<PAGE>

                                                                    EXHIBIT 10.2



[Bank]


                         INTEREST RATE SWAP CONFIRMATION

TO     : BAKER HUGHES INC
         HOUSTON, TEXAS
ATTN   : DOUG DOTY
FAX    : 17134398678
DATE   : 8 April 2003
RE     : Transaction Reference No.

       The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between us on the Trade Date below.
It constitutes a "Confirmation" as referred to in the ISDA Master Agreement
described below.

       The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc. ("ISDA")
are incorporated into this Confirmation. In the event of any inconsistency
between those definitions and provisions and this Confirmation, this
Confirmation will govern.

     1.This Confirmation supplements, forms part of, and is subject to, the
       Master Agreement dated as of 6 March 2000, as amended and supplemented
       from time to time (the "Agreement"), between [Bank] and Baker Hughes Inc
       ("Counterparty"). All provisions contained in the Agreement govern this
       Confirmation except as expressly modified below.

     2.The terms of the particular Transaction to which this Confirmation
relates are as follows:

       NOTIONAL AMOUNT:        USD 325,000,000.00

       TRADE DATE:             8 April 2003

       EFFECTIVE DATE:         10 April 2003

       TERMINATION DATE:       15 January 2009, subject to adjustment in
                               accordance with the Modified Following Business
                               Day Convention.


                                                                          Page 1

<PAGE>


Confirmation - Swap Transaction


    FLOATING AMOUNTS:
    -----------------
    FLOATING RATE PAYER:      COUNTERPARTY

    FLOATING RATE PAYER
    PAYMENT DATES:            15 July, 15 January of each year commencing with
                              15 July 2003 and ending with, and including, the
                              Termination Date, subject to adjustment in
                              accordance with the Modified Following Business
                              Day Convention.

    FLOATING RATE FOR INITIAL
    CALCULATION PERIOD:       1.290000 percent (exclusive of spread)

    FLOATING RATE OPTION:     USD - LIBOR - BBA

    SPREAD:                   plus 2.689000 percent

    DESIGNATED MATURITY:      6 Months

    RESET DATES:              The first day of each Calculation Period.

    COMPOUNDING:              Not Applicable

    FLOATING RATE
    DAY COUNT FRACTION:       Actual/360

    BUSINESS DAYS:            London, New York


    FIXED AMOUNTS:
    --------------

    FIXED RATE PAYER:         [Bank]

    FIXED RATE PAYER
    PAYMENT DATES:            15 July, 15 January of each year commencing with
                              15 July 2003 and ending with, and including, the
                              Termination Date, subject to adjustment in
                              accordance with the Modified Following Business
                              Day Convention.

    FIXED RATE:               6.250000 percent


    FIXED RATE
    DAY COUNT FRACTION:       30/360


                                                                          Page 2

<PAGE>




Confirmation - Swap Transaction


    PERIOD END DATE:          No Adjustment

    BUSINESS DAYS:            London, New York



    CALCULATION AGENT:        [Bank]




  3. ACCOUNT DETAILS

       PAYMENTS TO      [Bank Account Information]

       PAYMENTS TO COUNTERPARTY:       [Bank Account Information]
                                       ACCT:

   4. OFFICE, ADDRESS AND TELEPHONE NUMBER FOR NOTICES IN CONNECTION WITH THIS
      TRANSACTION

          (a) COUNTERPARTY: its Office in
                      Baker Hughes Inc               Baker Hughes Incorporated
                      Houston, Texas                 3900 Essex Lane, Suite 1200
                                                     Houston, Tx 77027

          (b) [Bank]





   5. DOCUMENTS TO BE DELIVERED

      Each party shall deliver to the other, at the time of its execution of
      this Confirmation, evidence of the incumbency and specimen signature of
      the person(s) executing this Confirmation, unless such evidence has been
      previously supplied and remains true and in effect.

   6. RELATIONSHIP BETWEEN PARTIES

      Each party will be deemed to represent to the other party on the date on
      which it enters into a Transaction that (absent a written agreement
      between the parties that expressly imposes affirmative obligations to the
      contrary for that Transaction):

      (a) Non-Reliance. It is acting for its own account, and it has made its
      own independent decisions to enter into that Transaction and as to whether
      that Transaction is appropriate


                                                                          Page 3

<PAGE>

Confirmation - Swap Transaction


      or proper for it based upon its own judgement and upon advice from such
      advisers as it has deemed necessary. It is hot relying on any
      communication (written or oral) of the other party as investment advice or
      as a recommendation to enter into that Transaction; it being understood
      that information and explanations related to the terms and conditions of a
      Transaction shall not be considered investment advice or a recommendation
      to enter into that Transaction. No communication (written or oral)
      received from the other party shall be deemed to be an assurance or
      guarantee as to the expected results of that Transaction.

      (b) Assessment and Understanding. It is capable of assessing the merits of
      and understanding (on its own behalf or through independent professional
      advice), and understands and accepts, the terms, conditions and risks of
      that Transaction. It is capable of assuming, and assumes the risks of that
      Transaction.

      (c) Status of Parties. The other party is not acting as a fiduciary for or
      an adviser to it in respect of that Transaction.

      Please confirm that the foregoing correctly sets forth the terms of our
      agreement by executing a copy of this Confirmation and returning it to us.

                                            Yours sincerely,

                                            [Bank]




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




Confirmed as of the date first
above written:

BAKER HUGHES INC.

By: /s/ DOUGLAS C. DOTY
    -----------------------------
Name: Douglas C. Doty
      ---------------------------
Title: Vice President & Treasurer
       --------------------------
mng


                                                                          Page 4




<PAGE>

(MULTICURRENCY-CROSS BORDER)


                        SCHEDULE TO THE MASTER AGREEMENT
                        DATED AS OF MARCH 6, 2000 BETWEEN
                               [BANK] ("PARTY A")
                                       AND
                          BAKER HUGHES,INC. ("PARTY B")


            PART 1: TERMINATION PROVISIONS AND CERTAIN OTHER MATTERS

     (a)  "SPECIFIED ENTITY" means, in relation to Party A, for the purpose of:

            SECTION 5(a)(v), none;

            SECTION 5(a)(vi), none;

            SECTION 5(a)(vii), none; and

            SECTION 5(b)(iv), none;

                    and, in relation to Party B, for the purpose of:

            SECTION 5(a)(v), none;

            SECTION 5(a)(vi), none;

            SECTION 5(a)(vii), none; and

            SECTION 5(b)(iv), none.

     (b)  "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.

     (c) The "CROSS-DEFAULT" provisions of Section 5(a)(vi) will apply to Party
A and Party B. In connection therewith, "SPECIFIED INDEBTEDNESS" will have the
meaning specified in Section 14, except that such term shall not include
obligations in respect of deposits received in the ordinary course of such
party's banking business, and "THRESHOLD AMOUNT" means an amount equal to three
percent of such party's shareholders' equity, determined in accordance with
generally accepted accounting principles in such party's country of
incorporation or organization, consistently applied, as at the end of such
party's most recently completed fiscal year. For purposes of this definition,
any Specified Indebtedness denominated in a currency other than the currency



<PAGE>



in which the financial statements of such party are denominated shall be
converted into USD.

     (d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will
apply to Party A and Party B; provided, however, that the phrase "materially
weaker" means (i) the senior long-term debt or deposits of the resulting,
surviving or transferee entity is or are, as the case may be, rated less than
investment grade by Standard & Poor's Corporation or Moody's Investors Service,
Inc., or (ii) in the event that there are no such Standard & Poor's Corporation
or Moody's Investors Service, Inc. ratings, the Policies (as defined below) in
effect at the time, of the party which is not the Affected Party, would lead
such non-Affected Party, solely as a result of a change in the nature,
character, identity or condition of the Affected Party, any Credit Support
Provider of the Affected Party or any applicable Specified Entity of the
Affected Party, as the case may be, from its state prior to such consolidation,
amalgamation, merger or transfer, to decline to make an extension of credit to,
or enter into a Transaction with, the resulting, surviving or transferee entity.
"Policies", for the purposes of this definition means: (l)(A) internal credit
limits applicable to individual entities or (B) other limits on doing business
with entities domiciled or doing business in certain jurisdictions or engaging
in certain activities, or (2) internal restrictions on doing business with
entities with whom the party which is not the Affected Party has had prior
adverse business relations.

     (e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A or Party B.

     (f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):

          (i) Market Quotation will apply.

          (ii) The Second Method will apply.

     (g) "TERMINATION CURRENCY" means United States Dollars.

     (h) ADDITIONAL TERMINATION EVENT. (i) The following shall constitute an
Additional Termination Event (with any event specified in the following
constituting an "Impossibility"):

Due to the occurrence of a natural or man-made disaster, armed conflict, act of
terrorism, riot, labor disruption, act of State, or any other similar
circumstance beyond its control after the date on which a Transaction is entered
into, it becomes impossible (other than as a result of its own misconduct) for a
party (which will be the Affected Party):

     (1) to perform any absolute or contingent obligation, to make a payment or
     delivery or to receive a payment or delivery in respect of a Transaction or
     to comply with any other material provision of this Agreement relating to
     such Transaction; or


                                       2



<PAGE>



     (2) to perform, or for any Credit Support Provider of such party to
     perform, any contingent or other obligation which the party or such Credit
     Support Provider has under any Credit Support Document relating to a
     Transaction.

     (ii) The definition of "Affected Transactions" in Section 14 of this
Agreement is amended by adding the word "Impossibility" immediately before the
word "Illegality" in the first line thereof.

     (iii) If an event or circumstance which would otherwise constitute or give
rise to an Event of Default also constitutes an Impossibility, it will be
treated as a Termination Event and will not constitute an Event of Default.


                           PART 2: TAX REPRESENTATIONS

                                 Not applicable.


                     PART 3: AGREEMENT TO DELIVER DOCUMENTS

For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents:

     (a) Tax forms, documents or certificates to be delivered are: none.

     (b) Other documents to be delivered are:


PARTY REQUIRED                                            COVERED BY
  TO DELIVER     FORM/DOCUMENT/     DATE BY WHICH         SECTION 3(d)
   DOCUMENT      CERTIFICATE       TO BE DELIVERED      REPRESENTATION
--------------  ---------------    ---------------      --------------
Party B         Annual Report      As soon as               Yes
                of Party B         available and
                containing         in any event
                consolidated       within 120 days
                financial          after the end
                statements         of each fiscal
                certified by       year of Party B
                independent
                certified
                public
                accountants and
                prepared in
                accordance with
                GAAP



                                       3



<PAGE>



Party B          Unaudited           As soon as              Yes
                 consolidated        available and
                 financial           in any event
                 statements of       within 45 days
                 Party B for a       after the end
                 fiscal quarter      of each fiscal
                 prepared in         quarter of
                 accordance with     Party B
                 GAAP and on a
                 basis
                 consistent with
                 that of the
                 annual
                 financial
                 statements of
                 Party B


Party B          Certified           Upon execution          Yes
                 copies of all       and delivery of
                 corporate           this Agreement
                 authorizations
                 and any other
                 documents with
                 respect to the
                 execution,
                 delivery and
                 performance of
                 this Agreement


Party B          Certificate of      Upon execution          Yes
                 authority and       and delivery of
                 specimen            this Agreement
                 signatures of       and thereafter
                 individuals         upon request of
                 executing this      Party A
                 Agreement and
                 Confirmations


                              PART 4: MISCELLANEOUS

          (a)  Address for Notices. For the purpose of Section 12(a) of this
               Agreement:

Address for notice or communications to Party A:

Any notice relating to a particular Transaction shall be delivered to the
address or facsimile or telex number specified in the Confirmation of such
Transaction. Any notice delivered for purposes of Sections 5 and 6 of this
Agreement shall be delivered to the following address:

           [Bank's Contact Information]
           Attention: Legal Department-Capital Markets Group


                                       4
<PAGE>


Address for notice or communications to Party B:

     Baker Hughes, Inc.
     Attention: Gene Shiels, Assistant Treasurer
     3900 Essex Lane
     Houston, Texas 77027
     Telex No.: _____; Answerback: _____
     Facsimile No.: (713) 439-8678

     (b) PROCESS AGENT. For the purpose of Section 13(c):

     Party A appoints as its Process Agent: Not applicable.
     Party B appoints as its Process Agent: Not applicable.

     (c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.

     (d) MULTIBRANCH PARTY. For the purpose of Section 10 of this Agreement:

     Party A is a Multibranch Party and may act through any Office specified in
     a Confirmation.

     Party B is not a Multibranch Party.

     (e) CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

     (f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document: not
applicable.

     (g) CREDIT SUPPORT PROVIDER. Credit Support Provider means, in relation to
either party: not applicable.

     (h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine).

     (i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) will not apply
to any Transaction unless specified in the relevant Confirmation.

     (j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.


                                       5

<PAGE>


                            PART 5: OTHER PROVISIONS

    (a) SET-OFF. Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party in the
case where a Termination Event under Section 5(b)(iv) has occurred, will, at the
option of the party ('X') other than the Defaulting Party or the Affected Party
(and without prior notice to the Defaulting Party or the Affected Party), be
reduced by its set-off against any amount(s) (the 'Other Agreement Amount')
payable (whether at such time or in the future or upon the occurrence of a
contingency) by the Payee to the Payer (irrespective of the currency, place of
payment or booking office of the obligation) under any other agreement(s)
between the Payee and the Payer or instrument(s) or undertaking(s) issued or
executed by one party to, or in favor of, the other party (and the Other
Agreement Amount will be discharged promptly and in all respects to the extent
it is so set-off). X will give notice to the other party of any set-off effected
under this section.

For this purpose, either the Early Termination Amount or the Other Agreement
Amount (or the relevant portion of such amounts) may be converted by X into the
currency in which the other is denominated at the rate of exchange at which such
party would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency.

If an obligation is unascertained, X may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.

Nothing in this section shall be effective to create a charge or other security
interest. This section shall be without prejudice and in addition to any right
of set-off, combination of accounts, lien or other right to which any party is
at any time otherwise entitled (whether by operation of law, contract or
otherwise).

    (b) Exchange of Confirmations. For each Transaction entered into hereunder,
Party A shall promptly send to Party B a Confirmation, via telex or facsimile
transmission. Party B agrees to respond to such Confirmation within 10 Business
Days (for this purpose, Business Days refers to Business Days in the location of
the recipient), either confirming agreement thereto or requesting a correction
of any error(s) contained therein. Failure by Party B to respond within such
period shall not affect the validity or enforceability of such Transaction and
shall be deemed to be an affirmation of the terms contained in such
Confirmation, absent manifest error. The parties agree that any such exchange of
telexes or facsimile transmissions shall constitute a Confirmation for all
purposes hereunder.


                                       6

<PAGE>


    (C) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

    (d) TELEPHONIC RECORDING. Each party (i) consents to the recording of the
telephone conversations of trading, marketing and operations personnel of the
parties and their Affiliates in connection with this Agreement or any potential
Transaction and (ii) agrees to obtain any necessary consent of, and give notice
of such recording to, such personnel of it and its Affiliates.

    (e) FURTHER REPRESENTATIONS. (i) Party B represents to Party A (which
representations will be deemed to be repeated by Party B on each date on which a
Transaction is entered into) that:

    NO CHANGE. Since March 31, 1999, there has been no material adverse change
in the business, operations, assets or financial or other condition of Party B.

    (ii) Each party represents to the other party (which representation will be
deemed to be repeated on each date on which a Transaction is entered into) that
it is an "eligible swap participant" as such term is defined in Part 35 of
Chapter I of Title 17 of the Code of Federal Regulations, promulgated by the
Commodity Futures Trading Commission, entitled "Exemption of Swap Agreements."

    (f) FURTHER REPRESENTATIONS OF PARTY A AND PARTY B. With respect to
commodity swap transactions, commodity cap transactions, commodity floor
transactions, commodity collar transactions and commodity option transactions
(for purposes of this Part 5(f), "Commodity Transactions"), each party
represents to the other (which representations will be deemed to be repeated by
each party on each date on which a Commodity Transaction is entered into) that:

                  (i) it has entered into this Agreement and each Commodity
         Transaction in conjunction with its line of business (which may include
         financial intermediation services) or the financing of its business;

                  (ii) the material terms of this Agreement and each Commodity
         Transaction have been and will be individually tailored and negotiated;

                  (iii) the creditworthiness of the other party was or will be a
         material consideration in its entering into this Agreement and any such
         Commodity Transaction;

                  (iv) solely with respect to Party B, it is a producer,
         processor, or commercial user of, or a merchant handling, the commodity
         which is the subject of any Commodity Transaction, or the products or
         by-products thereof, and that it is


                                       7

<PAGE>


         entering into any such Commodity Transaction solely for purposes
         related to its business as such; and

                  (v) solely with respect to Party A, it shall always be the
         offeror of each Commodity Transaction and that Party A offered to enter
         into this Agreement with Party B and initiated their trading
         relationship.

         (g) RELATIONSHIP BETWEEN PARTIES. The following representation shall be
inserted as a new Section 3(g) of this Agreement:

         "(g) RELATIONSHIP BETWEEN PARTIES. Each party will be deemed to
represent to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):

                  (i) NON-RELIANCE. It is acting for its own account, and it has
         made its own independent decisions to enter into that Transaction and
         as to whether that Transaction is appropriate or proper for it based
         upon its own judgment and upon advice from such advisers as it has
         deemed necessary. It is not relying on any communication (written or
         oral) of the other party as investment advice or as a recommendation to
         enter into that Transaction; it being understood that information and
         explanations related to the terms and conditions of a Transaction shall
         not be considered investment advice or a recommendation to enter into
         that Transaction. No communication (written or oral) received from the
         other party shall be deemed to be an assurance or guarantee as to the
         expected results of that Transaction.

                  (ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing
         the merits of and understanding (on its own behalf or through
         independent professional advice), and understands and accepts, the
         terms, conditions and risks of that Transaction. It is also capable of
         assuming, and assumes, the risks of that Transaction.

                  (iii) STATUS OF PARTIES. The other party is not acting as a
         fiduciary for or an adviser to it in respect of that Transaction."

         (h) EMU PROVISIONS. (i) 1998 ISDA EURO DEFINITIONS. Unless the parties
expressly agree otherwise in the related Confirmation, each Transaction
currently existing or to be entered into between the parties will be deemed to
incorporate, to the extent applicable, the 1998 ISDA Euro Definitions as
published on 25th November 1998 and any subsequent amendments and supplements
thereto (the "Euro Definitions"). In the event of any inconsistency between the
Euro Definitions and any other provisions or definitions incorporated by
reference into the Confirmation in respect of any Transaction, the Euro
Definitions shall prevail.


                                       8

<PAGE>


         (ii) ISDA EMU PROTOCOL. The parties agree that the definitions and
provisions contained in Annexes 1 and 3 and Section 6 of the ISDA EMU Protocol
published on 6th May 1998 (the "ISDA Protocol"), are incorporated into and apply
to this Agreement and form a part hereof. References in those definitions and
provisions to any "ISDA Master Agreement" will be deemed to be references to
this Agreement.

         (i) NEGATIVE INTEREST RATES. (i) FLOATING AMOUNTS. "Swap Transaction"
means, for the purposes of this provision concerning Negative Interest Rates, a
rate exchange or swap transaction, including transactions involving a single
currency or two or more currencies. Party A and Party B agree that, if with
respect to a Calculation Period for a Swap Transaction either party is obligated
to pay a Floating Amount that is a negative number (either due to a quoted
negative Floating Rate or by operation of a Spread that is subtracted from the
Floating Rate), the Floating Amount with respect to that party for that
Calculation Period will be deemed to be zero, and the other party will pay to
that party the absolute value of the negative Floating Amount as calculated, in
addition to any amounts otherwise owed by the other party for that Calculation
Period with respect to that Swap Transaction, on the Payment Date that the
Floating Amount would have been due if it had been a positive number. Any
amounts paid by the other party with respect to the absolute value of a negative
Floating Amount will be paid to such account as the receiving party may
designate (unless such other party gives timely notice of a reasonable objection
to such designation) in the currency in which that Floating Amount would have
been paid if it had been a positive number (and without regard to the currency
in which the other party is otherwise obligated to make payments).

         (ii) COMPOUNDING. Party A and Party B agree that, if with respect to
one or more Compounding Periods for a Swap Transaction where "Compounding" or
"Flat Compounding" is specified to be applicable the Compounding Period Amount,
the Basic Compounding Period Amount or the Additional Compounding Period Amount
is a negative number (either due to a quoted negative Floating Rate or by
operation of a Spread that is subtracted from the Floating Rate), then the
Floating Amount for the Calculation Period in which that Compounding Period or
those Compounding Periods occur will be either the sum of all the Compounding
Period Amounts or the sum of all the Basic Compounding Period Amounts and all
the Additional Compounding Period Amounts in that Calculation Period (whether
positive or negative). If such sum is positive, then the Floating Rate Payer
with respect to the Floating Amount so calculated will pay that Floating Amount
to the other party. If such sum is negative, the Floating Amount with respect to
the party that would be obligated to pay that Floating Amount will be deemed to
be zero, and the other party will pay to that party the absolute value of the
negative Floating Amount as calculated, such payment to be made in accordance
with (i) above.

         (j) ABSENCE OF LITIGATION. Section 3(c) of this Agreement is amended by
deleting the words "or, to its knowledge, threatened" in the first line thereof.


                                       9

<PAGE>


                      PART 6: FOREIGN EXCHANGE TRANSACTIONS

         (a) DEFINITIONS AND APPLICATION. (i) This Agreement is subject to the
1998 FX and Currency Option Definitions (the "FX Definitions"), as published by
the International Swaps and Derivatives Association, Inc., the Emerging Markets
Traders Association, and The Foreign Exchange Committee, as hereinafter amended.
In the event of any inconsistency between the FX Definitions and this Agreement,
this Agreement will govern. Unless otherwise agreed in writing by the parties,
each FX Transaction and Currency Option Transaction, whether now existing or
hereafter entered into, between the parties shall be governed by this Agreement,
notwithstanding Section 1(b) of this Agreement, the absence of any reference to
this Agreement in the Confirmation in respect of any such FX Transaction or
Currency Option Transaction, or the reference to any other governing terms or
law in such Confirmation.

         (ii) Section 3.4 of the FX Definitions is amended by adding the
following:

               (c) Non-Payment. If any Premium is not received on the Premium
Payment Date, the Seller may elect either: (i) to accept a late payment of such
Premium; (ii) to give written notice of such non-payment and, if such payment
shall not be received within three (3) Local Business Days (as defined in this
Agreement) of such notice, treat the related Currency Option Transaction as
void; or (iii) if such payment shall not be received within three (3) Local
Business Days of such notice, treat such non-payment as an Event of Default
under Section 5(a)(i) of this Agreement. If the Seller elects to act under
either clause (i) or (ii) of the preceding sentence, the Buyer shall pay all
out-of-pocket costs and actual damages incurred in connection with such unpaid
or late Premium or void Currency Option Transaction, including, without
limitation, interest on such Premium in the same currency as such Premium at the
then prevailing market rate and any other costs or expenses incurred by the
Seller in covering its obligations (including, without limitation, a delta
hedge) with respect to such Currency Option Transaction.

               (d) Discharge and Termination. Unless otherwise agreed, any Call
or any Put written by a party will automatically be terminated and discharged,
in whole or in part, as applicable, against a Call or a Put, respectively,
written by the other party, such termination and discharge to occur
automatically upon the payment in full of the last Premium payable in respect of
such Currency Option Transactions; provided that such termination and discharge
may only occur in respect of Currency Option Transactions:

         (i) each being with respect to the same Put Currency and the same Call
Currency;

         (ii) each having the same Expiration Date and Expiration Time;

         (iii) each being of the same style, i.e. either both being American
style Currency Option Transactions or both being European style Currency Option
Transactions;


                                       10

<PAGE>

         (iv) each having the same Strike Price;

         (v) neither of which shall have been exercised by delivery of a Notice
of Exercise; and

         (vi) each having been transacted by the same pair of offices of the
Buyer and the Seller

         and, upon the occurrence of such termination and discharge, neither
party shall have any further obligation to the other party in respect of the
relevant Currency Option Transactions or, as the case may be, parts thereof so
terminated and discharged. In the case of a partial termination and discharge
(i.e., where the relevant Currency Option Transactions are for different amounts
of the Currency Pair), the remaining portion of the Currency Option Transaction
which is partially discharged and terminated shall continue to be a Currency
Option Transaction for all purposes of this Agreement, including this Section
3.4(d).

         (b) CONFIRMATIONS. In respect of FX Transactions and Currency Option
Transactions, the term "Confirmation" means a writing (including telex,
facsimile or other electronic means from which it is possible to produce a hard
copy) evidencing an FX Transaction or Currency Option Transaction, as the case
may be, notwithstanding the absence of any reference to this Agreement therein
or the reference therein to any other governing terms or law. In relation to
such Confirmations, unless either party objects to the terms contained in any
Confirmation within three (3) Business Days in its location of receipt thereof,
or such shorter time as may be appropriate given the Settlement Date of an FX
Transaction, the terms of such Confirmation shall be deemed correct and accepted
absent manifest error, unless a corrected Confirmation is sent by a party within
such three (3) Business Days, or shorter period, as appropriate, in which case
the party receiving such corrected Confirmation shall have three (3) Business
Days in its location, or shorter period, as appropriate, after receipt thereof
to object to the terms contained in such corrected Confirmation. In the event of
any conflict between the terms of such a Confirmation of an FX Transaction or a
Currency Option Transaction, as the case may be, and this Agreement, the terms
of this Agreement shall prevail, and the Confirmation shall not modify the terms
of this Agreement.


Accepted and agreed:

[Bank]                                    BAKER HUGHES INCORPORATED


By:                                       By: /s/ DOUGLAS C. DOTY
    --------------------------                ----------------------------------
    Name:                                     Name: Douglas C. Doty
    Title:                                    Title: Vice President & Treasurer


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