THIRD THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "Third Amendment") is made and dated as of April 28, 1999 among SUNRISE MEDICAL, INC., a Delaware...

THIRD



THIRD AMENDMENT TO
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this
"Third Amendment") is made and dated as of April 28, 1999 among SUNRISE
MEDICAL, INC., a Delaware corporation (the "Borrower"), the subsidiaries of the
Borrower signatory hereto as "Subsidiary Borrowers" or "Guarantors", the lenders
(the "Lenders") party hereto, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent (the "Agent") and amends that certain Third Amended and
Restated Credit Agreement dated as of August 28, 1997 among the parties
hereto, as amended by a First Amendment and Waiver to Third Amended and Restated
Credit Agreement dated as of February 18, 1998 and a Second Amendment to
Third Amended and Restated Credit Agreement dated as of August 26, 1998
(together with is Third Amendment, the "Agreement").
RECITALS
A.	The Borrower has advised the Agent and the Lenders that it intends
to work towards issuing indebtedness to refinance all Obligations outstanding
under the Agreement and that Cumulative Consolidated EBITDA for the three Fiscal
Quarters ending April 2, 1999 is likely to be less than $49,500,000, which
would, in the absence of relief from the Lenders, constitute a Collateralization
Event upon the Borrower's delivery of a Compliance Certificate for such Fiscal
Quarter.
B.	In view of the foregoing, the Agent, the Lenders and Loan Parties
desire to (1) escrow all Collateral Documents signed by the Loan Parties, the
Lenders, the Agent and the Collateral Agent no later than
July 31, 1999; (2) defer the effectiveness of the Collateral Documents
and the creation of any security interest until the Collateralization Date,
which is defined as provided below; (3) require the Borrower to use best efforts
to arrange third-party financing to refinance all Obligations no later than
September 30, 1999; (4) charge an appropriate amendment approval fee now and, if
and when the Collateralization Date occurs, increase interest rates and fees and
charge an additional fee; and (5) require the Borrower to provide projections of
quarterly income statements, balance sheets and cash flows for the remainder of
the term of the Agreement and to inform the Agent and the Lenders monthly of its
progress towards arranging refinancing, all on the terms and conditions set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as
follows:
1.	Terms.  All terms used herein shall have the same meanings as in
the Agreement unless otherwise defined herein.  All references to the Agreement
shall mean the Agreement as hereby amended.
2.	Amendments to Agreement.  The Loan Parties, the Lenders and the
Agent hereby agree that the Agreement is amended as follows:
2.01	Deferral of Collateralization.  To defer collateralization of
the Obligations and to provide for an escrow of the Collateral Documents prior
to their effectiveness, the Agreement is amended as follows:
(a)	Section 1.01 of the Agreement (Defined Terms) is amended by inserting
the following new definitions in proper alphabetical order as follows:


"'Collateral Documents Escrow' means the deposit of the documents
required by Section 6.12(a) and (b) into an escrow with a third party escrow
agent pursuant to an escrow agreement reasonably satisfactory to the Majority
Lenders."
"'Material Adverse Refinancing Event' means any set of circumstances
or events which, in the good faith opinion of the Majority Lenders (a) is
material and adverse to the condition (financial or otherwise) or business
operations of the Borrower and its Subsidiaries, taken as a whole, and which
could reasonably be expected to materially impair the ability of the Borrower to
issue new indebtedness sufficient to refinance all Obligations outstanding under
the Agreement in full by September 30, 1999, or (b) materially impairs (i) the
validity or enforceability of any then-effective Loan Document or (ii) the
ability of the Borrower and its Subsidiaries, taken as a whole, to perform the
Obligations."


(b)	The definition of "Collateralization Date" in Section 1.01 of the
Agreement is amended and restated in its entirety as follows:


"'Collateralization Date' means, unless all Obligations have been paid
in full and all Commitments terminated prior thereto, the earliest to occur of
any of the following:


"(a)	August 31, 1999, unless the Borrower has made substantial progress
towards issuing indebtedness in a principal amount sufficient to refinance all
Obligations outstanding under the Agreement in full by September 30, 1999.
Substantial progress shall be evidenced by the occurrence of all of the
following:  (1) the board of directors of the Borrower shall have approved a
specific refinancing, (2) due diligence associated with such a refinancing shall
have been substantially completed, (3) presentations to potential lenders (the
'roadshow') with respect to such a financing shall have been scheduled, (4) the
Borrower shall have publicly released its audited Fiscal Year financial results,
(5) the Borrower shall have entered into (and distributed to the Lenders) a
signed mandate letter with a financial institution to arrange such a
refinancing, (6) the Borrower shall have retained a law firm to represent it
with respect to such refinancing, (7) the Borrower shall have made a
presentation to a rating agency, if appropriate, with respect to such a
refinancing, and (8) appropriate documentation shall have been substantially
completed, including preparation of a final (subject to insertion of Fiscal
Year-end financials if required) offering memorandum with respect thereto, which
offering memorandum shall have been distributed to the Lenders.  The Borrower
shall deliver to the Agent no later than August 31, 1999 a certificate signed by
a Senior Officer of the Borrower representing and warranting to each of the
foregoing;
"(b)	September 30, 1999;
"(c)	without prejudice to the Lender's rights and remedies under Section
9.01, 60 days after the occurrence of any Default or Event of Default under
Section 7.09, 7.10, 7.11, 7.18 or any payment default hereunder; and
"(d)	60 days after the Majority Lenders determine in good faith that a
Material Adverse Refinancing Event has occurred."




(c)	To reflect that certain documents must be escrowed no later than July
31, 1999, the Section 6.12 of the Agreement is amended and restated in its
entirety as follows:


"6.12	Collateral Documents.
"(a)	Not later than the earlier of (i) July 31, 1999 and (ii) the
Collateralization Date, the Borrower shall deposit, or cause to be deposited, in
the Collateral Documents Escrow the following, which documents shall be in form
and substance reasonably satisfactory to the Agent and legal counsel for the
Agent (unless the Majority Lenders otherwise agree):


"(i)	signature pages to the Security Agreement executed by Borrower and
each Domestic Subsidiary, together with the Pledged Securities accompanied by
appropriate stock powers endorsed in blank, which Security Agreement shall, upon
the Collateralization Date and subject to subsection (c) below, grant to the
Collateral Agent on behalf of the Secured Parties a security interest in
substantially all domestic accounts receivable and inventory of the Borrower and
the Domestic Subsidiaries, the capital stock of all Domestic Subsidiaries and
60% of the capital stock of all Material Foreign Subsidiaries; provided,
however, that such documents shall be held in escrow and shall not be
delivered or deemed delivered to the Collateral Agent and shall not create any
Lien or security interest on any property of the Borrower or any of its
Subsidiaries; and
"(ii)	such financing statements on Form UCC-1 executed by Borrower and
each Domestic Subsidiary with respect to the Security Agreement as the Agent may
request.


"(b)	Prior to the Collateralization Date, the Borrower shall use its best
efforts to obtain such approvals of the Noteholders to the Collateral Documents
as required by the Note Purchase Agreement, and the Agent is authorized by the
Banks and the Borrower to negotiate such changes to the Collateral Documents as
may be reasonably satisfactory to the Majority Lenders and the Required
Noteholders.
"(c)	On the Collateralization Date, the Borrower shall deliver, or cause
to be delivered (i) the Collateral Documents, acceptable to the Collateral Agent
and in compliance with the Note Agreements (as defined in the Security
Agreement) and acceptable to the Majority Lenders and the Noteholders, to grant
to the Collateral Agent for the benefit of the Secured Parties. the Liens
required by subsection (a) above, (ii) an opinion of counsel to the Borrower and
the Domestic Subsidiaries to the effect that the Secured Parties' security
interest in the Collateral are (or will be upon the filing of the UCC-1
financing statements) perfected, and the Loan Parties' obligations under the
Collateral Documents to which it is a party are the legal, valid and binding
obligation of such Loan Party, enforceable against it in accordance with their
terms, and such other matters as the Collateral Agent may reasonably request;
and (iii) such other assurances, certificates, documents, consents or opinions
as the Collateral Agent may reasonably request.
"(d)	If all Obligations are paid in full and all Commitments hereunder are
terminated prior to the Collateralization Date, the Collateral Document Escrow
shall be terminated in accordance with the terms thereof and all documents
deposited therein returned to the Borrower."


(f)	Section 9.01(m) of the Agreement (Failure of Collateral Documents
during Collateralization Period) is amended by deleting "cease to" wherever it
appears and inserting "fail to or cease to" in lieu thereof.
(g)	Section 9.01(n) of the Agreement (Failure to deliver Collateral
Documents) is amended and restated in its entirety as follows:


"(n)	The Borrower fails to deliver the documents required by Section 6.12
into the Collateral Documents Escrow by July 31, 1999."


2.02	Issuance of New Indebtedness and Payoff of all Obligations.
To require the Borrower to issue additional Indebtedness to payoff all
Obligations in full, the Agreement is amended as follows:
(a)	Section 2.10 of the Agreement (Reduction of Commitments) is amended by
inserting a new subsection (e) as follows:


"(e)	Concurrently with any mandatory prepayments and cash
collateralization required pursuant to Section 2.11(d), the Commitments
shall be reduced to the amount of Loans and Letters of Credit remaining
outstanding after giving effect thereto."


(b)	Section 2.11 of the Agreement (Mandatory Prepayments) is amended by
inserting a new subsection (d) as follows:


"(d)	Concurrently with receipt of the net proceeds from the issuance of
any additional Indebtedness for borrowed money of the Borrower and its Domestic
Subsidiaries, the Borrower shall apply all of such net proceeds towards (i)
paying off outstanding Advances and accrued interest thereon, together with any
amounts payable under Section 2.20, (ii) replacing or cash
collateralizing all Outstanding Letter of Credit Liability, (iii) paying accrued
Commitment, Letter of Credit and other fees and expenses owing hereunder, and
(iv) paying off all other outstanding Obligations."


(c)	The following new section is inserted in the Agreement immediately
following Section 6.15 as follows:


"6.16	Issuance of Additional Indebtedness to Payoff Obligations.
The Borrower shall use best efforts to refinance all outstanding Obligations by
issuing sufficient new senior or subordinated secured or unsecured Indebtedness
no later than September 30, 1999; provided, however, that if the
Borrower issues Indebtedness which refinances less than all of the outstanding
Obligations, the terms and conditions of such Indebtedness shall be acceptable
to the Majority Lenders.  The Borrower shall engage an investment banker not
later than June 30, 1999 to arrange the issuance of such indebtedness to
refinance all outstanding Obligations, and shall deliver a copy of the signed
mandate letter to the Agent for distribution to the Lenders."


2.03	Pricing
(a)	To increase the interest rate applicable to extensions of credit
from and after the Collateralization Date, with a clawback to July 3, 1999 if
the Collateralization Date occurs, the definition of "Applicable Margin" in
Section 1.01 of the Agreement is amended by inserting the following at the end
thereof:


"Notwithstanding the foregoing, from and after the Collateralization Date,
the Applicable Margin shall mean:


"(a)	with respect to each Eurocurrency Rate Committed Advance, 3.25% per
annum;
"(b)	with respect to the Standby Letter of Credit fees referred to in
Section 3.05(a), 3.25% per annum;
"(c)	with respect to each Base Rate Advance, 2.00% per annum; and
"(d)	with respect to the commitment fee referred to in Section 2.03(c),
0.50% per annum;


"provided, further, that if the Collateralization Date occurs,
the foregoing Applicable Margins shall be effective retroactively to July 3,
1999, with such retroactive interest to be paid on the date when the next
payment of interest is otherwise due hereunder."


(b)	To make the interest rate applicable to Swing Line Advances the same
as other Base Rate Loans, Section 2.05(l) of the Agreement (Swing Line Advances)
is amended by inserting "plus the Applicable Margin, if any, for Base
Rate Advances" after "at a fluctuating interest rate per annum equal to the Base
Rate in effect from time to time."
(c)	To provide for additional fees, Section 2.03 of the Agreement is
amended by adding the following subsection at the end thereof:


"(f)	Collateralization Date Fee.  On the Collateralization Date,
the Borrower shall pay to the Agent for the account of each Lender a fee equal
to 0.20% of such Lender's Commitment."


2.04	Reporting
(a)	To provide the Lenders with additional information concerning
projected cash flows and the Borrower's progress towards arranging refinancing,
Section 6.01 of the Agreement (Financial and Business Information) is amended by
deleting "and" at the end of subsection (l); deleting the period at the end of
subsection (m) and inserting ";" in lieu thereof, and inserting new subsections
(n) and (o) immediately following subsection (m) as follows:


"(n)	As soon as practicable, and in any event within 50 days after the end
of each Fiscal Quarter, projections of quarterly income statements, balance
sheets and cash flows for the remainder of the term of the Agreement, in a form
and utilizing assumptions satisfactory to the Agent; and
"(o)	As soon as practicable, and in any event within 7 days after the end
of each fiscal month, an update on the Borrower's progress towards refinancing
the Obligations."


3.	Representations and Warranties.  Each of the Loan Parties
jointly and severally represent and warrant to the Lenders and the Agent:
3.01	Authorization.  The execution, delivery and performance of
this Third Amendment have been duly authorized by all necessary corporate action
by each of them and has been duly executed and delivered by each of them.
3.02	Binding Obligation.  This Third Amendment is the legally valid
and binding obligation of each Loan Party, enforceable in accordance with its
terms against each of them respectively, except as such enforcement may be
limited by Debtor Relief Laws or equitable principles relating to the granting
of specific performance and other equitable remedies as a matter of judicial
discretion.
3.03	No Legal Obstacle to Agreement.  Neither the execution of this
Third Amendment, the making by any Borrower of any borrowing under the
Agreement, nor the performance of the Agreement has constituted or resulted in
or will constitute or result in a breach of the provisions of any Contractual
Obligation to which any Loan Party is a party, or the violation of any
Requirement of Law, or result in the creation under any agreement or instrument
of any security interest, lien, charge, or encumbrance upon any of the assets of
any of them, except as contemplated hereby.  No approval or authorization of any
Governmental Agency is required by any Loan Party to permit the execution,
delivery or performance by any Loan Party of this Third Amendment, the
Agreement, or the transactions contemplated hereby or thereby, or the making of
any borrowing under the Agreement.
3.04	Incorporation of Certain Representations.  The representations
and warranties set forth in Article 5 of the Agreement, as amended hereby, are
true and correct in all material respects on and as of the date hereof as though
made on and as of the date hereof except to the extent any such representation
or warranty is expressly stated to be made as of any other date.
3.05	Default. No Default or Event of Default under the Agreement
has occurred and is continuing.
3.06	No Material Adverse Effect.  Other than disclosed to the Agent
and the Lenders prior to the date hereof, no event or circumstance has occurred
since January 1, 1999 which constitutes a Material Adverse Effect after giving
effect to this Third Amendment.
4.	Conditions, Effectiveness.  The effectiveness of this Third
Amendment shall be subject to the compliance by the Borrower with its agreements
herein contained, and to the delivery of the following to the Agent in form and
substance satisfactory to the Agent:
4.01	Corporate Resolutions.  A copy of a resolution or resolutions
passed by the Board of Directors of the Borrower, certified by the Secretary or
an Assistant Secretary of the Borrower as being in full force and effect on the
date hereof, authorizing the amendments to the Agreement herein provided for and
the execution, delivery and performance of this Third Amendment and any note or
other instrument or agreement required hereunder.
4.02	Authorized Signatories.  A certificate, signed by the
Secretary or an Assistant Secretary of the Borrower dated the date hereof, as to
the incumbency of the person or persons authorized to execute and deliver this
Third Amendment and any instrument or agreement required hereunder on behalf of
the Borrower.
4.03	Amendment Fee.  An amendment fee for the account of each
Lender approving this Third Amendment prior to 5:00 p.m. (Los Angeles time) on
April 28, 1999 equal to 0.15% of such Lender's Commitment after giving effect to
this Third Amendment.
4.04	Opinion.  An opinion of outside counsel to the Borrower
stating to the effect that the execution and performance of this Third Amendment
does not or will not constitute or result in a breach of the 7.09% Series A
Senior Notes Due October 28, 2004 or the 7.25% Series B Senior Notes Due October
28, 2007.
4.05	Attorneys' Fees.  Payment of all fees and expenses of the
Agent's outside and inhouse counsel invoiced to the Borrower.
4.06	Other Evidence.  Such other evidence with respect to the
Borrower or any other person as any Lender may reasonably request to establish
the consummation of the transactions contemplated hereby, the taking of all
corporate action in connection with this Third Amendment and the Agreement and
the compliance with the conditions set forth herein.
5.	Miscellaneous.
5.01	Effectiveness of the Agreement.  Except as hereby expressly
amended, the Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.
5.02	Acknowledgement of Obligations.  The Borrower hereby (a)
confirms and agrees, on behalf of itself and each of its Subsidiaries, that it
and they are truly and justly indebted to the Agent and the Lenders for all
amounts due and owing under the Credit Agreement and the other Loan Documents
without defense, offset or counterclaim of any kind whatsoever and (b) reaffirms
and admits, on behalf of itself and each of its Subsidiaries, the validity and
enforceability of the Agreement and the other Loan Documents.
5.03	Effectiveness of Agreement and Loan Documents.  (a)  Except as
expressly amended hereby, the Loan Parties agree that each provision of the
Agreement and each provision of each other Loan Document shall continue to be
and shall remain, in full force and effect.  This Third Amendment shall not be
deemed or otherwise construed (a) to be a waiver of, or consent to, or a
modification or amendment of, any other term or condition of the Agreement or
any other Loan Document, (b) to be a commitment or any other undertaking by the
Lenders or any of them to engage in any restructuring of any aspect of the
Agreement or the Loan Documents, (c) to constitute any obligation to further
amend or otherwise modify the Agreement or any Loan Document or (d) to prejudice
any other right or rights which the Agent or the Lenders may now have or may
have in the future under or in connection with the Agreement or the Loan
Documents or any of the instruments or agreements referred to therein, as the
same may be amended or modified from time to time.
(b)	This Third Amendment is specific in time and in intent and does not
constitute, nor should it be construed as, a waiver of any other right, power or
privilege under the Agreement, or under any agreement, contract, indenture,
document or instrument mentioned in the Agreement; nor does it preclude any
exercise thereof or the exercise of any other right, power or privilege, nor
shall any future waiver of any right, power, privilege or default hereunder, or
under any agreement, contract, indenture, document or instrument mentioned in
the Agreement, constitute a waiver of any other default of the same or of any
other term or provision.
5.04	Counterparts.  This Third Amendment 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.  This Third Amendment shall
not become effective until each Loan Party, the Majority Lenders and the Agent
shall have signed a copy hereof, whether the same or counterparts, and the same
shall have been delivered to the Agent.
5.05	Jurisdiction.  This Third Amendment, and any instrument or
agreement required hereunder, shall be governed by and construed under the laws
of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed and delivered as of the date first written
above.












BORROWER:
SUNRISE MEDICAL, INC.,
as Borrower and as a Guarantor
By:  	

Xxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer


GUARANTORS:
DYNAVOX SYSTEMS, INC.
SUNMED FINANCE INC.
SUNRISE MARIN HOLDINGS INC.
SUNRISE MEDICAL CCG INC.
SUNRISE MEDICAL HHG INC.
By:	

Xxx X. Xxxxxx
Treasurer


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent 
By:	
Xxxxxxx Xxxxxx
Vice President
 
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as a Lender
By:	
Name  	
Title  	

ABN AMRO BANK NV Los Angeles International Branch
By  	
Name  	
Title  	
UNION BANK OF CALIFORNIA, N.A.
By  	
Name  	
Title  	

XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By  	
Name  	
Title  	
 
DEUTSCHE BANK AG, New York
Branch and/or Caymen Islands Branch
By  	
Name  	
Title  	
 
By  	
Name  	
Title  	
 
PNC BANK, NATIONAL ASSOCIATION
By  	
Name  	
Title