<PAGE>

                                                                     Exhibit 4

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                                       CREDIT AGREEMENT


                                  dated as of April 15, 1999


                                            among


                                         SONAT INC.,


                                   THE BANKS NAMED HEREIN,


                                             and


                                  THE CHASE MANHATTAN BANK,
                                   as Administrative Agent,


                   BANK OF AMERICA National Trust AND Savings Association,
                                     as Syndication Agent


                                             and


                                   SUNTRUST BANK, ATLANTA,
                                    as Documentation Agent

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<PAGE>



                                      TABLE OF CONTENTS

Article                                                                    Page

I.      LOANS...........................................................      1

           1.01       Syndicated Loans..................................      1
           1.02       Money Market Loans................................      4
           1.04       Change of Commitments.............................      5
           1.05       Borrowings of Syndicated Loans....................      6
           1.06       Several Commitments; Remedies Independent........       8
           1.08       Borrowings of Swingline Loans.......................    8
           1.09       Lending Offices...................................      9
           1.10       Notes..............................................     9

II.     PAYMENTS, INTEREST AND CERTAIN FEES.............................     10

           2.01       Repayment of Loans................................     10
           2.02       Interest..........................................     10
           2.03       Interest Periods..................................     11
           2.04       Prepayments.......................................     11
           2.05       Payments, etc.....................................     12
           2.06       Pro Rata Treatment; Sharing.......................     13
           2.07       Computations........................ .............     14
           2.08       Facility Fee......................................     14

III.    PROVISIONS RELATING TO FIXED RATE LOANS............... .........     14

           3.01       Additional Costs..................................     14
           3.02       Limitation on Types of Loans......................     17
           3.03       Illegality........................................     17
           3.04       Treatment of Affected Loans.......................     17
           3.05       Compensation......................................     17
           3.06       Survival..........................................     18

IV.     CONDITIONS......................................................     18

           4.01       Conditions to Effectiveness.......................     18
           4.02       Conditions Precedent to Loans.....................     19

V.      COVENANTS.......................................................     20

           5.01       Financial Statements..............................     20
           5.02       Access to Books and Inspection....................     21
           5.03       Litigation........................................     21
           5.04       Maintenance of Existence..........................     21
           5.05       Merger; Sale of Assets............................     21
           5.06       Default; Investment Rating........................     22
           5.07       ERISA.............................................     22
           5.08       Liens.............................................     23
           5.09       Total Indebtedness to Consolidated Capitalization.     24
           5.10       [Intentionally Omitted.]..........................     24
           5.11       Insurance.........................................     24
           5.12       Maintenance of Properties.........................     24
           5.13       Public Utility Holding Company Act................     24

VI.     REPRESENTATIONS AND WARRANTIES..................................     24

           6.01       Corporate Existence and Powers....................     24
           6.02       Corporate Authority, etc....................... ..     25
           6.03       Financial Condition................. .............     25
           6.04       Litigation........................................     25
           6.05       Taxes.............................................     25
           6.06       Approvals.........................................     26
           6.07       ERISA.............................................     26
           6.08       Margin Regulations................................     26
           6.09       Certain Subsidiaries..............................     26
           6.10       Investment Company Act............................     26
           6.11       Environmental Laws................................     26
           6.12       Year 2000 Problem.................................     26

VII.    EVENTS OF DEFAULT...............................................     27


VIII.   MISCELLANEOUS...................................................     29

           8.01       Waiver............................................     29
           8.02       Notices and Delivery of Documents.................     29
           8.03       Governing Law.....................................     29
           8.04       Offsets, etc......................................     29
           8.05       Disposition of Loans..............................     30
           8.06       Expenses..........................................     30
           8.07       Amendments, Waivers, etc..........................     31
           8.08       Definitions.......................................     31
           8.09       Successors and Assigns............................     31
           8.10       Counterparts......................................     32
           8.11       Confidentiality...................................     32
           8.12       WAIVER OF JURY TRIAL..............................     33
           8.13       Severability......................................     33

IX.     THE AGENTS......................................................     33

           9.01       Appointment, Power and Immunities.................     33
           9.02       Reliance by Agents................................     33
           9.03       Default............................ ..............     34
           9.04       Rights as a Lender................................     34
           9.05       Indemnification...................................     34
           9.06       Reports...........................................     35
           9.07       Non-Reliance on Agents and Other Banks............     35
           9.08       Failure to Act....................................     35
           9.09       Resignation or Removal of Agents..................     35
           9.10       Documentation Agent...............................     36
           9.11       Syndication Agent.................................     36


SCHEDULE 1            Definitions
SCHEDULE 2.....       Lending Offices and/or Addresses for Notices
SCHEDULE 3.....       Commitments

EXHIBIT A-1 Form of Note for Syndicated Loans EXHIBIT A-2 Form of Note for Money
Market  Loans  EXHIBIT A-3 Form of Note for  Swingline  Loans  EXHIBIT B Form of
Opinion of Counsel to the Company EXHIBIT C Form of Opinion of Special New York
                      Counsel to the Banks
EXHIBIT D             Form of Money Market Quote Request
EXHIBIT E             Form of Money Market Quote



<PAGE>



               CREDIT  AGREEMENT  dated as of April 15, 1999 among SONAT INC., a
Delaware corporation (the "Company");  the undersigned banks (each herein called
a "Bank");  and THE CHASE  MANHATTAN  BANK,  as  Administrative  Agent,  BANK OF
AMERICA  National  Trust AND Savings  Association,  as  Syndication  Agent,  and
SUNTRUST BANK, ATLANTA,  as Documentation  Agent (in such capacities,  each such
agent being herein called an "Agent" and collectively the "Agents");  and CREDIT
LYONNAIS,  NEW YORK BRANCH and THE BANK OF NOVA SCOTIA,  as Managing  Agents and
THE FIRST NATIONAL BANK OF CHICAGO,  MELLON BANK,  N.A., and WACHOVIA BANK, N.A.
as Co-Agents.

               The  Company  has  requested  the Banks to  extend  credit to the
Company  for the  general  corporate  purposes  of the  Company.  The  Banks are
prepared to do so on the terms hereof.

               Accordingly,  the Company,  each Bank and the Agents hereby agree
as follows:

               I.     LOANS

               1.01 Syndicated  Loans.  Each Bank severally agrees, on the terms
of this  Agreement,  to make loans to the  Company in Dollars  during the period
from  and  including  the  date  hereof  to but  not  including  the  Commitment
Termination Date in an aggregate principal amount at any one time outstanding up
to but not  exceeding  the amount of such Bank's  Commitment  as then in effect.
Subject to the terms of this  Agreement,  during  such  period the  Company  may
borrow, repay and reborrow the amount of the Commitments;  provided that the sum
of (i) the aggregate  principal amount of all Money Market Loans,  plus (ii) the
aggregate  principal  amount of all  Syndicated  Loans plus (iii) the  aggregate
principal amount of all Swingline  Loans, at any one time outstanding  shall not
exceed  the  aggregate  amount  of the  Commitments  at such time  except  that,
notwithstanding the foregoing, Money Market Loans outstanding at the time of any
termination or reduction of the Commitments  pursuant to 1.04 hereof need not be
prepaid on account of this proviso.

               1.02   Money Market Loans.

               (a) In addition to borrowings of  Syndicated  Loans,  the Company
may,  as set forth in this 1.02,  request the Banks to make offers to make Money
Market  Loans to the  Company  in  Dollars.  The Banks  may,  but shall  have no
obligation  to,  make  such  offers  and the  Company  may,  but  shall  have no
obligation  to,  accept  any such  offers in the  manner set forth in this 1.02.
Money Market Loans shall be Set Rate Loans, provided that:

                     (i) there may be no more than  fifteen  different  Interest
        Periods for both Syndicated  Loans (other than Domestic Loans) and Money
        Market Loans  outstanding  at the same time (for which purpose  Interest
        Periods described in different lettered clauses of the definition of the
        term  "Interest  Period" in 2.03 hereof  shall be deemed to be different
        Interest Periods even if they are coterminous); and

                    (ii) the sum of (x) aggregate  principal amount of all Money
        Market Loans, plus (y) the aggregate  principal amount of all Syndicated
        Loans plus (z) the aggregate principal amount of all Swingline Loans, at
        any one time  outstanding  shall not exceed the aggregate  amount of the
        Commitments  at such time except that,  notwithstanding  the  foregoing,
        Money  Market  Loans  outstanding  at the  time  of any  termination  or
        reduction of the Commitments pursuant to 1.04 hereof need not be prepaid
        on account of this proviso.

               (b) When the  Company  wishes to  request  offers  to make  Money
Market Loans, it shall give each Bank notice (a "Money Market Quote Request") so
as to be received  no later than 11:00 a.m.  New York time on the  Business  Day
next  preceding  the date of borrowing  proposed  therein or such other time and
date as the Company and the  Majority  Banks may agree.  The Company may request
offers to make Money Market Loans for up to three different  Interest Periods in
a single  notice  (for which  purpose  Interest  Periods in  different  lettered
clauses of the  definition of the term  "Interest  Period" shall be deemed to be
different  Interest  Periods even if they are  coterminous);  provided  that the
request for each separate Interest Period shall be deemed to be a separate Money
Market Quote Request for a separate borrowing (a "Money Market Borrowing"). Each
such  notice  shall be  substantially  in the form of Exhibit D hereto and shall
specify as to each Money Market Borrowing:

                     (i)     the proposed date of such borrowing, which shall be
        a Business Day;

                    (ii) the  aggregate  amount of such Money Market  Borrowing,
        which  shall  be  at  least  $25,000,000  (or  in  larger  multiples  of
        $5,000,000)  but shall not cause the limits  specified in 1.02 hereof to
        be violated  (without giving effect to any other Money Market  Borrowing
        subject to a simultaneous Money Market Quote Request);

                   (iii)     the duration of the Interest Period applicable
        thereto; and

                    (iv) the date on which the  Money  Market  Quotes  are to be
        submitted  if it is before the proposed  date of borrowing  (the date on
        which  such  Money  Market  Quotes  are to be  submitted  is called  the
        "Quotation Date").

Except as otherwise  provided in this 1.02,  no Money Market Quote Request shall
be given within five  Business Days (or such other number of days as the Company
and the Majority Banks may agree) of any other Money Market Quote Request.

               (c) (i) Each Bank may  submit one or more  Money  Market  Quotes,
each  containing  an offer to make a Money  Market Loan in response to any Money
Market Quote  Request;  provided  that, if the  Company's  request under 1.02(b)
hereof  specified  more than one  Interest  Period,  such Bank may make a single
submission  containing  one or more Money Market  Quotes for each such  Interest
Period.  Each Money Market Quote must be submitted to the Company not later than
10:00 a.m.  New York time on the  Quotation  Date or such other time and date as
the Company and the Majority Banks may agree. Subject to 3.02(b), 3.03, 4.02 and
Article VII hereof,  any Money Market Quote so made shall be irrevocable  except
with the written consent of the Company.

                    (ii) Each Money Market Quote shall be  substantially  in the
        form of Exhibit E hereto and shall specify:

                      (A)    the proposed date of borrowing and the Interest
        Period therefor;

                      (B) the  principal  amount  of the Money  Market  Loan for
               which each such offer is being made, which principal amount shall
               be at  least  $5,000,000  or a  larger  multiple  of  $1,000,000;
               provided that the aggregate  principal amount of all Money Market
               Loans for which a Bank  submits  Money  Market  Quotes (x) may be
               greater or less than the  Commitment of such Bank but (y) may not
               exceed the principal  amount of the Money Market  Borrowing for a
               particular Interest Period for which offers were requested;

                      (C) the rate of interest per annum  (rounded  upwards,  if
               necessary,  to the  nearest  1/10,000th  of 1%)  offered for each
               Money Market Loan (the "Money Market Rate"); and

                      (D) the identity of the quoting Bank.

Unless  otherwise  agreed by the Company,  no Money  Market Quote shall  contain
qualifying,  conditional  or similar  language or propose terms other than or in
addition to those set forth in the applicable Money Market Quote Request and, in
particular,  no Money Market Quote may be  conditioned  upon  acceptance  by the
Company of all (or some specified  minimum) of the principal amount of the Money
Market Loan for which such Money Market Quote is being made.

               (d) Not later than 11:30 a.m. New York time on the Quotation Date
or such other time and date as the Company and the Majority Banks may agree, the
Company shall notify each Bank of its acceptance or  nonacceptance of the offers
so notified to it pursuant to 1.02(c)(i)  hereof (and the failure of the Company
to give such notice by such time shall constitute nonacceptance). In the case of
acceptance,  such notice shall specify the aggregate  principal amount of offers
for each  Interest  Period that are  accepted.  The Company may accept any Money
Market Quote in whole or in part  (provided that any Money Market Quote accepted
in part shall be at least  $5,000,000  or in larger  multiples  of  $1,000,000);
provided that:

                     (i) the  aggregate  principal  amount of each Money  Market
        Borrowing may not exceed the applicable  amount set forth in the related
        Money Market Quote Request;

                    (ii) the  aggregate  principal  amount of each Money  Market
        Borrowing  shall be at least  $25,000,000  (or in  larger  multiples  of
        $5,000,000)  but shall not cause the limits  specified in 1.02 hereof to
        be violated;

                   (iii)  acceptance  of offers  may be made  only in  ascending
        order of Money Market  Rates,  in each case  commencing  with the lowest
        rate so offered; and

                    (iv) the  Company  may not  accept  any offer  that fails to
        comply with  1.02(c)(ii)  hereof or  otherwise  fails to comply with the
        requirements of this Agreement (including,  without limitation,  1.02(a)
        hereof).

If offers are made by two or more Banks with the same Money  Market  Rates for a
greater  aggregate  principal  amount than the amount in respect of which offers
are accepted for the related  Interest  Period,  the  principal  amount of Money
Market Loans in respect of which such offers are accepted  shall be allocated by
the Company among such Banks as nearly as possible (in multiples of  $1,000,000)
in proportion to the aggregate  principal amount of such offers.  Determinations
by the Company of the amounts of Money Market Loans shall be  conclusive  in the
absence of manifest  error.  Promptly after the acceptance by the Company of any
Money Market Quote,  the Company shall give Chase notice of the principal amount
of each Money Market Loan to be made  pursuant to such Money Market  Quote,  the
rate of interest per annum and the duration of the  Interest  Period  applicable
thereto and the name of the Bank making such Loan.

               (f) Any Bank whose  offer to make any Money  Market Loan has been
accepted shall, not later than 1:00 p.m. New York time on the date specified for
the making of such  Loan,  make the  amount of such Loan  available  to Chase at
account number  323-506909  maintained by Chase with The Chase Manhattan Bank at
its Principal Office in immediately available funds, for account of the Company.
The amount so received by Chase shall,  subject to the terms and  conditions  of
this Agreement,  be made available to the Company on such date by depositing the
same, in immediately  available  funds, in an account of the Company  maintained
with The Chase Manhattan Bank at its Principal Office designated by the Company.

               (g) The  amount of any Money  Market  Loan made by any Bank shall
not constitute a utilization of such Bank's Commitment.

               1.03  Swingline  Commitment.  Subject to the terms and conditions
hereof,  the  Swingline  Bank  agrees to make a portion of the credit  otherwise
available  to the  Company  under  the  Commitments  by making  swingline  loans
("Swingline  Loans")  in  Dollars to the  Company  during  the  period  from and
including the date hereof to but not including the Commitment  Termination Date;
provided that (a) the aggregate  principal amount of Swingline Loans outstanding
at any time shall not exceed the Swingline  Commitment  then in effect,  (b) the
aggregate  principal  amount of  Swingline  Loans plus the  aggregate  principal
amount of Syndicated  Loans made by the Swingline  Bank  outstanding at any time
shall not exceed the Swingline  Bank's  Commitment  then in effect,  and (c) the
Company shall not request,  and the Swingline Bank shall not make, any Swingline
Loan if, after giving effect to the making of such  Swingline  Loan,  the sum of
(i) the  aggregate  principal  amount of all Money Market  Loans,  plus (ii) the
aggregate  principal  amount of all  Syndicated  Loans plus (iii) the  aggregate
principal  amount of all  Swingline  Loans,  at any one time  outstanding  shall
exceed  the  aggregate  amount  of the  Commitments  at such time  except  that,
notwithstanding the foregoing, Money Market Loans outstanding at the time of any
termination or reduction of the Commitments  pursuant to 1.04 hereof need not be
prepaid on account of this proviso.  During such period, the Company may use the
Swingline Commitment by borrowing,  repaying and reborrowing,  all in accordance
with the terms and conditions hereof.

               1.04   Change of Commitments.

               (a) The Company  shall have the right at any time or from time to
time upon not less than three Business  Days' prior notice to Chase  (specifying
the date and the  aggregate  amount of each such  reduction or  termination)  to
terminate in whole, or to reduce in part, (i) the aggregate unused amount of the
Commitments  (and, in accordance with 1.02(g) hereof,  outstanding  Money Market
Loans shall not  constitute a utilization  of the  Commitments)  and/or (ii) the
aggregate unused amount of the Swingline Commitment.  Each such reduction of the
Commitments  shall  be in an  aggregate  amount  of at least  $25,000,000  and a
multiple of $1,000,000 and each such reduction of the Swingline Commitment shall
be in an aggregate  amount of at least  $5,000,000 and a multiple of $1,000,000.
Chase shall promptly notify each Bank of its proportionate share and the date of
each such reduction.

               (b) If either (i) during  any  period of 12  consecutive  months,
individuals  who were  directors of the Company at the  beginning of such period
cease to constitute a majority of the board of directors of the Company  (except
for changes due to the retirement or death of any such  individuals) or (ii) any
Person (or group of Persons which has an agreement, arrangement or understanding
for the purpose of acquiring the shares of the Company) shall acquire,  directly
or  indirectly,  beneficial  ownership  or  control of more than 35% of the then
outstanding  voting shares of the Company  (either such event being  hereinafter
referred to as a "Change in  Control"),  then on the date 20 Business Days after
the Company  shall have  notified the Agents of any such Change in Control,  the
Commitment  of each Bank and the Swingline  Commitment  shall be reduced to zero
unless,  prior to such 20th  Business  Day, all of the Banks shall have provided
written consent to maintain their respective Commitments. The Company agrees, as
soon as it shall  become  known to one of its  senior  officers,  to notify  the
Agents of any such Change in Control (and Chase shall promptly  notify the Banks
thereof), but the failure to so notify shall not preclude any Bank from reducing
the unused amount of such Bank's Commitment as aforesaid.

               (c)  Provided   that  no  Default  shall  have  occurred  and  be
continuing,  the Company may at any time  terminate  the  Commitment of any Bank
(and, in the case of the Swingline  Bank,  the  Swingline  Commitment)  that has
claimed any compensation  under 3.01(a) or 3.01(c) hereof at any time during the
preceding one-month period, in whole but not in part, by (i) giving Chase (which
shall promptly  notify such Bank) not less than five Business Days' prior notice
thereof,  which notice shall be  irrevocable  and effective only upon receipt by
Chase and shall specify the identity of such Bank and the effective date of such
termination,  and (ii)  paying to such  Bank (and  there  shall  become  due and
payable) on such date the outstanding principal amount of all Loans made by such
Bank,  interest  on such  principal  amount  accrued to such date,  any  amounts
payable to such Bank pursuant to Article III hereof in connection  therewith and
all other amounts owing to such Bank by the Company hereunder (provided that the
obligations  of the Company under Article III and 8.06 hereof to such Bank shall
survive such termination).

               (d)  Provided   that  no  Default  shall  have  occurred  and  be
continuing,  the Company  may at any time  replace any Bank that has claimed any
compensation  under  3.01(a) or 3.01(c)  hereof at any time during the preceding
one-month  period,  in whole but not in part, by giving Chase not less than five
Business Days' prior notice (and Chase shall promptly notify such Bank), that it
intends to replace such Bank with one or more banks (which may include any other
Bank under this  Agreement)  selected  by the Company  and  acceptable  to Chase
(which shall not unreasonably withhold its consent).  Any such replacement shall
be accomplished pursuant to documentation in form and substance  satisfactory to
Chase.  Upon the effective date of any replacement  under this 1.04(d) (and as a
condition  thereto),  the  Company  shall repay to the Bank being  replaced  the
principal of and interest on each Loan then  outstanding from such Bank together
with all other amounts owing to such Bank  hereunder and such  replacement  bank
(or banks,  as the case may be) shall  make a loan (or loans) to the  Company in
the  (aggregate)  principal  amount of each such Loan so repaid  which  loan (or
loans) shall be of the same type and have the same maturity and interest rate as
the respective Loan so repaid), whereupon such replacement bank (or banks) shall
become a  "Bank"  (or  "Banks")  for all  purposes  of this  Agreement  having a
Commitment (or Commitments in the aggregate)  (and, in the case of the Swingline
Bank,  the Swingline  Commitment)  in the amount of such Bank being replaced and
such loan (or loans) shall be deemed a Loan (or Loans) hereunder.

               (e) The Swingline  Bank may terminate in its sole  discretion the
Swingline  Commitment by giving the Company  written  notice thereof at least 30
days in advance of the date of such termination.

               (f) The Commitments  (and, in the case of the Swingline Bank, the
Swingline  Commitment) once terminated or reduced may not be reinstated,  except
that the  Swingline  Commitment  may be reinstated by agreement of the Swingline
Bank and the Company.

               1.05   Borrowings of Syndicated Loans.

               (a) Each  Syndicated  Loan  shall be  either a  Domestic  Loan or
Eurodollar  Loan.  Syndicated  Loans on the  occasion of any  borrowing  thereof
hereunder may be Domestic  Loans or Eurodollar  Loans (each a "type" of Loan) or
any  combination  thereof;  provided that there may be no more than ten Interest
Periods  for  Eurodollar  Loans  outstanding  at the same  time;  and  provided,
further,  that there may be no more than fifteen different  Interest Periods for
both Eurodollar  Loans and Money Market Loans  outstanding at the same time (for
which purpose  Interest Periods  described in different  lettered clauses of the
definition  of the term  "Interest  Period" in 2.03 hereof shall be deemed to be
different Interest Periods even if they are coterminous).

               (b) The Company shall give Chase (which shall promptly notify the
Banks)  notice of each  borrowing  hereunder of Syndicated  Loans,  which notice
shall be  irrevocable  and effective  only upon receipt by Chase,  shall specify
with respect to the  Syndicated  Loans to be borrowed (i) the  aggregate  amount
(which  shall be at least  $10,000,000  or a multiple  of  $1,000,000  in excess
thereof),  (ii) the type or types  of  Loans to be  borrowed  and the  aggregate
amount of each type, (iii) the date of such borrowing (which shall be a Business
Day),  and (iv) (in the case of  Eurodollar  Loans) the duration of the Interest
Period  therefor and shall be given not later than 11:00 a.m. New York time,  in
the case of Domestic  Loans,  on the same day as the date of such borrowing and,
in the  case of  Eurodollar  Loans,  on the day  which is not  less  than  three
Business Days prior to the date of such borrowing.

               (c) If at any time during which  Syndicated Loans are outstanding
under  this  Agreement  the  Company  shall  fail to give a  notice  of the type
referred to in 1.05(b) or otherwise to advise Chase in writing by 11:00 a.m. New
York  time on the day  which is not  less  than one  Business  Day  prior to the
maturity date of any such  Syndicated  Loans that it does not intend to reborrow
an amount at least equal to the aggregate  amount of such Syndicated  Loans (or,
if less,  the aggregate  amount of the  Commitments)  on such maturity date, the
Company shall be deemed to have given on such first  Business Day preceding such
maturity date a notice of borrowing  hereunder for Domestic  Loans to be made on
such date in an amount equal to the lesser of (i) the aggregate principal amount
of the  Syndicated  Loans which are maturing on such date or (ii) the  aggregate
amount of the Commitments to be outstanding on such date (after giving effect to
any reductions of the Commitments to be effected on such date),  and Chase shall
notify the Banks of such borrowing.

               (d) Subject to Chase's  receipt or deemed  receipt of a notice of
borrowing  as  provided in 1.05(b) or 1.05(c)  hereof and to Chase's  receipt of
notice  from the  Swingline  Bank of the  outstanding  principal  amount  of the
Swingline Loans as of the Swingline Business Day next preceding the date of such
notice of  borrowing,  Chase  shall give each Bank not less than three  Business
Days' prior  notice (with  respect to each  borrowing  of  Eurodollar  Loans) or
same-day notice by noon (with respect to each borrowing of Domestic  Loans),  as
the case may be, of each such borrowing  specifying (i) the aggregate  amount to
be borrowed, (ii) the date of borrowing,  (iii) the type or types of Loans to be
borrowed,  (iv) in the case of any Fixed Rate Loans to be borrowed, the duration
of the Interest  Period  therefor and (v) such Bank's pro rata portion  thereof.
Each  Bank's  (other  than  the  Swingline  Bank's)  pro  rata  portion  of each
Syndicated  Loan shall equal a  fraction,  the  numerator  of which shall be the
amount of such Bank's Commitment as of the date the notice of borrowing is given
for such Syndicated Loan and the denominator of which shall be (i) the aggregate
Commitments  of all Banks as of the date such notice of borrowing is given minus
(ii) the  outstanding  principal  amount of the  Swingline  Loans as of the next
preceding  Swingline Business Day. The Swingline Bank's pro rata portion of each
Syndicated Loan shall equal a fraction,  the numerator of which shall be (i) the
amount of the Swingline Bank's Commitment as of the date the notice of borrowing
is given  with  respect  to such  Syndicated  Loan  minus  (ii) the  outstanding
principal  amount  of the  Swingline  Loans as of the next  preceding  Swingline
Business Day and the denominator of which shall be (i) the aggregate  Commitment
of all Banks as of the date such  notice of  borrowing  is given  minus (ii) the
outstanding  principal  amount of the Swingline  Loans as of the next  preceding
Swingline  Business  Day. From and including the date that notice of a borrowing
of a Syndicated  Loan is given to but  excluding  the date that such  Syndicated
Loan is made, the principal  amount of such  Syndicated Loan required to be made
by the Swingline Bank shall be deemed to be  outstanding  for purposes of clause
(b) of 1.03.

               (e) Not later than 1:00 p.m. New York time on the date  specified
for each borrowing of Syndicated Loans, each Bank shall make available to Chase,
at account  number  323-506909  maintained  by The Chase  Manhattan  Bank at its
Principal  Office in  immediately  available  funds the amount of the Syndicated
Loan or  Syndicated  Loans to be made by it on such  date,  for  account  of the
Company.  The  amount  so  received  by Chase  shall,  subject  to the terms and
conditions of this  Agreement,  be made available to the Company on such date by
depositing  the same,  in  immediately  available  funds,  in an  account of the
Company  maintained  with  The  Chase  Manhattan  Bank at its  Principal  Office
designated  by the Company.  If any Bank shall (i) be obligated but fail to make
available  the  amount  of the  Syndicated  Loan to be  made  by it on the  date
specified for a borrowing hereunder and (ii) have any Syndicated Loans which are
maturing on such date, such maturing  Syndicated  Loans shall  automatically  be
extended  in an  amount  equal  to (but  not in  excess  of) the  amount  of the
Syndicated  Loan to be made and in the type and for the Interest  Period of such
Loan to be made (and such Loan which would  otherwise  mature on such date shall
not be considered to be past due hereunder).

               1.06 Several Commitments;  Remedies  Independent.  The failure of
any Bank to make any Loan to be made by it shall not  relieve  any other Bank of
its obligation to make its Loan on such date, but neither any other Bank nor any
Agent shall be responsible for such failure.  The amounts payable at any time by
the Company  hereunder  and under the Notes to each Bank shall be a separate and
independent  debt and each Bank shall be  entitled  to protect  and  enforce its
rights  arising  out of  this  Agreement  and the  Notes,  and it  shall  not be
necessary  for any other Bank or any Agent to consent  to, or to be joined as an
additional party in, any proceedings for such purposes.

               1.07 Availability of Funds. Unless Chase shall have been notified
by a Bank prior to the date of any borrowing  hereunder  that such Bank does not
intend to make  available  to Chase  such  Bank's  Loans to be made on such day,
Chase may  assume  that such Bank has made the  amount of such  Loans to be made
available to Chase on such date and Chase may in reliance  upon such  assumption
(but shall not be required  to) make  available  to the Company a  corresponding
amount.  If such proceeds are not in fact made  available to Chase by such Bank,
Chase shall be entitled to recover such corresponding amount on demand from such
Bank (or, if such Bank fails to pay such  corresponding  amount  forthwith  upon
such demand, from the Company) together with interest thereon in respect of each
day during the period commencing on the date such corresponding  amount was made
available to the Company and ending on (but  excluding)  the date Chase recovers
such  corresponding  amount at a rate per annum equal to the Federal  Funds Rate
for such day (or if such day is not a Business Day, the next preceding  Business
Day).

               1.08  Borrowings  of  Swingline  Loans.  (a) If on any  Swingline
Business  Day  prior  to  the   Commitment   Termination   Date  the   aggregate
disbursements  authorized  by the  Company and made from the  Swingline  Account
exceed the aggregate cash on hand and deposits received in the Swingline Account
on such  Swingline  Business Day, the Swingline Bank shall make a Swingline Loan
to the Company in an amount equal to such excess  (subject to the  provisions of
1.03 hereof),  unless otherwise  instructed by the Company.  Each Swingline Loan
shall be credited to the Swingline  Account as of the date made. The outstanding
Swingline  Loans  shall bear  interest at such rate per annum as the Company and
the Swingline Bank shall agree.  Accrued  interest on the outstanding  Swingline
Loans shall be paid on each date on which the  outstanding  Swingline  Loans are
paid in full and on the first Swingline  Business Day of each month if there are
any  outstanding  Swingline  Loans on the Swingline  Business Day next preceding
such day. The Company shall have the right to prepay the  outstanding  Swingline
Loans,  in whole or in part, at any time. All payments with respect to Swingline
Loans shall be made at the Lending Office of the Swingline Bank. Upon request of
the Company made on any Swingline  Business  Day, the Swingline  Bank shall give
Chase notice as promptly as practicable  but in any event by no later than 11:00
a.m.  New  York  time on the  next  Swingline  Business  Day of the  outstanding
principal  amount  of the  Swingline  Loans as of the close of  business  on the
Swingline  Business  Day next  preceding  the date that such  notice is given to
Chase.

               (b) In the case of any of the  Events  of  Default  specified  in
paragraphs  A through I of Article VII hereof,  (i) the  Swingline  Bank may, by
notice to the Company, terminate the Swingline Commitment hereunder and it shall
thereupon terminate,  and (ii) the Swingline Bank may, by notice to the Company,
declare  the  outstanding  Swingline  Loans  and  Swingline  Note and all  other
obligations of the Company thereunder to be due and payable,  whereupon the same
shall become forthwith due and payable,  without further  protest,  presentment,
notice or demand,  all of which are expressly waived by the Company.  In case of
any of the Events of  Default  specified  in  paragraph  J or K of  Article  VII
hereof,  without any notice to the Company or any act by the Swingline Bank, the
Swingline  Commitment  hereunder shall terminate  forthwith and the principal of
and interest  accrued on the outstanding  Swingline Loans and the Swingline Note
and all other obligations of the Company  thereunder shall become and be due and
payable.

               1.09  Lending  Offices.  The Loans of each type made by each Bank
shall be made and maintained at such Bank's Applicable  Lending Office for Loans
of such type.

               1.10   Notes.

               (a) The Syndicated  Loans made by each Bank shall be evidenced by
a single promissory note (a "Syndicated  Note") of the Company  substantially in
the form of Exhibit A-1 hereto,  dated the Effective Date,  payable to such Bank
in a principal  amount equal to the amount of its  Commitment  as  originally in
effect and otherwise duly completed.  The date, amount,  type, interest rate and
maturity date of each Syndicated Loan made by each Bank to the Company, and each
payment made on account of the principal thereof, shall be recorded by such Bank
on its books and,  prior to any  transfer  of such Note held by it,  endorsed by
such Bank on the schedule attached to such Note or any continuation thereof. The
failure  of any  Bank to make  any  notation  or  entry  or any  error in such a
notation or entry shall not,  however,  limit or otherwise affect any obligation
of the Company under this Agreement or the Notes.

               (b) The Money Market Loans made by any Bank shall be evidenced by
a single promissory note (a "Money Market Note") of the Company substantially in
the form of Exhibit A-2 hereto,  dated the date of the  delivery of such Note to
Chase under this  Agreement,  payable to such Bank and otherwise duly completed.
The date, amount, interest rate and maturity date of each Money Market Loan made
by each Bank to the Company,  and each payment made on account of the  principal
thereof,  shall be recorded by such Bank on its books and, prior to any transfer
of such Note held by it, endorsed by such Bank on the schedule  attached to such
Note or any continuation  thereof.  The failure of any Bank to make any notation
or entry or any error in such a notation or entry shall not,  however,  limit or
otherwise  affect any  obligation  of the Company  under this  Agreement  or the
Notes.

               (c) The Loans made by the Swingline  Bank shall be evidenced by a
single promissory note (a "Swingline Note") of the Company  substantially in the
form of Exhibit A-3 hereto,  dated the Effective Date,  payable to the Swingline
Bank in a principal  amount equal to the amount of the  Swingline  Commitment as
originally in effect and  otherwise  duly  completed.  The date,  amount,  type,
interest  rate and maturity  date of each  Swingline  Loan made by the Swingline
Bank to the Company,  and each payment made on account of the principal thereof,
shall be recorded by the Swingline  Bank on its books and, prior to any transfer
of such Note held by it, endorsed by the Swingline Bank on the schedule attached
to such Note or any continuation  thereof.  The failure of the Swingline Bank to
make any  notation  or entry or any error in such a notation or entry shall not,
however,  limit or otherwise  affect any  obligation  of the Company  under this
Agreement or the Notes.

               II.    PAYMENTS, INTEREST AND CERTAIN FEES

               2.01 Repayment of Loans.  The Company  hereby  promises to pay to
Chase for account of each Bank,  the principal  amount of each Loan made by such
Bank (except for the Swingline  Loan, as to which  payments shall be made to the
Swingline Bank pursuant to 1.08), and such Loan shall mature, on the last day of
the Interest Period therefor.

               2.02 Interest.  The Company  hereby  promises to pay to Chase for
account of each Bank,  interest on the unpaid principal amount of each Loan made
by such Bank (except for the Swingline Loans, as to which payments shall be made
to the  Swingline  Bank  pursuant to 1.08) for the period from and including the
date of such Loan to but  excluding the date such Loan shall be paid in full, at
the following rates per annum:

               (a) if such Loan is a Domestic  Loan, the Base Rate (as in effect
        from time to time) plus the Applicable Margin (if any);

               (b) if such Loan is a  Eurodollar  Loan,  the Fixed Rate for such
        Loan for the Interest  Period for such Loan plus the  Applicable  Margin
        (as in effect  from time to time  during  the  Interest  Period for such
        Loan); and

               (c) if such Loan is a Set Rate Loan,  the Money  Market  Rate for
        such Loan for the  Interest  Period  therefor  quoted by the Bank making
        such Loan and accepted by the Company in accordance with 1.02 hereof.

Notwithstanding  the foregoing,  the Company hereby promises to pay to Chase for
account  of each  Bank,  interest  at the  applicable  Post-Default  Rate on any
principal of any Loan made by such Bank,  and on any other amount payable by the
Company hereunder or under the Notes held by such Bank to or for account of such
Bank, which shall not be paid in full when due (whether at stated  maturity,  by
acceleration  or  otherwise),  for the period  from and  including  the due date
thereof to but excluding the date the same is paid in full.  Accrued interest on
each Loan shall be payable on each Interest  Payment Date for such Loan,  except
that  interest  payable at the  Post-Default  Rate shall be payable from time to
time on demand and  interest on any  Eurodollar  Loan that is  converted  into a
Domestic  Loan  (pursuant  to 3.04  hereof)  shall  be  payable  on the  date of
conversion   (but  only  to  the  extent  so  converted).   Promptly  after  the
determination  of any interest rate  provided for herein or any change  therein,
Chase shall give notice thereof to the Banks,  to which such interest is payable
and to the Company.

               2.03   Interest Periods.  As used in this Agreement, "Interest
        Period" shall mean:

               (a) With respect to any Eurodollar Loan, the period commencing on
        the date such  Eurodollar  Loan is made and  ending  on the  numerically
        corresponding  day in the first,  second,  third or sixth calendar month
        thereafter,  as the Company  may select as  provided in 1.05(b)  hereof,
        except that each  Interest  Period which  commences on the last Business
        Day of a calendar month (or on any day for which there is no numerically
        corresponding  day in the appropriate  subsequent  calendar month) shall
        end on the last  Business  Day of the  appropriate  subsequent  calendar
        month;

               (b) With respect to any Domestic Loan,  the period  commencing on
        the date such  Domestic Loan is made and ending on the date such Loan is
        repaid;

               (c) With respect to any Set Rate Loan,  the period  commencing on
        the date such Set Rate Loan is made and ending on any Business Day up to
        180 days  thereafter,  as the  Company may select as provided in 1.02(b)
        hereof; and

               (d) With respect to a Swingline  Loan,  the period  commencing on
        the  Swingline  Business  Day on which such  Swingline  Loan is made and
        ending on the date such Swingline Loan is repaid.

Notwithstanding  the foregoing:  (i) no Interest  Period may commence before and
end after the Commitment Termination Date; (ii) each Interest Period which would
otherwise  end on a day  which  is not a  Business  Day  shall  end on the  next
succeeding  Business Day (or, in the case of an Interest  Period for  Eurodollar
Loans,  if such  next  succeeding  Business  Day  falls in the  next  succeeding
calendar month, on the next preceding  Business Day); and (iii)  notwithstanding
clause (i) above,  no  Interest  Period for any  Eurodollar  Loans  shall have a
duration of less than one month and, if the Interest  Period for any  Eurodollar
Loans would  otherwise  be a shorter  period,  such Loans shall not be available
hereunder.

               2.04  Prepayments.  (a) The Company shall have the right,  at any
time or from  time to  time,  to  prepay  Syndicated  Loans in whole or in part,
provided  that (i) the Company  shall give Chase notice of each such  prepayment
not less than three Business Days' prior to the date of such  prepayment  (which
notice shall be effective upon receipt),  (ii) each partial  prepayment shall be
in an  aggregate  principal  amount which is at least  $1,000,000  or a multiple
thereof,  (iii)  interest on the principal  prepaid,  accrued to the  prepayment
date, shall be paid on the prepayment date and (iv) in the case of prepayment of
a Eurodollar Loan other than on the last day of the Interest  Period  applicable
thereto,  the Company shall pay  compensation,  if any, due in  accordance  with
3.05(a) with respect thereto. The Company may not prepay any Money Market Loans.
Notwithstanding  the  foregoing,  upon not less than four  Business  Days' prior
notice (which shall be effective  upon  receipt) the Company may  simultaneously
prepay  all  Loans  then  outstanding  hereunder  and  terminate  in  whole  the
Commitments  (in which case  interest on the principal  prepaid,  accrued to the
prepayment  date,  together with all other amounts  owing  hereunder,  including
without limitation under 3.05, shall be paid on such prepayment date).

               (b) If, after giving  effect to any  termination  or reduction of
the  Commitment of any Bank pursuant to 1.04(a) or (b) hereof,  the  outstanding
aggregate principal amount of the Syndicated Loans held by such Bank exceeds the
amount  of  such  Bank's  Commitment,  the  Company  shall  prepay  or pay  such
Syndicated  Loans (of a type to be  designated by the Company by notice to Chase
not less  than  four  Business  Days  prior to the date of such  termination  or
reduction  and,  failing  such notice,  such  prepayment  or repayment  shall be
applied,  first,  to the  outstanding  Domestic  Loans and,  next, to the extent
necessary,  to the  outstanding  Fixed Rate Loans with the fewest number of days
remaining  in the Interest  Periods  therefor on such  termination  or reduction
date) in an  aggregate  principal  amount equal to such  excess,  together  with
interest thereon accrued to the date of such prepayment or payment and any other
amounts payable pursuant to 3.05 hereof in connection therewith.

               2.05   Payments, etc.

               (a) Except to the extent otherwise  provided herein, all payments
of  principal,  interest and other  amounts to be made by the Company under this
Agreement  and the Notes  shall be made in  Dollars,  in  immediately  available
funds,  without  deduction,  set-off or counterclaim,  to Chase at its Principal
Office,  not later  than  11:00  a.m.  New York  time on the date on which  such
payment shall become due; provided that, if a new Loan is to be made by any Bank
on a date the Company is to repay any principal of an  outstanding  Loan of such
Bank,  such Bank shall apply the proceeds of such new Loan to the payment of the
principal  to be repaid  and only an  amount  equal to the  difference  (if any)
between the  principal  to be borrowed  and the  principal to be repaid shall be
made available by such Bank to Chase as provided in 1.02 or 1.05 hereof (if such
principal  to be borrowed  exceeds  such  principal to be repaid) or paid by the
Company to Chase  pursuant to this 2.05 (if such  principal to be repaid exceeds
such principal to be borrowed).

               (b) Each  payment  received by Chase under this  Agreement or any
Note for account of a Bank shall be paid promptly to such Bank,  in  immediately
available  funds, for account of such Bank's  Applicable  Lending Office for the
Loan in respect of which such payment is made.

               (c) If the due date of any payment  under this  Agreement  or any
Note would  otherwise fall on a day which is not a Business Day (or, in the case
of any  Swingline  Loan or Swingline  Note, a Swingline  Business Day) such date
shall be extended to the next  succeeding  Business  Day (or, in the case of any
Swingline Loan or Swingline  Note, the next succeeding  Swingline  Business Day)
and  interest  shall be payable for any  principal so extended for the period of
such extension.

               2.06   Pro Rata Treatment; Sharing.

               (a)  Except to the extent  otherwise  provided  herein:  (i) each
borrowing from the Banks under 1.01 hereof shall be made from the Banks and each
termination  or  reduction  of the amount of the  Commitments  under 1.04 hereof
shall be applied to the  Commitments  of the Banks,  pro rata  according  to the
amounts of their  respective  Commitments;  (ii) each  payment of  principal  of
Syndicated  Loans by the Company shall be made for account of the Banks pro rata
in accordance  with the respective  unpaid  principal  amounts of the Syndicated
Loans held by the Banks;  and (iii) each payment of interest on Syndicated Loans
by the  Company  shall be made for  account of the Banks pro rata in  accordance
with the  amounts  of  interest  on  Syndicated  Loans  due and  payable  to the
respective Banks.

               (b) If any Bank  shall  obtain  payment  of any  principal  of or
interest on any Loan made by it to the Company under this Agreement  through the
exercise of any right of set-off, banker's lien or counterclaim or similar right
or otherwise,  and, as a result of such payment, such Bank shall have received a
greater  percentage of the principal or interest then due to such Bank hereunder
than the percentage received by any other Banks, it shall promptly purchase from
such other Banks  participations  in (or, if and to the extent specified by such
Bank,  direct  interests  in) the Loans made by such other Banks (or in interest
due  thereon,  as the  case  may  be) in  such  amounts,  and  make  such  other
adjustments  from  time to time as shall be  equitable,  to the end that all the
Banks shall share the benefit of such excess  payment (net of any expenses which
may be incurred by such Bank in obtaining or preserving such excess payment) pro
rata in  accordance  with the unpaid  principal of and/or  interest on the Loans
held by each of the Banks before giving effect to such payment.  To such end all
the Banks shall make appropriate  adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.

               (c)  The   Company   agrees  that  any  Bank  so   purchasing   a
participation  (or  direct  interest)  in the Loans  made by other  Banks (or in
interest  due  thereon,  as the case may be) may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such  Bank were a direct  holder  of Loans in the  amount of such
participation.

               (d) Nothing  contained  herein shall require any Bank to exercise
any such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Company.

               (e) If,  under any  applicable  bankruptcy,  insolvency  or other
similar  law,  any Bank  receives a secured  claim in lieu of a set-off to which
this 2.06  applies,  such Bank shall,  to the extent  practicable,  exercise its
rights in respect of such secured claim in a manner  consistent  with the rights
of the Banks  entitled  under this 2.06 to share in the benefits of any recovery
on such secured claim.

               (f)  Notwithstanding  the  foregoing,  this  2.06  shall  not  be
applicable to the Swingline Bank with respect to Swingline Loans.

               2.07 Computations.  Interest on Money Market Loans and Eurodollar
Loans  shall be  computed  on the  basis of a year of 360 days and  actual  days
elapsed  (including  the first day but excluding the last day)  occurring in the
period for which payable,  and interest on Domestic  Loans,  Swingline Loans and
facility  fees shall be computed  on the basis of a year of 365 or 366 days,  as
the case may be, and actual days elapsed  (including the first day but excluding
the last day) occurring in the period for which payable.

               2.08  Facility Fee. The Company shall pay to Chase for account of
each Bank a facility fee on such Bank's Commitment (whether used or not) for the
period commencing on the Effective Date and ending on the Commitment Termination
Date (or such earlier date on which such Bank's Commitment shall have terminated
in full  pursuant  to 1.04  hereof) at a rate per annum for each day during such
period equal to the Applicable  Facility Fee Rate in effect on such day. Accrued
facility  fees shall be payable  quarterly  on the last  Business  Day in March,
June, September and December in each year,  commencing the first such date after
the Effective Date and on the date the Commitments are terminated in full.

               III.  PROVISIONS  RELATING  TO FIXED RATE  LOANS.  The  following
provisions shall apply to all Fixed Rate Loans:

               3.01   Additional Costs.

               (a) The Company shall pay directly to each Bank from time to time
on request  pursuant to paragraph (d) of this 3.01 such amounts as such Bank may
determine  to be  necessary  to  compensate  it for any  costs  which  such Bank
determines are attributable to its making or maintaining of any Fixed Rate Loans
or its  obligation to make any Fixed Rate Loans  hereunder,  or any reduction in
any amount  receivable by such Bank hereunder in respect of any of such Loans or
such obligation  (such  increases in costs and reductions in amounts  receivable
being herein called  "Additional  Costs"),  resulting from any Regulatory Change
which:

                     (i) changes the basis of taxation of any amounts payable to
        such Bank  under this  Agreement  or its Notes in respect of any of such
        Loans (other than taxes imposed on or measured by the overall net income
        of such Bank or of its  Applicable  Lending Office for any of such Loans
        by the  jurisdiction in which such Bank has its principal office or such
        Applicable Lending Office); or

                    (ii)  imposes or modifies any  reserve,  special  deposit or
        similar  requirements (other than in the case of any Bank for any period
        as to which the Company is required  to pay any amount  under  paragraph
        (e)  below,  the  reserves  against  "Eurocurrency   liabilities"  under
        Regulation D therein  referred to) relating to any  extensions of credit
        or other assets of, or any deposits with or other  liabilities  of, such
        Bank  (including  any of such Loans or any  deposits  referred to in the
        definition of "Fixed Base Rate" in Schedule 1 hereof), or any commitment
        of such Bank (including the Commitment of such Bank hereunder); or

                   (iii) imposes any other condition affecting this Agreement or
        its Notes (or any of such  extensions of credit or  liabilities)  or its
        Commitment.

If any Bank  requests  compensation  from the Company  under this  3.01(a),  the
Company  may,  by  notice  to such  Bank  (with a copy to  Chase),  suspend  the
obligation  of such Bank to make  additional  Loans of the type with  respect to
which such  compensation  is  requested  (in which case the  provisions  of 3.04
hereof shall be applicable)  until either (A) the Regulatory  Change giving rise
to such  request  ceases to be in effect  or (B) such Bank  gives  notice to the
Company  that it will no longer  require  the  Company to pay  Additional  Costs
arising from such Regulatory Change.

               (b) Without  limiting the effect of the  provisions  of paragraph
(a) of this 3.01, in the event that,  by reason of any  Regulatory  Change,  any
Bank either (i) incurs Additional Costs based on or measured by the excess above
a specified  level of the amount of a category of deposits or other  liabilities
of such Bank which includes  deposits by reference to which the interest rate on
Eurodollar  Loans is determined  as provided in this  Agreement or a category of
extensions  of credit or other  assets of such Bank  which  includes  Eurodollar
Loans or (ii) becomes  subject to  restrictions on the amount of such a category
of  liabilities  or assets  which it may hold,  then,  if such Bank so elects by
notice to the Company  (with a copy to Chase),  the  obligation  of such Bank to
make  additional  Loans of such type  hereunder  shall be  suspended  until such
Regulatory  Change ceases to be in effect (in which case the  provisions of 3.04
hereof shall be applicable).

               (c) Without  limiting the effect of the  foregoing  provisions of
this 3.01 (but without duplication), the Company shall pay directly to each Bank
from time to time on request pursuant to paragraph (d) of this 3.01 such amounts
as such Bank may determine to be necessary to compensate such Bank for any costs
which it determines  are  attributable  to the  maintenance by such Bank (or any
Applicable   Lending  Office),   pursuant  to  any  law  or  regulation  or  any
interpretation, directive or request (whether or not having the force of law) of
any court or  governmental  or monetary  authority (i) following any  Regulatory
Change or (ii)  implementing  any  risk-based  capital  guideline or requirement
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) heretofore or hereafter issued by any government or
governmental  or supervisory  authority  implementing  at the national level the
Basle  Accord  (including,  without  limitation,  the Final Risk  Based  Capital
Guidelines of the Board of Governors of the Federal  Reserve System (12 CFR Part
208, Appendix A; 12 CFR Part 225,  Appendix A) and the Final Risk-Based  Capital
Guidelines  of the Office of the  Comptroller  of the  Currency  (12 CFR Part 3,
Appendix  A)),  of  capital  in  respect  of  its   Commitment  or  Loans  (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Bank (or any  Applicable  Lending
Office) to a level below that which such Bank (or any Applicable Lending Office)
could have achieved but for such law, regulation,  interpretation,  directive or
request). For purposes of this 3.01(c),  "Basle Accord" shall mean the proposals
for risk-based  capital  framework  described by the Basle  Committee on Banking
Regulations  and  Supervisory  Practices  in its paper  entitled  "International
Convergence of Capital  Measurement and Capital  Standards"  dated July 1988, as
amended,  modified  and  supplemented  and in  effect  from  time to time or any
replacement thereof.

               (d) Each Bank will  notify  the  Company  of any event  occurring
after the date of this  Agreement  that will entitle  such Bank to  compensation
under paragraph (a) or (c) of this 3.01 as promptly as  practicable,  but in any
event  within  90 days,  after  such  Bank  obtains  actual  knowledge  thereof;
provided,  however,  that if any Bank fails to give such  notice  within 90 days
after it  obtains  actual  knowledge  of such an event,  such Bank  shall,  with
respect to  compensation  payable  pursuant to this 3.01 in respect of any costs
resulting from such event, only be entitled to payment under this 3.01 for costs
incurred  from and after the date 90 days  prior to the date that such Bank does
give such  notice;  and  provided,  further,  that each  Bank will  designate  a
different  Applicable Lending Office for the Loans of such Bank affected by such
event or by the matters requiring compensation pursuant to paragraph (e) of this
3.01, and take other  measures in its sole  discretion,  if such  designation or
other  measures  will  avoid  the need  for,  or  reduce  the  amount  of,  such
compensation  and will  not,  in the sole  opinion  of such  Bank,  result  in a
material  cost to, or be otherwise  disadvantageous  to, such Bank,  except that
such Bank shall have no  obligation to designate an  Applicable  Lending  Office
located in the United States of America. Each Bank will furnish to the Company a
certificate  setting forth the basis and amount of each request by such Bank for
compensation  under  paragraph  (a) or  (c) of  this  3.01.  Determinations  and
allocations  by any  Bank  for  purposes  of  this  3.01  of the  effect  of any
Regulatory  Change  pursuant  to  paragraph  (a) or (b) of this 3.01,  or of the
effect of capital  maintained  pursuant to  paragraph  (c) of this 3.01,  on its
costs or rate of return of maintaining Loans or its obligation to make Loans, or
on amounts  receivable by it in respect of Loans, and of the amounts required to
compensate  such Bank under this 3.01,  shall be conclusive,  provided that such
determinations and allocations are made on a reasonable basis.

               (e) Without  limiting  the effect of the  foregoing  (but without
duplication),  the  Company  shall  pay to  each  Bank on the  last  day of each
Interest  Period  so  long  as  such  Bank  is  maintaining   reserves   against
"Eurocurrency  liabilities"  under  Regulation D (or,  unless the  provisions of
paragraph  (b) above are  applicable,  so long as such Bank is, by reason of any
Regulatory   Change,   maintaining   reserves  against  any  other  category  of
liabilities  which includes  deposits by reference to which the interest rate on
Eurodollar  Loans is  determined  as provided in this  Agreement  or against any
category of extensions of credit or other assets of such Bank which includes any
Eurodollar  Loans) an additional  amount  (determined by such Bank and notified,
not less than five  Business  Days prior to the end of the  applicable  Interest
Period,  to the Company through Chase) equal to the product of the following for
each Eurodollar Loan made by such Bank for each day during such Interest Period:

                    (i) the principal amount of such Eurodollar Loan
                     outstanding on such day; and

                    (ii) the  remainder of (x) a fraction the numerator of which
        is the annual rate (expressed as a decimal) at which interest accrues on
        such  Eurodollar  Loan for such  Interest  Period  as  provided  in this
        Agreement  (less the Applicable  Margin) and the denominator of which is
        one minus the  effective  annual rate  (expressed as a decimal) at which
        such reserve requirements are imposed on such Bank on such day minus (y)
        such numerator; and

                   (iii)     1/360.

               3.02  Limitation  on  Types  of  Loans.  Anything  herein  to the
contrary notwithstanding, if, on or prior to the determination of any Fixed Base
Rate for any Interest Period in accordance with the terms hereof:

               (a) Chase determines,  which  determination  shall be conclusive,
        that quotations of interest rates for the relevant  deposits referred to
        in the  definition  of "Fixed  Base  Rate" in  Schedule 1 hereof are not
        being  provided in the relevant  amounts or for the relevant  maturities
        for purposes of determining rates of interest for any type of Fixed Rate
        Loans as provided herein; or

               (b) the Majority Banks determine,  which  determination  shall be
        conclusive,  and notify (or notifies, as the case may be) Chase that the
        relevant rates of interest  referred to in the definition of "Fixed Base
        Rate" in  Schedule 1 hereof upon the basis of which the rate of interest
        for  Eurodollar  Loans for such Interest  Period is to be determined are
        not  likely  adequately  to  cover  the cost to such  Banks  (or to such
        quoting Bank) of making or maintaining such type of Loans;

then Chase shall give the Company and each Bank prompt  notice  thereof,  and so
long as such condition remains in effect, the Banks (or such quoting Bank) shall
be under no obligation to make additional Loans of such type.

               3.03  Illegality.  Notwithstanding  any other  provision  of this
Agreement,  in the event that it becomes unlawful for any Bank or its Applicable
Lending  Office to honor its  obligation  to make or maintain  Eurodollar  Loans
hereunder, then such Bank shall promptly notify the Company thereof (with a copy
to Chase) and such Bank's obligation to make Eurodollar Loans shall be suspended
until such time as such Bank may again make and  maintain  Eurodollar  Loans (in
which case the provisions of 3.04 hereof shall be applicable).

               3.04 Treatment of Affected  Loans.  If the obligation of any Bank
to make a  particular  type of Fixed Rate Loans shall be  suspended  pursuant to
3.01 or 3.03 hereof (Loans of such type being herein called "Affected Loans" and
such type being herein called the "Affected Type"),  all Loans (other than Money
Market  Loans)  which  would  otherwise  be made by such  Bank as  Loans  of the
Affected Type shall be made instead as Domestic  Loans and, if an event referred
to in 3.01(b) or 3.03 hereof has occurred and such Bank so requests by notice to
the  Company  with a copy  to  Chase,  all  Affected  Loans  of such  Bank  then
outstanding  shall be  automatically  converted  into Domestic Loans on the date
specified by such Bank in such notice and, to the extent that Affected Loans are
so made (or  converted),  all  payments of  principal  which would  otherwise be
applied to such Bank's Affected Loans shall be applied instead to such Loans.

               3.05 Compensation.  The Company shall pay to Chase for account of
each Bank,  upon the request of such Bank through Chase,  such amount or amounts
(the basis for which shall be set forth in reasonable detail in such request) as
shall be sufficient  (in the  reasonable  opinion of such Bank) to compensate it
for any loss, cost or expense which such Bank determines is attributable to:

               (a) any payment or  conversion of a Fixed Rate Loan or a Set Rate
        Loan made by such Bank for any reason  (including,  without  limitation,
        the  acceleration of the Loans pursuant to Article VII hereof) on a date
        other than the last day of the Interest Period for such Loan; or

               (b) any failure by the Company for any reason (including, without
        limitation,  the failure of any of the conditions precedent specified in
        Article IV hereof to be  satisfied,  but  excluding  the failure of such
        Bank to make a Loan when so obligated  hereunder) to borrow a Fixed Rate
        Loan or a Set Rate Loan (with  respect to which,  in the case of a Money
        Market Loan,  the Company has  accepted a Money Market  Quote) from such
        Bank on the date for such borrowing  specified in the relevant notice of
        borrowing given pursuant to 1.05 or 1.02 hereof.

Without limiting the effect of the preceding  sentence,  such compensation shall
include an amount  equal to the  excess,  if any,  of (i) the amount of interest
which otherwise would have accrued on the principal  amount so paid or converted
or not  borrowed  for the period from the date of such  payment,  conversion  or
failure to borrow to the last day of the  Interest  Period for such Loan (or, in
the case of a failure to borrow,  the Interest  Period for such Loan which would
have commenced on the date specified for such  borrowing) at the applicable rate
of interest for such Loan  provided for herein minus the  Applicable  Margin for
such Loan over (ii) the  interest  component  of the amount such Bank would have
bid in the London  interbank  market (if such Loan is a Eurodollar  Loan) or the
United States  secondary  certificate  of deposit  market (if such Loan is a Set
Rate Loan) for Dollar  deposits of leading  banks in amounts  comparable to such
principal  amount and with  maturities  comparable to such period (as reasonably
determined by such Bank).

               3.06 Survival.  The obligations of the Company under this Article
III shall survive the repayment of the Loans and the cancellation of the Notes.

               IV.    CONDITIONS

               4.01   Conditions  to   Effectiveness.   The   Agreement   herein
contemplated  shall become  effective on April 15, 1999 (the "Effective  Date"),
provided that on the Effective  Date, the following  conditions  shall have been
satisfied:

               (a) Chase has received each of the following  documents,  in form
        and substance satisfactory to Chase:

                   (i)     one or more counterparts of this Agreement executed
        by each of the parties hereto;

                   (ii) certified  copies of all corporate  action taken by the
        Company to authorize the  execution  and delivery of this  Agreement and
        the Notes and the borrowings hereunder;

                   (iii)  a  certificate  of a duly  authorized  officer  of the
        Company as to the incumbency, and setting forth a specimen signature, of
        each of the persons (a) who has signed this  Agreement  on behalf of the
        Company,  (b) who will sign the Notes on behalf of the Company,  and (c)
        who will,  until  replaced by other  persons  duly  authorized  for that
        purpose,  act as the  representatives  of the Company for the purpose of
        signing documents in connection with this Agreement and the transactions
        contemplated hereby;

                    (iv) the Syndicated  Note and the Money Market Note for each
        Bank and the Swingline  Note for the Swingline  Bank, all as provided in
        1.10 hereof, in each case duly completed and executed by the Company;

                     (v) an opinion of Hughes  Hubbard & Reed LLP,  counsel  for
        the  Company,  substantially  in the form of  Exhibit  B  hereto,  which
        (except as to matters of New York or Federal law) may rely as to certain
        matters  upon an opinion of the  Executive  Vice  President  and General
        Counsel  of the  Company  substantially  in the  form  attached  to said
        Exhibit B;

                    (vi) an  opinion  of  Simpson  Thacher &  Bartlett,  special
        counsel  to the  Banks  and the  Agents,  substantially  in the  form of
        Exhibit C hereto; and

                   (vii)   such   other   statements,   documents,   reports  or
        certificates as any Bank or Agent may reasonably request.

               (b) The Banks and the  Administrative  Agent shall have  received
        all fees required to be paid  relating to this  Agreement in the amounts
        and on the dates previously  agreed to in writing by the Company and the
        Administrative  Agent  and all  expenses  for which  invoices  have been
        presented  (including the reasonable fees and expenses of legal counsel)
        on or before the Effective Date.

               4.02 Conditions Precedent to Loans. The obligation of any Bank to
make any Loan hereunder (including any Money Market Loan and such Bank's initial
Syndicated  Loan on or after  the  Effective  Date) is  subject  to the  further
conditions  precedent that, both  immediately  prior to such Loan and also after
giving effect  thereto:  (a) either (i) if such borrowing is a Money Market Loan
or will increase the outstanding  aggregate  principal  amount of the Syndicated
Loans,  no Default  shall have occurred and be continuing or (ii) in the case of
any other borrowing,  no Event of Default shall have occurred and be continuing;
and (b) the  representations  and  warranties  made by the Company in Article VI
(other than, if such  borrowing is not a Money Market Loan and will not increase
the outstanding  aggregate  principal  amount of the Syndicated  Loans, the last
sentence of 6.03,  6.04,  6.05, 6.07, 6.09 and 6.11 hereof) shall be true on and
as of the date of the notice or deemed notice of borrowing for such Loans and on
the date of the  making of such  Loans with the same force and effect as if made
on and as of each such date.  The  obligation  of any Bank to make a  Eurodollar
Loan  hereunder  is  subject  to the  further  condition  precedent  that,  both
immediately prior to such Loan and also after giving effect thereto,  no Default
shall have occurred and be continuing. Each notice or deemed notice of borrowing
by the Company  hereunder shall constitute a certification by the Company to the
effect set forth in the two preceding  sentences to the extent applicable to the
borrowing  that is the  subject  of such  notice  (both  as of the  date of such
borrowing  notice  and,  unless the  Company  otherwise  notifies  Chase in such
borrowing notice or prior to the date of such borrowing,  as of the date of such
borrowing).

     V.   COVENANTS.  So  long as any  Loan or any  other  amount  owing  by the
          Company  to any Agent or Bank  hereunder  remains  outstanding  or any
          Bank's Commitment remains in effect:

               5.01  Financial  Statements.  The Company  shall  deliver to each
          Bank:

               (a) As soon as  available  and in any event  within 60 days after
        the end of each of the first three quarterly  accounting periods in each
        fiscal year, the 10-Q report of the Company for such period;

               (b) As soon as  available  and in any event within 120 days after
        the end of each  fiscal  year,  the 10-K  report of the Company for such
        fiscal  year,  accompanied  by  (A)  an  opinion  as  to  the  financial
        statements contained in such 10-K report of independent certified public
        accountants of recognized national standing, and (B) a statement by said
        accountants  that in the  course  of their  regular  examination  of the
        Company and its Consolidated  Subsidiaries for purposes of their opinion
        they  obtained  no  knowledge,  except as  specifically  stated,  of the
        occurrence and continuance of any Default;

               (c) With each report delivered under 5.01(a) or (b) hereof, (A) a
        statement  signed by an  Appropriate  Officer of the Company  certifying
        and, where calculations are necessary,  demonstrating  compliance by the
        Company with the  provisions  of 5.09 hereof,  and (B) a statement of an
        Appropriate  Officer of the Company that such officer has no  knowledge,
        except as specifically  stated, of the occurrence and continuance of any
        Default.

               (d) Promptly after their becoming available:

                     (i) Copies of all financial  statements,  reports and proxy
        statements  which  the  Company  shall  have  sent  to its  stockholders
        generally.

                    (ii)  Copies of all regular and  periodic  reports,  if any,
        which the Company or any Restricted Subsidiary shall have filed with the
        Securities  and  Exchange   Commission,   or  any  governmental   agency
        substituted therefor, or with any national securities exchange.

               (e) From time to time, with reasonable  promptness,  such further
        information  regarding the business,  affairs and financial  position of
        the Company and each Subsidiary as any Bank may reasonably request.

               5.02  Access to Books and  Inspection.  The Company  shall,  upon
reasonable  request by any Bank, give any representative of such Bank access, at
the Company's principal office, during normal business hours to, and permit such
representative  to  examine,  copy or make  excerpts  from,  any and all  books,
records and documents in the  possession of the Company  relating to its affairs
and the affairs of its  Subsidiaries,  excluding,  however,  any  privileged and
confidential  communications  or  other  materials,  and to  inspect  any of the
properties of the Company or such  Subsidiaries;  provided that all  information
(other than publicly available information) delivered by the Company to any Bank
pursuant  to this 5.02 is  strictly  confidential,  and each Bank agrees that it
shall (or shall cause the persons  referred to in clause (ii) below to) maintain
the  confidentiality of any such information,  subject to: (i) the obligation to
disclose such  information  pursuant to subpoena or other legal  process,  or to
regulatory  or  examining  authorities  or other  governmental  agencies  having
jurisdiction, or otherwise as may be required by law; (ii) the right to disclose
such information to the independent auditors and counsel of such Bank, or to the
Agents or any other Bank;  and (iii) the right to disclose such  information  to
assignees and participants (including prospective assignees and participants) as
provided in 8.05 hereof.

               5.03  Litigation.  Notwithstanding  any other  provision  of this
Agreement, the Company shall, promptly after its becoming available,  furnish to
each Bank a copy of any report  filed by the  Company  with the  Securities  and
Exchange Commission which contains a statement,  description or disclosure as to
any  litigation or proceeding  before any  governmental  or regulatory  agencies
affecting the Company or any of its Subsidiaries.

               5.04  Maintenance  of  Existence.  The Company will  preserve and
maintain,  and  cause  each  of its  Restricted  Subsidiaries  to  preserve  and
maintain, its corporate existence, provided that the foregoing shall not prevent
a merger  or  consolidation,  or sale or other  disposition  of  assets,  of the
Company  or any  Restricted  Subsidiary  unless  otherwise  prohibited  by  this
Agreement.

               5.05   Merger; Sale of Assets.  The Company shall not:

               (a) merge into or  consolidate  with any  corporation  if (i) the
        Company  is not the  surviving  corporation,  (ii)  the  Company  is the
        surviving  corporation  and a majority of the board of  directors of the
        Company for a period of three  months after the  effective  date of such
        merger does not consist of individuals who were directors of the Company
        12 months  prior to such  effective  date (except for changes due to the
        retirement  or death  of any such  individuals)  or (iii)  after  giving
        effect to such merger or  consolidation,  a Default has  occurred and is
        continuing; or

               (b) permit any Restricted  Subsidiary to be a party to any merger
        or consolidation or to transfer all or substantially  all of its assets,
        except  that any such  Restricted  Subsidiary  may merge or  consolidate
        with, or transfer all or substantially all of its assets to, the Company
        or any  of the  Company's  other  Subsidiaries  provided  that  (i)  the
        surviving  entity of such merger or  consolidation  or the transferee of
        such assets (if it is not the Company or another Restricted  Subsidiary)
        shall thereafter be treated as a Restricted  Subsidiary for all purposes
        of  this  Agreement  and  (ii)  after  giving  effect  to  such  merger,
        consolidation or transfer of assets,  no Default shall have occurred and
        be continuing; or

               (c)  sell,  assign,  transfer  or  otherwise  dispose  of  all or
        substantially  all of its assets or, in any case,  any stock of or other
        equity interest in any of the Restricted  Subsidiaries,  except that (i)
        stock of or other equity interest in any such Restricted  Subsidiary may
        be  sold,  assigned  or  transferred  by  the  Company  to  any  of  its
        wholly-owned Subsidiaries provided that thereafter such Subsidiary shall
        be treated as a Restricted Subsidiary for all purposes of this Agreement
        and the  Company  shall not  permit  such  Subsidiary  to sell,  assign,
        transfer or otherwise dispose of any such stock or other equity interest
        except to the Company or otherwise in  accordance  with this clause (c),
        (ii) stock of or other equity interest in any Restricted  Subsidiary may
        be sold, assigned, transferred or disposed of (whether by the Company or
        any of its  wholly-owned  Subsidiaries)  so  long as  immediately  after
        giving effect to such  transaction the Company and/or one or more of its
        wholly-owned  Subsidiaries  owns stock of or other  equity  interests in
        such  Restricted   Subsidiary  (x)  representing,   in  the  case  of  a
        partnership,  not less than 80% of the  outstanding  capital  and profit
        interests in such  partnership or, in the case of any other entity,  not
        less than 80% of the fair market  value of the  outstanding  stock of or
        other  equity  interests  in  such  Restricted   Subsidiary   (excluding
        Mandatory  Preferred  Stock  of  such  Restricted  Subsidiary)  and  (y)
        representing  not less  than 80% of the  ordinary  voting  power for the
        election of directors or other persons  performing  similar functions of
        such Restricted  Subsidiary  (other than stock or other equity interests
        having such power only by reason of the happening of a contingency)  and
        (iii)  Mandatory  Preferred  Stock of any  Restricted  Subsidiary may be
        sold,  assigned,  transferred  or disposed of (whether by the Company or
        any of its Subsidiaries).

               5.06   Default; Investment Rating.  The Company shall:

               (a) as soon as it shall become  known to a senior  officer of the
        Company, forthwith notify each Agent if any Default shall have occurred;
        and

               (b) if  Moody's  or S&P (or any  successor  thereto)  shall  have
        assigned a new  rating to the senior  debt  securities  of the  Company,
        notify  each Agent of such new  rating  within 30 days after it is first
        announced by the applicable rating agency.

               5.07 ERISA. The Company will furnish to the Banks:

               (a) as soon as possible and in any event within 15 days after the
        Company  knows or has  reason  to know  that any  Termination  Event has
        occurred, a statement of a senior officer of the Company describing such
        Termination  Event and the action, if any, which the Company proposes to
        take with respect thereto;

               (b) from time to time  promptly  after the  request  of any Bank,
        copies of each annual report filed pursuant to Section 104 of ERISA with
        respect to each Plan  (including,  to the extent required by Section 103
        of ERISA,  the related  financial and actuarial  statements and opinions
        and  other   supporting   statements,   certifications,   schedules  and
        information  referred to in Section  103) and each annual  report  filed
        with respect to each Plan under Section 4065 of ERISA;

               (c) promptly after receipt  thereof by the Company from the PBGC,
        copies of each notice  received by the  Company of PBGC's  intention  to
        terminate  any Plan or to have a trustee  appointed  to  administer  any
        Plan; and

               (d)  promptly  after  such  request,  such  other  documents  and
        information  relating to Plans as any Bank may  reasonably  request from
        time to time.

               5.08  Liens.  The  Company  will  not,  and will not  permit  any
Subsidiary  to, grant a security  interest in any stock of any of the Restricted
Subsidiaries  or Citrus Corp. The Company will not grant a security  interest in
any of its other assets to secure  Indebtedness  (except as provided in the next
sentence) unless the Company  simultaneously  grants to any Designated Agent for
the  benefit of the Banks an equal and ratable  security  interest in the assets
subject to such security  interest.  The  provisions  of the preceding  sentence
shall not apply to the grant by the Company of:

               (a) Any  purchase  money  mortgage  or  purchase  money  security
        interest  created  to secure  all or part of the  purchase  price of any
        property  (or to secure a loan made to enable the Company to acquire the
        property  described  in  such  mortgage  or in any  applicable  security
        agreement);  provided  that such  mortgage  or security  interest  shall
        extend only to the property so  acquired,  fixed  improvements  thereon,
        replacements thereof and the income and profits therefrom;

               (b) Any security interest on any property acquired or constructed
        by the Company,  and created not later than twelve months after (i) such
        acquisition or completion of such  construction or (ii)  commencement of
        operation  of such  property,  whichever  is later;  provided  that such
        security  interest  shall  extend  only to the  property  so acquired or
        constructed, fixed improvements thereon, replacements thereof and income
        and profits therefrom;

               (c) Any security interest deemed to be created as a result of the
        deposit  of  cash  or  securities  for  the  purpose  of  defeasance  of
        Indebtedness; and

               (d) Any security  interest in any of its cash or cash equivalents
        (within the meaning of generally accepted accounting principles) created
        by the Company for the purpose of securing Derivative Obligations of the
        Company,  provided  that  the  aggregate  amount  of all  cash  or  cash
        equivalents  secured by security interests  permitted by this clause (d)
        shall not exceed $25,000,000.

               (e) Any  security  interest  not  otherwise  permitted  under the
        preceding  clauses (a)  through (d) in any of its assets  created by the
        Company  for  the  purpose  of  securing  Indebtedness  of the  Company,
        provided that the aggregate  amount of all  Indebtedness  of the Company
        secured by  security  interests  permitted  by this clause (e) shall not
        exceed $10,000,000.

               5.09  Total  Indebtedness  to  Consolidated  Capitalization.  The
Company will not at any time permit Total  Indebtedness of the Company to exceed
65% of the Consolidated Capitalization of the Company.

               5.10   [Intentionally Omitted.]

               5.11  Insurance.  The  Company  will,  and will cause each of its
Subsidiaries to, keep insured with financially  sound and reputable  insurers or
through  self-insurance   conforming  with  practices  of  similar  corporations
maintaining  systems of  self-insurance  all  property  of a  character  usually
insured  by  corporations  engaged  in the same or  similar  business  similarly
situated  against  loss or damage of the  kinds and in the  amounts  customarily
insured  against  by such  corporations  and carry such  other  insurance  as is
usually carried by such corporations.

               5.12 Maintenance of Properties.  The Company will, and will cause
each of its  Subsidiaries to, keep all of its material  properties  necessary in
its business in good working order and condition  appropriate  for the use being
made thereof, ordinary wear and tear excepted;  except, in every case, as and to
the  extent  that  the  Company  or  its  Subsidiaries  may  be  prevented  from
maintaining their respective properties by fire, strikes, lockouts, acts of God,
inability  to  obtain  labor or  materials,  governmental  (including  judicial)
restrictions,  enemy action,  civil commotion or unavoidable casualty or similar
causes  beyond the control of the Company;  provided,  however,  that nothing in
this  5.12  shall  prevent  the  Company  or  any  of  its   Subsidiaries   from
discontinuing  the use,  operation or maintenance  of any of such  properties if
such  discontinuance  is,  in the  judgment  of the  Company  or its  applicable
Subsidiary,  desirable  in the  conduct of the  business  of the Company or such
Subsidiary and if such  discontinuance  is not  disadvantageous  in any material
respect to the Banks;  and  provided,  further,  that nothing in this 5.12 shall
prohibit any sale,  assignment,  transfer or other disposition permitted by 5.05
hereof.

               5.13 Public  Utility  Holding  Company Act. The Company will not,
and will not permit any of its  Subsidiaries  to, be subject to regulation under
the Public Utility Holding Company Act of 1935, as amended.

               VI.  REPRESENTATIONS  AND WARRANTIES.  The Company represents and
warrants as follows:

               6.01 Corporate  Existence and Powers. The Company and each of its
Restricted  Subsidiaries is a corporation duly incorporated and validly existing
and in good standing  under the laws of the  jurisdiction  of its  incorporation
(or, in case of any Restricted  Subsidiary not a  corporation,  such  Restricted
Subsidiary  is  duly  organized  and  validly  existing  under  the  laws of the
jurisdiction  of its  organization)  and is duly  licensed  or  qualified  to do
business and is in good standing in all states in which the Company believes the
conduct  of  its  business  or  the  ownership  of  its  assets   requires  such
qualification,  and the Company has corporate  power to make this  Agreement and
the Notes and to borrow hereunder.

               6.02 Corporate Authority,  etc. The making and performance by the
Company of this Agreement and the Notes and each  borrowing  hereunder have been
duly  authorized  by all  necessary  corporate  action  and do not and  will not
contravene any provision of law applicable to the Company or of the  certificate
of  incorporation or by-laws of the Company or result in the material breach of,
or constitute a material  default or require any consent under, or result in the
creation of any material lien,  charge or other security interest or encumbrance
not  permitted  by 5.08 hereof upon any property or assets of the Company or any
of its Restricted  Subsidiaries pursuant to, any indenture or other agreement or
instrument to which the Company or any of its Restricted Subsidiaries is a party
or by which the Company or any of its  Restricted  Subsidiaries  or any of their
respective  properties  may be bound or affected  (or, if any such consent is so
required,  the Company has obtained  such consent,  which is sufficient  for the
purpose  and  remains in full force and  effect,  and copies  thereof  have been
furnished  to Chase).  This  Agreement  has been duly and validly  executed  and
delivered by the Company and  constitutes,  and each of the Notes when  executed
and  delivered  will  constitute,  its  legal,  valid  and  binding  obligation,
enforceable in accordance with its terms.

               6.03 Financial Condition.  The consolidated balance sheets of the
Company  and its  Consolidated  Subsidiaries  as at  December  31,  1998 and the
related statements of consolidated  income and cash flows of the Company and its
Consolidated  Subsidiaries  for the 12  months  ended on said  date,  heretofore
furnished by the Company to the Banks,  fairly present in all material  respects
the financial  condition of the Company and its Consolidated  Subsidiaries as at
said date and the results of their  operations  and cash flows for the 12 months
then ended in accordance with generally accepted accounting  principles.  Except
as disclosed in a letter dated the  Effective  Date,  from the  Treasurer of the
Company,  a copy of which has been  furnished to each Bank,  since  December 31,
1998 there has  heretofore  been no  material  adverse  change in the  financial
condition or operating results of the Company and its Consolidated Subsidiaries,
taken as a whole,  from that set  forth in the  consolidated  balance  sheet and
related statements as at and for the period ended on said date.

               6.04  Litigation.  Except  as  disclosed  in a letter  dated  the
Effective  Date,  from the Executive Vice  President and General  Counsel of the
Company,  a copy of which has heretofore been furnished to each Bank,  there are
no actions, suits or proceedings, and no proceedings before any arbitrator or by
or before any governmental  commission,  board,  bureau or other  administrative
agency,  pending,  or to the  knowledge  of the Company  threatened,  against or
affecting the Company or any Subsidiary  which are  reasonably  likely to have a
material adverse effect on the financial condition,  properties or operations of
the Company and its Subsidiaries, taken as a whole.

               6.05 Taxes.  Each of the Company and each  Restricted  Subsidiary
has filed all  material  tax returns  required to be filed and paid all material
taxes shown thereon to be due,  including  interest and  penalties,  or provided
adequate reserves for payment thereof, except to the extent the same have become
due and  payable  but are not yet  delinquent,  and  except  for any  taxes  and
assessments of which the amount,  applicability  or validity is currently  being
contested in good faith by appropriate proceedings.

               6.06   Approvals.   No  approval,   license  or  consent  of  any
governmental  regulatory  body is requisite to the making and performance by the
Company of this Agreement,  or the execution,  delivery and payment of the Notes
(or, if any such approval,  license or consent is so requisite,  the Company has
obtained the same, which is sufficient for the purpose and remains in full force
and effect, and copies thereof have been furnished to Chase).

               6.07 ERISA. The Company, and each Subsidiary, has met its minimum
funding  requirements  under  ERISA  with  respect  to all its Plans and has not
incurred  any  material  liabilities  to PBGC or to such  Plan  under  ERISA  in
connection with any such Plan.

               6.08 Margin Regulations.  The Company is not engaged principally,
or as one of its important  activities,  in the business of extending credit for
the  purpose of  purchasing  or  carrying  margin  stock  (within the meaning of
Regulation U of the Board of Governors of the Federal  Reserve  System),  and no
part of the  proceeds  of any Loan  will be used to  purchase  or carry any such
margin  stock or to extend  credit to others for the  purpose of  purchasing  or
carrying any such margin stock.

               6.09  Certain   Subsidiaries.   Except  as  a  consequence  of  a
transaction or transactions permitted by this Agreement, the Company directly or
indirectly  owns all of the  outstanding  shares of common  stock of each of the
Restricted  Subsidiaries  (except for  directors'  qualifying  shares),  and all
shares  of  stock  of such  corporations  are  validly  issued,  fully  paid and
non-assessable.

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

               6.11 Environmental  Laws. The Company and its Subsidiaries are in
compliance  in  all  material  respects  with  the  Comprehensive  Environmental
Response,  Compensation  and Liability  Act of 1980,  as amended,  the Superfund
Amendments  and  Reauthorization  Act of 1986,  the  Resource  Conservation  and
Recovery Act, the Toxic Substances  Control Act, as amended,  the Clean Air Act,
as amended,  the Clean Water Act, as amended,  and each other federal,  state or
local statute, law, ordinance, code, rule or regulation,  regulating or imposing
liability or standards of conduct concerning,  any hazardous, toxic or dangerous
waste,  substance  or  material,  except  for  any  noncompliance  that  is  not
reasonably likely to have a material adverse effect on the financial  condition,
properties or operations of the Company and its Subsidiaries, taken as a whole.

               6.12 Year 2000 Problem. The Company has (i) undertaken a detailed
review and assessment of all areas within its business and operations that could
reasonably be affected by the Year 2000 Problem,  (ii) developed a detailed plan
and  timeline for  addressing  the Year 2000 Problem on a timely basis and (iii)
implemented that plan to date in accordance with such plan and timeline.  To the
best of Company's knowledge,  all computer applications that are material to the
Company's  business  and  operations  will on a timely  basis be able to perform
date-sensitive functions for all dates on and after January 1, 2000.

               All  representations and warranties made herein shall survive the
making of the Loans and the delivery of the Notes hereunder.

               VII.  EVENTS  OF  DEFAULT.  If any of the  following  "Events  of
Default" shall occur and shall not have been remedied:

                      A.  default by the  Company in the payment of any
               principal of any of theNotes when the same becomes due and
               payable;

                      B.  default by the  Company in the  payment of interest on
               any of the Notes or any other amounts  payable under 1.03 or 2.08
               hereof which shall remain  unremedied for ten days after the same
               becomes due and payable;

                      C. any  representation  or warranty made by the Company in
               Article VI hereof or in any  certificate  furnished to the Agents
               or to the Banks  hereunder  (or  deemed to have been given at the
               time  of any  borrowing  hereunder)  shall  prove  to  have  been
               incorrect when made or deemed made, in any material respect;

                      D.     default by the Company in the due performance or
               observance of 5.05, 5.08 or 5.09 hereof;

                      E.     default by the Company in the due performance or
               observance of 5.06(a) hereof which shall remain unremedied for a
               period of ten days;

                      F.  default  by the  Company  in the  due  performance  or
               observance   of  5.03  or  5.06(b)   hereof  which  shall  remain
               unremedied  for a period of 30 days after such default shall have
               become known to an executive officer of the Company;

                      G.  default  by the  Company  in the  due  performance  or
               observance of any other  covenant or agreement  herein  contained
               which  shall  remain  unremedied  for a period  of 30 days  after
               written  notice  thereof  shall have been given to the Company by
               any Bank (through any Designated Agent);

                      H. default by the Company or any Restricted Subsidiary (i)
               in the payment of any  Indebtedness  of the Company and/or one or
               more  Restricted  Subsidiaries in an aggregate  unpaid  principal
               amount of at least  $25,000,000,  beyond the period or periods of
               grace (if any)  provided  with  respect  thereto,  or (ii) in the
               performance or observance of any other  provisions in indentures,
               credit or loan  agreements  or other  agreements  or  instruments
               under which such  Indebtedness in such aggregate unpaid principal
               amount of the Company and/or one or more Restricted  Subsidiaries
               is outstanding or by which such Indebtedness is evidenced and, in
               the case of clause (ii) only, if the effect of such default is to
               cause, or permit the holder or holders of such Indebtedness (or a
               trustee  or an agent on behalf  of such  holder  or  holders)  to
               cause,  such  Indebtedness  to  become  due  prior to its  stated
               maturity;

                      I. any  Termination  Event shall have  occurred  and shall
               have continued under  circumstances  which result in an uninsured
               payment  or  repayment  liability  of the  Company  or any of its
               Subsidiaries  to PBGC in an amount  which is material in relation
               to the financial position of the Company and its Subsidiaries, on
               a consolidated basis;

                      J.   either  the   Company  or  one  or  more   Restricted
               Subsidiaries  (taken as a group)  with  total  assets of at least
               $10,000,000  in the  aggregate  (such  Restricted  Subsidiary  or
               Subsidiaries  being  hereinafter  called the "Restricted  Group")
               shall (1) apply for or consent to the  appointment  of, or taking
               possession  by, a receiver,  trustee,  custodian,  liquidator  or
               other similar  official of itself or of all or a substantial part
               of its  assets,  (2) admit in writing  its  inability  to pay its
               debts,  or  generally  become  unable to pay its  debts,  as they
               become due, (3) make a general  assignment for the benefit of its
               creditors,  (4)  commence  a  voluntary  case  under the  federal
               bankruptcy  laws  (as now or  hereafter  in  effect),  (5) file a
               petition  seeking to take advantage of any other laws relating to
               bankruptcy, reorganization, insolvency, winding-up or composition
               or readjustment of debts, or (6) acquiesce in writing to, or fail
               to controvert in a timely and  appropriate  manner,  any petition
               filed against it or in any  involuntary  case under the aforesaid
               federal  bankruptcy  laws; or corporate  action shall be taken by
               the Company or the Restricted  Group for the purpose of effecting
               any of the foregoing; or

                      K. a proceeding  or case shall be  commenced,  without the
               application or consent of the Company or the Restricted Group (as
               defined  in  paragraph  J  above),  in  any  court  of  competent
               jurisdiction,   seeking  (1)  its  liquidation,   reorganization,
               dissolution, winding-up, or composition or readjustment of debts,
               (2) the appointment of a receiver, trustee, custodian, liquidator
               or any similar official of itself of all or a substantial part of
               its assets, (3) similar action with respect to the Company or the
               Restricted  Group  under the federal  bankruptcy  laws (as now or
               hereafter  in effect) or any other laws  relating to  bankruptcy,
               insolvency,   reorganization,   liquidation  or  winding-up,   or
               composition or adjustment of debts,  and such  proceeding or case
               shall  continue  undismissed,  or an  order,  judgment  or decree
               approving or ordering any of the  foregoing  shall be entered and
               continued   unstayed  and  in  effect,   for  any  period  of  60
               consecutive  days; or an order for relief  against the Company or
               the  Restricted  Group  shall be entered in an  involuntary  case
               under such federal bankruptcy laws,

THEREUPON,  (in  addition  to the  rights and  remedies  of the  Swingline  Bank
pursuant to 1.08(b))  (1) in the case of any of the Events of Default  specified
in paragraphs A through I above,  (i) any  Designated  Agent may and, upon being
directed  so to do by the  Majority  Banks,  shall,  by notice  to the  Company,
terminate all Commitments hereunder and they shall thereupon terminate, and (ii)
any  Designated  Agent may and,  upon being  directed by Banks  holding at least
66-2/3% of the aggregate  unpaid  principal amount of the Loans shall, by notice
to  the  Company,  declare  all  outstanding  Loans  and  Notes  and  all  other
obligations of the Company  hereunder to be due and payable,  whereupon the same
shall become forthwith due and payable,  without further  protest,  presentment,
notice or demand,  all of which are expressly waived by the Company,  and (2) in
case of any of the  Events  of  Default  specified  in  paragraph  J or K above,
without  any  notice to the  Company or any act by any  Designated  Agent or the
Majority Banks or any Bank, all Commitments  hereunder shall terminate forthwith
and the principal of and interest accrued on all the Loans and the Notes and all
other obligations of the Company hereunder shall become and be due and payable.

               VIII.  MISCELLANEOUS

               8.01 Waiver.  No failure on the part of any Agent, Bank or holder
of a Note to exercise and no delay in  exercising  and no course of dealing with
respect to any right, power or privilege under this Agreement or the Notes shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right,  power, or privilege under this Agreement or the Notes preclude any other
or further  exercise  thereof or the  exercise  of any other  right,  power,  or
privilege.  The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

               8.02  Notices and  Delivery  of  Documents.  Except as  otherwise
specified  herein,  all notices and other  communications  hereunder shall be in
writing  or by telex or  telecopy,  and shall be deemed to have been duly  given
when transmitted by telex or telecopier or personally  delivered or, in the case
of a mailed notice or other  communication,  three  Business Days after the date
deposited in the mails,  certified and postage  prepaid,  addressed to any party
hereto at its address given on Schedule 2 hereto or on the  signature  pages of,
or any schedule to, any amendment  hereto, or at such other address of which any
party hereto shall have  notified in writing the party giving such notice or (in
the case of a telex message) addressed to any party at any telex number which is
published as belonging to the addressee.  Except as otherwise expressly provided
herein,  all Notes and other  documents  to be delivered to any Agent under this
Agreement shall be delivered to it at its Principal Office.

               8.03 Governing Law. This Agreement and the Notes  hereunder shall
be  construed  in  accordance  with and  governed by the law of the State of New
York.

               8.04 Offsets, etc. Upon the occurrence and during the continuance
of an Event of Default, each Bank is hereby authorized at any time and from time
to time,  without  notice to the  Company  except as  required  by law (any such
notice being expressly waived by the Company),  to set off and apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and other  indebtedness at any time owing by such Bank to or for the credit
or the account of the  Company  against  any and all of the  obligations  of the
Company now or hereafter  existing  under this  Agreement  and the Notes held by
such  Bank.  Each Bank  agrees  promptly  to notify the  Company  after any such
set-off and  application  made by such Bank,  provided  that the failure to give
such notice shall not affect the validity of such set-off and  application.  The
rights of the Banks under this 8.04 are in addition to other rights and remedies
(including,  without  limitation,  other rights of set-off)  which the Banks may
have.

               8.05 Disposition of Loans.  Each Bank may at any time, at its own
expense,  assign (but only with the prior written consent of the Company,  which
it may refuse or grant in its sole discretion),  or sell  participations in, all
or any portion of any Loans made by it to another bank or other entity; provided
that no such assignment  shall be in a principal  amount less than  $10,000,000.
Any Bank making an assignment hereunder shall pay to Chase an administrative fee
of $2,500 with respect to each  assignment.  In the case of an assignment,  upon
notice thereof by such Bank to the Company and the Agents, to the extent of such
assignment  and the Loans so assigned,  the assignee  shall have the same rights
and benefits as it would have if it were a Bank hereunder and the assignor shall
cease to have the rights and  benefits of a Bank  hereunder  (provided  that the
obligations  of the Company  under  Article III to such Bank shall  survive such
assignment).  In the case of a  participation,  except as otherwise  provided in
2.06(c) hereof,  the participant  shall not have any rights under this Agreement
or such Bank's Notes (the  participant's  rights against such Bank in respect of
such participations to be those set forth in the agreement executed by such Bank
in favor of the  participant  relating  thereto) and all amounts  payable by the
Company  under  Article III hereof shall be  determined  as if such Bank had not
sold  such  participation.  The  granting  of any such  participation  shall not
relieve  the  grantor of its  Commitment  hereunder.  Each Bank may  furnish any
information  concerning the Company or any of its Subsidiaries in the possession
of  such  Bank  from  time  to time to  assignees  and  participants  (including
prospective  assignees and participants)  under this 8.05, provided that, if any
such  information  is  confidential  information  consisting  of or  based  upon
information  provided by the Company,  prior to furnishing any such  information
such Bank shall obtain the  agreement of any such  assignee or  participant,  in
favor of the  Company,  to maintain  the  confidentiality  of such  information,
subject to the same requirements and exceptions as specified in 5.02 hereof (and
such Bank shall promptly  furnish a copy of each such agreement to the Company).
Any Bank may at any time  pledge or  assign a  security  interest  in all or any
portion of its rights under this Agreement to secure obligations of such Bank to
a Federal  Reserve Bank,  and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security  interest shall release a Bank from any of its obligations  hereunder
or substitute any such pledgee or assignee for such Bank as a party hereto.

               8.06 Expenses. All statements,  reports,  certificates,  opinions
and other documents or information furnished by the Company to the Agents or the
Banks under this Agreement  shall be supplied  without cost to the Agents or the
Banks. Further, the Company hereby agrees that it shall pay, on demand,  whether
or not any Loan is made hereunder,  (a) all reasonable  out-of-pocket  costs and
expenses  of  the  Banks  and  the  Agents   incurred  in  connection  with  the
preparation,  execution  and  delivery of this  Agreement,  or any  amendment or
supplement thereto, and the Notes and the making of the Loans hereunder, (b) the
reasonable fees and disbursements of Simpson Thacher & Bartlett, special counsel
to the  Banks,  in  connection  therewith,  and (c) all  costs and  expenses  of
collection  (including,  without limitation,  reasonable legal fees) incident to
the enforcement,  protection or preservation of any right of any Bank under this
Agreement or the Notes.

               8.07 Amendments,  Waivers,  etc. This Agreement and the Notes may
not be amended, supplemented or modified, nor any of its terms be waived, except
by written instruments signed by the Company and the Majority Banks (and, in the
case of any amendment,  supplement,  modification or waiver affecting Article IX
hereof,  each  of the  Agents);  provided,  however,  that  no  such  amendment,
supplement,  modification or waiver shall, without the written consent of all of
the Banks: (i) extend the term of, or change the amount of, or change any of the
provisions  of 1.04 hereof with  respect to the  reduction  or increase  of, the
Commitment  of any Bank,  or decrease the rate at which  commitment  or facility
fees accrue hereunder or extend the time for payment thereof, (ii) amend, modify
or waive any of the  provisions  of 1.04(b)  with  respect to the  reduction  of
Commitments  resulting  from a Change of  Control  or any of the  provisions  of
5.05(a),  (iii)  extend the  maturity  of any Loan,  change the rate of interest
thereon,  or affect  in any way the terms of  payment  thereof,  (iv)  alter the
definition of "Majority Banks", (v) affect any provisions relating to Fixed Rate
Loans, (vi) alter this 8.07 or 8.09(a),  (vii) waive any condition  specified in
Article IV, (viii) waive an Event of Default  under  paragraph J or K of Article
VII or modify  the  effect  thereof  or (ix)  waive or amend any  representation
contained  in Article VI;  provided,  further,  that 1.03 and 1.08 hereof may be
amended,  supplemented  or modified,  and any of the terms  thereof  waived,  by
written  instrument  signed only by the Company and the Swingline Bank. Any such
amendment,  supplement,  modification  or waiver so  entered  into  shall  apply
equally  to all of the  Banks and any  holder of the Notes and shall be  binding
upon all  parties  hereto.  Any waiver  hereunder  shall be for such  period and
subject to such conditions as shall be specified in such written instrument.  In
the case of any waiver of an Event of  Default,  such Event of Default  shall be
deemed to be cured and not  continuing,  but no such waiver  shall extend to any
subsequent  or other Event of Default or any right,  power or  privilege  of the
Banks hereunder in connection therewith.

               8.08 Definitions.  Certain terms are defined in Schedule 1 hereto
and as used herein shall have meanings as so defined.

               8.09 Successors and Assigns.  (a) This Agreement shall be binding
upon and inure to the benefit of the Banks,  the  Agents,  the Company and their
respective  successors  and  assigns,  except  that  Company  may not  assign or
transfer any of its respective rights or obligations hereunder without the prior
written consent of all the Banks.

               (b)  Notwithstanding  anything to the contrary  contained herein,
any Bank (a "Granting  Lender") may grant to a special  purpose  funding vehicle
(an "SPC") of such Granting  Lender,  identified as such in writing from time to
time by the Granting Lender to the Agents and the Company, the option to provide
to the  Company  all or any part of any Loan that  such  Granting  Lender  would
otherwise be obligated to make to the Borrower pursuant to Section 1.01 or 1.02,
provided that (i) nothing herein shall  constitute a commitment to make any Loan
by any SPC and (ii) if an SPC elects not to exercise  such  option or  otherwise
fails to provide  all or any part of such Loan,  the  Granting  Lender  shall be
obligated  to make  such Loan  pursuant  to the terms  hereof.  The  making of a
Syndicated Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same  extent,  and as if,  such  Loan  were  made by the  Granting
Lender.  Each party  hereto  hereby  agrees  that no SPC shall be liable for any
payment under this Agreement for which a Bank would otherwise be liable,  for so
long as, and to the extent,  the related Granting Lender makes such payment.  In
furtherance of the foregoing, each party hereto hereby agrees that, prior to the
date that is one year and one day after the later of (i) the  payment in full of
all  outstanding  senior  indebtedness  of  any  SPC  and  (ii)  the  Commitment
Termination  Date,  it will not institute  against,  or join any other person in
instituting  against,  such  SPC any  bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceedings or similar  proceedings under the laws of
the United States or any State thereof. In addition, notwithstanding anything to
the contrary contained in this Section 8.09(b),  any SPC may (i) with notice to,
but without the prior  written  consent of, the Company or any Agent and without
paying any processing fee therefor,  assign all or a portion of its interests in
any Loans to its  Granting  Lender or to any  financial  institutions  providing
liquidity and/or credit facilities to or for the account of such SPC to fund the
Loans made by such SPC or to support the  securities (if any) issued by such SPC
to fund such Loans and (ii)  disclose  on a  confidential  basis any  non-public
information relating to its Loans to any rating agency,  commercial paper dealer
or provider of a surety,  guarantee or credit or liquidity  enhancement  to such
SPC. In no event shall the Company be obligated to pay to an SPC that has made a
Loan any greater  amount than the Company would have been obligated to pay under
this Agreement if the Granting  Lender had made such Loan.  Each Granting Lender
shall  indemnify  and hold  harmless  the Company and its  directors,  officers,
employees and agents from and against any and all losses,  liabilities,  claims,
damages and expenses  arising from or attributable to the making of a Loan by an
SPC of such Granting Lender.

               8.10  Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one instrument and
any of the  parties  hereto may  execute  this  Agreement  by  signing  any such
counterpart.

               8.11  Confidentiality.  Each of the Agents and the Banks agree to
maintain the confidentiality of the Information (as defined below),  except that
Information  may  be  disclosed  (a)  to  its  Affiliates  and  its  Affiliates'
directors,  officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be  informed of the  confidential  nature of such  Information  and
instructed to keep such Information  confidential),  (b) to the extent requested
by any regulatory  authority,  (c) to the extent  required by applicable laws or
regulations or by any subpoena or similar legal process,  (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding  relation to this Agreement or the enforcement
of  rights  hereunder,  (f)  subject  to  any  agreement  containing  provisions
substantially  the  same  as  those  of  this  Section,  to any  assignee  of or
participant  in, or any  prospective  assignee of or participant  in, any of its
rights or obligations under this Agreement,  (g) with the consent of the Company
or (h) to the extent such Information (i) becomes publicly  available other than
as a result of a breach of this Section or (ii)  becomes  available to any Agent
or any Bank on a nonconfidential basis from a source other than the Company. For
the purposes of this Section,  "Information" means all information received from
the  Company,  its  Subsidiaries  or its agents  relating  to the Company or its
business,  other than any such information that is available to any Agent or any
Bank on a nonconfidential basis prior to disclosure by the Company.

               8.12 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY  WAIVES,  TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY  IN ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF OR
RELATING TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

               8.13  Severability.  Any  provision  of this  Agreement  which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof or  affecting  the  validity or
enforceability  of such provision in any other  jurisdiction,  and the remaining
portion of such  provision  and all other  remaining  provisions  hereof will be
construed to render them enforceable to the fullest extent permitted by law.

               IX.    THE AGENTS

               9.01  Appointment,   Power  and  Immunities.   Each  Bank  hereby
irrevocably  appoints and authorizes each  Designated  Agent to act as its agent
hereunder  with such powers as are  specifically  delegated to such Agent by the
terms of this  Agreement,  together  with such  other  powers as are  reasonably
incidental thereto.  No Agent shall have any duties or  responsibilities  except
those expressly set forth in this  Agreement,  nor shall any Agent, by reason of
this Agreement,  have a fiduciary  relationship with any Bank. No Agent shall be
responsible  to the  Banks  for any  recitals,  statements,  representations  or
warranties  contained  in  this  Agreement  or  in  any  information  memorandum
pertaining to the Company or in any certificate or other document referred to or
provided  for in, or  received  by any of them under,  this  Agreement,  for the
value, validity,  effectiveness,  genuineness,  enforceability or sufficiency of
this  Agreement or the Notes or any other  document  referred to or provided for
herein or for any failure by the Company to perform  its  obligations  under any
thereof. Each Designated Agent may employ agents and attorneys-in-fact and shall
not be  answerable,  except  as to money  or  securities  received  by it or its
authorized  agents,  for the  negligence  or  misconduct  of any such  agents or
attorneys-in-fact  selected by it with reasonable  care.  Neither the Agents nor
any of their  directors,  officers,  employees  or  agents  shall be  liable  or
responsible  for any action taken or omitted to be taken by them hereunder or in
connection   herewith,   except  for  their  own  gross  negligence  or  willful
misconduct.

               9.02  Reliance  by Agents.  Each Agent  shall be entitled to rely
upon any certificate,  notice or other document (including any cable,  telegram,
telecopy  or telex)  believed  by it to be genuine  and correct and to have been
signed or sent by or on behalf of the proper person or persons,  and upon advice
and  statements  of legal  counsel,  independent  accountants  and other experts
selected  by Chase.  Chase may deem and treat the payee of any Note as the owner
thereof  for all  purposes  hereof  unless and until a notice of the  assignment
thereof  satisfactory  to Chase  signed by such payee shall have been filed with
it. As to any matters not expressly  provided for by this Agreement,  each Agent
shall in all cases be fully  protected in acting,  or in refraining from acting,
hereunder in accordance with written  instructions signed by the Majority Banks,
and such  instructions  of the Majority Banks and any action taken or failure to
act pursuant thereto shall be binding on all of the Banks.

               9.03 Default.  No Agent shall be deemed to have  knowledge of the
occurrence  of a  Default  or an Event of  Default  (other  than  nonpayment  of
principal,  interest or commitment or other fees) unless such Agent has received
written  notice from a Bank or the Company  specifying  such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
any Designated Agent receives such a notice of the occurrence of a Default or an
Event of Default,  such Agent shall give prompt  written  notice  thereof to the
other Agents and the Banks.  The  Designated  Agents shall take such action with
respect to such Default or Event of Default as shall be  reasonably  directed in
writing by the Majority  Banks provided that (i) unless and until the Designated
Agents shall have received such directions,  the Designated Agents may take such
action,  or refrain  from taking such  action,  with  respect to such Default or
Event of Default as they shall deem advisable in the best interests of the Banks
and (ii) in no event shall any Agent be required to institute  any action,  suit
or other proceeding in connection herewith.

               9.04 Rights as a Lender.  With respect to its  Commitment and the
Loans made by it or any collateral therefor,  each of Chase, Bank of America and
SunTrust  (and any  successor  Agent  hereunder) in its capacity as a Bank under
this Agreement shall have the same rights and powers hereunder as any other Bank
and may exercise the same as though it were not acting as an Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include each of
Chase,  Bank of America and SunTrust (and any successor Agent  hereunder) in its
individual  capacity.  Each of Chase,  Bank of  America  and  SunTrust  (and any
successor Agent  hereunder) and their  affiliates may (without having to account
therefor to any Bank) accept deposits from,  lend money to and generally  engage
in any kind of banking, trust or other business with the Company (and any of its
related  companies) as if it were not acting as an Agent and may accept fees and
other  consideration  from the Company  for  services  in  connection  with this
Agreement  and  otherwise  without  having to account  for the same to the other
Agent and the Banks.

               9.05 Indemnification. The Banks severally agree to indemnify each
Agent (to the extent  requested by such Agent as provided in 9.08 hereof  and/or
to the extent not reimbursed by the Company),  pro rata according to the amounts
of  their  respective  Commitments,  for any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements  of any  kind and  nature  whatsoever  which  may be  imposed  on,
incurred by or asserted against such Agent in any way relating to or arising out
of this Agreement or any other documents  referred to herein or the transactions
contemplated hereby (including, without limitation, the costs and expenses which
the  Company is  obligated  to pay under 8.06  hereof  but  excluding,  unless a
Default has occurred and is continuing, normal administrative costs and expenses
incident to the  performance of its agency duties  hereunder) or the enforcement
of any of the terms  hereof or of any such other  documents,  provided  that (a)
such Agent  shall have given the Banks  notice  thereof  and an  opportunity  to
defend against the same at the expense of the Banks and with counsel selected by
the  Majority  Banks,  (b) no Bank  shall be  liable  to an Agent for any of the
foregoing to the extent they arise from such Agent's gross negligence or willful
misconduct  and (c) no Bank  shall be liable  for any  amount in  respect of any
compromise  or  settlement  of any of the  foregoing  unless such  compromise or
settlement is approved by the Majority Banks.

               9.06 Reports. Promptly after its receipt thereof, each Agent (or,
if all Agents shall have  received the same,  Chase) will forward to each Bank a
copy of each report,  notice or other document  required by this Agreement to be
delivered to such Agent for such Bank.

               9.07  Non-Reliance  on Agents and Other  Banks.  Each Bank agrees
that it has,  independently and without reliance on any Agent or any other Bank,
and based on such documents and information as it has deemed  appropriate,  made
its own credit analysis of the Company and decision to enter into this Agreement
and that it will, independently and without reliance upon any 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 analysis  and  decisions in taking or not
taking  such  action  under this  Agreement.  No Agent shall be required to keep
itself  informed  as to the  performance  or  observance  by the Company of this
Agreement  or any other  document  referred to or provided for herein or to make
inquiry of or to inspect  the  properties  or books of the  Company.  Except for
notices,  reports and other documents and information  expressly  required to be
furnished to the Banks by any Agent  hereunder,  no Agent shall have any duty or
responsibility  to  provide  any Bank  with  any  credit  or  other  information
concerning the affairs,  financial  condition or business of the Company (or any
of its related  companies)  which may come into the  possession of such Agent or
any of its affiliates.

               9.08 Failure to Act. Except for action expressly  required of any
Agent under this Agreement,  such Agent shall in all cases be fully justified in
failing or refusing to act unless it shall be indemnified to its satisfaction by
the Banks  against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.

               9.09 Resignation or Removal of Agents. Subject to the appointment
and acceptance of a successor Agent as provided  below,  any Agent may resign at
any time by giving  written  notice thereof to the Banks and the Company and any
Agent may be removed at any time with or without  cause by the  Majority  Banks.
Upon any such resignation or removal, the Majority Banks shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Majority Banks and shall have accepted such appointment within 30 days after
the retiring  Agent's  giving of notice of  resignation  or the Majority  Banks'
removal of the retiring  Agent,  then the  retiring  Agent may, on behalf of the
Banks,  appoint a successor Agent, which shall be a bank which has an office (or
an  affiliate or a Subsidiary  with an office) in New York,  New York.  Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights,  powers,  privileges 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 or removal  hereunder as Agent, the provisions of
this  Agreement  shall  continue  in effect  for its  benefit  in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.

               9.10 Documentation  Agent. Nothing in this Agreement shall impose
on SunTrust,  in its capacity as Documentation  Agent, any duties or obligations
whatsoever.

               9.11 Syndication Agent. Nothing in this Agreement shall impose on
Bank of America, in its capacity as Syndication Agent, any duties or obligations
whatsoever.



<PAGE>

                                                                   SCHEDULE 1


               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.

                                        SONAT INC.


                                        By:
                                      Name:
                                     Title:



                                        AMSOUTH BANK, as a Bank


                                        By:
                                      Name:
                                     Title:



                                        BANK OF AMERICA NATIONAL
                                        TRUST AND SAVINGS
                                        ASSOCIATION, as a Bank



                                        By:
                                      Name:
                                     Title:




                                        THE BANK OF NOVA SCOTIA, as a Bank



                                        By:
                                      Name:
                                     Title:






                                       THE FIRST NATIONAL BANK OF CHICAGO,
                                         as a Bank


                                        By:
                                      Name:
                                     Title:




                                        CREDIT AGRICOLE INDOSUEZ, as a Bank


                                        By:
                                      Name:
                                     Title:


                                         By:
                                      Name:
                                     Title:




                                       THE CHASE MANHATTAN BANK, as a Bank


                                        By:
                                      Name:
                                     Title:






                                        CREDIT LYONNAIS, NEW YORK BRANCH,
                                            as a Bank


                                        By:
                                      Name:
                                     Title:




                                        MELLON BANK, N.A., as a Bank


                                        By:
                                      Name:
                                     Title:



                                        THE NORTHERN TRUST CO., as a Bank


                                        By:
                                      Name:
                                     Title:




                                        REGIONS BANK, as a Bank


                                        By:
                                      Name:
                                     Title:



                                        SOUTHTRUST BANK N.A., as a Bank


                                        By:
                                      Name:
                                     Title:


                                        SUNTRUST BANK, ATLANTA, as a Bank


                                        By:
                                      Name:
                                     Title:


                                        By:
                                      Name:
                                     Title:


                                        WACHOVIA BANK, N.A., as a Bank



                                        By:
                                      Name:
                                     Title:


                                              Agents

                                        THE CHASE MANHATTAN BANK,
                                                      as Administrative Agent


                                        By:
                                      Name:
                                     Title:



                                        BANK OF AMERICA NATIONAL TRUST
                                            AND SAVINGS ASSOCIATION,
                                              as Syndication Agent


                                        By:
                                      Name:
                                     Title:


                                        SUNTRUST BANK, ATLANTA,
                                           as Documentation Agent


                                        By:
                                      Name:
                                     Title:


<PAGE>


                                        DEFINITIONS

               As used in this  Agreement,  the  following  terms shall have the
following respective meanings:

     "Additional  Costs"  shall have the meaning  attributed  thereto in 3.01(a)
          hereof.

     "Affected Loans" shall have the meaning attributed thereto in 3.04 hereto.

     "Affected Type" shall have the meaning attributed thereto in 3.04 hereto.

     "Agents" shall have the meaning  attributed thereto in the preamble to this
          Agreement.

     "Annual Dates" shall mean the Quarterly Date in December of each year.

     "Applicable  Facility  Fee Rate" shall mean,  with respect to any
day, the percentage  indicated below opposite the Rating Level in effect on such
day:

              Rating Level                                  Percentage
                    I                                         0.100%
                    II                                        0.125%
                    III                                       0.150%
                    IV                                        0.175%
                    V                                         0.225%

               "Applicable  Lending  Office"  shall mean,  with  respect to each
Bank, with respect to each type of Loan, the Lending Office  designated for such
type of Loan on Schedule 2 hereof, or on the signature pages of, or any schedule
to, any amendment hereto, or such other office or affiliate of such Bank as such
Bank may from time to time  specify  to Chase and the  Company  as the office at
which its Loans of such type are to be made and maintained.

               "Applicable  Margin"  shall  mean:  (a) with  respect to Domestic
Loans,  zero;  and (b) with  respect  to any  Eurodollar  Loan on any  day,  the
percentage indicated below opposite the Rating Level in effect on such day:

              Rating Level                                  Percentage
                    I                                         0.350%
                    II                                        0.375%
                    III                                       0.425%
                    IV                                        0.475%
                    V                                         0.525%

provided,  that if on such  day the  aggregate  principal  amount  of the  Loans
outstanding  equals or exceeds 33% of the Commitments in effect on such day, the
Applicable  Utilization  Margin  shall  be  added  to the  foregoing  percentage
otherwise applicable on such day.

               "Applicable  Utilization  Margin" shall mean, with respect to any
Eurodollar  Loan on any day, the percentage  indicated below opposite the Rating
Level in effect on such day:

                         Rating Level                             Percentage
                               I                                    0.125%
                              II                                    0.125%
                              III                                   0.125%
                              IV                                    0.150%
                               V                                    0.250%

               "Appropriate Officer" shall mean the chief executive officer, the
chief   operating   officer,    the   chief   financial   officer,    the   Vice
President-Comptroller, the Vice President-Finance or the Treasurer.

               "Bank of America"  shall mean Bank of America  National Trust and
Savings Association, in its capacity as Syndication Agent.

               "Banks" shall have the meaning attributed thereto in the preamble
to this Agreement, and which shall include the Swingline Bank in its capacity as
such.

               "Base  Rate"  shall  mean,  for any day,  the  higher  of (a) the
Federal  Funds Rate for such day plus 1/2 of 1% per annum and (b) the Prime Rate
for such day.  Each change in any interest  rate  provided for herein based upon
the Base Rate  resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.

               "Basle Accord" shall have the meaning attributed thereto in 3.01
(c) hereto.

               "Business Day" shall mean any day on which  commercial  banks are
not authorized or required to close in New York City and, if such day relates to
a borrowing  of, a payment or  prepayment of principal of or interest on, or the
Interest  Period for, a Eurodollar  Loan or a notice by the Company with respect
to any such borrowing,  payment,  prepayment or Interest Period, which is also a
day on which dealings in Dollar deposits are carried out in the London interbank
market.

               "Change in Control" shall have the meaning attributed thereto in
1.04(b)hereto.

               "Chase"  shall mean The Chase  Manhattan  Bank in its capacity as
the Administrative Agent.

               "Commitment"  shall mean, as to each Bank, the obligation of such
Bank to make Syndicated  Loans pursuant to 1.01 hereof in an aggregate amount at
any one time  outstanding  up to but not  exceeding the amount set opposite such
Bank's name on Schedule 3 to this Agreement under the caption  "Commitment"  (as
the  same  may be  reduced  at any time or from  time to time  pursuant  to 1.04
hereof).

               "Commitment Termination Date" shall mean the 363rd day after the
Effective Date.

               "Company" shall have the meaning attributed thereto in the
preamble to this Agreement.

               "Consolidated Capitalization" shall mean, for any Person, the sum
of  Total   Indebtedness   and  Equity  of  such  Person  and  its  Consolidated
Subsidiaries,  provided  that  Consolidated  Capitalization  shall be determined
without giving effect to any non-cash charges after December 31, 1998, reflected
in the Company's consolidated financial statements attributable to the reduction
in the net carrying value of oil and natural gas properties.

               "Consolidated  Subsidiary"  shall mean any Subsidiary of a Person
which  was or  shall  be  consolidated  with  such  Person  in any  consolidated
financial statement furnished to the Banks under this Agreement.

               "Default" shall mean an Event of Default or an event which,  with
the notice or lapse of time or both  specified  in  Article  VII  hereof,  would
become such an Event of Default.

               "Derivative  Obligations"  shall mean any transaction  which is a
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 transaction,
cross-currency  rate swap  transaction,  currency  option  or any other  similar
transaction (including any option with respect to any of these transactions).

               "Designated Agents" shall mean Chase and Bank of America.

               "Dollars" and "$" shall mean lawful money of the United States of
 America.

               "Domestic  Loans" shall mean Syndicated Loans which bear interest
at rates based upon the Base Rate.

               "Effective Date" shall have the meaning attributed thereto in
4.01 hereof.

               "Equity" means at any time the sum of the following, for any
Person and its Consolidated Subsidiaries:

                     (i) the amount of share capital liability, including common
        and preferred shares (less cost of treasury shares), plus

                    (ii) the amount of surplus and retained earnings (or, in the
        case of a surplus or retained  earnings deficit minus the amount of such
        deficit).

               "ERISA" shall mean the Employee Retirement Income Security Act of
1974,  as amended  from time to time,  including  (unless the context  otherwise
requires) any rules or regulations promulgated thereunder.

               "Eurodollar  Loans"  shall mean  Syndicated  Loans,  the interest
rates  on  which  are  determined  on the  basis  of  rates  referred  to in the
definition of "Fixed Base Rate".

               "Event  of  Default"  shall  mean any of the  Events  of  Default
specified in Article VII hereof.

               "Federal  Funds Rate" shall mean, for any day, the rate per annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100  of 1%)  equal to the
weighted  average of the rates on  overnight  Federal  funds  transactions  with
members of the Federal  Reserve System arranged by Federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be  determined  is not a Business Day, the Federal Funds Rate for such day shall
be such  rate on such  transactions  on the next  preceding  Business  Day as so
published on the next  succeeding  Business Day, and (ii) if such rate is not so
published  for any day, the Federal Funds Rate for such day shall be the average
rate charged to The Chase  Manhattan  Bank on such day on such  transactions  as
determined by Chase.

               "Fixed  Base Rate"  shall  mean,  with  respect to any Fixed Rate
Loan, the arithmetic mean (rounded upwards,  if necessary,  to the nearest 1/100
of 1%), as determined by Chase,  of the rate per annum quoted by each  Reference
Bank  at  approximately  11:00  a.m.  London  time  (or as  soon  thereafter  as
practicable)  on the date  two  Business  Days  prior  to the  first  day of the
Interest Period for such Loan for the offering by such Reference Bank to leading
banks in the London interbank market of Dollar deposits having a term comparable
to such Interest Period and in an amount  comparable to the principal  amount of
the Eurodollar Loan to be made by such Reference Bank for such Interest  Period.
If any Reference  Bank is not  participating  in any Fixed Rate Loan,  the Fixed
Base Rate for such Loan shall be  determined  by  reference to the amount of the
Loan which such Reference Bank would have made had it been participating in such
Loan.  If any  Reference  Bank does not  timely  furnish  such  information  for
determination of any Fixed Base Rate, Chase shall determine such Fixed Base Rate
on the basis of information timely furnished by the remaining Reference Bank.

               "Fixed  Rate"  shall  mean,  for any Fixed Rate Loan,  a rate per
annum (rounded upwards, if necessary,  to the nearest 1/100 of 1%) determined by
Chase to be equal to the Fixed Base Rate for such Loan for the  Interest  Period
for such Loan.

               "Fixed Rate Loans" shall mean Eurodollar Loans.

               "Indebtedness"  shall mean, for any Person,  all  obligations for
borrowed money or purchase money  obligations of such Person which in accordance
with  generally  accepted  accounting  principles  would be shown on the balance
sheet of such Person as a liability; all obligations under leases required to be
capitalized  under  generally  accepted  accounting  principles  at the  time of
entering  into  such  lease;  all  guarantees  of  such  Person  in  respect  of
Indebtedness of others;  Indebtedness of others secured by any mortgage, pledge,
security  interest,  encumbrance,  lien or charge  upon  property  owned by such
Person, whether or not assumed; Operating Lease Obligations; and, only as to any
Consolidated  Subsidiary of the Company,  any Mandatory  Preferred Stock of such
Consolidated  Subsidiary;  provided that Indebtedness shall not include: (i) any
Indebtedness evidence of which is held in treasury (but the subsequent resale of
such Indebtedness shall be deemed to constitute the creation  thereof);  or (ii)
any particular  Indebtedness  if, upon or prior to the maturity  thereof,  there
shall have been deposited with the proper depositary,  in trust, money or United
States government  securities (or evidences of such Indebtedness as permitted by
the  instrument  creating such  Indebtedness)  in the  necessary  amount to pay,
redeem or  satisfy  such  Indebtedness;  or (iii)  only as to the  Company,  any
Indebtedness  of the  Company  to any of its  Subsidiaries  provided  that  such
Indebtedness is subordinated in right of payment to the prior payment in full of
the  obligations of the Company to the Banks and the Agents under this Agreement
and the termination in full of the  Commitments  hereunder  (including  interest
accruing on such obligations  after the date of any filing by the Company of any
petition in  bankruptcy or the  commencement  of any  bankruptcy,  insolvency or
similar  proceeding  with  respect to the Company) in the event that any Default
under this  Agreement  shall have occurred and be continuing and in the event of
any insolvency,  bankruptcy or similar proceeding affecting the Company; or (iv)
any  indirect   guarantees  or  other  contingent   obligations  in  respect  of
Indebtedness of other Persons,  including  agreements,  contingent or otherwise,
with such other  persons or with third  persons with respect to, or to permit or
assure the payment of,  obligations  of such other persons,  including,  without
limitation,  agreements  to purchase  or  repurchase  obligations  of such other
persons,  to advance or supply funds to, or to invest in, such other  persons or
to pay for  properties,  products or services of such other persons  (whether or
not conveyed,  delivered or rendered);  demand  charge  contracts,  through-put,
take-or-pay,  keep-well, make-whole or maintenance of working capital or similar
agreements;  or  guarantees  with  respect to rental or other  similar  periodic
payments to be made by such other Persons,  including,  but without limiting the
generality of the foregoing, the Guaranty Agreement dated as of June 1, 1968, as
amended as of August 1, 1968,  May 1, 1970,  April 13,  1973,  May 26,  1973 and
November 30, 1984, between Boise Cascade Corporation,  the Company and Parish of
Beauregard,  Louisiana; or (v) any capitalized leases for space and/or equipment
in respect of oil and gas  production  platforms not in excess of $25,000,000 in
the aggregate;  or (vi) any Indebtedness of Bear Creek Storage Company or Citrus
Corp. that is shown on the balance sheet of the Company as a liability and which
would not be required to be treated as Indebtedness of the Company or any of its
Subsidiaries under generally accepted accounting  principles as in effect on the
date hereof but which is required to be treated as  Indebtedness  of the Company
or any of its  Subsidiaries  as a  result  of a  change  in  generally  accepted
accounting principles after the date hereof. For purposes of this Agreement, the
principal  amount of any Indebtedness of any Person  (excluding  Operating Lease
Obligations and Mandatory  Preferred Stock of a Consolidated  Subsidiary)  shall
mean the amount  required  in  accordance  with  generally  accepted  accounting
principles  to be shown as a liability on the balance  sheet of such Person (or,
in the  case of  Indebtedness  of  another  Person  required  to be  treated  as
Indebtedness  of such Person  under this  Agreement,  the balance  sheet of such
other Person) prepared as of the applicable date.

               "Interest  Payment Date" shall mean, as to any Loan, the last day
of the  Interest  Period  for such Loan and (i) with  respect to a Set Rate Loan
with an Interest Period longer than 90 days, the last day of each consecutive 90
day period (other than such last day if such last day occurs within two Business
Days of the last day of such  Interest  Period)  occurring  during such Interest
Period commencing with the first day of such Interest Period,  (ii) with respect
to a Eurodollar Loan with an Interest Period longer than three months,  the last
day of each  consecutive  three month  period  (other than such last day if such
last day  occurs  within  two  Business  Days of the  last day of such  Interest
Period)  occurring during such Interest Period  commencing with the first day of
such Interest  Period and (iii) with respect to a Domestic Loan,  each Quarterly
Date that occurs prior to the end of the Interest Period for such Loan.

               "Interest  Period" shall mean, for any Loan, the period  provided
for such Loan pursuant to 2.03 hereof.

               "Loans" shall mean Money Market Loans, Syndicated Loans and
Swingline Loans.

               "Majority  Banks" shall mean Banks having at least 66-2/3% of the
aggregate  amount of the  Commitments;  provided that, if the Commitments  shall
have  terminated,  Majority  Banks  shall mean  Banks and SPCs  holding at least
66-2/3% of the aggregate unpaid principal amount of the Loans.

               "Mandatory  Preferred  Stock"  shall mean,  for any  Person,  the
aggregate stated liquidation value of any outstanding  preferred stock issued by
such Person  which is required to be redeemed,  in whole or in part,  by sinking
fund or other mandatory payments at any time prior to the Commitment Termination
Date.

               "Moody's" shall mean Moody's Investor Service, Inc.

               "Money Market  Borrowing" shall have the meaning assigned to such
term in 1.02(b) hereof.

               "Money Market Loans" shall mean the loans provided for by 1.02
hereof.

               "Money Market Note" shall have the meaning  assigned to such term
in 1.10(b) hereof.

               "Money  Market  Quote"  shall  mean an offer in  accordance  with
1.02(c)  hereof by a Bank to make a Money Market Loan with one single  specified
interest rate.

               "Money Market Quote Request"  shall have the meaning  assigned to
such term in 1.02(b) hereof.

               "Money Market Rate" shall have the meaning  assigned to such term
in 1.02(c)(ii)(C) hereof.

               "Note"  shall mean a  Syndicated  Note,  a Money Market Note or a
Swingline Note.

               "Operating Lease  Obligations" shall mean, for the Company at any
date,  if  the  minimum  annual  rental  commitments  of  the  Company  and  its
Consolidated  Subsidiaries as lessee under leases (other than capital leases and
mineral  leases) in effect on such date for the  fiscal  year in which such date
occurs shall exceed  $30,000,000,  the minimum rental commitments of the Company
and its  Consolidated  Subsidiaries  as lessee over the remaining  terms of such
leases that cause such minimum annual rental commitments to exceed  $30,000,000,
discounted to present  value at the rate of 10% per annum.  For purposes of this
definition,  rental  payments  under leases  having the longest  terms and which
cannot be canceled by the Lessee without the incurrence of a substantial penalty
shall be deemed to be those  leases  that cause such  aggregate  minimum  rental
commitments to exceed $30,000,000.

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

               "Person" shall mean an individual,  a corporation,  a company,  a
voluntary association, a partnership, a trust, an unincorporated organization or
a government or any agency, instrumentality or political subdivision thereof.

               "Plan" shall mean any employee  benefit or other plan  maintained
by the Company or any Subsidiary of the Company for its employees and covered by
Title IV of ERISA.

               "Post-Default  Rate" shall mean, in respect of any amount payable
under this Agreement which is not paid when due (whether at stated maturity,  by
acceleration or otherwise), a rate per annum for each day during the period from
the due date of such amount  until such amount shall be paid in full equal to 2%
above the Base Rate in effect on such day  (provided  that,  if the amount so in
default is  principal  of a Fixed Rate Loan or a Money  Market  Loan and the due
date thereof is a day other than the last day of the Interest  Period  therefor,
the  "Post-Default  Rate" for such  principal  shall be, for the period from and
including such due date to but excluding the last day of the Interest Period for
such Loan,  2% above the interest  rate for such Loan as provided in 2.02 hereof
and, thereafter, the rate provided for above in this definition).

               "Prime  Rate" shall mean the rate of  interest  from time to time
announced by Chase at its Principal Office as its prime commercial lending rate.

               "Principal  Office"  shall mean (i) with  respect to Chase or The
Chase  Manhattan  Bank, its principal  office in New York,  New York,  presently
located at 1 Chase Manhattan  Plaza,  New York, NY and (ii) with respect to Bank
of America,  its principal office in Concord  California,  presently  located at
1850 Gateway Boulevard, Concord, CA.

               "Quarterly  Dates"  shall mean the last day of each March,  June,
September  and  December,  commencing on the first such date after the Effective
Date.

               "Quarterly  Period"  shall mean the  period of three  consecutive
calendar months ending on each Quarterly Date.

               "Quotation Date" shall have the meaning attributed thereto in
1.02(b)(iv)hereof.

               "Rating  Level" shall mean,  as of any day,  the level  indicated
below  opposite the statement that is correct with respect to the ratings of the
Company's senior unsecured  long-term debt securities as of such day,  provided,
that if the ratings of S&P and Moody's on such day fall within different levels,
the level  shall be the level  which is the level with the lower  rating  unless
there is a difference  of two or more  levels,  in which case the level shall be
the level which is one level above the level with the lower rating:


              Rating                                                  Level

              A- or better by S&P or A3 or better by                    I
              Moody's

              BBB+ by S&P or Baa1 by Moody's                           II

              BBB by S&P or Baa2 by Moody's                            III

              BBB- by S&P or Baa3 by Moody's                           IV

              Below BBB- by S&P and below Baa3 by Moody's               V

For purposes of this definition, "I" shall be the highest level and "V" shall be
the lowest level. If any rating  established or deemed to have been  established
by Moody's or S&P shall be changed,  such change  shall be  effective  as of the
date on which it is first announced by the applicable rating agency. Each change
in the Rating Level shall apply during the period  commencing  on the  effective
date of such change and ending on the date  immediately  preceding the effective
date of the next such  change.  If the  rating  system of  Moody's  or S&P shall
change so as to make the above  ratings  inapplicable,  or if either such rating
agency shall cease to be in the business of rating corporate debt obligations or
shall no longer  have in effect a rating for any  reason,  the  Company  and the
Banks shall negotiate in good faith to amend the references to specific  ratings
in this definition to reflect such changed rating system or the non-availability
of ratings from such rating  agency or to select a substitute  rating agency and
pending or in the absence of any  agreement  the Rating Level will be determined
by reference to the single available  rating,  if any, or, in the absence of any
rating, then such rating agencies will be deemed to have established a rating in
Level V.

               "Reference Banks" shall mean The Chase Manhattan Bank and Bank of
America  National Trust and Savings  Association  (or their  Applicable  Lending
Offices, as the case may be).

               "Regulation D" shall mean  Regulation D of the Board of Governors
of the Federal Reserve System (or any successor),  as the same may be amended or
supplemented from time to time.

               "Regulatory  Change"  shall mean,  with respect to any Bank,  any
change  after the date of this  Agreement  in United  States  Federal,  state or
foreign law or regulations (including, without limitation,  Regulation D) or the
adoption or making after such date of any  interpretation,  directive or request
applying to a class of banks  including  such Bank of or under any United States
Federal, state or foreign law or regulations (whether or not having the force of
law) by any  court  or  governmental  or  monetary  authority  charged  with the
interpretation or administration thereof.

               "Restricted  Subsidiaries"  shall mean SNG, Sonat Exploration and
any other Subsidiary of the Company which shall acquire or succeed to all or any
substantial  part of the assets or the stock of any such  Restricted  Subsidiary
(in  which  case  any  references  to any  such  Restricted  Subsidiary  in this
Agreement shall, mutatis mutandis, be deemed to refer to such other Subsidiary).

               "Set Rate  Auction"  shall mean a  solicitation  of Money  Market
Quotes setting forth Money Market Rates pursuant to 1.02 hereof.

               "Set Rate Loans" shall mean Money Market Loans the interest rates
on which are  determined  on the basis of Money Market  Rates  pursuant to a Set
Rate Auction.

               "SNG" shall mean  Southern  Natural Gas Company,  a  wholly-owned
Subsidiary of the Company (except for directors' qualifying shares).

               "Sonat  Exploration"  shall mean  Sonat  Exploration  Company,  a
wholly-owned  Subsidiary  of  the  Company  (except  for  directors'  qualifying
shares).

               "S&P" shall mean Standard & Poor's Ratings  Services,  a division
of The Mc-Graw Hill Companies.

               "SPC" shall have the meaning provided in 8.09(b).

               "Subsidiary"  shall  mean,  as to any  Person,  any  corporation,
partnership  or other  entity at least a majority of whose  securities  or other
ownership  interests  having ordinary voting power for the election of directors
or other persons performing  similar functions of such corporation,  partnership
or entity (other than securities or other ownership  interests having such power
only by reason of the happening of a contingency)  are at the same time owned by
such Person and/or one or more of its other Subsidiaries.

               "SunTrust" shall mean SunTrust Bank, Atlanta, in its capacity as
the Documentation Agent.

               "Swingline  Account"  shall  mean  the  account  of  the  Company
maintained  with the Swingline  Bank at its Lending Office which the Company and
the Swingline  Lender shall  designate as the Swingline  Account for purposes of
this Agreement.

               "Swingline  Bank"  shall  mean  SunTrust  Bank,  Atlanta,  in its
capacity as the lender of Swingline Loans.

               "Swingline  Business Day" shall mean any day on which  commercial
banks are not authorized or required to close in Atlanta, Georgia.

               "Swingline Commitment" shall mean the obligation of the Swingline
Bank to make Swingline  Loans pursuant to 1.03 hereof in an aggregate  principal
amount at any one time outstanding up to but not exceeding $60,000,000.

               "Swingline Loans" shall have the meaning assigned to such term in
1.03 hereof.

               "Swingline  Note" shall have the meaning assigned to such term in
1.10(c) hereof.

               "Syndicated Loans" shall mean the loans provided for by 1.01
ereof.

               "Syndicated Note" shall have the meaning assigned to such term in
1.10(a) hereof.

               "Termination Event" shall mean any event or condition which would
constitute  grounds  under ss.4042 of ERISA for the  termination  of, or for the
appointment of a trustee to administer, any Plan.

               "Total  Indebtedness"  shall mean, for any Person,  the aggregate
unpaid  principal amount of the Indebtedness of such Person and its Consolidated
Subsidiaries  (excluding  Indebtedness  of any  Consolidated  Subsidiary to such
Person or another  such  Consolidated  Subsidiary  and,  except for the Company,
Indebtedness of such Person to any of its Consolidated Subsidiaries).

               "Year  2000  Problem"  shall  mean for any  Person  the risk that
computer  applications  used by such  Person may be unable to  perform  properly
date-sensitive functions involving certain dates after December 31, 1999.


<PAGE>



                                                                     SCHEDULE 2

                                       LENDING OFFICES
                                            AND/OR


                                    ADDRESSES FOR NOTICES

1.      Sonat Inc.

        Address for Notices:
           AmSouth-Sonat Tower
           1900 Fifth Avenue North
           Birmingham, Alabama 35202-2563
           Attention:  Treasurer

           Fax:  205-325-7490
           Telex:  4955644
           Answerback:  SNGC UI

2.     The Chase Manhattan Bank (as a Bank and as Administrative Agent)

        Lending Office for All Types of Loans:
           The Chase Manhattan Bank
           1 Chase Manhattan Plaza
           New York, New York 10081

        Address for Notices:
           The Chase Manhattan Bank
           1 Chase Manhattan Plaza
           New York, New York 10081
           Attention:  Loan and Agency Services
                      Lisa Pucciarelli

           Telephone:  212-552-7886
           Fax:  212-552-5777


        With copies to:
           The Chase Manhattan Bank
           270 Park Avenue, 21st Floor
           New York, New York 10017
           Attention:  Oil & Gas Group
                      Steven Wood
                      Carlos Morales

           Chase Securities Inc.
           270 Park Avenue
           New York, New York 10017-2070
           Attention:  Financial Products Money Market Management
                      6th Floor

           Chase Securities Inc.
           707 Travis, 8th Floor
           Houston, Texas  77002

3.     Bank of America National Trust and Savings Association (as a Bank and
       as Syndication Agent)

        Lending Office for All Types of Loans:
           Bank of America National Trust and Savings Association
           1850 Gateway Boulevard
           Concord, CA  94520

        Address for Notices:
           Bank of America National Trust and Savings Association
           1850 Gateway Boulevard
           Concord, CA  94520
           Attention: Camille Gibby

           Telephone: 925-675-7759
           Fax: 925-975-7531

        with copies to:

           Bank of America  National Trust and Savings  Association  Three Allen
           Center, 333 Clay St.
           Houston, TX  77002

           Attention:

           Michael J. Dillon
           Telephone: 713-651-4903
           Fax: 713-651-4808

           Robert R. Ingersoll
           Telephone: 713-651-4922
           Fax: 713-651-4904


4.     SunTrust Bank, Atlanta (as a Bank, as the Swingline Bank and as
       Documentation Agent)

        Lending Office for All Types of Loans:
           SunTrust Bank, Atlanta
           25 Park Place
           Atlanta, Georgia 30303
           Attention:  John Frazer

           Telephone:  404-575-2841
           Fax:  404-588-8833


        Address for Notices:
           SunTrust Bank, Atlanta
           P.O. Box 4418, Mail Code 120
           Atlanta, Georgia 30303
           Attention:  Gina Muncus

           Telephone:  404-658-4624
           Fax:  404-827-6270
           Telex:  54220
           Answerback:  TruscoIntAtl

5.     The Bank of Nova Scotia

        Lending Office for All Types of Loans:
           The Bank of Nova Scotia
           600 Peachtree Street, N.E.
           Suite 2700
           Atlanta, Georgia 30308

        Address for Notices:
           The Bank of Nova Scotia
           600 Peachtree Street, N.E.
           Suite 2700
           Atlanta, Georgia 30308
           Attention:  Donna Gardner

           Telephone:  404-877-1559
           Fax:  404-888-8998


        Address for Loan Documentation Matters:
           The Bank of Nova Scotia
           1100 Louisiana, Suite 3000
           Houston, Texas  77002
           Attention:  Jean Paul Purdy

           Telephone:  713-759-3433
           Fax:  713-752-2425

6.     Credit Lyonnais, New York Branch

        Lending Office for All Types of Loans
           Credit Lyonnais, New York Branch
           c/o Credit Lyonnais Houston Representative Office
           1000 Louisiana, Suite #5360
           Houston, Texas 77002

        Address for Notices:
           Credit Lyonnais, New York Branch
           c/o Credit Lyonnais Houston Representative Office
           1000 Louisiana, Suite #5360
           Houston, Texas 77002
           Attention:  Robert LaRocque

           Telephone:  (713) 751-8721
           Fax:  (713) 751-0307
           Telex:  6868674
           Answerback:  CL HOU UN

7.     Mellon Bank, N.A.

        Lending Office for All Types of Loans:
           Mellon Bank, N.A.
           Three Mellon Bank Center
           Loan Administration
           Room 1203
           Pittsburgh, PA  15259
           Attention:  Supervisor

           Telephone:  412-234-4087
           Fax:  412-236-2027

        Address for notices:
           Mellon Bank, N.A.
           One Mellon Bank Center
           Room 4425
           Pittsburgh, PA  15258
           Attention:  Roger Howard

           Telephone:  412-234-5606
           Fax:  412-236-1840

        Address for Notices Regarding Money Market Loans
           Mellon Bank, N.A.
           One Mellon Bank Center
           Capital Markets, Room 151-0400
           Pittsburgh, PA 15258-0001
           Attention:  Marilyn Wagner

           Telephone:  (412) 234-1693
           Fax:  (412) 234-7834

8.     AmSouth Bank

        Lending Office for All Types of Loans:
           AmSouth Bank
           1900 Fifth Avenue North
           Birmingham, Alabama  35203

        Address for Notices:
           AmSouth Bank
           1900 Fifth Avenue North
           Birmingham, Alabama  35203
           Attention:  David A. Simmons
                      Senior Vice President

           Telephone:  205-326-5924
           Fax:  205-801-0157

9.     Regions Bank

        Lending Office for All Types of Loans
           Regions Bank (Birmingham)
           417 20th Street North
           Birmingham, AL  35202

        Address for Notices:
           Regions Bank (Birmingham)
           417 North 20th Street
           Birmingham, AL 35202
           Attention: Chuck Allen

           Telephone:  (205) 326-7003
           Fax:  (205) 326-7739

10.    Credit Agricole Indosuez

        Lending Office for All Types of Loans
           Credit Agricole Indosuez
           600 Travis Street, Suite 2340
           Houston, TX  77002
           Attention:  Doug Whiddon

           Telephone:  (713) 223-7003
           Fax:  (713) 223-7029

           Alternate:  Brian Knezeak
           Telephone:  (713) 223-7001
           Fax:  223-7029

        Address for Notices:
           Credit Agricole Indosuez
           55 East Monroe Street, Suite 4700
           Chicago, IL  60603
           Attention:  Teresa Howard

           Telephone:  (312) 917-7554
           Fax:  (312) 372-4421

11.    The Northern Trust Co.

        Lending Office for All Types of Loans
           Northern Trust
           50 South LaSalle Street
           Chicago, IL 60675
           Attention:

           Telephone:
           Fax:

        Address for Notices:
           Northern Trust
           50 South LaSalle Street
           Chicago, IL 60675
           Attention: Christina Jakuc

           Telephone:  (312) 444-3455
           Fax:  (312) 630-6062

12.    SouthTrust Bank N.A.

        Lending Office for All Types of Loans
           SouthTrust Bank N.A.
           420 N. 20th Street, 6th Floor
           Birmingham, AL 35203 Attention:

           Telephone:
           Fax:

        Address for Notices:
           SouthTrust Bank N.A.
           420 N. 20th Street, 6th Floor
           Birmingham, AL 35203
           Attention: John A. Lotz, Jr.

           Telephone:  (205) 254-5795
           Fax:  (205) 254-5911

13.    The First National Bank of Chicago

        Lending Office for All Types of Loans
           The First National Bank of Chicago
           One First National Plaza
           0634, IFNP, 10
           Chicago, IL  60670
           Attention: Bill Laird

           Telephone:  (312) 732-5635
           Fax:  (312) 732-4840

        Address for Notices:
           The First National Bank of Chicago
           One First National Plaza
           I FNP, 0634
           Chicago, IL  60670
           Attention: Bill Laird

           Telephone:  (312) 732-5635
           Fax:  (312) 732-4840

14.    Wachovia Bank N.A.

        Lending Office for All Types of Loans

           191 Peachtree Street, N.E., 29th Floor
           Atlanta Georgia  30303-1750
           Attention:  Margery Pace

           Telephone:  (404) 332-4029
           Fax:  (404) 332-5016

        Address for Notices:

           191 Peachtree Street, N.E., 29th Floor
           Atlanta Georgia  30303-1750
           Attention:  John Canty

           Telephone:  (404) 332-4331
           Fax:  (404) 332-5016



<PAGE>



                                                                     SCHEDULE 3


             BANKS                                                   COMMITMENT

THE CHASE MANHATTAN BANK                                         $   92,000,000

BANK OF America National Trust and Savings Association               91,500,000

SUNTRUST BANK, ATLANTA                                               91,500,000

CREDIT LYONNAIS, NEW YORK BRANCH                                     90,000,000

THE BANK OF NOVA SCOTIA                                              90,000,000

MELLON BANK, N.A.                                                    90,000,000

WACHOVIA BANK N.A.                                                   90,000,000

THE FIRST NATIONAL BANK OF CHICAGO                                   90,000,000

AMSOUTH BANK                                                         50,000,000

SOUTHTRUST BANK N.A.                                                 35,000,000

CREDIT AGRICOLE INDOSUEZ                                             30,000,000

THE NORTHERN TRUST CO.                                               30,000,000

REGIONS BANK                                                         30,000,000
                                                                   $900,000,000
<PAGE>



                                                                   EXHIBIT A-1



                             [Form of Note for Syndicated Loans]


                                       PROMISSORY NOTE
                                                               April 15, 1999
                                                           New York, New York

               FOR VALUE  RECEIVED,  SONAT  INC.,  a Delaware  corporation  (the
"Company"),  hereby  promises  to  pay  to  (the  "Bank"),  for  account  of its
respective  Applicable  Lending  Offices  provided  for by the Credit  Agreement
referred to below,  at the  principal  office of The Chase  Manhattan  Bank at 1
Chase Manhattan  Plaza,  New York, New York 10081,  the principal sum of Dollars
(or such lesser amount as shall equal the aggregate  unpaid  principal amount of
the  Syndicated  Loans  made  by  the  Bank  to the  Company  under  the  Credit
Agreement),  in lawful money of the United States of America and in  immediately
available  funds,  on the dates and in the  principal  amounts  provided  in the
Credit  Agreement,  and to pay interest on the unpaid  principal  amount of each
such Syndicated  Loan, at such office,  in like money and funds,  for the period
commencing on the date of such  Syndicated Loan until such Syndicated Loan shall
be paid in full, at the rates per annum and on the dates  provided in the Credit
Agreement.

               The date, amount,  type,  interest rate and maturity date of each
Syndicated  Loan  made by the  Bank to the  Company,  and each  payment  made on
account of the  principal  thereof,  shall be  recorded by the Bank on its books
and,  prior to any  transfer of this Note,  endorsed by the Bank on the schedule
attached hereto or any continuation thereof. The failure of the Bank to make any
notation or entry or any error in such a notation  or entry shall not,  however,
limit or  otherwise  affect  any  obligation  of the  Company  under the  Credit
Agreement or this Note.

               This Note is one of the Notes referred to in the Credit Agreement
(as  modified  and  supplemented  and in effect  from time to time,  the "Credit
Agreement")  dated as of April 15,  1999,  among the  Company,  the banks  named
therein and The Chase Manhattan Bank, as  Administrative  Agent, Bank of America
National Trust and Savings Association, as Syndication Agent, and SunTrust Bank,
Atlanta, as Documentation Agent, and evidences Syndicated Loans made by the Bank
thereunder.  Capitalized  terms used in this Note have the  respective  meanings
assigned to them in the Credit Agreement.

               The  Credit  Agreement  provides  for  the  acceleration  of  the
maturity of this Note upon the occurrence of certain events and for  prepayments
of Loans upon the terms and conditions specified therein.

               This Note shall be governed by, and construed in accordance with,
the law of the State of New York.

                                                   SONAT INC.



                                                   By
                                                   Title:



<PAGE>


                                      SCHEDULE OF LOANS

               This Note evidences Loans made under the within-described  Credit
Agreement to the Company,  on the dates, in the principal amounts, of the types,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:


         Principal
  Date    Amount    Type             Maturity   Amount     Unpaid
  of       of        of    Interest  Date of    Paid or   Principal    Notation
 Loan     Loan      Loa     Rate      Loan      Prepaid     Amount     Made by




<PAGE>




                                                                  EXHIBIT A-2



                            [Form of Note for Money Market Loans]


                                       PROMISSORY NOTE
                                                                April 15, 1999
                                                            New York, New York

               FOR VALUE  RECEIVED,  SONAT  INC.,  a Delaware  corporation  (the
"Company"),  hereby  promises  to  pay  to  (the  "Bank"),  for  account  of its
respective  Applicable  Lending  Offices  provided  for by the Credit  Agreement
referred to below,  at the  principal  office of The Chase  Manhattan  Bank at 1
Chase Manhattan  Plaza, New York, New York 10081, the aggregate unpaid principal
amount of the  Money  Market  Loans  made by the Bank to the  Company  under the
Credit  Agreement,  in  lawful  money of the  United  States of  America  and in
immediately  available funds, on the dates and in the principal amounts provided
in the Credit  Agreement,  and to pay interest on the unpaid principal amount of
each such Money Market Loan,  at such office,  in like money and funds,  for the
period  commencing on the date of such Money Market Loan until such Money Market
Loan shall be paid in full, at the rates per annum and on the dates  provided in
the Credit Agreement.

               The date,  amount,  interest rate and maturity date of each Money
Market Loan made by the Bank to the Company, and each payment made on account of
the principal thereof,  shall be recorded by the Bank on its books and, prior to
any transfer of this Note,  endorsed by the Bank on the schedule attached hereto
or any  continuation  thereof.  The failure of the Bank to make any  notation or
entry or any error in such a  notation  or entry  shall not,  however,  limit or
otherwise  affect any  obligation of the Company  under the Credit  Agreement or
this Note.

               This Note is one of the Notes referred to in the Credit Agreement
(as  modified  and  supplemented  and in effect  from time to time,  the "Credit
Agreement")  dated as of April 15,  1999,  among the  Company,  the banks  named
therein and The Chase Manhattan Bank, as  Administrative  Agent, Bank of America
National Trust and Savings Association, as Syndication Agent, and SunTrust Bank,
Atlanta,  as  Documentation  Agent, and evidences Money Market Loans made by the
Bank  thereunder.  Capitalized  terms  used in this  Note  have  the  respective
meanings assigned to them in the Credit Agreement.

               The  Credit  Agreement  provides  for  the  acceleration  of  the
maturity of this Note upon the occurrence of certain events and for  prepayments
of Loans upon the terms and conditions specified therein.

               This Note shall be governed by, and construed in accordance with,
the law of the State of New York.

                                                   SONAT INC.



                                                   By
                                                   Title:



<PAGE>


                                      SCHEDULE OF LOANS

               This Note evidences Loans made under the within-described  Credit
Agreement  to the  Company,  on the dates,  in the  principal  amounts,  bearing
interest at the rates and maturing on the dates set forth below,  subject to the
payments and prepayments of principal set forth below:


         Principal
Date      Amount              Maturity      Amount        Unpaid
 of        of      Interest    Date of     Paid or       Principal     Notation
Loan      Loan      Rate        Loan       Prepaid        Amount        Made by



<PAGE>


                                                                    EXHIBIT A-3
                             [Form of Note for Swingline Loans]


                                       PROMISSORY NOTE
                                                                 April 15, 1999
                                                             New York, New York

               FOR VALUE  RECEIVED,  SONAT  INC.,  a Delaware  corporation  (the
"Company"),  hereby promises to pay to SUNTRUST BANK, ATLANTA (the "Bank"),  for
account of its respective  Applicable Lending Offices provided for by the Credit
Agreement referred to below, at the principal office of The Chase Manhattan Bank
at 1 Chase  Manhattan  Plaza,  New York,  New York 10081,  the  principal sum of
Dollars (or such lesser  amount as shall equal the  aggregate  unpaid  principal
amount of the  Swingline  Loans made by the Bank to the Company under the Credit
Agreement),  in lawful money of the United States of America and in  immediately
available  funds,  on the dates and in the  principal  amounts  provided  in the
Credit  Agreement,  and to pay interest on the unpaid  principal  amount of each
such  Swingline  Loan, at such office,  in like money and funds,  for the period
commencing on the date of such Swingline Loan until such Swingline Loan shall be
paid in full,  at the rates per annum and on the dates  provided  in the  Credit
Agreement.

               The date, amount,  type,  interest rate and maturity date of each
Swingline Loan made by the Bank to the Company, and each payment made on account
of the principal thereof,  shall be recorded by the Bank on its books and, prior
to any  transfer  of this Note,  endorsed by the Bank on the  schedule  attached
hereto or any continuation thereof. The failure of the Bank to make any notation
or entry or any error in such a notation or entry shall not,  however,  limit or
otherwise  affect any  obligation of the Company  under the Credit  Agreement or
this Note.

               This Note is one of the Notes referred to in the Credit Agreement
(as  modified  and  supplemented  and in effect  from time to time,  the "Credit
Agreement")  dated as of April 15,  1999,  among the  Company,  the banks  named
therein and The Chase Manhattan Bank, as  Administrative  Agent, Bank of America
National Trust and Savings Association, as Syndication Agent, and SunTrust Bank,
Atlanta, as Documentation  Agent, and evidences Swingline Loans made by the Bank
thereunder.  Capitalized  terms used in this Note have the  respective  meanings
assigned to them in the Credit Agreement.

               The  Credit  Agreement  provides  for  the  acceleration  of  the
maturity of this Note upon the occurrence of certain events and for  prepayments
of Loans upon the terms and conditions specified therein.

               This Note shall be governed by, and construed in accordance with,
the law of the State of New York.

                                                   SONAT INC.



                                                   By
                                                   Title:





<PAGE>




                                      SCHEDULE OF LOANS

               This Note evidences Loans made under the within-described  Credit
Agreement to the Company,  on the dates, in the principal amounts, of the types,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:


        Principal
Date     Amount    Type              Maturity   Amount     Unpaid
 of       of        of     Interest   Date of   Paid or    Principal   Notation
Loa      Loan      Loan      Rate      Loan     Prepaid     Amount     Made by





<PAGE>



                                                                     EXHIBIT B



                     [Form of Opinion of Special Counsel to the Company]
                                                                April 15, 1999

To the Banks party to the Agreement
        referred to below and The Chase
        Manhattan Bank, as Administrative
        Agent, Bank of America National Trust and Savings Association,
        as Syndication Agent and SunTrust Bank,
        Atlanta, as Documentation
        Agent

Dear Sirs:

               We have  acted as  special  counsel  for Sonat  Inc.,  a Delaware
corporation  (the  "Company"),  in connection with the execution and delivery of
the Credit  Agreement (the  "Agreement")  dated as of April 15, 1999,  among the
Company, the Banks named therein and The Chase Manhattan Bank, as Administrative
Agent,  Bank of America National Trust and Savings  Association,  as Syndication
Agent and SunTrust Bank, Atlanta, as Documentation Agent.

               This  opinion  is  delivered  to you  pursuant  to 4.01(v) of the
Agreement.  All  capitalized  terms not otherwise  defined herein shall have the
meanings attributed to them in the Agreement.

               In this  connection,  and as a basis for the  opinions  expressed
below,  we have  examined  or relied  upon  originals  or copies,  certified  or
otherwise  identified  to  our  satisfaction,   of  such  records,  instruments,
certificates  and other  documents,  have made such inquiries as to questions of
fact  of  officers  and  representatives  of the  Company  and  have  made  such
examinations  of law as we have deemed  necessary or appropriate for purposes of
giving the opinions hereinafter  expressed.  As to certain matters in respect of
the opinions  expressed in paragraphs 1 and 2 below,  we have relied,  with your
permission,  solely  on the  opinion,  a copy of which is  attached  hereto,  of
William A. Smith, Executive Vice President and General Counsel.

               In rendering the opinions  expressed  below, we have assumed that
the  Agreement  has been duly  authorized,  executed and delivered by each party
thereto  other than the Company,  that each party thereto other than the Company
has the  requisite  power and  authority  to  execute,  deliver  and perform the
Agreement,  and that such  execution,  delivery  and  performance  by such other
parties does not and will not breach, conflict with or constitute a violation of
the laws or governmental rules or regulations of any jurisdiction.

               Each of the opinions  expressed  below is  restricted  to matters
controlled or affected by Federal laws, the General Corporation Law of the State
of Delaware and the laws of the State of New York.

               On the basis of the foregoing, it is our opinion that:

                      1. The Company is a corporation duly incorporated, validly
               existing  and in good  standing  under  the laws of the  State of
               Delaware and is duly  licensed or qualified to do business and is
               in good  standing in the States of  Alabama,  Texas and New York,
               constituting  those  states  which we have been  advised  are the
               states in which the Company  believes the conduct of its business
               or the ownership of its assets requires such  qualification,  and
               the Company has the corporate power to make the Agreement and the
               Notes and to borrow under the Agreement.

                      2.  The  making  and  performance  by the  Company  of the
               Agreement and the Notes and  borrowings  under the Agreement have
               been duly authorized by all necessary corporate action and do not
               and will not  contravene  any provision of law  applicable to the
               Company or of the certificate of  incorporation or by-laws of the
               Company  or result in the  material  breach of, or  constitute  a
               material  default or require any consent under,  or result in the
               creation of any material lien,  charge or other security interest
               or encumbrance  (except as may be required by the Agreement) upon
               any property or assets of the Company  pursuant to, any indenture
               or other  agreement or instrument to which the Company is a party
               or by which the  Company or any of its  property  may be bound or
               affected.

                      3. No  approval,  license or  consent of any  governmental
               regulatory body is requisite to the making and performance by the
               Company of the Agreement or the  execution,  delivery and payment
               of the Notes.

                      4. The Agreement and the Notes have been duly executed and
               delivered by the Company and each constitutes a valid and binding
               agreement of the Company enforceable in accordance with its terms
               (subject  to  applicable   bankruptcy,   fraudulent   conveyance,
               fraudulent   transfer,    preferential   transfer,    insolvency,
               moratorium and other like laws of general  application  affecting
               creditors' rights and to the application of general principles of
               equity,  including  without  limitation  concepts of materiality,
               reasonableness,   good  faith  and  fair   dealing   and  whether
               considered in a proceeding  in equity or at law),  except that we
               express no opinion as to 2.06(c) of the Agreement.

               In  connection  with  the  above,  we  wish  to  point  out  that
provisions of the Agreement which permit any Agent or any Bank to take action or
make  determinations or allocations,  or to benefit from indemnities and similar
undertakings of the Company, may be subject to a requirement that such action be
taken or such  determinations  or  allocations  be made,  and that any action or
inaction  by an Agent or a Bank  which may give rise to a  request  for  payment
under such an  indemnity  or  similar  undertaking  be taken or not taken,  on a
reasonable basis and in good faith.

               We express no opinion with respect to:

               (A)  the  effect  of any  provision  of the  Agreement  which  is
intended to permit modification thereof only by means of an agreement in writing
by the parties thereto;

               (B)  the  effect  of  any  provision  of the  Agreement  imposing
penalties or forfeitures;

               (C) the  enforceability  of any provision of the Agreement to the
extent that such  provision  constitutes  a waiver of illegality as a defense to
performance of contract obligations; and

               (D) the effect of any  provision  of the  Agreement  relating  to
indemnification  or exculpation in connection  with violations of any securities
laws or relating to  indemnification,  contribution or exculpation in connection
with willful,  reckless or criminal acts or gross  negligence of the indemnified
or exculpated Person or the Person receiving contribution.

                                Very truly yours,


<PAGE>




                                                               (ATTACHMENT TO
                                                                  EXHIBIT B)



                             [Form of Opinion of General Counsel]
                                                                 April 15, 1999

Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York  10004

Dear Sirs:

               As Executive Vice President and General  Counsel of Sonat Inc., a
Delaware  corporation (the  "Company"),  I am familiar with the Credit Agreement
(the "Agreement") dated as of April 15, 1999, among the Company, the Banks named
therein and The Chase Manhattan Bank, as  Administrative  Agent, Bank of America
National Trust and Savings Association,  as Syndication Agent and SunTrust Bank,
Atlanta, as Documentation Agent.

               This opinion is delivered to you in  connection  with the opinion
which you are rendering  pursuant to 4.01(v) of the  Agreement.  You may rely on
this opinion in  rendering  your  opinion,  you may attach a copy hereof to your
opinion and the Banks may rely on this opinion as if it were  addressed to them.
All  capitalized  terms not  otherwise  defined  herein  shall have the  meaning
attributed to them in the Agreement.

               In this  connection,  and as a basis for the  opinions  expressed
below, I have examined or relied upon originals or copies certified or otherwise
identified to my satisfaction,  of such records,  instruments,  certificates and
other  documents,  have made  inquiries  as to questions of fact of officers and
representatives  of the Company and have made such examinations of law as I have
deemed necessary or appropriate for purposes of giving the opinions  hereinafter
expressed.

               On the basis of the foregoing, it is my opinion that:

                      1.  The  Company  is  duly  licensed  or  qualified  to do
               business and is in good standing in the States of Alabama,  Texas
               and New York,  constituting  those  states  in which the  Company
               believes  the  conduct of its  business or the  ownership  of its
               assets requires such qualification.

                      2.  The  making  and  performance  by the  Company  of the
               Agreement and the Notes and borrowings under the Agreement do not
               and will not  contravene  any  provision  of law of the  State of
               Alabama or the United States  applicable to the Company by virtue
               of the nature of its or any of its Subsidiaries' businesses or of
               the  properties  owned or  leased by any of them or result in the
               material  breach of, or constitute a material  default or require
               any consent  under,  or result in the  creation  of any  material
               lien,  charge or other security  interest or encumbrance upon any
               property or assets of the Company  pursuant to, any  indenture or
               other  agreement or instrument to which the Company is a party or
               by  which  the  Company  or any of its  property  may be bound or
               affected.

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

                      4.  Neither  the Company  nor any of its  Subsidiaries  is
               subject to regulation  under the Public Utility  Holding  Company
               Act of 1935, as amended.

                                Very truly yours,



<PAGE>



                                                                     EXHIBIT C

                             [Form of Opinion of Special Counsel
                                 to the Banks and the Agents]
                                                                 April 15, 1999

To the Banks  currently  party to the  Credit  Agreement  referred  to below and
listed  on  Schedule  1  attached   hereto;   The  Chase   Manhattan   Bank,  as
Administrative
Agent, Bank of America National Trust and Savings Association,
as Syndication Agent and SunTrust Bank,
Atlanta, as Documentation
Agent

Gentlemen:

               We have  acted as your  special  counsel in  connection  with the
Credit  Agreement  (the "Credit  Agreement")  dated as of April 15, 1999,  among
Sonat Inc.  (the  "Company"),  the Banks named  therein and The Chase  Manhattan
Bank,  as  Administrative  Agent,  Bank of America  National  Trust and  Savings
Association,  as Syndication Agent and SunTrust Bank,  Atlanta, as Documentation
Agent. Terms defined in the Credit Agreement are used herein as defined therein.

               We have assumed for purposes of our opinion hereinafter set forth
that (1) the Credit Agreement is a valid and legally binding  obligation of each
of the Banks and that the Credit  Agreement has been duly  authorized,  executed
and delivered by the Company,  each Bank and each Agent, (2) the Company is duly
incorporated  and validly  existing  under the laws of the State of Delaware and
has full  power,  authority  and  legal  right to make and  perform  the  Credit
Agreement and the Notes and that such execution, delivery and performance by the
Company does not  contravene  its  certificate  of  incorporation  or by-laws or
violate,  or require any consent  not  obtained  under,  any  applicable  law or
regulation  or any  order,  writ,  injunction  or  decree  of any court or other
governmental authority and does not violate, or require any consent not obtained
under, any contractual  obligation applicable to or binding upon the Company and
(3) the Company is not an "investment company" within the meaning of and subject
to regulation under the Investment Company Act of 1940.

               We have examined (i) a copy of the Credit Agreement signed by the
Company,  each Bank and each Agent,  (ii) a copy of the Notes  delivered  on the
date hereof and (iii) a copy of the opinion letter of Hughes Hubbard & Reed LLP,
counsel for the  Company,  addressed to you and dated the date hereof in respect
of the  Credit  Agreement  together  with  the  opinion  of the  Executive  Vice
President and General Counsel of the Company,  attached thereto. We have assumed
the genuineness of all signatures, the authenticity of documents submitted to us
as originals, the conformity with the originals of all documents submitted to us
as certified or photostatic  copies,  and the  authenticity  of the originals of
such latter documents.

               Based  upon  the  foregoing  and  subject  to  the  comments  and
qualifications  set forth below, we are of the opinion that the Credit Agreement
constitutes,  and the Notes when executed and delivered for value  (assuming due
execution  and  delivery  by the  Company)  will  constitute,  valid and binding
obligations  of the Company  enforceable  in  accordance  with their  respective
terms,  except  as the  foregoing  may be  limited  by  bankruptcy,  insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or  affecting  creditors'  rights  generally,  general  equitable  principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good  faith and fair  dealing,  and  except  that we express no opinion as to
2.06(c) of the Credit Agreement.

               We express no opinion in respect to:

               (A) the effect of any provision of the Credit  Agreement which is
intended to permit modification thereof only by means of an agreement in writing
by the parties thereto;

               (B) the effect of any provisions of the Credit Agreement imposing
penalties or forfeitures;

               (C) the  enforceability  of any provision of the Credit Agreement
to the  extent  that such  provision  constitutes  a waiver of  illegality  as a
defense to performance of contract obligations; and

               (D) the effect of any provision of the Credit Agreement  relating
to   indemnification  or  exculpation  in  connection  with  violations  of  any
securities laws or relating to  indemnification,  contribution or exculpation in
connection  with willful,  reckless or criminal acts or gross  negligence of the
indemnified or exculpated Person or the Person receiving contribution.

               We are  members  of the Bar of the  State  of New York and do not
herein  intend to express  any  opinion as to any  matters  governed by any laws
other  than the law of the State of New York and the  Federal  law of the United
States of America.

               This  opinion is  rendered  to you in  connection  with the above
described transactions. This opinion may not be relied upon by you for any other
purpose,  or  relied  upon by,  or  furnished  to,  any  other  person,  firm or
corporation without our prior written consent.

                                Very truly yours,



<PAGE>



                                                                      EXHIBIT D



                             [Form of Money Market Quote Request]
                                     [Date]

To:     [Bank]

From:   Sonat Inc.

Re:     Money Market Quote Request

               Pursuant to 1.02 of the Credit Agreement (the "Credit Agreement")
dated as of April 15, 1999,  among Sonat Inc.,  the banks named  therein and The
Chase Manhattan Bank, as  Administrative  Agent,  Bank of America National Trust
and Savings  Association,  as Syndication Agent and SunTrust Bank,  Atlanta,  as
Documentation  Agent,  we hereby give notice that we request Money Market Quotes
for the following proposed Money Market Borrowing(s):

Borrowing            Quotation                                   Interest
  Date                Date [1]           Amount [2]               Period [3]


               Money Market Quotes responding to this Money Market Quote Request
must be submitted to us not later than [time and date] [4].

               Terms  used  herein  have the  meanings  assigned  to them in the
Credit Agreement.

                                                   SONAT INC.



                                                   By
                                                   Title:




<PAGE>



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

[1]     For use if a Money  Market Rate in a Set Rate Auction is requested to be
        submitted before the Borrowing Date.

[2]     Each amount must be $25,000,000 or a larger multiple of $5,000,000.

[3]     A period of up to 180 days after the making of such Set Rate Loan and
        ending on a Business Day.

[4]     Insert time and date determined pursuant to 1.02(c)(i).



<PAGE>


THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF APRIL 15, 1999
AMONG  SONAT  INC.,  THE BANKS  NAMED  HEREIN,  THE  CHASE  MANHATTAN  BANK,  AS
ADMINISTRATIVE AGENT, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS
SYNDICATION AGENT AND SUNTRUST BANK, ATLANTA, AS DOCUMENTATION AGENT.




THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT DATED AS OF APRIL 15, 1999
AMONG  SONAT  INC.,  THE BANKS  NAMED  HEREIN,  THE  CHASE  MANHATTAN  BANK,  AS
ADMINISTRATIVE AGENT, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, AS
SYNDICATION AGENT AND SUNTRUST BANK, ATLANTA, AS DOCUMENTATION AGENT.






                                 [Form of Money Market Quote]

To:     Sonat Inc.

Attention:

Re:     Money Market Quote to Sonat
        Inc. (the "Borrower")

               This Money  Market Quote is given in  accordance  with 1.02(c) of
the Credit Agreement (the "Credit  Agreement") dated as of April 15, 1999, among
the  Borrower,  the  banks  named  therein  and The  Chase  Manhattan  Bank,  as
Administrative Agent, Bank of America National Trust and Savings Association, as
Syndication  Agent and SunTrust Bank,  Atlanta,  as Documentation  Agent.  Terms
defined in the Credit Agreement are used herein as defined therein.

               In response to the Borrower's invitation dated , , we hereby make
the following Money Market Quote(s) on the following terms:

                      1.     Quoting Bank:

                      2.     Person to contact at Quoting Bank:

                      3. We hereby  offer to make  Money  Market  Loan(s) in the
               following  principal   amount[s],   for  the  following  Interest
               Period(s) and at the following rate(s):

Borrowing         Quotation                       Interest
  Date             Date [1]      Amount [2]       Period [3]            Rate [4]

               We  understand  and agree  that the  offer(s)  set  forth  above,
subject to the satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate[s] us to make the Money Market Loan(s) for which
any  offer(s)  (is/are)  accepted,  in whole or in part  (subject  to the  third
sentence of 1.02(d) of the Credit Agreement).

                                Very truly yours,

                                 [Name of Bank]



                                                   By
                                                        Authorized Officer

Dated:


<PAGE>



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

[1]     As specified in the related Money Market Quote Request.

[2]     The  principal  amount bid for each  Interest  Period may not exceed the
        principal amount requested. Bids must be made for at least $5,000,000 or
        a larger multiple of $1,000,000.

[3]     A period of up to 180 days  after  the  making of such Set Rate Loan and
        ending on a Business Day, as specified in the related Money Market Quote
        Request.

[4] Specify rate of interest per annum (rounded to the nearest 1/10,000 of 1%).