
<PAGE>
                                                                   Exhibit 10.18
                               CREDIT AGREEMENT

                                By and Between
                           Baker Hughes Incorporated
                                      and


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



                         Dated as of September 1, 1994

                                       
<PAGE>
                               Table of Contents
<TABLE> 
<CAPTION> 
<C>           <S>                                                         <S> 
ARTICLE I.    DEFINITIONS ..............................................   -1-
  1.01        "Advance(s)" .............................................   -1-
  1.02        "Agreement" ..............................................   -1-
  1.03        "Business Day" ...........................................   -1-
  1.04        "Commitment" .............................................   -1-
  1.05        "Commitment Limit" .......................................   -1-
  1.06        "Consolidated Net Worth" .................................   -1-
  1.07        "Control Group" ..........................................   -1-
  1.08        "Default Rate" ...........................................   -2-
  1.09        "Dollars" and "$" ........................................   -2-  
  1.10        "Effective Date" .........................................   -2-
  1.11        "Encumbrance" ............................................   -2-
  1.12        "ERISA" ..................................................   -2-
  1.13        "Eurodollar Advance(s)" ..................................   -2-
  1.14        "Eurodollar Rate" ........................................   -2-
  1.15        "Eurodollar Reserve Percentage"...........................   -2-
  1.16        "Event of Default"........................................   -3-
  1.17        "Facility Fee"............................................   -3-
  1.18        "Facility Fee Rate".......................................   -3-
  1.19        "GAAP"....................................................   -3-
  1.20        "Governmental Requirement"................................   -3-
  1.21        "Interest Period".........................................   -3-
  1.22        "Lending Office"..........................................   -4-
  1.23        "LIBOR"...................................................   -4-
  1.24        "LIBOR Margin"............................................   -4-
  1.25        "Mortgage"................................................   -4-  
  1.26        "Net Worth"...............................................   -4-
  1.27        "Note"....................................................   -5-
  1.28        "Other Bank(s)"...........................................   -5-
  1.29        "Other Bank Agreement(s)".................................   -5-
  1.30        "PBGC" ...................................................   -5-
  1.31        "Permitted Encumbrance" ..................................   -5-
  1.32        "Person" .................................................   -5-
  1.33        "Plan" ...................................................   -5-
  1.34        "Reference Rate" .........................................   -5-
  1.35        "Reference Rate Advance(s)" ..............................   -5-
  1.36        "Reportable Event" .......................................   -5-
  1.37        "Stockholders' Equity" ...................................   -5-
  1.38        "Subsidiary" .............................................   -6-
  1.39        "Taxes" ..................................................   -6-
  1.40        "Termination Date" .......................................   -6-
</TABLE> 

                                       
<PAGE>
<TABLE>
<CAPTION> 
<C>           <S>                                                         <S> 
ARTICLE II.   LOAN COMMITMENT...........................................   -6-
  2.01        Commitment to Lend........................................   -6-
  2.02        Change of Law.............................................   -6-
  2.03        Termination and Reduction of Commitment...................   -7-
  2.04        Facility and Origination Fees.............................   -7-
  2.05        Withholding Taxes.........................................   -7-
  2.06        Increased Costs...........................................   -8-
  2.07        Bank as Foreign Person....................................   -8-
  2.08        Bank's Obligation for Taxes...............................  -10-
  2.09        Change of Lending Office..................................  -11-
             
ARTICLE III.  REVOLVING CREDIT LOANS TO THE COMPANY.....................  -11-
  3.01        Advances to the Company...................................  -11-
  3.02        Disposition of Funds and Amount Payable in the Event of
               Refinancing..............................................  -13-
  3.03        Funding Losses............................................  -14-
  3.04        Conditions to the Initial Borrowing.......................  -14-
  3.05        Conditions To All Advances................................  -15-
             
ARTICLE IV.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............  -l5-
  4.01        Existence and Rights......................................  -15-
  4.02        Agreement and Note........................................  -15-
  4.03        No Conflict...............................................  -16-
  4.04        Litigation................................................  -16-
  4.05        Financial Condition.......................................  -16-
  4.06        Title to Assets...........................................  -16-
  4.07        Trademarks, Patents.......................................  -16-
  4.08        Margin Securities.........................................  -17-
  4.09        ERISA.....................................................  -17-
  4.10        Investment Company Act....................................  -17-
  4.11        Labor Matters.............................................  -17-
  4.12        Environmental Laws........................................  -17-
  4.13        Other Bank Agreements.....................................  -17-
             
ARTICLE V.    AFFIRMATIVE COVENANTS.....................................  -17-
  5.01        Corporate Rights and Franchises...........................  -18-
  5.02        Insurance.................................................  -18-
  5.03        Taxes and other Liabilities...............................  -18-
  5.04        Records...................................................  -18-
  5.05        Reports by the Company....................................  -19-
    
ARTICLE VI.   NEGATIVE COVENANTS .......................................  -21-
  6.01        Liens and Encumbrances. ..................................  -21-
  6.02        Sales of Assets or Business...............................  -22-
             
</TABLE> 

                                      ii
<PAGE>
<TABLE>
<CAPTION> 
<C>           <S>                                                         <S> 
  6.03        Liquidation, Dissolution, Consolidation or Merger.........  -23-
  6.04        Minimum Consolidated Net Worth ...........................  -23-

ARTICLE VII.  EVENTS OF DEFAULT AND REMEDIES ...........................  -23-
  7.01        Failure to Pay Note; Breach of Certain Covenants..........  -23-  
  7.02        Breach of Remaining Covenants ............................  -23-
  7.03        Breach of Warranty........................................  -24-
  7.04        Other Obligations.........................................  -24-
  7.05        Insolvency; Receiver......................................  -24-
  7.06        Judgments; Attachments....................................  -25-
  7.07        ERISA.....................................................  -25- 
  7.08        Remedies .................................................  -25-

ARTICLE VIII. MISCELLANEOUS.............................................  -26-
  8.01        Survival of Warranties....................................  -26-
  8.02        Failure or Indulgence Not Waiver..........................  -26-
  8.03        Notices...................................................  -26-
  8.04        Applicable Law............................................  -26-
  8.05        Interest Limitation.......................................  -26-
  8.06        Assignability.............................................  -27-
  8.07        Computation of Interest Rates and Fees; Time of Payment...  -27-
  8.08        Expenses; Indemnity by the Company........................  -27-
  8.09        Modifications and Amendments..............................  -27-
  8.10        Restriction on Transfers..................................  -27-
  8.11        Table of Contents; Headings...............................  -28-
  8.12        Articles; Sections........................................  -28-
  8.13        Counterparts..............................................  -28-
  8.14        Survival of Agreements....................................  -28-
  8.15        Severability..............................................  -28-
  8.16        Confidentiality...........................................  -29-
  8.17        Consequential Damages.....................................  -29-
  8.18        Replacement of Prior Agreements...........................  -29-
  8.19        Final Agreement...........................................  -29-
</TABLE>

                                      iii
<PAGE>
EXHIBITS

  Exhibit A    Form of Note
  Exhibit B    Banks
  Exhibit C    Form of Company Request For Advance
  Exhibit D    Form of Opinion of Counsel of the Company

                                      iv
<PAGE>
                           BAKER HUGHES INCORPORATED

                               CREDIT AGREEMENT



  THIS CREDIT AGREEMENT, dated as of September 1, 1994, is hereby made and
entered into by and between BAKER HUGHES INCORPORATED, a Delaware corporation
(the "Company"), and                  (the "Bank"), on the following terms and
conditions.

                            ARTICLE I. DEFINITIONS


  For the purposes hereof, unless the context otherwise requires:

  1.01 "Advance(s)" means any or all of the Eurodollar Advances and Reference
Rate Advances made to the Company by the Bank pursuant to Section 3.01.

  1.02 "Agreement" means this Credit Agreement as originally executed or, if
later amended or supplemented, then as so amended or supplemented.

  1.03 "Business Day" means any day (other than a day which is Saturday, Sunday,
or a legal holiday in London, England, the State of Texas, the State of New
York, or the State within the U.S., if any, where the Bank maintains its
corporate headquarters) on which commercial banks are open for domestic and
international business in London, England, Houston, Texas, New York, New York,
and the city within the U.S., if any, where the Bank maintains its corporate
headquarters; provided, however, that when used in connection with a Eurodollar
Advance, the term "Business Day" shall also exclude any day on which banks are
not open for dealings in dollar deposits in the London interbank market.

  1.04 "Commitment" means the Bank's commitment to lend an aggregate amount not
to exceed the Commitment Limit at any time outstanding pursuant to Section 2.01,
as such Commitment may be reduced or terminated pursuant to Section 2.02,
Section 2.03 or Article VII.

  1.05 "Commitment Limit" means               MILLION DOLLARS ($              ).

  1.06 "Consolidated Net Worth" of any Person means the Net Worth of such Person
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

  1.07 "Control Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common CONTROL
WHICH, together with the Company, are treated as a single employer under Section
414(b) or 414(c) of the Internal Revenue Code of 1986, as from time to time
amended.

                                       1
<PAGE>
  1.08 "Default Rate" means a rate per annum equal to the sum of 1% plus
the Reference Rate (changing when and as such Reference Rate changes).

  1.09 "Dollars" and "$" mean the lawful currency of the United States of
America and in respect of all payments to be made in Dollars under this
Agreement mean funds which are for same day settlement in immediately available
funds through the Federal Reserve wire transfer system (or such other United
States dollar funds as may at the relevant time be customary for the settlement
of international banking transactions denominated in United States dollars).

  1.10 "Effective Date" means the date of this Agreement first written above.

  1.11 "Encumbrance" means any mortgage, deed of trust, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance, but excluding any right of offset or set-off which arises by
operation of law or which may be granted to a lender in connection with credit
facilities for the Company or any of its Subsidiaries, and further excluding any
encumbrance which arises by reason of any restraining order, injunction, or
similar impediment or restriction that affects the transfer of any assets.

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

  1.13 "Eurodollar Advance(s)" means loans made by the Bank to the Company under
Section 3.01 that bear interest at the Eurodollar Rate.

  1.14 "Eurodollar Rate" means, in respect of each Interest Period of each
Eurodollar Advance, a rate per annum equal to LIBOR plus the LIBOR Margin;
provided, however, that if the Bank incurs a reserve requirement (as set forth
below in the definition of "Eurodollar Reserve Percentage") on any day of any
Interest Period and the Bank notifies the Company, within thirty (30) days after
incurring such reserve requirement that it has incurred same, then "Eurodollar
Rate" means, in respect of the portion of the Interest Period of such Eurodollar
Advance in which such reserve requirement is in effect, a rate per annum equal
to the sum of LIBOR Margin plus the quotient obtained (rounded upwards, if
necessary, to the next higher 1/16 of 1%) by dividing (i) LIBOR by (ii) 1.00
minus the Eurodollar Reserve Percentage in effect during such portion of such
Interest Period.

  1.15 "Eurodollar Reserve Percentage" means for any day that a Eurodollar
Advance is outstanding, that percentage (expressed as a decimal) which is in
effect on such day of the applicable Interest Period, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the reserve requirement for the Bank in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Advances is determined or any
category of extensions of credit or other assets which includes loans by a non-
United States office of the Bank to United States residents).

                                       2
<PAGE>
  1.16 "Event of Default" shall have the meaning attributed thereto in Article
VII.

  1.17 "Facility Fee" means the fee payable to the Bank pursuant to Section
2.04.

  1.18 "Facility Fee Rate" means the rate per annum which shall be used to
calculate the Facility Fee and is equal to (i) 1/10 of 1% if the Company has a
senior unsecured credit rating by Standard and Poors of better than BBB+ or a
senior unsecured credit rating by Moody's Investor Services of better than Baal;
(ii) 1/8 of 1% if the Company has a senior unsecured credit rating by Standard
and Poors between BBB+ and BBB-, inclusive or a senior unsecured credit rating
by Moody's Investor Services between Baal and Baa3, inclusive; or (iii) 1/4 of
1% if the Company has a senior unsecured credit rating by Standard and Poors
of less than BBB- or a senior unsecured credit rating by Moody's Investor
Services of less than Baa3; provided, however, that the greater senior unsecured
credit rating (Standard and Poors or Moody's Investor Services) shall always be
applied to determine the Facility Fee Rate, and if Standard and Poors (or
Moody's Investor Services) changes its rating designations, then the new
equivalent Standard and Poors (or Moody's Investor Services) credit ratings 
shall be applied.

  1.19 "GAAP" means those generally accepted accounting principles which are in
effect on the date of determination and which are recognized as such by the
Financial Accounting Standards Board (or any generally recognized successor).

  1.20 "Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, guideline, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including, without limitation, any of the foregoing which relate to
environmental standards or controls, energy regulations and occupational, safety
and health standards or controls) of any (domestic or foreign) federal, state,
county, municipal, parish, provincial or other government or any department,
commission, board, court, agency or any other instrumentality of any of them.

  1.21 "Interest Period" means (a) in respect of each Eurodollar Advance made to
the Company, the period commencing on the date of such Eurodollar Advance and
ending one, three or six months thereafter (as designated by the Company
pursuant to Section 3.01(a)) or such other time period as may be mutually agreed
upon by the Bank and the Company, and (b) in respect of each Reference Rate
Advance made to the Company, the period commencing on the date of such Reference
Rate Advance and ending one, three or six months thereafter (as designated by
the Company pursuant to Section 3.01(a)) or such other time period as may be
mutually agreed upon by the Bank and the Company; provided, however, that in
each case:

      (i) any Interest Period which would otherwise end on a day which is not a
   Business Day shall be extended to the next succeeding Business Day unless by
   such extension it would fall in another calendar month, in which case such
   Interest Period shall end on the next preceding Business Day;

                                       3
<PAGE>
      (ii) any Interest Period which begins on a day for which there is no
   numerically corresponding day in the calendar month during which such
   Interest Period is to end shall, subject to the provisions of clause (i)
   hereof, end on the last day of such calendar month;

      (iii) no Interest Period shall extend beyond the Termination Date; and

      (iv) no more than ten different Interest Periods may be outstanding at any
   one time.

  1.22 "Lending Office" means the office or offices of the Bank specified as its
"Domestic Lending Office" or "Eurodollar Lending Office", as the case may be,
below its name on the signature page hereof or such other office or offices of
the Bank as the Bank may from time to time specify in writing to the Company,
or, if the Bank fails to so notify the Company, the Bank's Domestic Lending
Office listed below its name on the signature page hereof

  1.23 "LIBOR" means, in respect of each Interest Period of each Eurodollar
Advance, the rate per annum quoted by the Bank at which deposits in Dollars, in
amounts comparable to the amount of the subject Eurodollar Advance and with
maturities comparable to such Interest Period, are offered to the principal
office of the Bank in London, England (or if the Bank does not have an office in
London, England, the rate at which such deposits are offered to the principal
offices of major banks in London, England) by major banks in the interbank
market at 11:00 A.M. London time two (2) Business Days prior to the first day of
such Interest Period (rounded upward, if necessary, to the next higher 1/16 of
1%).

  1.24 "LIBOR Margin" means the rate per annum which shall be added to LIBOR to
determine the Eurodollar Rate and is equal to (i) .275% if the Company has a
senior unsecured credit rating by Standard and Poors of better than BBB+ or a
senior unsecured credit rating by Moody's Investor Services of better than Baal;
(ii) .375% if the Company has a senior unsecured credit rating by Standard and
Poors between BBB+ and BBB-, inclusive, or a senior unsecured credit rating by
Moody's Investor Services between Baal and Baa3, inclusive; or (iii) .5% if the
Company has a senior unsecured credit rating by Standard and Poors of less than
BBB- or a senior unsecured credit rating by Moody's Investor Services of less
than Baa3; provided, however, that the greater senior unsecured credit rating
(Standard and Poors or Moody's Investor Services) shall always be applied to
determine the LIBOR Margin, and if Standard and Poors (or Moody's Investor
Services) changes its rating designations, then the new equivalent Standard and
Poors (or Moody's Investor Services) credit ratings shall be applied.

  1.25 "Mortgage" means any Encumbrance, excluding Permitted Encumbrances.

  1.26 "Net Worth" of a Person shall mean the sum of the par value or stated
value of its issued and outstanding capital stock (common and preferred),
capital in excess of par

                                       4
<PAGE>
or stated value of shares of its capital stock, retained earnings, and any other
account which, in accordance with GAAP, constitutes Stockholders' Equity.

  1.27 "Note" means the note substantially in the form of Exhibit A hereto
issued by the Company pursuant to Section 3.01.

  1.28 "Other Bank(s)" means, collectively, the banks set forth on Exhibit B,
other than the Bank.

  1.29 "Other Bank Agreement(s)" shall have the meaning attributed thereto in
Section 4.13.

  1.30 "PBGC" means the Pension Benefit Guaranty Corporation or any successor
established under ERISA.

  1.31 "Permitted Encumbrance" shall have the meaning attributed thereto in
Section 6.01.

  1.32 "Person" means an individual, corporation, partnership, joint venture,
trust, unincorporated organization, association, joint stock company, government
or any agency or political subdivision thereof or any other entity.

  1.33 "Plan" means each employee benefit plan or other plan maintained by the
Company or any member of the Control Group for employees of the Company or any
member of the Control Group and covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code of
1986, as from time to time amended.

  1.34 "Reference Rate" means the varying rate of interest per annum equal to
the rate of interest per annum publicly announced from time to time by Citibank,
N.A., New York, New York, or its successor, as its "Base Rate" of interest,
changing as and when a change in such rate occurs; provided, however, that in
the event that such rate ceases or fails to be published, the Reference Rate
shall be equal to the "Prime Rate" published in the Wall Street Journal in the
Money Rates Column, as it may change from time to time.

  1.35 "Reference Rate Advance(s)" means loans made by the Bank to the Company
under Section 3.01 that bear interest at the Reference Rate.

  1.36 "Reportable Event" means any event described in Section 4043 of ERISA,
but excluding Sections 4043(b)(2) and 4043(b)(3) thereof.

  1.37 "Stockholders' Equity" means the excess of assets over liabilities, in
each case of the Company and its Subsidiaries on a consolidated basis, as
determined and computed in accordance with GAAP.

                                       5
<PAGE>
  1.38 "Subsidiary" means a corporation of which the Company and/or one or more
of its other subsidiaries of any tier own, directly or indirectly, such number
of outstanding shares as have the power (disregarding any voting power, solely
by reason of the happening of any default, of shares of any class) to elect a
majority of the Board of Directors of such corporation.

  1.39 "Taxes" means all present and future taxes, levies, imposts, duties,
fees, assessments, or charges of whatever nature (excluding income and similar
taxes) now or hereafter imposed by any governmental authority, or any political
subdivision or taxing authority thereof, together with interest thereon and
penalties in respect thereof

  1.40 "Termination Date" means the date on which the Commitment expires, which
shall be five (5) years after the Effective Date (August 31, 1999), or such
earlier date as the Bank's obligation to honor its Commitment shall have
terminated under Section 2.02, Section 2.03 or Article VII of this Agreement.

                          ARTICLE II. LOAN COMMITMENT

  2.01 Commitment to Lend. The Bank agrees, on the terms and conditions of this
Agreement and in reliance upon the representations and warranties set forth in
Article IV, to make Eurodollar Advances and Reference Rate Advances to the
Company, from time to time, from the Effective Date to but excluding the
Termination Date, at such times and in such amounts as the Company shall request
in accordance with Section 3.01, in an aggregate principal amount not to exceed
at any one time outstanding the Commitment Limit.

  2.02 Change of Law. Notwithstanding any other provision herein, in the event
that any change in any applicable Governmental Requirement or in the
interpretation or administration thereof shall make it unlawful or impossible
for the Bank to (i) honor its Commitment under Section 2.01, then the obligation
of the Bank to make Advances to the Company under Section 2.01 and the
obligation of the Company to pay the Facility Fee for the period of time
subsequent thereto shall terminate, or (ii) maintain its Advances, then the
aggregate principal amount of the Bank's Advances which are then outstanding and
which cannot be lawfully maintained, together with interest accrued and unpaid
thereon and all other amounts payable hereunder to the Bank in respect thereof,
shall be paid, all as provided below in this Section 2.02. Upon the occurrence
of any change making it unlawful for the Bank to honor its Commitment under
Section 2.01 or maintain its Advances as aforesaid, the Bank shall immediately
notify an officer of the Company thereof by telephone (which shall be confirmed
by written notice in accordance with Section 8.03), and shall furnish to the
Company written evidence of such change. Any payment of the principal amount of
the Bank's Advances which is required under this Section 2.02 shall be made,
together with accrued and unpaid interest and all other amounts payable
hereunder to the Bank in respect thereof, on the earlier of (i) the last day of
the respective Interest Periods applicable to such Advances, or (ii) such
earlier date or dates required by any such

                                       6
<PAGE>
Governmental Requirement or any such interpretation or administration thereof,
provided the Company has been notified of such earlier date or dates.

  2.03 Termination and Reduction of Commitment. The Company may, upon at least
five (5) Business Days' prior written notice given by the Company to the Bank,
and upon payment of the Facility Fee accrued through the date of such
termination or reduction, at any time wholly terminate or from time to time
permanently reduce the unused portion of the Commitment; provided that any such
partial reduction of the commitment must be in the amount of $1,000,000 or an
integral multiple thereof.

  2.04 Facility and Origination Fees.

      (a) Facility Fee. The Company agrees to pay the Bank a Facility Fee, in
   Dollars, equal to the Facility Fee Rate multiplied by the daily average
   amount of the Commitment Limit, used and unused, as it may exist for the
   period from and including the Effective Date, to but not including the
   Termination Date (or such earlier date as the Bank's obligation to honor its
   Commitment shall have terminated pursuant to Sections 2.02. 2.03 or 7.08).
   The applicable Facility Fee Rate shall be determined as of, and the accrued
   Facility Fee shall be paid to the Bank on, (i) the last Business Day of each
   March, June, September and December, commencing with the first of such dates
   which follows the Effective Date, and (ii) the date of any early termination
   of the Commitment pursuant to Sections 2.02. 2.03 or 7.08.

      (b) Origination Fee. The Company agrees to pay the Bank a one-time
   origination fee, in Dollars, equal to .03% of the Commitment Limit, payable
   within fifteen (15) days of the Effective Date of this Agreement.

  2.05 Withholding Taxes. Subject to Sections 2.07 and 2.08, if at any time any
applicable law, regulation or regulatory requirement or any governmental
authority, monetary agency or central bank enacted after the Effective Date
requires the Company to make any deduction or withholding in respect of Taxes
from any payment due under this Agreement for the account of the Bank, the sum
due from the Company in respect of such payment shall be increased to the extent
necessary to ensure that, after the making of such deduction or withholding, the
Bank receives on the due date for such payment a net sum equal to the sum which
it would have received had no such deduction or withholding been required to be
made, and the Company shall indemnify the Bank against any losses or costs
incurred by the Bank by reason of any failure of the Company to make any such
deduction or withholding or by reason of any increased payment not being made on
the due date for such payment, except to the extent the same arise by reason of
a transfer, sale, or assignment of the Note. The Company shall promptly deliver
to the Bank any receipts, certificates or other proof evidencing the amounts (if
any) paid or payable in respect of any deduction or withholding as aforesaid. If
the Bank should, in connection with any payment made by the Company pursuant to
this Section 2.05, receive any offsetting tax credit or obtain any similar tax
benefit which may reasonably be applied to the benefit of the Company, the Bank
will in a timely manner reimburse the Company an amount equal to the

                                       7
<PAGE>
amount of such credit or benefit after deducting any expenses reasonably and
properly attributable thereto. The Bank agrees to use its reasonable efforts to
obtain any such tax credit or similar tax benefit. If any such tax credit or
benefit, the amount of which has been reimbursed to the Company, is subsequently
disallowed in whole or in part by the appropriate taxation authorities, the
Company agrees to repay on demand to the Bank the amount of credit or benefit so
reimbursed to the Company and subsequently disallowed.

  2.06 Increased Costs. Without duplication of any amounts otherwise payable 
under this Agreement the Company agrees to reimburse the Bank, within ten (10)
days after receipt of written notice from the Bank, for any increase in its cost
or decrease in its effective rate of return incurred after the Effective Date
hereof (which shall include, but not be limited to, taxes (other than income or
similar taxes), fees, charges and/or reserves) directly or indirectly resulting
from the making of any Advances to the Company or maintaining of its Commitment,
and arising as a result of:

      (a) any change after the Effective Date in any Governmental Requirement or
   the interpretation thereof by any governmental authority, court, bureau or
   agency charged with the administration or interpretation thereof (whether or
   not having the force of law); or

      (b) any capital or similar requirements imposed on the Bank or any
   corporation controlling the Bank against assets or liabilities (or against
   any class thereof or any required change in the amount thereof) of, or
   commitments or extensions of credit by, the Bank (including, without
   limitation, the Bank's obligation to make Advances hereunder);

except to the extent the same arise by reason of a transfer, sale or assignment
of the Note. Such reimbursement shall be made to the Bank within ten (10) days
after the receipt by the Company of notice from the Bank setting forth the
nature and amount of such loss, decrease in its effective rate of return, or
expense and an explanation as to how such amounts were calculated by the Bank,
said notice to be conclusive and binding in the absence of manifest error. The
Company will pay all amounts required pursuant to this Section 2.06 to the Bank
in immediately available funds.

  2.07 Bank as Foreign Person. If the Bank is a foreign Person (i.e., a Person
other than a United States Person for United States Federal income tax
purposes), then Bank hereby agrees that:

      (i) it shall on or prior to the Effective Date deliver to the Company one
   original of the following:

         (A) if any Lending Office is located in the United States of America,
      accurate and complete signed copies of IRS Form 4224 or any successor
      thereto ("Form 4224") and IRS Form W-9 or any successor thereto
      ("Form W-9"); and/or

                                       8
<PAGE>
         (B) if any Lending Office is located outside the United States of
      America, accurate and complete signed copies of IRS Form 1001 or any
      successor thereto ("Form 1001") and IRS Form W-8 or any successor thereto
      ("Form W-8");

   in each case indicating that the Bank is on the date of delivery thereof
   entitled to receive payments of principal, interest and fees for the account
   of such Lending Office or Lending Offices under this Agreement free from
   withholding of United States Federal income tax;

      (ii) if at any time the Bank changes its Lending Office or Lending Offices
   or selects an additional Lending Office, it shall, at the same time, but only
   to the extent the forms previously delivered by it hereunder are no longer
   effective, deliver to the Company one original, in replacement for the forms
   previously delivered by it hereunder:

         (A) if such changed or additional Lending Office is located in the
      United States of America, accurate and complete signed originals of Form
      4224 and Form W-9; or

         (B) otherwise, accurate and complete signed originals of Form 1001 and
      Form W-8;

   in each case indicating that the Bank is on the date of delivery thereof
   entitled to receive payments of principal, interest and fees for the account
   of such changed or additional Lending Office under this Agreement free from
   withholding of United States Federal income tax;

      (iii) it shall, upon the occurrence of any event (including the passing of
   time, but excluding any event mentioned in clause (ii) above) requiring a
   change in the most recent Form 4224, Form W-9, Form 1001 or Form W-8
   previously delivered by such Bank, deliver to the Company one original
   accurate and complete signed copies of Form 4224, Form W-9, Form 1001 or Form
   W-8 in replacement for the forms previously delivered by the Bank;

      (iv) it shall, promptly upon the request of the Company, deliver to the
   Company such other forms or similar documentation as may be required from
   time to time by any applicable law, treaty, rule or regulation in order to
   establish the Bank's tax status for withholding purposes;

      (v) if the Company claims exemption from withholding tax under a United
   States tax treaty by providing a Form 1001 and the Bank sells or grants a
   participation of all or part of its rights under this Agreement, it shall
   notify the Company of the percentage amount in which it is no longer the
   beneficial owner under this Agreement. To the extent of this percentage
   amount, the Company shall

                                       9
<PAGE>
   treat the Bank's Form 1001 as no longer applicable for purposes of this
   Section 2.07. In the event the Bank is claiming exemption from United States
   withholding tax by filing Form 4224 with the Company, and sells or grants a
   participation in its rights under this Agreement, the Bank agrees to
   undertake sole responsibility for complying with the withholding tax
   requirements imposed by Sections 1441 and 1442 of the Code; and

      (vi) if the IRS or any authority of the United States of America or other
   jurisdiction asserts a claim that the Company did not properly withhold tax
   from amounts paid to or for the account of the Bank (because the appropriate
   form was not delivered, was not properly executed, or because the Bank
   failed to notify the Company of a change in circumstances which rendered the
   exemption from withholding tax ineffective), the Bank shall indemnify the
   Company fully for all amounts paid, directly or indirectly, by the Company,
   as tax or otherwise, including penalties and interest, and including any
   taxes imposed by any jurisdiction on the amounts payable by the Company under
   Sections 2.05 and 2.06 together with all costs, expenses and reasonable
   attorneys' fees (including the allocated cost of in-house counsel).

   Without limiting or restricting the Bank's right to increased amounts under
Sections 2.05 and 2.06 from the Company upon satisfaction of such Bank's
obligations under the provisions of this Section 2.07, if the Bank is a foreign
Person and is entitled to a reduction in the applicable withholding tax, the
Company may withhold from any interest to the Bank an amount equivalent to the
applicable withholding tax after taking into account such reduction. If the
forms or other documentation required by clause (i) above are not delivered to
the Company, then the Company may withhold from any interest payment to the Bank
an amount equivalent to the applicable withholding tax. In addition, the Company
may also withhold against periodic payments other than interest payments to the
extent United States withholding tax is not eliminated by obtaining Form 4224 or
Form 1001.

   2.08 Bank's Obligation for Taxes. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to pay any additional
amounts in respect of United States Federal income tax pursuant to Sections 2.05
or 2.06 to the Bank for the account of any Lending Office of the Bank:

      (i) if the obligation to pay such additional amounts would not have arisen
   but for a failure by the Bank to comply with its obligations under Section
   2.07 in respect of such Lending Office;

      (ii) if the Bank shall have delivered to the Company a Form 4224 and a
   Form W-9 in respect of such Lending Office pursuant to Sections 2.07(i)(A),
   2.07(ii)(A) or 2.07(iii) and the Bank shall not at any time be entitled to
   exemption from deduction or withholding of United States Federal income tax
   in respect of payments by the Company hereunder for the account of such
   Lending Office for any reason other than a change in United States law or
   regulations or in the official

                                       10
<PAGE>
   interpretation of such law or regulations by any governmental authority
   charged with the interpretation or administration thereof (whether or not
   having the force of law) after the date of delivery of such Form 4224 and
   Form W-9; or

      (iii) if the Bank shall have delivered to the Company a Form 1001 and a
   Form W-8 in respect of such Lending Office pursuant to Sections 2.07(i)(B),
   2.07(ii)(B), or 2.07(iii) and the Bank shall not at any time be entitled to
   exemption from deduction or withholding of United States Federal income tax
   in respect of payments by the Company hereunder for the account of such
   Lending Office for any reason other than a change in United States law or
   regulations or any applicable tax treaty or regulations or in the official
   interpretation of any such law, treaty or regulations by any governmental
   authority charged with the interpretation or administration thereof (whether
   or not having the force of law) after the date of delivery of such Form 1001
   and Form W-8.

   Any and all present or future Taxes and related liabilities (including
penalties, interest, additions to tax and expenses) which are not required to be
paid by the Company pursuant to Sections 2.05 and 2.06 shall be paid by the Bank
and Bank agrees to indemnify and hold the Company harmless from the same.

   2.09 Change of Lending Office. Bank agrees that upon the occurrence of any
event giving rise to the payment of taxes or withholding pursuant to Sections
2.05 or 2.06, it will if so requested by the Company, use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Lending Office for any Advances affected by such event
with the object of avoiding the consequence of the event giving rise to the
payment of taxes or withholding pursuant to such Sections; provided, however,
that such designation would not, in the judgment of Bank, be otherwise
disadvantageous to Bank. Nothing in this Section 2.09 shall affect or postpone
any of the obligations of the Company or the right of the Bank provided in
Sections 2.05 or 2.06.

              ARTICLE III. REVOLVING CREDIT LOANS TO THE COMPANY

   3.01 Advances to the Company. Subject to the terms and conditions of this
Agreement, the Company may from time to time borrow under this Section 3.01, pay
pursuant to this Section 3.01, and reborrow under this Section 3.01. Each
Advance made to the Company and payment thereof shall be in Dollars in an
aggregate principal amount of not less than $1,000,000. All Advances to the
Company shall be subject to the provisions of Section 3.01(a) through 3.01(g).

      (a) Manner of Borrowing. The Company shall give the Bank, not later than
   10:00 A.M. (Houston time) (i) three (3) Business Days prior to the drawdown
   date in the case of a Eurodollar Advance; and (ii) on the drawdown date in
   the case of a Reference Rate Advance, irrevocable notice (effective upon
   receipt), substantially in the form of Exhibit C attached hereto, of each
   requested Advance to be made to the Company specifying (A) the amount of the
   requested Advance,

                                       11
<PAGE>
   (B) the drawdown date of the requested Advance (which shall be a Business
   Day), (C) whether the Advance is to be comprised of Eurodollar Advances or
   Reference Rate Advances, and (D) the term of the Interest Period for such
   Advance, provided that if the Company fails to specify the duration of such
   term, the Interest Period for such Advance shall be three (3) months. If such
   Advance will be a Eurodollar Advance, the Bank shall notify the Company of
   the Eurodollar Rate by no later than 1l:OO A.M. (Houston time) one (1)
   Business Day prior to the drawdown date specified for such Advance. If such
   Advance will be a Reference Rate Advance, the Bank shall notify the Company
   of the Reference Rate by no later than 11:30 A.M. (Houston time) on the
   drawdown date specified for such Advance.

      (b) Manner of Making Funds Available. The Bank, not later than 12:00 Noon
   Houston time, on the drawdown date specified for such Advance, shall make the
   Advance available to the Company by transferring in immediately available
   funds the amount of such Advance to The Northern Trust Company, 50 South
   LaSalle Street, Chicago, Illinois, U.S.A., 60675 for credit to the Company's
   account #93343 or to such other bank and/or account as the Company shall
   designate to the Bank in writing.

      (c) Payment of Principal. The Company hereby promises to pay to the Bank
   the principal of each Advance made to the Company on the last day of the
   Interest Period applicable to such Advance. The Company shall have the right,
   at any time and from time to time, to prepay, in whole or in part, any
   Advance by giving Bank not less than (i) three (3) Business Days prior
   written notice in the case of a prepayment of a Eurodollar Advance; and (ii)
   one (1) Business Day prior written notice in the case of a Reference Rate
   Advance; together with accrued interest to the date of such prepayment on the
   principal amount prepaid; provided, however, that each partial prepayment of
   principal shall be in an integral multiple of $1,000,000 and further provided
   that the Company shall be required to pay reasonable costs and losses
   incurred by the Bank as a result of the Company prepaying any Eurodollar
   Advance, pursuant to Section 3.03.

      (d) Payment of Interest. The Company hereby promises to pay to the Bank
   accrued but unpaid interest on the principal amount of each Advance made to
   the Company, from the date of such Advance until the principal amount of such
   Advance shall be paid in full (i) at the Eurodollar Rate for Eurodollar
   Advances; and (ii) at the Reference Rate for Reference Rate Advances; payable
   on the last day of the Interest Period applicable to such Advance and, if
   such Interest Period is longer than six months, also on each six-month
   anniversary of the making of such Advance; provided. however, that any amount
   of such principal and, to the extent permitted by law, any interest thereon
   which is not paid when due (whether at stated maturity, by acceleration or
   otherwise) shall bear interest from the date on which such amount is due
   until such amount is paid in full, payable on demand, at the Default Rate.

                                       12
<PAGE>
      (e) Currency of Payment. All payments of principal and interest on
   Advances shall be made in Dollars.

      (f) Note. The Advances made by the Bank to the Company shall be evidenced
   by the Note substantially in the form attached hereto as Exhibit A with
   appropriate insertions, payable to the order of the Bank, dated the Effective
   Date, maturing on the Termination Date and bearing interest from the
   Effective Date on the unpaid principal amount thereof from time to time
   outstanding at the rates provided for in this Agreement. The Bank shall
   record and endorse on the Note all transactions in the space provided
   thereon, which recordation and endorsement, absent manifest error, shall be
   prima facie evidence of Advances made to the Company and payments thereon;
   provided, however, that the failure by the Bank to make such recordation and
   endorsement shall not limit or otherwise affect the obligations of the
   Company hereunder or under the Note and payments of principal and interest on
   the Note by the Company shall not be affected by the failure to make any such
   recordation and endorsement thereof on the Note. Although the Note shall be
   dated the Effective Date, interest in respect thereof shall be payable only
   for the periods during which the Advances evidenced thereby are outstanding
   and then only with respect to such Advances.

      (g) Available London Interbank Rate. Anything herein to the contrary
   notwithstanding, if, with respect to any proposed Eurodollar Advance to the
   Company, the Bank determines (i) that for any reason whatsoever the rates for
   the offering of Dollars for deposit in the London interbank market in
   immediately available funds in an amount and for a period comparable to the
   scheduled maturity of such Eurodollar Advance are not being offered to the
   Bank in the London interbank market or (ii) that the rates offered for
   purposes of computing the rate of interest on the requested Eurodollar
   Advance do not accurately reflect the cost to the Bank of making such
   Eurodollar Advance, then the Bank shall notify an officer of the Company
   immediately by telephone (which shall be promptly confirmed by written notice
   in accordance with Section 8.03) and so long as such failure to offer such
   rates continue and/or such rates fail to accurately reflect costs to the Bank
   as aforesaid, the Bank shall be under no obligation to make such Eurodollar
   Advance under this Agreement; provided, however, that the Company shall have
   the option to elect to have such Advance changed to a Reference Rate Advance
   by giving the Bank notice at any time prior to 11:00 a.m. (Houston time) on
   the date of the proposed Advance.

   3.02 Disposition of Funds and Amount Payable in the Event of Refinancing. If
the Bank makes a new Advance to the Company hereunder on a day on which the
Company is to pay all or any part of an outstanding Advance made to the Company,
the Bank shall apply the proceeds of such new Advance to make such payment and
(i) only an amount equal to the excess, if any, of the amount being borrowed by
the Company over the amount applied by the Bank to make such payment shall be
made available by the Bank to the Company as provided in Section 3.01(b) and
(ii) only an amount equal to the excess, if any,

                                       13
<PAGE>
of the amount payable by the Company to the Bank on such day over the amount
applied by the Bank to make such payment shall be payable by the Company to the
Bank on such day.

   3.03 Funding Losses. The Company shall pay to the Bank upon written request
(which request shall set forth in reasonable detail the basis for such request),
such amount or amounts as shall be sufficient (in the reasonable opinion of the
Bank) to reasonably compensate the Bank for any loss or expense (other than the
loss of margin) incurred by the Bank as a result of (i) any prepayment by the
Company of any Eurodollar Advance made to the Company on a date other than the
last day of the Interest Period applicable thereto (but specifically excluding
Section 2.02), or (ii) any failure by the Company to borrow an Advance on the
date scheduled for such borrowing pursuant to Section 3.01, except Section
3.01(g), whether because of any Event of Default by the Company or otherwise.

   3.04 Conditions to the Initial Borrowing. The obligation of the Bank to make
its initial Advance to the Company is subject to the conditions precedent that
the Bank shall have received:

      (a) Note. In the case of the initial Advance to the Company, the Note
   drawn to the order of the Bank complying with the provisions of Section 3.01
   hereof.

      (b) Authorized Signatories of the Company. A certificate of the Secretary
   or an Assistant Secretary of the Company which shall certify the names of the
   officers of the Company authorized to sign this Agreement, the Note, and any
   other document related to this Agreement, together with the true specimen
   signatures of such officers. The Bank may conclusively rely upon such
   certificate unless it received evidence to the contrary.

      (c) Evidence of Corporate Action of the Company. Certified copies of all
   corporate action taken by the Company to authorize this Agreement, the Note,
   and the borrowings by the Company hereunder, and such other papers as the
   Bank shall reasonably require.

      (d) Opinion of Company Counsel. An opinion of the General Counsel or
   Deputy General Counsel of the Company in substantially the form set forth in
   Exhibit D hereto.

      (e) Certificate of the Company. A certificate dated the date of such
   Advance to the Company and signed by an authorized executive or financial
   officer of the Company stating that the representations and warranties of the
   Company contained in Article IV are true and correct as of the date thereof,
   and that no Event of Default, or event which with the giving of notice or
   lapse of time or both would constitute an Event of Default, has occurred and
   is continuing.

                                       14
<PAGE>
   3.05 Conditions To All Advances. The obligation of the Bank to make each
Advance to the Company is subject to the conditions precedent that on the date
of such Advance:

      (a) Notice. The Bank shall have received the applicable notice required by
   Section 3.01.

      (b) Compliance with Agreement. The Company shall have complied and shall
   then be in compliance with all the terms, covenants and conditions of this
   Agreement which are binding upon it.

      (c) No Default. There shall exist or result from such Advance no Event of
   Default as defined in Article VII and no event which, with the giving of
   notice or the lapse of time, or both, would constitute such an Event of
   Default.

      (d) Accuracy of Representations and Warranties. The representations and
   warranties of the Company contained in Article IV shall be true with the same
   effect as though such representations and warranties had been made at the
   time of such Advance. In the case of each Advance to the Company hereunder,
   each notice or request by the Company to the Bank to make each borrowing
   shall be deemed to be a representation and warranty to the foregoing effects.

           ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  4.01 Existence and Rights. The Company (i) is duly organized, validly
existing, and in good standing under the laws of the State of Delaware, (ii) has
all necessary corporate power to own its properties and to carry on its
businesses as now conducted, and (iii) is duly qualified and in good standing
(to the extent such concepts are applicable) in each United States jurisdiction
which requires qualification and in which the character of the properties owned
by it or the conduct of its business therein makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on the Company and its Subsidiaries on a consolidated basis. The Company has all
necessary corporate power and authority to make and carry out this Agreement and
to issue and deliver and perform the Note as herein provided.

  4.02 Agreement and Note. The execution, delivery and performance of this
Agreement and the Note by the Company have been duly authorized by all necessary
corporate action and do not require the consent or approval of any governmental
body or other regulatory authority, are not in contravention of or in conflict
with any law or regulation applicable to the Company or any term or provision of
the charter or bylaws of the Company, and this Agreement is, and the Note when
delivered for value received, will be, the valid and legally binding
obligations of the Company, enforceable in accordance with their terms, except
as such enforceability may be (i) limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws from time to time in effect and judicial decisions relating to or
affecting the enforceability

                                       

                                      15
<PAGE>
of creditors' rights and debtor's obligations generally, and (ii) subject to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

  4.03 No Conflict. The execution, delivery and performance of this Agreement
and the Note are not in contravention of or in conflict with any material
agreement, indenture, undertaking or Governmental Requirement to which the
Company or any of its Subsidiaries is a party or by which any of them or any of
their property is subject, and do not cause any Mortgage to be created or
imposed upon any such property, except pursuant to the terms of this Agreement.

  4.04 Litigation. There are no proceedings pending or, so far as the officers
of the Company know, threatened before any court, administrative agency or
arbitration panel which, in the opinion of the officers of the Company, are
expected to materially adversely affect the financial condition or operations of
the Company and its Subsidiaries on a consolidated basis. Neither the Company
nor any of its Subsidiaries is in material default with respect to any order,
writ, injunction or decree of any court or other governmental or regulatory
authority which, in the opinion of the officers of the Company, is expected to
materially adversely affect the financial condition or operations of the Company
and its Subsidiaries on a consolidated basis.

  4.05 Financial Condition. The consolidated balance sheet of the Company and
its Subsidiaries as of September 30, 1993 and the related consolidated statement
of income for the fiscal year then ended, covered by the opinion of Deloitte &
Touche and heretofore delivered to the Bank, present fairly the financial
position of the Company and its consolidated Subsidiaries as of such date and
the results of their operations for the period then ended and have been prepared
in accordance with GAAP. There were no material liabilities, direct or indirect,
fixed or contingent, of the Company or any of its consolidated Subsidiaries as
of the date of such balance sheet which are not reflected therein or in the
notes thereto. Other than as has been previously disclosed to the Bank in
writing through the date hereof (including through the delivery of filings made
with the U.S. Securities and Exchange Commission), there has been since
September 30, 1993 no material adverse change in the financial condition and
operations of the Company and its Subsidiaries on a consolidated basis.

  4.06 Title to Assets. The Company and its Subsidiaries have sufficient title
to their respective assets to enable them to conduct their business, and such
assets are subject to no Mortgage not permitted by Section 6.01, except where
the failure to have such title would not have a material adverse effect on the
Company and its Subsidiaries on a consolidated basis.

  4.07 Trademarks, Patents. The Company and each of its Subsidiaries as of the
date hereof possess all necessary trademarks, copyrights, patents, patent rights
and licenses to conduct their respective businesses as now operated, without any
known material infringement of valid trademarks, trade names, copyrights,
patents or license rights of others,

                                       16
<PAGE>
except to the extent that the failure of the foregoing would not have a material
adverse effect on the Company and its Subsidiaries on a consolidated basis.

  4.08 Margin Securities. The Company is not incurring the indebtedness
evidenced by the Note hereunder for the purpose, directly or indirectly, of
purchasing or carrying any "margin stock" as that term is defined in Regulations
U and X of the Board of Governors of the Federal Reserve System, as amended from
time to time. Neither the Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock.

  4.09 ERISA. Neither the Company nor any member of the control group has
incurred any material accumulated funding deficiency within the meaning of
Section 412 of the Internal Revenue Code of 1986, as from time to time amended,
or has incurred any material liability to the PBGC under Title IV of ERISA in
connection with any Plan or other class of benefit which PBGC has elected to
insure, and no Reportable Event that is materially adverse to the Company and
its Subsidiaries taken in the aggregate has occurred with respect to any Plan.

  4.10 Investment Company Act. The Company is not an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.

  4.11 Labor Matters. There are no strikes or other labor disputes pending, or
to the knowledge of Company threatened, against the Company or any of its
Subsidiaries which have any reasonable likelihood of having a material adverse
effect on the Company and its Subsidiaries on a consolidated basis.

  4.12 Environmental Laws. Except as may have been previously disclosed to the
Bank or may be disclosed in any information furnished by the Company to the Bank
pursuant to Section 5.05, the Company and its Subsidiaries are in compliance
with all environmental, health, and safety laws having applicability to the
Company and its Subsidiaries, and their respective operations and properties,
except to the extent that such non-compliance would not, in the aggregate, have
a material adverse effect on the Company and its Subsidiaries on a consolidated
basis.

  4.13 Other Bank Agreements. Substantially concurrently with the execution of
this Agreement by the Company and the Bank, the Company is executing with each
of the Other Banks a substantively identical (other than with respect to the
amount of the Commitment) form of this Agreement (collectively, the "Other Bank
Agreements," and individually an "Other Bank Agreement").

                       ARTICLE V. AFFIRMATIVE COVENANTS

  Unless the Bank shall otherwise consent in writing, it is agreed that, so long
as any credit hereunder shall be available and until payment in full of the
Note:

                                       17
<PAGE>
  5.01 Corporate Rights and Franchises. The Company will, and will cause each of
its Subsidiaries to, except as may be otherwise permitted by the provisions of
Sections 6.02 and 6.03, (i) maintain and preserve its corporate or partnership
existence and all rights, franchises and other authority necessary for the
conduct of its business unless, in the judgment of management of the Company,
the preservation thereof is no longer desirable to the conduct of the business
of the Company and its Subsidiaries taken as a whole and the loss thereof is not
disadvantageous in any material respect to the Bank; and (ii) maintain its
properties, equipment and facilities in good working order and repair and
conduct its business in an orderly manner without voluntary interruption unless,
in the judgment of management of the Company, such activities are no longer
desirable to the conduct of the Company's business and the discontinuance
thereof is not disadvantageous in any material respect to the Bank.

  5.02 Insurance. The Company will, and will cause each of its Subsidiaries to,
maintain with responsible insurance carriers liability, property damage and
worker's compensation insurance coverage in such amounts and with such
deductibles and retentions as the management of the Company considers
reasonable.

  5.03 Taxes and other Liabilities. The Company will, and will cause each of its
Subsidiaries to, pay and discharge, before the same become delinquent and before
penalties accrue thereon, all taxes, assessments and governmental charges upon
or against it or any of its properties, and all its other liabilities at any
time existing which, if unpaid, might by law become a Mortgage on a material
portion of its property, except to the extent that and so long as:

      (a) the same are being contested in good faith and by appropriate
   proceedings in such manner as not to cause any materially adverse effect upon
   the financial condition of the Company and its Subsidiaries taken as a whole
   or the loss of any material right of redemption from any sale thereunder; and

      (b) it shall have set aside on its books reserves (segregated in
   accordance with GAAP) deemed by it adequate with respect thereto.

  5.04 Records. The Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting in accordance with GAAP and permit
representatives of the Bank to have reasonable access to and to examine the
properties and publicly available information of the Company and its
Subsidiaries at all reasonable times, provided that the Bank shall keep
confidential any proprietary information of the Company or any Subsidiary
identified in writing by such entity or entities as being proprietary and
confidential; provided, however, that the Bank may disclose any such information
(i) to enable it to comply with the requirements of governmental bodies or legal
process, if the Company, after written notice to it (except in cases where
notice would be prohibited by law or by court order), has failed to obtain a
protective or similar order to prevent such disclosure or to preserve the
confidentiality of such information prior to the time that the Bank is advised
by its legal counsel that immediate disclosure is necessary to avoid liability
for failure to

                                       18
<PAGE>
disclose, (ii) in connection with the defense of any litigation or other
proceeding brought against it arising out of the transactions contemplated by
this Agreement and related documents when such disclosure is necessary for such
defense, (iii) in connection with the enforcement of the rights and remedies of
the Bank under this Agreement when such disclosure is necessary for such
enforcement, (iv) to its auditors, legal advisors and bank examiners (provided
they agree to be bound by the provisions of this Section), (v) to its
subsidiaries and affiliates (provided they agree to be bound by the provisions
of this Section), and (vi) to assignees and participants, including prospective
assignees and participants, eligible as such under Section 8.10 hereof (provided
they agree to be bound by the provisions of this Section).

  5.05 Reports by the Company. The Company will furnish the Bank:

      (a) As soon as available, and in any event within forty-five (45) days
   after the close of each of the first three quarters of each fiscal year of
   the Company, commencing with the quarter next ending following the Effective
   Date, a copy of its Quarterly Report on Form 10-Q for such quarter as filed
   with the U.S. Securities and Exchange Commission.

      (b) As soon as available, and in any event within one hundred twenty
   (120) days after the close of each fiscal year of the Company ending
   following the Effective Date (i) a balance sheet of the Company and its
   consolidated Subsidiaries as of the end of such fiscal year and the related
   income statement and statement of changes in cash flows of the Company and
   its consolidated Subsidiaries for the fiscal year then ended, in reasonable
   detail in accordance with GAAP and stating, when appropriate, in comparative
   form the corresponding figures for the previous fiscal year, together with a
   signed opinion of Deloitte & Touche (or other independent certified public
   accountants reasonably satisfactory to the Bank) based on an audit using
   generally accepted auditing standards, certifying that such financial
   statements present fairly the financial position of the Company and its
   consolidated Subsidiaries as of the end of such fiscal year and the results
   of their consolidated operations for the fiscal year then ended, which
   opinion shall not contain any material qualification or exception not
   reasonably satisfactory to the Bank, and (ii) a certificate of such
   accountants stating that in the course of their examination they became aware
   of nothing of an accounting nature which would indicate the occurrence of an
   Event of Default under this Agreement or the occurrence of any event which,
   upon the lapse of time or the giving of notice, or both, would constitute an
   Event of Default hereunder, or, if such is not the case, stating the facts
   with respect thereto.

      (c) As soon as possible, and in any event within forty-five (45) days
   after the close of each of the first three quarters of each fiscal year of
   the Company, and ninety (90) days after the close of each fiscal year of the
   Company, commencing with the quarter next ending following the Effective
   Date, a certificate of the Chief Financial Officer, Vice President-Finance,
   Treasurer or Assistant Treasurer of the Company, any one acting alone,
   stating that the Company has performed and

                                       19
<PAGE>
   observed each and every covenant contained in this Agreement to be performed
   by it and that no event has occurred and no condition then exists which
   constitutes an Event of Default hereunder or would constitute such an Event
   of Default upon the lapse of time or upon the giving of notice or both, or,
   if any such event has occurred or any such condition exists, specifying the
   nature thereof and the action which the Company proposes to take with respect
   thereto.

      (d) Such other publicly available information of the Company as the Bank
   may from time to time reasonably request, within a reasonable period of time
   following such request.

      (e) Within ten (10) Business Days after the same are known, written notice
   of the following:

         (1) Each Event of Default or event which, with the giving of notice or
      lapse of time or both, would constitute an Event of Default under the
      terms of this Agreement.

         (2) Any other matter which has resulted or might result in a materially
      adverse change in the financial condition or operations of the Company and
      its Subsidiaries taken in the aggregate, including, without limitation,
      copies of any detailed report or "management letter" submitted by
      independent certified public accountants relating thereto.

         (3) All events of default under any notes, debentures, other evidences
      of indebtedness or preferred stock, or under any indenture, mortgage, deed
      of trust or other agreement relating to any evidence of indebtedness
      including, without limitation, any Other Bank Agreement, for which the
      Company or any Subsidiary is liable, including the occurrence of any event
      which upon the lapse of time or giving of notice or both would constitute
      such a default, if such events or the exercise of any remedies arising
      therefrom would have a material adverse effect upon the financial
      condition or operations of the Company and its Subsidiaries taken as a
      whole.

         (4) The occurrence of any Reportable Event with respect to any Plan,
      together with the statement of the Chief Financial Officer, Vice
      President-Finance, Treasurer, or Assistant Treasurer of the Company
      setting forth the details as to such Reportable Event and the action which
      the Company proposes to take, if any, with respect thereto.

         (5) Any material modification or amendment to or termination of any of
      the Other Bank Agreements.

         (6) If at any time the value of all "margin stock" (as defined in
      Regulation U of the Board of Governors of the Federal Reserve System, as

                                       20
<PAGE>
      amended from time to time) owned by the Company and its subsidiaries
      exceeds 25% of the value of the assets of the Company and its
      subsidiaries, on a consolidated basis, as reasonably determined by the
      Company.

                        ARTICLE VI. NEGATIVE COVENANTS

  Unless the Bank otherwise consents in writing, the company agrees that so long
as any credit hereunder shall be available and until payment in full of the
Note, the Company will not do or permit any of its Subsidiaries to do any of the
following:

  6.01 Liens and Encumbrances. Create, incur, assume or permit to exist any
mortgage affecting the assets of the Company or any Subsidiary except the
following (herein being collectively called "permitted encumbrance"):

      (a) Encumbrances simultaneously created in favor of the Bank and the other
   Banks, on a pari passu basis, to secure the indebtedness (up to a maximum
   aggregate of $300,000,000) under this Agreement and the Other Bank
   Agreements;

      (b) Encumbrances existing as of the date hereof, and any and all
   extensions, renewals or refinancings of any of the foregoing (provided that
   such extensions, renewals or refinancings do not increase the outstanding
   aggregate principal amount of indebtedness secured by such Encumbrances);

      (c) Encumbrances upon any materials, supplies, tools, articles or other
   things acquired or manufactured in connection with the performance of
   contracts with the United States of America or any department or agency
   thereof to secure partial progress or other payments or performance under
   such contracts;

      (d) Encumbrances against assets which (1) existed when such assets were
   acquired by the Company or such Subsidiary or (2) owned by an entity which,
   subsequent to the date hereof, becomes a Subsidiary, and such Encumbrance is
   in existence at the time such entity becomes a Subsidiary (and which, in the
   case of each of (1) and (2), (A) do not attach to assets other than those
   encumbered at the time of such acquisition or transaction resulting in such
   entity becoming a Subsidiary, and (B) were not created in contemplation of
   such acquisition or transaction resulting in such entity becoming a
   Subsidiary);

      (e) Mechanic's, workmen's, materialmen's, landlord's, carrier's,
   repairmen's, construction and other similar Encumbrances arising in the
   ordinary course of business in respect of obligations not delinquent or which
   are being contested in good faith;

      (f) Encumbrances in connection with worker's compensation, unemployment
   insurance or other social security obligations;

                                       21
<PAGE>
      (g) Encumbrances securing bids, tenders, contracts (other than contracts
   for the payment of money), leases, statutory obligations, surety, appeal and
   customs bonds and other obligations of like nature, and other Encumbrances
   arising by operation of law in respect of the providing of goods or services,
   arising in the ordinary course of business;

      (h) Encumbrances on any property hereafter acquired by the Company or such
   Subsidiary which are created contemporaneously with such acquisition to
   secure or provide for the payment or financing of any part of the purchase
   price thereof, provided:

         (1) The obligation thereby secured consists primarily of the unpaid
     balance of the purchase price of the property (including improvements
     existing or to be constructed) being acquired by the Company or such
     Subsidiary;

         (2) The unpaid purchase price so secured does not exceed 90% of the
     total purchase price of the property being acquired; and

         (3) Any such encumbrance does not extend to, or otherwise affect or
     apply to, property other than that being so acquired;

      (i) Encumbrances on any property of a Subsidiary in favor of the Company
   or any other Subsidiary which is wholly-owned (except for directors' or other
   qualifying shares);

      (j) Encumbrances for taxes, assessments or other governmental charges or
   levies (i) which are not yet due, or (ii) which are due so long as the
   Company or such Subsidiary is contesting the validity thereof in good faith
   and by appropriate proceedings so as not to cause any materially adverse
   effect upon the financial condition of the Company and its Subsidiaries taken
   as a whole and has set aside on its books reserves (segregated in accordance
   with GAAP) deemed by it adequate with respect thereto;

      (k) Any right of set-off granted to any lending institution in connection
   with that lending institution providing cash management services and/or other
   financing to the Company and any of its Subsidiaries; and

      (l) Any other Encumbrances; provided, however, that the aggregate claims
   secured by such other Encumbrances (excluding those Encumbrances otherwise
   permitted pursuant to this Section 6.01) shall not exceed 10% of
   Stockholder's Equity.

  6.02 Sales of Assets or Business. Other than sales or dispositions by a
Subsidiary to the Company or another Subsidiary or by the Company to a
Subsidiary, or sales in the

                                       22
<PAGE>

ordinary course of business, the Company shall not sell, lease or otherwise
dispose of its assets, business or stock or other investment in any Subsidiary
having a value, in each case, in excess of $20,000,000 unless the Board of
Directors of the Company determines that the sale, lease or other disposition
thereof (a) is in the best interest of the Company and its Subsidiaries taken as
a whole, and (b) will not significantly adversely affect the Company's ability
to meet its financial obligations as they become due.

  6.03 Liquidation, Dissolution, Consolidation or Merger. Liquidate, dissolve or
enter into any consolidation or merger unless:

      (a) In the case of a consolidation or merger (1) involving the Company,
   the Company will be the surviving corporation, and (2) involving a
   Subsidiary, (i) a Subsidiary will be the surviving entity, or (ii) the fair
   market value of the Company's investment in such Subsidiary is less than
   $20,000,000, or (iii) the fair market value of the Company's investment in
   such Subsidiary is $20,000,000 or greater and the Board of Directors of the
   Company determines that the preservation thereof is no longer desirable to
   the business of the Company and its Subsidiaries taken as a whole and that
   the absence thereof will not significantly adversely affect the Company's
   ability to meet its financial obligations as they become due; and

      (b) After giving effect to any such merger or consolidation, there will
   exist neither an Event of Default under this Agreement nor any event which,
   upon the giving of notice of lapse of time or both would constitute such an
   Event of Default.

  6.04 Minimum Consolidated Net Worth. The Company will not permit its
 consolidated net worth to be less than $1 billion at any time.

                  ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES

  The occurrence of any one or more of the following events described in
Sections 7.01 through 7.07 shall be deemed an Event of Default under this
Agreement (an "Event of Default"):

  7.01 Failure to Pay Note; Breach of Certain Covenants. Failure to make any
payment of principal or interest on the Note, or any payment of any Facility
Fee or any other amount due under this Agreement, when due and payable as
required under this Agreement, whether at the end of the applicable interest
period, at maturity, or otherwise, and such failure shall have continued
unremedied for a period of three (3) days after written notice by Bank to the
Company, or the failure to observe or perform any term, covenant or agreement
of the Company contained in Sections 5.05(e)(1). 6.02. or 6.03; or

  7.02 Breach of Remaining Covenants. The failure to observe or perform any
term, covenant or agreement of the Company contained in this Agreement (other
than those described in Section 7.01), and such failure shall have continued
unremedied for a period of thirty (30) days after written notice by the Bank to
the Company or beyond a reasonable

                                       23
<PAGE>
period of time thereafter, if such Event of Default is not reasonably capable of
being cured within such thirty (30) day period and the Company is diligently
pursuing the cure thereof; or

  7.03 Breach of Warranty. Any representation or warranty made by the Company
herein, or any statement or representation made in any certificate, report or
opinion delivered pursuant hereto, shall prove to have been incorrect in any
material respect when made; or

  7.04 Other Obligations. The Company or any Subsidiary shall default (as
principal, guarantor or surety):

      (a) in the payment of any principal of or premium, if any, or interest on
   any indebtedness (other than its indebtedness hereunder and indebtedness
   between the Company and any Subsidiary or between Subsidiaries) beyond the
   applicable grace period, if any, (i) for borrowed money in an amount in
   excess of an aggregate of $20,000,000 and/or (ii) representing the deferred
   purchase price of property with an outstanding deferred aggregate liability
   in excess of $20,000,000; or

      (b) with respect to the performance or observance of any term of any
   instrument pursuant to which any indebtedness described in Section 7.04(a)
   was created or any mortgage, indenture or other agreement relating thereto if
   the effect of such default (after giving effect to any applicable grace
   period) is to cause or permit such indebtedness exceeding an aggregate of
   $20,000,000 to become due and payable prior to its stated maturity; or

   7.05 Insolvency; Receiver.

      (a) if the Company makes an assignment for the benefit of creditors, files
   a petition in bankruptcy, is adjudicated or held to be insolvent or bankrupt,
   petitions or applies to any tribunal for any receiver or any trustee for the
   Company or any substantial part of the Company's property, commences any
   proceeding relating to the Company under any reorganization, arrangement,
   readjustment of debt or similar law or statute of any jurisdiction, whether
   now or hereafter in effect, or if there is commenced against the Company any
   such proceeding which remains undismissed, unstayed (or, if stayed, such stay
   shall have been set aside) or unvacated for a period of 60 days, or the
   Company by any act indicates its consent to, approval of or acquiescence in
   any such proceeding or the appointment of any receiver or of any trustee for
   the Company or any substantial part of the Company's property, or suffers any
   such receivership or trusteeship to continue undischarged, unstayed (or, if
   stayed, such stay shall have been set aside) or unvacated for a period of 60
   days; or

      (b) if any of the foregoing events described in this Section 7.05(a)
   occurs with respect to a Subsidiary instead of the Company and such event
   will have a

                                       24
<PAGE>
   material adverse effect on the ability of the Company to meet its financial
   obligations as they become due; or

   7.06 Judgments; Attachments.

      (a) The Company or any Subsidiary shall suffer the entry against it of a
   final judgment or decree for any amount in excess of $20,000,000 (not
   adequately covered by insurance or reserves as determined by the Bank in its
   reasonable discretion) unless, within 30 days after the entry thereof, the
   same is satisfied or discharged or an appeal or appropriate proceeding for
   review thereof is taken and a stay of execution pending such appeal is
   obtained; or

      (b) The Company or any Subsidiary shall suffer one or more writs or
   warrants of attachment to be issued by any court against any of its property
   exceeding in the aggregate $20,000,000 in value, and such writs or warrants
   of attachment are not satisfied, stayed or released within thirty (30) days
   after the entry or levy thereof or after any stay is vacated or set aside; or

   7.07 ERISA. Any Reportable Event which the Bank shall determine in good faith
constitutes grounds for the termination of any Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer any Plan shall have occurred and be continuing for 30 days after
written notice shall have been given by the Bank to the Company; or any Plan
shall be terminated without another Plan being available to replace or
substitute for the terminated Plan; or a trustee shall be appointed by an
appropriate United States District Court to administer any Plan; or the PBGC
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan; and in any situation described above the aggregate amount
of the excess of the current value of the Plan's benefits guaranteed under Title
IV of ERISA over the current value of the Plan's assets allocable to such
benefits under Section 4044 of ERISA shall exceed $20,000,000.

   7.08 Remedies. If any one or more of the Events of Default described in
Sections 7.01 through 7.07 above shall occur and be continuing, then the Bank,
by notice to the Company, may take either or both of the following actions: (i)
declare the obligation of the Bank to make Advances to the Company hereunder to
be terminated whereupon the same shall forthwith terminate, and/or (ii) declare
the entire unpaid principal amount of the Note, all interest accrued and unpaid
thereon, all accrued Facility Fees and all other amounts due and payable by the
Company under this Agreement to be forthwith due and payable, whereupon the
Note, all such accrued and unpaid interest, accrued Facility Fees and all such
other amounts due and payable by the Company shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Company; provided, however, that
if an Event of Default described in Section 7.05(a) shall occur, then the
actions described in this Section 7.08(i) and (ii) shall occur automatically,
without any notice to the Company or declaration by the Bank.

                                       25
<PAGE>
                          ARTICLE VIII. MISCELLANEOUS

  8.01 Survival of Warranties. All agreements, representations and warranties
made herein or made in writing in connection herewith shall survive the
execution and delivery of this Agreement, the making of the Advances hereunder
and the execution and delivery of the Note.

  8.02 Failure or Indulgence Not Waiver. No failure or delay on the part of the
Bank, or any holder of the Note in the exercise of any power, right or privilege
hereunder or under the Note shall operate as a waiver thereof, and no single or
partial exercise of any such power, right or privilege shall preclude other or
further exercise thereof or of any other right, power or privilege. All rights
and remedies existing under this Agreement and the Note are cumulative to, and
not exclusive of, any rights or remedies otherwise available.

  8.03 Notices. Any notice herein required or permitted to be given shall be in
writing, and may be sent by telex, facsimile, personal delivery or mail and, in
each case, shall be deemed to have been given when received by the party to
which such notice was addressed. Notices shall be sent to the addresses which
are set out in the signature pages hereof (until notice of change thereof is
served in the manner provided in this Section 8.03).

  8.04 Applicable Law. This Agreement, the Note, all documents provided for
herein and the rights and obligations of the parties hereto shall be governed by
and construed in accordance with the laws of the State of Texas, United States
of America. The foregoing provision is not intended to limit the rate of
interest payable with respect to the Bank to the maximum rate permitted by the
laws of the State of Texas, United States of America if a higher rate is
permitted with respect to the Bank by supervening provisions of United States
federal law.

  8.05 Interest Limitation. It is the intention of the Company and the Bank to
conform strictly to the usury laws as set forth in Section 8.04 hereof.
Accordingly, if the transactions contemplated hereby would be usurious under
such laws or any other applicable laws, then, in that event, notwithstanding
anything to the contrary in the Note, or this Agreement, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest that
is contracted for, taken, reserved, charged or received under the Note, or this
Agreement, or otherwise in connection with any Advance, shall under no
circumstances exceed the maximum amount allowed by such laws, and any excess
shall be credited by the Bank on the principal amount of such Advance (or, if
the principal amount of such Advance shall have been paid in full, refunded to
the Company); and (ii) in the event that the maturity of any Advance is
accelerated or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the maximum
amount allowed by such laws, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by the
Bank on the principal amount of such Advance (or, if the principal amount of
such Advance shall have been paid in full, refunded by the Bank to the Company).

                                       26
<PAGE>

  8.06 Assignability. Subject to Section 8.10 hereof, this Agreement shall
be binding upon and inure to the benefit of the Company and the Bank and their 
respective successors and permitted assigns, except that the Company may not
assign or transfer its rights hereunder without the prior written consent of the
Bank, which will not be unreasonably withheld.

  8.07 Computation of Interest Rates and Fees; Time of Payment. All computations
of interest and fees shall be made on the basis of a year of 360 days for the
actual number of days elapsed (including the first day but excluding the last
day) (which results in greater interest than if a year of 365 days is used). The
Company shall make each payment of principal of, and interest on, the Advances
made to it and of the fees due hereunder by it not later than 11:00 a m. (in the
time of the city in which the Bank has its principal office) on the date when
due.

  8.08 Expenses; Indemnity by the Company. The Company agrees to pay and hold
the Bank harmless against liability for the payment of all reasonable
attorneys' fees (including, without limitation, the allocated costs of in-house
counsel) and court costs incurred by the Bank arising in connection with the
enforcement against the Company of this Agreement, the Note, and the other
instruments and documents to be delivered by the Company hereunder.

  8.09 Modifications and Amendments. This Agreement and the Note may only be
modified or amended by a written agreement duly executed by the Company and the
Bank.

  8.10 Restriction on Transfers.

     (a) The Bank may, without the consent of the Company, sell participations
  to one or more Banks or other entities (including, without limitation, the
  Other Banks) in all or a portion of its rights and obligations under this
  Agreement (including, without limitation, the Bank's commitment), the advances
  then owing to the Bank and the Note; provided, however, that (1) such sales
  are made in compliance with all applicable United States federal and state
  securities laws, (2) the Bank's obligations under this Agreement shall remain
  unchanged, (3) the Bank shall remain solely responsible and liable to the
  Company for the performance of such obligations, (4) the participating Banks
  or other entities shall be entitled to the cost protection provisions
  contained in Sections 2.05. 2.06. and 3.03 hereof, but only to the extent that
  such protection would have been available to the Bank, calculated as if no
  such participation had been sold, (5) the Company shall continue to deal
  solely and directly with the Bank in connection with the Bank's rights and
  obligations under this Agreement, and (6) the Bank shall retain the sole right
  and responsibility to enforce the obligations of the Company relating to this
  Agreement, the Advances and the Note, including, without limitation, the right
  to approve any Amendment, Modification or Waiver of any provision hereof or
  thereof.

                                       27
<PAGE>
     (b) The Bank may, with the prior written consent of the Company (which
  consent shall not be unreasonably withheld in the case of a proposed
  assignment by the Bank to one of its subsidiaries or affiliates) (which
  consent may be withheld in the sole discretion of the Company in the case of
  any other proposed assignment by the Bank), assign to one or more banks or
  other institutions (including, without limitation, the Other Banks and
  subsidiaries and/or affiliates of the Bank) all or a portion of the Bank's
  Commitment and its other rights and obligations under this Agreement and the
  same portion of the then outstanding Advances and Note; provided, however,
  that (1) each such assignment shall be of a constant, and not a varying,
  percentage of the Bank's Commitment and its other rights and obligations under
  this Agreement, and the then outstanding Advances and the Note, and (2) the
  parties to each such assignment shall execute and deliver to the Company an
  assignment and assumption agreement in form and substance satisfactory to the
  Company. Upon such execution and delivery, from and after the effective date
  specified in such assignment and assumption agreement, the assignee shall be a
  party hereto and, to the extent provided in such assignment and assumption
  agreement, shall have the rights and obligations of the Bank under this
  Agreement and the Bank shall, to the extent provided in such assignment and
  assumption agreement, be released from its obligations under this Agreement.

     (c) The Bank may, without the consent of the Company, assign to a Federal
  Reserve Bank all or a portion of the Bank's rights and obligations under this
  Agreement, the then outstanding Advances and the Note; provided, however, that
  the Bank's obligations under this Agreement shall remain unchanged and the
  Bank shall remain solely responsible to the Company for performance of such
  obligations.

  8.11 Table of Contents; Headings. The Table of Contents and the section
headings used in this Agreement are for convenience only and shall not affect
the construction of this Agreement.

  8.12 Articles; Sections. References herein to "Article(s)" and "Section(s)"
mean the respective Article(s) and Section(s) of this Agreement.

  8.13 Counterparts. This Agreement may be separately executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to constitute one and the same Agreement.

  8.14 Survival of Agreements. All of the agreements of the Company in this
Agreement shall survive the Company's repayment of all Advances made by the Bank
pursuant hereto.

  8.15 Severability. If any term or provision of this Agreement and the Note
shall be determined to be illegal or unenforceable, all other terms and
provisions of such documents shall nevertheless remain effective and shall be
enforced to the fullest extent permitted by applicable law.

                                       28
<PAGE>
  8.16 Confidentiality. The Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all non-
public information provided to it by the Company in connection with this
Agreement and agrees and undertakes that neither the Bank nor any of its
affiliates shall use any such information for any purpose or in any manner other
than pursuant to the terms contemplated by this Agreement. The Bank may disclose
such information (a) at the request of any bank regulatory authority or in
connection with an examination of the Bank by any such authority; (b) to Bank's
independent auditors, counsel and other professional advisors; or (c) pursuant
to subpoena or other court process or when required to do so in accordance with
the provisions of any applicable law or at the express direction of any agency
of any State of the United States of America or of any other jurisdiction in
which the Bank conducts its business, if the Company, after written notice to it
(except in cases where notice would be prohibited by law or court order), has
failed to obtain a protective or similar order to prevent such disclosure or to
preserve the confidentiality of such information prior to the time that the
Bank is advised by its legal counsel that immediate disclosure is necessary to
avoid liability for failure to disclose. Notwithstanding the foregoing, the
Company authorizes the Bank to disclose to any participant, assignee,
prospective participant, prospective assignee or the Bank's U.S. investment
banking affiliates, such financial and other information in Bank's possession
concerning the Company or its Subsidiaries which has been delivered to the
Bank; provided, however, that such participant, assignee, prospective
participant, prospective assignee or the Bank's U.S. investment banking
affiliates, as the case may be, agrees in writing to the Bank to keep such
information confidential to the same extent required of the Bank hereunder.

  8.17 Consequential Damages. Notwithstanding anything herein to the contrary,
neither party shall have any liability for any consequential, indirect,
punitive, exemplary or special damages, including without limitation, loss of
business, opportunities, revenue, profit or anticipated profit.

  8.18 Replacement of Prior Agreements. This Agreement and the Note hereby
replace (i) that certain Credit Agreement (the "Prior Credit Agreement") dated
on or about September 1, 1993 by and between the Bank and the Company, and (ii)
the Note described in and executed in connection with the Prior Credit Agreement
(all of such documents with the Prior Credit Agreement being collectively
referred to as the "Prior Credit Documents"); and the Prior Credit Documents are
hereby canceled, terminated, and of no further force or effect. The Bank and the
Company shall have no further obligations or liabilities under the Prior Credit
Documents.

  8.19 Final Agreement.

     THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
     PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
     OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                                       29
<PAGE>
     THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

  IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
duly executed as of the day and year first above written.

                                         COMPANY:
                                         
                                         BAKER HUGHES INCORPORATED,
                                         a Delaware corporation



                                         By:                                    
                                            Eric L. Mattson
                                            Vice President and Chief
                                            Financial Officer

                                         Address for Notices:
                                         BAKER HUGHES INCORPORATED
                                         3900 Essex Lane, Suite 1200
                                         Houston, Texas 77027
                                         Attention: Treasurer and
                                           Assistant Treasurer
                                         Telex:       857656 (BHI HOU)
                                         Facsimile:   713/439-8699
                                         Telephone:   713/439-8600

                                       30
<PAGE>
                                         BANK:
                                              

                                                                                

                                         By:                                    
                                         Name:                                  
                                         Title:                                 

                                         Addresses for Notices:

                                                                                
                                                                                

                                         Telex:                                 
                                         Facsimile:                             
                                         Telephone:                             


                                         Bank's Domestic Lending Office:
                                         

                                                                                


                                         Bank's Eurodollar Lending Office:
                                         

                                                                                

                                       31
<PAGE>
                                   EXHIBIT A
                                   

                             FORM OF COMPANY NOTE
                                                 

                                                               September 1, 1994

    For value received, BAKER HUGHES INCORPORATED, a Delaware corporation (the
"Company") promises to pay to the order of                                   
(the "Bank"), for the account of its applicable lending office, at the principal
office of the Bank at                     , the principal amount of each Advance
made by the Bank to the Company pursuant to Section 3.01 of the Credit Agreement
hereinafter referred to on the last day of the Interest Period for such Advance.
In any event, the aggregate unpaid principal amount of each Advance shall be due
and payable on the Termination Date.

    The Company also promises to pay interest on the unpaid principal amount of
each such Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement; provided, however, that any amount of such
principal and, to the extent permitted by law, any interest thereon which is not
paid when due (whether at stated maturity, by acceleration or otherwise) shall
bear interest from the date on which such amount is due until such amount is
paid in full, payable on demand, at the Default Rate.

    Loans and payments under this note shall be recorded and endorsed hereon by
the holder hereof, provided, however, that the failure by the holder hereof to
make such recordation and endorsement shall not limit or otherwise affect the
obligation of the Company hereunder and payments of principal and interest
hereof by the Company shall not be affected by the failure to make any such
recordation and endorsement thereof hereon.

    Principal and interest shall be payable in Dollars in immediately available
funds.

    This note is the Note referred to in, is issued in connection with, and is
entitled to the benefits of, that certain Credit Agreement dated as of September
1, 1994, between the Company and the Bank, to which Credit Agreement reference
is hereby made for a statement of the terms and provisions under which this note
is issued. Capitalized terms used herein shall have the respective meanings set
forth in the Credit Agreement. This note shall be governed by and construed in
accordance with the laws of the State of Texas, United States of America. Except
for notice required to be given to the Company under the Credit Agreement, the
Company hereby waives presentment, demand, protest, or notice in connection with
this Note.

   THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
   PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
   SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

   THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


                                         BAKER HUGHES INCORPORATED


                                         By:                                    
                                         Name:                                  
                                         Title:                                 

                                      A-1
<PAGE>
                          TRANSACTIONS ON WITHIN NOTE
<TABLE>
<CAPTION> 

<S>      <C>          <C>          <C>         <C>         <C>          <C>
          Amount                                Amount      Unpaid      Notation
            of        Maturity     Interest       of       Principal      Made
Date     Advance        Date         Rate      Payment      Balance        By
- ----     -------        ----         ----      -------      -------        --
</TABLE> 

                                      A-2
<PAGE>
                                   EXHIBIT B

ABN AMRO Bank N.V.
Bank of America National Trust and Savings Association
Bank of Scotland
Banque Nationale de Paris, Houston Agency
Bayerische Vereinsbank AG, Los Angeles Agency
Chase Manhattan Bank, N.A.
Citibank, N.A.
Dresdner Bank AG, New York Branch
Morgan Guaranty Trust Company of New York
NationsBank of Texas, N.A.
Northern Trust Company
PNC Bank, National Association
Royal Bank of Canada
Texas Commerce Bank National Association
The Mitsubishi Bank, Ltd.
The Sumitomo Bank, Ltd.
Toronto Dominion (Texas), Inc.
Union Bank of Switzerland

                                      B-1
<PAGE>
                                   EXHIBIT C

                          COMPANY REQUEST FOR ADVANCE
                          


                                     [Date]



[Name and address of Bank]



Gentlemen:

  Baker Hughes Incorporated (the "Company") refers to the Credit Agreement,
dated September 1, 1994 (the "Credit Agreement") (the terms defined therein
being used herein as therein defined), by and between the Company and you. The
Company hereby gives you notice pursuant to Section 3.01 of the Credit Agreement
that the Company hereby requests an Advance under the Credit Agreement, and in
that connection sets forth the terms on which such proposed Advance is
requested to be made.

  The principal amount of the proposed Advance is $ ; the drawdown date of the
proposed Advance is , 19 ; the proposed Advance is to be a [Eurodollar Advance]
or [Reference Rate Advance]; the term of the Interest Period for such proposed
Advance is months; the maturity date for payment of the principal amount of the
proposed Advance is , 19 ; the interest payment date[s] of the proposed Advance
is/are                        ; and the other terms applicable to the
proposed Advance are                                      .

  In accordance with Section 3.01 of the Credit Agreement, please advise the
Company of the [Eurodollar Rate] or [Reference Rate].

Sincerely,

BAKER HUGHES INCORPORATED



By:                            
Name:                          
Title:                         

                                       C-1
<PAGE>
                                   EXHIBIT D
                                   
                      FORM OF OPINION OF COMPANY COUNSEL
                      
                                               , 1994



Dear Sirs:

  I am the duly elected                      of Baker Hughes Incorporated,
a Delaware corporation (the "Company"), and have acted as counsel to the Company
in connection with the preparation and execution of that certain Credit
Agreement (the "Credit Agreement") dated as of September 1, 1994, by and between
the Company and                       ("Bank"). Terms used herein which are
defined in the Credit Agreement have the respective meanings ascribed to such
terms in the Credit Agreement, unless the context otherwise indicates.

  In that connection, I have examined the Note and the Credit Agreement which
have been executed by the Company, but not by the Bank (herein being
collectively referred to as the "Examined Documents"). I have also examined the
originals or photostatic copies, certified or otherwise identified to my
satisfaction, of the Certificate of Incorporation and Bylaws of the Company,
each as amended to date, corporate records of the Company, certificates of
public officials, and certificates of representatives of the Company, and such
other documents as I have deemed necessary or appropriate for the purposes of
this opinion.

  Based upon the foregoing, subject to the qualifications, limitations,
exceptions and assumptions hereinafter set forth, and having due regard for such
legal considerations as I deem relevant, I am of the opinion that:

      1. The Company is a corporation duly incorporated, validly existing and in
   good standing under the laws of the State of Delaware and has all necessary
   corporate power and authority to own its properties and carry on its business
   as now conducted and is duly qualified and in good standing in each United
   States jurisdiction which requires qualification, except those jurisdictions,
   if any, in which the failure to so qualify would not have a material adverse
   affect on the business, properties or financial condition of the Company and
   its Subsidiaries taken as a whole.

                                      D-1
<PAGE>
         , 1994
Page 2


      2. The Company has all necessary corporate power and authority to enter
   into and perform the Credit Agreement and to issue and deliver the Note, as
   provided in the Credit Agreement. The execution, delivery and performance of
   the Credit Agreement and the Note have been authorized by all necessary
   corporate action on the part of the Company.

      3. The Credit Agreement is, and the Note when duly executed and delivered
   for value received will be, the valid and legally binding obligations of the
   Company enforceable in accordance with their terms, except as such
   enforceability may be (i) limited by the effect of any applicable bankruptcy,
   insolvency, reorganization, moratorium, fraudulent transfer and other
   similar laws from time to time in effect and judicial decisions relating to
   or affecting the enforcement of creditors' rights and debtor's obligations
   generally, or (ii) subject to the effect of general principles of equity
   (regardless of whether such enforceability is considered in a proceeding in
   equity or at law).

      4. The execution, delivery and performance of the Credit Agreement and the
   Note by the Company do not require the consent or approval of any United
   States governmental body or other regulatory authority and are not in
   contravention of or in conflict with any law or regulation applicable to the
   Company or any term or provision of the Certificate of Incorporation or
   Bylaws of the Company.

      5. The execution, delivery and performance of the Credit Agreement and the
   Note, to the best of my knowledge, are not in contravention of or in conflict
   with any agreement or indenture which is material to the Company and its
   Subsidiaries, taken as a whole, and to which the Company is a party or by
   which any of its property is bound, and do not cause any Mortgage upon any
   such property to be created or imposed or to mature except as may be
   permitted by the terms of the Credit Agreement.

      6. To my knowledge, there is no pending or threatened litigation before
   any court, administrative agency or arbitration panel to which the Company
   is a party, which, in view of the facts currently available to me, is
   expected to have a material adverse effect on the financial condition or
   operations of the Company and its Subsidiaries, taken as a whole. To my
   knowledge, the Company is not in default with respect to any material order,
   writ, injunction or decree of any court or other governmental or regulatory
   authority which is expected to have a material adverse effect on the
   financial condition or operations of the Company and its Subsidiaries, taken
   as a whole.

   The opinions expressed herein are subject to the following qualifications,
limitations, exceptions and assumptions:

                                      D-2
<PAGE>
            , 1994
Page 3


      (A) In rendering the opinions expressed in Paragraph 1, above, I have
   relied in part on certificates or telegrams of recent date of public
   officials of the State of Delaware. Such opinions are limited to the date of
   the relevant certificates or telegrams.

      (B) The opinions expressed in Paragraph 5 hereof are limited to the
   agreements, indentures and instruments filed by the Company with the U.S.
   Securities and Exchange Commission ("SEC') as material agreements pursuant to
   the rules and regulations of the SEC as a part of its annual report on Form
   10-K for the year ending September 30, 1993, and those filed by the Company
   with the SEC subsequent to September 30, 1993.

      (C) I have assumed, without independent investigation, that the Bank will
   duly execute and deliver to the Company each of the Examined Documents to
   which it is a party, with all necessary power and authority (corporate and
   otherwise) and that (i) if the Company or the Bank exercise any rights or
   enforce any remedies, it will do so in good faith and in a commercially
   reasonable manner and will abide by any implied covenant of good faith and
   fair dealing which may be imposed by law, and (ii) the Bank will comply with
   any applicable state or federal securities laws.

      (D) As to matters of fact relevant to this opinion, I have, to the extent
   I have deemed appropriate, relied upon (i) certificates and other
   representations of officers and representatives of the Company and its
   Subsidiaries who have made investigations outside of my personal control, and
   (ii) certificates and telegrams of governmental officials.

      (E) In my examination of the documents referred to above, I have assumed
   (i) all documents submitted to me as originals are authentic and complete,
   (ii) all documents submitted to me as certified or photostatic copies conform
   to the original document, and such original document is authentic and
   complete, (iii) that signatures on all documents are genuine, (iv) all
   statements of fact contained in the Examined Documents and all other
   documents, certificates, and records that I have examined are true, accurate,
   and correct, and all statements of fact made to me by officers and
   representatives of the Company and its Subsidiaries are true and correct, and
   (v) there has been no material change in the facts set forth in the Examined
   Documents, or such other documents, certificates, and records that I have
   examined or representations made to me, prior to the date hereof. I have no
   knowledge that any such documents, certificates, and records were not
   authentic and complete, or that any of such statements are not true and
   correct as of the date hereof.

      (F) I have assumed there has been no cancellation or withdrawal of any of
   the organizational documents of the Company, and that no act or event has
   occurred which would, pursuant to the terms of such organizational documents
   or other applicable law, permit or require the dissolution of the Company,
   and I have no

                                      D-3
<PAGE>
         , 1994
Page 4


   knowledge of any such cancellation, withdrawal, act or event. I have further
   assumed due authorization for execution, delivery, and performance of such
   organizational documents by each party by whom such authorization is
   required, and that none of the signatories to such organizational documents
   was operating under any legal disability under the laws of the state of
   residence or incorporation of such party.

      (G) I express no opinion as to the availability or enforceability of the
   following provisions and remedies set forth in the Examined Documents: (i)
   equitable remedies, including specific performance, or any other remedy set
   forth in the Examined Documents; (ii) provisions relating to waivers by any
   of the parties or precluding any of the parties from asserting certain claims
   or defenses or from obtaining certain rights and remedies, or which purport
   to waive any applicable statute of limitations, or rights to any stay or
   extension laws, or which purport to establish evidentiary standards; (iii)
   provisions expressly or by implication waiving broadly or vaguely stated
   rights, unknown future rights, or defenses to obligations or rights granted
   by law; (iv) provisions relating to subrogation rights, delay or omission or
   enforcement of rights or remedies, severability, injunctions, appointment of
   receivers, waivers or ratifications of future acts, the rights of third
   parties, prohibitions against the sale, transfer, or assignment of any
   property or interest, marshalling of assets, set-offs, or sale in the inverse
   order of alienation; (v) provisions at variance with public laws which do not
   affect the practical benefits of the Examined Documents; (vi) provisions
   covenanting to take actions, the taking of which are discretionary with or
   subject to the approval of a third party or which are otherwise subject to a
   contingency, the fulfillment of which is not within the control of the
   parties so covenanting; (vii) provisions purporting to apply subsequently
   enacted laws; (viii) provisions to the effect that rights or remedies may be
   exercised without notice, that rights or remedies are not exclusive, that
   every right or remedy is cumulative and may be exercised in addition to or
   with any other right or remedy, or that the election of a particular remedy
   or remedies does not preclude recourse to one or more other remedies, or that
   the failure to exercise or delay in exercising rights or remedies will not
   operate as a waiver of such right or remedy; and (ix) limitations on
   enforceability posed by public policy consideration or court decisions which
   may limit the right to obtain indemnification under certain circumstances.
   Enforcement of obligations under the Examined Documents may also be limited
   by constitutional limitations (including notice and due process
   requirements), by the redemption rights of the United States under the
   Federal Tax Lien Act of 1966, as amended, and requirements that the Bank
   exercise rights under the Examined Documents in a commercially reasonable
   manner.

      (H) The opinions expressed herein relate solely to, are based solely upon,
   and are limited exclusively to the laws of the State of Texas, the General
   Corporation Law of the State of Delaware, and the laws of the United States
   of America, to the extent applicable and as currently in effect. I assume no,
   and hereby specifically disclaim any, obligation to supplement this opinion
   if any applicable laws change

                                      D-4
<PAGE>
         , 1994
Page 5


   after the date of this opinion, of if I become aware of any facts that might
   change the opinions expressed above after the date of this opinion.

      (I) The opinions set forth herein are limited to the specific matters
   addressed hereby, and no opinion is to be implied or may be inferred beyond
   the matters specifically addressed.

      (J) This letter is provided to you as a legal opinion only and not as a
   guaranty or warranty of the matters discussed herein, nor does this letter
   constitute a guarantee of any of the obligations set forth in the Examined
   Documents. By rendering this opinion, I am not guaranteeing or insuring the
   obligations set forth in the Examined Documents, or other matters referred to
   herein or opined upon herein.

   This opinion is furnished to you solely for your benefit pursuant to the
Credit Agreement. This letter and the opinions expressed herein may not be used
or relied upon by you for any other purpose and may not be relied upon for any
purpose by any other person or entity without my prior written consent. Except
for the use permitted herein, this letter is not to be quoted or reproduced in
whole or in part or otherwise referred to in any manner, nor is it to be filed
with any governmental agency or delivered to any other person or entity without
my prior written consent.

                                         Very truly yours,

                                      D-5
