<PAGE>
 
                            INTEREST RATE AGREEMENT


     This Interest Rate Agreement (as amended, supplemented and restated, this
"Agreement") dated as of September 16, 1996 among TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (the "Lender"); DRILEX  INTERNATIONAL INC. ("Parent") (formerly,
Drilex Holdings Corp.), DRILEX SYSTEMS, INC. ("DSI"), COBB DIRECTIONAL DRILLING
COMPANY, L.L.C. ("Cobb"), SHAREWELL, INC. ("Sharewell") (formerly Shareco, Inc.)
and DRILEX SYSTEMS LIMITED ("DSL");

                              W I T N E S S E T H:
                              ------------------- 

     WHEREAS, Parent, DSI, Cobb, Sharewell and DSL (collectively, the
"Borrowers") and the Lender executed and delivered that certain Amended and
Restated Credit Agreement (as amended, supplemented and restated, the "Credit
Agreement") of even date herewith;

     WHEREAS, pursuant to the Credit Agreement, Parent, DSI, Cobb and Sharewell
(collectively, the "Dollar Borrowers") executed and delivered the Dollar Note
and DSL has executed and delivered the Pound Note; and

     WHEREAS, for convenience, the Borrowers and the Lender desire to gather the
provisions of the Credit Documents relating solely to interest on the Notes,
including the selection of interest rate options, into a supplemental agreement;

     NOW, THEREFORE, in consideration of the execution and delivery of the
Notes, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.   Definitions.
     ----------- 

     1.1  Credit Agreement.  Any term defined in the Credit Agreement and used
in this Agreement shall have the meaning ascribed to it in the Credit Agreement.
Section 1.2 and Article 9 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis.

     1.2  Defined Terms.  Unless a particular word or phrase is otherwise
defined or the context otherwise requires, capitalized words and phrases used in
this Agreement have the meaning provided below.

     Adjusted Eurodollar Interbank Rate shall mean, with respect to each
Interest Period applicable to a Eurodollar Rate Borrowing, a rate per annum
equal to the quotient, expressed as a percentage, of (a) the Eurodollar
Interbank Rate with respect to such Interest Period divided by
<PAGE>
 
(b) the difference of (1) 1.0000 minus (2) the Eurodollar Reserve Requirement in
effect on the first day of such Interest Period.

     Base Rate shall mean for any day a rate per annum (rounded upwards, if
necessary, to the nearest 1/8%, except for the Highest Lawful Rate, which shall
never be rounded upwards) equal to the lesser of (a) the Prime Rate for that day
or (b) the Highest Lawful Rate.

     Base Rate Borrowing shall mean that portion of the principal balance of the
Dollar Loans at any time bearing interest at the Base Rate.

     Base Rate Interest Payment Dates shall mean the last Business Day of each
January, April, July and October.

     Chapter One shall mean Chapter One of the Texas Credit Code, as in effect
on the date the document using such term was executed.

     Euro Borrowing shall mean either a Eurodollar Rate Borrowing or a
Eurosterling Rate Borrowing, as appropriate.

     Euro Business Day shall mean a Business Day on which transactions in Dollar
or Pound deposits (as appropriate) between banks may be carried on in the
Eurodollar Interbank Market or the Eurosterling Interbank Market (as
appropriate).

     Euro Rate shall mean either a Eurodollar Rate or a Eurosterling Rate, as
appropriate.

     Eurodollar Interbank Market shall mean whatever Eurodollar interbank market
may be selected by the Lender in its reasonable discretion.

     Eurodollar Interbank Rate shall mean, for each Interest Period, the rate of
interest per annum determined by the Lender to be the arithmetic average of the
rates per annum in accordance with the then-existing practice in the Eurodollar
Interbank Market for the offering to the Lender (at or before 10:00 a.m., local
time, in the Eurodollar Interbank Market on the date two Euro Business Days
before the first day of such Interest Period) by one or more prime banks
(selected by the Lender in its sole discretion) in the Eurodollar Interbank
Market, of deposits in Dollars for delivery on the first day of such Interest
Period and having a maturity equal to the length of such Interest Period and in
an amount equal (or as nearly equal as may be) to the Eurodollar Rate Borrowing
to which such Interest Period relates.  Each determination by the Lender of the
Eurodollar Interbank Rate shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.

                                       2
<PAGE>
 
     Eurodollar Rate shall mean for any day a rate per annum (rounded upwards,
if necessary, to the nearest 1/8%, except for the Highest Lawful Rate, which
shall never be rounded upwards) equal to the lesser of (a) the sum of (1) the
Adjusted Eurodollar Interbank Rate in effect on the first day of the Interest
Period for the applicable Eurodollar Rate Borrowing plus (2) the applicable
Margin Percentage from time to time in effect or (b) the Highest Lawful Rate.
Each Eurodollar Rate is subject to adjustments for reserves and other matters as
provided for in Section 2.3.

     Eurodollar Rate Borrowing shall mean each portion of the principal balance
of the Dollar Loans at any time bearing interest at a Eurodollar Rate pursuant
to a Rate Designation Notice.

     Eurodollar Reserve Requirement shall mean, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next higher
 .0001) which is in effect on such day for determining all reserve requirements
(including, without limitation, basic, supplemental, marginal and emergency
reserves) applicable to "Eurocurrency liabilities," as currently defined in
Regulation D, all as specified by any Governmental Authority, including those
imposed under Regulation D.  Each determination of the Eurodollar Reserve
Requirement by the Lender shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.

     Eurosterling Interbank Market shall mean whatever Eurosterling interbank
market may be selected by the Lender in its sole discretion.

     Eurosterling Interbank Rate shall mean, for each Interest Period, the rate
of interest per annum (rounded upwards to the nearest 1/8%) determined by the
Lender to be the arithmetic average of the rates per annum in accordance with
the then-existing practice in the Eurosterling Interbank Market for the offering
to the Lender (at or before 10:00 a.m., local time, in the Eurosterling
Interbank Market on the date two Euro Business Days before the first day of such
Interest Period) by one or more prime banks (selected by the Lender in its sole
discretion) in the Eurosterling Interbank Market, of deposits in Pounds for
delivery on the first day of such Interest Period and having a maturity equal to
the length of such Interest Period and in an amount equal (or as nearly equal as
may be) to the Eurosterling Rate Borrowing to which such Interest Period
relates.  Each determination by the Lender of the Eurosterling Interbank Rate
shall be conclusive and binding, absent manifest error, and may be computed
using any reasonable averaging and attribution method.

     Eurosterling Rate shall mean for any day a rate per annum equal to the
lesser of (a) the sum of (1) the Eurosterling Interbank Rate in effect on the
first day of the Interest Period for the applicable Eurosterling Rate Borrowing
plus (2) the applicable Margin Percentage from time to time in effect or (b) the
Highest Lawful Rate.  Each Eurosterling Rate is subject to adjustments for
reserves and other matters as provided for in Section 2.3.

                                       3
<PAGE>
 
     Eurosterling Rate Borrowing shall mean each portion of the principal
balance of the Pound Loans at any time bearing interest at a Eurosterling Rate
pursuant to a Rate Designation Notice.

     Excess Interest Amount shall mean, on any day, the amount by which (a) the
amount of all interest which would have accrued before such day on the
outstanding principal of a Note (had the Stated Rate at all times been in effect
without limitation by the Highest Lawful Rate) exceeds (b) the aggregate amount
of interest actually paid to the Lender on such Note on or before such day.

     Funding Loss shall mean, with respect to (a) a Borrower's payment or
prepayment of principal of a Euro Borrowing on a day other than the last day of
the applicable Interest Period; (b) a Borrower's failure to borrow a Euro
Borrowing on the date specified by such Borrower; (c) a Borrower's failure to
make any a prepayment of a Euro Borrowing on the date specified by such
Borrower, or (d) any cessation of a Euro Rate to apply to the Loans or any part
thereof pursuant to Section 2.3, in each case whether voluntary or involuntary,
any loss, expense, penalty, premium or liability reasonably incurred by the
Lender (including but not limited to any loss or expense reasonably incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
the Lender to fund or maintain a Loan).

     Highest Lawful Rate shall mean the maximum nonusurious rate of interest
permitted to be charged by applicable federal or Texas law (whichever shall
permit the higher lawful rate) from time to time in effect.  At all times, if
any, as Chapter One shall establish the Highest Lawful Rate, the Highest Lawful
Rate shall be the "indicated rate ceiling" (as defined in Chapter One) from time
to time in effect.

     Interest Options shall mean the Base Rate, each Eurodollar Rate and each
Eurosterling Rate, and "Interest Option" shall mean either of them.

     Interest Payment Dates shall mean for (a) Base Rate Borrowings, the Base
Rate Interest Payment Dates and (b) Euro Borrowings, the end of the applicable
Interest Period and, with respect to a six-month Interest Period, on the date
which would have been the end of a three-month Interest Period if such an
Interest Period had been selected; in each case, Interest Payment Date shall
also mean the maturity date (whether by acceleration or otherwise) of a Note.

     Interest Period shall mean, for each Euro Borrowing, a period commencing on
the date such Euro Borrowing began and ending on the numerically corresponding
day which is one, two, three or six months thereafter; provided that (a) any
Interest Period with respect to a Euro Borrowing which would otherwise end on a
day which is not a Euro Business Day shall be extended to the next succeeding
Euro Business Day, unless such Euro Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding Euro
Business Day; (b) any Interest Period with respect to a Euro Borrowing which
begins on the last

                                       4
<PAGE>
 
Euro Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Euro Business Day of the appropriate calendar
month; (c) no Interest Period shall ever extend beyond the stated maturity of
the Note evidencing such Euro Borrowing, and (d) Interest Periods shall be
selected by each Borrower in such a manner that the Interest Period with respect
to any portion of the Loans which shall become due shall not extend beyond such
due date.

     Margin Percentage means:

     (a) On any day prior to October 1, 1996, (1) 0.00% with respect to Base
Rate Borrowings and (2) 0.75% with respect to Euro Borrowings.

     (b) On and after October 1, 1996, the applicable per annum percentage set
forth at the appropriate intersection in the table shown below, based on the
Debt to Capitalization Ratio as of the last day of the most recently ended
fiscal quarter of Parent calculated by the Lender as soon as practicable after
receipt by the Lender of all financial reports required under the Credit
Agreement with respect to such fiscal quarter (including a Certificate of No
Default as therein provided) (provided, however, that if the Margin Percentage
is increased as a result of the reported Debt to Capitalization Ratio, such
increase shall be retroactive to the date that Borrowers were obligated to
deliver such financial reports to the Lender pursuant to the terms of the Credit
Agreement and provided further, however, that if the Margin Percentage is
decreased as a result of the reported Debt to Capitalization Ratio, and such
financial reports are delivered to the Lender not more than ten (10) calendar
days after the date required to be delivered pursuant to the terms of the Credit
Agreement, such decrease shall be retroactive to the date that Borrowers were
obligated to deliver such financial reports to the Lender pursuant to the terms
of the Credit Agreement):

<TABLE>
<CAPTION>
                                       Euro
Debt to                           Borrowings Margin  Base Rate Borrowings
Capitalization Ratio                 Percentage       Margin Percentage
--------------------------------  -----------------  --------------------
<S>                               <C>                <C>
     Greater than 30%                         1.125                  0.00
 
     Less than or equal to 30%                 0.75                  0.00
</TABLE>

     Past Due Rate shall mean the lesser of the Highest Lawful Rate or a rate
per annum equal to the Prime Rate plus 3% per annum.

                                       5
<PAGE>
 
     Prime Rate shall mean the prime rate as announced from time to time by the
Lender. Without notice to either Borrower or any other Person, the Prime Rate
shall change automatically from time to time as and in the amount by which said
prime rate shall fluctuate, with each such change to be effective as of the date
of each change in such prime rate.  The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer.  The Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

     Rate Designation Date shall mean 10:00 a.m. on that Business Day which is
(a) in the case of Base Rate Borrowings, the date of such borrowing or (b) in
the case of Euro Borrowings, the date three Euro Business Days preceding the
first day of any proposed Interest Period.

     Rate Designation Notice shall mean (a) in the case of a new Loan, a Request
for Loan or (b) otherwise, a written notice substantially in the form of 
Exhibit A.

     Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and includes any successor or
other regulation relating to reserve requirements applicable to member banks of
the Federal Reserve System.

     Stated Rate means the effective weighted average per annum rate of interest
applicable to a Note; provided that if on any day such rate shall exceed the
Highest Lawful Rate for that day, the Stated Rate shall be fixed at the Highest
Lawful Rate on that day and on each day thereafter until the total amount of
interest accrued at the Stated Rate on the unpaid principal balance of such Note
equals the total amount of interest which would have accrued if there had been
no Highest Lawful Rate.  Without notice to either Borrower or any other Person,
the Stated Rate shall automatically fluctuate upward and downward in accordance
with the provisions of this definition.

     Taxes shall mean any governmental tax, levy, impost, duty, charge or fee.

     Texas Credit Code shall mean Title 79, Texas Revised Civil Statutes, 1925,
as amended.

2.   Interest Options for Loans.
     -------------------------- 

     2.1  Options Available.  The outstanding principal balance of the Dollar
Note shall bear interest at the lesser of (a) the Base Rate or (b) the Highest
Lawful Rate and each Pound Loan shall bear interest at the lesser of (a) the
Eurosterling Rate for the date of such Loan and with an Interest Period of one
month or (b) the Highest Lawful Rate; provided that (1) all past due amounts,
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) 

                                       6
<PAGE>
 
subject to the provisions hereof, the Dollar Borrowers shall have the
option of having all or any portion of the principal balance of the Dollar Note
from time to time outstanding bear interest at a Eurodollar Rate and DSL shall
have the option of having all or any portion of the principal balance of the
Pound Note from time to time outstanding bear interest at a Eurosterling Rate
with a different Interest Period. The records of the Lender with respect to
Interest Options, Interest Periods and the amounts of Loans to which they are
applicable shall be binding and conclusive, absent manifest error. Interest on
the Loans shall be calculated at the Base Rate or a Eurosterling Rate with a 
one-month Interest Period, as the case may be, except where it is expressly
provided pursuant to this Agreement that a Euro Rate (including a different
Eurosterling Rate) is to apply. Interest on the amount of each advance against a
Note shall be computed on the amount of that advance and from the date it is
made. Notwithstanding anything in this Agreement to the contrary, for the full
term of a Note the interest rate produced by the aggregate of all sums paid or
agreed to be paid to the holder of such Note for the use, forbearance or
detention of the debt evidenced thereby shall not exceed the Highest Lawful
Rate.

     2.2  Designation and Conversion.  A Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof.  Provided that no Event of Default has occurred and is continuing and
subject to the last sentence of Section 2.1 and the provisions of Section 2.3, a
Borrower may elect to have a Euro Rate apply or continue to apply to all or any
portion of the principal balance of the Note made by such Borrower. Each change
in Interest Options shall be a conversion of the rate of interest applicable to
the specified portion of a Loan, but such conversion shall not change the
outstanding principal balance of the Note evidencing such Loan.  The Interest
Options shall be designated or converted in the manner provided below:

     (a) A Borrower shall give the Lender a Rate Designation Notice.  Each Rate
Designation Notice shall be irrevocable and shall be given to the Lender no
later than the applicable Rate Designation Date.

     (b) No more than three Eurodollar Rate Borrowings shall be in effect at any
time.

     (c) No more than three Eurosterling Rate Borrowings shall be in effect at
any time.

     (d) Each designation or conversion of a Euro Borrowing shall occur on a
Euro Business Day.

     (e) Except as provided in Section 2.3, no Euro Borrowing shall be converted
on any day other than the last day of the applicable Interest Period.

     (f) Each Eurodollar Rate Borrowing shall be in the amount of at least
$250,000.

                                       7
<PAGE>
 
     (g) Each Eurosterling Rate Borrowing shall be in the amount of at least
(Pounds)100,000.

     2.3  Special Provisions Applicable to Euro Borrowings.
          ------------------------------------------------ 

     (a) Options Unlawful.  If the adoption of any applicable Legal Requirement
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by the Lender
with any request or directive (whether or not having the force of law) of any
Governmental Authority shall at any time make it unlawful or impossible for the
Lender to permit the establishment of or to maintain any Euro Borrowing, the
commitment of the Lender to establish or maintain such Euro Borrowing shall
forthwith be canceled and the relevant Borrower shall forthwith, upon demand by
the Lender to such Borrower, (1) convert any Euro Borrowing with respect to
which such demand was made to a Base Rate Borrowing, if such Euro Borrowing is a
Eurodollar Rate Borrowing; (2) pay all accrued and unpaid interest to date on
the amount so converted, and (3) pay any amounts required to compensate the
Lender for any additional reasonable cost or expense which the Lender may incur
as a result of such adoption of or change in such Legal Requirement or in the
interpretation or administration thereof and any Funding Loss which the Lender
may incur as a result of such conversion.  If, when the Lender so notifies the
Dollar Borrowers, the Dollar Borrowers have given a Rate Designation Notice
specifying a Eurodollar Rate Borrowing but the selected Interest Period has not
yet begun, such Rate Designation Notice shall be deemed to be of no force and
effect, as if never made, and the balance of the Dollar Loans specified in such
Rate Designation Notice shall bear interest at the Base Rate until a different
available Interest Option shall be designated in accordance herewith.

     (b) Increased Cost of Borrowings.  If the adoption after the date hereof of
any applicable Legal Requirement or any change after the date hereof in any
applicable Legal Requirement or in the interpretation or administration thereof
by any Governmental Authority or compliance by the Lender with any request or
directive (whether or not having the force of law) of any Governmental Authority
shall at any time as a result of any portion of the principal balance of a Note
being maintained on the basis of a Euro Rate:

          (1) subject the Lender (or make it apparent that the Lender is
subject) to any Taxes, or any deduction or withholding for any Taxes, on or from
any payment due under any Euro Rate Borrowing or other amount due hereunder,
other than any income and franchise taxes; or

          (2) change the basis of taxation of payments due from a Borrower to
the Lender under any Euro Borrowing (otherwise than by a change in the rate of
taxation of the overall net income of the Lender); or

                                       8
<PAGE>
 
          (3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement included in the
calculation of the applicable Euro Rate), special deposit requirement or similar
requirement (including state law requirements and Regulation D) imposed,
modified, increased or deemed applicable by any Governmental Authority against
assets held by the Lender, or against deposits or accounts in or for the account
of the Lender, or against loans made by the Lender, or against any other funds,
obligations or other property owned or held by the Lender; or

          (4) impose on the Lender any other condition regarding any Euro
Borrowing;

and the result of any of the foregoing is to materially increase the cost to the
Lender of agreeing to make or of making, renewing or maintaining such Euro
Borrowing, or materially reduce the amount of principal or interest received by
the Lender then, upon demand by the Lender, the relevant Borrower shall pay to
the Lender, from time to time as specified by the Lender, additional amounts
which shall compensate the Lender for such increased cost or reduced amount. The
determination by the Lender of the amount of any such increased cost, increased
reserve requirement or reduced amount shall be conclusive and binding, absent
manifest error, and may be prepared using any reasonable averaging and
attribution methods.  The relevant Borrower shall have the right, if it receives
from the Lender any demand referred to in this paragraph, upon three Business
Days' notice to the Lender, either (1) to repay in full (but not in part) any
Euro Borrowing with respect to which such notice was given, together with any
accrued and unpaid interest thereon, or (2) to convert any Euro Borrowing which
is the subject of the demand to a Base Rate Borrowing, if such Euro Borrowing is
a Eurodollar Rate Borrowing; provided that any such repayment or conversion
shall be accompanied by payment of (x) the amount required to compensate the
Lender for the increased cost or reduced amount referred to in this paragraph;
(y) all accrued and unpaid interest to date on the amount so repaid or
converted, and (z) any Funding Loss which the Lender may incur as a result of
such repayment or conversion.

     (c) Inadequacy of Pricing and Rate Determination.  If for any reason the
Lender shall have reasonably determined (which determination shall be conclusive
and binding upon the Borrowers) that:

          (1) the Lender is unable through its customary general practices to
determine any applicable Euro Rate, or

          (2) by reason of circumstances affecting the Eurodollar Interbank
Market or the Eurosterling Interbank Market, as appropriate, generally, the
Lender is not being offered deposits in Dollars or Pounds (as the case may be)
in such market through its customary general practices, for the applicable
Interest Period and in an amount equal to the amount of any applicable Euro
Borrowing requested by a Borrower, or

                                       9
<PAGE>
 
          (3) any applicable Euro Rate will not adequately and fairly reflect
the cost to the Lender of making and maintaining such Euro Borrowing hereunder
for any proposed Interest Period, then the Lender shall give the relevant
Borrower notice thereof and thereupon, (A) any Rate Designation Notice
previously given by such Borrower designating the applicable Euro Borrowing or
Base Rate Borrowing which has not commenced as of the date of such notice from
the Lender shall be deemed for all purposes hereof to be of no force and effect,
as if never given, and either (B) until the Lender shall notify such Borrower
that the circumstances giving rise to such notice from the Lender no longer
exist (which notice shall be given promptly to such Borrower after the Lender
becomes aware thereof), each Rate Designation Notice requesting a Eurodollar
Rate shall be deemed a request for a Base Rate Borrowing, and any applicable
Euro Borrowing then outstanding shall be converted, without any notice to or
from such Borrower, upon the termination of the Interest Period then in effect
with respect to it, to a Base Rate Borrowing, or (C) until the Lender shall
notify DSL that the circumstances giving rise to such notice from the Lender no
longer exist (which notice shall be given promptly to DSL after the Lender
becomes aware thereof), each Rate Designation Notice from DSL shall be deemed a
request for a Eurosterling Rate Borrowing with a one-month Interest Period.

     (d) Funding Losses.  Each Borrower shall indemnify the Lender against and
hold the Lender harmless from any Funding Loss with respect to the Loans
received, and the Note made, by such Borrower.  A certificate as to any
additional amounts payable pursuant to this paragraph submitted by the Lender to
the relevant Borrower shall be conclusive and binding upon such Borrower, absent
manifest error, and may be prepared using any reasonable averaging and
attribution methods.

     (e) Application of Prepayments.  If a Borrower makes a prepayment on a Note
and any Euro Borrowing is outstanding under that Note, then, notwithstanding
anything in the Credit Documents to the contrary, such prepayment shall be
applied as follows:

          (1) if such prepayment is voluntary, it shall be applied first to the
outstanding principal of the Base Rate Borrowings (if any), then to unpaid
accrued interest on the Base Rate Borrowings and then to Euro Borrowings;
prepayments on Euro Borrowings shall be applied first to unpaid accrued interest
on the Euro Borrowings in inverse order of their respective Interest Payment
Dates and then to the outstanding principal of the Euro Borrowings in such
manner as shall minimize the resulting Funding Losses (with the Funding Loss to
be deducted from a prepayment before applying such prepayment to the principal
of a Euro Borrowing); or

          (2) if such prepayment is mandatory, it shall be applied first to the
outstanding principal of the Base Rate Borrowings (if any), then to Euro
Borrowings in such manner as shall minimize the resulting Funding Losses (with
the Funding Loss plus accrued and unpaid interest 

                                       10
<PAGE>
 
on a prepaid Euro Borrowing to be added to the amount of any mandatory principal
prepayment required by the Credit Agreement).

     (f) Obligations Survive.  A Borrower's obligations under this Section shall
survive the payment of the such Borrower's Loans and the termination of such
Borrower's Commitment; provided that any request for compensation pursuant to
Section 2.3(b), (c) or (d) must be made on or before six (6) months after the
Lender incurs such reduction, expense or loss referred to or the Lender shall be
deemed to have waived the right to such compensation.

     2.4  Interest Payments.  Interest on each Loan shall be due and payable on
each Interest Payment Date and upon the payment or prepayment of such Loan,
except that (a) accrued interest payable at the Past Due Rate shall be due and
payable from time to time on demand of the Lender and (b) accrued and unpaid
interest on any amount converted pursuant to Section 2.3 shall be paid on the
amount so converted in accordance with Section 2.3.

3.   Miscellaneous.
     ------------- 

     3.1  Funding Offices.  The Lender may, if it so elects, fulfill its
obligation as to any Euro Borrowing by causing a branch or Affiliate of the
Lender to make such Loan and may transfer and carry such Loan at, to or for the
account of any branch office or Affiliate of the Lender; provided that in such
event for the purposes of this Agreement such Loan shall be deemed to have been
made by the Lender, and the obligation of the relevant Borrower to repay such
Loan shall nevertheless be to the Lender, and shall be deemed held by it for the
account of such branch or Affiliate; and provided further that the Lender shall
use reasonable efforts to select among funding offices available to it in such
manner as will reduce or eliminate any Taxes which otherwise would be payable by
such Borrower.

     3.2  Adjustments Automatic; Calculation Year.  Without notice to the
Borrowers or any other Person, each rate (other than any Eurodollar Rate)
required to be calculated or determined under this Agreement shall automatically
fluctuate upward and downward in accordance with the provisions of this
Agreement.  Interest at the Prime Rate shall be computed on the basis of the
actual number of days elapsed in a year consisting of 365 or 366 days, as the
case may be.  All other interest required to be calculated or determined under
this Agreement shall be computed on the basis of the actual number of days
elapsed in a year consisting of 360 days, unless the Highest Lawful Rate would
thereby be exceeded, in which event, to the extent necessary to avoid exceeding
the Highest Lawful Rate, the applicable interest shall be computed on the basis
of the actual number of days elapsed in the applicable calendar year in which
accrued.

     3.3  Funding Sources.  Notwithstanding any provision of this Agreement to
the contrary, the Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this 

                                       11
<PAGE>
 
Agreement all determinations hereunder shall be made as if the Lender had
actually funded and maintained each Euro Borrowing during each Interest Period
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Euro Rate for such
Interest Period.

     3.4  No Usury Intended.  The Borrowers and the Lender intend to strictly
comply with all applicable Legal Requirements, including usury laws.
Accordingly, the provisions of this Section shall govern and control over every
other provision of any Credit Document which conflicts or is inconsistent with
this Section, even if such provision states that it controls.  As used in this
Section, the term "interest" includes the aggregate of all charges, fees,
benefits or other compensation which constitute interest under applicable law;
provided that, to the maximum extent not prohibited by applicable law, (a) any
non-principal payment shall be characterized as an expense or as compensation
for something other than the use, forbearance or detention of money, and not as
interest; (b) all interest at any time contracted for, reserved, charged or
received with respect to a Note shall be amortized, prorated, allocated and
spread, in equal parts during the full term of such Note; (c) all Loans to a
Borrower shall be treated as but a single extension of credit (and each Borrower
and the Lender agree that such is the case and that provisions in the Credit
Documents for multiple Loans to such Borrower is for convenience only), and (d)
the parties shall exclude voluntary prepayments and the effects thereof.  In no
event shall either Borrower or any other Person be obligated to pay, or the
Lender have any right or privilege to reserve, receive or retain, (x) any
interest in excess of the maximum amount of nonusurious interest permitted under
the laws of the State of Texas or other applicable laws (if any) of the USA or
any other jurisdiction, (y) any unearned interest or (z) total interest in
excess of the amount which the Lender could lawfully have contracted for,
reserved, received, retained or charged and the interest been calculated for the
full term of the Loans at the Highest Lawful Rate.  None of the terms and
provisions contained in the Credit Documents which directly or indirectly relate
to interest shall ever be construed without reference to this Section or be
construed to create a contract to pay for the use, forbearance or detention of
money at an interest rate in excess of the Highest Lawful Rate.

     3.5  Chapter 15.  Each Borrower and the Lender agree that Chapter 15 of the
Texas Credit Code shall not apply to any Credit Document or any Loan.

     3.6  Use of Loans.  Each Borrower represents and warrants to the Lender
that all of the Loans are and will be for business, commercial, investment or
other similar purpose and not primarily for personal, family, household or
agricultural use, as such terms are used in Chapter One.

     3.7  Excess Payments.  If the term of any Loan is shortened by reason of
acceleration of maturity as a result of any Event of Default or by any other
cause, or by reason of any prepayment (voluntary or mandatory), and if for that
(or any other) reason the Lender at any time, 

                                       12
<PAGE>
 
including but not limited to the stated maturity, is owed or receives (and/or
has received) interest in excess of interest calculated at the Highest Lawful
Rate, then and in any such event all of any such excess interest shall be
canceled automatically as of the date of such acceleration, repayment or other
event which produces the excess, and, if such excess interest has been paid to
the Lender, it shall be credited pro tanto against the then-outstanding
principal balance of the obligations of the payor thereof to such Person,
effective as of the date or dates when the event occurs which causes it to be
excess interest, until such excess is exhausted or all of such principal has
been fully paid and satisfied, whichever occurs first, and any remaining balance
of such excess shall be promptly refunded to its payor.

     3.8  Recapture.  If as of any Interest Payment Date the Lender does not
receive payment in full of interest computed at the Stated Rate (computed
without regard to any limitation by the Highest Lawful Rate) because the Stated
Rate (as so computed) exceeds or has exceeded the Highest Lawful Rate, the
relevant Borrower shall pay to the Lender, in addition to interest otherwise
required, on each Interest Payment Date thereafter, the Excess Interest Amount
(calculated as of each such subsequent Interest Payment Date); provided that in
no event shall either Borrower be required to pay, for any computation period,
interest at a rate exceeding the Highest Lawful Rate applicable to and effective
during such period.

     3.9  UK Taxes.  The obligations of DSL to the Lender under the Credit
Documents will be discharged only to the extent of funds received by the Lender,
without set-off or counterclaim and free and clear of and without deduction or
withholding for or on account of any present or future Tax (collectively, "UK
Taxes") imposed, levied, assessed or required to be withheld by any government,
political subdivision or taxing authority (collectively, the "UK Authorities")
of the United Kingdom.  The Lender agrees to file appropriate documents with the
UK Authorities promptly after request by DSL to enable DSL to obtain an
exemption from the payment of UK Taxes and deliver evidence thereof to DSL.
Within 30 days after each date scheduled for a payment of principal, interest or
both under the Credit Documents which is subject to any UK Tax, DSL shall
furnish the Lender with the originals or certified copies of official receipts
or other evidence in Proper Form evidencing the payment of UK Taxes when due.

     3.10 Amendment and Restatement.  This Agreement amends and restates in its
entirety that certain Interest Rate Agreement dated as of September 29, 1995
executed by and among Lender, Drilex Holdings Corp., DSI, Cobb, Sharewell and
DSL.

                                       13
<PAGE>
 
     EXECUTED as of the date first set forth above.

                                 DRILEX INTERNATIONAL INC.,
                                 a Delaware corporation


                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 President

                                       14
<PAGE>
 
                              DRILEX SYSTEMS, INC.,
                              a Texas corporation


                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 President



                              COBB DIRECTIONAL DRILLING COMPANY,
                              L.L.C., a Delaware limited liability company

                              By:   Drilex International Inc.,
                                    a Delaware corporation,
                                    Member


                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 President

                              By:   Drilex Systems, Inc.,
                                    a Texas corporation,
                                    Member


                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 President



                              SHAREWELL, INC.,
                              a Delaware corporation


                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 Chief Executive Officer

                                       15
<PAGE>
 
                              DRILEX SYSTEMS LIMITED,
                              a company incorporated in Scotland under the
                              Companies Act

WITNESSES to
execution by Drilex Systems 
Limited:

                              By: /s/ John Forrest
                                 ----------------------------
                                 John Forrest,
                                 Director

/s/ G. Bruce Broussard
-----------------------------
Name: G. Bruce Broussard
Address: 15151 Sommermeyer   
         Houston, Texas 77041 
 
Occupation: V.P.--Finance


/s/ Angie Kreutzfeldt
-----------------------------
Name: Angie Kreutzfeldt
Address: 15151 Sommermeyer   
         Houston, Texas 77041 

Occupation: Exec. Secretary

                                       16
<PAGE>
 
                              TEXAS COMMERCE BANK NATIONAL
                              ASSOCIATION,
                              a national banking association


                              By: /s/ Michael V. Addy
                                 --------------------------------
                                 Name: Michael V. Addy
                                 Title: Executive Vice President

Exhibit A - Rate Designation Notice

                                       17
<PAGE>
 
                            RATE DESIGNATION NOTICE


        Drilex International Inc.; Drilex Systems, Inc.; Cobb Directional 
Drilling Company, L.L.C.; Sharewell, Inc.; Drilex Systems Limited, and Texas 
Commerce Bank National Association executed and delivered that certain Interest 
Rate Agreement (as amended, supplemented and restated, the "Interest Rate 
Agreement") dated as of September 16, 1996.  Any capitalized term used herein 
and not otherwise defined herein shall have the meaning ascribed to it in the 
Interest Rate Agreement.

        In accordance with the Interest Rate Agreement, a Borrower hereby 
notifies the Lender of the exercise of an Interest Option.

A.      Current borrowing
        -----------------
        
        1.      Applicable Note (check one):

                [    ] Dollar Note      [    ] Pound Note
                 ----                    ----

        2.      Amount of the existing Base Rate Borrowings or the expiring Euro
                Borrowing covered by this Rate Designation Notice:
                $/(Pound)_______________

        3.      Expiration of current Interest Period, if applicable:
                ________________, 199__

B.      Proposed election
        -----------------

        1.      Amount of the new Base Rate Borrowings (not available for Pound
                Loans) or the new Euro Borrowing covered by this Rate 
                Designation Notice (repeat this Section B if the existing Base
                Rate Borrowings or expiring Euro Borrowing is to be divided
                between Base Rate Borrowings and/or Euro Borrowing(s)):
                $/(Pounds)___________________

        2.      Date Interest Option is to be effective:_________, 199__

        3.      Interest Option to be applicable (check one):

                [    ] Base Rate (not available to DSL)
                [    ] Euro Rate



                                   EXHIBIT A

<PAGE>
 
        4.      Interest Period (if applicable) (check one):

                [  ] one month          [   ]three months
                [  ] two months         [   ]six months

        The Borrowers represent and warrant that the Interest Option and 
Interest Period selected above comply, in all material respects, with all
provisions of the Interest Rate Agreement and that there exists no Default or
Event of Default.

Date:______________,199__


                                        [SIGNATURE ON BEHALF OF ALL
                                                                ---
                                        BORROWERS]






                                   EXHIBIT A