EXHIBIT 4(c) ================================================================== ============== CREDIT AGREEMENT

EXHIBIT 4(c)
================================================================================

$165,000,000

CREDIT AGREEMENT

dated as of

September 30, 1996

among

QUAKER STATE CORPORATION,

[QUAKER STATE LOGO]

The Banks Listed Herein

and

TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Agent

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

[CHASE LOGO] CHASE SECURITIES INC.,
as Arranger
2
TABLE OF CONTENTS

Page

ARTICLE 1

DEFINITIONS

SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.3. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE 2

THE CREDIT

SECTION 2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.2. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.3. Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.4. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.5. Maturity of Loans; Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.6. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.8. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.9. Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Mandatory Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.14. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.15. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE 3

CONDITIONS

SECTION 3.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Corporate and Governmental Authorization, No Contravention . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.4. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.7. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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SECTION 4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.9. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.10. Regulatory Restrictions on Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.12. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.13. Debt Rating; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.14. Use of Proceeds; Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE 5

COVENANTS

SECTION 5.1. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.2. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.3. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.4. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.6. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.7. Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.9. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.10. Debt to Total Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.11. Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.12. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE 6

DEFAULTS

SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE 7

THE AGENT

SECTION 7.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.6. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.9. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

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ARTICLE 8

CHANGE IN CIRCUMSTANCES

SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.5. Base Rate Loans Substituted for Affected LIBOR Loans . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE 9

MISCELLANEOUS

SECTION 9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.3. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.4. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.5. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.8. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.9. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.12. Maximum Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.13. Non-Application of Chapter 15 of Texas Credit Code . . . . . . . . . . . . . . . . . . . . . . . . . 39

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INDEX TO SCHEDULES AND EXHIBITS

Schedules

Schedule 2.6 Pricing Schedule
Schedule 4.6 Potential Liability under Title IV of ERISA

Exhibits

Exhibit A - Note
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Administrative Questionnaire

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CREDIT AGREEMENT (the "Agreement") dated as of September 30,
1996 among QUAKER STATE CORPORATION, the BANKS listed on the signature pages
hereof and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:

"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.6(b).

"Administrative Questionnaire" means, with respect to each
Bank other than Texas Commerce, an administrative questionnaire in the form
attached hereto as Exhibit C and submitted to the Agent (with a copy to the
Borrower) duly completed by such Bank.

"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to vote 10% or more of any class of voting securities of a Person or to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

"Agent" means Texas Commerce Bank National Association in its
capacity as agent for the Banks hereunder, and its successors in such capacity.

"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its LIBOR Loans, its LIBOR Lending office.

"Assignee" has the meaning set forth in Section 9.6(c).

"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.

"Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the higher of (i) the
Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day. The Base Rate may not be any Bank's best or favored rate
and a Bank may make other loans to other Persons at rates lower than the Base
Rate.

CREDIT AGREEMENT, PAGE 1
7
"Base Rate Loan" means (i) a Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election or the provisions of Article 8 or (ii) an overdue amount which
was a Base Rate Loan immediately before it became overdue.

"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

"Borrower" means Quaker State Corporation, a Delaware
corporation, and its successors.

"Borrower's 1995 Form 10-K" means the Borrower's annual
report on Form 10-K for 1995, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.

"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.

"Borrowing" has the meaning set forth in Section 1.3.

"Closing Date" means the date on or after the Effective Date
on which the Agent shall have received the documents specified in or pursuant
to Section 3.1.

"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof or in its
Assignment and Assumption Agreement in the form attached as Exhibit B, as
applicable, as such amount may be reduced from time to time pursuant to
Sections 2.8 and 2.10.

"Consolidated Debt" means, at any date, the Debt of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date.

"Consolidated EBITDA" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income for such period, the aggregate amount of
(i) Consolidated Interest Expense, (ii) income tax expense and (iii)
depreciation, amortization and other similar non-cash charges.

"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis for such period.

"Consolidated Net Income" means, for any fiscal period, the
net income of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, exclusive of the effect of any
extraordinary or other non-recurring gain (but not loss).

CREDIT AGREEMENT, PAGE 2
8
"Consolidated Rental Expense" means, for any period, the
aggregate rental expense of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis for such period.

"Consolidated Stockholders' Equity" means, at any date,
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries at such date.

"Consolidated Subsidiary" means, at any date, any Subsidiary
or other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.

"Consolidated Tangible Net Worth" means, at any date, the
Consolidated Stockholders' Equity less consolidated Intangible Assets, all
determined as of such date. For purposes of this definition "Intangible
Assets" means the amount (to the extent reflected in determining such
Consolidated Stockholders' Equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve months after the acquisition of such
business) subsequent to December 31, 1995 in the book value of any asset owned
by the Borrower or a consolidated Subsidiary, (ii) all Investments in
unconsolidated Subsidiaries and all equity investments in Persons which are not
Subsidiaries and (iii) all unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry-forwards, copyrights, organization
or developmental expenses and other intangible assets.

"Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.9 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person and (vii) all Debt of others Guaranteed
by such Person.

"Debt Offering" means the first public offering by Borrower of
Debt securities after the Closing Date.

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

"Derivatives Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap

CREDIT AGREEMENT, PAGE 3
9
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.

"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Houston, Texas are authorized
by law to close.

"Domestic Lending office" means, as to each Bank, its office
located at its address set forth on the signature pages hereto as its "Domestic
Lending Office" or in its Administrative Questionnaire as its Domestic Lending
Office or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Agent.

"Effective Date" means the date this Agreement becomes
effective in accordance with Section 9.9.

"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.

"Equity Offering" means the first public offering by Borrower
of equity securities after the Closing Date but excluding any public offering
of stock of Borrower if (a) the stock of Borrower offered to be sold in such
offering is held by third parties, (b) the offering is made under the terms of
registration rights agreements between Borrower and such third parties and (c)
no proceeds of the offering are received by the Borrower.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.

"ERISA Group" means the Borrower, any Subsidiary and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.

"Event of Default" has the meaning set forth in Section 6.1.

"Federal Funds Rate" means, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as released on the
next succeeding Domestic Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so released for any day which is a Domestic Business
Day,

CREDIT AGREEMENT, PAGE 4
10
the arithmetic average (rounded upwards to the next 1/100th of 1%), as
determined by the Agent, of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent. If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Rate for any reason, including the
inability of the Agent to obtain sufficient quotations in accordance with the
terms thereof, the Base Rate shall be determined without regard to the Federal
Funds Rate until the circumstances giving rise to such inability no longer
exist.

"Fee and Procedure Letter" means that certain Fee and
Procedure Letter dated August 23, 1996 among Borrower, Texas Commerce and Chase
Securities Inc. which was agreed to by the Borrower on August 30, 1996, as the
same may be modified.

"Fixed Charge Coverage Ratio" means, at any date, the ratio of
(i) the sum of (A) Consolidated EBITDA plus (B) Consolidated Rental Expense, in
each case for the four consecutive fiscal quarters of the Borrower and its
Consolidated Subsidiaries ending on such date to (ii) the sum of Consolidated
Interest Expense and Consolidated Rental Expense for such period.

"Group of Loans" means at any time a group of Loans consisting
of (i) all Loans which are Base Rate Loans at such time or (ii) all LIBOR Loans
having the same Interest Period at such time; provided that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time
to time as it would have been in if it had not been so converted or made.

"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.

"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.

"Indemnitee" has the meaning set forth in Section 9.3(b).

"Interest Period" means, with respect to each LIBOR Loan, the
period commencing on the date of borrowing specified in the applicable Notice
of Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:

CREDIT AGREEMENT, PAGE 5
11
(a) any Interest Period which would otherwise end on a
day which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day unless such LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end
on the next preceding LIBOR Business Day;

(b) any Interest Period which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
LIBOR Business Day of a calendar month; and

"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.

"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).

"LIBOR Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.

"LIBOR Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth on the signature pages
hereto as its "LIBOR Lending Office" or in its Administrative Questionnaire as
its LIBOR Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its LIBOR Lending Office by notice to the
Borrower and the Agent.

"LIBOR Loan" means (i) a Loan which bears interest at a LIBOR
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a LIBOR Loan immediately before it
became overdue.

"LIBOR Margin" means a rate per annum determined in accordance
with the Pricing Schedule.

"LIBOR Rate" means a rate of interest determined pursuant to
Section 2.6(b) on the basis of an Adjusted London Interbank Offered Rate.

"LIBOR Reserve Percentage" has the meaning set forth in
Section 2.6(b).

"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind. For the purposes
of this Agreement, the Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject

CREDIT AGREEMENT, PAGE 6
12
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.

"Loan" means a loan made by a Bank pursuant to Section 2.1;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Loan"
shall refer to the combined principal amount resulting from such combination or
to each of the separate principal amounts resulting from such subdivision, as
the case may be. As a result, the term "Loan" shall also mean a Base Rate Loan
or a LIBOR Loan and "Loans" means Base Rate Loans, LIBOR Loans or any
combination of the foregoing, all as the context may require.

"London Interbank Offered Rate" has the meaning set forth in
Section 2.6(b).

"Material Adverse Effect" means (i) a material adverse effect
upon the business, financial position, results of operations or prospects of
the Borrower and its Consolidated Subsidiaries, considered as a whole or (ii)
an adverse effect on the rights and remedies of the Agent and the Banks
hereunder or under any Note.

"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$10,000,000.

"Material Financial Obligations" means a principal or face
amount of Debt and/or payment or collateralization obligations in respect of
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $10,000,000.

"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.

"Material Subsidiary" means, at any time, any Subsidiary of
the Borrower whose total revenues (or, in the case of a Subsidiary which has
subsidiaries, consolidated total revenues) as shown by the latest financial
statements delivered by the Borrower pursuant to Section 4.4(a), 5.1(a) or
5.1(b), as the case may be, are at least 15% of the consolidated total revenues
of the Borrower and its Consolidated Subsidiaries (as shown on such financial
statements) at such time.

"Xxxxxx Credit Agreement" means the Amended and Restated
Credit Agreement dated as of September 30, 1996 among the Borrower, the banks
party thereto and Xxxxxx Guaranty Trust Company of New York, as agent, as the
same may be modified.

"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.

CREDIT AGREEMENT, PAGE 7
13
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.

"Notice of Borrowing" has the meaning set forth in Section
2.2.

"Notice of Interest Rate Election" has the meaning set forth
in Section 2.9.

"Parent" means, with respect to any Bank, any Person
controlling such Bank.

"Participant" has the meaning set forth in Section 9.6(b).

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

"Permanent Takeout Date" means the first date after which the
following two events shall have occurred: (i) the Equity Offering and (ii) the
Debt Offering.

"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity
or organization, including a government or political subdivision or an agency
or instrumentality thereof.

"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.

"Pricing Schedule" means the Schedule 2.6 attached hereto.

"Prime Rate" means, as of any day, the rate of interest per
annum then most recently publicly announced by Texas Commerce as its prime rate
in effect for such day at its principal office in Houston, Texas.

"Quarterly Dates" means each March 31, June 30, September 30
and December 31.

"Reference Bank" means the principal London office of Texas
Commerce (or any of its affiliates).

"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

CREDIT AGREEMENT, PAGE 8
14
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the
aggregate unpaid principal amount of the Loans.

"Revolving Credit Period" means the period from and including
the Closing Date to but not including the Termination Date.

"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.

"Termination Date" means (A) the earlier of (i) September 25,
1997 or (ii) the Permanent Takeout Date or, (B) if the day described in clause
(A) is not a LIBOR Business Day, the next succeeding LIBOR Business Day unless
such LIBOR Business Day falls in another calendar month or would cause the
Commitments hereunder to be in existence longer than 364 days, in which case
the Termination Date shall be the next preceding LIBOR Business Day.

"Texas Commerce" means Texas Commerce Bank National
Association in its individual capacity.

"Total Capital" means, at any date, the sum of (x)
Consolidated Debt plus (y) Consolidated Stockholders' Equity (including for
this purpose any amount attributable to stock which is required to be redeemed
or is redeemable at the option of the holder, if certain events or conditions
occur or exist or otherwise), in each case determined at such date.

"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.

"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.

SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the financial statements of the
Borrower and its Consolidated Subsidiaries described in Section 4.4 (a);
provided that, if the Borrower notifies the Agent that the Borrower wishes to
amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles

CREDIT AGREEMENT, PAGE 9
15
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.

SECTION 1.3. Types of Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article 2 on the same date, all of which Loans are of the
same type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. Borrowings may be classified for
purposes of this Agreement by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Base Rate Borrowing" is a Borrowing comprised of Base Rate
Loan, and a "LIBOR Borrowing" is a Borrowing comprised of LIBOR Loans).

ARTICLE 2

THE CREDIT

SECTION 2.1. Commitments to Lend. (a) During the
Revolving Credit Period, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make loans to the Borrower pursuant
to this Section from time to time in amounts such that the aggregate principal
amount of Loans by such Bank at any one time outstanding shall not exceed the
amount of its Commitment. Each Borrowing under this Section shall be in an
aggregate principal amount of $15,000,000 or any larger multiple of $5,000,000
(except that any such Borrowing may be in the aggregate amount available in
accordance with Section 3.2) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing limits,
the Borrower may borrow under this Section, prepay Loans to the extent
permitted by Section 2.11 and reborrow at any time during the Revolving Credit
Period under this Section.

SECTION 2.2. Notice of Borrowing. The Borrower shall give
the Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (Houston,
Texas time) on (x) the date of each Base Rate Borrowing and (y) the third LIBOR
Business Day before each LIBOR Borrowing, specifying:

(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a LIBOR Business
Day in the case of a LIBOR Borrowing;

(ii) the aggregate amount of such Borrowing;

(iii) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate or a LIBOR Rate; and

(iv) in the case of a LIBOR Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.

CREDIT AGREEMENT, PAGE 10
16
SECTION 2.3. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.

(b) Not later than 12:00 Noon (Houston, Texas time) on
the date of each Borrowing, each Bank participating therein shall make
available its share of such Borrowing, in Federal or other funds immediately
available in Houston, Texas, to the Agent at its address referred to in Section
9.1. Unless the Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Agent will make the funds so received
from the Banks available to the Borrower at the Agent's aforesaid address.

(c) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Agent such Bank's share of such Borrowing, the Agent may assume that
such Bank has made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this Section and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank shall
not have so made such share available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum, equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.6 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such Borrowing
for purposes of this Agreement.

SECTION 2.4. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank in an amount equal
to the aggregate unpaid principal amount of such Bank's Loans.

(b) Each Bank may, by notice to the Borrower and the
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.

(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; Provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower

CREDIT AGREEMENT, PAGE 11
17
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by
the Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.

SECTION 2.5. Maturity of Loans; Mandatory Prepayment.
Each Loan shall mature, and the principal amount thereof shall be due and
payable, on the Termination Date. Borrower shall prepay the principal amount
of the Loans on each date the proceeds of either the Equity Offering or the
Debt Offering are received by the Borrower, such prepayment to be in an amount
equal to the proceeds so received on such a date, net of underwriting
discounts, commissions and other reasonable costs associated therewith. If at
any time the outstanding principal amount of the Loans exceeds the aggregate
amount of the Commitments, Borrower shall make a prepayment on the Loans in an
amount equal to the excess. Any prepayment of the Loans under this Section 2.5
shall be accompanied with accrued interest thereon to the date of prepayment
and any amount payable under Section 2.13. Each such prepayment shall be
applied to prepay ratably the Loans of the several Banks included in the Group
of Loans being prepaid.

SECTION 2.6. Interest Rates. (a) Each Base Rate Loan
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and, with respect to the principal amount of any
Base Rate Loan converted to a LIBOR Loan, on each date a Base Rate Loan is so
converted. Any overdue principal of or interest on any Base Rate Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans
for such day.

(b) Each LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the LIBOR Margin
for such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.

The "Adjusted London Interbank Offered Rate"
applicable to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London Interbank Offered
Rate by (ii) 1.00 minus the LIBOR Reserve Percentage.

The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum (rounded upward, if
necessary, to the next higher 1/16 of 1%) at which deposits in dollars
are offered to the Reference Bank in the London interbank market at
approximately 11:00 A.M. (London time) two LIBOR Business Days before
the first day of such Interest Period in an amount approximately equal
to the principal amount of the LIBOR Loan of the Reference Bank to
which such Interest Period is to apply and for a period of time
comparable to such Interest Period.

CREDIT AGREEMENT, PAGE 12
18
"LIBOR Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement for a
member bank of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR
Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank
to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date
of any change in the LIBOR Reserve Percentage.

(c) Any overdue principal of or interest on any LIBOR
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the LIBOR Margin for
such day plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three LIBOR Business Days,
then for such other period of time not longer than three months as the Agent
may select) deposits in dollars in an amount approximately equal to such
overdue payment due to the Reference Bank are offered to the Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the LIBOR Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.1 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day) and (ii) the sum of 2% plus the LIBOR Margin for such day plus the
Adjusted London Interbank Offered Rate applicable to such Loan at the date such
payment was due.

(d) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.

(e) The Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.

SECTION 2.7. Fees. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate
(determined daily in accordance with the Pricing Schedule). Such facility fee
shall accrue (i) from and including the Closing Date to but excluding the date
of termination of the Commitments in their entirety, on the daily aggregate
amount of the Commitments (whether used or unused) and (ii) from and including
such date of termination to but excluding the date the Loans shall be repaid in
their entirety, on the daily aggregate outstanding principal amount of the
Loans. Such facility fee shall be payable quarterly in arrears on each
Quarterly Date and on the date of termination of the Commitments in their
entirety (and, if later, the date the Loans shall be repaid in their entirety).

CREDIT AGREEMENT, PAGE 13
19
SECTION 2.8. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may, upon at
least three Domestic Business Days' notice to the Agent, (i) terminate the
Commitments at any time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of $25,000,000 or a
larger multiple of $10,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the Loans.

SECTION 2.9. Method of Electing Interest Rates. (a) The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified by the Borrower in the applicable Notice of Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8), as follows:

(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to LIBOR Loans as of any LIBOR Business
Day; and

(ii) if such Loans are LIBOR Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as LIBOR Loans for an additional Interest Period, subject to
Section 2.13 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.

Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent not later than 10:00 A.M. (Houston, Texas
time) on the third LIBOR Business Day before the conversion or continuation
selected in such notice is to be effective (unless the relevant Loans are to be
converted to Base Rate Loans, in which case such notice shall be delivered to
the Agent not later than 10:00 A.M. (Houston, Texas time) on the Domestic
Business Day such conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the remaining portion to
which it does not apply, are each $15,000,000 or any larger multiple of
$5,000,000.

(b) Each Notice of Interest Rate Election shall specify:

(i) the Group of Loans (or portion thereof) to which such
notice applies;

(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of subsection (a) above;

(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being converted are
to be LIBOR Loans, the duration of the next succeeding Interest Period
applicable thereto; and

CREDIT AGREEMENT, PAGE 14
20
(iv) if such Loans are to be continued as LIBOR Loans for
an additional Interest Period, the duration of such additional
Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.

(c) Upon receipt of a Notice of Interest Rate Election
from the Borrower pursuant to subsection (a) above, the Agent shall promptly
notify each Bank of the contents thereof and such notice shall not thereafter
be revocable by the Borrower.

(d) An election by the Borrower to change or continue the
rate of interest applicable to any Group of Loans pursuant to this Section
shall not constitute a "Borrowing" subject to the provisions of Section 3.2.

SECTION 2.10. Mandatory Termination and Reduction of
Commitments. (a) The Commitments shall terminate on the Termination Date.

(b) The Commitments shall irrevocably be reduced on each
date the proceeds of either the Equity Offering or the Debt Offering are
received by the Borrower and shall be reduced on each such date by an amount
equal to the proceeds so received on such date, net of underwriting discounts,
commissions and other reasonable costs associated therewith.

SECTION 2.11. Optional Prepayments. (a) The Borrower may,
upon at least one Domestic Business Day's notice to the Agent, prepay any Group
of Loans, in whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger multiple of $5,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment and any amount payable under Section 2.13. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group.

(b) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.

SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (Houston, Texas time) on the
date when due, in Federal or other funds immediately available in Houston,
Texas, to the Agent at its address referred to in Section 9.1. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the LIBOR Loans shall be due on a day which is
not a LIBOR Business Day, the date for payment thereof shall be extended to the
next succeeding LIBOR Business Day unless such LIBOR Business Day falls in
another calendar month, in which case the date for payment thereof shall be the

CREDIT AGREEMENT, PAGE 15
21
next preceding LIBOR Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.

(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.

SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any LIBOR Loan or any LIBOR Loan is
converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.6(c), or if the Borrower fails to
borrow, prepay, convert or continue any LIBOR Loans after notice has been given
to any Bank in accordance with Section 2.3(a), 2.11(b) or 2.9(c) the Borrower
shall reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to
borrow, prepay, convert or continue, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.

SECTION 2.14. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day) (i.e. (interest
rate divided by 365 (or 366 days in a leap year)) times (actual number of days
elapsed)). All other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day) (i.e. (interest rate or fee rate divided
by 360) times (actual number of days elapsed )).

SECTION 2.15. Change of Control. If a Change of Control
shall occur (i) the Borrower will, within ten days after the occurrence
thereof, give each Bank notice thereof and shall describe in reasonable detail
the facts and circumstances giving rise thereto and (ii) each Bank may, by
three Domestic Business Days' notice to the Borrower and the Agent given not
later than 60 days after such Change of Control, terminate its Commitment,
which shall thereupon be terminated, and declare the Note held by it (together
with accrued interest thereon) and any other amounts payable hereunder for its
account to be, and such Note and such other amounts shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

For purposes of this Section, the following terms have the
following meanings:

CREDIT AGREEMENT, PAGE 16
22
A "Change of Control" shall occur if (i) any person or group
of persons (with-in the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 45% or more in
voting power of the outstanding Voting Stock of the Borrower or (ii)
during any period of 12 consecutive calendar months, individuals who
were either (x) directors of the Borrower on the first day of such
period or (y) elected to fill vacancies caused by the ordinary course
resignation or retirement of any other director and whose nomination
or election was approved by a vote of at least a majority of the
directors then still in office who were directors of the Borrower on
the first day of such period, shall cease to constitute a majority of
the board of directors of the Borrower.

"Voting Stock" means capital stock of any class or classes
(however designated) having ordinary voting power for the election of
directors of the Borrower, other than stock having such power only by
reason of the happening of a contingency.

ARTICLE 3

CONDITIONS

SECTION 3.1. Closing. The closing hereunder shall occur
upon receipt by the Agent of the following, each dated the Closing Date unless
otherwise indicated or not applicable:

(a) a duly executed Note for the account of each Bank
dated on or before the Closing Date complying with the provisions of
Section 2.4;

(b) an opinion of New York and in-house counsel to the
Borrower covering such matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;

(c) evidence satisfactory to Agent that the fees required
to be paid on the Closing Date under the terms of the Fee and
Procedure Letter have been paid; and

(d) all documents the Agent may reasonably request
relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory to the
Agent.

The Agent shall promptly notify the Borrower and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.

SECTION 3.2. Borrowings. The obligation of any Bank to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:

(a) the fact that the Closing Date shall have occurred on
or prior to September 30, 1996;

CREDIT AGREEMENT, PAGE 17
23
(b) receipt by the Agent of a Notice of Borrowing as
required by Section 2.2;

(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;

(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and

(e) the fact that the representations and warranties of
the Borrower contained in this Agreement shall be true on and as of
the date of such Borrowing.

Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(c), (d) and (e) of this Section.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

SECTION 4.1. Corporate Existence and Power. The Borrower
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.

SECTION 4.2. Corporate and Governmental Authorization, No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the corporate powers of the Borrower, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official or
other third Person and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries (except for the potential default under the Consolidated
Debt to Total Capital covenant set forth in the Xxxxxx Credit Agreement) or
result in the creation or imposition of any Lien on any asset of the Borrower
or any of its Subsidiaries.

SECTION 4.3. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights and general
principles of equity.

SECTION 4.4. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of December
31, 1995 and the related consolidated

CREDIT AGREEMENT, PAGE 18
24
statements of income and cash flows for the fiscal year then ended, reported on
by Coopers & Xxxxxxx L.L.P. and incorporated by reference in the Borrower's
1995 Form 10-K, a copy of which has been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.

(b) The unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of June 30, 1996 and the related
unaudited consolidated statements of income and cash flows for the six months
then ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six month period (subject to normal year-end adjustments).

(c) Since December 31, 1995 there has been no material
adverse change in the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole (including without limitation any such material adverse change caused by
any action, suit or proceeding disclosed in the Borrower's periodic reports
filed with the Securities and Exchange Commission from time to time).

SECTION 4.5. Litigation. Except as set forth in the
Borrower's periodic reports filed with the Securities and Exchange Commission
from time to time, there is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.

SECTION 4.6. Compliance with ERISA. To the best of the
Borrower's knowledge, each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. To the best of the Borrower's
knowledge, no member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) except as set forth in
Schedule 4.6, incurred any liability in excess of $10,000,000 under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.

SECTION 4.7. Environmental Matters. In the ordinary
course of its business, the Borrower conducts an ongoing review of the effect
of Environmental Laws on the business,

CREDIT AGREEMENT, PAGE 19
25
operations and properties of the Borrower and its Subsidiaries, in the course
of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any
capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in
the level of or change in the nature of operations conducted thereat, any costs
or liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis of this review,
the Borrower has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.

SECTION 4.8. Taxes. The Borrower and its Subsidiaries
have filed (or have made timely requests for an extension to file) all United
States Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary, other than any such taxes the non-payment of which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.

SECTION 4.9. Subsidiaries. Each of the Borrower's
corporate subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted
(except for any governmental licenses, authorizations, consents or approvals
the absence of which could not reasonably be expected to have a Material
Adverse Effect).

SECTION 4.10. Regulatory Restrictions on Borrowing. The
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or otherwise subject to
any regulatory scheme which restricts its ability to incur debt.

SECTION 4.11. Full Disclosure. The information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby taken as
a whole does not, and the information hereafter so furnished, taken as a whole
with all information previously furnished will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

SECTION 4.12. Defaults. Neither the Borrower nor any of
its Subsidiaries is in default in any respect in the performance, observance,
or fulfillment of any of the obligations,

CREDIT AGREEMENT, PAGE 20
26
covenants, or conditions contained in any agreement or instrument to which it
is a party other than defaults which will not have a Material Adverse Effect.

SECTION 4.13. Debt Rating;. Borrower's senior unsecured
long-term debt is rated as of the date hereof as BBB by Standard & Poor's
Rating Group and Baa1 by Xxxxx'x Investors Service, Inc.

SECTION 4.14. Use of Proceeds; Ranking. The proceeds of
the Loans will be or have been utilized as required by Section 5.8. The Loans
rank pari passu in right of payment to all other senior unsecured Debt of
Borrower.

ARTICLE 5

COVENANTS

The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:

SECTION 5.1. Information. The Borrower will deliver to
each of the Banks:

(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
income and cash flows for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Coopers & Xxxxxxx L.L.P. or other independent public
accountants of nationally recognized standing;

(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash flows for such
quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in the case of such statements of
income and cash flows, in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer
or the chief accounting officer of the Borrower;

(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.9 through 5.13,
inclusive, on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists

CREDIT AGREEMENT, PAGE 21
27
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;

(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement of
the firm of independent public accountants which reported on such
statements (i) whether anything has come to their attention to cause
them to believe that any Default existed on the date of such
statements and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant to
clause (c) above;

(e) within ten days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing,
a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;

(f) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;

(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;

(h) if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which
the Borrower reasonably believes might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given or is required to give notice
of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any amendment
to any Plan or Benefit Arrangement which has resulted or which the
Borrower reasonably believes could result in the imposition of a Lien
or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group is required or
proposes to take;

CREDIT AGREEMENT, PAGE 22
28
(i) promptly after any officer of the Borrower obtains
knowledge thereof, notice of any change in the rating of the
Borrower's senior unsecured long-term debt securities; and

(j) from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.

SECTION 5.2. Payment of Obligations. The Borrower will
pay and discharge, and will cause each Subsidiary to pay and discharge, at or
before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.

SECTION 5.3. Maintenance of Property; Insurance. (a) The
Borrower will keep, and will cause each Subsidiary to keep, all material
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.

(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all their respective material properties in at least
such amounts, against at least such risks and with such risk retention as are
usually maintained, insured against or retained, as the case may be, in the
same general area by companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.

SECTION 5.4. Conduct of Business and Maintenance of
Existence. The Borrower will preserve, renew and keep in full force and
effect, and will cause each Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and their respective
material rights, privileges and franchises necessary or desirable in the normal
conduct of business (except for any rights, privileges or franchises the
non-maintenance of which could not reasonably be expected to have a Material
Adverse Effect); provided that nothing in this Section 5.4 shall prohibit (i)
the merger of a Subsidiary into the Borrower or the merger or consolidation of
a Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have occurred and be continuing or (ii) the
termination of the corporate existence of any Subsidiary if the Borrower in
good faith determines that such termination is in the best interest of the
Borrower and is not materially disadvantageous to the Banks.

SECTION 5.5. Compliance with Laws. The Borrower will
comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except (i) where the necessity
of compliance

CREDIT AGREEMENT, PAGE 23
29
therewith is contested in good faith by appropriate proceedings or (ii) where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

SECTION 5.6. Inspection of Property, Books and Records.
The Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any Bank
at such Bank's expense to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records
and to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.

SECTION 5.7. Mergers and Sales of Assets. The Borrower
will not consolidate or merge with or into any other Person; provided that, the
Borrower may merge with another Person if (x) the Borrower is the corporation
surviving such merger and (y) after giving effect to such merger, no Default
shall have occurred and be continuing. The Borrower will not sell, lease or
otherwise transfer directly or indirectly, all or substantially all of its
assets to any other Person or Persons.

SECTION 5.8. Use of Proceeds. The proceeds of the Loans
made under this Agreement will be used by the Borrower to acquire the stock of
Medo Industries, Inc .and certain of its affiliated entities. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.

SECTION 5.9. Negative Pledge. Neither the Borrower nor
any Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:

(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $26,000,000;

(b) any Lien existing on any asset of any Person at the
time such Person becomes a Subsidiary and not created in contemplation
of such event;

(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;

(d) any Lien on any asset of any Person existing at the
time such Person is merged or consolidated with or into the Borrower
or a Subsidiary and not created in contemplation of such event;

(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition;

CREDIT AGREEMENT, PAGE 24
30
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section, provided that such Debt is
not increased and is not secured by any additional assets;

(g) Liens existing as of the date hereof or arising
hereafter, in each case arising in the ordinary course of its business
and which (i) do not secure Debt or Derivatives Obligations, (ii) do
not secure any obligation in an amount exceeding $10,000,000 and (iii)
do not in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the operation of its
business;

(h) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount of cash
and cash equivalents subject to such Liens may at no time exceed
$10,000,000; and

(i) Liens not otherwise permitted by the foregoing
clauses of this Section securing Debt in an aggregate principal or
face amount at any date not to exceed 20% of Consolidated Tangible Net
Worth at such date.

SECTION 5.10. Debt to Total Capital. The ratio of
Consolidated Debt to Total Capital shall not exceed at any time 0.6:1.0.

SECTION 5.11. Debt of Subsidiaries. The Borrower will not
permit any of its Material Subsidiaries to incur or at any time be liable with
respect to any Debt except:

(a) Debt owed to the Borrower or to a wholly owned
Subsidiary;

(b) Debt secured by a Lien permitted by Section 5.9(c)
and any refinancing, extension, renewal or refunding thereof;

(c) Debt of any Person existing at the time such Person
is merged or consolidated with or into any Material Subsidiary and not
incurred in contemplation of such merger or consolidation;

(d) Debt of any Person existing at the time such Person
becomes a Material Subsidiary, regardless of whether such Debt was
incurred in contemplation of such event; and

(e) Debt not otherwise permitted by the foregoing clauses
in an aggregate principal or face amount at any time outstanding not
to exceed $35,000,000.

SECTION 5.12. Fixed Charge Coverage Ratio. As of the last
day of each fiscal quarter of the Borrower, the Fixed Charge Ratio will not be
less than 1.4:1.

SECTION 5.13. Transactions with Affiliates. The Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, pay
any funds to or for the account of, make any Investment in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible, to, or

CREDIT AGREEMENT, PAGE 25
31
participate in, or effect, any transaction with, any Affiliate except on an
arms-length basis on terms at least as favorable to the Borrower or such
Subsidiary than could have been obtained from a third party who was not an
Affiliate; Provided that the foregoing provisions of this Section shall not
prohibit any such Person from declaring or paying any lawful dividend or other
payment ratably in respect of all of its capital stock of the relevant class so
long as, after giving effect thereto, no Default shall have occurred and be
continuing.

ARTICLE 6

DEFAULTS

SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:

(a) the Borrower shall fail to pay any principal of any
Loan when due. Borrower shall fail to pay any interest, any fees or
any other amount payable hereunder within 5 days of the due date
thereof;

(b) the Borrower shall fail to observe or perform any
covenant contained in Article 5, other than those contained in
Sections 5.1 through 5.6;

(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
covered by clause (a) or (b) above) for 30 days after notice thereof
has been given to the Borrower by the Agent at the request of any
Bank;

(d) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made);

(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period;

(f) any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt or enables the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;

(g) the Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of

CREDIT AGREEMENT, PAGE 26
32
creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the
foregoing;

(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against the Borrower or
any Material Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;

(i) except with respect to any liability disclosed in
Schedule 4.6; any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Material Plan under Section 4041(c) of ERISA
shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist under Section
4042(a) of ERISA by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of ERISA,
with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment
obligation in excess of $10,000,000; or

(j) judgments or orders for the payment of money in
excess of $10,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgments or orders shall continue unsatisfied and
unstayed for a period of 10 days;

then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% of the aggregate principal amount of
the Loans, by notice to the Borrower declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without further notice of intent to accelerate, notice of
acceleration, presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any of
the Events of Default specified in clause 6.1(g) or, 6.1(h) above with respect
to the Borrower, without any notice to the Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon terminate and the Loans
(together with accrued interest thereon) shall become immediately due and
payable without notice of acceleration, notice of intent to accelerate,
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

CREDIT AGREEMENT, PAGE 27
33
Notwithstanding anything contained in the foregoing paragraph, if at
any time within 60 days after the Notes have been declared due pursuant to the
preceding paragraph, the Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than by
acceleration and all Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 9.5, then the Required Banks by written notice to the Borrower to be
delivered by the Agent, may at their option rescind and annul the acceleration
and its consequences; but such action shall not affect any subsequent Event of
Default or Default or impair any right of the Banks consequent thereon.

SECTION 6.2. Notice of Default. The Agent shall give
notice to the Borrower under Section 6.1(c) promptly upon being requested to do
so by any Bank and shall thereupon notify all the Banks thereof.

ARTICLE 7

THE AGENT

SECTION 7.1. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.

SECTION 7.2. Agent and Affiliates. Texas Commerce shall
have the same rights and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent,
and Texas Commerce and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not the Agent.

SECTION 7.3. Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article 6.

SECTION 7.4. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.

SECTION 7.5. Liability of Agent. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents
or employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any borrowing
hereunder; (ii) the performance or

CREDIT AGREEMENT, PAGE 28
34
observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.

SECTION 7.6. INDEMNIFICATION. EACH BANK, RATABLY IN
ACCORDANCE WITH ITS COMMITMENT, INDEMNIFIES THE AGENT, ITS AFFILIATES AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES (TO THE EXTENT NOT
REIMBURSED BY THE BORROWER) AGAINST ANY COST, EXPENSE (INCLUDING COUNSEL FEES
AND DISBURSEMENTS), CLAIM, DEMAND, ACTION, LOSS OR LIABILITY (EXCEPT SUCH AS
RESULT FROM SUCH INDEMNITEES' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) THAT SUCH
INDEMNITEES MAY SUFFER OR INCUR IN CONNECTION WITH THIS AGREEMENT OR ANY ACTION
TAKEN OR OMITTED BY SUCH INDEMNITEES HEREUNDER.

SECTION 7.7. Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.

SECTION 7.8. Successor Agent. The Agent may resign at any
time by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.

SECTION 7.9. Agent's Fee. The Borrower shall pay to the
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and the Agent.

CREDIT AGREEMENT, PAGE 29
35
ARTICLE 8

CHANGE IN CIRCUMSTANCES

SECTION 8.1. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any Interest Period
for any LIBOR Loan:

(a) the Agent is advised by the Reference Bank that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Bank in the relevant market for such Interest Period,
or

(b) Banks having 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the Adjusted London
Interbank Offered Rate, as determined by the Agent, will not
adequately and fairly reflect the cost to such Banks of funding their
LIBOR Loans for such Interest Period,

the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make LIBOR Loans or to continue or convert outstanding Loans as or into LIBOR
Loans shall be suspended, (ii) each outstanding LIBOR Loan shall be converted
into a Base Rate Loan on the last day of the then current Interest Period
applicable thereto and (iii) unless the Borrower notifies the Agent at least
two Domestic Business Days before the date of any LIBOR Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.

SECTION 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its LIBOR Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its LIBOR Lending Office) to make, maintain or fund
its LIBOR Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make LIBOR Loans, or to convert outstanding Base Rate Loans into LIBOR Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different LIBOR Lending office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
notice is given, each LIBOR Loan of such Bank then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such LIBOR Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Bank shall determine that it may not lawfully continue to maintain and fund
such Loan to such day.

CREDIT AGREEMENT, PAGE 30
36
SECTION 8.3. Increased Cost and Reduced Return. (a) If on
or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding any such requirement included in an applicable LIBOR Reserve
Percentage), special deposit, insurance assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or the London interbank market any other condition
affecting its LIBOR Loans, its Note or its obligation to make LIBOR Loans and
the result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any LIBOR Loan, or
to-reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.

(b) If any Bank shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.

(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.

SECTION 8.4. Taxes. (a) For the purposes of this Section
8.4, the following terms have the following meanings:

CREDIT AGREEMENT, PAGE 31
37
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings with
respect to any payment by the Borrower pursuant to this Agreement or
under any Note, and all liabilities with respect thereto, excluding
(i) in the case of each Bank and the Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by a
jurisdiction under the laws of which such Bank or the Agent (as the
case may be) is organized or in which its principal executive office
is located or, in the case of each Bank, in which its Applicable
Lending office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only to the
extent that such Bank is subject to United States withholding tax at
the time such Bank first becomes a party to this Agreement.

"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar
charges or levies, which arise from any payment made pursuant to this
Agreement or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note.

(b) Any and all payments by the Borrower to or for the
account of any Bank or the Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.1, the
original or a certified copy of a receipt evidencing payment thereof.

(c) THE BORROWER INDEMNIFIES EACH BANK AND THE AGENT FOR
THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY
TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION) PAID BY SUCH BANK OR THE AGENT (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR
WITH RESPECT THERETO. THIS INDEMNIFICATION SHALL BE PAID WITHIN 15 DAYS AFTER
SUCH BANK OR THE AGENT (AS THE CASE MAY BE) MAKES DEMAND THEREFOR.

(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Bank remains lawfully able to do so),
shall provide the Borrower and the Agent with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts the Bank
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying

CREDIT AGREEMENT, PAGE 32
38
that the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States.

(e) For any period with respect to which a Bank has
failed to provide the Borrower or the Agent with the appropriate form pursuant
to Section 8.4(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.4(b) or (c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.

(f) If the Borrower is required to pay additional amounts
to or for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.

SECTION 8.5. Base Rate Loans Substituted for Affected
LIBOR Loans. If (i) the obligation of any Bank to make, or convert outstanding
Loans to, LIBOR Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3 or 8.4 with respect to its
LIBOR Loans and the Borrower shall, by at least five LIBOR Business Days, prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:

(a) all Loans which would otherwise be made by such Bank
as (or continued as or converted into) LIBOR Loans shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related LIBOR Loans of the other Banks);
and

(b) after each of its LIBOR Loans has been repaid (or
converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such LIBOR Loans shall be applied to
repay its Base Rate Loans instead.

If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a LIBOR Loan on the first day of the next succeeding Interest
Period applicable to the related LIBOR Loans of the other Banks.

CREDIT AGREEMENT, PAGE 33
39
ARTICLE 9

MISCELLANEOUS

SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Borrower, the Agent or Texas Commerce, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (b) in the case of any other Bank, at its address, facsimile number or
telex number set forth in its Administrative Questionnaire or (c) in the case
of any party, such other address, facsimile number or telex number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (iii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iv) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Agent under Article 2 or Article 8 shall not be effective
until received.

SECTION 9.2. No Waivers. No failure or delay by the Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 9.3. Expenses; Indemnification. (a) The Borrower
shall pay (i) all out-of-pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including (without duplication) the reasonable fees
and disbursements of counsel, in connection with such Event of Default and the
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.

(b) THE BORROWER INDEMNIFIES THE AGENT AND EACH BANK,
THEIR RESPECTIVE AFFILIATES AND THE RESPECTIVE DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES OF THE FOREGOING (EACH AN "INDEMNITEE") AND HOLDS EACH INDEMNITEE
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND
EXPENSES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL, WHICH MAY BE INCURRED BY SUCH INDEMNITEE IN
CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS FINANCED OR OTHERWISE
CONTEMPLATED HEREBY OR THE SYNDICATION OF THE LOANS BY TEXAS COMMERCE OR ITS
AFFILIATES; OR ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING

CREDIT AGREEMENT, PAGE 34
40
(WHETHER OR NOT SUCH INDEMNITEE SHALL BE DESIGNATED A PARTY THERETO) BROUGHT OR
THREATENED RELATING THERETO OR ARISING THEREFROM; PROVIDED THAT NO INDEMNITEE
SHALL HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR SUCH INDEMNITEE'S OWN
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION.

SECTION 9.4. Sharing of Set-Offs. Each Bank agrees that
if it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.

SECTION 9.5. Amendments and Waivers. Any provision of
this Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed
by all the Banks, (i) increase or decrease the Commitment of any Bank (except
for a ratable decrease in the Commitments of all Banks) or subject any Bank to
any additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder or for any
scheduled reduction or termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement.

SECTION 9.6. Successors and Assigns. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.

(b) Any Bank may at any time grant to one or more banks
or other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice
to the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with

CREDIT AGREEMENT, PAGE 35
41
such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; Provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), or (iii)
of Section 9.5 without the consent of the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article 8 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).

(c) Any Bank may at any time assign to one or more banks
or other institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000) of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit B hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower, which shall not be unreasonably withheld, and the
Agent; provided that (a) if an Assignee is an affiliate of such transferor Bank
or was a Bank immediately prior to such assignment, no such consent shall be
required and (b) Texas Commerce agrees as long as no Default exists it will not
assign any portion of its Loans until after May 31, 1997. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and further
consent or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor Bank, the Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in
accordance with Section 8.4.

(d) Any Bank may at any time assign all or any portion of
its rights under this Agreement and its Note to a Federal Reserve Bank. No
such assignment shall release the transferor Bank from its obligations
hereunder.

(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Section
8.3 or 8.4 than such Bank would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.

CREDIT AGREEMENT, PAGE 36
42
SECTION 9.7. Collateral. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.

SECTION 9.8. Governing Law; Submission to Jurisdiction.
This Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Courts located in
Dallas or Xxxxxx County and of any Texas State court sitting in Dallas or
Xxxxxx County for purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.

SECTION 9.9. Counterparts; Integration; Effectiveness.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. THIS AGREEMENT AND THE NOTES EMBODY THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF (PROVIDED THAT THE BORROWER'S
AGREEMENTS SET FORTH IN THE FEE AND PROCEDURAL LETTER TO ENGAGE THE CHASE
SECURITIES INC. TO STRUCTURE AND ARRANGE THE LOANS, TO PAY THE FEES DESCRIBED
IN THE FEE AND PROCEDURAL LETTER AND COOPERATE IN THE SYNDICATION OF THE LOANS
AND THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE FEE AND PROCEDURAL
LETTER SHALL SURVIVE AND SHALL NOT BE SUPERSEDED BY THIS AGREEMENT) AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES HERETO. This Agreement shall become
effective upon receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).

SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 9.11. Confidentiality. The Agent and each Bank
agrees to keep any information delivered or made available by the Borrower
pursuant to this Agreement confidential from anyone other than Persons employed
or retained by such Bank who are engaged in evaluating, approving, structuring
or administering the credit facility contemplated hereby; provided that nothing

CREDIT AGREEMENT, PAGE 37
43
herein shall prevent any Bank from disclosing such information (a) to any other
Bank or to the Agent, (b) subject to provisions substantially similar to those
contained in this Section, to any other Person if reasonably incidental to the
administration of the credit facility contemplated hereby, (c) upon the order
of any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank prohibited by this
Agreement, (f) in connection with any litigation to which the Agent, any Bank
or its subsidiaries or Parent may be a party, (g) to the extent necessary in
connection with the exercise of any remedy hereunder, (h) to such Bank's or
Agent's legal counsel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed Participant or Assignee. The Agent or any Bank, as the case may be,
shall give prompt notice of any disclosure made by it pursuant to clauses (c)
or (f) of this Section; provided that the Agent or such Bank shall be required
to give such notice with respect to any disclosure made by it pursuant to
clause (f) solely to the extent that the interests of the Agent or such Bank,
as the case may be, and the Borrower in the relevant litigation are not adverse
in any material respect.

SECTION 9.12. Maximum Interest Rate.

(a) No interest rate specified in this Agreement or any
Note shall at any time exceed the Maximum Rate. If at any time the
interest rate (the "Contract Rate") for any obligation owed under this
Agreement or any Note shall exceed the Maximum Rate, thereby causing
the interest accruing on such obligation to be limited to the Maximum
Rate, then any subsequent reduction in the Contract Rate for such
obligation shall not reduce the rate of interest on such obligation
below the Maximum Rate until the aggregate amount of interest accrued
on such obligation equals the aggregate amount of interest which would
have accrued on such obligation if the Contract Rate for such
obligation had at all times been in effect. The term "Maximum Rate"
means, at any time and with respect to any Bank, the maximum rate of
nonusurious interest under applicable law that such Bank may charge
the Borrower. The Maximum Rate shall be calculated in a manner that
takes into account any and all fees, payments, and other charges
contracted for, charged, or receive in connection with this Agreement
and any Note that constitute interest under applicable law. Each
change in any interest rate provided for herein based upon the Maximum
Rate resulting from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under
Texas law, to the extent applicable, the applicable rate ceiling shall
be the indicated rate ceiling described in, and computed in accordance
with, Article 5069-1.04, Vernon's Texas Civil Statutes.

(b) No provision of this Agreement or any Note shall
require the payment or the collection of interest in excess of the
maximum amount permitted by applicable law. If any excess of interest
in such respect is hereby provided for, or shall be adjudicated to be
so provided, in this Agreement or any Note or otherwise in connection
with this loan transaction, the provisions of this Section shall
govern and prevail and neither the Borrower nor the sureties,
guarantors, successors, or assigns of the Borrower shall be obligated
to pay the excess amount of such interest or any other excess sum paid
for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event any Bank ever receives, collects, or applies as interest
any such sum, such amount which would be in excess of the maximum

CREDIT AGREEMENT, PAGE 38
44
amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the obligations owed under this
Agreement or any Note and, if the principal of such obligations has
been paid in full, any remaining excess shall forthwith be paid to the
Borrower. In determining whether or not the interest paid or payable
exceeds the Maximum Rate, the Borrower and each Bank shall, to the
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of
such obligations so that interest for the entire term does not exceed
the Maximum Rate.

SECTION 9.13. Non-Application of Chapter 15 of Texas Credit
Code. To the extent if any that the laws of the State of Texas may apply to
the transactions contemplated hereby, the provisions of Chapter 15 of the
Texas Credit Code (Vernon's Texas Civil Statutes, Article 5069-15) are
specifically declared by the parties hereto not to be applicable to this
Agreement or any Note or to the transactions contemplated thereby.

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

QUAKER STATE CORPORATION

By:/s/ XXXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------------
Title: Vice Chairman and Chief Financial Officer
------------------------------------------

Address: 000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000

CREDIT AGREEMENT, PAGE 39
45

Total Commitments: TEXAS COMMERCE BANK NATIONAL
------------------ ASSOCIATION, individually as a Bank and as
$165,000,000 Agent

By /s/ XXXXXXX X. XXXXXXXX
-------------------------------------------------
Xxxxxxx X. Xxxxxxxx
Vice President

Address for Notices:
-------------------

1111 Fannin, 9th Floor, MS46
Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Telex: 166-350 TCB HOU
Telephone No.: (000) 000-0000
Attention: Loan Syndication Services
Re: Quaker State Corporation

With a copy to:
P. O. Box 660197
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
Telex: 496-20477
Telephone No.: (000) 000-0000
Attention: Corporate Banking Group

Domestic Lending Office and
LIBOR Lending Office
--------------------
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000

CREDIT AGREEMENT, PAGE 40
46
INDEX TO SCHEDULES AND EXHIBITS

Schedules

Schedule 2.6 - Pricing Schedule
Schedule 4.6 - Potential Liability under Title IV of ERISA

Exhibits

Exhibit A - Note
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Administrative Questionnaire

CREDIT AGREEMENT, PAGE 41

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Table of Contents

EXHIBIT 4(c) ================================================================== ============== CREDIT AGREEMENT

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