated if it considers, in   
its sole opinion, that such information is confidential.                        

14.5 Tax receipts                                                               

If, as a result of a payment being made by or on behalf of the Borrower under   
this Agreement or the Security Documents, the Borrower is required to pay any   
Tax, the Borrower shall pay such Tax in full to the relevant authority within   
the time allowed for such payment under applicable law. The Borrower shall, as  
soon as reasonably practicable after payment falls due to the relevant          
authority, deliver to the Facility Agent any original (or a Certified Copy) of a
receipt issued by the relevant authority evidencing that payment in full has    
been received by the relevant authority.                                        

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14.6 Tax Saving                                                                 

(a)  In the event that, following the imposition of any Tax on any payment by   
     any Obligor (or any corresponding payment by any Finance Party to any other
     Finance Party under this Agreement) in consequence of which such Obligor is
required under Clauses 14.2 or 14.3,  to pay such Tax or to pay any   
 additional amount in respect of it, any Finance Party shall in its sole
opinion and based on its own interpretation of any relevant laws or   
regulations (but acting in good faith) receive or be granted a credit 
     against or remission for or deduction from or in respect of any Tax payable
     by it, or shall obtain any other relief in respect of Tax on its profits or
income, which in such Finance Party's opinion in good faith is both   
     identifiable and quantifiable by it without requiring such Finance Party or
  its professional advisers to expend a material amount of time or incur a
     material cost in so identifying or quantifying or at the written request of
     the Obligor and if the Finance Party is of the opinion that it will recover
    the cost incurred, after incurring such cost (any of the foregoing, to the
    extent so identifiable and quantifiable, being referred to as a "saving"),
     such Finance Party shall, to the extent that it can do so without prejudice
to the retention of the relevant saving and subject to deduction for  
    reasonable costs and subject further to such Obligor's obligation to repay
 the amount to such Finance Party if the relevant saving is subsequently
    disallowed or cancelled (which repayment shall be made promptly on receipt
of notice by such Finance Party of such disallowance or cancellation),
reimburse such Obligor promptly after receipt of such saving by such  
Finance Party with such amount as such Finance Party shall in its sole
   opinion but in good faith have concluded to be the amount or value of the
relevant saving.                                                      

(b)  Nothing contained in this Agreement shall interfere with the right of any  
  Finance Party to arrange its Tax and other affairs in whatever manner it
thinks fit and, in particular, no Finance Party shall be under any    
   obligation to claim relief from Tax on its corporate profits, or from any
similar Tax liability, in respect of the Tax, or to claim relief in   
   priority to any other claims, reliefs, credits or deductions available to
  it or to disclose details of its Tax affairs.  No Finance Party shall be
required to disclose any confidential information relating to the     
organisation of its affairs.                                          

(c)  Each Finance Party will notify the relevant Obligor promptly of the receipt
    by such Finance Party of any saving and of such Finance Party's opinion as
to the amount or value of that saving.                                

14.7 U.S Taxation-delivery of forms and statements                              

(a)  Each Finance Party which is not a U.S. Person shall (as soon as it is      
reasonably practicable for it to do so after the date hereof or upon  
   becoming a party to this Agreement (as the case may be)) deliver (through
     the Facility Agent) to each U.S. Obligor which is a Borrower duly completed
     and signed, two copies of such form or forms as may be required to indicate
that such Finance Party is entitled to receive payments under this    
    Agreement without deduction, withholding or payment by the U.S. Obligor of
 any United States federal Taxes, including without limitation, either:-

    (i)  two copies of Form 1001 of the Internal Revenue Service of the United
States of                                                   

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          America (relating to an applicable double revenue tax treaty concluded
by the United States of America); or                        

    (ii) two copies of Form 4224 of the Internal Revenue Service of the United
        States of America (relating to income effectively connected with the
    conduct of a trade of business in the United States of America).

    Each such Finance Party , subject as otherwise provided in Clause 14.7(b),
    shall deliver (through the Facility Agent) to each U.S. Obligor additional
   duly completed copies of any of the above forms and/or such additional or
successor forms as shall be adopted form time to time by the Internal 
    Revenue Service of the U.S.A. if it is notified by the U.S. Obligor or the
Internal Revenue Service of the U.S.A. that any previous such form    
  delivered by it pursuant to this Clause 14.7 has expired or that Finance
Party becomes aware that any such form shall have become incomplete or
  inaccurate in any respect unless prior to that delivery any event occurs
which renders the relevant form inapplicable.                         

(b)  Each Finance Party which is a U.S. Person shall deliver (through the       
  Facility Agent) to each U.S. Obligor a statement signed by an authorised
   signatory of the Finance Party to the effect that it is a U.S. Person and
if necessary to avoid United States backup withholding, two a duly    
completed and signed copies of Internal Revenue Service Form W-9 (or  
     successor form) establishing that such Finance Party is organised under the
laws of the United States and is not subject to United States backup  
withholding.                                                          

(c)  Each Finance Party that is not a U.S. Person that is entitled to an        
   exemption from or reduction of withholding tax under the IRC with respect
    to payments under this Agreement shall deliver to the Company (with a copy
     to the Facility Agent), at the time or times prescribed by applicable laws,
    properly completed and executed documentation prescribed by applicable law
   or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate.                        

(d)  The Facility Agent shall have no responsibility or liability for and no    
obligation to check the accuracy or appropriateness of any form or    
 statement delivered by any Finance Party pursuant to Clauses 14.7(a) or
14.7(b) respectively.                                                 

(e)  If any Finance Party determines, as a result of any change in applicable   
     law, regulation or treaty, or in any official application or interpretation
thereof, that it is unable to submit to any U.S. Obligor any form or  
     certificate that the Finance party is obliged to submit pursuant to Clauses
   14.7(a) or 14.7(b), or that such Finance Party is required to withdraw or
cancel any form or certificate previously submitted, the Finance Party
shall promptly notify the U.S. Obligor of that fact.                  

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14.8 Double tax-treaties                                                        

Each Bank and the Facility Agent or the relevant Obligor (as the case may be)   
shall as soon as reasonably practicable after the date hereof or upon becoming a
party to this Agreement or (as the case may be) after the date a Borrower not   
incorporated in the United Kingdom accedes to this Agreement submit the form or 
forms to the appropriate revenue authorities as may reasonably be necessary in  
order to comply with the requirements of any applicable law or relevant double  
taxation (if any) in relation to the payment of any interest and commitment     
commission hereunder to such Bank or the Facility Agent free (or subject to any 
applicable reduced rate) of deduction or withholding of or on account of any Tax
which would otherwise be applicable and, if such Bank or the Facility Agent     
fails to comply with this Clause 14.8 the relevant Obligor shall not have any   
obligation to pay any increased amount required by Clauses 14.2 or 14.3 if and  
to the extent that it would not have been required to make any deduction or     
withholding (or would only have been required to make any such deduction or     
withholding at any applicable reduced rate) of or on account of any Tax had such
Bank or the Facility Agent complied with this Clause 14.8.                      

14.9 Qualifying Bank                                                            

Each Bank that becomes a party to this Agreement on a date occurring 30 days or 
more after the date of this Agreement confirms to each of the Obligors that as  
at the date it becomes a party to this Agreement it is a Qualifying Bank and    
agrees to notify the Obligors' Agent (through the Facility Agent) promptly if it
becomes aware that it is not a Qualifying Bank.                                 

15.  INCREASED COSTS                                                            

15.1 Indemnity for increased costs                                              

If any Bank determines that, as a result of:                                    

(a)  the introduction or variation of any law or any change in the              
administration or interpretation of any law; and/or                   

(b)  compliance with any request from or requirement of any central bank or     
other fiscal, monetary or other authority (including any request or   
     requirement which affects the manner in which a Bank or any Holding Company
 of such Bank is required to, or does, maintain capital resources having
     regard to such Bank's obligations under this Agreement and to amounts which
are owing to it under this Agreement); and/or                         

(c)  the introduction, or changeover or operation of the euro in any            
participating member state;                                           

     (i)  such Bank, or any Holding Company of such Bank, incurs a cost (being a
      cost which it would not otherwise have incurred) as a result of it
       having entered into and/or it performing its obligations under this
        Agreement and/or it assuming or maintaining its Revolving Commitment
    or its Standby L/C Commitment under any this Agreement and/or it
       making one or more Advances under this Agreement and/or assuming or
maintaining a contingent liability under any Standby L/C; or

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  (ii) such Bank, or any Holding Company of such Bank, is unable to obtain
      the rate of return on its overall capital which it would have been
    able to obtain but for it having entered into and/or assuming or
      maintaining its Revolving Commitment or its Standby L/C Commitment
under this Agreement; or                                    

(iii) there is any increase in the cost to such Bank, or any Holding    
     Company of such Bank, of funding or maintaining all or any of the
       assets or liabilities comprised in a class of assets or liabilities
  formed by, or including, those referable to this Agreement; or

     (iv) such Bank, or any Holding Company of such Bank, becomes liable to make
    any payment on account of Tax (other than Tax on its overall net
       income) or otherwise on or calculated by reference to the amount of
         Advances made or to be made by it under this Agreement and/or any sum
received or receivable by it under this Agreement,          

then the relevant Obligor shall, from time to time on demand by the   
 Facility Agent, pay to the Facility Agent for the account of that Bank,
    amounts sufficient to indemnify that Bank against, as the case may be, (i)
such costs, (ii) such reduction, (iii) such increased costs (or such  
proportion of such increased costs as is, in the opinion of that Bank,
    attributable to its funding, maintaining or assuming assets or liabilities
referable to this Agreement) or (iv) such liability.                  

15.2 Exceptions                                                                 

No Bank shall be entitled to make any claim under Clause 15.1 which:            

(a)  is compensated for by the operation of Clause 14;                          

(b)  is attributable to any change in the rate of Tax on the overall net income 
of such Bank (or the overall net income of the Bank or its Holding    
Company);                                                             

(c)  arises as a result of a breach by such Bank of any regulation, guideline or
requirement of any central bank or other fiscal, monetary or other    
authority (whether or not having the force of law);                   

(d)  arises as a result of the implementation by any authority after the date of
   this Agreement of any of the matters set out in the paper prepared by the
   Basle Committee on Banking Regulation and Supervisory Practice dated July
   1988 (as amended in November 1991) entitled "International Convergence of
Capital Measurement and Capital Standings".                           

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15.3 Notification by Bank                                                       

Any Bank proposing to make a claim pursuant to Clause 15.1 shall promptly upon  
becoming aware of its entitlement to make such a claim notify the Obligors'     
Agent (through the Facility Agent), setting out, in reasonable detail, the      
calculation and cause of the amounts claimed. No Bank shall be required to      
disclose any information relating to the organisation of its affairs which it   
considers to be confidential.                                                   

15.4 Regulation D Compensation                                                  

Any Bank which is required by Regulation D issued by the Board of Governors of  
the Federal Reserve System of the USA to maintain and does maintain any reserves
against "Eurocurrency liabilities" (as defined in such Regulation) pursuant to  
such Regulation may require any U.S. Obligor to pay, contemporaneously with each
payment of interest on any Advance (in respect of which the Eurodollar Reserve  
Percentage applies) made to such U.S. Obligor for any Term relative thereto,    
additional interest on the participation of such Bank in that Advance at the    
rate per annum determined from the formula (i) LIBOR applicable to such Advance 
for that Term divided by (ii) one minus the Euro-Dollar Reserve Percentage minus
LIBOR applicable to such Advance for that Term.  Any Bank requiring payment by  
any U.S. Obligor of such additional interest shall notify such U.S. Obligor and 
the Facility Agent at least five Business Days prior to the last day of each    
Term each relevant Advance of the amount due to be paid to it with respect to   
such Advance pursuant to this Clause 15.4 (certifying in that notice that the   
amount claimed does not exceed such part of the cost to such Bank of maintaining
such reserves as in the opinion of that Bank should fairly and reasonably be    
apportioned to such Advance), which notice shall be final and binding in the    
absence of manifest error.  No Bank shall be required to disclose in support of 
any claim hereunder any information reasonably regarded by such Bank as being   
confidential.                                                                   

16.  ILLEGALITY                                                                 

16.1 Illegality in relation to Advances                                         

If, as a result of the introduction, imposition or variation of any law,        
regulation or regulatory requirement of any authority (including any fiscal or  
monetary authority), it is unlawful for any Bank to make, maintain or fund any  
Advance, or be a party to this Agreement then, unless such illegality is avoided
in accordance with Clause 17:                                                   

(a)  after delivery of a notice to the Facility Agent detailing the unlawful    
    circumstances, the relevant Bank shall not be obliged to make any Advances
   or make available any Facilities under any Ancillary Facility to which it
     is a party and its Revolving Commitment (including part thereof that is, at
   such time, being utilised under an Ancillary Facility) shall be cancelled
   and reduced to zero, whereupon its Ancillary Commitment (if any) shall be
cancelled and reduced to zero);                                       

(b)  on the date specified in the notice delivered under Clause 16 (a) (which   
shall not be earlier than the last date on which the relevant Bank    
     determines (acting reasonably) it may legally maintain its participation in
 the Advances and/or its Revolving Commitment), the Borrower shall repay
such Bank's participation in each outstanding Advance, together with  
accrued                                                               

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interest thereon and any other amounts owing to that Bank under the   
    Senior Finance Documents or, if the relevant Bank is party to an Ancillary
Facility, cash collateralise any contingent obligations owed to such  
Ancillary Bank under such Ancillary Facility.                         

16.2 Illegality in relation to Standby L/Cs                                     

If, as a result of the introduction, imposition or variation of any law,        
regulation or regulatory requirement of any authority (including any fiscal or  
monetary authority), it is unlawful for any Bank to participate in or perform   
its obligations in respect of all or any of the Standby L/Cs issued or to be    
issued hereunder, then unless such illegality is avoided in accordance with     
Clause 17:                                                                      

(a)  after delivering of a notice to the Facility Agent detailing the unlawful  
   circumstances, the relevant Bank shall cease to be obliged to participate
in such Standby L/Cs hereunder; and                                   

(b)  if the Facility Agent on behalf of such Bank so requires, the Borrower that
  requested each Standby L/C in which that Bank has participated shall, on
such date (which shall not be earlier than the last date on which the 
  relevant bank determines (acting reasonably) it may lawfully perform its
obligations under each Standby L/C in which such Bank has participated
    hereunder) pay to the Facility Agent for credit of that Bank for credit to
   the appropriate Standby L/C Account on such Bank's books relating to that
 Standby L/C, an amount equal to the amount of its participation in that
Standby L/C.                                                          

17.  MITIGATION                                                                 

17.1 Mitigation                                                                 

(a)  If, in respect of any Finance Party, circumstances arise which would, or on
the giving of notice would, result in:                                

(i)  the application of Clause 10; or                                 

     (ii) an increase in the amount of any payment to be made to it under Clause
14.1; or                                                    

(iii) any claim for indemnification being made or any obligation to     
       increase the amount any payment under any of Clauses 14.2, 14.3 and
Clause 15.1; or                                             

(iv) any prepayment or cancellation under Clause 16,                  

     then, without limiting the obligations of any Obligor under this Agreement,
  and without prejudice to the terms and conditions of those Clauses, that
Finance Party will (provided that it considers that it is reasonably  
 practicable for it to do so), promptly upon becoming aware of the same,
    notify the Facility Agent and, in consultation with the Facility Agent and
the Obligors' Agent, take steps to mitigate the effects of such       
circumstances, including, if appropriate, changing its Facility Office
 and/or transferring its rights and obligations under the Senior Finance
Documents to another branch or financial institution acceptable to the
Obligors' Agent.                                                      

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(b)  No Finance Party shall be obliged to take any steps under this Clause 17 if
     it considers, in its opinion, that to do so might have an adverse effect on
its business, operation, financial condition, or its return under this
   Agreement or it considers such steps to be unreasonable. This Clause 17.1
    shall not oblige any Finance Party to disclose any information relating to
  the organisation of its business, operations, financial condition or any
   other matters if it considers, in its sole opinion, that such information
is confidential.                                                      

(c)  In the circumstances where the relevant Borrower would otherwise be        
     entitled or required to prepay any Bank's participation in the Utilisations
     or make a payment into such Bank's Standby L/C Accounts (or any of them) or
 procure such Bank's release from its obligations under each Standby L/C
     (other than as a result of the application of Clause 16 or Clause 21), such
 Bank will, if requested by the Company, transfer by means of a Novation
  Certificate pursuant to Clause 29.2, such participation (and the related
   Revolving Commitment and Standby L/C Commitment) to any bank or financial
    institution which is a Qualifying Bank and is specified by the Company and
   has confirmed to such Bank its willingness to acquire such participation,
 such Revolving Commitment and such Standby L/C Commitment by means of a
 Novation Certificate, subject to receipt by such Bank from the proposed
    transferee of an amount equal to such Bank's entitlement to all principal,
accrued interest and other sums payable by the Obligors or any of them
under the Senior Finance Documents (whether or not then due) and any  
amounts then standing to the credit of its Standby L/C Accounts and   
     provided further that any consents required from any Beneficiary in respect
thereof has been obtained.                                            

17.2 Costs and Expenses of Mitigation                                           

Any costs and expenses reasonably incurred by any Finance Party pursuant to this
Clause 17 shall be paid by the Obligors' Agent within five Business Days after  
receipt of a demand specifying the same in reasonable detail.                   

PART 6        

18.   REPRESENTATIONS AND WARRANTIES                                            

18.1  General representations and warranties                                    

The Company acknowledges that the each of the Finance Parties have entered into 
the Finance Documents in full reliance on the following statements and          
represents and warrants to each of the Finance Parties that :                   

(a)   Due incorporation and status: each Obligor is a private limited company,  
duly incorporated and validly existing under the place of its       
     incorporation, possesses the capacity to sue and be sued in its own name,
     and has the power to carry on its business substantially as now being (or
    will immediately after the Closing be) conducted and to own its property
and other assets;                                                   

(b)   Corporate power: each Obligor has the power to execute, deliver and       
    perform its obligations under each of the Transaction Documents to which
it is a party, and any other                                        

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     document or instrument executed, delivered or to be executed or delivered
  by it under any of the Transaction Documents; all necessary corporate,
     shareholder and other action has been taken or will be taken to authorise
    the execution, delivery and performance of the same and no limitation on
     its powers to borrow, to guarantee and to grant security will be exceeded
   as a result of the performance of the transactions contemplated by such
documents;                                                          

(c)   Binding obligations: the Transaction Documents, and any other document or 
  instrument executed or delivered or to be executed or delivered by any
Group Member thereunder, constitute or, as the case may be, will    
    constitute valid and legally binding obligations of each of the Obligors
   which are expressed to be a party thereto and, as far as the Company is
aware, in the case of the Recapitalisation Documents and the Note   
Documents of the other parties thereto and, without limiting the    
      generality of the foregoing (and subject to registration under Section 395
  Companies Act 1985 (as amended), the filing of Uniform Commercial Code
financing statements and filings with the United States Patent and  
    Trademark Office and the United States Copyright Office, in each case as
 contemplated by the Security Documents, the Filing of Forms 47 in the
   Companies Registry Office in Dublin in respect of the Irish Debentures,
the registration of the Debentures entered into by those Obligors   
incorporated in the United Kingdom at the Land Registry or the Land 
     Charges Registry (as appropriate), (to the extent necessary) registration
in the Land Registry in Ireland in respect of property charges to be
      created by the Irish Debentures, the filing of particulars of the relevant
   trade marks (if any) assigned or charged under such mortgage debenture,
    the registration of the transfers of the shares which are the subject of
 the relevant mortgages and other Encumbrances created by the Security
      Documents and other filings and registrations necessary in connection with
the Security Documents (including any filings required to be made in
connection with Sections 155 to 158 of the Companies Act 1985), and 
    compliance with and registration under any analogous requirements in any
   other jurisdiction) each of the Security Documents creates the security
    interest which that Security Document purports to create or, as the case
   may be, accurately evidences a security interest which has been validly
created (except that no warranty is given as to whether any such    
Encumbrance is of a fixed or floating nature);                      

(d)   No conflict with other obligations: the execution and delivery of each of 
    the Transaction Documents, and any other document or instrument executed
 or delivered or to be executed or delivered thereunder by any Obligor
      party thereto, and the performance of each of their respective obligations
     thereunder, and compliance with their respective provisions, will not (i)
      contravene any existing applicable law, statute, rule or regulation or any
 judgment, decree or permit to which any of them are subject, conflict
 with, or result in any breach of any of the terms of, or constitute a
      default under, any agreement or other instrument to which any Group Member
     is expressed to be a party or is subject to or by which it, or any of its
     property is bound in a manner which is reasonably likely to result in any
      liability on the part of the Finance Parties (or any of them) to any third
    party by reason of any such conflict, (ii) nor, so far as the Company is
aware, will it result in the creation, or requirement to create, any
      Encumbrance on the assets of any Obligor (save for any Encumbrance created
     pursuant to the Security Documents), or (iii) contravene or conflict with
      any provision of the Memorandum and Articles of Association (or similar or
analogous documents) of any Obligor;                                

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(e)   Consents: all material, authorisations, approvals, consents, licences,    
    exemptions, filings, registrations and other matters required by law for
     or in consequence of (i) the Recapitalisation, and/or (ii) the entry into
and performance by each Obligor of and/or the validity of any of the
     Transaction Documents to which it/they are expressed to be a party or the
     transactions to be implemented pursuant thereto and/or (iii) the carrying
    on of the business of each Obligor and each Material Group Member in the
 ordinary course have been obtained or effected or will be obtained or
      effected prior to the date required by law, save (in the case of (ii)) for
 the filing in the United Kingdom of the prescribed particulars of the
    Security Documents pursuant to Section 395 of the Companies Act 1985 (as
amended), the Filing of Forms 47 in the Companies Registry Office in
Dublin in respect of the Irish Debentures, the registration of the  
Debentures entered into by those Obligors incorporated in the United
Kingdom at the Land Registry or the Land Charges Registry (as       
     appropriate), (to the extent necessary) registration in the Land Registry
in Ireland in respect of property charges to be created by the Irish
      Debentures, the filing of particulars of the relevant trade marks (if any)
assigned or charged under the Debentures, the registration of the   
   transfers of the shares which are the subject of the relevant mortgages
      and other Encumbrances created by the Security Documents and other filings
      and registrations necessary in connection with the Security Documents, all
of which filings and registrations will be effected promptly after  
execution;                                                          

(f)   No winding-up: no order has been made or petition presented (which has not
     been discharged or stayed within 14 days of it being so presented) or any
      corporate action taken, or any other steps been taken or legal proceedings
      started or resolution passed for the winding-up of any Group Member or for
   an administration order in respect of any Group Member and no distress,
 execution or other process has been levied on any assets of any Group
     Member which has not been discharged or which in the bona fide opinion of
     the Facility Agent is not being contested by the relevant Group Member in
good faith;                                                         

(g)   Insolvency: no order has been made or petition presented or resolution    
    passed for an administration order in respect of any Group Member and no
     distress, execution or other process has been levied on any assets of any
   Group Member which has not been discharged, no Group Member has stopped
     payment and is insolvent or unable to pay its debts within the meaning of
    Section 123(1) Insolvency Act 1986 (construed as if the figure stated at
      section 123(1)(a) was $100,000), it has not been determined that any Group
Member is unable to pay its debts in accordance with Section 123(2) 
  Insolvency Act, no administrative receiver or receiver or receiver and
   manager, trustee or similar officer has been appointed by any Person of
any part of the business or assets of any Group Member;             

(h)   No default: (i) no Event of Default has occurred and is continuing which  
has not been waived; (ii) (so far as the Company is aware) save as  
previously notified to the Facility Agent in accordance with Clause 
     19.1(e)(vii) no Potential Event of Default has occurred and is continuing
   which has not been waived; and (iii) no Group Member is in breach of or
     default under any agreement to which it is a party or which is binding on
it or any of its assets which could have a Material Adverse Effect; 

(i)   No litigation: no action, litigation, arbitration, alternative dispute    
     resolution, or administrative or regulatory proceeding is taking place or
pending against any Group                                           

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      Member, and, so far as the Company is aware, no such action, litigation or
    administrative proceeding is threatened nor are there any current labour
disputes involving any Group Member which:                          

(i)  in the case of any such action, litigation, alternative dispute
           resolution, arbitration, administrative or regulatory proceedings are
        reasonably likely to be determined adversely to the relevant Group
         Member, and which, if so adversely determined would have a Material
Adverse Effect; or                                        

(ii) in the case of any such labour disputes, would have a Material 
Adverse Effect;                                           

(j)   Group Structure:                                                          

(i)  the Structure Memorandum contains descriptions which are true, 
           complete and correct, of the corporate and ownership structure of the
           Group and the Intra-Group Loan Memorandum contains descriptions which
       are true, complete and correct of all inter-company loans as they
        will be immediately after the Diamond Back Acquisition and the IGF
Liquidation;                                              

    (ii) there are no companies, partnerships, Joint Ventures, businesses or
           the like having material assets or indebtedness or trading activities
      (a) which are or will be a Subsidiary of the Company immediately
      after the Diamond Back Acquisition and the IGF Liquidation whose
     intended ownership and corporate structure are not shown in the
        Structure Memorandum or (b) in which it or any of its Subsidiaries
          will have an interest immediately after the Diamond Back Acquisition
  and the IGF Liquidation which are not shown in the Structure
Memorandum;                                               

   (iii)  there are no re-organisational steps affecting the Company or any of
      its Subsidiaries (including, without limitation, any significant
    transfers of business or assets from one Person to another and
     significant disposals) which are not described in the Structure
Memorandum; and                                           

(iv) immediately following the Diamond Back Acquisition and the IGF 
          Liquidation there will be no Material Group Members other than those
companies set out at Schedule 11;                         

(k)   Accountant's Report:                                                      

   (i)  save as fully and fairly disclosed in the Accountant's Report, the
     financial information in relation to the Group contained in the
          Accountant's Report was prepared using generally accepted accounting
        principles in the United Kingdom, and give a true and fair view of
         the state of affairs of the Group as at the date to which they were
        prepared and as at such date there were no material liabilities of
          the Group which were not disclosed by or shown as being provided for
in the Accountant's Report;                               

(ii) there has been no material adverse change in the business,     
operations, assets,                                       

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       prospects, or financial condition of the Group (taken as a whole)
since the date the Accountant's Report was prepared; and  

(iii)  the Accountant's Report includes or consolidates into such       
         financial information the results of each Group Member and does not
      consolidate or include the results of any other company, limited
partnership or like entity or business other than Derby   
International;                                            

(l)   Initial Information:                                                      

     (i)  all information contained in the Information Package was true in all
       material respects (or, in the case of information provided by any
          Person other than the Company or its advisors as far as the board of
    directors of the Company is aware, was true to the best of its
        knowledge and belief in all material respects at the date (if any)
         ascribed thereto in the Information Package) and, in respect of the
  Group's Pre-Closing Accounts was prepared in accordance with
     Applicable Accounting Principles, all expressions of opinion or
  intention and all forecasts and projections contained in the
           Information Package were arrived at after careful consideration, were
    fair and were based on reasonable grounds, and the Information
           Package as of its date was not misleading in any material respect and
          did not omit to disclose any matter, failure to disclose which would
          result in any information contained in the Information Package being
         misleading in any material respect in the context of this Agreement
and the transactions contemplated hereby; and             

(ii) there has been no material adverse change in the business,     
       operations, assets, prospects or financial condition of the Group
           (taken as a whole) since the date of the annual consolidated accounts
referred to at paragraph (i) above.                       

 (iii) The Derby Group Consolidated Budget and the information contained
in it:                                                    

         (a) was prepared by the Company based upon reasonable assumptions for
             each entity included in Derby Cycle Group Consolidated Budget and
   in the case of the Company and the Swedish Obligor such
          assumptions take account of the revenues, income, expenditure,
           assets and liabilities expected to result from the Diamond Back
Acquisition and the funding thereto;                

    (b) provided by any Person other than a Group Member is true and
complete and accurate in all material respects;     

  (c) has been prepared in accordance with Applicable Accounting
Principles; and                                     

     (d) all expressions of opinion or intention and all forecasts and
              projections contained in the Derby Cycle Group Consolidated Budget
           were arrived at after careful consideration, were fair and were
  based on reasonable grounds, and the Derby Cycle Group
        Consolidated Budget as of its date was not misleading in any
             material respect and did not omit to disclose any matter, failure
              to disclose which would result in any information contained in the

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         Derby Cycle Group Consolidated Budget being misleading in any
     material respect in the context of this Agreement and the
transactions contemplated hereby; and               

(iv) there has been no material adverse change in the business,     
       operations, assets, prospects or financial condition of the Group
           (taken as a whole) since the date of the Financial Accounts ending 29
November 1998.                                            

(m)   All information is correct: all financial and other information provided  
    in writing by, or on behalf of, any Group Member to any Finance Party in
     connection with this Agreement or the Finance Documents after the date of
    this Agreement was true and accurate in all material respects when given
      and (so far as it is aware having made due and proper enquiries) there are
      no other facts or matters, the admission of which would have made any such
   statement or information provided misleading or a materially inaccurate
representation of the situation described therein and all opinions, 
projections and forecasts given or made have been honestly made and 
based upon reasonable assumptions;                                  

(n)   Financial Accounts: the Business Plan and the Financial Accounts most     
   recently delivered to the Facility Agent under this Agreement after the
      Closing (including for the avoidance of doubt the Monthly Accounts for the
Accounting Period ending 31 November 1998) have been prepared in    
accordance with Applicable Accounting Principles and (in the case of
   audited annual Financial Accounts) give a true and fair view or (in the
case of unaudited Financial Accounts) fairly present of the state of
    affairs of the such Group Member (consolidated if prepared on that basis
      pursuant to Applicable Accounting Principles or if required to be prepared
    on that basis pursuant to the terms of this Agreement) as at the date to
which they are made up and as at such date there were no material   
   liabilities of any Group Member not disclosed in the Financial Accounts
which according to Applicable Accounting Principles should have been
     disclosed and since the Financial Accounts most recently delivered to the
Facility Agent under this Agreement after Closing there has been no 
  material adverse change in the financial condition or prospects of the
Group (as a whole);                                                 

(o)   Tax liabilities: no claims in excess of $50,000 (or the equivalent in     
   other currencies) in aggregate are being or are reasonably likely to be
      asserted against the Group (as a whole), any Group Member or Group Members
with respect to Taxes which are reasonably likely to be determined  
adversely to such Group Member and no Group Member is overdue in the
 filing of any Tax returns required to be filed by it and has paid all
   Taxes shown to be due on Tax returns or any assessments made against it
   other than those contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with
Applicable Accounting Principles;                                   

(p)   Acquired Assets: all of the Acquired Assets which have been acquired by   
      the Company pursuant to the Recapitalisation are beneficially owned by the
     Company which is, or is entitled to become, the legal registered owner of
the Acquired Assets free from all Encumbrances, claims and competing
  interests whatsoever save as expressly permitted under this Agreement;

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(q)   Ownership of assets:                                                      

      (i) (save to the extent that such may be disposed of without breaching the
         terms of any of the Finance Documents) with effect from and after the
        Closing, each Material Group Member will have good title to or valid
          leases or licences of or is otherwise entitled to use and permit other
     Group Members to use all assets necessary to conduct its business
       substantially as conducted by it at the Closing or reflected in the
  Accountant's Report and without limiting the generality of the
       foregoing, save as aforesaid each Obligor has, with effect from and
   after the Closing a good and valid title in its own name of its
     interest in all properties specifically referred to by address or
title number in the Security Documents; and                 

     (ii) each Obligor is the absolute legal and beneficial owner of all rights,
        title and interest in and to the assets, free from any right of set-
     off, counterclaim, dispute or Encumbrance (other than a Permitted
     Encumbrance) comprising the Eligible Finished Goods, the Eligible
          Receivables, the Eligible Raw Materials and the Cash Collateral Amount
        that are taken into account when computing such Borrower's Borrowing
Base;                                                       

(r)   Intellectual Property Rights:                                             

  (i) so far as it is aware (after due and careful enquiry) it (and each
          Group Member) owns or has licensed to it all the Intellectual Property
          Rights which are material in the context of its business and which are
         required by it in order for it to carry on its business in accordance
with the Business Plan and it does not (nor do any of its   
         Subsidiaries), in carrying on its business, infringe any Intellectual
Property Rights of any third party in any way;              

(ii) none of the Material Intellectual Property Rights is, to its     
  knowledge, being infringed nor, to its knowledge, is there any
       threatened infringement of the Intellectual Property Rights, by any
third party; and                                            

(iii)  all registered material Intellectual Property Rights owned by it   
       (or any Subsidiary of it) are subsisting and all actions (including
        payment of all fees) required to maintain the same in full force and
effect have been taken;                                     

(s)   Representations under Recapitalisation Documents: it has no reason to     
      believe that any representation or warranty by any Person party thereto in
any of the Recapitalisation Documents is untrue or inaccurate in any
material respect;                                                   

(t)   Pari passu:  the obligations of the Obligors under this Agreement and of  
  the Group Members under the Senior Finance Documents to which they are
   expressed to be a party (to the extent that any such obligations do not
acquire enhanced priority by virtue of the security created and/or  
  conferred by the Security Documents) rank at least pari passu with all
     other present and future unsecured and unsubordinated obligations of such
    Group Member with the exception of any obligations which are mandatorily
preferred by law or arise by equity and not only by contract;       

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(u)   Constitutional documents: the documents delivered to the Facility Agent   
   pursuant to Clause 4 or pursuant to an Accession Agreement are, if such
     documents relate to a Borrower, as at the date the first Advance (if any)
    is made to such Borrower and, in the case of a Guarantor, as at the date
     such documents are delivered, true, up to date and complete copies in all
material respects, of originals which had not been amended, varied, 
     supplemented or superseded in any way which would be likely to affect the
      interest of the Finance Parties under any of the Senior Finance Documents;

(v)   Transaction Documents:                                                    

   (i)  the Recapitalisation Documents, as furnished to the Facility Agent
           under this Agreement, contains all the terms of the Recapitalisation;

(ii)  the Recapitalisation Documents contain all the terms of the     
           agreements and arrangements between the Investors and the Company (or
any Group Member);                                        

  (iii) other than as provided in (iv) below the Service Contracts and the
           Articles of Association of the Company contain all the material terms
           of all the agreements and arrangements between the Executives and the
          Investors and Derby International and between the Executives and the
Company (or any other Group Member);                      

(iv) the Management Agreement (if any) contains all the terms and   
arrangements between Thayer and the Company;              

      (v)  the Service Contracts of each of the Executives will be in full force
and effect in the respective agreed forms at Closing;     

(vi) the Note Documents and any agreements or documents referred to 
  therein or contemplated thereby contain all the terms of the
    agreements and arrangements between the Note Issuers, the Note
          Trustee and the Noteholders, and each of the other Persons expressed
to be a party thereto in connection therewith;            

(vii) the Diamond Back Acquisition Agreement, as furnished to the     
        Facility Agent under this Agreement, contains all the terms of the
Diamond Back Acquisition; and                             

   (viii) the Diamond Back Acquisition Agreement contains all the terms of the
agreements and arrangements between the Parties thereto.  

    (ix) the GSIC Note Documents contain all the terms of the agreements and
        arrangements between the GSIC Note Issuer, the GSIC Noteholder and
      each other Persons expressed to be a party thereto in connection
therewith.                                                

(w)   Encumbrances and Financial Indebtedness:                                  

(i)     immediately following the Closing no Encumbrances (save for 
              Permitted Encumbrances (if any)) will exist over any assets of any
Group Member; and                                   

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   (ii)    immediately following the Closing no Group Member will have any
            Financial Indebtedness outstanding (save for Permitted Financial
     Indebtedness) and no Group Member will have any Financial
             Indebtedness owed to it by another Group Member (other than under
             the Finance Documents) that is not stated in the Intra-Group Loan
Memorandum; and                                     

(iii)   the execution of the Transaction Documents by each Obligor  
            expressed to be a party thereto will not create any Encumbrances
           except as required by the Security Documents and such Obligor's
     exercise of its rights and performance of its obligations
             thereunder will not result in the existence of, nor oblige it to,
            create, any Encumbrance over all or any of its present of future
revenues or assets except a Permitted Encumbrance;  

(x)   Environmental Matters:                                                    

   (i)     so far as the Company is aware, (after due and careful enquiry)
      each Group Member has obtained all requisite Environmental
              Licences required for the carrying on of its business as currently
            conducted and has at all times complied in all material respects
            with (a) the terms and conditions of such Environmental Licences
and (b) all other applicable Environmental Law;     

     (ii)    so far as the Company is aware (after due and careful enquiry) no
              Dangerous Substance has been used, disposed of, generated, stored,
             transported, dumped, released, deposited, owned, leased, occupied
          or controlled by any Group Member (including any offsite waste
            management or disposal location utilised by any Group Member) in
     circumstances where this would be likely to result in the
            imposition of a liability on any Group Member which would have a
Material Adverse Effect;                            

  (iii)   so far as the Company is aware (after due and careful enquiry)
           there is no Environmental Claim (whether in respect of any site
            previously or currently owned or occupied by any Group Member or
              otherwise) pending or threatened, and there are no past or present
            acts, omissions, events or circumstances that would be likely to
            form the basis of any Environmental Claim (whether in respect of
           any site previously or currently owned or occupied by any Group
             Member or otherwise), against any Group Member which in each case
           is reasonably likely to be determined against that Group Member
         and which if so decided would have a Material Adverse Effect;

 (iv)    without limiting the generality of Clause 18.1(x)(i), (ii) or
              (iii) above, so far as the Company is aware (after due and careful
          enquiry) as at the Closing (a) there is no Environmental Claim
             (whether in respect of any site previously or threatened which is
           reasonably likely to be determined against any Group Member and
            which if so decided would have a Material Adverse Effect, (b) so
       far as it is aware (after due enquiry) there are no past or
            present acts or omissions, events or circumstances that would be
        likely to form the basis of any material Environmental Claim
(whether in respect of such site or                 

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           otherwise) against any Group Member (which is, or will upon the
           Closing be a Group Member which, if adversely determined, would
         have a Material Adverse Effect and, (c) so far as it is aware
              (after due enquiry), since Closing, each Group Member has complied
         in all material respects with the terms and conditions of all
              requisite Environmental Licences and applicable Environmental Laws
           which in each case, if not complied with, would have a Material
           Adverse Effect and neither it nor any Group Member has received
 any notice from any third party of any breach of such
         Environmental Licence or Environmental Law which would have a
Material Adverse Effect;                            

(y)   ERISA:                                                                    

     (i)     no act, omission or transaction has occurred which will result in
          imposition on any U.S. Obligor or any ERISA Affiliate (whether
directly or indirectly) of:-                        

            (1)   either a civil penalty assessed pursuant to section 502(i)
                of ERISA or a tax imposed by section 4975 of the IRC; or

              (2)   breach of fiduciary duty liability damages under section 409
of ERISA;                               

    (ii)    no U.S. Obligor or ERISA Affiliate has maintained or contributed
             to any Plan that is or was subject to Title IV or ERISA or to the
           minimum funding requirements of Section 302 of ERISA or Section
412 of the IRC;                                     

      (iii)   payment has been made of all amounts which any U.S. Obligor or any
             ERISA Affiliate is required under the terms of each Multiemployer
        Plan or applicable law to have paid as contributions to such
Multiemployer Plan;                                 

     (iv)    each U.S. Obligor and each ERISA Affiliate are in compliance with
         the presently applicable provisions of ERISA and the IRC with
respect to each Multiemployer Plan;                 

      (v)     neither any U.S. Obligor nor any ERISA Affiliate (nor any trade or
             business that was an ERISA Affiliate) has at any time contributed
             to or been obliged to contribute to any Multiemployer Plan which,
           upon the complete or partial withdrawal from such Multiemployer
       Plan, could result in the imposition of complete or partial
withdrawal liability;                               

(z)   Investment Company Status: each U.S. Obligor is either not an "investment 
      company" within the meaning of the United States Investment Company Act of
      1940, as amended or is exempt from all provisions of such Act, as amended;

(aa)  Solvency of U.S. Obligors: at the date of this Agreement and after giving 
    effect to the transactions contemplated by the Transaction Documents and
after                                                               

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giving effect to each Advance, each U.S. Obligor is, and after      
     consummation of this Agreement and after giving effect to all obligations
incurred and Encumbrances created by such U.S. Obligor in connection
      herewith, will be Solvent. No U.S. Obligor is entering into this Agreement
 or the transactions contemplated hereby with actual intent to hinder,
delay or defraud either present or future creditors. As used herein,
   "Solvent" means, with respect of any U.S. Obligor on a particular date,
      that on such date (i) the fair saleable value of the property of such U.S.
Obligor is greater than the total amount of liabilities, including, 
      without limitation, contingent liabilities, of such U.S. Obligor, (ii) the
     amount that will be required to pay the probable liabilities of such U.S.
Obligor on its debts as they become absolute and matured will not be
      greater than the fair saleable value of the assets of such U.S. Obligor at
     such time, (iii) such U.S. Obligor is able to realise upon its assets and
 pay its debts and other liabilities, contingent obligations and other
  commitments as they mature in the normal course of business, (iv) such
     U.S. Obligor does not intend to, and does not believe that it will, incur
  debts or liabilities beyond such U.S. Obligor's ability to pay as such
     debts and liabilities mature, and (v) such U.S. Obligor is not engaged in
      a business or a transaction, and is not about to engage in a business or a
transaction, for which such U.S. Obligor's property would constitute
   unreasonably small capital after giving due consideration to prevailing
practices in the industry in which such U.S. Obligor is engaged. In 
computing the amount of any contingent liability at any time, it is 
 intended that such liability will be computed at the amount which, in
      light of all the facts and circumstances existing at such time, represents
the amount that might reasonably be expected to become an actual or 
      matured liability. For purposes of determining whether any U.S. Obligor is
 solvent such U.S. Obligor shall take place into account all rights of
  contribution, reimbursement, subrogation and other similar rights that
    such U.S. Obligor may have from any other Obligor by virtue of such U.S.
Obligor making any payment in its capacity as a Guarantor hereunder.

(bb)  U.S. Reserve Regulations:                                                 

      (i)     no Group Member 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 (as defined herein);

(ii)    no part of the proceeds of any Advance will be used, whether
            directly or indirectly, and whether immediately, incidentally or
           ultimately, for any purpose that entails a violation of, any of
              Regulation G, T, U or X of the Federal Reserve Board of the U.S.A;

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(cc)  U.S. Security Documents:                                                  

     (i)     the U.S. Pledge Agreement is, or when executed will be, effective
             to create in favour of the Security Agent for the ratable benefit
         of the Secured Beneficiaries (as defined in the U.S. Security
           Agreement), a legal, valid and enforceable security interest in
          Collateral (as defined in the U.S. Pledge Agreement) and, when
           such Collateral is the Pledged delivered to the Security Agent,
              the U.S. Pledge Agreement shall constitute a fully perfected first
            priority lien on, and security interest in, all right, title and
           interest of the pledgors thereunder in such Collateral, in each
            case prior and superior in right to any other person, subject to
           Permitted Encumbrances that have a priority as a matter of law;

(ii)    the U.S. Security Agreement is, or when executed will be,   
       effective to create in favour of the Security Agent for the
           ratable benefit of the Secured Beneficiaries (as defined in the
      U.S. Security Agreement) and, when financing statements in
             appropriate form are filed in the offices specified in Schedule 5
          to the Perfection Certificate (as defined in the U.S. Security
        Agreement), the U.S. Security Agreement shall create a fully
             perfected lien on, and security interest in, all right, title and
             interest of the grantors thereunder in such Collateral in which a
         security interest may be perfected by the filing of financing
            statements in each case prior and superior in right to any other
          person, other than with respect to Permitted Encumbrances that
have a priority as a matter of law;                 

   (iii)   to the extent that the laws of the United States are applicable
              thereto, when the U.S. Patent and Trademark Security Agreement and
        the U.S. Patent Assignment for Security Purposes (the "US IP
             Security Documents") are recorded in the United States Patent and
            Trademark Office , the U.S. IP Security Documents shall create a
         fully perfected lien on, and security interest in, all right,
          title and interest of the grantors thereunder in the federally
           registered and applied for Patents and Trademark Collateral (as
              defined in the U.S. IP Security Documents), in each case prior and
           superior in right to any other Person (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 U.S. registered trademarks, trademark
             applications, U.S. patents and patent applications and copyrights
  acquired by the grantors after the date hereof and the
              registration of any copyright may be required to perfect a lien in
          such copyright), subject to Permitted Encumbrances that have a
priority as a matter of law;                        

(dd)  U.S. Obligors:                                                            

     (i)     no Obligor has any ownership interest in any capital stock of any
              Person organized under the laws of any State of the United States,
             except for such ownership interests that are Collateral under the
U.S. Pledge Agreement; and                          

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     (ii)    No Obligor directly owns any assets located in the United States,
             except for (x) assets constituting real property, (y) assets that
              are subject to the U.S. Pledge Agreement in accordance with clause
       (i) above and (z) assets that are Collateral under the U.S.
Security Agreement; and                             

(ee)  Year 2000: in relation to each Obligor which is not a Dormant Company, any
     reprogramming required to permit the proper functioning, in and following
the year 2000, of (i) each such Obligor's computer systems and (ii) 
     equipment containing embedded microchips (including systems and equipment
   supplied by others or with which each such Obligor's systems interface)
  and the testing of all such systems and equipment, as so reprogrammed,
   will be completed by March 31, 1999 in the case of (i) and 30 September
1999 in the case of (ii).  The cost to each such Obligor of such    
    reprogramming and testing and of the reasonably foreseeable consequences
of year 2000 to each such Obligor (including, without limitation,   
      reprogramming errors and the failure of others' systems or equipment) will
     not result in a Default or a Material Adverse Effect.  Except for such of
the reprogramming referred to in the preceding sentence as may be   
   necessary, the computer and management information systems of each such
 Obligor are and, with ordinary course upgrading and maintenance, will
    continue for the term of this Agreement to be, sufficient to permit each
Obligor to conduct its business without Material Adverse Effect.    

(ff)  Diamond Back Acquired Assets:  all the Diamond Back Acquired Assets which 
 have been acquired by the Company or, as the case may be, the Swedish
      Obligor (the "Relevant Acquirer") pursuant to the Diamond Back Acquisition
     are beneficially owned by the Relevant Acquirer and the Relevant Acquirer
  is, or is entitled to become the legal registered owner of the Diamond
 Back Acquired Assets free from any Encumbrances, claims and competing
     interests whatsoever save as is expressly permitted under this Agreement.

(gg)  Disqualified Stock: none of the Company's share capital constitutes       
Disqualified Stock as defined in the Senior Notes.                  

18.2  Repetition of representations and warranties                              

The representations and warranties contained in Clause 18.1;                    

(a)   are made by the Company on the date of this Agreement; and                

(b)   will be deemed to be repeated by the Company on each date that a Request  
 is delivered to the Facility Agent, on each Drawdown Date, each Issue
      Date, each Interest Date and each Expiry Date as if made with reference to
the facts and circumstances existing at that time,                  

Provided that the representations and warranties set out in Clause 18.1, (k),   
(l), (m) (to the extent that it relates to information delivered prior to       
Closing), (n) (to the extent it relates to the Business Plan), (p), and (s) of  
Clause 18.1 shall not be repeated after Closing.                                

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PART 6

19.   UNDERTAKINGS                                                              

19.1  Information undertakings                                                  

(a)   Financial Accounts                                                        

  The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:                                                    

(i)     Audited Financial Accounts:                                 

             (A)   promptly upon the same being available but in any event not
                   later than [120] days from the end of the annual Accounting
                 Period to which the Financial Accounts relate the audited
             consolidated Financial Accounts of the Group for such
                  Accounting Period ending after the date hereof (comprising
                  at least an audited consolidated balance sheet, profit and
                    loss account and historic cash flow statement (and the notes
thereto) for such Accounting Period);   

          (B)   (without prejudice to (A) above) promptly after the same
                have been prepared the audited Financial Accounts of any
                  Group Member to the extent that the same are prepared; and

         (C)   promptly upon the same being available but in any event
              prior to the date falling 150 days from the end of the
                    Accounting Period to which the Financial Accounts relate or,
                    if later, 150 days from the date the relevant request by the
                  Facility Agent was made, the audited Financial Accounts of
             any Material Group Member previously requested by the
              Facility Agent (acting reasonably) for such Accounting
                    Period (comprising at least an audited consolidated (if such
              Group Member has a Subsidiary or Subsidiaries) balance
             sheet, profit and loss account and historic cash flow
             statement (and the notes thereto) for such Accounting
Period),                                

            together, in each case, with the report of the auditors thereon,
the notes thereto and the directors' report thereon;

    (ii)    Quarterly Financial Accounts: as soon as practicable, and in any
           event within 45 days after the end of each quarterly Accounting
         Period copies of the unaudited consolidated accounts for such
       Accounting Period of the Group, such unaudited consolidated
            accounts to show the detailed financial information provided for
            quarterly financial reporting in the Proforma Financial Accounts
            (comprising at least (A) a consolidated balance sheet and profit
             and loss account for such quarter and cumulatively for the period
             from the beginning of the current annual Accounting Period to the
end of such                                         

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             quarterly Accounting Period, (B) a year to date consolidated cash
           flow statement for the period from the beginning of the current
            annual Accounting Period to the end of such quarterly Accounting
             Period, (C) details of each item of Capital Expenditure which was
            not included in the budget for such period delivered pursuant to
            Clause 19.1(b) in excess of $100,000 (or the equivalent in other
           currencies) in such quarterly Accounting Period, and (D) with a
           report on the main operational, commercial and financial issues
              arising during such Accounting Period and explaining any variances
        of more than five per cent. (5%) against the budget for such
quarterly Accounting Period ;                       

      (iii)   Monthly Management Financial Accounts: as soon as practicable, and
    in any event within 30 days after the end of the monthly
          Accounting Period to which they relate copies of the unaudited
           monthly management accounts of the Group such unaudited monthly
             management accounts split out monthly and on a year to date basis
           to show the detailed information provided for monthly financial
             reporting in the Proforma Financial Accounts, including a written
              report by an Executive Officer on the main operating and financial
     issues (if any) arising during such Accounting Period and
             confirmation that all premiums payable in that monthly Accounting
          Period in respect of all Material Insurances maintained by the
            Group (or any Group Member) have been paid by such time so as to
           ensure that those Material Insurances remain in full force, all
              such Financial Accounts to be approved by an Executive Officer (or
             in their absence one other director of the Company) and one other
            director of the Company (in each case without incurring personal
       liability) as giving an accurate and reasonable view of the
     financial condition and trading performance of the Group;

     (iv)    Borrowing Base Summary: in addition to any Borrowing Base Summary
             required to accompany a Request under Clause 6, the Company shall
              deliver a completed Borrowing Base Summary as soon as practicable,
         and in any event within 15 days after the end of each monthly
Accounting Period;                                  

(v)     Auditor's Confirmations:                                    

           (A)   at the same time as the Financial Accounts for the annual
                Accounting Period in each year are delivered (or, if not
               delivered, required to be delivered) pursuant to Clause
19.1(a)(i); and                         

             (B)   upon the Facility Agent notifying the Company that it is of
                the opinion that the process by which one or more of the
                    Borrowing Base Summaries is prepared requires further review
        and input, as soon as practicable after any such
    notification, and within 30 days thereafter,

         the Company undertakes that it will procure that the Auditors
        shall deliver a certificate to the Facility Agent confirming
             whether or not each of the Borrowing Base Summaries most recently
delivered under this Agreement (or                  

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          such other Borrowing Base Summaries as are identified for such
          purpose by the Facility Agent) were, in all material respects,
           true, complete and accurate and prepared in accordance with the
              provisions of this Agreement and whether or not the Company has in
       place satisfactory methods and procedures for obtaining and
            collating the information required in order for it to be able to
        compile accurate Borrowing Base Summaries for this Agreement
     having regard, where appropriate, to each of the specific
              requirements of this Agreement relating thereto including, without
limitation, Clause 6.                               

(b)   Budgets                                                                   

The Company undertakes it shall furnish, or procure that there shall be         
furnished, to the Facility Agent in sufficient copies for each of the Finance   
Parties to the Facility Agent:                                                  

 (i)     not later than 15 days before the commencement of each annual
           Accounting Period a budgeted consolidated balance sheet, profit
       and loss account, cash flow statement, rolling monthly cash
             forecast of the Group and budgeted monthly Capital Expenditure of
            the Group, for (or in the case of a balance sheet, as at the end
             of) the following annual Accounting Period, together with details
          of the principal assumptions underlying such projections and a
           description of the proposed activities of the Group during such
     annual Accounting Period, all as approved by the board of
              directors of the Company and in each case, the format, heading and
         characterisation shall be consistent with the form of monthly
             management accounts delivered pursuant to Clauses 19.1(a)(ii) and
19.1(a)(iii);                                       

      (ii)    not later than the date on which the monthly Financial Accounts in
        respect of January in each year are required to be delivered
       pursuant to the terms Clause 19.1(a)(iii) a revision of the
      budgets furnished to the Facility Agent pursuant to Clause
           19.1(b)(i) adjusted so as to reflect the actual opening balance
       sheet of the annual Accounting Period to which they relate;

  (iii)   if, in the course of any annual Accounting Period, the Company
           updates or revises any of the budgets furnished to the Facility
            Agent pursuant to Clause 19.1(b)(i) or Clause 19.1(b)(ii) in any
         material respect, the Borrower shall furnish, or procure that
          there shall be furnished (as soon as possible and in any event
          within fourteen days of such revision), to the Facility Agent,
              sufficient copies for each of the Finance Parties, such updated or
       revised forecasts, together with a statement explaining the
requirement for such updating or revision; and      

 (iv)    at the same time as it is required to deliver to the Facility
        Agent Financial Accounts required by Clauses 19.1(a)(ii) and
              19.1(a)(iii) , the Company shall deliver to the Facility Agent, in
         the agreed form, in sufficient copies for each of the Finance
        Parties a cash flow forecast for the Group to the end of the
           current annual Accounting Period together with the basis of the
assumptions used in its preparation.                

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(c)   Certificates                                                              

  The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:                                                    

(i)     at the same time as the Financial Accounts for any annual   
              Accounting Period are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(i):        

              (A)   a report of the Company in a form reasonably satisfactory to
           the Facility Agent setting out in reasonable detail
                   computations establishing, as at the date of such Financial
                    Accounts, whether each of the financial undertakings set out
           in Clause 20 were complied with, (B) setting out in
                    reasonable detail computations demonstrating the application
             of the financial ratios set out in Clause 20 for such
            Accounting Period such report being confirmed by the
Auditors as being true and accurate; and

           (B)   a certificate signed by two Authorised Signatories of the
                   Company (one of whom shall be an Executive Officer (in each
                    case without incurring personal liability)), stating that as
            the date of such certificate no Event of Default has
               occurred and is then continuing, and that so far as the
                 Company is aware having made due and diligent enquiry, no
                  Potential Event of Default has occurred and is continuing,
            or providing details of any such Defaults and of any
 remedial action proposed to be taken; and

(ii)    at the same time as the Financial Accounts for any quarterly
              Accounting Period are delivered (or, if not delivered, required to
           be delivered) pursuant to Clause 19.1(a)(ii) above a Compliance
            Certificate, signed by two Authorised Signatories of the Company
             (one of which shall be an Executive Officer (in each case without
incurring personal liability)):                     

             (A)   setting out in reasonable detail computations establishing,
                  as at the date of such Financial Accounts, whether each of
                  the financial conditions set out in Clause 20 was complied
with; and                               

             (B)   stating that as at the date of such certificate no Event of
                   Default has occurred and is then continuing and that so far
            as the Company is aware having made due and diligent
                    enquiry, or providing details of any such Default and of any
  remedial action proposed to be taken ; and

(iii)   at the same time as the Financial Accounts for the annual   
    Accounting Period in each year are delivered (or, if not
              delivered, required to be delivered) pursuant to Clause 19.1(a)(i)
            above the Company shall procure that the Auditors shall, confirm
(by reference to the relevant Financial Accounts)   

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             whether or not each of the Financial conditions set out in Clause
20 was complied with.                               

(d)   Reviews: The Majority Banks shall be entitled to request the Facility     
    Agent no more frequently than quarterly to conduct a review of books and
accounting records of each Borrower to examine the basis of the     
   information used by the Company to compile the Borrowing Base Summaries
delivered to the Facility Agent hereunder provided that:            

  (i)     such a review does not take place more than once in any annual
              Accounting Period unless the Facility Agent (acting reasonably) is
           of the opinion that some or all of the information contained in
  any of the Borrowing Base Summaries may be inaccurate:

      (ii)    any Bank may request on reasonable notice a copy of the results of
              any such review carried out by or on behalf of the Facility Agent;

   (iii)   neither the Facility Agent nor any of its employees, directors,
         agents or advisers shall have any responsibility or liability
           whatsoever for the accuracy or completeness of any such review;
and                                                 

    (iv)    the Company shall indemnify the Facility Agent on demand for all
              reasonable costs and expenses incurred in connection with any such
review;                                             

(e)   Notifications: The Company undertakes it shall furnish, or procure that   
    there shall be furnished to the Facility Agent, in sufficient copies for
each of the Finance Parties:                                        

      (i)     promptly upon their despatch (and in any event within ten Business
              Days), all notices, reports or other documents despatched by or on
            behalf of any Obligor to (a) its shareholders (in their capacity
         as shareholders) generally (or any class of them); (b) to its
              creditors generally (in their capacity as creditors), or any class
              of them; and; (c) (without prejudice to (b) above) the Noteholders
            or, the Note Trustee, or any SEC filings made in connection with
all or any of the Note Documents or otherwise;      

   (ii)    promptly, and in any event within ten Business Days of the same
             being instituted or, to its knowledge, threatened, details of any
              litigation, arbitration or administrative proceedings involving it
            or any of its Subsidiaries which, if adversely determined might,
              have a Material Adverse Effect or which would involve liability or
              potential liability or alleged liability in excess of $250,000 (or
its equivalent in other currencies);                

    (iii)   at the same time as the monthly Financial Accounts in respect of
            the period during which the same becomes known to the Company or
         any other Group Member is delivered under Clause 19.1(a)(ii),
             19.1(a)(iii) (or, if not delivered, the latest date by which they
            are required to be delivered) reasonable details of all warranty
             and indemnity claims in excess of $100,000 made by or against any
Group Member or any shareholder of the Company      

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            pursuant to, or in respect of, the Recapitalisation Documents or
         which could be so made if Clause 9(b) of the Recapitalisation
Agreement was disregarded;                          

   (iv)    promptly, and in any event within ten Business Days of the same
             being delivered or received, and in any event by 15 June 1998 the
Completion Accounts;                                

     (v)     promptly (and in any event within ten Business Days or such other
              period as the Facility Agent may require) upon being so requested,
       such further information regarding its financial condition,
             business and assets and that of the Group and/or any Group Member
             (including any requested amplification or explanation of any item
             in any Financial Accounts, budgets, projections or other material
              provided by any Group Member under this Agreement) as the Facility
     Agent or any Finance Party through the Facility Agent may
reasonably request from time to time;               

    (vi)    at the same time as the monthly Financial Accounts in respect of
              the period during which the same occurs are delivered under Clause
         19.1(a)(ii) or Clause 19.1(a)(iii) (or, if not delivered, the
            latest date by which they are required to be delivered), details
            of all transfers of shares of any Group Member (which when taken
              together with any other transfer made to Persons connected with or
           associated with the relevant transferee equate to 3 per cent or
         more of the issued share capital of such Group Member) in the
          share capital of any Group Member (including any change in the
       beneficial ownership of any such shares of which any of the
           directors of the Company become aware) and details of the issue
       and allocation of any shares in the capital of the Company;

      (vii)   written details of any Default forthwith upon the Company becoming
        aware of the same, and of any remedial steps being taken and
proposed to be taken in respect of that Default;    

   (viii)  (other than to a transferee or in respect of replacement Senior
            Notes) promptly (and in any event within ten Business Days) upon
             the Company being aware, details of any Additional Securities (as
            defined in the Note Indentures) being issued after Closing under
or pursuant to the Note Documents;                  

  (ix)    promptly (and in any event, within ten Business Days) upon the
        Company being aware, details of any Group Member that is not
         listed at Schedule 12 that becomes a "Material Group Member";

  (x)     promptly (and in any event, within ten Business Days) upon the
              Company being aware, details of any Group Member that is a Dormant
Company, ceasing to be a Dormant Company;           

      (xi)    promptly upon the Company being aware (and in any event within ten
   Business Days), details of any change in any applicable
Environmental Law                                   

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             which is reasonably likely to have a Material Adverse Effect; and

      (xii)   promptly (and in any event within ten Business Days) after receipt
        or despatch thereof deliver to the Facility Agent sufficient
          copies for each of the Finance Parties certified copies of all
          notices given by any Group Member under any of the Transaction
Documents.                                          

(f)   Listings: The Company shall promptly (and in any event within 14 days of  
  the relevant proposal) inform the Facility Agent of any Listing of any
Group Member proposed by the Board of Directors.                    

(g)   Audit and Accounting Dates: The Company will ensure that:                 

 (i)     the annual Financial Accounts to be delivered to the Facility
      Agent pursuant to Clause 19.1 are audited by the Auditors;

(ii)    it shall at all times have duly appointed Auditors;         

  (iii)   each Accounting Period of the Group shall end on an Accounting
Date; and                                           

      (iv)    each annual Accounting Period of each Group Member shall, with the
              exception of Derby Nederland BV and its Subsidiaries (which annual
         Accounting Period shall end on 30 November or, if such annual
           Accounting Period is changed at any time after the date of this
         Agreement, 31 December) no later than 30 June 1998, end on 31
            December, and no Group Member will change its financial year end
             without prior written consent of the Facility Agent other than to
conform its financial year end to 31 December.      

(h)   GSIC Notes:  If at any time the Company elects to make any issuance of    
      GSIC Notes (whether in respect of or in lieu of interest on any GSIC Notes
     then outstanding or otherwise), the Company will, at least ten days prior
      to such issuance, furnish to the Facility Agent a report: (i) stating that
    the Company is permitted under the Note Indentures to incur an amount of
   indebtedness not less than the aggregate principal amount of GSIC Notes
intended to be issued; (ii) setting forth the provision of the Note 
      Indentures under which the Company is so permitted and (iii) setting forth
   in reasonable detail calculations demonstrating that the conditions for
incurring indebtedness set forth therein have been complied with.   

19.2  Form of financial statements                                              

Each set of consolidated financial statements delivered by or on behalf of the  
Company in connection with this Agreement shall, subject to Clause 19.3 and the 
proviso stated below be prepared (and if appropriate, audited) on the same basis
as the Pre-Closing Accounts and in accordance with Applicable Accounting        
Principles provided that if the Auditors have confirmed in writing to the       
Facility Agent that a change in the basis on which the Financial Accounts are   
prepared is:                                                                    

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(a)   necessary so as to take into account changes in applicable laws since the 
date the above mentioned Financial Accounts were prepared;          

(b)   necessary so that the Financial Accounts to which such proposed change    
  relates are not qualified by the Auditors in a manner which they would
otherwise have been qualified; or                                   

(c)   in their opinion, appropriate;                                            

and, in the case of a proposed change to which paragraph (b) or (c) above       
applies the Facility Agent, acting on the instructions of the Majority Banks has
approved the proposed change (such approval not to be unreasonably withheld or  
delayed), from such date each set of financial statements delivered by or on    
behalf of any Group Member in connection with this Agreement shall be prepared  
as aforesaid, but subject to such change.                                       

19.3  Variation of financial undertakings                                       

In the case of any change in Applicable Accounting Principles, any change to be 
made in accordance with Clause 19.2 or any proposed change in accounting        
reference date of the Company the Company shall, promptly upon becoming aware,  
notify the Facility Agent of such change or such proposed change, and as soon as
practicable after receipt of such notice, the Company and the Facility Agent    
shall (for a period of up to 7 days) negotiate with a view to agreeing such     
varied financial undertakings as would provided the Finance Parties with no less
protection as the financial undertakings set out in Clause 20 as at the date of 
the Agreement to the extent that any revised financial undertakings will, as    
nearly as practicable, be based on a similar differential as that between the   
financial projections in the Business Plan and the financial undertakings as at 
the date of this Agreement). If, after any negotiations conducted between the   
Facility Agent and the Company, an agreement is not able to be reached as to    
what adjustments (if any) are required to be made to the financial undertakings 
contained in this Agreement, within the said 7 day period (or such negotiations 
are not commenced within 7 days of the receipt of the Facility Agent of the     
relevant notice (or such longer period as the Facility Agent may agree)) the    
matter shall be referred to the Auditors to determine, as experts and not as    
arbitrators. The costs of the Auditors shall be for the account of the Company. 
For the avoidance of doubt, during any such period of consultation, the         
financial undertakings set out in Clause 20 shall be calculated in accordance   
with Applicable Accounting Principles prevailing before the relative            
determination, introduction or implementation.                                  

19.4  Positive undertakings                                                     

(a)   Taxes: The Company shall, and shall procure that each other Group Member  
    shall, pay and discharge all Taxes and governmental charges prior to the
    date on which the same become overdue other than in respect of Taxes and
   governmental charges which, in aggregate, are less than $10,000 (or the
equivalent in other currencies) and overdue by no more than 30 days,
      unless, and only to the extent that such Taxes, shall be contested in good
    faith by appropriate proceedings, pending determination of which payment
    may lawfully be withheld, and there shall be set aside adequate reserves
     with respect to any such Taxes or charges so contested in accordance with
Applicable Accounting Principles.                                   

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(b)   Insurances:                                                               

  (i)  The Company shall, and shall procure that each other Group Member
           shall, maintain in full force and effect prudent insurances on and in
       relation to its business and assets and in particular and without
limitation:                                               

         (A) maintain in full force and effect insurances covering the risks
              covered by the insurances set out in Schedule 15 or replacements
              therefor as the case may be, and in each case: to the same level
            of sums insured as detailed in Schedule 15 and if the Security
               Agent shall so stipulate in an insurance office with underwriters
             approved by the Security Agent or if and to the extent that the
               Security Agent does not so stipulate, in such insurance office of
               repute as shall have been selected by the Company or with Lloyd's
               underwriters and in the joint names of the relevant insured Group
            Member or Group Members (as the case may be) or, to the extent
        that the Facility Agent has confirmed to the Company that,
         in its opinion (acting reasonably) it is not practicable or
             possible for any such insurance to be in the joint names of the
             relevant Group Member or Group Members (as the case may be) and
              the Security Agent, the Security Agent shall be named thereon as
"Loss Payee";                                     

         (B) without prejudice to Clause 19.4(b)(i)(A), cause all Inventory,
               Receivables, buildings, trade and other fixtures, fixed and other
             plants and machinery forming part of the Secured Property to be
insured and to be kept insured:                   

             (1)  (if the Security Agent shall so stipulate) in an insurance
               office with underwriters approved by the Security Agent
                   against loss or damage by fire, explosion, aircraft and all
                  such other risks as the Security Agent shall direct to the
                full reinstatement value thereof adequate provision also
                   being made for the cost of clearing the site and architects
                   engineers, surveyors and other professional fees incidental
                 thereto and the loss of rents or prospective rents (for a
                  period of not less than three years) in the joint names of
                   the Group Member that occupies or owns the relevant Secured
Property and the Security Agent; or     

            (2)  (if and to the extent that the Security Agent does not so
                   stipulate) in such insurance office of repute as shall have
                    been selected by the Company or with Lloyd's underwriters on
              the same basis as insurances are maintained by prudent
                    companies carrying on businesses comparable with that of the
                  relevant Group Member and on a comparable scale as regards
                 the property and assets insured the insured risks and the
classes of risk to be covered;          

       (C) without prejudice to Clauses 19.4(b)(i)(A) and 19.4(b)(i)(B),
    maintain such other insurances (including, but without
              limitation, product liability insurance with a deductible of not
 more than $250,000 in respect of any one claim) are

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       as normally made by prudent companies carrying on similar
           businesses including business interruption insurances, public
     liability insurances and employers liability insurance;

           (D) promptly and in any event within 20 days following any request to
        do so, provide the Facility Agent with such information in
               relation to insurances maintained or previously maintained by any
        Group Member as the Facility Agent may (acting reasonably)
request from time to time;                        

     (E) duly and punctually pay all other premiums and other monies
          payable under such insurances as aforesaid and promptly upon
           request by the Security Agent produce the premium receipts or
other evidence of the payments thereof;           

  (F) (if so required by the Security Agent but subject to the
          provisions of any lease of the Secured Property) deposit all
               policies and other contracts of insurance relating to the Secured
             Property or any part thereof with the Security Agent or produce
to the Security Agent for inspection; and         

        (G) if default shall be made by any Group Member in complying with
               paragraphs (A), (B) (C), (D) , (E) and F above it shall be lawful
             for the Security Agent but not obligatory on the Security Agent
           to effect or renew any such insurance as is mentioned in that
             paragraph either in its own name or in its name and that of the
         relevant Group Member or in the name of the Company with an
               endorsement of the Security Agent's interest, the monies expended
        by the Security Agent in so effecting or renewing any such
          insurance shall be reimbursed by the Company to the Security
       Agent on demand and shall until so reimbursed shall carry
            interest at the rate (as well after as before any judgment) as
              provided for in Clause 9 of this Agreement mutatis mutandis from
the date of payment to the date of reimbursement. 

(ii) The Company undertakes that:                                   

        (A) if an Event of Default has occurred and is continuing (and has
               not been waived in writing by the Facility Agent on behalf of the
Banks); or                                        

         (B) (otherwise) to the extent not applied in repair, replacement or
reinstatement of physical loss or damage;         

           (and without prejudice to the provisions of any Security Document) it
           will procure that the proceeds of any policy of insurance (other than
          any such policy in respect of third party liabilities) maintained by
any Group Member shall:                                   

     (C) if such proceeds relate to an asset or assets which, in the
               opinion of the Facility agent were utilised by the relevant Group
             Member in or towards the generation of income and are more than
             $250,000 (or the equivalent in other currencies), be applied in
or towards prepayment of the whole or such part   

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    of the Facilities as the Facility Agent (acting on the
            instructions of the Majority Banks) shall direct whereupon the
             Total Commitments shall be cancelled by an amount equal to such
           proceeds and the Standby L/C Commitment of each Bank shall be
          reduced by a proportionate amount pro rata and the Revolving
             Commitment of each Bank (including, for the avoidance of doubt,
               the Revolving Commitment of each Ancillary Bank disregarding, for
           this purpose, its Ancillary Commitment) shall be reduced by a
             proportionate amount and pro rata to their respective Revolving
Commitments at such time.                         

(c)   Hedging Arrangements: The Company shall put or cause there to be put into 
     effect as soon as possible and in any event within 30 days from the first
  Drawdown Date in form and substance satisfactory to the Facility Agent
     with such counterparty as is (or counterparties as are) acceptable to the
  Facility Agent (acting reasonably) and then maintain in full force and
effect, exercisable by and for its benefit interest rate hedging or 
protection arrangements and currency rate protection arrangements in
accordance with the Approved Hedging Programme.                     

(d)   Security - UK Obligors If requested to do so by the Facility Agent, the   
     Company shall procure that in respect of any Group Member incorporated in
  England and Wales, Scotland or Northern Ireland (that is not a Dormant
     Company) to which such request relates there is delivered to the Facility
 Agent within 45 days (or such longer period as the Majority Banks may
     agree) a Guarantor's Accession Agreement and/or a Guarantee together with
   a notice of accession under such Intercreditor Agreements as advised by
  the Facility Agent duly executed by such company and the Company and a
Security Document, together with each of the conditions precedent   
    documents required to be provided in connection therewith, all in a form
and substance reasonably satisfactory to the Facility Agent.        
Notwithstanding anything to the contrary in this Agreement, only the
Company shall be liable for its obligations under this Agreement and
     nothing herein shall oblige an Obligor to guarantee or act as a guarantor
for any obligation of the Company under this Agreement.             

(e)   Security - Non-UK Obligors If requested to do so in writing by the        
Facility Agent, the Company shall procure that in respect of a Group
Member not incorporated in England and Wales (that is not a Dormant 
     Company) to which such request relates there is delivered to the Facility
 Agent within 45 days (or such longer period as the Majority Banks may
 agree) of any such request a Guarantor's Accession Agreement and/or a
Guarantee duly executed by such Non-UK Obligor, a Security Document 
      together with a notice of accession under such Intercreditor Agreements as
advised by the Facility Agent and each of the conditions precedent  
    documents required to be provided in connection therewith, all in a form
  and substance reasonably satisfactory to the Facility Agent save that,
   notwithstanding the foregoing, (x) only the Company shall be liable for
   its obligations under this Agreement and nothing herein shall oblige an
Obligor to guarantee or act as a guarantor for any obligation of the
Company under this Agreement and (y) nothing herein shall oblige the
     Company to pledge (as determined by applicable law) more than 65%  of its
     interest in the voting share capital in any of its Immediate Subsidiaries
      and the Company shall not be obliged to procure that a Non-UK Obligor (the
"Relevant Company") becomes an Obligor:                             

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(i)  if it is unlawful in the Relevant Company's jurisdiction of    
          incorporation for it to support the obligations of the Company under
        the Finance Documents and, for the purposes of this Clause 19.4 it
     shall not be unlawful if an amendment to the Relevant Company's
          constitutive documents may be made which would enable it lawfully to
become an Obligor; or                                     

 (ii) if, as a result of the Relevant Company becoming an Obligor, the
         directors of the Relevant Company in their capacity as directors of
       an Obligor otherwise than solely as a result of any such director
        failing to properly discharge all of his obligations and duties in
         his capacity as a director of such Relevant Company would be liable
        to criminal prosecution solely as a result of the Relevant Company
becoming an Obligor,                                      

  and, in each case, the maximum level of support provided by an Obligor
    shall not exceed the maximum amount able to be provided by such Relevant
Company having regard to generally applicable laws in its country of
incorporation.                                                      

(f)   Security Threshold:  Without prejudice to Clauses 19.4(d), 19.4(e) and    
19.4(g) the Company shall procure that if:                          

(i)  the consolidated earnings before interest, tax depreciation and
      amortisation of the Obligors as at the last day of the quarterly
           Accounting Period of the Group last ended is less than 85 per cent of
   the Consolidated Adjusted EBITDA in respect of such quarterly
     Accounting Period (as determined by reference to the Compliance
    Certificate delivered pursuant to Clause 19 in respect of such
Accounting Period); and                                   

      (ii) at any time the total assets of the Obligors is less than 85 per cent
       of the sum of the Total Assets less the value of pre-paid pension
         assets shown in the latest annual Financial Accounts of the Company
at such time,                                             

    then promptly after service of a notice to that effect on the Company by
      the Facility Agent and in any event within forty five days (or such longer
   period as the Facility Agent acting on the instructions of the Majority
 Banks may agree) thereafter, in the event that the shortfall was with
 respect to paragraph (i) above, a Group Member or Group Members whose
    earnings before interest, tax depreciation and amortisation in aggregate
      in respect of the financial year to which such shortfall relates was equal
    to or greater than such shortfall and/or in the event that the shortfall
    was with respect to paragraph (ii) above a Group Member or Group Members
    whose total assets at such time in aggregate is equal to or greater than
  such shortfall shall each execute a Guarantor's Accession Agreement or
    enter into a Guarantee and in each case execute a Security Document over
      all of its assets (both present and future) and an Intercreditor Agreement
     Accession Notice and deliver them to the Facility Agent together with the
conditions precedent documents required to be provided in connection
      therewith, all in a form and substance satisfactory to the Facility Agent,

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     Provided that for the purposes of this Clause 19.4(f) the terms "adjusted
    earnings before interest, tax, depreciation and amortisation" and "total
assets" of a company shall be determined in accordance with the     
capitalised defined terms contained in Clauses 1.1 and 1.2 (namely  
      "Consolidated Adjusted EBITDA" and "Total Assets" respectively), but as if
references therein to the Company were references to such company,  
references therein to the Group were references to such company,    
      references to the relevant period were references to the annual Accounting
Period of such company, and references therein to the consolidated  
financial statements were references to the latest audited financial
      statements of such company and on the basis that all intra-Group items and
investments shall be excluded.                                      

(g)   Additional Security                                                       

   (i)   The Company shall procure that (a) on acquiring (and in any event
           within 45 days of such acquisition) any asset of material value, or
          material to the operation of the business of any Obligor or to the
        value of any other asset over which the Banks have security, the
        Obligor acquiring such asset shall (if such asset is not, in the
         reasonable opinion of the Security Agent, subject to any existing
            Security Document giving equivalent security to that provided by the
     Security Documents over similar assets held by any Obligor at
       Closing and (subject to sub-paragraph (iii) below) it is legal,
   practical and (in the opinion of the Facility Agent, acting
     reasonably and having regard to the value of the asset or its
          materiality to the operation of the business of such Obligor) cost
          effective to do so) execute and deliver to the Security Agent such
           further or additional Security Documents in relation to such assets
            as the Majority Banks may require in substantially the same terms as
      the Security Documents charging similar assets entered into at
       Closing, and (b) if there has, in the reasonable opinion of the
           Majority Banks, been a material and adverse change in the business,
        assets or financial condition of any Obligor, such Obligor shall
            execute and deliver to the Security Agent such further or additional
      Security Documents in such form and in relation to such of its
           assets as the Majority Banks shall require, subject in each case to
        any provisions of law prohibiting such person from entering into
           such Security Documents provided that notwithstanding the foregoing
           (y) only the Company shall be liable for its obligations under this
            Agreement and nothing herein shall oblige an Obligor to guarantee or
       act as a guarantor for any obligation of the Company under this
           Agreement and (z) nothing herein shall oblige the Company to pledge
            (as determined by applicable law) more than 66.6% of its interest in
      the voting share capital in any of its Immediate Subsidiaries.

    (ii)  The Company shall procure that any entity which becomes a Material
      Group Member after Closing shall (within 45 days of becoming a
        Material Group Member) execute and deliver to the Security Agent
         such further or additional Security Documents in such form and in
          relation to such of its assets as the Majority Banks shall require
    subject to any provision of law prohibiting such person from
entering into such Security Documents.                  

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(iii) Where any such prohibition as is referred to above exists, the
           Obligors shall use their reasonable endeavours lawfully to overcome
     the prohibition, and the Security Agent may (but shall not be
      obliged to) agree with the relevant Obligor limitations on the
      extent of the security granted by it to the extent that in its
            opinion, based on the advice of independent legal counsel acceptable
           to the Security Agent in the relevant jurisdiction, it is necessary
to do so in order to overcome the prohibition.          

 (iv)  The Obligors shall at their own expense execute and do all such
         assurances, acts and things as the Security Agent or the Majority
     Banks may reasonably require for perfecting or protecting the
         security intended to be afforded by the Security Documents or for
           facilitating the realisation of all or any part of the assets which
     are subject to the Security Documents and the exercise of all
            powers, authorities and discretion's vested in the Security Agent or
            in any receiver of all or any part of those assets and in particular
          shall execute all transfers, conveyances, assignments and releases
         of that property whether to the Security Agent or to its nominees
            and give all notices, orders and directions which the Security Agent
may reasonably think expedient.                         

(v)   The Company shall procure that in relation to each further or 
       additional Security Document the relevant Borrower or Guarantor
            shall do all things necessary duly to perfect in the jurisdiction of
          its incorporation and in the jurisdiction wherein the assets which
           are the subject of the further or additional Security Documents are
         located, the security to be afforded to the Finance Parties under
          such further or additional Security Documents and shall deliver to
       the Security Agent such directors and shareholders resolutions,
            legal opinions, notices, certificates or documents of title or other
items as the Facility Agent shall require.              

(h)   New Auditors: Other than in circumstances where the outgoing auditor has  
      resigned the Company may appoint any one or more of Coopers Lybrand, Ernst
      & Young, KPMG, Deloitte & Touche, Arthur Andersen, or Price Waterhouse (or
 such other firm or firms as the Facility Agent may agree from time to
   time) without the prior approval of the Facility Agent and in all other
     cases the Company may only change its auditors with the prior approval of
     the Facility Agent.  If the Company wishes to change its auditors it will
    notify the Facility Agent as to the reasons for any such proposed change
     and if the Facility Agent so requests, will instruct the audit partner of
      each of the outgoing firm of auditors and the replacement firm of auditors
   to discuss the financial position of the Group with the Facility Agent.
   The Company shall procure that, within ten Business Days of the date of
their appointment as Auditors, the accountants shall deliver to the 
      Facility Agent a letter from such newly appointed Auditors confirming that
      they are aware of the provisions of this Agreement, including Clauses 6.3,
6.10, 19.1 and 20.                                                  

(i)   Pari passu ranking: The Company shall ensure that the obligations of each 
Group Member under the Senior Finance Documents to which they are   
   expressed to be a party rank, and will at all times rank, at least pari
    passu in right and priority of payment and in point of security (save by
reason of and to the extent of the security afforded thereto by the 
   Security Documents) with all its other present and future unsecured and
      unsubordinated obligations, other than obligations applicable generally to
  companies incorporated in its jurisdiction of incorporation which have
priority by operation of law                                        

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(including, without prejudice to the generality of the foregoing, in
respect of employees' remuneration, Taxes and like obligations).    

(j)   Compliance with laws: The Company shall, and shall procure that each      
 Obligor and other Material Group Member shall procure that each other
   Group Member shall, comply with all applicable laws, rules, regulations
  and orders of any governmental authority, whether domestic or foreign,
    having jurisdiction over it or any of its assets, failure to comply with
which might have a Material Adverse Effect.                         

(k)   Consents: The Company shall, and shall procure that each Obligor and each 
  Material Group Member (that is not an Obligor) shall, obtain, promptly
     renew from time to time and maintain in full force and effect, and if so,
      requested promptly furnish certified copies thereof to the Facility Agent,
all such material authorisations, approvals, consents, licences and 
 exemptions as may be required under any applicable law or regulation:

(i)   to enable each Obligor to perform its respective material     
         obligations under the Finance Documents to which it is a party or
   required for the validity or enforceability of such Finance
     Documents or of any Encumbrances provided for thereby; and/or

      (ii)  to carry on its business as it is being conducted from time to time.

(l)   The Payment of Existing Financial Indebtedness:  The Company shall pay    
    (or, as the case may be, procure that each other Group Member shall pay)
    all amounts payable to Derby International and any other Persons to whom
      the Existing Financial Indebtedness is owed and will otherwise perform its
material obligations in accordance with the terms of each of the    
    Recapitalisation Documents, and the Company will ensure that appropriate
   action is taken to ensure receipt by the Company (or the relevant Group
      Member) of any sums payable by any Person to any Group Member under any of
the Recapitalisation Documents.                                     

(m)   Books and Records: The Company shall, and shall procure that each other   
   Group Member shall, keep or cause or procure to be kept proper books of
account and records relating to the business.                       

(n)   Group Activity:  The Company shall, and shall procure that each Group     
  Member shall, conduct any trading business it has with any other Group
  Member on an arm's length basis and on terms and conditions similar to
those such Group Member offers (or, if it does not so offer, might  
      reasonably be expected to offer) to Persons that are not a Group Member or
consistent with practice applicable at the date hereof.             

(o)   Access:  Upon reasonable notice being given by the Facility Agent , the   
     Company will procure that any one or more representatives of the Facility
    Agent and/or accountants or other professional advisers appointed by the
  Facility Agent shall be entitled to have access during normal business
   hours (i) to the Persons involved in the management of the Group as the
     Facility Agent may reasonably request), and (ii) to the assets, books and
    records of each Group Member that is not a Dormant Company, and are able
to inspect and copy the same at reasonable times.                   

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(p)   Pension schemes:  The Company will, if requested by the Facility Agent    
deliver to the Facility Agent (i) at such time as those reports are 
prepared in order to comply with then current statutory or auditing 
     requirements and (ii) not more than once in any period of three years, if
the Facility Agent reasonably believes that the requirements of this
     Clause 19.4(p) are not being complied with, actuarial reports in relation
     to each of the pension schemes with an actuarial valuation of liabilities
   of more than $1,000,000 (or the equivalent thereof in other currencies)
      for the time being operated by the Group Members (in sufficient copies for
      each of the Finance Parties), and will, save as fully and fairly disclosed
      in the Accountant's Report, ensure that all such pension schemes are fully
    funded in accordance with reasonable actuarial assumptions applicable in
      the jurisdiction in which the relevant pension scheme is maintained and in
   accordance with Applicable Accounting Principles or, to the extent that
  any such pension scheme is not fully funded, promptly upon being aware
thereof, take such action as is required to ensure that such pension
 scheme is fully funded in accordance with the recommendations made or
instructions given in such respect of the relevant actuaries.       

(q)   Syndication:  The Company shall ensure that all Group Members will provide
   assistance to the Facility Agent and the Arranger in the preparation of
  the information memorandum for syndication of the Facilities, make the
     Executives available, comply with all reasonable requests for information
     from potential syndicate members and provide reasonable opportunities for
   potential syndicate members to have access to their respective managers
and other personnel and to any sites operated by any Group Member.  

(r)   Registered Office: The Company shall, and shall procure that each Obligor 
(that is not a Material Group Member) and each Material Group Member
      shall, promptly (and in any event within 4 days) notify the Facility Agent
    in writing of any change in its name or in the address of its registered
or principal office.                                                

(s)   Executives:  The Company undertakes that if (i) either the Chief Financial
Officer, or the Chief Executive Officer ceases or (ii) more than one
      Executive together cease (whether by reason of death, retirement at normal
     retiring age, ill health or otherwise) to perform the functions for which
     he was or they were (as the case may be) employed it will within 6 months
 of such Executive ceasing to perform such functions have offered to a
Person or Persons (as the case may be) having the appropriate       
   qualifications, background and experience, the position of the relevant
   Executive or Executives (as the case may be) and such Person or Persons
  (as the case may be) shall have accepted such offer in writing and the
     Company will procure that each such Person shall have taken up his duties
 as the relevant Executive of the Company within 6 months of each such
Executive ceasing to perform such functions.                        

(t)   Dormant Companies:  Each Obligor will procure that, save as permitted by  
 the Facility Agent or unless it becomes an Obligor and a party to the
  Debenture or such other Security Document satisfactory to the Facility
    Agent and provides to the Facility Agent each of the condition precedent
 documents required to be provided in connection therewith, no Dormant
    Company shall commence to trade (whether for its own account or for that
of                                                                  

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  another) after Closing or the date it became a Group Member (if later)
   or incur any further liabilities or hold or acquire (whether legally or
beneficially) any material assets or property after such date.      

(u)   ERISA: Each U.S. Obligor will not, and will procure that no ERISA         
      Affiliate will engage in any transaction in connection with which any U.S.
Obligor or any ERISA Affiliate could be subjected to either a civil 
  penalty assessed pursuant to section 502(i) of ERISA, a tax imposed by
 section 4975 of the IRC or breach of fiduciary duty liability damages
(whether directly or indirectly);                                   

(v)   Compliance with Margin Stock Regulation: Each U.S. Obligor shall not, and 
shall procure that its Subsidiaries shall not:                      

 (i)  (A) sell, carry, pledge or otherwise dispose of any margin stock
         ("Margin Stock") within the meaning of Regulation U of the Board of
        Governors of the Federal Reserve System of the U.S.A. as in effect
         from time to time ("Regulation U"), now owned or acquired after the
date of this Agreement; or                                

         (B) incur any Financial Indebtedness directly or indirectly secured
(within the meaning of Regulation U) by any Margin Stock; 

      if such transaction would cause any of the Advances or any part thereof to
      be in violation of Regulation U, or Regulation X of the Board of Governors
  of the Federal Reserve System of the U.S.A., as in effect from time to
time ("Regulation X");                                              

 (ii) use the proceeds of any Advance, directly or indirectly, for the
          purpose, whether immediate, incidental or ultimate, of purchasing or
           carrying any Margin Stock or for the purpose of maintaining, reducing
   or retiring any indebtedness which was originally incurred to
         purchase or carry any stock that is currently a Margin Stock or for
       any other purpose which might constitute any of the Facilities or
          this Agreement a "purpose credit" within the meaning of Regulation U
         or Regulation X.  No Obligor and no agent acting on its behalf will
          take or has taken any action which might cause this Agreement or the
   Advances to violate Regulation U or Regulation X or any other
         regulation of the Board of Governors of the Federal Reserve System.

(w)   UCC filings: Each U.S. Obligor at its own expense will make and renew     
 promptly or request the Facility Agent to instruct appropriate United
States counsel to make and renew, and, in any event, in the case of 
   renewal such that the renewal is made before any UCC filing relating to
any Senior Finance Document expires, all UCC filings relating to any
      Senior Finance Document reasonably required by the Facility Agent and will
pay all applicable fees.                                            

(x)   Intellectual Property Rights: The Company shall and shall procure that    
each Group Member shall:                                            

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   (i)   make such registrations and pay such fees, registration Taxes and
            similar amounts as are necessary to keep those Intellectual Property
       Rights which are material in the context of the business of any
          Group Member and which are required by it in order for it to carry
            on its business in accordance with the Business Plan in force and to
  record its interest in those Intellectual Property Rights;

(ii)  take such steps as are necessary and commercially reasonable  
            (including, without limitation, the institution of appropriate legal
     proceedings) to prevent third parties infringing the Material
            Intellectual Property Rights and (without prejudice to paragraph (i)
     above) take such other steps as are reasonably practicable to
maintain and preserve its interests in those rights;    

  (iii) promptly upon being required to so by the Security Agent, comply
    with all proper instructions of the Security Agent which the
          Security Agent is entitled to give under the Security Documents in
            respect of the Intellectual Property Rights referred to in paragraph
(i) above; and                                          

   (iv)  own or have licensed to it all Intellectual Property Rights which
          are material in the context of its business and which are required
         by it in order for it to carry on its business in accordance with
          the Business Plan and that in carrying on its business it does not
           infringe any Intellectual Property Rights of any third party in any
way.                                                    

(y)   Clean Down: The Company shall ensure that for a continuous period of at   
      least 30 days during the period of 1 July to 31 October (inclusive) during
     each annual Accounting Period the aggregate Deutschmark Equivalent of all
     Financial Indebtedness of the Group (excluding any Financial Indebtedness
     owed by a Group Member to another Group Member) other than under the GSIC
Notes or in respect of the Note Documents and foreign exchange      
     transactions (and without double-counting) outstanding at any time during
   such period does not exceed DM 80,000,000 (or the equivalent thereof in
other currencies).                                                  

(z)   Distributions:  The Company shall ensure that:                            

(i)  no agreement, instrument, Articles of Association or any other 
          arrangement (other than the Senior Finance Documents) shall restrict
           or prevent any Group Member (excluding the Company) from declaring or
       making payment of any dividend or make any other distributions of
        capital or income profits (any such payment being a "Group Company
 Distribution") to the maximum amount permitted by generally
       applicable laws in the jurisdiction in which such Group Member is
       incorporated provided that no Group Company Distribution shall be
paid to any Person in breach of Clause 19.5(o); and       

(ii) each Group Member (that is not an Obligor) makes Group Company 
          Distributions in each annual Accounting Period to the maximum extent
         permitted by generally applicable laws in the jurisdiction in which
        such Group Member is incorporated, to the extent not restricted by
     the terms and conditions of any of the Senior Finance Documents
(including without limitation Clause 19.5(o)).            

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(aa)  Note Exchange: Notwithstanding any other provision of this Agreement      
  nothing herein shall be construed as prohibiting any Note Issuer, from
 time to time, agreeing to the exchange of one type of Senior Note for
    another type of Senior Note or the refinancing of a Senior Note from the
proceeds of the issuance of new Senior Notes in accordance with the 
     provisions of the Note Documents and taking such action as is required to
facilitate the same.                                                

19.5  Negative undertakings                                                     

(a)   Negative pledge:  The Company shall not, and shall procure that no other  
   Group Member shall, create or permit to subsist any Encumbrances on the
     whole or any part of its respective present or future business, assets or
undertaking (including its Intellectual Property Rights) other than 
Permitted Encumbrances.                                             

(b)   Disposals: The Company shall not, and shall procure that no other Group   
      Member shall, sell, transfer, lease, lend or otherwise dispose of or enter
into any agreement under which it may be or become obliged to sell, 
  transfer, lease, lend or otherwise dispose of any of its shares in any
Group Member or undertaking and assets from time to time either in a
single transaction or a series of transactions otherwise than:      

(i)    (in the case of any Group Member which is a trading company) 
          disposals of trading assets in the ordinary course of trading on
arm's-length terms;                                   

    (ii)   disposals of assets on arm's length terms not otherwise permitted
           under this Clause 19.5(b) provided that the aggregate fair market
             value of the assets disposed of during any annual Accounting Period
      does not exceed $500,000 (or the equivalent thereof in other
currencies);                                          

(iii)  disposal of assets in exchange for other assets comparable or
superior as to type, value and quality;               

      (iv)   disposals of surplus, obsolete or redundant plant and equipment, or
          of land or buildings not required for the efficient operation of
       its business, on arm's length terms and at fair market value;

     (v)    the expenditure of Cash in payment for assets or services acquired
     at market value in the course of its business carried on in
    compliance with the terms of the Senior Finance Documents;

(vi)   the lending of Cash and payment or repayment of Cash lent in 
    compliance with the terms of the Senior Finance Documents;

    (vii)  the disposal of assets by one UK Obligor to another UK Obligor on
an arm's length basis on normal commercial terms;     

      (viii) (to the extent that paragraph (vii) does not apply) the disposal of
            assets by one Obligor (the "disposing Obligor") to another Obligor
(the "recipient Obligor")                             

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           on an arm's length basis on normal commercial terms provided that
        the recipient Obligor has received prior confirmation from the
           Facility Agent that it is satisfied that the Encumbrance that the
        recipient Obligor has given (or, as the case may be, will give
     promptly after the proposed disposal pursuant to a Security
            Document) is such that the Encumbrance granted thereby, should the
           proposed disposal be permitted pursuant to this paragraph (viii),
       over the relevant asset or assets is, or will be, at least as
       favourable to the Finance Parties as the Encumbrance that the
            disposing Obligor provided to the Finance Parties over such assets
or assets immediately before the proposed disposal;   

      (ix)   the payment of dividends in compliance with the terms of the Senior
Finance Documents;                                    

  (x)    the payment of amounts payable under or in respect of or in the
           performance of obligations under the Note Documents to the extent
             that such payment does not breach the provisions of Clause 19.5(p);

  (xi)   the transfer of the legal title to the property situated on the
           west side of Triumph Road, Nottingham, England (Postcode WE7 2EL)
            by Raleigh Industries Limited (together, in respect of one part of
          the said property, with Derby Holdings Limited to Sturmey-Archer
          Limited of Triumph Road, Nottingham, England and the transfer of
             the legal title to the property at the corner of Downing Street and
          Cornwall Road, Nottingham from British Cycle Limited to Sturmey-
Archer Limited;                                       

 (xii)  the disposal of assets as contemplated by Exhibit 8.10A of the
            Recapitalisation Agreement, provided that the aggregate book value
          of such assets does not exceed South African Rand 1,300,000; and

 (xii)  disposals of assets which were acquired after the date of this
         Agreement in accordance with, and as permitted by, the terms of
           this Agreement the future disposal of which was in the opinion of
           the Facility Agent contemplated at the time of their acquisition.

  All such sales, transfers, leases or other disposals shall (other than
      intra-Group transfers to which the Facility Agent has previously consented
   (such consent not to be unreasonably withheld), be made only for a cash
  consideration payment of which may not be deferred for more than three
 months from the date of such sale, transfer, lease or other disposal.

     Provided that, without prejudice to the foregoing, no Group Member (other
    than the Company or a Group Member that is an Immediate Subsidiary ) may
 sell, transfer, lease, lend or otherwise dispose of or enter into any
agreement under which it may be or become obliged to sell, transfer,
     lease, lend or otherwise dispose of any of its shares in any Group Member
    or undertaking and assets, either in a single transaction or a series of
transactions to the Company or an Immediate Subsidiary other than   
   as specifically contemplated, at Clause 19.5(c) or, as the case may be,
Clause 19.5(o).                                                     

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(c)   Loans out:  The Company shall not and shall procure that no other Group   
 Member shall, grant or make available to another Person any Financial
Indebtedness, save for:                                             

 (i)  any Financial Indebtedness where trade credit is extended by any
           Group Member on normal commercial terms and in the ordinary course of
 its business on substantially the same terms (or terms more
        favourable to it) and in similar circumstances as for trade credit
extended prior to the Closing;                            

(ii) loans made by one Group Member to another Group Member where:  

   (A) the loan is specified in the Intra-Group Loan Memorandum;

        (B) (subject to paragraph (D) below) the recipient of the loan, if
             made by a Group Member is an Obligor that is not a Note Issuer;

    (C) the recipient of the loan, if made by a Note Issuer, is an
Obligor;                                          

          (D) the recipient of the loan is the Company or, as the case may be,
Lyon Investments B.V. provided that:              

             (i)  such loan is required to be made to the Company or, as the
                case may be, Lyon Investments B.V. (having regard to the
                    available assets of the Company or, as the case may be, Lyon
                  Investments B.V. at such time) so as to enable the Company
             or, as the case may be, Lyon Investments B.V. to make
                   payment of interest or liquidated damages as defined in the
                  Note Documents when due under the Note Documents (provided
              that such payment would not be in breach of any of the
                  Senior Finance Documents and such loan is promptly, and in
                 any event within 7 days of it being made, so applied); or

       (ii) the loan is made to the Company to enable it to pay:

                    (AA) fees of an amount which is, in the context, reasonable,
                        payable to any of its non-executive directors pursuant
               to the terms of the contracts or other formal
                         arrangements entered into by the Company with such non-
executives;                   

                    (BB) management fees payable to Thayer by the Company at any
                        time after 31 December 1998 pursuant to the Management
                        Agreement (if any) not exceeding $400,000 in aggregate
                         in any Financial Year provided that payment of the same
           could not reasonably be expected to (were
                        such payment made) result in a breach of any provision
of this Agreement;            

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                  the loan is made to the Company by each other Group Member
                to enable the Company to pay amounts due to the Internal
                  Revenue Service in the United States on account of tax due
           in respect of such Group Member's operations or the
                    Company's operations and payable by the Company on behalf of
such Group Member or by the Company;    

          (E) the recipient of the loan (made by an Obligor) is a Group Member
              that is not an Obligor provided that the aggregate amount of any
        such loans does not exceed in aggregate $1,000,000 (or the
equivalent in other currencies); and              

    (iii)  (in addition to paragraphs (i) and (ii) Financial Indebtedness in
  an aggregate principal amount (for the Group as a whole) not
       exceeding $250,000 (or the equivalent in other currencies) at any
time.                                                     

(d)   Acquisitions:  The Company shall not, and shall procure that no other     
Group Member shall acquire any asset otherwise than:                

(i)   in the ordinary course and for the purposes of its business;  

(ii)  Cash Equivalent Investments;                                  

    (iii) the acquisition of shares in a wholly-owned Subsidiary acquired or
          established solely for the purpose of holding the assets of and/or
 administering the pensions of employees of Group Members;

  (iv)  in accordance with the disposal provisions in Clause 19.5(b); or

  (v)   in addition to Clauses 19.5(d)(i) to (d)(iv) above, acquisitions
            made pursuant to this paragraph (v) (each a "Permitted Acquisition")
      the aggregate consideration (whether in cash or otherwise, and
          whether actual or contingent) paid or payable by a Group Member in
        respect thereof, or exposure thereto or in respect thereof (when
            taken together with all other Permitted Acquisitions and Investments
            made during the relevant annual Accounting Period) does not and will
          not, in such annual Accounting Period, exceed the Permitted Amount
       for such period and, in any event (when taken together with all
           other Permitted Acquisitions and Investments made after the date of
         this Agreement), does not and will not exceed $72,800,000 (or the
equivalent in other currencies).                        

(e)   Sales with recourse: Without prejudice to Clause 19.5(b) and Clause       
19.5(h) the Company shall not, and shall procure that no other Group
Member shall:                                                       

     (i)  sell or otherwise dispose of any of their respective assets on terms
          whereby such asset or assets are or may be leased to, or re-acquired
or acquired by, any Group Member; or                      

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(ii) sell or dispose of any of its receivables (including, without  
      limitation to the Financial Accounts, as defined at Clause 6) on
         recourse terms or enter into any factoring (or similar) arrangement
without respect thereto,                                  

    unless the aggregate book value of the assets and receivables so sold or
    disposed does not exceeds $500,000 per annum (or the equivalent in other
currencies).                                                        

(f)   Change of business: The Company shall not, and shall procure that no other
      Group Member shall, make or threaten to make any change in its business as
     presently conducted, which would result in a change in the general nature
    of business carried on by the Group as a whole (other than where this is
      due to acquisitions permitted under Clause 19.5(d) above or disposals made
    consistent with the Business Plan), or carry on any other business which
   is substantial in relation to the business of the Group as conducted at
the date of this Agreement.                                         

(g)   Mergers: The Company shall not, and shall procure that no other Group     
Member shall enter into any merger or consolidation or make any     
  acquisition of any other company, Person or business save as otherwise
specifically permitted pursuant to this Agreement.                  

(h)   Financial Indebtedness: The Company shall not, and shall procure that no  
other Group Member shall incur or permit to subsist any Financial   
 Indebtedness other than Permitted Financial Indebtedness and, without
prejudice to the foregoing the Company shall procure that:          

     (i)  no Person including any Group Member, other than a Note Issuer shall
 guarantee or offer any financial accommodation or financial
         assistance of any nature whatsoever in respect of the Note Issuers'
         obligations under the Note Documents or any of them or of any other
          Financial Indebtedness incurred by them in any capacity and further,
          no Group Member shall incur any Financial Indebtedness which has the
          economic effect of being Financial Indebtedness but which is an "off
balance sheet" arrangement; and                           

      (ii) no Person including any Group Member, other than the GSIC Note Issuer
       shall guarantee or offer any financial accommodation or financial
     assistance of any nature whatsoever in respect of the GSIC Note
        Issuer's obligations under the GSIC Note Documents or of any other
Financial Indebtedness incurred by it in any capacity.    

(i)   Third party guarantees: The Company shall not, and will procure that no   
      other Group Member shall, incur or permit to be outstanding, any Financial
Indebtedness falling within the provisions of paragraph (g) of the  
definition of that term in Clause 1.2 other than any such Financial 
Indebtedness:                                                       

(i)  arising under the Senior Finance Documents;                    

 (ii) arising out of the endorsement of negotiable instruments for the
    purpose and in the ordinary course of carrying on the relevant
entity's trade; or                                        

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 (iii) arising out of guarantees in favour of a Bank to facilitate the
        operation of bank accounts of such Group Members (other than the
          Note Issuers) maintained with such Bank on a net balance basis for
the purposes of cash management.                        

 Provided that, notwithstanding the foregoing, no Obligor may incur or
permit to be outstanding any Financial Indebtedness falling within  
    paragraph (g) of the definition of that term in Clause 1.2 to the extent
     that it relates to any Financial Indebtedness incurred by or on behalf of
     a Note Issuer (in any capacity), or a Group Member that is not an Obligor
      which for the avoidance of doubt includes any Group Member incorporated in
South Africa.                                                       

(j)   Options: Other than the exercise of an option entered into in accordance  
    with, and not prohibited by the Approved Hedging Programme or in respect
  of the MS Group Option the Company shall not, and will procure that no
     other Group Member shall, enter into or permit to subsist any arrangement
whereby any Person:                                                 

    (i)  has the right (whether or not exercisable only in a contingency) to
   require any Group Member to purchase or otherwise acquire any
property or any interest in any property; or              

    (ii) has the right (whether or not exercisable only in a contingency) to
           require any Group Member to sell or otherwise dispose of any property
or interest in any property.                              

(k)   Treasury Transactions: The Company shall not, and will procure that no    
other Group Member shall, enter into any interest rate, swap, cap,  
    ceiling, collar or floor or any currency swap, futures, foreign exchange
 or commodity contract or option (whether over the counter or exchange
traded) or any similar treasury transaction, other than the Hedging 
    Protection Arrangements, spot foreign exchange contracts entered into in
 the ordinary course of business and transactions entered into for the
      hedging of actual or projected exposures arising in the ordinary course of
ordinary trading activities of the Group and in accordance with the 
   Approved Hedging Programme carried on, in each case, in compliance with
    the terms of the Senior Finance Documents and which in any such case are
entered into with an Approved Bank.                                 

(l)   Investments: Save to the extent permitted by Clause 19.5(d) the Company   
    shall not, and will procure that no other Group Member shall acquire (by
     subscription or otherwise) any business or any shares or other securities
    (or any interest therein) or otherwise establish other than the Acquired
     Assets and Cash Equivalent Investments save as disclosed in the Structure
Memorandum.                                                         

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(m)   Subsidiaries:                                                             

      (i)   Save to the extent permitted by Clause 19.5(d) the Company shall not
       acquire any Subsidiaries which are not Subsidiaries immediately
            following the Closing or acquire any businesses after the Closing or
           enter into any agreement which it may be or become bound to acquire
            any Subsidiary or business unless such Subsidiary is incorporated in
   the United Kingdom and each of the other provisions of this
Agreement and the Finance Documents are complied with.  

      (ii)  The Company shall not incorporate any Subsidiaries without the prior
        consent of the Facility Agent (acting on the instructions of the
Majority Banks).                                        

(n)   Joint Ventures: The Company shall not, and will procure that no other     
      Group Member shall, without the consent of the Majority Banks, acquire any
   shares, stock, securities or other interest in, or transfer any assets,
to, or lend to or guarantee the obligations of any Joint Venture, or
     commit to any third party or enter into any Joint Venture or become party
     to any joint venture agreement or arrangement where it has any obligation
     (whether to such Joint Venture or to any other Person, and whether actual
     or contingent) to lend to or guarantee or transfer assets to or otherwise
     fund or incur any liability in respect of such Joint Venture or any other
 Person (each such acquisition, transfer, loan, guarantee, commitment,
     agreement and arrangement being an "Investment"), save that Group Members
may make, or agree to make any Investment, provided that as a result
  thereof the aggregate consideration (whether in cash or otherwise, and
      whether actual or contingent) paid or payable by a Group Member in respect
   thereof, or exposure thereto or in respect thereof (when taken together
 with all other Investments made during the relevant annual Accounting
    Period and Permitted Acquisitions in such annual Accounting Period) does
    not and will not, in such annual Accounting Period, exceed the Permitted
  Amount for such period and, in any event (when taken together with all
    other Investments made and Permitted Acquisitions after the date of this
      Agreement), does not and will not exceed $72,800,000 (or the equivalent in
other currencies).                                                  

(o)   Distributions:  the Company shall not, and shall procure that Lyon        
  Investments B.V. and each of the Company's and Lyon Investments B.V.'s
    respective immediate Subsidiaries shall not, at any time declare or make
payment of any dividend or make any other distribution of capital or
 income or profits or payment of any fees, management charges or other
  amounts whatsoever to any of its members, make any other redemption or
purchase of its own shares or create or issue or reissue any loan or
    debenture stock (any such payment being a "Distribution") to its members
    or, as the case may be, the Company or Lyon Investments B.V. other than:

      (i)   to the extent required (having regard to the available assets of the
          Company or as the case may be, Lyon Investments B.V. at such time)
            so as to enable the Company or, as the case may be, Lyon Investments
          B.V. to make payment of interest (including liquidated damages (as
            defined in the Note Documents) when due under the Note Documents or,
           in the case of the Company only, this Agreement (provided that each
        such payment would not be in breach of any of the Senior Finance
Documents);                                             

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(ii) to enable the Company to pay fees of an amount which is, in the
        context, reasonable, payable to any of its non-executive directors
         pursuant to the terms of the contracts or other formal arrangements
    entered into by the Company with such non-executive directors;

   (iii) to enable the Company to pay management fees payable to Thayer by
     the Company pursuant to the Management Agreement (if any) not
      exceeding $400,000 in aggregate in any Financial Year after 31
            December 1998 provided that payment of the same could not reasonably
            (were such payment made) result in a breach of any provision of this
Agreement;                                              

 (iv)  payments required to be made to the Company by each other Group
       Member to enable the Company to pay amounts due to the Internal
     Revenue Service in the United States on account of tax due in
  respect of such Group Member's operations or the Company's
            operations and payable by the Company on behalf of such Group Member
or by the Company; and                                  

(v)   so as to enable the Company to remit monies to Group Members  
       incorporated in The Republic of South Africa in order to enable
        those companies to purchase all of the minority shareholdings in
            such Group Member as at the date of this Agreement for an amount not
     exceeding $2,000,000 less any amounts loaned to Group Members
        incorporated in South Africa for such purpose as contemplated by
     Clause 19.5(c)(ii)(C) at Closing (or within 30 days thereof).

  The Company shall procure that no Group Member may make any payment or
 take any action on behalf of the Company or any other Group Member or
  enter into any arrangement on behalf of the Company or any other Group
      Member if the Company or any other Group Member, is restricted from making
such payment, taking such action or entering into such arrangement  
pursuant to the provisions hereof.                                  

(p)   Payments - Note Documents:                                                

(i)  None of the Note Issuers shall:                                

         (A) repay, prepay, redeem or repurchase all or any (or any part) of
             the Senior Notes (other than to the extent the same is required
               in order to effect an exchange or refinancing of the Senior Notes
as permitted by Clause 19.4(aa)); or              

   (B) make any deposits pursuant to the "Defeasance" provisions
contained in the Note Documents.                  

  (ii) Save to the extent prohibited under paragraph (i) above, the Note
           Issuers shall be entitled to make payments they are obligated to make
     under the Note Documents in the manner and at the time any such
payment is required to be made thereunder.                

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  The Company shall procure that no Group Member may make any payment or
  take any action on behalf of any of the Note Issuers or enter into any
arrangement on behalf of any of the Note Issuers if such Note Issuer
 itself, is restricted from making such payment, taking such action or
entering into such arrangement pursuant to the provisions hereof.   

(q)   Amendments: The Company shall not, and shall procure that no other Group  
     Member shall, permit or effect any variations, novations or amendments or
waive any conditions to any of:                                     

 (i)   the objects clause of the Memorandum of Association (or, if the
            country of incorporation of the relevant Group Member is not England
        and Wales, the applicable similar or analogous documents) of any
            Obligor or Material Group Member (that is not an Obligor) (as at the
date of this Agreement);                                

     (ii)  the Articles of Association of any Group Member (or, if the country
        of incorporation of the relevant Group Member is not England and
        Wales, the applicable similar or analogous documents) (as at the
date of this Agreement);                                

    (iii) the Recapitalisation Documents (as at the date of this Agreement);

(iv)  the Finance Documents (as at the date of this Agreement or, in
           respect of any Finance Document entered into post Closing as at the
date of the completion of the Diamond Back Acquisition),

     unless such variation, novation, amendment or waiver (when taken together
   with any other variation, novation, amendment or waiver) is of a purely
  technical or administrative nature or has previously been agreed to in
     writing by the Facility Agent in respect of the Senior Finance Documents,
in accordance with the provisions of this Agreement).               

(r)   Administration and winding-up orders etc.:  The Company shall not, and    
      shall procure that no other Group Member shall, make or join in making any
    application to any court for an administration, winding-up, receivership
    or other similar order to be made in relation to any Group Member, other
    than in respect of a solvent winding-up or dissolution of a Group Member
which is not an Obligor.                                            

(s)   Arm's-length terms:  The Company shall not, and shall procure that no     
  other Group Member shall, enter into any material transaction with any
     Person otherwise than on arms-length terms and for full market value save
for inter-company loans permitted pursuant to this Clause 19.5.     

(t)   Bank Accounts:  The Company shall not, and shall procure that no other    
   Group Member shall, open or maintain any account with any branch of any
      bank or other financial institution providing like services (other than an
 account maintained pursuant to the requirements of the Senior Finance
Documents) unless:-                                                 

   (i)  such branch and bank or financial institution shall be an Approved
      Bank save that to the extent not otherwise prohibited under this
Agreement, a Group Member that                            

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          is not an Obligor or a Material Group Member may be entitled to open
           or maintain an account with a bank or branch or financial institution
          which is not an Approved Bank (an "Alternative Bank" ) provided that
     the Alternative Bank does not have an Encumbrance (other than a
         Permitted Encumbrance) over such account or any other assets of any
        Group Member in respect of such account and any liabilities of the
relevant Group Member relating thereto; or                

    (ii) such account was maintained by such Obligor or, as the case may be,
        such Material Group Member prior to the date of this Agreement and
        (within 30 days of the date of this Agreement) such Obligor or, as
  the case may be, such Material Group Member has put in place
        arrangements satisfactory to the Facility Agent whereby the amount
        standing to the credit of such account is transferred (without any
       specific instructions being given in respect thereof on a regular
      basis) to an account held by an Approved Bank at the end of each
Business Day.                                             

(u)   Capital Expenditure: The Company may request the Facility Agent to approve
     and the Facility Agent (acting on the instructions of the Majority Banks)
     may approve in writing prior to the commencement of any annual Accounting
 Period the figure for Capital Expenditure (the "Revised Capex Level")
 shown in the budget for any annual Accounting Period delivered to the
      Facility Agent pursuant to Clause 19.1.  If the Facility Agent so approves
   the Revised Capex Level for any annual Accounting Period then the Group
      taken as a whole may make Capital Expenditure on assets in an amount up to
 (but not in excess of) the amount of the Revised Capex Level for such
 Annual Accounting Period, and the Company will procure that the Group
    taken as a whole will not make Capital Expenditure on assets during such
annual Accounting Period in an amount in excess of the Revised Capex
    Level.  In respect of the period from the Closing to the date set out in
      the first line of column (1) below and, in the absence of any such written
     approval by the Facility Agent of a Revised Capex Level for any following
    annual Accounting Period, the Company undertakes that in respect of each
      of the annual Accounting Periods ending on the dates set out in column (1)
  below, it will procure that the Group, taken as a whole, will not make
      Capital Expenditure on assets in an amount for each such Accounting Period
     or period in excess of the amount set out in column (2) below against the
  relevant date (the Capital Expenditure in respect of any period listed
   below, or, as the case may be, the Revised Capex Level relating thereto
being the "Original Capital Expenditure Level").                    

====================================================================            
(1)                                (2) $ (or the equivalent thereof             
         in other currencies
====================================================================            
31 December 1998                              9,000,000                         
--------------------------------------------------------------------            
31 December 1999                             10,000,000                         
--------------------------------------------------------------------            
31 December 2000                              8,500,000                         
--------------------------------------------------------------------            
31 December 2001                              8,500,000                         
--------------------------------------------------------------------            
31 December 2002                              8,500,000                         
--------------------------------------------------------------------            
31 December 2003                              8,500,000                         
--------------------------------------------------------------------            
31 December 2004                              8,500,000                         
--------------------------------------------------------------------            
31 December 2005                              8,500,000                         
====================================================================            

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provided that:                                                      

(i)   the amount of any such Original Capital Expenditure Level not 
           utilised in any annual Accounting Period may be carried forward for
            twelve months only and added (otherwise than for the purposes of the
    further application of this proviso) to the Original Capital
            Expenditure Level for the next annual Accounting Period and, for the
      purpose of this Clause 19.5(u), to the extent that any Capital
       Expenditure limit is carried forward pursuant to the provisions
           herewith, to the next annual Accounting Period, Capital Expenditure
       made in such annual Accounting Period shall be deemed to relate
          first to such Capital Expenditure limit so carried forward to such
annual Accounting Period;                               

     (ii)  in addition to the Original Capital Expenditure Level applicable to
  any period set out in column (1) above, the Group may make
            additional Capital Expenditure on assets during such period equal to
       50% of the amount by which Consolidated Adjusted EBITDA for the
        immediately preceding period exceeded the amount of Consolidated
            Adjusted EBITDA shown in the Model for such period less amounts paid
  by the Company in respect of the management fee, under the
      Management Agreement (if any) or otherwise in such immediately
           preceding period(in each case the "Excess Amount") having regard to
          the financial statements delivered pursuant to Clause 19, Provided
        that the application of an amount equal to such Excess Amount in
           making such additional Capital Expenditure, ought not, on a balance
         of probabilities, having regard to the relevant budget or budgets
  provided pursuant to Clause 19.1(b) or any other financial
          information provided under Clause 19 or otherwise give rise to the
      breach of any of the said financial conditions, as the same is
 determined by the Facility Agent (acting reasonably); and

     (iii) the Original Capital Expenditure Level in respect of any period set
       out in column (1) above ending on or prior to 31 December 1999,
            shall be reduced by an amount equal to the amount by which Year 2000
          Expenditure was expensed by the Group through its income statement
during such period.                                     

(v)   Real Property: Save to the extent that the aggregate amount applied by the
  Group for such purpose in any annual Accounting Period does not exceed
      $250,000 (or the equivalent thereof in other currencies) the Company shall
not, and shall procure that no other Group Member shall develop or  
     redevelop all or any part of any real property owned by it or in which it
 has a freehold or leasehold (or any other) interest, save for its own
    occupation and use and in each case where the cost of so doing is within
the Capital Expenditure limits set out in Clause 19.5(u) above.     

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(w)   Share Capital: The Company will not:                                      

(i)   redeem, repurchase, retire, return or repay any of its share  
            capital, or resolve to do so save that the Company shall be entitled
to redeem C Common Stock for an amount not exceeding    
          (Pounds)2,100,000 of its share capital provided by DC Cycle LLC in
            connection with the Diamond Back Acquisition provided that an amount
        equal to the amount of its share capital to be redeemed has been
      irrevocably credited to the Company's account in cash by or on
        behalf of Perseus Cycle LLC so as to enable Perseus Cycle LLC to
            subscribe for an identical number of shares of C Common Stock of the
    Company within 30 days of the completion of the Diamond Back
    Acquisition and that no Event of Default has occurred and is
outstanding or would result from such redemption; or    

(ii)  redeem, repurchase, retire, return or repay any of its share  
            capital, or resolve to do so save that the Company shall be entitled
  to redeem Class C Common Stock for an amount not exceeding
          (Pounds)8,400,000 of its share capital provided by DC Cycle LLC in
            connection with the Diamond Back Acquisition provided that an amount
        equal to the amount of its share capital to be redeemed has been
      irrevocably credited to the Company's account in cash by or on
          behalf of Derby Finance Sarl so as to enable Derby Finance Sarl to
           subscribe for an identical number of shares of Class C Common Stock
            of the Company within 180 days of the completion of the Diamond Back
    Acquisition and that no Event of Default has occurred and is
outstanding or would result from such redemption;       

   (iii) save as contemplated by the Recapitalisation Documents (as at the
        date of this Agreement) issue any new share capital or grant any
       option to any Person to subscribe for any shares in its capital
            other than another Group Member (provided that if the Security Agent
          already has security over the shares of the issuer of any such new
          shares then the Company will procure that the Group Member to whom
       such new shares are issued promptly provides security over such
          shares to the Security Agent to the reasonable satisfaction of the
Security Agent),                                        

  Provided that, notwithstanding the foregoing, the Company may provided
    that no Event of Default has occurred and is outstanding or would result
as a consequence of the following:                                  

    (a)   issue (x) ordinary share capital of a type similar to any class of
            its shares in issue as at completion of the Diamond Back Acquisition
          which is subscribed for in full in cash, or as contemplated in the
           GSIC Note Documents including, for the avoidance of doubt, Clause 4
           of the Stockholders' Agreement (as at the date of the completion of
          the Diamond Back Acquisition) provided such issuance does not give
            rise to any breach of the Senior Notes and is not Disqualified Stock
         as defined in the Senior Notes in respect of which no dividend or
            distribution may be declared, made or paid unless to do so would not
           result in a breach of this Agreement and where such issue would not
           result in a breach of Clause 21.1(y) or any other provision of this
      Agreement and (y) classes of shares other than ordinary shares
        provided that at the time of their issue and subsequently, their

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          issue would not (or could not, if any rights attached thereto were
            to be exercised) breach Clause 21.1(y) hereof or any other provision
            of this Agreement. For the avoidance of doubt, the Company shall not
      issue and shall procure that no other Group Member shall issue
           Excluded Share Capital or share capital which constitutes or may be
converted into Financial Indebtedness;                  

    (b)   issue shares to employees pursuant to the employee share ownership
          scheme in existence as at the date of this Agreement or, if later,
        as at the date of the completion of the Diamond Back Acquisition
           (details of which have been provided to the Facility Agent pursuant
           to paragraph 15 of Schedule 6 or have been provided to the Facility
     Agent prior to the date of the completion of the Diamond Back
           Acquisition and provided that the exercise of any rights under such
         a scheme does not give rise to an Event of Default) and any other
           similar or replacement scheme to which the Facility Agent has given
its prior written approval;                             

(c)   as contemplated in connection with the MS Group Option; and   

(d)   take all such actions as are permitted pursuant to 19.5(aa).  

(x)   Prepayment of other Financial Indebtedness: The Company will not, and will
procure that no Group Member will prepay any Financial Indebtedness 
  earlier than its original scheduled maturity which, in the case of the
     Senior Notes' is approximately May 2008 (i) other than to the Banks under
  the Senior Finance Documents in accordance with the provisions of this
Agreement; (ii) to an Obligor; or (iii) to another Group Member not 
exceeding $100,000 in aggregate in any Financial Year.              

(y)   Surplus Cash:  Neither the Company nor any of the Immediate Subsidiaries  
   will, at any time, hold any Cash or Cash Equivalent Investments greater
      than required for its projected cashflow requirements for the next 30 days
    (the amount of any such excess being the "Cash Balance") and the Company
  shall, promptly upon being aware of such a situation procure that such
     Cash Balance shall be lent by itself or, as the case may be, the relevant
     Immediate Subsidiary to an account situated in England, Wales or Ireland,
    provided that such account and any credit balance standing to the credit
thereof is subject to a Debenture or, as the case may be, an Irish  
      Debenture.  save that, notwithstanding the foregoing, the Company may hold
   Cash that has been remitted to it in accordance with Clause 19.5(o) and
apply the same in accordance therewith.                             

(z)   Redemption: RIC shall not redeem or agree to redeem all or any of its     
     shares, including, without limitation any of the RIC Preferred Shares nor
     permit the holder of any of the RIC Preferred Shares to redeem or attempt
   to redeem all or any of the RIC Preferred Shares without, in each case,
having obtained the Facility Agent's prior approval (acting on the  
instructions of each of the Banks).                                 

(aa)  Payment - GSIC Notes:  The Company shall not repay, redeem, cancel or     
  repurchase the GSIC Notes or make any other payment or distribution in
      cash whatsoever in respect of the GSIC Notes and the Company shall procure
   that no other Group Member shall make any payment or take any action on
behalf of the Company to or enter into any such                     

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arrangement on behalf of the Company save that the Company shall be 
entitled to redeem or, as the case may be, cancel GSIC Notes (the   
"Transferred GSIC Notes") purchased by a Relevant Purchaser either; 

    (1)  pursuant to Clause 2 of the Stockholders' Agreement (as at the date
of the completion of the Diamond Back Acquisition); or    

    (2)  pursuant to Clause 3 of the Stockholders' Agreement (as at the date
of the completion of the Diamond Back Acquisition); and   

    (3)  pursuant to Clause 4 of the Stockholders' Agreement (as at the date
     of the completion of the Diamond Back Acquisition to a Relevant
Purchaser.                                                

Provided that in each case:                               

        (A) the Transferred GSIC Notes are delivered to the Company by the
           holder of the Transferred GSIC Notes for and on behalf of the
             Relevant Purchaser for cancellation whereupon the Company shall
             immediately cancel such Transferred GSIC Notes and issue to the
              Relevant Purchaser, shares in the Company in an aggregate amount
            equal to the aggregate principal amount (together with accrued
             but unpaid interest thereon) of such Transferred GSIC Notes; or

   (B) an amount in cash equal to the aggregate principal amount
        (together with accrued but unpaid interest thereon) of the
Transferred GSIC                                  

             Notes has been irrevocably credited to the Company's account by
        or on behalf of the Relevant Purchaser so as to enable the
       Relevant Purchaser to subscribe, simultaneously with such
          redemption, for shares in the Company in an aggregate amount
            equal to the aggregate principal amount (together with accrued
         but unpaid interest thereon) of the Transferred GSIC Notes;

      And further provided in each case that all the following
conditions are met or fulfilled:                  

               (i)   no Event of Default has occurred which is still outstanding
      or arises as a consequence of the foregoing;

             (ii)  the holder of the Transferred GSIC Notes has confirmed to
                   the Relevant Purchaser and the Company that any liability
                 of the GSIC Note Issuer to the holder of the GSIC Notes
                     under, or in respect of, the GSIC Note Documents in respect
              of the Transferred GSIC Notes has been extinguished;

            (iii) none of the shares issued by the Company pursuant to the
              foregoing shall constitute Excluded Share Capital or
                  Disqualification Stock (as the latter term is defined in
            the Note Documents), or which constitute or may be
converted into Financial Indebtedness.

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            (iv) that as a consequence of the steps set out in (A) and (B)
                    above, the aggregate amount of subordinated debt pursuant to
              the GSIC Note Documents and equity shall not be for an
          aggregate amount less than the aggregate amount of
                 subordinated debt pursuant to the GSIC Note Documents and
                   equity immediately prior to the transactions referred to at
(A) and (B) above.                      

     For the avoidance of doubt, no other payment nor distribution of any kind
or character may be made in respect of the GSIC Notes other than the
      issuance of further GSIC Notes in accordance with clause 2.3.2 of the GSIC
   Loan (as at the date of the completion of the Diamond Back Acquisition)
(provided that no Event of Default is outstanding or occurs as a    
  consequence thereof) or, as the case may be, PIK C Preferred Shares in
accordance with the terms of the Side Letter (as at the same date). 

(ab)  GSIC Notes: the Company shall not make any issuance of GSIC Notes (whether
      in respect of or in lieu of interest on any GSIC Notes then outstanding or
      otherwise) that results in or would, upon the passage of time or giving of
notice, result in an Event of Default under the Note Indentures.    

PART 7  
20.  FINANCIAL UNDERTAKINGS                                                     

20.1                                                                            

(a)   The Company shall ensure that in calculating Consolidated Adjusted EBITDA 
   and Consolidated Net Interest Payable, for any Accounting Period (other
   than in respect of in the case of Consolidated Net Interest Payable, to
the extent that the calculation relates to the periods ending on 27 
September 1998, 31 December 1998 and 28 March 1999 respectively) an 
    adjustment shall be made so as to ensure that such calculations are made
 on a fully annualised basis in accordance with the following formula:

A x 365                                                             
-                                                                   
B                                                                   
Where:                                                                          

   A =  The amount (being Consolidated Adjusted EBITDA or, as the case may
      be, Consolidated Net Interest Payable, in each case, having been
         determined on a Rolling 4 Quarterly basis in accordance with Clause
  20.2 (including, for the avoidance of doubt, any such amount
   determined in accordance with Clause 20.2(a)(i)) to which the
calculation relates.                                      

    B =  the number of actual days comprising the four consecutive quarterly
     Accounting Periods to which the relevant determination relates.

20.2  The Company shall ensure that, the consolidated financial condition of the
Group shall be such that:                                           

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(a)   the ratio of Consolidated Adjusted EBITDA to Consolidated Net Interest    
Payable;                                                            

    (i)  in respect of each of the periods ending on the Accounting Dates 27
      September 1998, 31 December 1998 and 28 March 1999 respectively,
     where Consolidated Adjusted EBITDA is calculated on a Rolling 4
       Quarterly basis and Consolidated Net Interest Payable is, for the
          purposes of this sub-paragraph (i), calculated on a fully annualised
basis as per the formula:                                 

A x 365                                                   
---                                               
B                                                 

where:                                                    

          A = the Consolidated Net Interest Payable for the period from 1 July
      1998 to the Accounting Date at the end of the relevant quarterly
Accounting Period; and                                    

        B = the number of days elapsed from the Closing to (and including)
   the last day of the relevant quarterly Accounting Period Date
relates;                                                  

and                                                                 

     (ii) in respect of each of the subsequent Accounting Dates, calculated on
        a Rolling 4 Quarterly basis for any period ending on an Accounting
Date specified in the table below,                        

shall, in each case, not be less than the ratio set opposite such   
Accounting Date in the table below:                                 

================================================                                
Accounting Date      Ratio                                                      
------------------------------------------------                                
27 September 1998    1.70:1                                                     
------------------------------------------------                                
31 December 1998     1.25:1                                                     
------------------------------------------------                                
28 March 1999        1.20:1                                                     
------------------------------------------------                                
27 June 1999         1.25:1                                                     
------------------------------------------------                                
26 September 1999    1.50:1                                                     
------------------------------------------------                                
31 December 1999     1.75:1                                                     
------------------------------------------------                                
2 April 2000         1.85:1                                                     
------------------------------------------------                                
2 July 2000          1.90:1                                                     
------------------------------------------------                                
1 October 2000       1.90:1                                                     
------------------------------------------------                                
31 December 2000     2.00:1                                                     
------------------------------------------------                                

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================================================                                
Accounting Date      Ratio                                                      
------------------------------------------------                                
1 April 2001         2.00:1                                                     
------------------------------------------------                                
1 July 2001          2.05:1                                                     
------------------------------------------------                                
30 September 2001    2.05:1                                                     
------------------------------------------------                                
31 December 2001     2.10:1                                                     
------------------------------------------------                                
31 March 2002        2.15:1                                                     
------------------------------------------------                                
30 June 2002         2.20:1                                                     
------------------------------------------------                                
29 September 2002    2.25:1                                                     
------------------------------------------------                                
31 December 2002     2.25:1                                                     
------------------------------------------------                                
30 March 2003        2.35:1                                                     
------------------------------------------------                                
29 June 2003         2.35:1                                                     
------------------------------------------------                                
28 September 2003    2.40:1                                                     
------------------------------------------------                                
31 December 2003     2.40:1                                                     
------------------------------------------------                                
28 March 2004        2.50:1                                                     
------------------------------------------------                                
27 June 2004         2.50:1                                                     
------------------------------------------------                                
26 September 2004    2.55:1                                                     
------------------------------------------------                                
31 December 2004     2.55:1                                                     
------------------------------------------------                                
3 April 2005         2.60:1                                                     
================================================                                

(b) the Consolidated Net Worth, during each of the periods specified in the 
table below shall be more than the amount set opposite to such period in the    
table below:                                                                    

===============================================================                 
Period                               Consolidated Net Worth ($)                 
---------------------------------------------------------------                 
Closing - 27 September 1998                         100,000,000                 
---------------------------------------------------------------                 
1 October 1998 - 31 December 1998                   100,000,000                 
---------------------------------------------------------------               
1 January 1999 - 28 March 1999                      105,000,000                 
---------------------------------------------------------------                 
29 March 1999 - 27 June 1999                        110,000,000                 
---------------------------------------------------------------                 
28 June 1999 - 26 September 1999                    110,000,000                 
---------------------------------------------------------------                 
27 September 1999 - 31 December                     110,000,000                 
1999                                                                            
---------------------------------------------------------------                 
1 January 2000 - 2 April 2000                       110,000,000                 
---------------------------------------------------------------                 

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===============================================================                 
Period                               Consolidated Net Worth ($)                 
---------------------------------------------------------------                 
3 April 2000 - 2 July 2000                          120,000,000                 
---------------------------------------------------------------                 
3 July 2000 - 1 October 2000                        120,000,000                 
---------------------------------------------------------------                 
2 October 2000 - 31 December 2000                   120,000,000                 
---------------------------------------------------------------                 
1 January 2001 - 1 April 2001                       120,000,000                 
---------------------------------------------------------------                 
2 April 2001 - 1 July 2001                          127,500,000                 
---------------------------------------------------------------                 
2 July 2001 - 30 September 2001                     127,500,000                 
---------------------------------------------------------------                 
1 October 2001 - 31 December 2001                   130,000,000                 
---------------------------------------------------------------                 
1 January 2002 - 31 March 2002                      130,000,000                 
---------------------------------------------------------------                 
1 April 2002 - 30 June 2002                         140,000,000                 
---------------------------------------------------------------                 
1 July 2002 - 29 September 2002                     140,000,000                 
---------------------------------------------------------------                 
30 October 2002 - 31 December                       140,000,000                 
2002                                                                          
---------------------------------------------------------------                 
1 January 2003 - 30 March 2003                      150,000,000                 
---------------------------------------------------------------                 
31 March 2003 - 29 June 2003                        150,000,000                 
---------------------------------------------------------------                 
30 June 2003 - 28 September 2003                    155,000,000                 
---------------------------------------------------------------                 
29 September 2003 - 31 December                     155,000,000                 
2003                                                                          
---------------------------------------------------------------                 
1 January 2004 - 28 March 2004                      162,500,000                 
---------------------------------------------------------------                 
29 March 2004 - 27 June 2004                        162,500,000                 
---------------------------------------------------------------                 
28 June 2004 - 26 September 2004                    170,000,000                 
---------------------------------------------------------------                 
27 September 2004 - 31 December                     170,000,000                 
2004                                                                          
---------------------------------------------------------------                 
1 January 2005 - 3 April 2005                       175,000,000                 
===============================================================                 

(c)   the ratio of Net Average Financial Indebtedness (excluding, for the       
avoidance of doubt, the GSIC Notes) to Consolidated Adjusted EBITDA,
 calculated on a Rolling 4 Quarterly basis for any period ending on an
     Accounting Date specified in the table below shall be less than the ratio
set opposite such Accounting Date in the table below:               

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=================================================                               
Accounting Date                            Ratio                                
-------------------------------------------------                               

7 April 2000                               5.45:1                               
-------------------------------------------------                               
2 July 2000                                5.30:1                               
-------------------------------------------------                               
1 October 2000                             5.15:1                               
-------------------------------------------------                               
1 April 2001                               5.00:1                               
-------------------------------------------------                               
1 July 2001                                4.80:1                               
-------------------------------------------------                               
30 September 2001                          4.75:1                               
-------------------------------------------------                               
31 December 2001                           4.70:1                               
-------------------------------------------------                               
31 March 2002                              4.60:1                               
-------------------------------------------------                               
30 June 2002                               4.50:1                               
-------------------------------------------------                               
29 September 2002                          4.40:1                               
-------------------------------------------------                               
31 December 2002                           4.40:1                               
-------------------------------------------------                               
30 March 2003                              4.30:1                               
-------------------------------------------------                               
29 June 2003                               4.20:1                               
-------------------------------------------------                               
28 September 2003                          4.00:1                               
-------------------------------------------------                               
31 December 2003                           4.00:1                               
-------------------------------------------------                               
28 March 2004                              3.90:1                               
-------------------------------------------------                               
27 June 2004                               3.75:1                               
-------------------------------------------------                               
26 September 2004                          3.75:1                               
-------------------------------------------------                               
31 December 2004                           3.60:1                               
-------------------------------------------------                               
3 April 2004                               3.60:1                               
=================================================                               

(d)   the Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis
    for any period ending on an Accounting Date specified in the table below
      shall not be less than the amount set opposite such Accounting Date in the
table below:                                                        

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==================================================                              
Accounting Date                        Amount ($)                               
--------------------------------------------------                              
27 September 1998                      35,000,000                               
--------------------------------------------------                              
31 December 1998                       25,000,000                               
--------------------------------------------------                              
28 March 1999                          25,000,000                               
--------------------------------------------------                              
27 June 1999                           26,000,000                               
--------------------------------------------------                              
26 September 1999                      31,000,000                               
--------------------------------------------------                              
31 December 1999                       36,000,000                               
--------------------------------------------------                              
2 April 2000                           38,000,000                               
--------------------------------------------------                              
2 July 2000                            39,000,000                               
--------------------------------------------------                              
1 October 2000                         40,000,000                               
--------------------------------------------------                              
31 December 2000                       41,000,000                               
--------------------------------------------------                              
1 April 2001                           41,000,000                               
--------------------------------------------------                              
1 July 2001                            42,000,000                               
--------------------------------------------------                              
30 September 2001                      42,000,000                               
--------------------------------------------------                              
31 December 2001                       42,500,000                               
--------------------------------------------------                              
31 March 2002                          43,000,000                               
--------------------------------------------------                              
30 June 2002                           44,000,000                               
--------------------------------------------------                              
29 September 2002                      44,000,000                               
--------------------------------------------------                              
31 December 2002                       44,000,000                               
--------------------------------------------------                              
30 March 2003                          44,000,000                               
--------------------------------------------------                              
29 June 2003                           44,000,000                               
--------------------------------------------------                              
28 September 2003                      45,000,000                               
--------------------------------------------------                              
31 December 2003                       45,000,000                               
--------------------------------------------------                              
28 March 2004                          46,000,000                               
--------------------------------------------------                              
27 June 2004                           46,000,000                               
--------------------------------------------------                              
26 September 2004                      47,000,000                               
--------------------------------------------------                              
31 December 2004                       47,000,000                               
--------------------------------------------------                              
3 April 2005                           48,000,000                               
==================================================                              

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(e) Debtor Days shall at all times be less than 80 days as the same is          
determined, as at the end of each relevant monthly Accounting Period, by    
reference to the relevant financial statements delivered pursuant to Clauses
19.1(a)(i), 19.1(a)(ii) and 19.1(a)(iii):                                   

Debtor Days =   A x 365                                                     
-                                           
B                                           

    A =  The aggregate of the Dollar Equivalent of trade receivables payable
        by non-Group Members to Group Members as at the end of  the twelve
      immediately preceding and consecutive monthly Accounting Periods
           ending on the last day of the monthly Accounting Period for which the
calculation is to be determined, divided by 12; and       

   B =  The Dollar Equivalent of sales in the twelve immediately preceding
          and consecutive monthly Accounting Periods ending on the last day of
      the monthly Accounting Period for which the calculation is to be
determined.                                               

   "Dollar Equivalent" means, in respect of any currency other than Dollars,
    the amount of Dollars able to be purchased with such other currency at the
rate of exchange applied by the Company or, as the case may be, the   
  Auditors, in compiling the financial statements to which the calculation
relates.                                                              

(f)   Inventory Days shall at all times during the period in Column 1 below be  
  less than the number specified opposite such period in Column 2 below:

=====================================================                           
Column 1                                     Column 2                           
-----------------------------------------------------                           
From the date of this Agreement until             110                           
(and including) 30 June 1999                                                    
-----------------------------------------------------                           
From 1 July 1999 until (and including) 26         105                           
September 1999                                                                  
-----------------------------------------------------                           
From 27 September 1999 and at all times           100                           
thereafter                                                                      
=====================================================                           

and in all instances, the determination of Inventory Days shall be by reference 
to the relevant financial statements delivered pursuant to Clauses 19.1(a)(i),  
19.1(a)(ii) and 19.1(a)(iii):                                                   

Inventory Days  =  A x 365                                          
-                             
B                             

      A =  The aggregate of the Dollar Equivalent of the value of Inventory held
      by Group Members as at the end of each of the twelve immediately
         proceeding and consecutive monthly Accounting Periods ending on the
         last day of the monthly Accounting Period for which the calculation
is to be determined, divided by 12; and                   

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B =  the Dollar Equivalent of the cost of sales for the twelve      
          immediately and preceding and consecutive monthly Accounting Periods
           ending on the last day of the monthly Accounting Period for which the
         calculation is to be determined less depreciation relating thereto.

     "Dollar Equivalent" means, in respect of any currency other than Dollars,
      the amount of Dollars able to be purchased with such other currency at the
rate of exchange applied by the Company or, as the case may be, the 
    Auditors, in compiling the financial statements to which the calculation
relates; and                                                        

(g)   the aggregate amount of Financial Indebtedness of the Group (excluding,   
      the GSIC Notes, any amounts due under the Note Documents and any Financial
Indebtedness described at paragraph (h) of the definition "Financial
     Indebtedness" (and without double-counting)) shall not, during any period
     listed in Column 1 below exceed the amount specified opposite such period
  in Column 2 below and, for the purposes of any such determination, any
   Financial Indebtedness not denominated in Dollars shall be converted to
  Dollars by reference to the Facility Agent's spot rate of exchange for
such currency and Dollars at or about 10.00 a.m. on the date such   
determination is made:                                              

======================================================                          
Column 1                                  Column 2 ($)                          
------------------------------------------------------                          
1 December 1998 to (and                    70,000,000                           
including) 31 December 1998                                                     
------------------------------------------------------                          
1 January 1999 to (and                    100,000,000                           
including) 31 January 1999                                                      
------------------------------------------------------                          
1 February 1999 to (and                   115,000,000                           
including) 28 February 1999                                                     
------------------------------------------------------                          
1 March 1999 to (and                      115,000,000                           
including) 28 March 1999                                                        
------------------------------------------------------                          
29 March 1999 to (and                     110,000,000                           
including) 2 May 1999                                                           
------------------------------------------------------                          
3 May 1999 to (and including)              95,000,000                           
30 May 1999                                                                     
------------------------------------------------------                          
31 May 1999 to (and                        70,000,000                           
including) 27 June 1999                                                         
------------------------------------------------------                          
28 June 1999 to (and                       50,000,000                           
including) 1 August 1999                                                        
------------------------------------------------------                          
2 August 1999 to (and                      50,000,000                           
including) 29 August 1999                                                       
------------------------------------------------------                          
30 August 1999 to (and                     45,000,000                           
including) 26 September 1999                                                    
------------------------------------------------------                          

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======================================================                          
Column 1                                  Column 2 ($)                          
------------------------------------------------------                          
27 September 1999 to (and                  55,000,000                           
including) 31 October 1999                                                      
------------------------------------------------------                          
1 November 1999 to (and                    65,000,000                           
including) 28 November 1999                                                     
------------------------------------------------------                          
29 November 1999 to (and                   60,000,000                           
including) 31 December 1999                                                     
======================================================                          

All calculations in this Clause 20.1 shall be made on a 365 day year basis.     

PART 8

21.   EVENTS OF DEFAULT                                                         

21.1  The Events of Default                                                     

Each of the events listed in this Clause 21, provided the same is continuing, is
an Event of Default, irrespective of whether it occurs as a result of any action
taken, or not taken, by any Person, including the Company or any other Group    
Member.                                                                         

(a)   Failure to pay:  The Company or any other Group Member fails to pay when  
      due any amount payable by it under any Finance Document in the currency in
    which the same is expressed to be payable (other than where such failure
      to pay results solely from an error in relation to the transmission of the
    relevant payment and such payment is actually received within 3 Business
Days of its due date).                                              

(b)   Breach of undertaking:  The Company or any Group Member fails to comply   
with any of the provisions of Clauses 19 or 20.                     

(c)   Breach of other undertakings:  Other than the provisions referred to in   
      paragraphs (a) and (b) above, any of the Obligors fails to comply with any
 provision of this Agreement and/or any provision of any other Finance
Document (irrespective of whether or not such provision is valid and
     enforceable against such Person) and, (other than the provisions referred
    to in paragraphs (a) and (b) above) if such failure is in the reasonable
    opinion of the Majority Banks capable of remedy within such period, such
     Obligor shall have failed to remedy such failure within 21 days after the
      earlier of the relevant Obligor becoming aware of such default and receipt
    by the relevant Obligor of written notice from the Facility Agent to the
Company requiring the failure to be remedied.                       

(d)   Representations and warranties:  Any representation or warranty or        
    statement made, or deemed to be made, or repeated by or on behalf of the
Company or any Group Member in, or in connection with, any Finance  
Document or any notice, certificate, statement delivered by it in   
      connection with any Finance Document is, or proves to have been, untrue or
misleading in any material way or material respect when made        
or deemed to be                                                     

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repeated or supplied in accordance with or in respect of any Finance
     Document by reference to the facts and circumstances then subsisting and,
      if the circumstances causing such misrepresentation are, in the reasonable
     opinion of the Majority Banks, capable of remedy within such period, such
      Group Member shall have failed to remedy such circumstances within 14 days
 after the earlier of the relevant Group Member becoming aware of such
   misrepresentation and receipt by the Company of written notice from the
   Facility Agent to such Group Member requiring the circumstances causing
such misrepresentation to be remedied such that if the relevant     
    representation was repeated by each such Group Member at the end of such
14 day period, such representation would, at such time, be true and 
correct in all material respects.                                   

(e)   Cross-default:                                                            

     (i)   Any Financial Indebtedness under any of the Senior Notes, any other
           Note Document or the GSIC Notes or other GSIC Note Documents is not
            paid when due, or becomes (or becomes capable of being declared) due
         and payable or due for redemption before its originally scheduled
          maturity date or are placed on demand, in each such case by reason
          of the occurrence of an event of default (howsoever characterised)
  or any event having the same effect, or any such Financial
            Indebtedness which is payable on demand shall have been demanded; or

(ii)  any Financial Indebtedness of one or more Group Members (taken
            together if more than one) aggregating $1,000,000 (or the equivalent
            in other currencies) or more at any one time outstanding is not paid
        when due, becomes (or becomes capable of being declared) due and
     payable or due for redemption before its originally scheduled
          maturity date or are placed on demand, in each such case by reason
          of the occurrence of an event of default (howsoever characterised)
  or any event having the same effect, or any such Financial
            Indebtedness which is payable on demand shall have been demanded; or

(iii) any Encumbrances over assets of any one or more Group Members 
           (taken together if more than one) securing an aggregate of $100,000
          (or its equivalent in other currencies) or more become enforceable
and steps are taken to enforce the same.                

(f)   Repudiation:  The Company or any Group Member rescinds or repudiates (or  
     purports to rescind or repudiate) any Transaction Document (excluding the
Service Contracts) to which it is expressed to be a party.          

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(g)   Distress:  Any distress, execution, attachment, registration or other     
      process affects any assets of the Group or any of the Group Members having
an aggregate value of $100,000 (or the equivalent thereof in other  
   currencies) save where (i) the relevant Group Member is, in good faith,
  contesting the distress, execution, attachment, sequestration or other
process by appropriate proceedings diligently pursued and (ii) the  
  Majority Banks acting reasonably are satisfied that the ability of any
 Obligor to comply with its obligations under the Finance Documents to
    which it is a party will not be materially and adversely affected whilst
     such distress, execution, attachment, diligence or other process is being
so contested.                                                       

(h)   Invalidity: Any of the Finance Documents shall cease to be in full force  
  and effect (except as a result of a specific release in writing by the
Banks) or shall cease to constitute the legal, valid and binding    
 obligation of any Obligor party to it or, in the case of any Security
      Document, fail to provide effective perfected security in favour of the of
the Security Agent and the Banks over the assets over which the     
      Encumbrance is intended to be given by that Security Document, in any such
  case concerning the Company or an Obligor in a manner and to an extent
   reasonably considered by the Majority Banks to be materially adverse to
  their interests under the Senior Finance Documents or in any such case
     concerning any Obligor in a manner and to an extent reasonably considered
  by the Majority Banks to have a Material Adverse Effect or it shall be
     unlawful for any Obligor to perform any of its material obligations under
any of the Finance Documents.                                       

(i) Unable to pay debts: The Company or any Group Member:                       

(i)     suspends payment of its debt or is unable or admits its inability to
       pay its debts as they fall due or is deemed unable to pay its debts
         within the meanings contained in Section 123(1) of the Insolvency Act
    1986 (construed as if the figure stated at Section 123(1)(a) was
       $100,000 or is determined pursuant to Section 123(2) Insolvency Act
        that it is unable to pay its debts (as that Section may be amended);
or                                                          

   (ii) commences negotiations with its creditors generally with a view to
    the general readjustment or rescheduling of all or part of its
          indebtedness which it would otherwise not be able to pay as it falls
due; or                                                   

   (iii)  proposes or enters into any composition or other arrangement for
       the benefit of its creditors generally or any class of creditors.

(j)   Insolvency: Any Group Member is declared or deemed pursuant to any        
     applicable legislation to be insolvent or is or is deemed pursuant to any
    applicable legislation to be unable, or admits in writing its inability,
      to pay its debts as they fall due or stops or threatens to stop payment of
   its debts as they fall due or stops or threatens to stop payment of its
   debts generally or becomes insolvent within the terms of any applicable
    law Provided that, for the purposes of this paragraph (j) in determining
   whether a Group Member is to be deemed to be insolvent or unable to pay
      its debts as they fall due under Section 123 Insolvency Act (i) the figure
stated at Section 123(1)(a) shall be deemed to be $100,000 and (ii) 
    Section 123(2) shall only apply if such a determination has been made in
accordance with the terms of that Section.                          

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(k)   Liquidation:  Any order is made or resolution passed or any steps are     
    initiated or are consented to by any Group Member or otherwise commenced
 by any Person or any petition shall be presented (and not, where that
     Person is unconnected with that Group Member save for being a creditor of
    such Group Member, discharged or stayed within fourteen days in the case
of both legal proceedings and such petition) for the suspension of  
     payments generally or for any process giving protection against creditors
      or for the dissolution, termination of existence, liquidation, winding up,
      bankruptcy or other like process of any Group Member (other than a solvent
  liquidation, dissolution or winding up of a Group Member (not being an
Obligor) that has been previously approved by the Facility Agent in 
writing).                                                           

(l)   Administration: An application is made to the Court for an administration 
  order under the Insolvency Act 1986 with respect of the Company or any
    other Group Member or an effective resolution is passed by the directors
or shareholders of the Company or any other Group Member for such an
    application to be made or an administrator or administrative receiver is
appointed in respect of any Group Member.                           

(m)   U.S. Bankruptcy:  Any Group Member shall commence a voluntary case under  
   the U.S. Bankruptcy Code, or an involuntary case is commenced under the
  U.S. Bankruptcy Code against that Group Member and the petition is not
  controverted within 10 days and is not dismissed within 30 days, after
  commencement of the case, or a custodian, receiver, trustee or similar
     officer is appointed for, or takes charge of, all or substantially all of
the property of that Group Member.                                  

(n)   Receiver: A liquidator or provisional liquidator (save as excepted by the 
 proviso to paragraph (k) above) or, trustee, receiver, administrative
receiver, manager (being a Person acting on behalf of all or any    
     creditors) or similar officer is appointed in respect of any Group Member
   or in respect of (or takes possession of) all or any part of its assets
    with an aggregate value in excess of $100,000 or more (or the equivalent
in other currencies).                                               

(o)   Analogous Acts: Any event occurs or proceeding is taken with respect to   
    the Company or any other Group Member in any jurisdiction to which it is
     subject which has an effect equivalent or substantially similar to any of
the events mentioned in paragraphs (k) to (n) inclusive above.      

(p)   Unlawfulness:  It becomes unlawful at any time for any Group Member to    
     perform all or any of its obligations under any Finance Document to which
it is a party.                                                      

(q)   Qualification of Financial Accounts: The Auditors qualify their report on 
  the audited consolidated accounts of the Group (taken as a whole) in a
    manner which is material in the context of the Finance Documents and the
transactions contemplated thereby.                                  

(r)  Cessation: Any Group Member ceases to carry on all or any material part of 
    its business (save in consequence of any reorganisation, reconstruction or
amalgamation permitted                                                

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 under this Agreement and save as may result from any disposal of assets
permitted by the terms of this Agreement or any solvent liquidation,  
dissolution or winding-up of any Group Member (not being an Obligor)).

(s)   Ownership of Obligors: Any Group Member shall cease to own, directly or   
      indirectly, at least the percentage ownership interest in any Group Member
  owned by it immediately following the Closing or immediately following
      implementation of the steps recorded in the Structure Memorandum contained
     in the Reports or (if later) the date on which the relevant entity became
   a Group Member unless such Group Member was a Dormant Subsidiary at the
  Closing and has remained a Dormant Subsidiary until such time as it is
wound-up on a solvent basis in accordance with paragraph (k) above. 

(t)   Proceedings:  There is current or pending at the Closing or there shall   
    occur thereafter any litigation, arbitration, administrative, regulatory
    or other proceedings or enquiry (including, without limitation, any such
     by the Office of Fair Trading, the Monopolies and Mergers Commission, the
 Department of Trade and Industry, or any equivalent body in any other
     jurisdiction or the European Commission or any division of any thereof or
authority deriving power from any thereof) concerning or arising in 
     consequence of any of the Transaction Documents and/or the implementation
  of any matter or transaction provided for in the Transaction Documents
(excluding, in each case, the Service Contracts) or otherwise.      

(u)   Recapitalisation Warranties: Any warranty made by any Person in any of the
     Recapitalisation Documents is incorrect in a material respect, any breach
by any Person of its obligations under any of the Recapitalisation  
   Documents occurs or any other claim is made by any Group Member against
      any Person under any of the Recapitalisation Documents in each case, which
  (in aggregate) results in or might reasonably be expected to result in
breach of Clause 20.                                                

(v)   Intercreditor Agreements, and Other Documents:                            

(i)   Any Group Member, fails to comply with any of the material    
  provisions of, or its obligations under, the Intercreditor
Agreements; or                                          

     (ii)  the Intercreditor Agreements are not, or cease to be, binding on or
    enforceable against any Group Member expressed to be a party
           thereto, the Note Trustee, the Noteholders, the GSIC Noteholders or
        any permitted successors, transferees or assignees agreed by the
     Facility Agent (as the case may be) or shall otherwise not be
effective;                                              

(iii) any event, howsoever described, constituting default under the
           Recapitalisation Documents shall occur thereunder and be continuing
unwaived; or                                            

     (iv) any event, however described, constituting default under the Diamond
          Back Acquisition Agreement shall occur thereunder and be continuing;

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(w)   ERISA: Any U.S. Obligor or any Subsidiary or any ERISA Affiliate has      
     incurred or is likely to incur a material liability to or on account of a
      Multiemployer Plan or employee pension benefit plan (as defined in Section
    3(2) of ERISA) under Section 409, 502(i), 502(1), 4062, 4063, 4064, 4201
     or 4204 of ERISA or Section 4971 or 4975 of the Code, or any U.S. Obligor
     or any Subsidiary has incurred or is likely to incur material liabilities
 pursuant to one or more employee welfare benefit plans (as defined in
     Section 3(1) of ERISA) which provide benefits to retired employees (other
than as required by Section 601 of ERISA).                          

(x)   Expropriation:  The authority or ability of any Material Group Member or  
   Obligor to conduct its business is wholly or substantially curtailed by
    any seizure, expropriation, intervention or other action by or on behalf
of any governmental, regulatory or other authority.                 

(y)   Control:                                                                  

(i)   Without the prior written consent of all the Banks, any single
            Person or group of Persons acting in concert (as defined in the City
      Code on Takeovers and Mergers) acquires control (as defined in
        Section 416 of the Income and Corporation Taxes Act 1988) of the
Company; or                                             

    (ii)  Thayer and Perseus cease collectively to hold or either or both of
       them (or DC Cycle LLC and/or Perseus Cycle LLC) enters into any
        arrangement or agreement, the effect of which is that Thayer and
            Perseus will cease to hold (in aggregate) the beneficial interest in
           at least 51 per cent of the voting rights of shares in the Company,
         or cease colletively to hold the largest economic interest in the
            Company of all the shareholders in the Company, or cease together to
      be able nominate the majority of the Board of Directors of the
Company; or                                             

    (iii) Thayer Capital Partners ceases to be the General Partner of Thayer
         and/or to manage Thayer or Perseus Management L.L.C. ceases to be
the managing member of Perseus; or                      

     (iv)  The Persons holding the majority of the voting share capital of the
           Company at the date of this Agreement cease to hold the majority of
            its voting share capital and one or more other Persons (if more than
           one acting in concert) own the majority of the voting share capital
           of the Company, and for the purposes of this paragraph (iv) "acting
in concert" means acting together by agreement.         

(v)   Without the prior written consent of all the Banks, there is a
        Change of Control as such expression is defined in the GSIC Note
Documents and the Note Documents.                       

(z)   Auditor's Confirmations:  Any confirmation required to be delivered       
     pursuant to Clause 19.1(a)(v) is not delivered in accordance therewith or
it is delivered but does not confirm that the Borrower Base Summary 
 referred to therein is, in all material respects accurate or does not
     confirm that the Company has in place satisfactory methods and procedures
      for obtaining and collating the information required in order for it to be
able to compile                                                     

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accurate Borrowing Base Summaries for the purposes of this Agreement
     having regard, where appropriate, to each of the specific requirements of
    this Agreement relating thereto including, without limitation, Clause 6.

(aa)  Adjusted Borrowing Base: If at any time, the aggregate Adjusted Borrowing 
 Base of the Borrowers exceeds the aggregate Deutschmark Amount of the
     Ancillary Facilities, Advances and Outstanding Standby L/C's at such time
     and such breach is not remedied within ten Business Days of the Borrowing
Base Summary which identified such breach being delivered hereunder.

(ab)  Material Adverse Effect: Any event or series of events whether related or 
not occurs which has a Material Adverse Effect.                     

(ac)  GSIC Notes.  The Company makes any issuance of GSIC Notes (whether in     
respect or in lieu of interest on any GSIC Notes then outstanding or
      otherwise) that results in or would, upon the passage of time or giving of
notice, result in an Event of Default under the Note Indentures.    

21.2  Acceleration                                                              

Upon the occurrence of an Event of Default and at any time thereafter while the 
same is continuing unremedied or unwaived in accordance with this Agreement, the
Facility Agent may, and shall if so directed by the Majority Banks, by notice to
the Company:                                                                    

(a)   declare that an Event of Default has occurred; and/or                     

(b)   declare that the Revolving Commitments and the Standby L/C Commitments    
      shall be cancelled forthwith, whereupon the same shall be so cancelled and
     all fees payable in relation to the Revolving Commitments and the Standby
L/C Commitments shall become immediately due and payable; and/or    

(c)   declare that the Advances to some or all of the Borrowers (as specified in
      such notice), together with all interest accrued on those Advances and all
      other amounts payable by some or all of the Obligors (as specified in such
  notice) or any of them under the Senior Finance Documents from time to
     time, shall thenceforth be repayable on demand being made by the Facility
    Agent (and in the event of any such demand those Advances, such interest
and such other amounts shall be immediately due and payable); and/or

(d)   declare some or all of the Advances to some or all of the Borrowers (as   
 specified in such notice) immediately due and payable, whereupon they
shall become immediately due and payable together with all interest 
      accrued on those Advances and all other amounts payable by those Borrowers
under the Senior Finance Document; and/or                           

(e)   require some or all of the Borrowers to pay in cash (whereupon each such  
      Borrower shall be obliged to pay) to the Facility Agent for the account of
    each Bank for credit to the Standby L/C Account on its books relating to
    each Standby L/C issued at the request of any such Borrower and which is
   then outstanding an amount equal to the portion of that Standby L/C for
which that Bank is liable.                                          

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(f)   Notwithstanding anything in this Clause 21.2 to the contrary, if an Event 
      of Default arising from filing by or against the Company or any proceeding
  in respect of the Company under the United States Bankruptcy Code, all
sums owing under the Senior Finance Documents whether for principal,
      interest or otherwise shall become immediately due without further demand,
    and the Revolving Commitments, the Standby L/C Commitments and any other
   obligations under the Senior Finance Documents to make credit available
   shall immediately terminate, all without notice of any kind whatsoever.

PART 9

22.   ADDITIONAL BORROWERS                                                      

(a)   If any Subsidiary of the Company wishes to become a Borrower under this   
   Agreement, it and the Obligors' Agent shall each so notify the Facility
Agent (which shall in turn notify the Banks and the Security Agent).

(b)   If all the Banks confirm to the Facility Agent in writing that they are   
  prepared to accept that Subsidiary as a Borrower hereunder (subject to
  such limitations as they may advise) and an Obligor under the relevant
   Intercreditor Agreement(s) the Facility Agent shall so notify the Banks
     and shall prepare and deliver to the Obligor's Agent a Borrower Accession
     Agreement (appropriately completed and subject to such limitations as are
imposed).                                                           

(c)   Upon receipt by the Facility Agent of the Borrower Accession Agreement,   
signed on behalf of the Obligors' Agent (for itself and the existing
  Borrowers, Guarantors and the Obligors) and by the proposed Additional
  Borrower, the Facility Agent shall execute the same (for itself and on
    behalf of the Finance Parties) and shall as promptly as practicable give
    notice of such execution to all of the parties to the Borrower Accession
Agreement.                                                          

(d)   Upon execution of any Borrower Accession Agreement as aforesaid, it shall 
take effect in accordance with, but subject to, the terms hereof and
thereof.                                                            

(e)   The obligations of each Finance Party to each Additional Borrower under   
    this Agreement with respect to the making of the first Utilisation by it
under this Agreement are subject to the condition precedent that the
    Facility Agent shall have received in respect of the Additional Borrower
and the Borrower Accession Agreement all of the documents listed in 
     Schedule 5 and such other reports, opinions and documents (if any) as the
Facility Agent may reasonably require, each in form and substance   
satisfactory to the Facility Agent and that the Facility Agent has  
      confirmed to the Obligors' Agent that it is satisfied that such Additional
Borrower has effectively become party to the relevant Intercreditor 
Agreement(s) as an Obligor.                                         

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23.   GUARANTEES                                                                

23.1  Guarantee                                                                 

In consideration of the Finance Parties entering into this Agreement and/or     
becoming party to this Agreement pursuant to a Novation Certificate and/or (in  
the case of the Banks) participating in any Utilisation, each Guarantor hereby  
irrevocably and unconditionally and jointly and severally but only to the extent
permitted under applicable law (which, in the case of any Guarantor incorporated
in the Netherlands shall be determined by reference to the fair market value    
determined, on a going concern basis, between a willing buyer and a willing     
seller, of its net assets (determined in accordance with Applicable Accounting  
Principles):                                                                    

(a)   guarantees to each Finance Party, as principal obligor and not merely as  
     surety (or similar in any applicable jurisdiction), prompt performance by
 each other Obligor (other than the Company and Lyon Cycle Investments
   B.V.) of all its obligations under the Senior Finance Documents and the
     payment of all sums payable now or in the future to each Finance Party by
 each other Obligor (other than the Company and Lyon Cycle Investments
      B.V.) under or in connection with the Senior Finance Documents when and as
the same shall become due;                                          

(b)   undertakes with each Finance Party that, if and whenever any other Obligor
(other than the Company and Lyon Cycle Investments B.V.) shall be in
default in the payment of any sum whatsoever due from it under or in
      connection with any Senior Finance Document, such Guarantor will on demand
pay such sum as if such Guarantor instead of such other Obligor were
      expressed to be the primary Obligor, together with interest on that sum at
      the rate per annum from time to time payable by such other Obligor on that
   sum from the date when that sum becomes payable by such Guarantor under
this Agreement until payment of that sum in full; and               

(c)   agrees to indemnify each Finance Party on demand against any loss or      
     liability suffered by it under any Senior Finance Document as a result of
  any obligation guaranteed by any Guarantor (other than the Company and
Lyon Investments B.V.) being or becoming unenforceable, invalid or  
illegal.                                                            

Provided that, in respect of the Swedish Obligor, the undertakings given by the 
Swedish Obligor in this Clause 23 and any security undertaking hereunder by the 
Swedish Obligor shall be conditional upon:                                      

(i)   receipt by the Swedish Obligor of a decision from the Swedish local tax   
 authority or from the Swedish Government which has gained legal force
     (lagakraftvunnet beslut) holding that Chapter 12 Section 7 of the Swedish
    Companies Act (aktiebolagslagen) is not applicable to such undertakings;
or                                                                  

(ii)  receipt by the Swedish Obligor of a decision from the Swedish local       
tax authority or from the Swedish Government which has gained legal 
force (lagakraftvunnet beslut) granting, pursuant to Chapter 12     
Section 8 of the Swedish Companies Act, an exemption from Chapter 12
Section 7 of the Swedish Companies Act for such undertakings.       

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The Swedish Obligor shall draft the application to the Swedish tax  
 authority, but shall make such amendments or additions, as the Banks'
local Swedish counsel shall reasonably require. The Swedish Obligor 
    undertakes to file the application to the Swedish tax authority promptly
following the Diamond Back Acquisition.                             

      If the Swedish local tax authority fails to hold that Chapter 12 Section 7
     of the Swedish Companies Act (aktiebolagslagen) is not applicable to such
   undertakings, or fails to grant the appropriate exemptions, the Swedish
Obligor shall lodge an appeal with the Swedish Government if in the 
   reasonable opinion of the Bank's Swedish counsel (and after taking into
      account any representations made by the Swedish Obligor's Swedish counsel)
   such appeal is likely to be successful on the balance of probabilities.

Anything contained in this Agreement to the contrary notwithstanding:           

(i)   the obligations of each U.S. Obligor hereunder shall be limited to a      
maximum aggregate amount equal to the greatest amount that would not
      render such U.S. Obligor's obligations hereunder subject to avoidance as a
  fraudulent transfer or conveyance under Section 548 of Title 11 of the
   United States Bankruptcy Code or any provisions of applicable state law
     (collectively, the "Fraudulent Transfer Laws"), in each case after giving
effect to all other liabilities of such U.S. Obligor, contingent or 
otherwise, that are relevant under the Fraudulent Transfer Laws     
      (specifically excluding, however, any liabilities of such U.S. Obligor (a)
in respect of intercompany indebtedness to the extent that such     
     indebtedness would be discharged in an amount equal to the amount paid by
such U.S. Obligor hereunder and (b) under any guarantee of senior   
      unsecured indebtedness or indebtedness subordinated in right of payment to
 the obligations hereunder which guarantee contains a limitation as to
   maximum amount similar to that set forth in this paragraph, pursuant to
 which the liability of such U.S. Obligor hereunder is included in the
  liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the 
   applicable provisions of the Fraudulent Transfer Laws) of any rights to
     similar rights of such U.S. Obligor pursuant to (A) applicable law or (B)
any agreement providing for an equitable allocation among such U.S. 
      Obligor and other Group Members of obligations arising under guarantees by
such parties;                                                       

(ii)  only the Company shall be liable for its obligations under this Agreement,
   and in no event shall any other Obligor guarantee or act as a Guarantor
for any obligation of the Company under this Agreement; and         

(iii) the Company shall pledge its assets, provided that it shall not pledge    
more than or an amount equal to 66 2/3% of the voting stock in any  
Subsidiary.                                                         

(iv)  the obligations of Raleigh Industries of Canada hereunder in its capacity 
as a Guarantor shall be limited to a maximum aggregate amount of    
C$13,000,000.                                                       

(v)   the obligations of the Swedish Obligors hereunder shall be limited to the 
greater of:                                                         

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(a)  an amount equal to seven times the Consolidated EBITDA of such 
Swedish Subsidiary; and                                   

(b)  the Total Assets of such Swedish Subsidiary;                   

   and in each case, determined by reference to the Swedish Obligor's most
    recently published audited financial statements and, for the purposes of
this paragraph only:                                                

"Consolidated EBITDA" shall be determined in accordance with the    
definition "Consolidated EBITDA" at Clause 1.2. but as if references
     therein to the Company were references to the Swedish Obligor, references
therein to the Group were references to the Swedish Obligor and its 
Subsidiaries (if any) and references therein to the audited annual  
financial statements were references to the latest audited annual   
     financial statements of such Swedish Obligor as the same is determined in
accordance with Applicable Accounting Principles; and               

    "Total Assets" means, in respect of a Swedish Obligor, the sum of fixed,
 intangible and current assets (including, for the avoidance of doubt,
     amounts falling due after more than one year) of such Swedish Obligor and
its Subsidiaries (if any).                                          

23.2  Continuing Guarantee                                                      

This guarantee is a continuing guarantee and shall extend to the ultimate       
balance of all sums payable by the Obligors (other than the Company and Lyon    
Cycle Investments B.V.) or any of them under the Senior Finance Documents.      

23.3  Reinstatement                                                             

Where any discharge (whether in respect of the obligations of any Obligor, any  
security for such obligations or otherwise) is made in whole or in part or any  
arrangement is made on the faith of any payment, security or other disposition  
which is avoided or must be repaid on insolvency, administration, liquidation or
otherwise without limitation, the liability of the Guarantors under this        
guarantee shall continue as if there had been no such discharge or arrangement. 
Each Finance Party shall be entitled to concede or compromise any claim that any
such payment, security or other disposition is liable to avoidance or repayment.

23.4  Waiver of Defences                                                        

Except to the extent that any Guarantor is specifically released in writing and 
except to the extent that its obligations are specifically waived in writing the
obligations of each Guarantor under this Agreement shall not be affected by any 
circumstance, act, omission, matter or thing which but for this provision might 
operate to release or otherwise exonerate such Guarantor from its obligations   
hereunder in whole or in part, including without limitation and whether or not  
known to any Obligor or any Finance Party:                                      

(a)   any time, indulgence or waiver granted to or composition with any other   
Obligor or any other Person; or                                     

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(b)   the taking, variation, compromise, exchange, renewal or release of or     
    refusal or neglect to perfect, take up or enforce any rights or remedies
 against, or any security over any assets of, any other Obligor or any
     other Person or any non-presentment or non-observance of any formality or
     other requirements in respect of any instruments or any failure to obtain
the full value of any security; or                                  

(c)   any legal limitation, disability, incapacity, lack of power, authority or 
   legal personality of, or dissolution or change in the members or status
 of, or other circumstances relating to any other Obligor or any other
   Person and including, without limiting the generality of the foregoing,
    any limitation on the amount guaranteed by any other Guarantor hereunder
     or provided for in any Guarantor Accession Agreement or any Guarantee; or

(d)   any variation (however fundamental and whether or not involving any       
      increase in the liability of any Obligor thereunder) or replacement of any
Senior Finance Document or any other document or security (including
    without limitation any substitute basis agreed pursuant to Clause 10 and
    any agreement contemplated by this Agreement) so that references to such
   Senior Finance Document or other document or security in this guarantee
shall include each such variation or replacement; or                

(e)   any unenforceability, illegality, invalidity or frustration of any        
 obligations of any other Obligor or any other Person under any Senior
     Finance Document or any other document or security, or any failure of any
    other Obligor or proposed Additional Borrower or Additional Guarantor to
   become bound by the terms of any other Senior Finance Document, in each
case whether through any want of power or authority or otherwise; or

(f)   any postponement, discharge, reduction, non-provability or other similar  
circumstance affecting any obligation of any Obligor under a Senior 
      Finance Document resulting from any insolvency, liquidation or dissolution
proceedings or from any law, regulation or order,                   

to the intent that such Guarantor's obligations under this Agreement shall      
remain in full force and this guarantee be construed accordingly as if there    
were no such circumstance, act, variation, limitation, omission, matter or      
thing.                                                                          

23.5  Immediate Recourse                                                        

Each Guarantor waives any right it may have of first requiring any Finance Party
to proceed against or enforce any other rights or security of or claim payment  
from or file any proof or claim in any insolvency, administration, winding up,  
bankruptcy or liquidation proceedings relating to, any other Obligor or any     
other Person before claiming from such Guarantor under this Agreement.          

23.6  Preservation of Rights                                                    

Until all amounts which may be or become payable by any and all Obligors under  
or in connection with the Senior Finance Documents have been irrevocably paid   
and discharged in full (whether by any Borrower or by one or more Guarantors or 
otherwise), after a claim has been made pursuant to this guarantee each Finance 
Party may:                                                                      

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(a)   refrain from applying or enforcing any other security, monies or rights   
     held or received by that Finance Party in respect of (or capable of being
     applied in respect of) such amounts or apply and enforce the same in such
 manner and order as that Finance Party sees fit (whether against such
 amounts or otherwise) and the Guarantors shall not be entitled to the
benefit of the same; and                                            

(b)   hold in a suspense account (with liability to pay interest on the monies  
    held therein at the rate payable to its corporate customers for deposits
in the same currency on like terms and in like amounts) any monies  
  received from any Guarantee or on account of any Guarantor's liability
under this Agreement.                                               

23.7  Non-competition                                                           

Until all amounts which may be or become payable by any and all Obligors under  
or in connection with the Senior Finance Documents have been irrevocably paid in
full (whether by any Borrower or by one or more Guarantors or otherwise), no    
Guarantor shall, after a claim has been made pursuant to this guarantee:        

(a)   be subrogated to any rights, security or monies held, received or         
receivable by any Finance Party or be entitled to any right of      
contribution or indemnity in respect of any payment made or monies  
   received on account of any Obligor's liability under any Senior Finance
Document and, to the extent that any Guarantor is so subrogated or  
      entitled by law, that Guarantor hereby (to the fullest extent permitted by
   law) waives and agrees not to exercise those rights or security or that
right of contribution or indemnity;                                 

(b)   be entitled or claim to rank as a creditor in the insolvency,             
      administration, winding-up, bankruptcy or liquidation of any other Obligor
  in competition with any Finance Party unless otherwise required by the
      Facility Agent or by law (in which case the proceeds, if any, of any claim
      in respect of any rights, security or monies of any Finance Party to which
    such Guarantor was subrogated, filed by the Guarantor with a receiver or
  other similar official, will be paid by such Guarantor to the Facility

Agent to be applied in accordance with the provisions of the Senior 
Finance Documents); or                                              

(c)   be entitled to receive, claim or have the benefit of any payment,         
distribution or security from or on account of any other Obligor or 
    exercise any right of set-off as against any other Obligor (and, without
 prejudice to the foregoing, each Guarantor shall forthwith pay to the
      Facility Agent for the Finance Parties an amount equal to any such set-off
      in fact exercised by it and forthwith pay or transfer, as the case may be,
to the Facility Agent for the Finance Parties any such payment or   
distribution or benefit of security in fact received by it).        

23.8  Additional Security                                                       

This guarantee shall be in addition to and shall not in any way be prejudiced by
any other security (including, without limitation, the Security Documents) now  
or hereafter held by any Finance Party as security for or capable of being      
applied against the obligations of any Obligor.                                 

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23.9  Certificate                                                               

A certificate of the Facility Agent as to any amount due from any Borrower under
this Agreement shall, in the absence of manifest error, be prima facie evidence 
of such amount as against each Guarantor.                                       

23.10 Guarantee Fees                                                            

(a)   The Company undertakes to pay, or procure the payment of, a guarantee fee 
  to the Swedish Obligor.  Such guarantee fee shall be payable yearly in
   advance within 60 days of the end of each annual Accounting Period save
     that the payment of the guarantee fee for the Accounting Period ending 31
  December 1999 (the "First Guarantee Fee Payment") shall be paid to the
Swedish Obligor on the date on which the Swedish Obligor executes an
Accession Agreement.                                                

(b)   Each such guarantee fee shall be for an amount equal to 1.75% of the      
    Maximum Amount save that the First Guarantee Fee Payment shall be for an
amount equal to 1.75% of the value of assets acquired by the Swedish
Obligor pursuant to the Diamond Back Acquisition Agreement.         

24.   RELEASE OF GUARANTORS AND SECURITY                                        

24.1  Guarantors                                                                

Subject to Clause 24.3, at the time of completion of any sale or other disposal 
to a Person or Persons outside (and which will remain outside) the Group of all 
of the shares in the capital of any Guarantor (or of all of the shares in any   
other Group Member such that any Guarantor ceases as a result thereof to be a   
Group Member) and in such other circumstances                                   

(if any) as all the Banks may from time to time agree in writing, such Guarantor
shall be released from all past, present and future liabilities (both actual and
contingent) hereunder and under the Security Documents to which it is a party   
(other than liabilities which it has in its capacity as a Borrower), and the    
security provided over its assets under such Security Documents shall be        
released.                                                                       

24.2  Assets                                                                    

Subject to Clause 24.3, at the time of completion of any sale or other disposal 
to a Person or Persons outside (and which will remain outside) the Group of any 
assets owned by an Obligor over which security has been created by the Security 
Documents to which that Obligor is expressed to be a party, those assets shall  
be released from such Security.                                                 

24.3  Conditions for Release                                                    

The release of the guarantees and security referred to in Clause 24.1 and 24.2  
above shall only occur if:                                                      

(a)   either (i) such disposal will not result directly or indirectly in any    
breach of any of the                                                

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   terms of this Agreement, or (ii) such disposal is being effected at the
    request of the Majority Banks in circumstances where any of the security
   created by the Security Documents has become enforceable, or (iii) such
disposal is being effected by enforcement of the Security Documents;

(b)   any assets to be transferred to another Group Member before completion of 
   such disposal shall have been so transferred and (if so required by the
    Majority Banks) security over such assets shall have been granted to the
Security Agent to its satisfaction; and                             

(c)   the Security Agent shall have executed such documents effecting such      
release as shall be reasonably required to achieve such release as  
 aforesaid (and the Security Agent shall execute such documents at the
  expense of the relevant Obligor promptly upon (and only upon) it being
   satisfied that the conditions in (a), (b) and (c) above are satisfied).

24.4  Release of Group Members                                                  

If any Person which is a Group Member shall cease to be such a member in        
consequence of the enforcement of any of the Security Documents or in           
consequence of a disposal of the shares therein effected at the request of the  
Majority Banks in circumstances where any of the security created by the        
Security Documents has become enforceable, any claim which any Obligor may have 
against such Person or any of its Subsidiaries or which that Person or any of   
its Subsidiaries may have against any Obligor in or arising out of this         
Agreement or any of the Security Documents (including, without limitation, any  
claim by way of subrogation to the rights of the Finance Parties against such   
Person under the Senior Finance Documents and any claim by way of contribution  
or indemnity) shall be released automatically and immediately upon such Person  
ceasing to be a Group Member.                                                   

PART 10                                                                         

25.   INDEMNITIES                                                               

25.1  Indemnifiable events                                                      

Each Obligor agrees to indemnify each Finance Party on demand against any loss  
or expense, including legal fees, and any applicable VAT, which any of them may 
sustain or incur as a result or a consequence of any of the events referred to  
in this Clause 25.1 having occurred:                                            

(a)   Advance not made: the funding of an Advance following delivery of a       
  Drawdown Request but not borrowed because of the application of one or
   more of the provisions of this Agreement (but not, for the avoidance of
doubt because of any default by such Finance Party);                

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(b)   Broken funding: receiving or recovering all or any part of any Advance    
    other than on the last day of the Term relating thereto or at the end of
   any period selected by the Facility Agent under Clause 9, including any
    amount required to compensate that Finance Party in respect of any loss,
      premium, penalty or other compensating payment sustained or incurred by it
     in liquidating, employing or redeploying deposits acquired or arranged or
entered into in order to make, fund or maintain such Advance;       

(c)   Occurrence of an Event of Default: the occurrence of an Event of Default  
      or any other breach of an Obligor's obligations expressed to be assumed by
it under this Agreement or under the Security Documents; or         

(d)   Currency indemnity: if any amount paid or received in respect of this     
  Agreement or any of the Security Documents, whether as a result of any
      order, judgment or otherwise, is not received or recovered by or on behalf
      of that Finance Party in the currency in which the same is expressed to be
payable hereunder or thereunder.                                    

25.2  Stamp duty                                                                

(a)   The Company will pay all stamp, documentary, registration and other       
      similar duties or Taxes, including any penalties, additions, surcharges or
    interest relating to such amounts, which are imposed or chargeable on or
in connection with this Agreement and the Security Documents or any 
judgment given in connection herewith and therewith.                

(b)   The Facility Agent may, but shall not be obliged to, pay any amounts which
  are referred to at 25.2(a). If the Facility Agent does so, the Company
    shall, on demand, indemnify the Facility Agent against any such payment,
together with any costs and expenses, including legal fees, and any 
applicable VAT, incurred by or on behalf of the Facility Agent in   
connection with such payment.                                       

26.   FEES                                                                      

26.1  Commitment fee                                                            

(a)   The Company will pay (or will procure that there is paid) to the Facility 
     Agent for distribution among the Banks pro rata to the aggregate of their
      respective Revolving Commitments, a commitment fee computed at the rate of
      one half of one per cent. (0.5%) per annum on the daily unutilised balance
 of the Revolving Commitments (for the avoidance of doubt, taking into
  account the undrawn balance of any Standby L/C outstanding during such
  period) during the period from and including the date hereof until the
 expiry of the Revolving Availability Period.  Accrued commitment fees
   shall be payable quarterly in arrears on the last day of each quarterly
      Accounting Period of the Group (provided that the first such payment shall
    be due on the last day of the first complete quarterly Accounting Period
of the Group after the Closing) and also on the date on which the   
Revolving Commitments shall be terminated.                          

(b)   Commitment fees are payable three monthly in arrears commencing on the    
   date falling three months from the date of this Agreement and ending on
      the date on which the Total Commitments are cancelled and reduced to zero.

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(c)   If any Bank's Revolving Commitment is cancelled and reduced to zero, any  
      commitment fee which had accrued at such time in relation to that Bank and
    which has not been paid, shall be payable by the Company on the date the
cancellation is effective.                                          

26.2  Utilisation Fee                                                           

The Company will pay (or will procure that there is paid) to the Facility Agent 
for distribution among the Banks pro rata to the aggregate of their respective  
Revolving Commitments in respect of each Utilisation Period (as defined below) a
utilisation fee calculated at the rate per annum determined pursuant to Clause  
26.3 on an amount equal to the sum of the average daily Deutschmark Amount of   
the Ancillary Facilities during such Utilisation Period and the average daily   
utilisation of the Revolving Facility and the Standby L/C Facility during such  
Utilisation Period (without double counting).                                   

26.3  Applicable Rate                                                           

The applicable rate of utilisation fee for any Utilisation Period shall be      
determined by reference to the average daily Deutschmark Amount of the Ancillary
Facilities, Advances and Standby L/Cs during such Utilisation Period and in     
accordance with the following scale:                                            

(a)   if the average daily Deutschmark Amount of the Ancillary Facilities,      
    Advances and Standby L/Cs expressed as a percentage of the average daily
    Total Commitments during such Utilisation Period less than 50 per cent.,
zero per cent. per annum; and                                       

(b)   if the average daily Deutschmark Amount of the Ancillary Facilities,      
    Advances and Standby L/Cs expressed as a percentage of the average daily
   Total Commitments during such Utilisation Period is equal to or greater
than 50 per cent. 0.25 per cent. per annum.                         

26.4  Calculation                                                               

For the purposes of Clause 26.2:                                                

(i)   "Utilisation Period" means each successive period of three months during  
  the period from the date hereof and ending on the Final Repayment Date
  (except that if the last such period would otherwise extend beyond the
   Final Repayment Date, it shall be shortened so as to end on that date),
the first of which shall commence on the date hereof;               

(ii)  a year shall have 360 days; and                                           

(iii) the average daily Total Commitments during a Utilisation Period shall     
  equal the aggregate of the Total Commitments (less any portion thereof
     which in accordance with the provisions hereof may not be utilised at any
      time after the day in question) on each day during such Utilisation Period
divided by the number of days in such Utilisation Period.           

26.5  Payment of Utilisation Fee                                                

The Facility Agent shall promptly after the end of each Utilisation Period,     
notify the Company and the Banks of the amounts payable by (or on behalf of) the
Company under Clause 26.2 in respect of such                                    

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Utilisation Period and the Company shall pay such amount to the Facility Agent  
for account of the Banks in proportion to their respective participation in the 
Facility during the applicable Utilisation Period within 5 Business Days of such
notification.                                                                   

26.6  Agency fees                                                               

The Company shall pay to the Facility Agent, for its own account and the account
of the Security Agent agency fees in the amounts and at the times specified in  
the letter relating to the Agents' fees.                                        

26.7  Arrangement fee                                                           

The Company shall pay to the Facility Agent, an arrangement fee in the amount   
and at the time specified in the letter relating to the arrangement fee.        

27.   COSTS AND EXPENSES                                                        

27.1  Initial Costs                                                             

The Company shall pay to the Facility Agent an amount equal to all reasonable   
costs and expenses, including reasonable legal fees and any applicable VAT      
incurred by the Agents and/or the Arranger in connection with the negotiation,  
preparation and execution of this Agreement and the Security Documents, subject 
to agreed limits.                                                               

27.2  Amendments                                                                

The Company shall pay to the Facility Agent an amount equal to all reasonable   
costs and expenses, including reasonable legal fees, and any VAT payable        
thereon, incurred by the Agents and/or the Arranger in connection with the      
negotiation, preparation and execution of any amendment, waiver, release or     
consent (each such event being on "Approval") which any of the Finance Parties  
is requested to give in connection with the Senior Finance Documents and the    
transactions contemplated by it and them to the extent that the Facility Agent  
(acting reasonably) determines that such Approval (either taken in isolation, or
aggregated with any other Approval requested in the annual Accounting Period to 
which such Approval relates), is in excess of the time and resource the Facility
Agent could reasonably have been expected to expend on such matters in the      
ordinary course of events having regard to its annual agency fee and, for the   
avoidance of doubt, the said annual agency fees does not contemplate any work   
that the Facility Agent may be required to undertake in that capacity following 
the occurrence of a Default or a restructuring or refinancing of the Facilities.

27.3  Protection, enforcement, etc.                                             

The Company shall pay, through the Facility Agent, an amount equal to all proper
costs and expenses, including, reasonable legal fees, and any applicable VAT    
incurred by any Finance Party in connection with protecting, preserving or      
enforcing (or attempting to do so) any of their rights under or arising out of  
any of the Senior Finance Documents.                                            

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PART 11 

28.   THE AGENTS AND THE ARRANGER                                               

28.1  Appointment of the Agents                                                 

(a)   Each Bank and the Arranger irrevocably appoints the Facility Agent and the
    Security Agent to act as its agent in connection with this Agreement and
with respect to the Senior Finance Documents and the transactions   
contemplated hereby and thereby.                                    

(b)   The Agents are authorised to take such action and to exercise and carry   
     out all the discretions, authorisations, rights, powers and duties as are
specifically delegated to it in this Agreement and the other Senior 
   Finance Documents, together with such discretions, rights and powers as
     such Facility Agent reasonably considers to be incidental and each of the
      Finance Parties irrevocably authorises the Facility Agent and the Security
      Agent on such Finance Party's behalf to enter into any Accession Agreement
     or Security Document (whereupon and by which act such Finance Party shall
become bound thereby).                                              

(c)   The Agents are not, nor will they be considered to be, acting as trustee  
    or in a fiduciary capacity under or in connection with this Agreement or
      any of the other Senior Finance Documents other than the Security Agent in
     its capacity as such, under and in respect of the Security Documents. The
 duties of the Agents are restricted to those expressly stated in this
Agreement.                                                          

(d)   Each Bank and the Agents agree (or shall be deemed to have agreed) that,  
where                                                               

    Security Documents are to be granted, or have been granted, in favour of
  the Security Agent, inter alia, for the benefit of the Banks, then the
  Security Agent may enter into such Security Documents on behalf of the
    Banks and shall hold the benefit of such Security Documents on trust for
the Banks and the Facility Agent to the extent of their respective  
  interests for the time being and that the terms and conditions of this
      paragraph (d) shall apply to the Security Agent in its capacity as trustee
    for the Banks and the Facility Agent under such Security Documents.  The
     Security Agent agrees with the Banks and the Facility Agent that it shall
hold on trust for each of them the assets secured by the Security   
    Documents. The perpetuity period applicable to the trusts created hereby
and pursuant hereto shall be eighty years.                          

(e)   Unless expressly excluded in the Security Documents the Security Agent may
      rely on, exercise and be protected by the discretions, protections, powers
      and rights conferred on trustees, mortgagees or receivers under the Law of
     Property Act 1925, the Trustee Act 1925, the Trustee Investments Act 1961
 and the Insolvency Act 1986 and if there is any ambiguity or conflict
    between the same and any of the Security Documents or where the terms of
     the same are less extensive or more restricted than those of the Security
      Documents, the terms of the Security Documents shall prevail to the extent
permitted by the applicable laws.                                   

(f)   The Security Agent in its capacity as trustee or otherwise shall not be   
  liable for any failure, omission, or defect in perfecting the security
constituted by any Security Document or any security created thereby
  including, without limitation, any failure to (i) register the same in
  accordance with the provisions of any of the documents of title of the
relevant Obligor to any                                             

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      of the property thereby charged, or (ii) effect or procure registration of
or otherwise protect the floating charge or any other such security 
     created or pursuant to the Security Documents under the Land Registration
Act 1925 or any other registration laws in any jurisdiction.        

(g)   The Security Agent in its capacity as trustee or otherwise may accept     
   without enquiry such title as any Obligor may have to the property over
which security is intended to be created by any Security Document.  

(h)   Save where the Security Agent holds a legal mortgage over or over an      
    interest in, real property or shares, the Security Agent in its capacity
 as trustee or otherwise shall not be under any obligation to hold any
     title deeds. Security Documents or any other documents in connection with
    the property charged by any Security Document or any other such security
 in its own possession or to take any steps to protect or preserve the
   same.  The Security Agent may permit the relevant Obligor to retain all
such title deeds and other documents in its possession.             

(i)   Save as otherwise provided in the Security Documents, all moneys which    
     under the trusts herein or therein contained are received by the Security
     Agent in its capacity as trustee or otherwise may be invested in the name
   of or under the control of the Security Agent in any investment for the
  time being authorised by English law for the investment by trustees of
trust money or in any other investments which may be selected by the
     Security Agent with the consent of the Majority Banks.  Additionally, the
same may be placed on                                               

     deposit in the name of or under the control of the Security Agent at such
bank or institution (including any Agent) and upon such terms as the
   Security Agent may think fit.  Any and all such monies and all interest
      thereon shall be paid over the Facility Agent forthwith upon demand by the
Facility Agent.                                                     

(j)   Each Bank hereby confirms its approval of the Senior Finance Documents and
any security created or to be created pursuant thereto and hereby   
     authorises, empowers and directs the Security Agent (by itself or by such
    Person(s) as it may nominate) to execute and enforce the same as trustee
or as otherwise provided (and whether or not expressly in the Banks'
names) on its behalf.                                               

28.2  Duties of the Agents                                                      

(a)   The Agents will promptly forward to the relevant Party the original or a  
     copy of any notice or document received by it in its capacity as Facility
Agent or, as relevant, Security Agent for such Party.               

(b)   The Facility Agent and, where applicable, the Security Agent will promptly
      notify the Banks if it receives notice from any Party of the occurrence of
      a Default or any other breach of this Agreement or any of the other Senior
 Finance Documents by an Obligor and that notice states the Default or
  breach and makes reference to the specific Event of Default and/or the
Clause that has been breached.                                      

(c)   Except as otherwise stated in this Agreement and the Security Documents,  
     the Facility Agent and the Security Agent will act in accordance with any
   instructions given to it by the Majority Banks, such instructions being
  binding on all the Banks whether or not they form part of the Majority
Banks.                                                              

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28.3  Exculpatory provisions                                                    

Except where this Agreement or the Security Documents specifically provides     
otherwise, the Facility Agent or, as the case may be, the Security Agent is not 
obliged:                                                                        

(a)   to review or check the accuracy or completeness of any document, notice or
other communication it receives or forwards to another Party;       

(b)   to monitor or enquire if a Default has occurred, or if the representations
     made by any Obligor under or in connection with any of the Senior Finance
  Documents and the Security Documents are true, correct or accurate, or
     whether any Obligor has performed each of the obligations expressed to be
assumed by it under any of the Senior Finance Documents;            

(c)   to disclose to any Party any information (whether in a documentary form or
      otherwise) if such disclosure would or might, in its opinion, constitute a
  breach of law, regulation, its duty of confidentiality or otherwise be
actionable at the suit of any Person;                               

(d)   to take any action or exercise any right, power or discretion under any of
the Senior                                                          

      Finance Documents, unless specifically instructed to do so by the Majority
     Banks, the Banks or any other Finance Party which is entitled to instruct
     it under any of the Senior Finance Documents and the manner in which such
right, power or discretion should be exercised; or                  

(e)   to begin any legal action or proceeding under or in connection with any of
     the Senior Finance Documents, unless it is satisfied that it has received
      such security as it may require in respect of any costs, claims, liability
   or loss, including legal fees, and any applicable VAT, which it will or
may incur in respect of, or in connection with, such actions or     
proceedings.                                                        

28.4  Assumptions                                                               

The Agents may assume that:                                                     

(a)   no Default has occurred and that no Obligor is not in breach of its       
obligations any of the Senior Finance Documents; and                

(b)   each representation made by the Obligors under or in connection with any  
of the Senior Finance Documents is correct,                         

unless it has, in its capacity as an Agent received notice to the contrary from 
any Party; and                                                                  

(c)   that the Facility Office of any Bank is that office which has been        
      notified to it by that Bank for such purpose by ten Business Days' notice,
     until such Bank informs the Facility Agent that it has designated another
office as its Facility Office.                                      

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28.5  Agents and Arranger not responsible to other Parties                      

None of the Agents nor the Arranger are responsible to any other Party for:     

(a)   the execution, validity or enforceability of any of the Finance Documents 
 or any documentation or communication delivered or made in connection
therewith;                                                          

(b)   the accuracy and/or completeness of any information supplied by or on     
behalf of an Obligor, including the Information Package;            

(c)   taking, or omitting to take, any action in connection any of the Senior   
     Finance Documents, unless such Party suffers loss directly as a result of
  such Agent's or as the case may be, the Arranger's gross negligence or
wilful misconduct; or                                               

(d)   any breach by any other Party of this Agreement or any of the other Senior
Finance Documents.                                                  

28.6  Delegation and advisers                                                   

Each of the Agents may:                                                         

(a)  engage, pay for and rely on the advice or services of any expert or        
 professional (whether a lawyer, accountant, surveyor or otherwise); and

(b)   act through any of its, or its Affiliates', personnel and agents.         

28.7  Indemnity                                                                 

Upon demand by an Agent, each Bank shall, in its pro rata share, indemnify such 
Agent, from and against any liabilities, costs, claims, losses and expenses,    
including legal fees, and any applicable VAT which it may incur in any way      
relating to or arising out of it acting in its capacity as an Agent, save to the
extent that such liability, cost, claim, loss or expense was incurred as a      
result of such Agent's gross negligence or wilful misconduct.                   

28.8  Resignation of the Agents                                                 

(a)   Each Agent may resign its appointment under this Agreement by giving not  
     less than thirty days' prior written notice to that effect to each of the
      other Parties stating whether or not it has appointed its Affiliate as its
      successor. No Agent's resignation shall become effective until a successor
  has been appointed pursuant to this Clause 28.8, and in respect of the
      resignation of a retiring Security Agent, shall not become effective until
  the Facility Agent is satisfied that all things required to be done in
    order that the Security Documents or replacements therefor shall provide
      for effective and perfected security in favour of the replacement Security
Agent have been done.  The Obligors shall take such action as may be
   necessary in order that the Security Documents or replacements therefor
shall provide for effective and perfected security in favour of any 
replacement Security Agent.                                         

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(b)   Without prejudice to the provisions of Clause 28.8(a), the Majority Banks 
     may require the Agents to retire from their respective appointments under
      this Agreement at any time without assigning any reason therefor by giving
 not less than thirty days' prior written notice to that effect to the
   Facility Agent, provided that no such retirement shall become effective
 until a successor for the Agents is appointed pursuant to this Clause
28.8.                                                               

(c)   If the successor to the Agents or is to be:                               

   (i)  one of its Affiliates, such Affiliate shall become the Agent under
  this Agreement upon notice to that effect being given by the
        resigning Agent and its successor to each of the other Parties; or

      (ii) other than one of its Affiliates, its successor shall be appointed by
        the Majority Banks following consultation with the Company. If the
         Majority Banks have not appointed a successor within 30 days of the
        Agents' notice given under (a) above, the Agents may appoint their
        successor, such appointment becoming effective upon notice to that
       effect being given by the resigning Agents and their successor to
each of the other Parties.                                

(d)   After a successor to the Agents has been appointed, the retiring Agents   
      shall continue to be entitled to the benefits of this Clause 28 but solely
     in respect of any actions taken or omitted to be taken by it while it was
     acting as an Agent under this Agreement and its successor and each of the
    Parties shall have the same rights and obligations amongst themselves as
if the successor had been a Party to this Agreement instead of the  
retiring Agents.                                                    

(e)   The retiring Agents will make available to its successor any documents,   
    records and advice which their successor reasonably requires in order to
enable it to perform its functions as an Agent.                     

28.9  Separate entity                                                           

Each of the Agents' agency divisions shall be treated as a separate entity from 
any of its other departments or divisions. Therefore, unless an Agent receives  
any information concerning an Obligor in connection with this Agreement or the  
facilities contemplated by any of the Senior Finance Documents in its capacity  
as an Agent it shall be entitled to treat that information as confidential.     

28.10 Reliance                                                                  

Each Agent may rely on any communication or document reasonably believed by it  
to be genuine and correct and, without limiting the generality of the foregoing,
may rely on any statement made by a director or employee or any Person regarding
any matters which may reasonably be assumed to be within his knowledge or within
his power to verify.  Each Agent may engage, pay for and rely on legal or other 
professional advisers selected by it and shall be protected in so relying.      

28.11 Credit approval                                                           

Each of the Banks severally represents and warrants to the Agents and the       
Arranger that it has made its                                                   

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own independent investigation and assessment of the financial condition and     
affairs of each Obligor and their related entities and other parties considered 
by it to be relevant in connection with its participation in this Agreement and 
has not relied exclusively on any information, including the Information        
Package, the Reports and any information distributed on behalf of any Obligor   
during syndication, provided to such Bank by any Agent or any Arranger in       
connection therewith. Each Bank represents, warrants and undertakes to each     
Agent and the Arranger that it shall continue to make its own independent       
appraisal of the creditworthiness of the Obligors and other parties considered  
by it to be relevant in connection with the Senior Finance Documents and their  
related entities while any amount is or may be outstanding under the Senior     
Finance Documents.                                                              

28.12 Tax Confirmation                                                          

Each Bank confirms in favour of the Facility Agent (on the date of this         
Agreement, or in the case of a Bank which becomes a party hereto pursuant to a  
transfer or assignment, on the date on which the relevant transfer or assignment
becomes effective) that either:                                                 

(a)   it is not resident for tax purposes in the United Kingdom and is          
beneficially entitled to its share of the Advances and the interest 
thereon; or                                                         

(b)   it is a bank as defined for the purposes of Section 349 of the Income and 

28.13 Miscellaneous provisions                                                  

(a)   Each of the Agents, and the Arranger shall, if they are also a Bank, have 
    the same rights and obligations under this Agreement as if they were not
an Agent, or an Arranger and exercise those rights and perform those
obligations accordingly.                                            

(b)   Each of the Agents and the Arranger may contract any banking or other     
business with any of the Obligors.                                  

(c)   None of the Banks will assert against any individual any claim which it   
may have against any of the Agents or the Arranger.                 

(d)   Each Agent may refrain from doing anything which would or might in its    
reasonable opinion (a) be contrary to the law of any applicable     
     jurisdiction or any applicable official directive or (b) render it liable
      to any Person, and may do anything which in its reasonable opinion (acting
   on legal advice) is necessary to comply with any such law or directive.

29.   TRANSFERS                                                                 

29.1  Obligors                                                                  

Save as expressly provided in this Agreement, no Obligor may without the prior  
written consent of the                                                          

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Banks, assign, transfer, novate or dispose of all or any of its rights or       
obligations under this Agreement.                                               

29.2  Banks                                                                     

(a)   Subject to Clause 29.5, any Bank (the "Existing Bank") may, at any time,  
 assign transfer or novate all or any part of its rights, benefits and
    obligations under this Agreement (including its Revolving Commitment and
   its Standby L/C Commitment) in a minimum amount of DM 5,000,000 (or, if
   less, equal to its Revolving Commitment and its Standby L/C Commitment)
and each of the other Senior Finance Documents to another financial 
      institution (the "New Bank") with the consent of the Company, such consent
      not to be unreasonably withheld or delayed and to have been deemed to have
been given if not refused within 14 days of the relevant request by 
      delivering, or causing to be delivered, to the Facility Agent, in the case
of a transfer or a novation, a Novation Certificate duly            

  completed and executed by the Existing Bank and the New Bank and to be
executed upon receipt by the Facility Agent and upon details of such
      transfer or novation having been reflected in the control account referred
to at Clause 31.3.                                                  

(b)   Unless otherwise expressly provided in any Security Document or otherwise 
    expressly agreed between the Existing Bank and the New Bank and notified
 by the Existing Bank to the Trustee at the time at which the relevant
transfer or novation takes effect under Clause 29.3 there shall     
automatically be transferred with any transfer or novated with any  
novation of the Existing Bank's rights and/or obligations under this
    Agreement, the Existing Bank's rights under or in respect of each of the
other Senior Finance Documents which relate to that portion of the  
      Existing Bank's rights and/or obligations under this Agreement and each of
   the other Senior Finance Documents which are the subject matter of such
transfer or novation.                                               

(c)   A Bank shall only be entitled to transfer or novate all or part of its    
    rights, benefits and obligations under this Agreement to the extent that
 it transfers its rights, benefits and obligations under the Revolving
 Facility and the Standby L/C Facility in the same proportion that the
Revolving Commitments of each of the Banks bears to the Standby L/C 
  Commitments of each of the Banks at such time and, for the purposes of
    this paragraph (c), any Ancillary Commitment of any Ancillary Bank shall
      be ignored and treated as if such Bank's Revolving Commitment had not been
reduced in accordance with Clause 7.                                

29.3  Time of transfer                                                          

Upon execution of an Intercreditor Agreement, Accession Memorandum and a        
Novation Certificate by the New Bank, the Existing Bank and the Facility Agent  
(or if later, the date specified for this purpose in the Novation Certificate)  
and to the extent that they are expressed to be subject to the transfer or      
novation stated therein:                                                        

(a)   the Existing Bank shall be released from its obligations to each other    
     Party (the "released obligations") and each other Party shall be released
from its obligations to the Existing Bank;                          

(b)   the New Bank will assume obligations towards each other Party which differ
from the released obligations only in so far as they are owed to or 
assumed by the New Bank and not the Existing Bank;                  

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(c)   the rights of the Existing Bank against the other Parties and vice versa  
(the "cancelled rights") will be cancelled; and                     

(d)   the New Bank and the other Parties will acquire rights against each other 
which differ from the cancelled rights only insofar as they are     
exercisable by or against the New Bank and not the Existing Bank.   

Each Party (other than the Existing Bank and the New Bank) irrevocably          
authorises the Facility Agent to execute each Novation Certificate on its       
behalf.                                                                         

29.4  Administration fee                                                        

Not later than on the date a transfer becomes effective in accordance with      
Clause 29.3, the New Bank will pay to the Facility Agent, for its own account,  
an administration fee of $1,000.                                                

29.5  Additional amounts payable to transferee                                  

No Bank may effect a transfer pursuant to this Clause 29 if, at the time of the 
transfer, or immediately after, or if a payment of interest, principal or       
otherwise was to be made by an Obligor under this Agreement at such time to or  
for the account of the proposed transferee, such Obligor would be liable to pay 
an additional amount, including an indemnity payment (the "additional amount")  
under Clause 14 and/or Clause 15 which would not have been payable to the       
proposed transferor, unless the proposed transferee has confirmed to the        
Facility Agent and the Obligors' Agent that it will promptly reimburse the      
relevant Obligor an amount equal to the additional amount.                      

29.6  Disclosure of information                                                 

(a)   Any Finance Party may provide to a Permitted Recipient, which has entered 
     into a Confidentiality Undertaking, a copy of this Agreement; each of the
  Transaction Documents and such information concerning the Group or any
  Group Member, including without limitation, the Recapitalisation as it
considers appropriate.                                              

(b)   A "Permitted Recipient" means, in respect of any Finance Party:           

(i)  its Affiliates;                                                

      (ii) any Person with which that Finance Party is considering entering into
        contractual relations in connection with this or any of the Senior
Finance Documents;                                        

(iii)  its advisers;                                                

 (iv) the courts, regulatory and other bodies in accordance with whose
          orders or regulations it is required or is accustomed to comply; and

(v)  any other Person who that Finance Party reasonably considers   
    appropriate to receive such information in order to protect or
preserve that Finance Party's position.                   

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30.   REDISTRIBUTION PROVISIONS                                                 

30.1  Redistributions                                                           

(a)   Subject to Clause 30.3, if all or any part of an Obligor's obligations    
    under this Agreement and each of the other Senior Finance Documents owed
    to any Finance Party are discharged, whether by way of set-off, payment,
combination of accounts or otherwise,                               

      other than as a result of an Agent receiving payment and distributing such
     payment in accordance with Clause 13, that Finance Party (the "Recovering
   Party") shall promptly pay to the Facility Agent an amount equal to the
amount so discharged (the "Discharged Amount").                     

(b)   The Facility Agent shall treat each Discharged Amount received by it from 
   a Recovering Party as if it had received the Discharged Amount from the
     relevant Obligor and distribute it amongst the Finance Parties (including
the Recovering Party) in accordance with Clause 13.2 .              

(c)   Upon a Discharged Amount being distributed by the Facility Agent, the     
      relevant Recovering Party shall be subrogated to the rights of each of the
     other Finance Parties which received such a distribution to the extent of
  such distribution and relevant Obligor will owe the Recovering Party a
 debt which is equal to the amount so distributed to each of the other
Finance Parties.                                                    

30.2  Repayment of a Discharged Amount                                          

If a Recovering Party is required to return or repay an amount which it         
determines relates to a Discharged Amount made by it under Clause 30.1, it shall
promptly inform the Facility Agent. Each of the Finance Parties (other than the 
Recovering Party which received a payment as a result of the Discharged Amount  
being distributed) shall pay to the Facility Agent (for the account of the      
Recovering Party) all that it has received of the Discharged Amount. Upon such  
payment being made, the rights of subrogation provided in Clause 30.1(c) above  
shall be operated in reverse to the extent of the reimbursement.                

30.3  Exceptions                                                                

(a)   A Recovering Party is not obliged to pay any amount under Clause 30.1 if, 
      in its opinion (acting reasonably), after such payment it would not have a
valid claim against the relevant Obligor by way of subrogation or   
otherwise in respect of such payment.                               

(b)   A Finance Party shall not be obliged to make any payment under Clause 30.1
    if the obligations owed to that Finance Party are discharged as a result
of it receiving payment from a New Bank in respect of a Novation    
Certificate.                                                        

(c)   A Recovering Party which has commenced or joined in an action or          
proceeding in any court to recover any amount due to it under this  
    Agreement or any of the other Senior Finance Documents and pursuant to a
 judgment obtained in such court or a settlement or compromise of that
     action or proceeding shall have received any amount, shall not be obliged
      to share all or any proportion of that amount with any Finance Party which
      has the legal right to, but does not, join in such action or proceeding or
commence and diligently prosecute a separate action                 

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    or proceeding to enforce its rights under this Agreement or, as the case
    may be, such other Senior Finance Document in the same or another court.

(d)   If a notice is served under Clause 21.2 each Bank and each Ancillary Bank 
shall adjust                                                        

by corresponding transfers (to the extent necessary) their claims in
    respect of amounts outstanding to them under the Revolving Facility, the
      Standby L/C Facility and Ancillary Facilities so that after such transfers
each such Bank shall have the same amount of outstandings under the 
      Revolving Facility and Ancillary Facilities and the same liabilities under
     the Standby L/C Facility pro rata corresponding to the proportion of each
    Bank's Revolving Commitment to the aggregate Revolving Commitments, each
as at the date the notice is served under Clause 21.2.              

PART 12 

31.   CALCULATIONS AND EVIDENCE OF DEBT                                         

31.1  Calculations                                                              

Interest and commitment commission shall accrue from day to day and shall be    
calculated on the basis of a year of 360 days (or, if market practice differs,  
in accordance with market practice) and the actual number of days elapsed.      

31.2  Financial Accounts                                                        

Each of the Banks shall, in accordance with its usual practices, maintain on its
books an account reflecting the amount which it has lent and the amount owing to
it under this Agreement and the each of the other Senior Finance Documents from 
time to time.                                                                   

31.3  Control account                                                           

(a)   The Facility Agent shall, in accordance with its usual practices, maintain
on its books a control account reflecting any amounts received or   
   recovered by it in connection with this Agreement and each of the other
      Senior Finance Documents and any amounts which are payable by any Party in
connection with this Agreement and each of the other Senior Finance 
Documents and the Parties' respective interests in such amounts.    

(b)   With respect to any Bank, the assignment, transfer or novation of all or a
      part of such Bank's interests under the Senior Finance Documents shall not
    be effective until such assignment, transfer or novation is reflected in
     the control account maintained by the Facility Agent with respect to such
interests, and prior to such reflection in the control account, all 
amounts owing to the transferor with respect to such interests shall
      remain owing to such transferor.  In addition to its capacity as agent for
    the Banks, solely for purposes of this Clause 31.3, the Facility Agent's
   maintenance of the control account shall also be as the Company's agent
without incurring any liability to the Company in such capacity     
whatsoever.                                                         

31.4  Standby L/C Accounts                                                      

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(a)   On the Issue Date of each Standby L/C each Bank participating in such     
      Standby L/C shall open its books at its Facility Office in accordance with
its usual practices an account                                      

      (a "Standby L/C Account") each in the name of the Borrower on whose behalf
   the same was issued and entitled "Raleigh Standby L/C" (together with a
     reference to such Standby L/C) and denominated in the currency of payment
of sums payable under that Standby L/C.                             

(b)   The Borrowers shall make such payments to each Bank for credit to each    
     Standby L/C Account on the books of such Bank as are provided for in this
Agreement.                                                          

(c)   The amount from time to time standing to the credit of each Standby L/C   
    Account on the books of a Bank shall bear interest at its overnight rate
for call deposits in the relevant currency from time to time, such  
  interest to be compounded daily and to be credited to such Standby L/C
 Account quarterly in arrear on the last Business Day of each calendar
quarter and on the date on which such Standby L/C Account is closed.

(d)   Each Bank shall be entitled to pay out of the amount standing to the      
    credit of the Standby L/C Account relating to any Standby L/C any amount
    which it is obliged to pay out under such Standby L/C.  However, subject
   to the provisions of paragraph (e) below, no withdrawals may be made by
  any Borrower from a Standby L/C Account (subject to the Senior Finance
  Documents) until such time as all actual and contingent liabilities of
such Borrower hereunder in respect of the Standby L/C to which that 
Standby L/C Account relates have been satisfied in full.            

(e)   If the amount of the Standby L/C is reduced, the Bank that issued that    
   Standby L/C shall, if so requested by the Borrower on whose behalf that
      Standby L/C was issued by not later than 12 noon on any Business Day after
such reduction, pay out of the amount standing to the credit of the 
  Standby L/C Account relating to such Standby L/C on such business day:

 (i)  a sum equal to the excess (if any) of the amount standing to the
       credit of such Standby L/C Account over the amount of such Bank's
participation in the Standby L/C; and                     

   (ii) a sum which bears to the amount (if any) standing to the credit of
           such Standby L/C Account as a result of payments made to the Facility
           Agent for credit thereof pursuant to Clause 16.2 the proportion borne
         by the amount of the reduction in such Banks' participation in that
          Standby L/C to the amount thereof immediately before that reduction.

31.5  Actual amount received                                                    

The amount owed by an Obligor to any Finance Party under this Agreement and each
of the other Senior Finance Documents shall be reduced by the amount actually   
received or recovered by such Finance Party and not by reference to any rate of 
exchange applied by any court or other body in calculating how much is payable  
by such Obligor under any judgment or order given in connection with this       
Agreement or any of the Senior Finance Documents.                               

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31.6  Prima facie evidence                                                      

The accounts referred to in Clauses 31.2, 31.3 and 31.4 are prima facie evidence
of the amount and details recorded in those accounts.                           

31.7  Certificates and determinations                                           

Any certificate delivered or determination made by a Finance Party, whether in  
relation to an amount payable to it under this Agreement or the any other Senior
Finance Documents or, in respect of an indemnity given by an Obligor or         
otherwise shall, in the absence of manifest error, be conclusive evidence of the
matters to which such certificate or determination relates.                     

31.8  Reference Banks                                                           

(a)   If any Reference Bank fails to provide the Facility Agent with a quotation
     when required for the purposes of this Agreement, the rate for which such
      quotation was required shall (provided that, if there are, at the relevant
time, four or more Banks, there are at least two) be determined by  
reference to the quotations that are received by the Facility Agent.

(b)   Additional or replacement banks may, by agreement between the Obligors'   
Agent and the Majority Banks, be appointed as a Reference Bank.     

32.   AMENDMENTS AND WAIVERS                                                    

32.1  Majority Banks                                                            

Unless prohibited by Clause 32.2, Clause 32.3 or Clause 32.4 , any provision of 
this Agreement or the other Senior Finance Documents may be amended, waived or  
supplemented or any consent given by written agreement made between the Company 
and the Majority Banks or, if the Facility Agent has received the Majority      
Banks' prior approval, the Facility Agent on their behalf.                      

32.2  All Banks                                                                 

The provisions contained in this Agreement and which relate to the following    
shall not be amended, supplemented or modified or any consent given without the 
prior consent of all Banks:                                                     

(a)   the definitions of "Availability Period", "Margin", "LIBOR",              
 "Encumbrance", "Event of Default", "Repayment Date", "Final Repayment
  Date", "Financial Indebtedness", "Majority Banks", "Potential Event of
Default" and Reduction Date;                                        

(b)   Clauses 6 (other than Clause 6.15), 19.4(y), 19.5 (a), (f), (g), (h), (i),
    (o), (p), (r), (t), (u), (v), (w), (x), (y) or (z), (aa), and 30 and the
definitions contained or referred to therein;                       

(c)   any provision of this Agreement which expressly requires the consent of   
each Bank; and                                                      

(d)   the amount of either of the Facilities, a Bank's Revolving Commitment,    
Standby L/C                                                         

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      Commitment, the amount (including both principal and interest) or currency
 or due date for payment of any amount payable under any of the Senior
Finance Documents or the Expiry Date of a Standby L/C;              

32.3  Super Majority Banks                                                      

Without the prior consent of a Super Majority:                                  

(a)   the Security Agent shall not (other than in accordance with Clause 24)    
release any asset which is subject to a fixed Encumbrance granted in
favour of the Security Agent (unless such consent is given so as to 
    facilitate a disposal permitted to be made, or not prohibited from being
made, under this Agreement);                                        

(b)   the provisions contained in this Agreement and which relate to Clauses    
     19.5(b), (c), (d), (e), (j), (k), (l),(m)(i),(n),(q) or (s) and Clause 20
  shall not be amended, supplemented or modified or any consent given in
respect thereof;                                                    
(c)   each of the Intercreditor Agreements shall not be amended, supplemented or
modified.                                                           

 "Super Majority Banks" means a Bank or group of Banks whose aggregate
 Revolving Commitments amount to more than eighty-five per cent of the
    Total Commitments or if each Banks' Commitment has been reduced to zero,
 would have amounted in aggregate to eighty-five per cent of the Total
Commitments immediately prior to such reduction to zero and, for the
     purposes of this definition, the provisions of Clause 7 and the Ancillary
  Commitment of any Ancillary Bank shall be ignored and be treated as if
    such Bank's Revolving Commitment had not been reduced in accordance with
Clause 7.                                                           

32.4  All Parties                                                               

Without the prior consent of all Parties, this Clause 32 may not be amended,    
waived or supplemented.                                                         

32.5  The Agents                                                                

Without the prior consent of the relevant Agent, none of such Agent's rights or 
obligations under any of the Senior Finance Documents may be amended, waived or 
supplemented.                                                                   

33.   NOTICES                                                                   

33.1  Method of delivery                                                        

All notices or other communications made or given in connection with this       
Agreement and each of the other Senior Finance Documents shall be made in       
writing by facsimile, letter or tested telex (unless such notice or             
communication relates to the making or advice of any payment, in which case it  
shall be made by tested telex only).                                            

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33.2  Addresses                                                                 

Each communication or document to be made or delivered in connection with this  
Agreement and each of the other Senior Finance Documents to a Party shall be    
delivered or sent to the address or facsimile number that has been:             

(a)   notified to the Facility Agent by that Party before it became a Party; or 

(b)   notified to the Facility Agent by at least five Business Days' notice.    

33.3  Agents' details                                                           

Unless the relevant Agent has given the other Parties five Business Days' notice
to that effect, its address and facsimile number are:                           

                                                                [Download Table]

Facility Agent:                        
                                       

(a)     Address:   Trinity Tower       
                   9 Thomas More Street
                   London EC1 9YT      

(b)     Fax:              0171 777 2360

(c)   Officer/Department: Stephen Clarke, Agency Loans Department               

                                                                [Download Table]


Security Agent:                        
                                       

(a)     Address:   Trinity Tower       
                   9 Thomas More Street
                   London EC1 9YT      

(b)     Fax:              0171 777 2360

(c)  Officer/Department: Stephen Clarke, Agency Loans Department                

33.4  Receipt of notices                                                        

(a)   Any notice or communication will be deemed to have been given, if sent by 
      post, when delivered and, if sent by facsimile, when received and, if sent
by telex, when an appropriate answer back is received by the sender.
     However, if the notice or communication is for an Agent, it shall only be
effective when the same is received by the department or the officer
      referred to at, Clause 33.3 or as otherwise notified by the relevant Agent
under that Clause.                                                  

(b)   The Company shall forthwith on demand indemnify each Finance Party against
  any direct loss or liability which that Finance Party incurs (and that
Finance Party shall not be liable to an Obligor in any respect) as a
consequence of:                                                     

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     (i) any Person to whom any notice or communication under or in connection
    with this Agreement is sent by facsimile failing to receive that
     notice orcommunication (unless such loss or liability is directly
caused by that Person's negligence or wilful default); or   

(ii) any facsimile communication which appears to that Finance Party
        (acting reasonably) to have been sent by an Obligor having in fact
been sent by a Person other than an Obligor.              

33.5  Language                                                                  

Each notice, communication and document given under or in connection with this  
Agreement and each of the other Senior Finance Documents shall be in English or,
if not, accompanied by an accurate translation thereof which has been confirmed 
by an Authorised Signatory of the Party giving the same as being a true and     
accurate translation.                                                           

34.   PARTIAL INVALIDITY                                                        

If any provision of this Agreement or any of the other Senior Finance Documents 
is or becomes illegal, invalid or unenforceable in any respect under the law of 
any jurisdiction, it shall not affect or impair the legality, validity or       
enforceability of:                                                              

(a)   any other provision of this Agreement or any of the other Senior Finance  
Documents; or                                                       

(b)   that provision, under the law of any other jurisdiction.                  

35.   REMEDIES AND WAIVERS                                                      

(a)   If any of the Finance Parties do not exercise, or delay in exercising, any
   of their respective rights or remedies under or in connection with this
    Agreement, it shall not operate as a waiver of any such right or remedy.

(b)   The single or partial exercise of any right or remedy shall not prevent   
any further or other exercise of that right or remedy.              

(c)   The rights and remedies provided in this Agreement or each of the other   
      Senior Finance Documents are additional to any rights or remedies provided
by law.                                                             

36.   COUNTERPARTS                                                              

This Agreement may be executed in any number of counterparts and by different   
Parties on separate counterparts each of which, when executed and delivered,    
shall constitute an original and all the counterparts shall together constitute 
but one and the same instrument.                                                

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37.   SECURITY                                                                  

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

38.   JURISDICTION                                                              

38.1  Courts of England                                                         

For the benefit of each Finance Party, each of the Obligors agree that the      
courts of England have jurisdiction to hear and settle any action, suit,        
proceeding or dispute in connection with this Agreement or any of the other     
Senior Finance Documents and therefore irrevocably submits to the jurisdiction  
of those courts.                                                                

38.2  Non-exclusivity                                                           

The submission to the jurisdiction of the English courts does not restrict the  
right of a Finance Party to take proceedings against an Obligor in connection   
with this Agreement or any of the other Senior Finance Documents in any other   
court of competent jurisdiction, whether concurrently or not.                   

38.3  Service of process agent                                                  

(a)   In addition to any other appropriate method of service, Non-UK Obligors   
      irrevocably agrees that any suit, action or proceeding may be served on it
by being delivered to Derby Holding Limited at 62 Triumph Road,     
      Nottingham, NG7 2DD, England or its registered office and confirms that it
  has appointed the Derby Holding Limited as its agent for such purpose.

(b)   Each of the Non-UK Obligors confirms that failure by its process agent to 
      notify it of receipt of any process will not invalidate the proceedings to
which it relates.                                                   

(c)   If the appointment of a process agent ceases to be effective, the relevant
   Non-UK Obligor shall immediately appoint a further Person in England as
its process agent in respect of this Agreement and each of the other
Senior Finance Documents and notify the Facility Agent of such      
      appointment. If such a Person is not appointed within 15 days the Facility
Agent shall be entitled to appoint such a Person.                   

38.4  Non-convenience of forum                                                  

Each of the Non-UK Obligors confirms that the English courts are not an         
inconvenient forum and irrevocably waives any right it may have to object to    
them on the grounds of inconvenience or otherwise.                              

39.   GOVERNING LAW                                                             

This Agreement is governed by and shall be construed in accordance with English 
law.                                                                            

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This Agreement has been entered into by the Parties on the date stated at the   
beginning of this Agreement.                                                    

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SCHEDULE 1

THE BORROWERS   

Name                                   Jurisdiction of Incorporation            

Raleigh Industries                     England and Wales                        
Limited                                                                       
Sturmey-Archer Limited                 England and Wales                        
Derby Holding                                    Germany                        
(Deutschland) GmbH                                                            
Koninklijke Gazelle BV                       Netherlands                        
The Derby Cycle             The United States of America                        
Corporation                                                                   
Raleigh Industries of                             Canada                        
Canada Limited                                                                
Raleigh Europe B.V.                          Netherlands                        
Raleigh B.V.                                 Netherlands                        
Englebert Wiener Bike                            Germany                        
Parts GmbH                                                                    
Winora-Staiger GmbH                              Germany                        
Derby Holdings Limited                 England and Wales                        
Raleigh Fahrrader                                Germany                        
GmbH                                                                          
Derby Cycle Werke                                Germany                        
GmbH                                                                          
Raleigh International                  England and Wales                        
Limited                                                                       
Curragh Finance                                  Ireland                        
Company                                                                       
Raleigh Ireland Limited                          Ireland                        

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SCHEDULE 2  

THE GUARANTORS  

Name                             Jurisdiction of Incorporation                  

Derby Holding Limited            England and Wales                              
Raleigh Industries Limited       England and Wales                              
Raleigh International Limited    England and Wales                              
Sturmey-Archer Limited           England and Wales                              
Raleigh Industries of Canada     Canada                                         
Limited                                                                       
The Derby Cycle Corporation      The United States of America                   
Raleigh BV                       Netherlands                                    
Raleigh Europe BV                Netherlands                                    
Koninklijke Gazelle BV           Netherlands                                    
Derby Nederland BV               Netherlands                                    
Derby Holding BV                 Netherlands                                    
Sturmey-Archer Europa B.V        Netherlands                                    
Lyon Investments BV              Netherlands                                    
Derby Holding (Deutschland)      Germany                                        
GmbH                                                                          
Raleigh Fahrrader GmbH           Germany                                        
NW Sportgerate GmbH              Germany                                        
Derby Cycle Werke GmbH           Germany                                        
Englebert Wiener Bike Parts      Germany                                        
GmbH                                                                          
Univega Worldwide Licence        Germany                                        
GmbH                                                                          
Univega Beteiligungen GmbH       Germany                                        

Univega Bikes & Sports Europe    Germany                                        
GmbH (formerly MS Sport                                                       
Vertriebs GmbH)                                                               
Derby Fahrrader GmbH             Germany                                        
Derby WS Vermogenswerwaltungs    Germany                                        
GmbH                                                                          

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Name                             Jurisdiction of Incorporation                  

Winora-Staiger GmbH              Germany                                        
Curragh Finance Company          Ireland                                        
Raleigh Ireland Limited          Ireland                                        
InterDerby Group Finance N.V.    Netherlands Antilles                           
The British Cycle Corporation    England and Wales                              
Limited                                                                       
BSA Cycles Limited               England and Wales                              
Triumph Cycle Co. Limited        England and Wales                              
Raleigh (Services) Limited       England and Wales                              

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SCHEDULE 3      

THE BANKS       

                                                                [Download Table]

Name                                      Revolving     Standby L/C
                                          Commitment    Commitment 
                                            (DM)            (DM)   
                                                                   
The Chase Manhattan Bank                  16,500,000     1,156,542 
ABN Amro Bank N.V.                        16,250,000     1,139,019 
Bank of Scotland                          16,250,000     1,139,019 
BHF - Bank AG                             16,250,000     1,139,019 
Dresdner Bank AG, Grand Cayman            16,250,000     1,139,019 
 branch                                                            
Lloyds Bank Plc                           16,250,000     1,139,019 
Midland Bank Plc                          16,250,000     1,139,019 
Scotiabank Europe Plc)                    16,250,000     1,139,019 

The Bank of Nova Scotia)                                           
The Sumitomo Bank, Limited                16,250,000     1,139,019 
Banque Nationale de Paris                 11,250,000       788,551 
San Paolo IMI SPA                         11,250,000       788,551 
Kredietbank (Nederland) N.V.              11,250,000       788,551 
Oldenburgische Landesbank AG              11,250,000       788,551 
The Governor and Company of the           11,250,000       788,551 
 Bank of Ireland                                                   
The Industrial Bank of Japan,             11,250,000       788,551 
Limited                                                            
                                       DM214,000,000  DM15,000,000 

NB: The Standby L/C Commitment of each Bank is a sub-set of the Revolving       
Commitment of such Bank and not additional to its Revolving Commitment.         

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SCHEDULE 4  

ACCESSION AGREEMENT 

THIS ACCESSION AGREEMENT is dated the         day of                         199
and made BETWEEN [                                 ] (the "Additional           
[Borrower/Guarantor]") (1), [                  ] (the "Company" and an "Existing
Borrower" and an "Existing Guarantor") on behalf of itself and each of the other
Borrowers and Guarantors [                                 ] (each an "Existing 
Guarantor" and together with the Company the "Existing Guarantors") (2), and    
Chase Manhattan International Limited in its capacities as Facility Agent and   
Security Agent under the Facility Agreement referred to in Recital (A) hereof   
and on behalf of the Arranger and the Banks parties to and defined as such in   
such Facility Agreement and on behalf of each of the parties to the             
Intercreditor Agreement[s] dated [                              ] (3).          

WHEREAS:                                                                        

(A)    By and upon and subject to the terms of a facility agreement (the        
       "Facility Agreement"), which term includes any supplements and amendments
    thereto which may at any time be made in relation thereto and also any
Novation Certificates and Accession Agreements) dated [           
   ], 1998 made between, inter alios, the Company, the Borrowers and the
   Guarantors as therein defined, Chase Manhattan plc as Arranger, Chase
      Manhattan International Limited as Facility Agent and Security Agent and
the financial institutions named therein as banks, a multicurrency
revolving credit facility was made available to the Company and/or
certain of the Borrowers (as defined in the Facility Agreement).  

(B)    Each of the entities expressed to be party hereto, whether directly or   
  through signature hereof by the Facility Agent or the Company on its
   behalf, is a party to the Facility Agreement either by having been an
original party thereto or pursuant to an Accession Agreement or a 
Novation Certificate to which it is party or otherwise.           

(C)    The Additional [Borrower/Guarantor] wishes to become party to the        
    Facility Agreement as a [Borrower/Guarantor] pursuant to the procedure
      established in Clause [22/19.4] of the Facility Agreement and a party to
  the Intercreditor Agreement[s] dated [               ] as an Obligor
pursuant to the procedure established in Clause [9[1]] of the     
    Intercreditor Agreements by the execution of this Accession Agreement.

(D)    It is the intention of the parties that this Accession Agreement shall   
take effect as a deed.                                            

NOW IT IS HEREBY AGREED as follows:                                             

1.    Definitions                                                               

       Terms used herein (including the Recitals hereto) which are defined in or
  to which a meaning or construction is assigned by or in the Facility
     Agreement shall, unless otherwise defined herein, have the same meaning
and construction herein as therein.                               

2.    Agreements, Confirmations and Representations                             

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(a)    The Additional [Borrower/Guarantor] hereby:                              

      (i)     confirms that it has received a copy of the Facility Agreement and
              the Intercreditor Agreement[s], together with such other documents
         and information as it has required in connection herewith and
therewith;                                          

 (ii)    agrees to become, with effect from the date of this Accession
           Agreement, a [Borrower/Guarantor] under the Facility Agreement,
             and an Obligor under the Intercreditor Agreement[s], agrees to be
             bound in that capacity with effect from such date by the terms of
         the Facility Agreement and the Intercreditor Agreement[s] and
  undertakes accordingly to perform its obligations as a
              [Borrower/Guarantor] (or, as the case may be, Obligor) thereunder;

      (iii)   confirms the accuracy of the information set out under its name at
the end of this Accession Agreement;                

      (iv)    represents and warrants as a [Borrower/Guarantor] to the Arranger,
             the Banks and the Facility Agent in the terms of Clause 18 of the
          Facility Agreement by reference to the facts and circumstances
existing at the date hereof;                        

    (v)     confirms it encloses herewith in respect of itself the documents
and evidence listed in Schedule 5;                  

(vi)    confirms it has not relied on the Arranger, the Banks, the  
             Facility Agent or the Security Agent to assess or inform it as to
            the legality, validity, effect or enforceability of the Facility
             Agreement or the Intercreditor Agreement[s] or any other document
           referred to therein or the accuracy or completeness of any such
       information as is referred to in paragraph (i) above or the
        creditworthiness, affairs, condition or status of any of the
             parties to the Facility Agreement, the Intercreditor Agreement[s]
or any such other document.                         

(b)    The Borrower(s), the Guarantor(s), the Arranger, the Facility Agent, the 
Security Agent, the Banks and the parties to the Intercreditor    
  Agreement[s] hereby agree amongst themselves and with the Additional
 [Borrower/Guarantor] that the Additional [Borrower/Guarantor] shall
       become party to the Facility Agreement and the Intercreditor Agreement[s]
with effect from the date of this Accession Agreement.            

3.    Law                                                                       

(a)    This Accession Agreement shall be governed by and construed in accordance
with English law.                                                 

(b)    [The Additional [Borrower/Guarantor] hereby irrevocably designates,      
appoints and empowers the Company to receive, for and on behalf of
     itself, service of process out of the English Courts in any proceedings
with respect to the Facility Agreement and/or the Intercreditor   
Agreement[s] and/or this Accession Agreement or any judgment in   
   connection therewith and agrees that failure by such process agent to
give notice of such service of process to the                     

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     Additional [Borrower/Guarantor] shall not impair or affect the validity
of such service or of any judgment based thereon.]                

IN WITNESS WHEREOF the parties hereto have caused this Accession Agreement to be
duly executed on the date first written above.                                  

SIGNATURES                                                                      

Additional [Borrower/Guarantor]:                                                

[                                     ]                                         

Company:                                                                        

[                                     ]                                         
for itself and as agent for and on                                              
behalf of the Borrowers and                                                     
Guarantors                                                                      

By:                                                                             

Facility Agent:                                                                 
CHASE MANHATTAN INTERNATIONAL LIMITED                                           
for itself and as Facility Agent and                                            
Security Agent for and on behalf of the                                         
Arranger and the Banks                                                          

By:                                                                             

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SCHEDULE 5

DOCUMENTS TO ACCOMPANY ADDITIONAL 
BORROWER/GUARANTOR ACCESSION AGREEMENT

1.     The proposed Additional [Guarantor/Borrower] shall deliver each in a form
and substance satisfactory to the Facility Agent:                 

(a)    A Certified Copy of its constitutive documents.                          

(b)    A Certified Copy of its board resolution approving the execution,        
      delivery and performance by the proposed Additional [Borrower/Guarantor]
     of an Accession Agreement in the form set out in Schedule 4 and each of
     the Senior Finance Documents to which it is expressed to be a party and
other documents to be delivered pursuant thereto and the terms and
    conditions thereof and authorising a Person or Persons (by name, or to
    the extent that the same is permitted so as to bind the relevant Group
       Member by applicable laws, by title) to sign the [Borrower's/Guarantor's]
Accession Agreement, the Senior Finance Documents and such other  
    documents and to give any notices on behalf of the proposed Additional
       [Borrower/Guarantor] in connection with such Senior Finance Documents, or
to give such notices, to another Person or Persons;               

(c)    A list of its Authorised Signatories.                                    

(d)    A certificate of an Authorised Signatory of the proposed Additional      
     [Borrower/Guarantor] confirming that neither the execution and delivery
       of the Additional [Borrower/Guarantor Accession Agreement and the Finance
Documents to which the proposed Additional [Borrower/Guarantor] is
 expressed to be a party nor the exercise of the proposed Additional
 [Borrower'/Guarantor's] rights, and the performance of the proposed
Additional [Borrower/Guarantor's] obligations, under such         
[Borrower/Guarantor] Accession Agreement and other Senior Finance 
Documents would result in any breach of the proposed Additional   
[Borrower/Guarantor] constitutive documents.                      

(e)    An opinion of the proposed Additional [Borrower/Guarantor's] local       
       counsel addressed to the Facility Agent and Security Agent for themselves
and for and on behalf of the Banks and acceptable to the Banks.   

(f)    A Security Document and an Intercreditor Agreement Accession Memorandum. 

(g)    If applicable, an Exchange Control Approval.                             

(h)    Such other documents as the Facility Agent may on the advice of local    
counsel to the Banks require.                                     

[2.    In relation to any proposed Additional [Borrower/Guarantor] incorporated 
      in the United Kingdom certified copies of the statutory declaration made
     in the prescribed form (and in the agreed form) by all the directors of
 such Companies as required by Section 155 of the Companies Act 1985
    together with a Certified Copy of the statutory report by its Auditors

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   required under Section 156(4) of the 1985 Act and confirmation by the
       Auditors in a form acceptable to the Facility Agent that such company has
     net assets (as defined in Section 152(2) of the Companies Act 1985) and
that the net assets are not reduced by the giving of the financial
     assistance or any reduction in net assets does not exceed distributable
profits.]                                                         

3.     In relation to any proposed Additional [Borrower/Guarantor] not          
incorporated in any part of the United Kingdom evidence that Derby
Holding Limited has agreed to act as the proposed Additional      
[Borrower/Guarantor's] service of process agent.                  

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SCHEDULE 6

CONDITIONS PRECEDENT

CONSTITUTIONAL DOCUMENTS                                                        

1.   In respect of each Obligor:                                                

  (a)  a Certified Copy of its Certificate of Incorporation and Memorandum
    and Articles of Association or of its statutes, by-laws or other
        constitutional or governing documents together with certified copies
        of the minutes of the meetings of its shareholders (if necessary) or
          written resolutions of its directors or officers adopting such changes
          to the Memorandum and Articles of Association or its statutes, by-laws
        or other constitutional or governing documents as the Facility Agent
          shall have required, and a certificate of a duly authorised officer of
    each such company confirming that such resolutions were duly and
     properly passed at duly convened and constituted meetings of that
Obligor;                                                    

   (b)  a Certified Copy of the resolutions of the board of directors of the
     company certifying that such board resolutions have been duly and
      properly passed at a duly convened and constituted meeting of that
        company and confirming that such resolutions are still in effect and
have not been varied or rescinded;                          

         (i)  authorising the execution, delivery and performance on behalf of
          that company of those of the Finance Documents to which that
company is a party; and                           

        (ii) authorising a Person or Persons (by name, or to the extent that
              the same is permitted so as to bind the relevant Group Member by
         applicable laws, by title) (each an "Authorised Signatory")
             specified therein to execute on behalf of that company those of
              the Finance Documents to which that company is expressed to be a
       party and to give any notices or certificates required in
connection therewith;                             

(c)  (which is also a Guarantor incorporated in England and Wales) a  
 Certified Copy of a resolution of the members of that company
     approving the execution delivery and performance of those Finance
       Documents to which such company is a party and confirming that such
      action is in the commercial interests of the company in accordance
with the terms thereof;                                     

  (d)  a certificate of an Authorised Signatory of that company confirming
        that at Closing the aggregate Financial Indebtedness of that company
         (including any Financial Indebtedness which may be incurred under any
         of the Finance Documents) does not or, as the case may be, would not,
          if fully drawn, exceed any borrowing limit contained in that company's
       constitutional documents or in any trust deed or other agreement or
          instrument to which that company is a party or which is binding on its
assets; and                                                 

     (e)  a certificate of an Authorised Signatory of that company in the agreed
terms to the effect                                         

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         that the execution of the Finance Documents by that company is lawful
and complies with its constitution.                         

2.   A specimen of the signature of each Person (each being an Authorised       
    Signatory) authorised to execute any of the Finance Documents on behalf of
     any Obligor and/or to sign all notices, certificates and other documents or
communications to be delivered by such Obligor thereunder.            

3.   If the initial Drawdown Date is not the same date as the date of receipt by
 the Facility Agent of the Memorandum and Articles of Association of the
     Obligors (or their equivalent constitutive documents), a certificate from a
   duly authorised officer of the Obligors confirming that as at the initial
  Drawdown Date the Memorandum and Articles of Association of the Obligors
(or their constitutive documents) as provided to the Facility Agent   
continue in full force and effect without amendment.                  

CONSENTS                                                                        

4.   A Certified Copy of (or, to the extent that the Banks have agreed that such
 documents may be delivered to the Facility Agent after the date of this
 Agreement, of all applications for) such approvals, consents, licences,
 exemptions and other requirements of governmental and other authorities
     required, for the entering into or performance of the Finance Documents and
any other Transaction Document for.                                   

TRANSACTION DOCUMENTS                                                           

5.   Evidence that each of the Transaction Documents has been entered into by   
    all parties thereto, that each such agreement is in full force and effect,
that the conditions precedent to such agreements have been, or will,  
simultaneously with the initial Utilisation be satisfied, that no     
  conditions or obligations contained therein have been waived or modified
except with the consent of the Facility Agent , that each of the      
   Transaction Documents is in a form satisfactory to the Facility Agent and
 that no Group Member, at the Closing, has the right to rescind any such
    agreements save for material breach by Derby International or, as the case
may be, DFS under any of the Recapitalisation Documents.              

6.   An original or a Certified Copy of each of the Transaction Documents.      

SECURITY DOCUMENTS                                                              

7.   At least three copies each of the Security Documents duly executed by all  
     the parties thereto other than the Facility Agent and/or the Security Agent
together with:                                                        

     (i)  share certificates in respect of any and all shares the subject matter
         of the created by the Security Documents and (if applicable) executed
        transfer forms in respect thereof and undated letters of resignation
 from each of the relevant directors together with irrevocable
         authority for the Facility Agent to date the same or where shares are
         not evidenced by certificates that notification of security over such
          shares has been entered in the Share Register, and all title documents
       relating to any land or buildings mortgaged or otherwise charged by
the Security Documents or confirmation that such documents  

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         are held to the order of the Security Agent or are in course of being
          lodged with the appropriate registration authority and will thereafter
be delivered to the order of the Security Agent;            

(ii) copies of all notices required to be despatched pursuant to the  
 Security Documents duly completed by an Authorised Signatory.

INFORMATION                                                                     

8.   A Certified Copy of each of the Disclosure Exhibits.                       

9.   A Certified Copy of the Information Package.                               

10.  A Certified Copy of the Financial Accounts prepared by the management of   
  each of the Borrowers and the Guarantors in respect of the Group for the
   monthly and, quarterly Accounting Periods since the latest annual audited
    Financial Accounts of each Borrower and Guarantor in each case in the form
required by respectively Clause 19.1(a)iii) and Clause 19.1(a)(ii).   

11.  A Certified Copy of the audited consolidated Financial Accounts in respect 
    of the annual Accounting Period to 31st December 1997 in the form required
by Clause 19.1(a).                                                    

12.  A Certified Copy of the Reports together with a Certified Copy of each the 
Letters of Engagement relating thereto.                               

Each of such Reports which, if not addressed to the Facility Agent on 
   behalf of itself and the Banks, to be accompanied by written confirmation
   from the company or firm which produced such Report that it can be relied
     upon by the Arranger, Security Agent and Facility Agent on behalf of itself
and by the Facility Agent and Security Agent on behalf of the Banks.  

13.  A Certified Copy of the final forms of each of the Recapitalisation        
Documents.                                                            

14.  A Certified Copy of the Transaction Costs Letter.                          

15.  A Certified Copy of the, Company's employee share ownership scheme and     
management incentive scheme.                                          

16.  Evidence that each Group Member will, contemporaneously with completion of 
the Recapitalisation, be released from:                               

     (a)  all guarantees and indemnities and similar documents granted by any of
        them in respect of the obligations of any third party other than any
         other Group Member or third party providers of Financial Indebtedness
         of each South African Borrower existing as at Closing which Financial
       Indebtedness has been disclosed to the Facility Agent in accordance
with paragraph 18 below;                                    

(b)  all Encumbrances (other than Permitted Encumbrances) existing    
     immediately prior to the Closing including without limitation all
mortgages or charges appearing as undischarged              

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   in the mortgages register of each Group Member at the Companies
Registration Office; and                                    

    (c)  all the Existing Financial Indebtedness will be fully repaid upon the
making of the initial Advances under this Agreement.        

17.  A Certified Copy of details of all insurance policies in existence in      
   respect of the Group as at Closing and copies of all policies of Material
     Insurance and evidence as that the Security Agent's interest has been noted
     thereon in accordance with the requirements of Clause 19.1(b) together with
     evidence that such policies are in full force and effect with premiums paid
to date in full.                                                      

18.  A certificate of the Chief Financial Officer of the Company summarising all
 Existing Financial Indebtedness and all Financial Indebtedness of Group
  Members as at immediately prior to the Closing and immediately following
Closing.                                                              

19.  Certified Copies of the Service Contracts of each of the Executives and the
Directors on terms satisfactory to the Facility Agent.                

20.  Confirmation from an Authorised Signatory of the Company that Clause       
18.1(v) is complete, true and accurate.                               

21.  Requests in relation to the Utilisations to be made at Closing.            

22.  Payment instructions in respect of all funds at Closing in accordance with 
the Funds Flow Memorandum.                                            

23.  Evidence that:                                                             

    (i)  the Investors have subscribed or contemporaneously with the making of
    the initial Advances will subscribe in full in cash an aggregate
amount of not less than $63,000,000 (the "Investors' Equity 
          Subscription") for shares in the capital of the Company issued to them
pursuant to the Recapitalisation Agreement at Closing;      
 (ii) the Note Issuers shall have received or contemporaneously with the
          making of the initial Advances will receive in aggregate not less than
          $160,000,000 pursuant to the Note Purchase Agreement in respect of the
 issuance and sale of the Notes (the "Note Proceeds") on terms
satisfactory to the Facility Agent; and                     

     (iii)the maximum aggregate amount payable to Derby International and DFS in
        cash at Closing will not exceed US$147,000,000 (or the equivalent in
other currencies);                                          

    and that the Investors Equity Subscription and the Note Proceeds have been
   or will contemporaneously with the making of the initial Advances will be
paid into and be standing to the credit of a Blocked Account;         

24.  The Facility Agent shall be satisfied, and shall have received such        
     evidence as it may reasonably require, that the aggregate monies payable in
respect of the Investors Equity Subscription the                      

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     Note Proceeds and the proceeds of each of the initial Utilisations that may
be drawn down or make on the date of Closing in accordance with the   
   provisions of this Agreement are at least equal to the amount required to
    refinance all of the Existing Financial Indebtedness owed to third parties
at Closing, and (when considered together with any relevant Hedging   
 Protection Agreements) in the same currency(ies) thereof (together with
  accrued interest and all other charges thereon) which are required to be
   repaid and discharged in order that it may comply with Clause 18.1(w) and
to pay all of the Transaction Costs;                                  

25.  Receipt by the Facility Agent of each of the Pre-Closing Accounts.         

26.  Proforma Financial Accounts.                                               

27.  A Certified Copy of the Approved Hedging Programme.                        

28.  Details of any Encumbrances existing over all or any of the Group's assets 
    (including, for the avoidance of doubt, any Encumbrances existing over all
 or any of the Group's assets) as at Closing (other than pursuant to the
Security Documents).                                                  

29.  A certified copy of the Structure Memorandum.                              

30.  A Certified Copy of the Funds Flow Memorandum.                             

31.  A Certified Copy of the Intra-Group Loan Memorandum.                       

32.  Details of any bank accounts held by Obligors other than with any Approved 
  Bank together with evidence that, in respect of each such account Clause
19.5(t)(ii) would be satisfied.                                       

33.  The bank mandates relating to the blocked accounts, duly completed.        

34.  A duly executed copy of each of the Fee Letters.                           

35.  Evidence that at Closing the Company or its Subsidiaries will be the       
beneficial and (subject only to the payment of the relevant stamp and 
     documentary Taxes in respect thereof by no later than the date on which the
 same are required to be paid by applicable law or regulation and to the
making of the necessary entries in the shareholders' registers of the 
 relevant members of the Subsidiaries that comprise the Acquired Assets)
legal owner of all the Acquired Assets (save, in the case of legal    
   ownership, to the extent that the Security Agent shall be the legal owner
 thereof pursuant to the Security Documents), free from all Encumbrances
other than Permitted Encumbrances and that the Obligors will be in    
compliance with their obligations under Clause 19.5(a) in all other   
respects immediately after Closing.                                   

36.  A Certified Copy of the Approved Provisioning Procedure.                   

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OPINIONS                                                                        

37.  An opinion of Dibb Lupton Alsop, addressed to the Facility Agent, the      
  Security Agent and the Banks, the English legal advisers to the Facility
Agent, the Security Facility Agent and the Banks as to such matters   
 relating to the Obligors and their obligations under the Senior Finance
Documents as the Facility Agent may reasonably require.               

38.  An opinion, addressed to the Facility Agent, the Security Agent and the    
Banks of Bogel & Gates, United States of America legal advisors to the
  Facility Agent and the Security Agent as to such matters relating to the
    United States of America, the obligations of the Obligors under the Senior
Finance Documents to which they are a party as the Facility Agent may 
reasonably require.                                                   

39.  An opinion addressed to the Facility Agent, the Security Agent and the     
   Banks of Kirkland & Ellis, United States of America legal advisors to the
   Company as to such matters relating to due authorisation and execution of
   Senior Finance Documents by Obligors incorporated in the United States of
America as the Facility Agent may reasonably require.                 

40.  An opinion, addressed to the Facility Agent, the Security Agent and the    
  Banks of Boekel de Neree Dutch legal advisors to the Facility Agent, the
Security Agent and the Banks as to such matters relating to the       
  Netherlands, the Obligors and their obligations under the Senior Finance
  Documents to which they are a party as the Facility Agent may reasonably
require.                                                              

41.  An opinion, addressed to the Facility Agent, the Security Agent and the    
   Banks of Aird & Berlis Canadian legal advisors to the Facility Agent, the
 Security Agent and the Banks as to such matters relating to Canada, the
    Obligors and their obligations under the Senior Finance Documents to which
they are a party as the Facility Agent may reasonably require.        

42.  An opinion, addressed to the Facility Agent, the Security Agent and the    
   Banks of Lapointe Rosenstein Canadian legal advisors to the Company as to
   such matters relating to Canada, the Obligors and their obligations under
the Senior Finance Documents to which they are a party as the Facility
Agent may reasonably require.                                         

43.  An opinion, addressed to the Facility Agent, the Security Agent and the    
  Banks of Sander Steinberg Canadian legal advisors to the Facility Agent,
     the Security Agent and the Banks as to such matters relating to Canada, the
    Obligors and their obligations under the Senior Finance Documents to which
they are a party as the Facility Agent may reasonably require.        

44.  An opinion, addressed to the Facility Agent, the Security Agent and the    
     Banks of Promes Trente van Doorne Netherland Antilles legal advisors to the
Facility Agent, the Security Agent and the Banks as to such matters   
  relating to the Netherlands Antilles, the Obligors and their obligations
under the Senior Finance Documents to which they are a party as the   
Facility Agent may reasonably require.                                

45.  An opinion, addressed to the Facility Agent, the Security Agent and the    
 Banks of A & L Goodbody Irish legal advisors to the Facility Agent, the
  Security Agent and the Banks as to such matters relating to Ireland, the
Obligors and their obligations under the Senior Finance               

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  Documents to which they are a party as the Facility Agent may reasonably
require.                                                              

46.  An opinion, addressed to the Facility Agent, the Security Agent and the    
  Banks of Johnston Stokes Master Hong Kong legal advisors to the Facility
     Agent, the Security Agent and the Banks as to such matters relating to Hong
     Kong, the Obligors and their obligations under the Senior Finance Documents
 to which they are a party as the Facility Agent may reasonably require.

47.  An opinion, addressed to the Facility Agent, the Security Agent and the    
   Banks of Feddersen, Laule, Scherzberg & Ohle Lansen Gwerwahn German legal
advisors to the Company as to such matters relating to Germany, the   
    Obligors and their obligations under the Senior Finance Documents to which
they are a party as the Facility Agent may reasonably require.        

48.  An opinion, addressed to the Facility Agent, the Security Agent and the    
 Banks of Woedtke Reszel & Partner German legal advisors to the Facility
 Agent, the Security Agent and the Banks, as to such matters relating to
Germany, the Obligors and their obligations under the Senior Finance  
  Documents to which they are a party as the Facility Agent may reasonably
require.                                                              

49.  Memoranda of Satisfaction in respect of charges registered against each of 
   Sturmey-Archer, Derby Holdings Limited, Raleigh International Limited and
The British Cycle Corporation Limited.                                

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SCHEDULE 7

Part 1

FORM OF DRAWDOWN REQUEST

To:  Chase Manhattan International Limited as Facility Agent.                   

From:  [            ] as Obligors' Agent                                        

                                                         Date: [               ]
Dear Sirs,                                                                      

Re DM 214,000,000 Multicurrency Credit Facility dated [           ] (the        
"Facility Agreement")                                                           

1.     We request that the Banks, in accordance with the terms of the Facility  
      Agreement and upon the terms and conditions contained therein, make [an]
Advance(s) as follows:                                            

(a)    Requested Amount [DM[         ]; and                                     

(b)    Currency;                                                                

(c)    Drawdown Date: [               ].                                        

(d)    Term: [             ].                                                   

(e)    Borrower:      [               ].                                        

2.     The Advance(s) should be credited to [insert account details].           

3.     We confirm that, at the date hereof, the representations set out in      
       Clause 18 that are to be repeated in accordance with Clause 18.2 are true
and correct and no Default has occurred and is continuing.        

4.     Terms used in this Drawdown Request and not otherwise defined shall bear 
the same meaning as in the Facility Agreement.                    

5.     This Advance is to be applied solely for the purpose of [           ].   

6.     This Drawdown Request is governed by and shall be construed in accordance
with and subject to English law.                                  

Yours faithfully                                                                

Obligors' Agent                                                                 
Authorised Signatory                                                            

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PART 2  

FORM OF STANDBY L/C REQUEST 

To:    Chase Manhattan International Limited as Facility Agent.                 

From:  [            ] as Obligors' Agent                                        

On behalf of [             ] ("ACCOUNT PARTY")                    

                                                         Date: [               ]
Dear Sirs,                                                                      

RE DM214,000,000 MULTICURRENCY REVOLVING CREDIT AGREEMENT DATED [            ]  
(the "FACILITY AGREEMENT")                                                      

1.     We request that the Banks, in accordance with the terms of the Facility  
Agreement and upon the terms and conditions contained therein,    
 participate in a Standby L/C in the form annexed hereto as follows:

(a)    Amount of Standby L/C [eg DM       ];                      

(b)    Currency of Standby L/C;                                   

(c)    Issue Date: [           ];                                 

(d)    Expiry Date of Standby L/C: [         ];                   

(e)    Account Party:  [                  ];                      

(f)    Beneficiary:   [               ];                          

(g)    Beneficiary's Account details: [              ].           

2.     We confirm that, as at the date of this Standby L/C Request, no Default  
  has occurred and is continuing, and the representations contained in
    Clause 18 of the Agreement that are repeated in accordance with Clause
18.2 are true and correct.                                        

3.     Terms used in this Standby L/C Request and not otherwise defined shall   
bear the same meaning as in the Agreement.                        

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4.     This Standby L/C Request is governed by and shall be construed in        
accordance with and subject to English law.                       

Yours faithfully                                                                

OBLIGORS' AGENT                                                                 
Authorised Signatory                                                            

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PART 3  

FORM OF STANDBY L/C 

TO:  [                    ]                                                     

For the attention of:                                                           

[Date]                                                                          

Dear Sirs                                                                       

IRREVOCABLE NON-TRANSFERABLE LETTER OF CREDIT NO. [      ]                      

The Banks (as defined below) in their several Participation Percentages (as     
defined below) hereby issue this Irrevocable Non-Transferable Letter of Credit  
No. [    ] )the "CREDIT"), details of which are as follows:-                    

                                                                [Download Table]
                                                                                
Account Party:             [Borrower under Facility Agreement]                  

Facility Agent:            [Chase Manhattan International Limited] as Facility  
                           Agent for the Banks or any other person notified from
                           time to time by the Facility Agent to the Beneficiary
                           as being the Facility Agent for the purposes of the  
                           Credit.                                              

Facility Agent's Office:   [                ] or such other office from time to 
                           time notified by the Facility Agent to the           
                           Beneficiary.                                         

Availability:              By payment against delivery of Required Documents:   

Bank:                      NAME          PARTICIPATION PERCENTAGE               

                           [     ]                     [       %]               
                           [     ]                     [       %]               
                           [     ]                     [       %]               


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                                                                [Download Table]
                                                                                
Beneficiary:               [Approved Bank details]                              

Charges:                   Any banking or other charges and commissions (other  
                           than our own) are for the Beneficiary's account.     

Maximum Amount:            [                     ]                              

Payment Currency:          [                     ]                              

Expiry Date:               [                     ]                              

Partial Payment:           Partial payments are permitted, provided that the    
                           Payment Amounts shall not in the aggregate exceed the
                           Maximum Amount.                                      

Participation Percentage:  In relation to a Bank, the percentage set out        
                           opposite its name above, as varied by any novation   
                           referred to below.                                   

Payment Amount:            An amount in the Payment Currency certified in a     
                           Certificate of Beneficiary to be a Payment Amount.   

Required Document:         A Certificate of Beneficiary in the form set out in  
                           Appendix A hereto (duly completed in a manner        
                           consistent with the requirements of this credit and  
                           signed on behalf of the Beneficiary).                


Each Bank engages with the Beneficiary that within five working days in London  
and the principal financial centre of the Payment Currency (each a "BUSINESS    
DAY") after receipt by the Facility Agent at the Agent's Office of the related  
Required Document conforming to the terms of this Credit, such Bank will pay to 
or to the order of the Beneficiary, in the Payment Currency in funds providing  
same day value, by credit to the account specified in the related Certificate of
Beneficiary, its Participation Percentage of the lesser of:                     

(i)  each Payment Amount, as stated in the Required Documents; and              

(ii) the balance of the Maximum Amount after deducting the amount of any and all
previous payments by the Banks under this Credit.                     

This Credit shall be non-transferable and shall be payable only against         
presentation of the Required Document.  This Credit shall expire on, and no     
payment shall be made pursuant hereto after, the Expiry Date.                   

The obligations of the Banks under this Credit are several according to their   
respective participation Percentages and not joint and several and neither the  
Facility Agent nor any Bank shall be liable for the failure of any other Bank to
perform its obligations hereunder.  The aggregate amount payable by each Bank   
hereunder shall not exceed its Participation Percentage of the Maximum Amount.  

The Facility Agent shall have no liability hereunder except in its capacity as a
Bank.                                                                           

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A Bank (the "EXISTING BANK") may with the prior written consent of the          
Beneficiary, such consent not to be unreasonably withheld or delayed, novate all
or part of its rights and/or obligations under this Credit to another bank or   
financial institution (the "NEW BANK").  Such consent of the Beneficiary shall  
not be withheld where an Existing Bank wishes to novate all or part of its      
obligations to a New Bank which is at the time of such novation rated BBB or    
above by Standard & Poor's Corporation or Baa2 by Moody's Investor Services Inc.
A novation of rights and/or obligations will only be effected if the Existing   
Bank and the New Bank deliver to the Facility Agent a duly completed            
certificate, substantially in the form of Annex B hereto (an "LC TRANSFER       
CERTIFICATE") duly executed by each of them and the Beneficiary (which shall be 
obliged to execute the same where not entitled to withhold consent to the       
transaction) and then countersigned by the Facility Agent on behalf of the other
Banks.                                                                          

Upon the novation becoming effective in the manner referred to in the previous  
paragraph, the Existing Bank shall be relieved of its obligations under this    
Credit to the extent that they are novated to the new Bank and any reference in 
this Credit to a Bank shall include the New Bank.  Each Bank (other than the    
Existing Bank and the New Bank) irrevocably authorises the Facility Agent to    
execute a duly completed LC Transfer Certificate on its behalf.                 

Failure by the Beneficiary (within ten Business Days or receiving a written     
request therefore) to give consent to any novation pursuant to and to execute an
LC Transfer Certificate, which by the terms of this Credit it is not entitled to
withhold or fail to execute will result in all obligations of the Existing Bank 
which were to have been novated being cancelled at the expiry of such ten       
Business Day period, such cancellation to result in non-payment by that Existing
Bank of its Participation Percentage of any further Payment Amount without      
affecting the payments to be made by the other Banks in respect thereof.        

On the date of execution of the Transfer Certificate by the Facility Agent and  
(if the Beneficiary's consent is required but not deemed give) the Beneficiary  
of, if later, the date specified in the LC Transfer Certificate:                

i.   the Facility Agent, the other Banks and the Beneficiary (the "EXISTING     
    PARTIES") and the Existing Bank will be released from their obligations to
each other under this Credit (the "DISCHARGED OBLIGATIONS");          

ii.  the New Bank and the Existing Parties will assume obligations towards each 
     other which differ from the Discharged Obligations only insofar as they are
owed to or assumed by the New Bank instead of the Existing Bank;      

iii. the rights of the Existing Bank against the Existing Parties and vice      
versa (the "DISCHARGED RIGHTS") will be cancelled; and                

iv.  the New Bank and the Existing Parties will acquire rights against each     
other which differ from the Discharged Rights only insofar as they are
exercisable by or against the New Bank instead of the Existing Bank.  

In each case to the extent only that the same relate to or arise out of the     
amount of the Existing Bank's Participation Percentage specified in the LC      
Transfer Certificate.                                                           

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Save insofar as such provisions may be inconsistent with the express terms of   
this Credit, this Credit is subject to the provisions of the Uniform Customs and
Practice for Documentary Credits (1993 Revision) ICC Publication No. 500.       

This Letter of Credit and the Credit established hereby shall be governed by    
English law.  For the avoidance of doubt, it is confirmed that demand may be    
made hereunder by tested telex.                                                 

Yours faithfully                                                                

-----------------------------------                                             
[Facility Agent to sign                                                         
on behalf of each Bank]                                                         

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EXHIBIT A 

CERTIFICATE OF BENEFICIARY

To: [             ] as Facility Agent                                           

Dear Sirs,                                                                      

IRREVOCABLE NON-TRANSFERABLE LETTER OF CREDIT NO. [            ] (THE "CREDIT") 

With reference to the above Credit, we hereby certify that:                     

(a) we have provided general banking facilities to [                ] [and its  
subsidiaries] incorporated in [                     ];                  

(b) an aggregate amount (the "PAYMENT AMOUNT") of [                ] (comprising
 [                  ] of principal and [              ] of interest and/or
other charges) fell due for payment in [                ] by [         ]
    on [           ] and remains due and unpaid at the date of this Certificate;

(c) save for the Credit, there is no security (whether in the nature of a       
mortgage, charge, pledge, lien or other security interest), guarantee,  
  indemnity or other like arrangements securing payment to us of the Payment
Amount granted or provided by any other member of the Group.            

Accordingly, we hereby request payment pursuant to the Credit of the Payment    
Amount.  Payment is to be made to our account (A/c No. [            ]) with     
[       ] at [                    ].                                            

Yours faithfully,                                                               

-------------------------------------                                           
for and on behalf of                                                            
[                       ]                                                       

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EXHIBIT B 

To: Chase Manhattan International Limited (the "FACILITY AGENT")                
for itself and on behalf of                                             
the other parties to the Facility                                       
Agreement and the Intercreditor Agreement                               
referred to below.                                                      

This Certificate ("NOVATION CERTIFICATE") relates to a facility agreement       
(together with and as supplemented and amended by all Accession Agreements,     
Novation Certificates and other agreements from time to time entered into in    
relation to it, the "FACILITY AGREEMENT") dated [         ], 1998 made between, 
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as  
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial        
institutions named therein as Banks, Chase Manhattan International Limited as   
Facility Agent and as Security Agent for the Banks in respect of a revolving    
credit facility of up to DM214,000,000 and to the Intercreditor Agreement       
referred to in the Facility Agreement.  Terms defined in the Facility Agreement 
shall unless defined herein, have the same meanings herein as in the Facility   
Agreement.                                                                      

1.  [Existing Bank] (the "EXISTING BANK"):                                      

  (a)       confirms that the details appearing in the Schedule hereto under
             the headings "Existing Bank's Commitments (Portion Substituted)",
              "Existing Bank's Participations in Advances (Portion Novated)" and
  "Outstanding Standby L/Cs of Credit" are accurate; and

(b)       requests [      ] (the "NEW BANK") to accept and procure the  
             substitution pursuant to Clause 29 of the Facility Agreement [and
            Clause [       ] of the Intercreditor Agreement] of the Existing
          Bank by the New Bank in respect of the portion of its relevant
      Commitment(s) specified under the heading "Existing Bank's
        Revolving Commitment (Portion Novated)" and "Existing Bank's
            Standby L/C Commitment (Portion Novated)" in the Schedule hereto
             and/or in respect of the Advance(s) referred to under the heading
     "Existing Bank's portion of Outstanding Advances (Portion
             Novated)" and/or in respect of the Standby L/Cs referred to under
             the heading "Existing Bank's participation in Outstanding Standby
       L/Cs (Portion Novated)" by counter-signing the copy of this
             Novation Certificate executed by the Existing Bank and delivering
the same to the Facility Agent.                     

2.  The New Bank hereby requests the Obligors, the Arranger, the Banks, and the 
  Agents and the other parties to the Intercreditor Agreement to accept this
 duly executed Novation Certificate as being delivered pursuant to and for
  the purposes of Clause 29 of the Facility Agreement and Clauses [  ], [  ]
and [  ] of each of the Intercreditor Agreements so as to take effect in
accordance with its terms under such Clauses on [date of novation].     

3.  The New Bank hereby (a) confirms receipt of a copy of the Finance Documents 
    as at the date hereof and all such other documents and information as it has

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    required in connection herewith, (b) accepts and confirms the application of
    the provisions of Clause 29 of the Facility Agreement and Clauses [  ], [  ]
    and [  ] of each of the Intercreditor Agreements as they apply in connection
 herewith and the transactions and matters to occur in consequence hereof,
  and (c) confirms the correctness of the details specified in respect to it
in the Schedule hereto.                                                 

4.  The New Bank confirms that:                                                 

   (a)       it has received a copy of the Finance Document together with such
            other documents and information as it has required in connection
with this transaction;                              

    (b)       it has not relied and will not hereafter rely on the Existing Bank
          to check or enquire on its behalf into the legality, validity,
         effectiveness, adequacy, accuracy or completeness of any such
documents or information;                           

 (c)       it has made its own independent investigation and assessment of
            the financial affairs of each Obligor and their related entities
    and the other parties considered by it to be relevant in
              connection with this transaction and agrees that it has not relied
              and will not rely on the Existing Bank, the Arranger, the Facility
          Agent, the Security Agent or the Banks to assess or keep under
           review on its behalf the financial condition, creditworthiness,
              condition, affairs, status or nature of any member of the Group or
       any other party to the Finance Documents (save as otherwise
expressly provided therein);                        

(d)       it has power and authority to become a party to the Finance   
     Documents and has taken all necessary action to authorise
       execution of this Novation Certificate and has obtained all
     necessary approvals and consents to the assumption of its
          obligations under the Facility Agreement and the Intercreditor
Agreements; and                                     

(e)       it is a Qualifying Bank;                                      

5.  The New Bank hereby undertakes with the Existing Bank and each of the other 
  parties to the Facility Agreement and each of the Intercreditor Agreements
that it will perform in accordance with its terms all those obligations 
 which by the terms of the Senior Facility Agreement and the Intercreditor
 Agreements will be assumed by it under the Senior Finance Documents after
    delivery of the executed copies of this Novation Certificate to the Facility
  Agent and countersignature thereof by the Facility Agent, and the New Bank
hereby undertakes to be bound by the provisions of the Senior Finance   
Documents.                                                              

6.  The Existing Bank hereby gives notice that nothing herein or any Senior     
  Finance Document (or any other document relating thereto) shall oblige the
  Existing Bank (i) to accept a re-transfer from or novation by the New Bank
 of the whole or any part of its rights, benefits and/or obligations under
  the Finance Documents or (ii) to support any losses directly or indirectly
  sustained or incurred by the New Bank for any reason whatsoever including,
 without limitation, the non-performance by any Obligor or any other party
to the Finance Documents (or any document relating thereto) of their    
  obligations under any such document.  The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and  
(ii) above.                                                             

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7.  This Novation Certificate shall be governed by and construed in accordance  
with English law.                                                       

8.  This Novation Certificate may be executed in any number of counterparts and 
 all of such counterparts taken together shall be deemed to constitute one
and the same instrument.                                                

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SCHEDULE 8

FORM OF NOVATION CERTIFICATE

To: Chase Manhattan International Limited (the "FACILITY AGENT")                
for itself and on behalf of                                             
the other parties to the Facility                                       
Agreement and the Intercreditor Agreements                              
referred to below.                                                      

This Certificate ("NOVATION CERTIFICATE") relates to a facility agreement       
(together with and as supplemented and amended by all Accession Agreements,     
Novation Certificates and other agreements from time to time entered into in    
relation to it, the "FACILITY AGREEMENT") dated [         ], 1998 made between, 
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as  
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial        
institutions named therein as Banks, Chase Manhattan International Limited as   
Facility Agent and as Security Agent for the Banks in respect of a revolving    
credit facility of up to DM214,000,000 and to the Intercreditor Agreements      
referred to in the Facility Agreement.  Terms defined in the Facility Agreement 
shall unless defined herein, have the same meanings herein as in the Facility   
Agreement.                                                                      

1.  [Existing Bank] (the "EXISTING BANK"):                                      

  (a)       confirms that the details appearing in the Schedule hereto under
             the headings "Existing Bank's Commitments (Portion Substituted)",
              "Existing Bank's Participations in Advances (Portion Novated)" and
  "Outstanding Standby L/Cs of Credit" are accurate; and

(b)       requests [      ] (the "NEW BANK") to accept and procure the  
             substitution pursuant to Clause 29 of the Facility Agreement [and
            Clause 9 of the Intercreditor Agreement] of the Existing Bank by
  the New Bank in respect of the portion of its relevant
      Commitment(s) specified under the heading "Existing Bank's
        Revolving Commitment (Portion Novated)" and "Existing Bank's
            Standby L/C Commitment (Portion Novated)" in the Schedule hereto
             and/or in respect of the Advance(s) referred to under the heading
     "Existing Bank's portion of Outstanding Advances (Portion
             Novated)" and/or in respect of the Standby L/Cs referred to under
             the heading "Existing Bank's participation in Outstanding Standby
       L/Cs (Portion Novated)" by counter-signing the copy of this
             Novation Certificate executed by the Existing Bank and delivering
the same to the Facility Agent.                     

2.  The New Bank hereby requests the Obligors, the Arranger, the Banks, and the 
   Agents and the other parties to the Intercreditor Agreements to accept this
 duly executed Novation Certificate as being delivered pursuant to and for
   the purposes of Clause 29 of the Facility Agreement and Clauses 9, [  ] and
    [  ] of the Intercreditor Agreements so as to take effect in accordance with
its terms under such Clauses on [date of novation].                     

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3.  The New Bank hereby (a) confirms receipt of a copy of the Finance Documents 
    as at the date hereof and all such other documents and information as it has
    required in connection herewith, (b) accepts and confirms the application of
    the provisions of Clause 29 of the Facility Agreement and Clauses 9, [  ], [
] and [  ] of the Intercreditor Agreements as they apply in connection  
 herewith and the transactions and matters to occur in consequence hereof,
  and (c) confirms the correctness of the details specified in respect to it
in the Schedule hereto.                                                 

4.  The New Bank confirms that:                                                 

   (a)       it has received a copy of the Finance Document together with such
            other documents and information as it has required in connection
with this transaction;                              

    (b)       it has not relied and will not hereafter rely on the Existing Bank
          to check or enquire on its behalf into the legality, validity,
         effectiveness, adequacy, accuracy or completeness of any such
documents or information;                           

 (c)       it has made its own independent investigation and assessment of
            the financial affairs of each Obligor and their related entities
    and the other parties considered by it to be relevant in
              connection with this transaction and agrees that it has not relied
              and will not rely on the Existing Bank, the Arranger, the Facility
          Agent, the Security Agent or the Banks to assess or keep under
           review on its behalf the financial condition, creditworthiness,
              condition, affairs, status or nature of any member of the Group or
       any other party to the Finance Documents (save as otherwise
expressly provided therein);                        

(d)       it has power and authority to become a party to the Finance   
     Documents and has taken all necessary action to authorise
       execution of this Novation Certificate and has obtained all
     necessary approvals and consents to the assumption of its
    obligations under each of the Facility Agreement and the
Intercreditor Agreements; and                       

(e)       it is a Qualifying Bank;                                      

5.  The New Bank hereby undertakes with the Existing Bank and each of the other 
  parties to the Facility Agreement and the Intercreditor Agreements that it
    will perform in accordance with its terms all those obligations which by the
    terms of the Senior Facility Agreement and the Intercreditor Agreements will
 be assumed by it under the Senior Finance Documents after delivery of the
executed copies of this Novation Certificate to the Facility Agent and  
countersignature thereof by the Facility Agent, and the New Bank hereby 
 undertakes to be bound by the provisions of the Senior Finance Documents.

6.  The Existing Bank hereby gives notice that nothing herein or any Senior     
  Finance Document (or any other document relating thereto) shall oblige the
  Existing Bank (i) to accept a re-transfer from or novation by the New Bank
 of the whole or any part of its rights, benefits and/or obligations under
  the Finance Documents or (ii) to support any losses directly or indirectly
  sustained or incurred by the New Bank for any reason whatsoever including,
 without limitation, the non-performance by any Obligor or any other party

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to the Finance Documents (or any document relating thereto) of their    
 obligations under any such document. The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and  
(ii) above.                                                             

7.  This Novation Certificate shall be governed by and construed in accordance  
with English law.                                                       

8.  This Novation Certificate may be executed in any number of counterparts and 
 all of such counterparts taken together shall be deemed to constitute one
and the same instrument.                                                

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THE SCHEDULE

1.  Existing Bank's Revolving Commitment: (Portion Novated)                     

2.  Existing Bank's portion of Outstanding Advances: (Portion Novated)          

                                                                [Download Table]

    DRAWDOWN DATE    AMOUNT          REPAYMENT DATE                             
                                                                                

    [            ]   [           ]   [            ]                             


3.  Existing Bank's Standby L/C Commitment: (Portion Novated)                   

4.  Existing Bank's participation in Outstanding Standby L/Cs: (Portion Novated)
                                                                                
    Issue Date       Amount          Expiry Date                                

    [            ]   [           ]   [            ]                             

NB. PLEASE NOTE CLAUSE 29.2(C) REGARDING THE PROPORTION OF REVOLVING COMMITMENT 
    AND STANDBY L/C COMMITMENT THAT ARE REQUIRED TO BE TRANSFERRED.             
                                                                [Download Table]
                                                       
[Name of Existing Bank]              [Name of New Bank]

By:                                  By:               
Date:                                Date:             

[Name of Facility Agent]                               

By:                                                    
Date:                                                  


CHASE MANHATTAN INTERNATIONAL LIMITED                                           
for itself and as the Facility Agent, Security                                  
Agent, and for and on behalf of the Obligors,                                   
the Arranger, the Banks and for and on behalf                                   
of the parties to the Intercreditor Agreements                                  

By:                                                                             

Date:                                                                           

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SCHEDULE 9

ADDITIONAL COSTS

1.  For the purpose of this Agreement, the cost of compliance with existing     
   requirements of the Bank of England and/or the Financial Services Authority
(or any other authority which replaces all or any of their functions) in
   respect of Advances will be calculated by the Facility Agent in relation to
each of the first day of each in respect of such Advance and, if the    
Interest Period of such Advance exceeds three months, at three calendar 
monthly intervals from the first day of such Term during its duration in
accordance with the following formula:                                  

  AB+C(B-D) + E x 0.01 per cent. per annum
--------------------                  
100 - (A+C)                     

Where:                                                                  

    A         is the percentage of eligible liabilities (assuming these to be in
          excess of any stated minimum) which the Facility Agent is from
            time to time required to maintain as an interest free cash ratio
      deposit with the Bank of England to comply with cash ratio
requirements;                                       

 B         is the percentage rate per annum at which sterling deposits are
       offered by the Facility Agent in accordance with its normal
             practice, for a period equal to (a) the relevant Term (or, as the
          case may be, remainder of such Term in respect of the relevant
        Advance) or (b) three months, whichever is the shorter, to a
              leading bank in the London Interbank Market at about 11.00 a.m. in
    a sum approximately equal to the amount of such Advance;

    C         is the percentage of eligible liabilities which the Facility Agent
         is required from time to time to maintain as interest bearing
special deposits with the Bank of England;          

    D         is the percentage rate per annum payable by the Bank of England to
        the Facility Agent on interest bearing special deposits; and

E         is the rate payable by the Facility Agent to the Financial    
              Services Authority pursuant to the Fees Regulations (but, for this
          purpose, the figure at paragraph 2.03b of the Fees Regulations
   shall be deemed to be zero) and expressed in pounds per
(Pounds)1,000,000 of the Fee Base of the Agent.     

2.  For the Purpose of this Schedule:                                           

(a)       "eligible liabilities" and "special deposits" shall bear the  
            meanings as ascribed to them from time to time under or pursuant
              to the Bank of England Act 1988 or (as appropriate) by the Bank of
England;                                            

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    (b)       "Fee Regulations" means the Banking Supervision (Fees) Regulations
          1998 or such other regulations as may be in force from time to
           time in respect of the payment of fees for banking supervision;
and                                                 

(c)       "Fee Base" shall bear the meaning ascribed to it, and shall be
calculated in accordance with, the Fees Regulations.

3.  The percentage used in A and C above shall be those required to be          
maintained on the first day of the relevant period as determined in     
accordance with B above.                                                

4.  In application of the above formula, A, B, C and D will be included in the  
  formula as figures and not as percentages e.g. if A is 0.5 per cent. and B
   is 12 per cent., AB will be calculated as 0.5 x 12 and not as 0.5 per cent.
x 12 per cent.                                                          

5.  Calculations will be made on the basis of a 365 day year (or, if market     
practice differs, in accordance with market practice).                  

6.  A negative result obtained by subtracting D from B shall be taken as zero.  

7.  The resulting figures shall be rounded upwards, if not already such a       
multiple, to the nearest whole multiple of one-thirty-second of one per 
cent. per annum.                                                        

8.  Additional amounts calculated in accordance with this Schedule are payable  
on the last day of the Term to which they relate.                       

9.  The determination of the Additional Costs by the Facility Agent in relation 
to any period shall, in the absence of manifest error, be conclusive and
binding on all of the parties hereto.                                   

10. The Facility Agent may from time to time, after consultation with the       
  Borrower and the Banks, determine and notify to all parties any amendments
   or variations which are required to be made to the formula set out above in
   order to comply with any requirements from time to time imposed by the Bank
    of England or the Financial Services Authority (or any other authority which
  replaces all or any of their functions) in relation to Advances (including
any requirements relating to sterling primary liquidity) and, any such  
determination shall, in the absence of manifest error, be conclusive and
binding on all the parties hereto.                                      

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SCHEDULE 10 

COMPLIANCE CERTIFICATE

To: The Facility Agent and each of the Banks                                    
(as defined in the Facility Agreement)                                  

                                                                          [Date]

The undersigned hereby certifies that to the best of their information,         
knowledge and belief after all due enquiry but without personal liability:      

1.  This certificate is given pursuant to Clause 19.1 (Compliance Certificate)  
of an agreement dated [                ] (the "FACILITY AGREEMENT") made
between inter alios, The Derby Cycle Corporation and certain of its     
   Subsidiaries as Borrowers and Guarantors and the parties defined therein as
 the Facility Agent, the Arranger, the Security Agent and the Banks. Terms
 defined in the Facility Agreement shall, unless otherwise defined herein,
bear the same meaning when used herein.                                 

2.  Terms defined in the Facility Agreement shall bear the same meaning herein. 

3.  We confirm that as at [insert appropriate Accounting Date]:                 

(a)       The ratio of Consolidated Adjusted EBITDA to Consolidated Net 
Interest Payable, was [    ];                       

(b)       Consolidated Net Worth was [        ];                        

  (c)       [NB. ONLY INCLUDE IF THE CERTIFICATE RELATES TO PERIOD OCCURRING
       AFTER 31 DECEMBER 1999]  The ratio of Net Average Financial
       Indebtedness to Consolidated Adjusted EBITDA was [       ];

(d)       Consolidated Adjusted EBITDA was [            ];              

(e)       Debtor Days was [    ]; [and]                                 

(f)       Inventory Days was [       ]; [and]                           

(g)       [NB. ONLY INCLUDE IF THE CERTIFICATE IS IN RESPECT OF A PERIOD
     PRIOR TO OR INCLUSIVE OF 31 DECEMBER 1999]  The aggregate
       Financial Indebtedness of the Group was [                ].

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4.  We set out below the computations giving rise to the above ratios and       
figures, each of which has been made in accordance with the provisions of the   
Facility Agreement;                                                             

5.  We therefore confirm, that as at [insert relevant Accounting Date] each of  
 the financial conditions specified at Clause 20 of the Facility Agreement
[was/was not] satisfied.                                                

6.  No Default has occurred and is continuing as of the date hereof.            

---------------------------------------                                         
for and on behalf of                                                            
THE DERBY CYCLE CORPORATION                                                     

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SCHEDULE 11 

MATERIAL GROUP MEMBERS

Derby Holding Limited                                                           
Raleigh Industries Limited                                                      
Raleigh International Limited                                                   
Sturmey-Archer Limited                                                          
Raleigh Industries of Canada Limited                                            
The Derby Cycle Corporation                                                     
Raleigh BV                                                                      
Raleigh Europe BV                                                               
Koninklijke Gazelle BV                                                          
Derby Nederland BV                                                              
Derby Holding BV                                                                
Sturmey-Archer Limited B.V                                                      
Lyon Investments BV                                                             
Derby Holding (Deutschland) GmbH                                                
Raleigh Fahrrader GmbH                                                          
NW Sportgerate GmbH                                                             
Derby Cycle Werke GmbH                                                          
Englebert Wiener Bike Parts GmbH                                                
Univega Worldwide GmbH                                                          
Univega Beteiligungen GmbH                                                      
Univega Bikes & Sports Europe GmbH (formerly MS Sport Vertiebs GmbH)            
Derby Farrader GmbH                                                             
Derby WS                                                                        
Vermogenswerwaltungs GmbH                                                       
Winora Staiger GmbH                                                             
Curragh Finance Company                                                         
Raleigh Ireland Limited                                                         
InterDerby Group Finance N.V.                                                   

The British Cycle Corporation Limited                                           
Derby Investment Holding (Pty) Limited                                          
Pro Bike South Africa (Pty) Limited                                             

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SCHEDULE 12 

DESCRIPTION OF ECU

The ECU is from time to time used as the unit of account of the European        
Communities.  Changes to the ECU may be made by the European Communities, in    
which event the ECU will change accordingly.  However, under Article 109G of the
Treaty establishing the European Communities, as amended by the Treaty on       
European Union (the "Treaty"), the currency composition of the ECU may not be   
changed.  The Treaty contemplates that European monetary union will occur in    
three stages, the second of which began on 1 January 1994 (following the entry  
into force of the Treaty on European Union).  The Treaty provides that, at the  
start of the third stage of European monetary union, the value of the ECU as    
against the currencies of the member states participating in the third stage    
(and the conversion rates at which such currencies shall be substituted by the  
ECU) will be irrevocably fixed, and the ECU will become a currency in its own   
right.  In contemplation of that third stage, the European Council meeting in   
Madrid on 16 December 1995 decided that the name of that currency will be the   
euro and that, in accordance with the Treaty, substitution of the euro for the  
ECU (and of references to the euro for references to the ECU) will be at the    
rate of one euro for one ECU.  From the start of the third stage of European    
monetary union, all payments expressed to be payable in ECU, or sums to be      
calculated by reference to ECU, will be payable in, or calculated by reference  
to, euro at the rate then established in accordance with the Treaty.            

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PREVIOUS SCHEDULE 13 (FORM OF BANK ACCESSION NOTICE) DELETED AS IT RELATED      
SOLELY TO THE POTENTIAL INCREASE IN THE FACILITY AMOUNT.                        

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SCHEDULE 13 

NOMINEE NOTICE

To:  Chase Manhattan International Limited (the "FACILITY AGENT")               
for itself and on behalf of the other parties to the                  
Facility Agreement and the Intercreditor Agreement                    
referred to below                                                     

THIS NOTICE ("NOMINEE NOTICE") relates to a facility agreement as amended by an 
Amendment Agreement dated [    ] (together with and as supplemented and amended 
by all Accession Agreements, Novation Certificates and other agreements from    
time to time entered into in relation to it (the "FACILITY AGREEMENT") dated 12 
May 1998 made between, amongst others, The Derby Cycle Corporation and various  
of its Subsidiaries as Borrowers and Guarantors, Chase Manhattan plc as         
Arranger, the financial institutions named therein as Banks, Chase Manhattan    
International Limited as Facility Agent and as Security Agent for the Banks in  
respect of a revolving credit facility of up to DM214,000,000 and to the        
Intercreditor Agreements referred to in the Facility Agreement.  Terms defined  
in the Facility Agreement shall unless defined herein, have the same meanings   
herein as in the Facility Agreement.                                            

1.     The Nominated Affiliate hereby requests the Obligors, the Arranger, the  
       Banks and the Agents and the other parties to the Intercreditor Agreement
     to accept this duly executed Nominee Notice as being delivered pursuant
       to Clause 7.3 of the Facility Agreement for the purposes of permitting it
to discharge the Nominating Banks' obligations under the Facility 
Agreement to provide an Ancillary Facility.                       

2.     AGREEMENTS, CONFIRMATIONS AND REPRESENTATIONS                            

2.1  The Nominated Affiliate hereby:                              

       2.1.1  confirms that it has received a copy of the Facility
                   Agreement and the Intercreditor Agreements, together with
                    such other documents and information as it has required in
connection herewith and therewith;    

             2.1.2  agrees to become, with effect from the date of delivery of
                   this Nominee Notice, an Ancillary Bank under the Facility
                   Agreement, and a Bank under the Intercreditor Agreements,
                   agrees to be bound in that capacity with effect from such
             date by the terms of the Facility Agreement and the
                Intercreditor Agreements and undertakes accordingly to
       perform its obligations as a Bank thereunder;

             2.1.3  confirms the accuracy of the information set out under its
 name at the end of this Nominee Notice;

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              2.1.4  confirms that it has not relied on the Arranger, the Banks,
               the Facility Agent or the Security Agent to assess or
           inform it as to the legality, validity, effect or
         enforceability of the Facility Agreement or the
                    Intercreditor Agreements or any other document referred to
             therein or the accuracy or completeness of any such
                   information as is referred to in paragraph 2.1.1 above or
                   the creditworthiness, affairs, condition or status of any
                     of the parties to the Facility Agreement, the Intercreditor
Agreements or any such other document.

       2.2  The Borrower(s), the Guarantor(s), the Arranger, the Facility Agent,
          the Security Agent, the Banks and the parties to the Intercreditor
         Agreements hereby agree amongst themselves and with the Ancillary
       Bank that the Ancillary Bank shall become party to the Facility
       Agreement and the Intercreditor Agreements with effect from the
date of this Accession Agreement.                       

3.     LAW                                                                      

       This Nominee Notice shall be governed by and construed in accordance with
English law.                                                      

IN WITNESS WHEREOF the parties hereto have caused this Nominee Notice to be duly
executed on the date first written above.                                       

SIGNATURES                                                                      

NOMINATED AFFILIATE:                                                            

[                    ]                                                          

                                                                [Download Table]

FACILITY AGENT:                              
                                             
CHASE MANHATTAN INTERNATIONAL               )
LIMITED for itself and as the Facility      )
Agent and Security Agent for and on         )
behalf of the Arranger and the Banks        )

By:                                          

OBLIGORS' AGENT                              
                                             
DERBY CYCLE CORPORATION                     )
for itself as the Company                   )
and for and on behalf of each of the        )
Borrowers and Guarantors                    )

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SCHEDULE 14 

SECURITY DOCUMENTS

THE SECURITY AGENT WILL BE A PARTY TO THE FOLLOWING SECURITY DOCUMENTS WHICH    
WILL BE GOVERNED BY AND SUBJECT TO THE APPLICABLE LAWS OF THE COUNTRIES AS      
INDICATED BELOW:                                                                

                                                                [Download Table]

    DOCUMENT                                    OBLIGOR GIVING SECURITY    
    --------                                    -----------------------    

                                                                           
1.     NETHERLANDS                                                         
       -------------------------------                                     

(a)    FIRST PLEDGE OF INTELLECTUAL             Koninklijke Gazelle BV     
       PROPERTY RIGHTS                                                     

(b)    FIRST PLEDGE OF RECEIVABLES              Lyon Investments BV        
       (each Obligor will enter into a          Derby Nederland BV         
       separate pledge)                         Sturmey-Archer Europa BV   
                                                Raleigh BV                 
                                                Raleigh Europe BV          
                                                Derby Holding BV           
                                                Koninklijke Gazelle BV     
(c)    FIRST PLEDGE OF TANGIBLES                Raleigh BV                 
       (each Obligor will                       Koninklijke Gazelle BV     
       enter into a separate pledge)                                       

(d)    MORTGAGE OF REAL PROPERTY                Koninklijke Gazelle BV     

(e)    DUTCH LAW SHARE PLEDGES: over the                                   
       following shares:                                                   

       (i)  Lyon Investments BV (66_%)          The Derby Cycle Corporation
       (ii) Derby Holding BV (66_%)                                        

       Derby Nederland BV                       Lyon Investments BV        

       (i) Sturmey-Archer Europa BV             Derby Nederland BV         
       (ii) Raleigh BV                                                     
       (iii) Koninklijke Gazelle BV                                        

       NV Dierense Maatschapij Tot              Koninklijke Gazelle BV     
       Exploitatie van Woningen en Asuranien                               

       Raleigh Europe BV                        Derby Holding BV           

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                                                        [Enlarge/Download Table]

2.  CANADA                                                                                          
    ------                                                                                          
                                                                                                    

(a)  GENERAL SECURITY AGREEMENT                 Raleigh Industries of Canada Limited                

(b)  CHARGE/MORTGAGE OF LAND                    Raleigh Industries of Canada Limited                

(c)  HYPOTHEC ON MOVEABLE PROPERTY              Raleigh Industries of Canada Limited (Les Industries
                                                Raleigh du Canada Limitee)                          

(d)  HYPOTHEC ON IMMOVEABLE PROPERTY            Raleigh Industries of Canada Limited (Les Industries
                                                Raleigh du Canada Limitee)                          

(e)  CANADIAN LAW PLEDGE over shares                                                                
     in the following:                                                                              

     Century Cycle Manufacturing                Raleigh Industries of Canada Limited                
     Corporation                                                                                    

3.   UNITED STATES OF AMERICA                                                                       
     ------------------------                                                                       

(a)  SECURITY AGREEMENT                         The Derby Cycle Corporation                         

(b)  US LAW SHARE PLEDGE over shares                                                                
     in the following:                                                                              

     (i)   Derby Trading Co. Inc.                The Derby Cycle Corporation                        
     (ii)  Lyon Investments BV (66 2/3%)                                                            
     (iii) Sturmey-Archer Limited (66 2/3%)                                                         
     (iv)  Derby Holding BV (66 2/3%)                                                               
     (v)   Raleigh Industries of Canada Limited                                                     
           (66 2/3%)                                                                                
     (vi)  Derby Holding (Deutschland) GmbH                                                         
           (5%)                                                                                     

(c)  US PATENT ASSIGNMENT FOR SECURITY          The Derby Cycle Corporation                         
     PURPOSES                                                                                       

(d)  US PATENT AND TRADEMARK SECURITY           The Derby Cycle Corporation                         
     AGREEMENT                                                                                      

(e)  US AMENDMENT TO SECURITY AGREEMENT         The Derby Cycle Corporation                         

(f)  US AMENDMENT TO PATENT AND TRADEMARK       The Derby Cycle Corporation                         
     SECURITY AGREEMENT                                                                             

(g)  US PATENT ASSIGNMENT FOR SECURITY          The Derby Cycle Corporation                         
     PURPOSES                                                                                       

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                                                                [Download Table]
                                                                                
(h) Leasehold Deed of Trust                   The Derby Cycle Corporation       

4.  DUTCH ANTILLES                                                              
    --------------                                                              

(a) SECURITY AGREEMENT                        InterDerby Group Finance NV       

(b) DUTCH ANTILLES LAW PLEDGE over shares in                                    
    the following:                                                              

    InterDerby Group NV                       Derby Holding (Deutschland) GmbH  
    in respect of its shares in:                                                

5.  HONG KONG                                                                   
    ---------                                                                   

(a) HONG KONG LAW CHARGE Over Shares in                                         
    the following:                                                              

    Derby (HK) Trading Company Limited        Derby Trading Co. Inc.            

6.  IRELAND                                                                     
    -------                                                                     

(a) DEBENTURE                                                                   
    (each Obligor will enter into a           Raleigh Ireland Limited           
    separate Debenture)                       Curragh Finance Company           

(b) IRISH LAW PLEDGES over the share                                            
    in the following:                                                           

    Curragh Finance Company Limited           N.W. Sportgerate GmbH             
    (49%)                                                                       

    (i)  Raleigh Ireland Limited              Derby Holding BV                  
    (ii) Curragh Finance Company Limited                                        
         (50%)                                                                  

(c) IRISH SUPPLEMENTAL DEED                   Raleigh Ireland Limited           
                                              Curragh Finance Company           

7.  GERMANY                                                                     
    -------                                                                     

(a) SECURITY AGREEMENTS WITH FOLLOW UP        Derby Cycle Werke GmbH            
    ASSIGNMENTS                               Englebert Wiener Bike-Parts GmbH  
    (each Obligor will enter into a           Raleigh Fahrrader GmbH            
    separate document):                       Winora Staiger GmbH               
                                              Univega Bikes & Sports Europe GmbH
                                              (formerly MS Sport Vertriebs GmbH)
                                              Derby Fahrrader GmbH              

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                                                                [Download Table]
                                                                            

(b) DEEDS OF ASSIGNMENT IN RESPECT OF     Derby Cycle Werke GmbH            
    TANGIBLE MOVEABLE PROPERTY:           Englebert Wiener Bike-Parts GmbH  
    (each Obligor will enter into a       Derby Fahrrader GmbH              
    separate document):                   Winora-Staiger GmbH               

(c) ASSIGNMENTS OF OWNER'S LAND CHARGES:  Derby Cycle Werke GmbH            
    (each Obligor will enter into a       Englebert Wiener Bike-Parts GmbH  
    separate document):                                                     

(d) INSURANCE ASSIGNMENT AGREEMENTS:      Derby Cycle Werke GmbH            
    (each Obligor will enter into a       Raleigh Fahrrader GmbH            
    separate document):                   Winora-Staiger GmbH               
                                          Englebert Wiener Bike Parts GmbH  
                                          Univega Bikes & Sports Europe GmbH
                                          (formerly MS Sport Vertriebs GmbH)
                                          Derby Fahrrader GmbH              

(e) INTELLECTUAL PROPERTY PLEDGE:         Derby Cycle Werke GmbH            
    (each Obligor will enter into a       Univega Bikes & Sports Europe GmbH
    separate document):                   (formerly MS Sport Vertriebs GmbH)
                                          Univega Worldwide Licence GmbH    
                                          Winora-Staiger GmbH               

(f) ASSIGNMENT OF INTER-COMPANY           Raleigh Fahrrader GmbH            
    INDEBTEDNESS:                         Derby Cycle Werke GmbH            
    (each Obligor will enter into a       Univega Worldwide Licence GmbH    
    separate document):                   Winora-Staiger GmbH               
                                          Derby Holding (Deutschland) GmbH  
                                          Englebert Wiener Bike Parts GmbH  
                                          Univega Bikes & Sports Europe GmbH
                                          (formerly MS Sport Vertriebs GmbH)

(g) SECURITISATION PLAN                   Derby Cycle Werke GmbH            
                                          Derby Holding (Deutschland) GmbH  
                                          Derby Fahrrader GmbH              
                                          Derby WS Vermogensverwaltungs GmbH
                                          NW Sportgerate GmbH               
                                          Univega Beteiligungen GmbH        
                                          Univega Worldwide Licence GmbH    
                                          Raleigh Fahrrader GmbH            
                                          Englebert Wiener Bike Parts GmbH  
                                          Univega Bikes & Sports Europe GmbH
                                          (formerly MS Sport Vertriebs GmbH)
                                          Winora-Staiger GmbH               

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                                                                [Download Table]
                                                                                
(h) GERMAN AMENDMENT AGREEMENT:               Univega Worldwide Licence GmbH    
                                              Winora-Staiger GmbH               
                                              Derby Holding (Deutschland) GmbH  
                                              Englebert Wiener Bike Parts GmbH  
                                              Univega Bikes & Sports Europe GmbH
                                              (formerly MS Sport Vertriebs GmbH)

(i) BLANKET ASSIGNMENTS                       Univega Worldwide Licence GmbH    
                                              NW Sportgerate Vertriebs GmbH     

(j) GERMAN LAW PLEDGES over the following                                       
    shares:                                                                     

    Derby Holding (Deutschland) GmbH          The Derby Cycle Corporation       

    (i)   Derby Fahrrader GmbH                Derby Holding (Deutschland) GmbH  
    (ii)  Raleigh Fahrrader GmbH                                                
    (iii) Derby WS Vermogensverwaltungs                                         
          GmbH                                                                  
    (iv)  Univega Beteilingungen GmbH                                           
    (v)   Univega Worldwide Licence GmbH                                        

    Derby Cycle Werke GmbH                    Raleigh Fahrrader GmbH            

    Winora-Staiger GmbH                       Derby Vermogensverwaltungs        
                                              Gesellschaft GmbH                 
    (i)   Univega Bike & Sports Europe GmbH                                     
          (formerly MS Sport Vertriebs GmbH)  Univega Beteiligungen GmbH        
    (ii)  MS Sport AG                                                           

    Engelbert Wiener Bike-Parts GmbH          Lyon Investments BV               
    NW Sportgerate GmbH                       Derby Cycle Werke GmbH            

    NW Sportgerate GmbH                       Derby Cycle Werke GmbH            

    Curragh Finance Company (49%)             NW Sportgerate GmbH               

    Derby Holding (Deutschland) GmbH          Derby Holding BV                  

8.  ENGLAND                                                                     
    -------                                                                     

(a) English Debenture                         Derby Holding Limited             
    (global debenture for all English         Raleigh Industries Limited        
    Obligors)                                 Raleigh International Limited     
                                              Sturmey-Archer Limited            

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                                                                [Download Table]
                                                                            
                                       The British Cycle Corporation Limited
                                       BSA Cycles Limited                   
                                       The Triumph Cycle Company Corporation

(b) English Law Charge over Shares in                                       
    the following Company:                                                  

    Sturmey-Archer Limited (66 2/3)    The Derby Cycle Corporation          

    Various                            Raleigh (Services) Limited           

9.  SWEDEN                                                                  
    ------                                                                  

(a) Swedish Law Pledge over Shares in                                       
    the following Company:                                                  

    Derby Sweden AB                    The Derby Cycle Corporation          

(b) Derby Sweden AB                                                         
    Floating Charge                                                         

(c) Pledge over Patents and            Derby Sweden AB                      
    Trademarks                                                              

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THE DERBY CYCLE CORPORATION                                                     

By:                                                                             

THE OTHER BORROWERS                                                             

RALEIGH INDUSTRIES LIMITED                                                      

By:                                                                             

STURMEY-ARCHER LIMITED                                                          

By:                                                                             

DERBY HOLDING (DEUTSCHLAND) GMBH                                                

By:                                                                             

KONINKLIJKE GAZELLE BV                                                          

By:                                                                             

RALEIGH INDUSTRIES OF CANADA LIMITED                                            

By:                                                                             

RALEIGH EUROPE B.V.                                                             

By:                                                                             

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RALEIGH B.V.                                                                    

By:                                                                             

ENGLEBERT WIENER BIKE PARTS GMBH                                                

By:                                                                             

WINORA-STAIGER GMBH                                                             

By:                                                                             

DERBY HOLDING LIMITED                                                           

By:                                                                             

RALEIGH FAHRRADER GMBH                                                          

By:                                                                             

DERBY CYCLE WERKE GMBH                                                          

By:                                                                             

RALEIGH INTERNATIONAL LIMITED                                                   

By:                                                                             

CURRAGH FINANCE COMPANY                                                         

By:                                                                             

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RALEIGH IRELAND LIMITED                                                         

By:                                                                             

THE GUARANTORS                                                                  

DERBY HOLDING LIMITED                                                           

By:                                                                             

RALEIGH INDUSTRIES LIMITED                                                      

By:                                                                             

RALEIGH INTERNATIONAL LIMITED                                                   

By:                                                                             

STURMEY ARCHER LIMITED                                                          

By:                                                                             

RALEIGH INDUSTRIES OF CANADA LIMITED                                            

By:                                                                             

THE DERBY CYCLE CORPORATION                                                     

By:                                                                             

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RALEIGH BV                                                                      

By:                                                                             

RALEIGH EUROPE BV                                                               

By:                                                                             

KONINKLIJKE GAZELLE BV                                                          

By:                                                                             

DERBY NEDERLAND BV                                                              

By:                                                                             

DERBY HOLDING BV                                                                

By:                                                                             

STURMEY ARCHER EUROPA B.V.                                                      

By:                                                                             

LYON INVESTMENTS BV                                                             

By:                                                                             

DERBY HOLDING (DEUTSCHLAND) GMBH                                                

By:                                                                             

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RALEIGH FAHRRADER GMBH                                                          

By:                                                                             

NW SPORTGERATE GMBH                                                             

By:                                                                             

DERBY CYCLE WERKE GMBH                                                          

By:                                                                             

ENGLEBERT WIENER BIKE PARTS GMBH                                                

By:                                                                             

UNIVEGA WORLDWIDE LICENCE GMBH                                                  

By:                                                                             

UNIVEGA BETEILIGUNGEN GMBH                                                      

By:                                                                             

UNIVEGA BIKER & SPORTS EUROPE GmbH                                              
(formerly MS SPORT VERTRIEBS GMBH)                                              

By:                                                                             

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DERBY FAHRRADER GMBH                                                            

By:                                                                             

DERBY WS VERMOGENSWERWALTUNGS GMBH                                              

By:                                                                             

WINORA-STAIGER GMBH                                                             

By:                                                                             

CURRAGH FINANCE COMPANY                                                         

By:                                                                             

RALEIGH IRELAND LIMITED                                                         

By:                                                                             

INTER-DERBY GROUP FINANCE B.V.                                                  

By:                                                                             

THE BRITISH CYCLE CORPORATION LIMITED                                           

By:                                                                             

BSA CYCLES LIMITED                                                              

By:                                                                             

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TRIUMPH CYCLE CO. LIMITED                                                       

By:                                                                             

RALEIGH (SERVICES) LIMITED                                                      

By:                                                                             

The Banks                                                                       

THE CHASE MANHATTAN BANK                                                        

By:                                                                             

ABN AMRO BANK N.V.                                                              

By:                                                                             

SCOTIABANK EUROPE PLC                                                           

By:                                                                             

DRESDNER BANK AG, GRAND CAYMAN BRANCH                                           

By:                                                                             

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BANK OF SCOTLAND                                                                

By:                                                                             

MIDLAND BANK PLC                                                                

By:                                                                             

LLOYDS BANK PLC                                                                 

By:                                                                             

THE SUMITOMO BANK, LIMITED                                                      

By:                                                                             

BHF - BANK AG                                                                   

By:                                                                             

THE INDUSTRIAL BANK OF JAPAN, LIMITED                                           

By:                                                                             

SAO PAOLO IMI SPA                                                               

By:                                                                             

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KREDIETBANK (NEDERLAND) N.V.                                                    

By:                                                                             

BANQUE NATIONALE DE PARIS                                                       

By:                                                                             

THE GOVERNOR AND COMPANY OF                                                     
THE BANK OF IRELAND                                                             

By:                                                                             

OLDENBURGISCHE LANDESBANK AG                                                    

By:                                                                             

THE BANK OF NOVA SCOTIA                                                         

By:                                                                             

THE FACILITY AGENT                                                              

CHASE MANHATTAN INTERNATIONAL LIMITED                                           

By:                                                                             

THE SECURITY AGENT                                                              

CHASE MANHATTAN INTERNATIONAL LIMITED                                           

By:                                                                             

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The Arranger                                                                    

CHASE MANHATTAN plc                                                             

By:                                                                             

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