Document:

<PAGE>
                                                                     EXHIBIT 4.1

                                                           Execution Counterpart

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

                                [JPMORGAN LOGO]

                                CREDIT AGREEMENT

                            DATED AS OF MAY 14, 2003

                                      AMONG

                         WEATHERFORD INTERNATIONAL LTD.,
                                   AS BORROWER

                        WEATHERFORD INTERNATIONAL, INC.,
                                  AS GUARANTOR,

                              JPMORGAN CHASE BANK,
                            AS ADMINISTRATIVE AGENT,

                 BANKONE, NA AND WELLS FARGO BANK, TEXAS, N.A.,
                            AS CO-SYNDICATION AGENTS,

                ABN AMRO BANK, N.V., AND THE BANK OF NOVA SCOTIA,
                           AS CO-DOCUMENTATION AGENTS,

               WACHOVIA BANK, NATIONAL ASSOCIATION, SUNTRUST BANK,
           ROYAL BANK OF CANADA AND DEUTSCHE BANK AG NEW YORK BRANCH,
                             AS CO-MANAGING AGENTS,

                            THE LENDERS PARTY HERETO,

                                       AND

                          J. P. MORGAN SECURITIES INC.,
                                       AND
                         BANC ONE CAPITAL MARKETS, INC.,
                   AS JOINT BOOKRUNNERS AND CO-LEAD ARRANGERS

================================================================================
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE
                                                                                                               ----
<S>        <C>                                                                                                 <C>
                                                     ARTICLE I
                                   DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION

   SECTION 1.01. Definitions......................................................................................1
   SECTION 1.02. Types of Borrowings.............................................................................20
   SECTION 1.03. Accounting Terms; Changes in GAAP...............................................................20
   SECTION 1.04. Interpretation..................................................................................20

                                                     ARTICLE II
                                                 COMMITMENTS; LOANS

   SECTION 2.01. Loans...........................................................................................21
   SECTION 2.02. Requests for Loans..............................................................................22
   SECTION 2.03. Funding of Borrowings...........................................................................23
   SECTION 2.04. Interest Elections..............................................................................24
   SECTION 2.05. Termination and Reduction of Commitments........................................................25
   SECTION 2.06. Repayment of Loans; Evidence of Debt............................................................25
   SECTION 2.07. Prepayment of Loans.............................................................................26
   SECTION 2.08. Fees............................................................................................27
   SECTION 2.09. Interest........................................................................................28
   SECTION 2.10. Alternate Rate of Interest......................................................................29
   SECTION 2.11. Increased Costs.................................................................................29
   SECTION 2.12. Break Funding Payments..........................................................................30

                                                      ARTICLE III
                                                   Letters of Credit

   SECTION 3.01. Letters of Credit...............................................................................31

                                                      ARTICLE IV
                                          PAYMENTS; PRO RATA TREATMENT; TAXES

   SECTION 4.01. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.....................................35
   SECTION 4.02. Taxes...........................................................................................36
   SECTION 4.03. Mitigation Obligations; Replacement of Lenders..................................................38

                                                      ARTICLE V
                                                 CONDITIONS PRECEDENT

   SECTION 5.01. Conditions Precedent to the Initial Credit Event................................................39
   SECTION 5.02. Conditions Precedent to All Credit Events.......................................................41
   SECTION 5.03. Delivery of Documents...........................................................................41
</Table>

                                      -i-
<PAGE>

<Table>
<Caption>
                                                                                                               PAGE
                                                                                                               ----
<S>        <C>                                                                                                 <C>

                                                    ARTICLE VI
                                           REPRESENTATIONS AND WARRANTIES

   SECTION 6.01. Organization and Qualification..................................................................42
   SECTION 6.02. Authorization, Validity, Etc....................................................................42
   SECTION 6.03. Governmental Consents, Etc......................................................................42
   SECTION 6.04. No Breach or Violation of Law or Agreements.....................................................42
   SECTION 6.05. Title to Assets.................................................................................43
   SECTION 6.06. Litigation......................................................................................43
   SECTION 6.07. Information; Financial Statements...............................................................43
   SECTION 6.08. Investment Company Act..........................................................................43
   SECTION 6.09. Public Utility Holding Company Act..............................................................43
   SECTION 6.10. ERISA...........................................................................................43
   SECTION 6.11. Tax Returns and Payments........................................................................44
   SECTION 6.12. Requirements of Law; Environmental Matters......................................................44
   SECTION 6.13. Purpose of Letters of Credit and Loans..........................................................45
   SECTION 6.14. Designation of this Agreement and the Obligations...............................................45
   SECTION 6.15. No Default......................................................................................45

                                                    ARTICLE VII
                                                AFFIRMATIVE COVENANTS

   SECTION 7.01. Information Covenants...........................................................................45
   SECTION 7.02. Books, Records and Inspections..................................................................47
   SECTION 7.03. Insurance and Maintenance of Properties.........................................................47
   SECTION 7.04. Payment of Taxes and other Claims...............................................................47
   SECTION 7.05. Existence.......................................................................................48
   SECTION 7.06. ERISA Information and Compliance................................................................48
   SECTION 7.07. Subsidiaries....................................................................................48

                                                    ARTICLE VIII
                                                NEGATIVE COVENANTS

   SECTION 8.01. Material Change in Business.....................................................................49
   SECTION 8.02. Consolidation, Merger, or Sale of Assets, Etc...................................................49
   SECTION 8.03. Liens...........................................................................................51
   SECTION 8.04. Indebtedness....................................................................................51
   SECTION 8.05. Ownership of the Guarantor......................................................................51
   SECTION 8.06. Financial Covenants.............................................................................51
   SECTION 8.07. Limitation on Transactions with Affiliates......................................................51
   SECTION 8.08. Restrictions on Subsidiary Dividends............................................................52
   SECTION 8.09. Debentures......................................................................................52
   SECTION 8.10. The Debenture Indentures........................................................................52
</Table>

                                      -ii-
<PAGE>

<Table>
<Caption>
                                                                                                               PAGE
                                                                                                               ----
<S>        <C>                                                                                                 <C>
                                                      ARTICLE IX
                                            EVENTS OF DEFAULT AND REMEDIES

   SECTION 9.01. Events of Default and Remedies..................................................................52
   SECTION 9.02. Right of Setoff.................................................................................55
   SECTION 9.03. Other Remedies..................................................................................55
   SECTION 9.04. Application of Moneys During Continuation of Event of Default...................................55

                                                      ARTICLE X
                                                 ADMINISTRATIVE AGENT

                                                      ARTICLE XI
                                                       GUARANTY

   SECTION 11.01. Guaranty.......................................................................................58
   SECTION 11.02. Continuing Guaranty............................................................................59
   SECTION 11.03. Effect of Debtor Relief Laws...................................................................61
   SECTION 11.04. Waiver.........................................................................................62
   SECTION 11.05. Agreement to Defer Exercise of Subrogation.....................................................62
   SECTION 11.06. Full Force and Effect..........................................................................63

                                                     ARTICLE XII
                                                    MISCELLANEOUS

   SECTION 12.01. Waiver; Amendments.............................................................................63
   SECTION 12.02. Notices........................................................................................63
   SECTION 12.03. Expenses, Etc..................................................................................65
   SECTION 12.04. Indemnity......................................................................................65
   SECTION 12.05. Amendments, Etc................................................................................66
   SECTION 12.06. Successors and Assigns.........................................................................66
   SECTION 12.07. Confidentiality................................................................................70
   SECTION 12.08. Survival of Representations and Warranties.....................................................70
   SECTION 12.09. Governing Law..................................................................................71
   SECTION 12.10. Independence of Covenants......................................................................71
   SECTION 12.11. Binding Effect.................................................................................71
   SECTION 12.12. Separability...................................................................................71
   SECTION 12.13. Conflicts Between This Agreement and the Other Loan Documents..................................71
   SECTION 12.14. Limitation of Interest.........................................................................71
   SECTION 12.15. Execution in Counterparts......................................................................72
   SECTION 12.16. Submission to Jurisdiction.....................................................................72
   SECTION 12.17. Waiver of Jury Trial...........................................................................73
   SECTION 12.18. Judgment Currency..............................................................................73
   SECTION 12.19. Final Agreement of the Parties.................................................................73
</Table>

                                     -iii-
<PAGE>
EXHIBITS

EXHIBIT 1.01     Form of Assignment and Assumption
EXHIBIT 2.06     Form of Note
EXHIBIT 7.01     Form of Compliance Certificate

SCHEDULES

SCHEDULE 1.01    Lenders
SCHEDULE 2.01    Commitments
SCHEDULE 6.01    Material Subsidiaries

                                      -iv-
<PAGE>

                                CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of May 14, 2003, is among:

         (a)      Weatherford International Ltd., a Bermuda exempted company
                  (the "Borrower");

         (b)      Weatherford International, Inc., a Delaware corporation (the
                  "Guarantor");

         (c)      JPMORGAN CHASE BANK, individually as a Lender and as
                  administrative agent for the other Lenders (in such latter
                  capacity together with any other Person that becomes the
                  Administrative Agent pursuant to Article X, the
                  "Administrative Agent"); and

         (d)      the banks and other financial institutions listed on the
                  signature pages hereof under the caption "Lenders" (together
                  with each other Person that becomes a Lender pursuant to
                  Section 12.06, collectively, the "Lenders").

NOW THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I

                  DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION

         SECTION 1.01. Definitions. As used in this Agreement the following
terms shall have the following meanings:

         "ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.

         "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

         "Administrative Agent" has the meaning specified in paragraph (c) on
page one hereof.

         "Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.

         "Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling" and
"controlled"), when used with respect to any Person, means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.

         "Aggregate Commitment Amount" means the aggregate amount of the
Commitments of all Lenders, which, as of the date hereof, is $500,000,000.

                                       1
<PAGE>
         "Agreement" means this Credit Agreement, as it may from time to time be
amended, modified, restated or supplemented.

         "Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.

         "Applicable Margin" means the per annum rate of interest set forth in
the definition of Applicable Rate under the heading "Applicable Margin", based
upon the ratings by Moody's and S&P, respectively, applicable on such date to
the Index Debt.

         "Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.

         "Applicable Rate" means, for any day, with respect to any Eurodollar
Loan, or with respect to the facility fees payable hereunder, as the case may
be, the applicable rate per annum set forth below under the captions
"Utilization Fee", "Facility Fee" or "Applicable Margin", as the case may be,
based upon the ratings by Moody's and S&P, respectively, applicable on such date
to the Index Debt:

<Table>
<Caption>

           Index                                 Facility      Applicable
       Debt Ratings:          Utilization Fee      Fee           Margin
    -------------------       ---------------    --------      ----------
<S>                           <C>                <C>           <C>
    Performance Level I             .125%            .1%          .40%

    Performance Level II            .125%          .125%          .50%

    Performance Level III           .125%           .15%          .60%

    Performance Level IV             .25%           .20%          .80%

    Performance Level V              .25%           .25%         1.25%
</Table>

         For purposes of the foregoing, (i) if either Moody's or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established the same rating as the rating
agency that has in effect a rating for the Index Debt; (ii) if the ratings
established or deemed to have been established by Moody's and S&P for the Index
Debt shall fall within different Performance Levels, the Applicable Rate shall
be based on the higher of the two ratings unless one of the two ratings is two
or more Performance Levels lower than the other, in which case the Applicable
Rate shall be determined by reference to the Performance Level next above that
of the lower of the two ratings; and (iii) if the ratings established or deemed
to have been established by Moody's and S&P for the Index Debt shall be changed
(other than as a result of a change in the rating system of Moody's or S&P),
such change shall be

                                       2
<PAGE>

effective as of the date on which it is first announced by the applicable rating
agency, irrespective of when or whether notice of such change shall have been
furnished by the Borrower to the Administrative Agent and the Lenders. Each
change in the Applicable Rate 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, or if either such rating agency shall cease to be in the business
of rating corporate debt obligations, the Borrower and the Lenders shall
negotiate in good faith to amend this definition to reflect such changed rating
system or the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.

         "Approved Fund" has the meaning specified in Section 12.06.

         "Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.

         "Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 12.06) and accepted by the Administrative Agent, in the form
of Exhibit 1.01.

         "Assurance" means, as to any Person, any guaranty or other contingent
liability of such Person (other than any endorsement for collection or deposit
in the ordinary course of business) or obligations as an account party in
respect of letters of credit, direct or indirect, with respect to any obligation
of another Person, through an agreement or otherwise, including (a) any other
endorsement or discount with recourse or undertaking substantially equivalent to
or having economic effect similar to a guarantee in respect of any such
obligation and (b) any agreement (i) to purchase, or to advance or supply funds
for the payment or purchase of, any such obligation, (ii) to purchase securities
or to purchase, sell or lease property (whether as lessee or lessor), products,
materials or supplies, or transportation or services, in respect of enabling
such other Person to pay any such obligation or to assure the owner thereof
against loss regardless of the delivery or non-delivery of the securities,
property, products, materials or supplies, or transportation or services or
(iii) to make any loan, advance or capital contribution to or other investment
in, or to otherwise provide funds to or for, such other Person in respect of
enabling such Person to satisfy any obligation (including any liability for a
dividend, stock liquidation payment or expense) or to assure a minimum equity,
working capital or other balance sheet condition in respect of any such
obligation. The amount of any Assurance shall be an amount equal to the lesser
of the stated or determinable amount of the primary obligation in respect of
which such Assurance is made or, if not stated or determinable, the maximum
reasonably

                                       3
<PAGE>

anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

         "Availability Period" means, for each Lender, the period from the
Effective Date to the earlier of the Maturity Date and the date of termination
of the Commitments.

         "Bankruptcy Code" means the United States Bankruptcy Code, as the same
may be amended and together with any successor statutes.

         "Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

         "Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).

         "Board of Directors" means, with respect to any Person, the Board of
Directors of such Person (or of its (managing) general partner or managing
member, as the case may be), or any committee thereof duly authorized to act on
behalf of such Board of Directors.

         "Borrower" has the meaning specified in paragraph (a) on page one
hereof.

         "Borrower Obligations" means the Obligations of the Borrower.

         "Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

         "Borrowing Request" means, as applicable, a request by the Borrower for
a Loan in accordance with Section 2.03, or a request for the issuance of a
Letter of Credit pursuant to Section 3.01.

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

         "Capital Lease" means, as to any Person, any lease in respect of which
the rental obligation of such Person constitutes a Capitalized Lease Obligation.

         "Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents (however designated) of such Person's equity, including all common
stock and preferred stock, common shares and preference shares, any limited or
general partnership interest and any limited liability company membership.

         "Capitalized Lease Obligation" means, with respect to any Person, the
obligation of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property that is
required to be classified and accounted for as a capital lease obligation on a
balance sheet of such Person under GAAP and, for purposes of this Agreement,

                                       4
<PAGE>

the amount of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP.

         "Change of Control" means an event or series of events by which (a) in
the case of the Borrower (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act as in effect on the Execution Date) or
related persons constituting a "group" (as such term is used in Rule 13d-5 under
the Exchange Act in effect on the Execution Date) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, as in effect
on the Execution Date, except that a person or such group shall be deemed to
have "beneficial ownership" of all shares that any such person or such group has
the right to acquire without condition, other than the passage of time, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 50% or more of the total voting power of the Voting
Stock of the Borrower, except as a result of a Redomestication in which the
Persons who were the shareholders of the Borrower immediately prior to such
Redomestication continue to own, directly or indirectly, 100% of the issued and
outstanding Capital Stock of each class of the Borrower; (ii) the shareholders
of the Borrower approve any plan of liquidation, winding up or dissolution of
the Borrower, except in connection with a Redomestication of the Borrower; (iii)
the Borrower conveys, transfers or leases all or substantially all of its assets
to any Person except in connection with a Redomestication of the Borrower; or
(iv) during any period of twelve consecutive months, individuals who, at the
beginning of such period, constituted the Board of Directors of the Borrower
(together with any new directors whose appointment or election by such Board of
Directors or whose nomination for election by the shareholders of the Borrower,
as applicable, was approved by a vote of not less than a majority of the
directors then still in office who were either directors at the beginning of
such period or whose appointment, election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office, but excluding from the
foregoing clause any change in the composition or membership of the Board of
Directors of the Borrower resulting (i) from a Redomestication of the Borrower
or (ii) from the addition thereto or removal therefrom of directors in
connection with the Borrower's compliance with the United States Sarbanes Oxley
Act of 2002 or the rules and regulations of any stock exchange on which the
Borrower's or the Guarantor's securities are listed, pursuant to the
recommendation of the Borrower's legal counsel, or (b) in the case of the
Guarantor, except in a transaction permitted by Section 8.02(a)(ii)(y) or
Section 8.02(b), the Persons who are the shareholders of the Borrower
immediately prior to a transaction cease to own, after giving effect to such
transaction, directly or indirectly, 100% of the issued and outstanding Capital
Stock of each class of the Guarantor .

         "Change of Control Event" means (a) the execution of any definitive
agreement which when fully performed by the parties thereto, would result in a
Change of Control; or (b) the commencement of a tender offer pursuant to Section
14(d) of the Exchange Act that would result in a Change of Control if completed.

         "Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.11(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if

                                       5
<PAGE>

any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.

         "Code" means the United States Internal Revenue Code of 1986, as
amended, from time to time, and the regulations promulgated thereunder.

         "Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Revolving Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.05 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 12.06. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $500,000,000.

         "Commitment Percentage" means, as to any Lender, the percentage
equivalent of a fraction, the numerator of which is the amount of such Lender's
Commitment, and the denominator of which is the aggregate amount of the
Commitments of all Lenders.

         "Communications" has the meaning specified in Section 12.02.

         "consolidated" means any Person whose financial condition and results
of operations are required in accordance with GAAP to be shown on a consolidated
basis with the financial condition and results of operations of the Borrower.

         "Consolidated EBITDA" means, for any Person, for any period, the
Consolidated Net Income of such Person and its consolidated Subsidiaries for
such period, increased (to the extent deducted in determining Consolidated Net
Income) by the sum of (a) all income taxes (including state franchise taxes or
similar taxes based on income) of such Person and its consolidated Subsidiaries
paid or accrued according to GAAP for such period; (b) Consolidated Interest
Expense of such Person and its consolidated Subsidiaries for such period; (c)
depreciation and amortization of such Person and its consolidated Subsidiaries
for such period determined in accordance with GAAP; and (d) other non-cash
charges (excluding any such non-cash charges to the extent they require an
accrual of, or reserve for, cash charges for any future periods) for such period
determined in accordance with GAAP, and decreased (to the extent added in
determining Consolidated Net Income) by any non-cash credits for such period
determined in accordance with GAAP.

         "Consolidated Indebtedness" means, for any Person, at the date of any
determination thereof, Indebtedness of such Person and its consolidated
Subsidiaries (other than Interest Rate Risk Indebtedness, Derivatives
Obligations, and contingent obligations in respect of letters of credit)
determined on a consolidated basis in accordance with GAAP.

         "Consolidated Interest Expense" means (without duplication), for any
Person, for any period, the aggregate amount of interest, whether expensed or
capitalized, paid, accrued or scheduled to be paid or accrued during such period
in respect of (a) all Indebtedness of such

                                       6
<PAGE>

Person and its consolidated Subsidiaries, plus (b) the October 1997 Debentures,
all determined on a consolidated basis in accordance with GAAP.

         "Consolidated Net Income" means, for any Person, for any period, the
net income or loss of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided, that there
shall be excluded from such net income (to the extent otherwise included
therein):

                           (a) net extraordinary gains and losses;

                           (b) net gains or losses in respect of  dispositions
                  of assets other than in the ordinary course of business;

                           (c) the net income of any Person in which such Person
                  for whom Consolidated Net Income is to be determined or any
                  consolidated Subsidiary has a joint equity interest, except to
                  the extent of the amount of dividends or other distributions
                  actually paid in cash to such Person for whom Consolidated Net
                  Income is to be determined or such Subsidiary by such other
                  Person during such period;

                           (d) the net income of any Person accrued prior to the
                  date it becomes a consolidated Subsidiary or is merged into or
                  consolidated or amalgamated with such Person for whom
                  Consolidated Net Income is to be determined or any
                  consolidated Subsidiary or prior to the date its assets are
                  acquired by such Person for whom Consolidated Net Income is to
                  be determined or any of the consolidated Subsidiaries, except
                  that the foregoing shall not apply to any business acquisition
                  accounted for as a pooling of interests;

                           (e) the net income of any consolidated Subsidiary to
                  the extent that the declaration or payment of dividends or
                  similar distributions by that consolidated Subsidiary of that
                  income is not at the time permitted by operation of the terms
                  of its charter or any agreement, instrument, judgment, decree,
                  order, statute, rule or governmental regulation applicable to
                  that Subsidiary;

                           (f) any gains or losses attributable to write-ups or
                  write-downs of assets other than in the ordinary course of
                  business; and

                           (g) foreign currency translations or adjustments.

         "Credit Event" means the making of any Loan or the issuance of any
Letter of Credit pursuant hereto.

         "Default" means the occurrence of any event which with the giving of
notice or the passage of time or both would become an Event of Default.

         "Derivatives Obligations" means, as to any Person all obligations of
such Person in respect of any swap transaction, forward rate transaction,
commodity swap, commodity option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar

                                       7
<PAGE>
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions, entered into in the ordinary course of business of such
Person for the purpose of hedging and not for speculative purposes.

         "Dollars," "US$", "dollars" and "$" means lawful money of the United
States of America.

         "domestic" means, when used with respect to a Subsidiary of a Person, a
Subsidiary organized under the laws of any State of the United States or the
District of Columbia.

         "Domestic Intercompany Debt" means Indebtedness owed by any domestic
Subsidiary of the Borrower to the Borrower or to any Wholly-Owned Subsidiary of
the Borrower.

         "Effective Date" means the date on which the conditions to borrowing
set forth in Article V are first satisfied or waived.

         "Environmental Law" means all federal, state, provincial or local laws,
statutes, rules, regulations, ordinances and codes, together with all final
administrative orders, licenses, authorizations and permits of, and written
agreements with, any Governmental Authorities, in each case relating to the
protection of the environment or the disposal of hazardous waste.

         "ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the U.S. Department of Labor thereunder.

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

         "Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

         "Event of Default" shall have the meaning specified in Article IX
hereof.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

         "Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower, the Administrative Agent, any
Lender, the Issuing Bank or any other such recipient is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by

                                       8
<PAGE>

the Borrower under Section 4.03(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or would have been
so imposed if the Borrower were a United States corporation, or is attributable
to such Foreign Lender's failure to comply with Section 4.02(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 4.02(a).

         "Execution Date" means the earliest date upon which all of the
following shall have occurred: counterparts of this Agreement shall have been
executed by the Obligors and each Lender listed on the signature pages hereof
and the Administrative Agent shall have received counterparts hereof which taken
together, bear the signature of the Obligors, each Lender and the Administrative
Agent.

         "Facility Fee Rate" means the per annum rate of interest set forth
under the heading "Facility Fee", in the definition of Applicable Rate, based
upon the ratings by Moody's and S&P, respectively, applicable on such date to
the Index Debt.

         "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

         "foreign" means, when used with respect to a Subsidiary of any Person,
a Subsidiary of such Person organized under the laws of any jurisdiction other
than a State of the United States or the District of Columbia.

         "Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof.

         "GAAP" means generally accepted accounting principles as in effect from
time to time as set forth in the opinions, statements and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board.

         "Governmental Authority" means any governmental authority of the United
States of America, any State of the United States, Bermuda or of any other
foreign jurisdiction and any political subdivision of any of the foregoing, and
any central bank, agency, department, commission, board, bureau, court or other
tribunal having or lawfully asserting jurisdiction over the Administrative
Agent, any Lender, either Obligor or their respective properties.

         "Guaranteed Obligations" has the meaning specified in Section 11.01.

         "Guarantor" has the meaning specified in paragraph (b) on page one
hereof.

                                       9
<PAGE>

         "Guaranty" means the guaranty contained in Article XI.

         "Indebtedness" means (without duplication), with respect to any Person,
(a) any liability (other than the October 1997 Debentures) of such Person (i)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such Person or only to a portion thereof), or under any
reimbursement obligation relating to a letter of credit, bankers' acceptance or
note purchase facility, (ii) evidenced by a bond, note, debenture or similar
instrument, (iii) for the balance deferred and unpaid of the purchase price for
any property or any obligation upon which interest charges are customarily paid
(except for trade payables arising in the ordinary course of business), or (iv)
for the payment of money relating to the principal portion of any Capitalized
Lease Obligation; (b) any obligation of any Person secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) a consensual Lien on property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person; (c) all net
obligations of such Person as of the date of a required calculation of any
Derivatives Obligations; (d) all Assurances of such Person of the Indebtedness
of any other Person of the type referred to in clause (a) or (c); (e) Interest
Rate Risk Indebtedness of such Person; and (f) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to above.

         "Indemnified Taxes" means any Taxes other than Excluded Taxes and Other
Taxes.

         "Indemnitee" has the meaning specified in Section 12.04.

         "Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of the Borrower that is not guaranteed by any other Person or
subject to any other credit enhancement.

         "Interest Coverage Ratio" means, for any Person, at the end of each
fiscal quarter of such Person, the ratio of (a) Consolidated EBITDA of such
Person for the fiscal quarter then ended and for the immediately preceding three
fiscal quarters to (b) Consolidated Interest Expense of such Person (excluding
interest accrued in respect (i) of the October 1997 Debentures but not actually
paid in cash, but including in Consolidated Interest Expense interest paid in
cash during such fiscal quarters, and (ii) of the Zero Coupon Debentures) for
such four fiscal quarters.

         "Interest Election Request" means a request by the Borrower to convert
or continue a Loan in accordance with Section 2.04.

         "Interest Payment Date" means (a) with respect to any ABR Borrowing,
the last day of each March, June, September and December, and (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.

         "Interest Period" means, with respect to a Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender, nine or twelve months) thereafter, as the
Borrower may elect; provided, that (i) if any Interest Period would end

                                       10
<PAGE>

on a day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of a Eurodollar Borrowing
only, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Loan, thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.

         "Interest Rate Risk Indebtedness" means, with respect to any Person,
all obligations and Indebtedness of such Person with respect to the program for
the hedging of interest rate risk provided for in any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
similar arrangement entered into such Person for the purpose of reducing its
exposure to interest rate fluctuations and not for speculative purposes,
approved in writing by the Administrative Agent (such approval not to be
unreasonably withheld), as it may from time to time be amended, modified,
restated or supplemented.

         "ISDA" means the International Swaps and Derivatives Association, Inc.

         "Issuing Bank" means JPMorgan Chase Bank, in its capacity as the issuer
of Letters of Credit hereunder, and its successors in such capacity as provided
in Section 3.01(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

         "LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.

         "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.

         "Lenders" means the Persons listed on Schedule 1.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.

         "Letter of Credit" means any letter of credit issued pursuant to this
Agreement.

         "LIBO Rate" means the Applicable Margin from time to time in effect
plus the applicable British Bankers' Association London interbank offered rate
for deposits in Dollars for such Loan, as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that if no such British Bankers' Association
London interbank offered rate is available to the Administrative Agent, the
applicable LIBO Rate

                                       11
<PAGE>

for the relevant Interest Period shall instead be the arithmetic average
determined by the Administrative Agent on the basis of notification from the
Reference Banks of the rates at which deposits in Dollars and in immediately
available funds are offered to first class banks in the London interbank market
by the Reference Banks at 11:00 a.m. (London time) two Business Days before the
first day of the applicable Interest Period and for a period equal to such
Interest Period and in amounts substantially equal to the amount of the
requested LIBO Rate Loan of each such Reference Bank comprising a part of such
Borrowing.

         "Lien" means any lien, mortgage, pledge, assignment (including any
assignment of rights to receive payments of money), security interest, charge or
encumbrance of any kind including any conditional sale or other title retention
agreement or any lease (excluding, however, any lease that is not a Capital
Lease) in the nature thereof (whether voluntary or involuntary and whether
imposed or created by operation of law or otherwise), and any agreement to give
a lien, mortgage, pledge, assignment (including any assignment of rights to
receive payments of money), security interest, charge or other encumbrance of
any kind; provided, however, that "Lien" shall not include or cover (i) setoff
rights and other standard arrangements for netting payment obligations in the
settlement of obligations, arising under ISDA standard documents or otherwise
customary in swap or hedging transactions; and (ii) setoff rights of banks party
to Derivative Obligations which rights arise in the ordinary course of customary
banking relationships.

         "Loan" means a loan made pursuant to Section 2.01.

         "Loan Documents" means, collectively, this Agreement, the Notes, all
instruments, certificates and agreements now or hereafter executed or delivered
by either Obligor to the Administrative Agent or any Lender pursuant to any of
the foregoing or in connection with the Obligations or any commitment regarding
the Obligations, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.

         "Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any adverse determination in any litigation, arbitration or
governmental investigation or proceeding) and after taking into account actual
insurance coverage and effective indemnification with respect to such
occurrence, (a) a material adverse effect on the financial condition, business
or operations of the Borrower and its consolidated Subsidiaries taken as a
whole, (b) the impairment of (i) the ability of the Obligors to collectively
perform their payment or other material obligations hereunder or under the Notes
and other Loan Documents or (ii) the ability of the Administrative Agent or the
Lenders to realize the material benefits intended to be provided by the Obligors
under the Loan Documents or (c) the subjection of the Administrative Agent or
any Lender to any civil or criminal liability arising in connection with the
Loan Documents.

         "Material Subsidiary" means, at any date, a consolidated Subsidiary the
Capital Stock of which is owned by the Borrower and/or one or more of its
Subsidiaries and that either (a) has total assets in excess of 5% of the total
assets of the Borrower and its consolidated Subsidiaries, in each case as
determined in accordance with GAAP or (b) has gross net revenues in excess of

                                       12
<PAGE>
5% of the consolidated gross revenues of the Borrower and its consolidated
Subsidiaries based, in each case, on the most recent audited consolidated
financial statements of the Borrower.

         "Maturity Date" means May 12, 2006.

         "Maximum Rate" has the meaning set forth in Section 12.14.

         "May 1996 Debenture Indenture" means the Indenture dated as of May 17,
1996, from the Guarantor to The Bank of New York, as Trustee, as amended and
supplemented to the Execution Date.

         "May 1996 Debentures" means the Guarantor's debentures issued pursuant
to the May 1996 Debenture Indenture, which are guaranteed by the Borrower.

         "Moody's" means Moody's Investors Service, Inc.

         "Multiemployer Plan" means any plan which is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).

         "Net Worth" means, for any Person, at the date of any determination
thereof, on a consolidated basis, the sum of (a) the par value or stated value
of its Capital Stock, plus (b) capital in excess of par or stated value of
shares of its Capital Stock, plus (or minus in the case of a deficit), (c)
retained earnings or accumulated deficit, as the case may be, plus (d) and any
other account which, in accordance with GAAP, constitutes stockholders' equity,
excluding (e) any treasury stock, and (f) the effects upon net worth resulting
from the translation of foreign currency denominated assets into Dollars.

         "New Parent" has the meaning specified in the definition of the term
"Redomestication".

         "Notes" has the meaning specified in Section 2.06(e) hereof.

         "Obligations" means, as at any date of determination thereof, the sum
of the following: (a) the aggregate principal amount of Loans outstanding
hereunder on such date, plus (b) all reimbursement obligations with respect to
then outstanding Letters of Credit, plus (c) all other outstanding liabilities,
obligations and indebtedness of either Obligor under any Loan Document on such
date.

         "Obligors" means the Borrower and the Guarantor.

         "October 1997 Debenture Indenture" means the Indenture dated as of
October 15, 1997, from the Guarantor to The Chase Manhattan Bank, as Trustee, as
amended and supplemented to the Execution Date.

         "October 1997 Debentures" means the Guarantor's 5% Convertible
Subordinated Preferred Equivalent Debentures due 2027 issued pursuant to the
October 1997 Debenture Indenture, which are guaranteed by the Borrower.

                                       13
<PAGE>

         "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies, other
than Excluded Taxes, arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement, but only to the extent that any of the foregoing is imposed by (i)
Bermuda, Barbados or the United States or any other jurisdiction in which the
Borrower is Redomesticated or is resident for tax purposes with respect to a
Foreign Lender or (ii) Bermuda or Barbados or any other jurisdiction (other than
the United States) in which the Borrower is Redomesticated or is resident for
tax purposes with respect to a Lender which is not a Foreign Lender.

         "Past Due Rate" means, on any day, a rate per annum equal to (a) for
ABR Borrowings, the applicable Alternate Base Rate plus 2% and (b) for
Eurodollar Borrowings, the applicable Adjusted LIBO Rate plus 2%.

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

         "Performance Level" means a reference to one of Performance Level I,
Performance Level II, Performance Level III, Performance Level IV or Performance
Level V.

         "Performance Level I" means, at any date of determination, the Borrower
shall have an Index Debt rating in effect on such date of A- or better by S&P
and A3 or better by Moody's.

         "Performance Level II" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I and (b)
the Borrower shall have an Index Debt rating in effect on such date of BBB+ or
better by S&P and Baa1 or better by Moody's.

         "Performance Level III" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I or
Performance Level II and (b) the Borrower shall have an Index Debt rating in
effect on such date of BBB or better by S&P and Baa2 or better by Moody's.

         "Performance Level IV" means, at any date of determination, (a) the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II or Performance Level III and (b) the Borrower shall have an
Index Debt rating in effect on such date of BBB- or better by S&P and Baa3 or
better by Moody's.

         "Performance Level V" means, at any date of determination, the
Performance Level does not meet the requirements of Performance Level I,
Performance Level II, Performance Level III or Performance Level IV.

         "Permitted Liens" means, without duplication,

                           (a) Liens, not otherwise permitted under any other
                  provision of this definition, securing Indebtedness permitted
                  under this Agreement in an aggregate principal amount at any
                  time outstanding which does not exceed 12% of the Borrower's
                  Net Worth;

                                       14
<PAGE>

                           (b) Liens for Taxes or unpaid utilities not yet
                  delinquent or which are being contested in good faith by
                  appropriate proceedings; provided that adequate reserves with
                  respect thereto are maintained on the books of the Borrower or
                  its Subsidiaries, as the case may be, in conformity with GAAP;

                           (c) carriers', warehousemen's, mechanics',
                  materialmen's, repairmen's or other like Liens arising in the
                  ordinary course of business and not overdue for a period of
                  more than 60 days or which are being contested in good faith
                  by appropriate proceedings and for which adequate reserves
                  have been made in accordance with GAAP;

                           (d) pledges or deposits or deemed trusts in
                  connection with workers' compensation, unemployment insurance,
                  pension, employment or other social security legislation;

                           (e) easements, rights-of-way, use restrictions, minor
                  defects or irregularities in title, reservations (including
                  reservations in any original grant from any government of any
                  land or interests therein and statutory exceptions to title)
                  and other similar encumbrances incurred in the ordinary course
                  of business which, in the aggregate, are not substantial in
                  amount and which do not in any case materially detract from
                  the value of the property subject thereto or materially
                  interfere with the ordinary conduct of the business of the
                  Borrower or any of its Subsidiaries;

                           (f) judgment and attachment Liens not giving rise to
                  an Event of Default or Liens created by or existing from any
                  litigation or legal proceeding that are currently being
                  contested in good faith by appropriate proceedings, promptly
                  instituted and diligently conducted, and for which adequate
                  reserves have been made to the extent required by GAAP;

                           (g) Liens on the assets of any entity or asset
                  existing at the time such asset or entity is acquired by the
                  Borrower or any of its Subsidiaries, whether by merger,
                  amalgamation, consolidation, purchase of assets or otherwise;
                  provided that such Liens (i) are not created, incurred or
                  assumed by such entity in contemplation of such entity's being
                  acquired by the Borrower or any of its Subsidiaries; (ii) do
                  not extend to any other assets of the Borrower or any of its
                  Subsidiaries; and (iii) the Indebtedness secured by such Lien
                  is permitted pursuant to this Agreement;

                           (h) Liens securing Indebtedness of the Borrower or
                  its Subsidiaries not prohibited by Section 8.04 incurred to
                  finance the acquisition of fixed or capital assets, provided
                  that (i) such Liens shall be created not more than 90 days
                  after the acquisition of such fixed or capital assets, (ii)
                  such Liens do not at any time encumber any property other than
                  the property financed by such Indebtedness and (iii) the Liens
                  are not modified to secure other Indebtedness and the amount
                  of Indebtedness secured thereby is not increased;

                                       15
<PAGE>

                           (i) Liens incurred to secure the performance of
                  tenders, bids, leases, statutory obligations, surety and
                  appeal bonds, government contracts, performance and
                  return-of-money bonds and other obligations of a like nature
                  incurred in the ordinary course of business (exclusive of
                  obligations for the payment of borrowed money);

                           (j) leases or subleases granted to others not
                  interfering in any material respect with the business of the
                  Borrower or any of its Subsidiaries;

                           (k) Liens to secure obligations arising from
                  statutory or regulatory requirements;

                           (l) any interest or title of a lessor in property
                  subject to any Capitalized Lease Obligation or operating lease
                  which, in each case, is permitted under this Agreement;

                           (m) Liens in favor of collecting or payor banks
                  having a right of setoff, revocation, refund or chargeback
                  with respect to money or instruments of the Borrower or any of
                  its Subsidiaries on deposit with or in possession of such
                  bank; and

                           (n) any renewal or refinancing of or substitution
                  for, or any extension or modification of any maturity date for
                  any Indebtedness secured by, any Lien permitted by any of the
                  preceding clauses; provided that the debt secured is not
                  increased nor the Lien extended to any additional assets.

         "Person" means any individual, corporation, company, limited or general
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization or other entity, or any Governmental
Authority.

         "Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (a) maintained by the Borrower or any ERISA Affiliate for
employees of the Borrower or any ERISA Affiliate or (b) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which the Borrower or any ERISA
Affiliate is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.

         "Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

                                       16
<PAGE>

         "Redomestication" means

                           (a) any amalgamation, merger, conversion or
                  consolidation of the Borrower or the Guarantor with or into
                  any other Person, or of any other Person with or into the
                  Borrower or the Guarantor, or the sale or other disposition
                  (other than by lease) of all or substantially all of its
                  assets by the Borrower, or the Guarantor, to any other Person,

                           (b) any continuation, discontinuation, amalgamation,
                  merger conversion, consolidation or domestication or similar
                  action with respect to the Borrower or the Guarantor pursuant
                  to the law of the jurisdiction of its organization and of any
                  other jurisdiction, or

                           (c) the formation of a Person that becomes, as part
                  of the transaction, the owner of 100% of the Capital Stock of
                  the Borrower (the "New Parent"),

if as a result thereof

                           (i) in the case of any action specified in clause
                  (a), the entity that is the surviving, resulting or continuing
                  Person in such merger, amalgamation, conversion or
                  consolidation, or the transferee in such sale or other
                  disposition,

                           (ii) in the case of any action specified in clause
                  (b), the entity that constituted the Borrower or the
                  Guarantor, as applicable, immediately prior thereto (but
                  disregarding for this purpose any change in its jurisdiction
                  of organization), or

                           (iii) in the case of any action specified in clause
                  (c), the New Parent

(in any such case the "Survivor") is a corporation or other entity, validly
incorporated or formed and existing in good standing (to the extent the concept
of good standing is applicable) under the laws of Delaware or another State of
the United States or under the laws of the United Kingdom or The Kingdom of the
Netherlands or (with the consent of the Required Lenders, such consent not to be
unreasonably withheld) under the laws of any other jurisdiction, whose Capital
Stock of each class issued and outstanding immediately following such action,
and giving effect thereto, shall be beneficially owned by the same Persons, in
the same percentages, as was the Capital Stock of the entity constituting the
Borrower immediately prior thereto and, if the Survivor is the Guarantor or the
New Parent, the Survivor continues to be owned, directly or indirectly, 100% by
Persons who were shareholders of the Borrower immediately prior to such
transaction and the Survivor shall have delivered to the Administrative Agent
(i) a certificate to the effect that, both before and after giving effect to
such transaction, no Default or Event of Default exists, (ii) an opinion,
reasonably satisfactory in form, scope and substance to the Administrative
Agent, of counsel reasonably satisfactory to the Administrative Agent,
addressing such matters in connection with the Redomestication as the
Administrative Agent or any Lender may reasonably request, and (iii) if the
Survivor is the New Parent, a guaranty of the Obligations in form and substance
reasonably satisfactory to the Administrative Agent.

         "Reference Banks" means JPMorgan Chase Bank and BankOne, NA.

                                       17
<PAGE>

         "Regulation A" means Regulation A of the Board (respecting loans to
depository institutions), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.

         "Regulation D" means Regulation D of the Board (respecting reserve
requirements), as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof.

         "Regulation U" means Regulation U of the Board (respecting margin
credit extended by banks), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.

         "Regulation X" means Regulation X of the Board (respecting borrowers
who obtain margin credit), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.

         "Reportable Event" means an event described in Section 4043(c) of ERISA
with respect to a Plan as to which the 30-day notice requirement has not been
waived by the PBGC.

         "Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing at least fifty-one percent (51%)
of the sum of the total Revolving Credit Exposures and unused Commitments at
such time.

         "Requirement of Law" means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

         "Responsible Officer" means, with respect to either Obligor, the
president, the chief financial officer, the controller or any vice president of
such Obligor, or an individual specifically authorized by the Board of Directors
of such Obligor to sign on behalf of such Obligor.

         "Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans and its
LC Exposure at such time.

         "S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc.

         "Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "eurocurrency liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit

                                       18
<PAGE>

for proration, exemptions or offsets that may be available from time to time to
any Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

         "Subsidiary" means (a) a company or corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more subsidiaries of such Person or by such Person and one or more
subsidiaries of such Person, (b) a partnership in which such Person or a
subsidiary of such Person is, at the date of determination, a general or limited
partner of such partnership, but only if such Person or its subsidiary is
entitled to receive more than 50% of the assets of such partnership upon its
dissolution, or (c) any other Person (other than a corporation or partnership)
in which such Person, directly or indirectly, at the date of determination
thereof, has (i) at least a majority ownership interest or (ii) the power to
elect or direct the election of a majority of the directors or other governing
body of such Person. Unless the context otherwise clearly requires, references
in this Agreement to a "Subsidiary" or the "Subsidiaries" refer to a Subsidiary
or the Subsidiaries of the Borrower or the Guarantor, as applicable.

         "Syndication Agent" shall have the meaning specified in paragraph (d)
on page one.

         "Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.

         "Termination Date" means the earlier of (a) the Maturity Date and (b)
the earlier date of the acceleration of the maturity of the Obligations pursuant
to Section 9.01.

         "Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.

         "Total Capitalization" means, for any Person, at the date of
determination thereof, the sum of (a) Consolidated Indebtedness of such Person,
plus (b) Net Worth of such Person, plus (c) the outstanding principal amount of
the October 1997 Debentures at such date.

         "Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.

         "Utilization Fee" means the per annum rate specified in Section
2.08(d), as determined under the heading "Utilization Fee" in the definition of
"Applicable Rate" and based upon the ratings by Moody's and S&P, respectively,
applicable on such date to the Index Debt.

                                       19
<PAGE>

         "Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors or other governing body of such Person.

         "Wholly-Owned Subsidiary" means a Subsidiary of which all issued and
outstanding Capital Stock (excluding directors' qualifying shares or similar
jurisdictional requirements) is directly or indirectly owned by the Borrower.

         "Zero Coupon Debentures" means the zero coupon convertible debentures
due June 30, 2020, issued by the Guarantor on August 22, 2000, pursuant to the
Indenture dated as of May 17, 1996, from the Guarantor to The Bank of New York,
as Trustee, as amended and supplemented thereafter, and guaranteed by the
Borrower.

         SECTION 1.02. Types of Borrowings. Borrowings hereunder are
distinguished by "Type." The "Type" of a Loan refers to the determination
whether such Loan is a part of a Loan bearing interest at the Adjusted LIBO Rate
or at the Alternate Base Rate.

         SECTION 1.03. Accounting Terms; Changes in GAAP. All accounting and
financial terms used herein and not otherwise defined herein and the compliance
with each covenant contained herein which relates to financial matters shall be
determined in accordance with GAAP applied on a consistent basis, except to the
extent that a deviation therefrom is expressly stated. Should there be a change
in GAAP from that in effect on the Execution Date, such that the defined terms
set forth in Section 1.01 or the covenants set forth in Article VIII would then
be calculated in a different manner or with different components or would render
the same not meaningful criteria for evaluating the matters contemplated to be
evidenced by such covenants, (a) the Borrower and the Lenders agree, within the
60-day period following any such change, to negotiate in good faith and enter
into an amendment to this Agreement in order to conform the defined terms set
forth in Section 1.01 or the covenants set forth in Article VIII, or both, in
such respects as shall reasonably be deemed necessary by the Required Lenders so
that the criteria for evaluating the matters contemplated to be evidenced by
such covenants are substantially the same criteria as were effective prior to
any such change in GAAP, and (b) the Borrower and the Guarantor shall be deemed
to be in compliance with such covenants during the 60-day period following any
such change, or until the earlier date of execution of such amendment, if and to
the extent that the Borrower would have been in compliance therewith under GAAP
as in effect immediately prior to such change.

         SECTION 1.04. Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:

         (i) the singular number includes the plural number and vice versa;

         (ii) reference to any gender includes each other gender;

         (iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;

                                       20
<PAGE>

         (iv) unless the context indicates otherwise, reference to any Person
includes such Person's successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement, including any Person
that becomes a successor to the Borrower or the Guarantor as a result of a
Redomestication, and reference to a Person in a particular capacity excludes
such Person in any other capacity or individually, provided that nothing in this
clause (iv) is intended to authorize any assignment not otherwise permitted by
this Agreement;

         (v) except as expressly provided to the contrary herein, reference to
any agreement, document or instrument (including this Agreement) means such
agreement, document or instrument as amended, supplemented or modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any Note or other note includes
any note issued pursuant hereto in extension or renewal thereof and in
substitution or replacement therefor;

         (vi) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;

         (vii) the word "including" (and with correlative meaning "include")
means including, without limiting the generality of any description preceding
such term;

         (viii) with respect to the determination of any period of time, except
as expressly provided to the contrary, the word "from" means "from and
including" and the word "to" means "to but excluding";

         (ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from time to
time; and

         (x) the term "annualized" as used herein shall mean the multiplication
of the applicable amount for any given period by a fraction, the numerator of
which is 365 or 366 (whichever may be the number of days in the applicable year)
and the denominator of which is the number of days elapsed in such year.

         (b) The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.

         (c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.

                                   ARTICLE II

                               COMMITMENTS; LOANS

         SECTION 2.01. Loans. Subject to the terms and conditions set forth
herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that shall not
result in (a) such Lender's Revolving Credit Exposure exceeding such Lender's
Commitment or (b) the sum of the total Revolving Credit Exposures exceeding the
total Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.
Each Lender

                                       21
<PAGE>

severally agrees, subject to all of the terms and conditions of this Agreement
to make Loans as follows:

                  (a) Each Loan shall be made as part of a Borrowing consisting
of Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.

                  (b) Subject to Section 2.10, (i) each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.

                  (c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $3,000,000 and not less than $3,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $500,000 and not less than $1,000,000; provided that
an ABR Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 3.01(e).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of seven Eurodollar
Borrowings outstanding.

                  (d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.

         SECTION 2.02. Requests for Loans. To request a Borrowing, the Borrower
shall notify the Administrative Agent, who shall promptly thereafter notify the
Lenders, of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, on the date of the proposed Borrowing;
provided that any such notice of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 3.01(e) may be given not later
than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.01:

                  (i) the aggregate amount of the requested Borrowing;

                  (ii) the date of such Borrowing, which shall be a Business
         Day;

                                       22
<PAGE>

                  (iii) whether such Borrowing is to be an ABR Borrowing or a
         Eurodollar Borrowing;

                  (iv) in the case of a Eurodollar Borrowing, the initial
         Interest Period to be applicable thereto, which shall be a period
         contemplated by the definition of the term "Interest Period"; and

                  (v) the location and number of the Borrower's account to which
         funds are to be disbursed, which shall comply with the requirements of
         Section 2.03.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.

         SECTION 2.03. Funding of Borrowings.

                  (a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders by 12:00 noon, New York City time for
Borrowings consisting of Eurodollar Loans, and 1:00 p.m. New York City time, for
Borrowings consisting of ABR Loans. The Administrative Agent shall make such
Loans available to the Borrower by promptly crediting the amounts so received,
in like funds, to an account of the Borrower maintained with the Administrative
Agent in Houston, Texas, and designated by the Borrower in the applicable
Borrowing Request; provided that an ABR Borrowing made to finance the
reimbursement of an LC Disbursement as provided in Section 3.01(e) shall be
remitted by the Administrative Agent to the Issuing Bank.

                  (b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender shall
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Borrowings. If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute such Lender's
Loan included in such Borrowing.

                                       23
<PAGE>

         SECTION 2.04. Interest Elections.

                  (a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.

                  (b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.02 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.

                  (c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:

                  (i) the Borrowing to which such Interest Election Request
         applies and, if different options are being elected with respect to
         different portions thereof, the portions thereof to be allocated to
         each resulting Borrowing (in which case the information to be specified
         pursuant to clauses (iii) and (iv) below shall be specified for each
         resulting Borrowing);

                  (ii) the effective date of the election made pursuant to such
         Interest Election Request, which shall be a Business Day;

                  (iii) whether the resulting Borrowing is to be an ABR
         Borrowing or a Eurodollar Borrowing; and

                  (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
         Interest Period to be applicable thereto after giving effect to such
         election, which shall be a period contemplated by the definition of the
         term "Interest Period".

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.

                  (d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.

                                       24
<PAGE>

                  (e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

         SECTION 2.05. Termination and Reduction of Commitments.

                  (a) Unless previously terminated, the Commitments shall
terminate on the Maturity Date.

                  (b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.07, the Revolving Credit Exposures would exceed the
total Commitments.

                  (c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments, and each such
reduction of each such Lender's Commitment shall be applied to the reduction of
such Lender's commitment to make Loans and acquire LC Exposure in the same
proportion as each such commitment bears to such Lender's total Commitment
immediately prior to such reduction.

         SECTION 2.06. Repayment of Loans; Evidence of Debt.

                  (a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date.

                  (b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from

                                       25
<PAGE>

each Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

                  (c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

                  (d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

                  (e) Any Lender may request that Loans made by it be evidenced
by a promissory note (all of such notes being hereinafter collectively referred
to as the "Notes"). In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender and
in the form of Exhibit 2.06. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 12.06) be represented by one or more Notes in such form
payable to the order of the payee named therein.

         SECTION 2.07. Prepayment of Loans.

                  (a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section.

                  (b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.05, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.05. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.09.

                                       26
<PAGE>

                  (c) On the date that a Change of Control of the type described
in clause (a)(iii) of the definition of that term occurs and on the date that is
15 days after the occurrence of any other type of Change of Control, the
Commitments shall terminate and the Borrower shall (i) prepay the principal
amount of the Loans and all accrued and unpaid interest thereon in immediately
available funds and (ii) deposit in an account with the Administrative Agent, in
the name of the Administrative Agent for the benefit of the Lenders, an amount
in cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon. Such deposit shall be held by the Administrative Agent for the
payment of LC Exposure. The Administrative Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account.
Such deposits shall be invested so as to earn interest at such rate on overnight
deposits as the Administrative Agent may reasonably obtain, but such investments
shall be made at the Borrower's risk and expense. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time. Moneys in such account (to the
extent not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all LC Exposure shall have been reduced to zero.

         SECTION 2.08. Fees.

                  (a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a Facility Fee, which shall accrue at the Facility
Fee Rate on the daily amount of the Commitment of such Lender (whether used or
unused) during the period from and including the Effective Date to but excluding
the date on which such Lender ceases to have any Revolving Credit Exposure.
Accrued facility fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any facility fees accruing after the date on which the
Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 365 or 366 days, as applicable, and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

                  (b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of .125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of

                                       27
<PAGE>

March, June, September and December of each year shall be payable on the third
Business Day following such last day, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on the
date on which the Commitments terminate and any such fees accruing after the
date on which the Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 365 or 366 days, as applicable, and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

                  (c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.

                  (d) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a utilization fee (the "Utilization Fee") which shall
accrue at the Applicable Rate on the daily amount of the Revolving Credit
Exposure of such Lender at all times when the Revolving Credit Exposure of such
Lender exceeds 33% of such Lender's Commitment. Accrued Utilization Fees shall
be payable in arrears on the last day of March, June, September and December of
each year and/or the Maturity Date.

                  (e) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees, participation fees and Utilization Fees, to the Lenders. Fees
paid shall not be refundable under any circumstances.

         SECTION 2.09. Interest.

                  (a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate.

                  (b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin.

                  (c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Borrowings as provided in paragraph (a) of this
Section.

                  (d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the
Termination Date), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any

                                       28
<PAGE>

Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

                  (e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be presumed correct absent manifest error.

         SECTION 2.10. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:

                  (i) the Administrative Agent determines (which determination
         shall be presumed correct absent manifest error) that adequate and
         reasonable means do not exist for ascertaining the Adjusted LIBO Rate
         or the LIBO Rate, as applicable, for such Interest Period; or

                  (ii) the Administrative Agent is advised by the Required
         Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable,
         for such Interest Period shall not adequately and fairly reflect the
         cost to such Lenders of making or maintaining their Loans included in
         such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any ABR Borrowing to, or
continuation of any Eurodollar Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.

         SECTION 2.11. Increased Costs.

                  (a) If any Change in Law shall:

                  (i) impose, modify or deem applicable any reserve, special
         deposit or similar requirement against assets of, deposits with or for
         the account of, or credit extended by, any Lender (except any such
         reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
         Bank; or

                  (ii) impose on any Lender or the Issuing Bank or the London
         interbank market any other condition affecting this Agreement or
         Eurodollar Loans made by such Lender or any Letter of Credit or
         participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining

                                       29
<PAGE>

any Letter of Credit or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower shall pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as shall compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.

                  (b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower shall pay
to such Lender or the Issuing Bank, as the case may be, such additional correct
amount or amounts as shall compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction suffered.

                  (c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section, along with (i) a calculation of such amount or amounts,
(ii) a description of the specific Change in Law that justifies such amounts
due, and (iii) such other pertinent information related to the foregoing as the
Borrower may reasonably request, shall be delivered to the Borrower and shall be
presumed correct absent manifest error. The Borrower shall pay such Lender or
the Issuing Bank, as the case may be, the correct amount shown as due on any
such certificate within 10 days after receipt thereof.

                  (d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 120 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 120-day period referred to above shall be extended to include the period of
retroactive effect thereof.

         SECTION 2.12. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.07(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant

                                       30
<PAGE>

to Section 4.03, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be presumed correct absent manifest error, and shall
set forth a calculation of such amounts and such other information as the
Borrower may reasonably request. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

                                  ARTICLE III

                                Letters of Credit

         SECTION 3.01. Letters of Credit.

                  (a) General. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control. Nothing contained in this
Article III is intended to limit or restrict the rights of the Borrower or any
Subsidiary to obtain letters of credit from any Person, regardless of whether
such Person is a party hereto.

                  (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section
3.01), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the Borrower also shall submit a letter of credit application on the Issuing
Bank's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and

                                       31
<PAGE>

upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $100,000,000 and (ii) the total Revolving Credit Exposure shall not
exceed the total Commitments.

                  (c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is fifteen (15) days prior to the Maturity Date.

                  (d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by the Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section 3.01, or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

                  (e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $1,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.02 or Section 2.03 that such payment be financed with an ABR Borrowing
in an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Borrowing. If the Borrower fails to make such payment when due,
the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Lender's Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.03 with respect to Loans made by such Lender (and Section
2.03 shall

                                       32
<PAGE>

apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Borrowings as contemplated above) shall not constitute a Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

                  (f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, excluding payments by the Issuing Bank
with respect to drafts or other documents that do not comply on their face with
the express terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Affiliates, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence, willful
misconduct or unlawful acts on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

                                       33
<PAGE>

                  (g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
shall make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.

                  (h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Borrowings; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (e) of this Section 3.01, then Section 2.09(c)(ii) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (d) of this Section 3.01 to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

                  (i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.08(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

                  (j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders with LC Exposure representing greater
than 51% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clauses (f) or (g) of Section 9.01. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the

                                       34
<PAGE>

Borrower under this Agreement. The Administrative Agent shall have control, as
defined in the Uniform Commercial Code of the State of New York, including the
exclusive right of withdrawal, over such account. Such deposits shall be
invested so as to earn interest at such rate on overnight deposits as the
Administrative Agent may reasonably obtain, but such investments shall be made
at the Borrower's risk and expense. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 51% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

                                   ARTICLE IV

                       PAYMENTS; PRO RATA TREATMENT; TAXES

         SECTION 4.01. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Sections 2.11, 2.12 or 4.02, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.11,
2.12, 4.02 and 12.04 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

                  (b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.

                  (c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or

                                       35
<PAGE>

participations in LC Disbursements resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Loans and participations in
LC Disbursements and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans and participations
in LC Disbursements of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Loans and participations in LC Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

                  (d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower shall not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. (e) If any Lender shall fail to make
any payment required to be made by it pursuant to Section 3.01(d), 3.01(e),
2.03(b) or 4.01(d), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.

         SECTION 4.02. Taxes.

                  (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that

                                       36
<PAGE>

after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

                  (b) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Bank, shall be presumed correct absent manifest error.

                  (c) Any Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located or treated as located for income Tax purposes, or any treaty
to which any such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as shall permit such payments to be made without
withholding or at a reduced rate.

                  (d) If the Administrative Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes paid
by the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 4.02, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 4.02 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay promptly the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority with respect to such amount) to the Administrative Agent
or such Lender in the event the Administrative Agent or such Lender is required
to repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent or any Lender to make available
its Tax returns (or any other information relating to its Taxes which it deems
confidential) to the Borrower or any other Person.

                  (e) Without limiting the generality of the foregoing, each
Foreign Lender shall deliver to the Borrower and the Administrative Agent on the
Effective Date or upon the effectiveness of any Assignment and Assumption by
which it becomes a party to this Agreement (i) two duly completed copies of
United States Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP or W-8IMY or
successor applicable form, as the case may be, certifying in each

                                       37
<PAGE>

case that such Lender is entitled to receive payments under this Agreement and
the Notes payable to it without deduction or withholding of any United States
federal income Taxes, as if the Borrower were incorporated under the laws of the
United States or a State thereof, and (ii) any other governmental forms which
are necessary or required under an applicable Tax treaty or otherwise by law to
eliminate any withholding Tax, which have been reasonably requested by the
Borrower. Each Lender which delivers to the Borrower and the Administrative
Agent a Form W-8ECI, W-8BEN, W-8EXP or W-8IMY pursuant to the preceding sentence
further undertakes to deliver to the Borrower and the Administrative Agent two
further copies of such form on or before the date that any such form expires
(currently, three successive calendar years for Form W-8BEN or Form W-8ECI) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may reasonably be requested by the Borrower and the
Administrative Agent, in each case certifying that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income Taxes, unless an event (including any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income Taxes and in any such
event, the Borrower shall withhold Taxes at the rate and in the manner required
by the laws of the United States with respect to payments made to such a Lender
and shall be required to pay any additional amounts or indemnify such a Lender
pursuant to this Section 4.02 with respect to such withheld Taxes.

                  (f) The Borrower will remit to the appropriate Governmental
Authority, prior to delinquency, all Indemnified Taxes and Other Taxes payable
in respect of any payment. Within 30 days after the date of any payment of
Indemnified Taxes or Other Taxes, the Borrower will furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment of such Indemnified Taxes or Other Taxes or such other evidence thereof
as may be reasonably satisfactory to the Administrative Agent.

         SECTION 4.03. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.11, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 4.02, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.11 or 4.02, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

                  (b) If any Lender requests compensation under Section 2.11, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.02,
or if any Lender defaults in its obligation to fund Loans hereunder or if any
Lender fails to provide its consent to a Redomestication under

                                       38
<PAGE>

the laws of a jurisdiction (other than the United Kingdom or The Kingdom of the
Netherlands) outside of the United States, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 12.06), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (ii) in the case of any such assignment resulting from a
claim for compensation under Section 2.11 or payments required to be made
pursuant to Section 4.02, such assignment shall result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply and such Lender neither received nor
continued to claim any such compensation or payment.

                                   ARTICLE V

                              CONDITIONS PRECEDENT

         SECTION 5.01. Conditions Precedent to the Initial Credit Event. The
obligation of each Lender to make its initial Loan or the Issuing Bank to issue
the initial Letter of Credit (whichever event shall first occur) for the account
of the Borrower is subject to the following conditions:

                  (a) The Administrative Agent shall have received the
following:

                  (i) this Agreement executed by each party hereto;

                  (ii) the appropriate Notes of the Borrower, if any, payable to
         each applicable Lender, duly completed and executed and dated the
         Execution Date;

                  (iii) a certificate of a Responsible Officer and of the
         secretary or an assistant secretary of each Obligor, dated the date of
         the initial Credit Event and certifying, inter alia, (A) true and
         complete copies of the memorandum of association and bye-laws or the
         bylaws and certificate of incorporation, each as amended and in effect,
         of such Person and the resolutions adopted by the Board of Directors of
         such Person (1) authorizing the execution, delivery and performance by
         such Person of this Agreement and the other Loan Documents to which it
         is or shall be a party and the borrowing of the Loans to be made, and
         the request for the Letters of Credit to be issued, hereunder, (2)
         approving the forms of the Loan Documents to which it is a party and
         which shall be delivered at or prior to the date of the initial Credit
         Event and (3) authorizing officers of such Person to execute and
         deliver the Loan Documents to which it is or shall be a party and any
         related documents, including any agreement contemplated by this
         Agreement, (B) the incumbency and specimen signatures of the officers
         of such Person executing any documents on its behalf and (C) (1) that
         the representations and warranties made by such Obligor in any Loan
         Document to which such Person is a party and which shall be

                                       39
<PAGE>

         delivered at or prior to the date of the initial Credit Event are true
         and correct in all material respects as of the date of the initial
         Credit Event, except for those that by their express terms apply to an
         earlier date which shall be true and correct in all material respects
         as of such earlier date, (2) the absence of any proceedings for the
         dissolution, liquidation or winding up of such Person, and (3) the
         absence of the occurrence and continuance of any Default or Event of
         Default;

                  (iv) favorable, signed opinions addressed to the
         Administrative Agent and the Lenders dated the date of the initial
         Credit Event from (A) Fulbright & Jaworski L.L.P., counsel to the
         Obligors, and (B) Conyers Dill & Pearman, special Bermuda counsel to
         the Borrower, each given upon the express instruction of the Obligors;

                  (v) letters from CT Corporation System in form and substance
         satisfactory to the Administrative Agent and the Lenders evidencing the
         obligation of CT Corporation System to accept service of process in the
         State of New York on behalf of each Obligor that is not authorized to
         do business as a foreign corporation in the State of New York; and

                  (vi) copies of the memorandum of association, articles or
         certificates of incorporation or other similar organizational documents
         of each Obligor certified as of a recent date by the appropriate
         Governmental Authority and certificates of appropriate public officials
         as to the existence, good standing and qualification to do business as
         a foreign corporation, of each Obligor in each jurisdiction in which
         the ownership of its properties or the conduct of its business requires
         such qualification and where the failure to so qualify would,
         individually or collectively, have a Material Adverse Effect.

                  (b) The Administrative Agent shall have received evidence
satisfactory to it that all material consents of each Governmental Authority and
of each other Person, if any, reasonably required in connection with (a) the
Loans and (b) the execution, delivery and performance of this Agreement and the
other Loan Documents have been satisfactorily obtained.

                  (c) The Borrower shall have paid (i) to the Administrative
Agent and the Lenders, as applicable, all fees and expenses agreed upon by such
parties to be paid on or prior to the Execution Date, and (ii) to Andrews &
Kurth, L.L.P. pursuant to Section 12.03 all fees and disbursements invoiced at
or before 10:00 a.m. (New York City time) on the Execution Date by said firm to
the Borrower, on the date of the initial Credit Event.

                  (d) The Administrative Agent shall have received a copy of the
irrevocable notice (i) from the Guarantor, Weatherford Eurasia Limited and
Weatherford Eurasia, terminating the Credit Agreement dated as of April 26,
2001, as amended, among such Persons, BankOne, NA, as administrative agent, and
the other parties thereto, and directing such administrative agent to prepay by
wire transfer, in immediately available funds, in full, any loans and other
amounts then outstanding thereunder, together with accrued interest thereon and
any unpaid fees then accrued, and (ii) from the Guarantor and Weatherford Canada
Ltd. terminating the Amended and Restated Credit Agreement dated as of May 27,
1998, as amended, among such Persons, JPMorgan Chase Bank, as administrative
agent, and the other parties thereto and directing such administrative agent to
prepay by wire transfer, in immediately available funds, in

                                       40
<PAGE>

full, any loans and other amounts then outstanding thereunder, together with
accrued interest thereon and any unpaid fees then accrued.

         SECTION 5.02. Conditions Precedent to All Credit Events. The obligation
of the Lenders to make any Loan and of the Issuing Bank to issue any Letter of
Credit (including any Loan made or Letter of Credit issued on the date of the
initial Credit Event) is subject to the further conditions precedent that on the
date of such Loan made or Letter of Credit is issued:

                  (a) The conditions precedent set forth in Section 5.01 shall
have theretofore been satisfied.

                  (b) The representations and warranties set forth in Article VI
and in the other Loan Documents shall be true and correct in all material
respects as of, and as if such representations and warranties were made on, the
date of the proposed Loan (unless such representation and warranty expressly
relates to an earlier date), and the Obligors shall be deemed to have certified
to the Administrative Agent and the Lenders that such representations and
warranties are true and correct in all material respects by the Borrower's
delivery of a Borrowing Request.

                  (c) The Administrative Agent shall have received a duly
executed Borrowing Request (i) as to the Loan by the time and on the Business
Day specified under Section 2.02, and (ii) as to the Letter of Credit not later
than 11:00 a.m., New York City time, three Business Days before the date the
Letter of Credit is to be issued.

                  (d) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event.

                  (e) The Administrative Agent and the Lenders shall have
received such other approvals, opinions or documents as the Administrative Agent
or the Required Lenders may reasonably request.

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each of the Obligors to each of the Lenders that
all of the conditions specified in this Section 5.02 above have been satisfied
as of that time.

         SECTION 5.03. Delivery of Documents. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Article V,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be satisfactory in form
and substance to the Administrative Agent.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

         To induce the Lenders to enter into this Agreement and to make the
Loans and issue or participate in Letters of Credit, the Borrower represents and
warrants as to itself and the Guarantor, and the Guarantor represents and
warrants as to itself (such representations and

                                       41
<PAGE>

warranties to survive any investigation and the making of the Loans), to the
Lenders, the Issuing Bank and the Administrative Agent as follows:

         SECTION 6.01. Organization and Qualification. Each Obligor and each
Material Subsidiary (a) is a company, corporation, partnership, or entity having
limited liability that is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (b) has
the corporate, partnership or other power and authority to own its property and
to carry on its business as now conducted and (c) is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the failure to be so qualified would, together with all such other
failures of the Obligors and their Subsidiaries, have a Material Adverse Effect.
As of the Execution Date, the companies, corporations and other entities named
in Schedule 6.01 are all of the Material Subsidiaries, such Schedule (x)
accurately reflects (i) the direct owner of the Capital Stock of each such
Subsidiary and (ii) the percentage of the issued and outstanding Capital Stock
of each such Subsidiary owned by each Obligor, and (y) accurately sets forth the
jurisdictions of their respective incorporation or organization and
jurisdictions in which they are required to be qualified as foreign
corporations, foreign partnerships or other foreign entities to do business.

         SECTION 6.02. Authorization, Validity, Etc. Each Obligor has the
corporate or other power and authority to execute, deliver and perform its
obligations hereunder and under the other Loan Documents to which it is a party
and, in the case of the Borrower, to obtain the Loans, and all such action has
been duly authorized by all necessary corporate, partnership or other
proceedings on its part or on its behalf. This Agreement has been duly and
validly executed and delivered by or on behalf of each Obligor and constitutes
valid and legally binding agreements of such Obligor enforceable against such
Obligor in accordance with the terms hereof, and the Notes and the other Loan
Documents to which such Obligor is a party, when duly executed and delivered by
or on behalf of such Obligor, shall constitute valid and legally binding
obligations of such Obligor enforceable in accordance with the respective terms
thereof and of this Agreement, except, in each case (a) as may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws relating to or affecting the enforcement of creditors' rights
generally, and by general principles of equity which may limit the right to
obtain equitable remedies (regardless of whether such enforceability is a
proceeding in equity or at law) and (b) as to the enforceability of provisions
for indemnification and the limitations thereon arising as a matter of law or
public policy.

         SECTION 6.03. Governmental Consents, Etc. No authorization, consent,
approval, license or exemption of or filing or registration with any
Governmental Authority, is necessary for the valid execution, delivery or
performance by either Obligor of any Loan Document to which it is a party,
except those that have been obtained and such matters relating to performance as
would ordinarily be done in the ordinary course of business after the Execution
Date.

         SECTION 6.04. No Breach or Violation of Law or Agreements. Neither the
execution, delivery and performance by either Obligor of the Loan Documents to
which it is a party, nor compliance with the terms and provisions thereof, nor
the extensions of credit contemplated by the Loan Documents, (a) shall breach or
violate any applicable Requirement of Law, (b) shall result in any breach or
violation of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or

                                       42
<PAGE>

impose) any Lien upon any of its property or assets pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which it or
any of its consolidated Subsidiaries is party or by which any property or asset
of it or any of its consolidated Subsidiaries is bound or to which it is
subject, except for breaches, violations and defaults under clauses (a) and (b)
that collectively for both Obligors shall not have a Material Adverse Effect or
(c) shall violate any provision of the organizational documents of either
Obligor.

         SECTION 6.05. Title to Assets. Each Obligor and each consolidated
Subsidiary of the Borrower has good and indefeasible title to its assets, except
for such defects in title as would not in the aggregate have a Material Adverse
Effect. As of the Effective Date, the property of the Obligors and their
Subsidiaries is subject to no Liens, except Permitted Liens.

         SECTION 6.06. Litigation. Except for actions, suits or proceedings
described in the filings made by the Borrower or the Guarantor with the
Securities and Exchange Commission pursuant to the Exchange Act, as of the
Effective Date there are no actions, suits or proceedings pending for which
service of process has been accomplished or, to the best knowledge of either
Obligor, threatened with respect to either Obligor, the Loan Documents or any
transactions contemplated therein that are reasonably likely to have
(individually or collectively) a Material Adverse Effect.

         SECTION 6.07. Information; Financial Statements. All information
heretofore furnished by the Borrower and the Guarantor to the Administrative
Agent or any Lender in connection with this Agreement, as affected by the
disclosures made herein, in the other Loan Documents and in the filings made by
the Borrower and the Guarantor with the Securities and Exchange Commission
pursuant to the Exchange Act, did not as of the date thereof and shall not as of
the date of the initial Credit Event hereunder, when read together and taken as
a whole, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in any material respect. As of the Execution Date, there has been no
material adverse change since December 31, 2002 in the financial condition,
business or operations of the Borrower and its Subsidiaries taken as a whole
which could reasonably be expected to have a Material Adverse Effect.

         SECTION 6.08. Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is, or is regulated as, an "investment company," as such term
is defined in the Investment Company Act of 1940 (as adopted in the United
States), as amended.

         SECTION 6.09. Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a non-exempt "holding company," or subject to
regulation as such, or, to the knowledge of either Obligor's officers, an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935
(as adopted in the United States), as amended.

         SECTION 6.10. ERISA.

                  (a) The Borrower, and each ERISA Affiliate has maintained and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and would not reasonably be
expected to have a Material Adverse Effect.

                                       43
<PAGE>

Neither the Borrower nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that would reasonably be
expected to result in the incurrence of any such liability by the Borrower or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Borrower or any ERISA Affiliate pursuant to Title I
or IV of ERISA Sections 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would in the aggregate reasonably be expected to have a
Material Adverse Effect.

                  (b) No accumulated funding deficiency (as defined in Section
412 of the Code or Section 302 of ERISA), in excess of $50,000,000, whether or
not waived, exists or is expected to be incurred with respect to any Plan.

                  (c) The Borrower and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Sections 4201 or 4204 of ERISA in respect of Multiemployer
Plans that in the aggregate would reasonably be expected to have a Material
Adverse Effect.

                  (d) All contributions have been timely made to all employee
benefit plans, as defined in Section 3 of ERISA, except for such failures as
would not reasonably be expected to have a Material Adverse Effect.

         SECTION 6.11. Tax Returns and Payments. Each Obligor and each Material
Subsidiary has caused to be filed all federal income tax returns and other
material tax returns, statements and reports (or obtained extensions with
respect thereto) which are required to be filed and have paid or deposited or
made adequate provision in accordance with GAAP for the payment of all taxes
(including estimated taxes shown on such returns, statements and reports) which
are shown to be due pursuant to such returns, except where the failure to pay
such taxes (collectively for the Obligors and the Material Subsidiaries, taken
as a whole) would not have a Material Adverse Effect. No material income tax
liability of either Obligor or any Material Subsidiary has been asserted by the
Internal Revenue Service of the United States or any other Governmental
Authority for any taxes in excess of those already paid, except for taxes which
are being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been created on the books of the
Obligors and their Subsidiaries.

         SECTION 6.12. Requirements of Law; Environmental Matters.

                  (a) The Obligors and each of their consolidated Subsidiaries
are in compliance with all Requirements of Law, applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of their
property, except for such noncompliances which, in the aggregate, would not have
a Material Adverse Effect.

                  (b) The Borrower monitors, in the ordinary course of its
business, the effect of existing Environmental Laws, and each claim asserted
against it, the Guarantor, or any of their Subsidiaries by any Governmental
Authority alleging potential liability or responsibility for violation of any
Environmental Law, on its business operations and properties. As a result

                                       44
<PAGE>
thereof, the Borrower has reasonably concluded that such Environmental Laws and
any such claims would not, in the aggregate, have a Material Adverse Effect.

         SECTION 6.13. Purpose of Letters of Credit and Loans.

                  (a) All Letters of Credit and all proceeds of the Loans shall
be used by the Borrower for working capital and general corporate purposes
including providing liquidity and other financial accommodations to the
Guarantor and its Subsidiaries. Neither the Administrative Agent nor any Lender
shall have any responsibility as to the use of any proceeds of the Loans.

                  (b) Neither any Letter of Credit nor the proceeds of any Loan
under this Agreement were or shall be used directly or indirectly for the
purpose of buying or carrying any "margin stock" within the meaning of
Regulation U (herein called "margin stock") or for the purpose of reducing or
retiring any indebtedness which was originally incurred to buy or carry a margin
stock, or for any other purpose which might constitute this transaction a
"purpose" credit within the meaning of Regulation U. Neither Obligor nor any
agent acting on its behalf has taken or shall take any action which might cause
this Agreement or any other Loan Document to violate Regulation T, U or X, or
any other regulation of the Board or to violate the Exchange Act. Margin stock
did not on the Execution Date, and does not now, constitute more than 25% of the
assets of the Borrower or the Guarantor.

         SECTION 6.14. Designation of this Agreement and the Obligations. This
Agreement constitutes the "principal bank credit agreement" of the Guarantor for
purposes of the October 1977 Debenture Indenture. The Obligations under this
Agreement and under the other Loan Documents constitute "Designated Senior
Indebtedness" (as such phrase is used in the October 1997 Debenture Indenture)
and are pari passu with Indebtedness under the May 1996 Debenture Indenture.

         SECTION 6.15. No Default. No Default or Event of Default has occurred
and is continuing.

                                  ARTICLE VII
                              AFFIRMATIVE COVENANTS

         Each of the Borrower and the Guarantor covenants and agrees that prior
to the termination of this Agreement it shall duly and faithfully perform, and
(as applicable) cause its Subsidiaries to perform, each and all of the following
covenants:

         SECTION 7.01. Information Covenants. Each of the Borrower and the
Guarantor shall furnish or cause to be furnished to the Administrative Agent and
each Lender:

                  (a) As soon as available, and in any event within 45 days
after the end of each of the first three quarterly accounting periods in each
fiscal year its Quarterly Report on Form 10-Q, or its equivalent, of the
Borrower; provided, however, that the Borrower shall be deemed to have furnished
said Quarterly Report on Form 10-Q for purposes of this Section 7.01(a) if the
same shall have timely been made available on "EDGAR" and/or on its

                                       45
<PAGE>

home page on the worldwide web (as the date of this Agreement located at
www.weatherford.com) and complied with Section 5.01(c) in respect thereof.

                  (b) As soon as available, and in any event within 90 days
after the close of each fiscal year, its Annual Report, the Form 10-K, or its
equivalent, of the Borrower, for such fiscal year and certified by Ernst & Young
LLP or other independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent and the Required
Lenders, whose certification shall be without qualification or limitation;
provided, however, that (x) the Borrower shall be deemed to have furnished said
Annual Report on Form 10-K for purposes of this Section 7.02(b) if the same
shall have timely been made available on "EDGAR" and/or on its home page on the
worldwide web (at the date of this Agreement located at www.weatherford.com) and
complied with Section 5.01(c) in respect thereof, and (y) if said Annual Report
on Form 10-K contains the report of such independent public accountants (without
qualification or exception, and to the effect, as specified above), the Obligors
shall not be required to deliver such report.

                  (c) Promptly after the same become publicly available,
(whether on "EDGAR" or the Borrower's homepage on the worldwide web or
otherwise), notice to the Administrative Agent of the filing of all periodic
reports, and all amendments to such reports, on Form 10-K or Form 10-Q, and all
definitive proxy statements filed by the Borrower, the Guarantor of any other of
its Subsidiaries with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be (and in furtherance
of the foregoing, the Borrower will give to the Administrative Agent prompt
written notice of any change at any time or from time to time of the location of
the Borrower's home page on the worldwide web).

                  (d) Promptly, and in any event within ten Business Days after
any Responsible Officer of either Obligor obtains knowledge of

                  (i) any event or condition (excluding events or conditions
         constituting generalized market conditions affecting the Borrower and
         its competitors in substantially the same way) which would reasonably
         be expected to have a Material Adverse Effect; or

                  (ii) any event or condition which constitutes a Default or an
         Event of Default; or

                  (iii) the occurrence of a Change of Control or Change of
         Control Event;

a notice of such event or condition, specifying the nature thereof.

                  (e) At the time of the delivery of the financial statements
provided for (i) in Sections 7.01(a) and (b), a certificate of a Responsible
Officer of the Borrower and/or the Guarantor, as applicable, in the form of
Exhibit 7.01 to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall also set forth calculations required to
establish whether the Borrower and/or the Guarantor, as applicable, was in
compliance with the provisions of Article VIII as at the end of such fiscal
quarter or fiscal year, as the case may be and (ii) to the

                                       46
<PAGE>

extent there has been any change in the information previously furnished to the
Administrative Agent and the Lenders on Schedule 6.01, a revised Schedule 6.01.

                  (f) Promptly, and in any event within 30 days after any
Responsible Officer of either Obligor obtains knowledge thereof, notice:

                  (i) of the occurrence or expected occurrence of any material
         Reportable Event with respect to any Plan, a failure to make any
         material required contribution to a Plan, any Lien in favor of the PBGC
         or a Plan, or any withdrawal from, or the termination, reorganization
         or insolvency (within the meaning of such terms as used in ERISA) of
         any Multiemployer Plan, or

                  (ii) of the institution of proceedings or the taking of any
         other action by the PBGC or the Borrower or any ERISA Affiliate or any
         Multiemployer Plan with respect to the withdrawal from, or the
         terminating, reorganization or insolvency (within the meaning of such
         terms as used in ERISA) of, any Plan which termination, reorganization
         or insolvency would reasonably be expected to have a Material Adverse
         Effect, except that no notice shall be required with respect to the
         merger of a defined contribution plan of one ERISA Affiliate into a
         defined contribution plan of another ERISA Affiliate.

                  (g) From time to time and with reasonable promptness, such
other information or documents (financial or otherwise) with respect to the
Borrower, the Guarantor or any of their Subsidiaries as the Administrative Agent
or any Lender through the Administrative Agent may reasonably request.

         SECTION 7.02. Books, Records and Inspections. Each of the Borrower and
the Guarantor shall, and shall cause each of its Material Subsidiaries to,
permit, or cause to be permitted, any Lender, upon written notice, to visit and
inspect any of the properties of each of the Borrower and the Guarantor and
their Subsidiaries, to examine the corporate books and financial records of each
of the Borrower and the Guarantor and their Subsidiaries and to discuss the
affairs, finances and accounts of any such corporations with a Responsible
Officer of each of the Borrower and the Guarantor and such Subsidiaries, all at
such reasonable times and as often as such Lender(s), through the Administrative
Agent, may reasonably request.

         SECTION 7.03. Insurance and Maintenance of Properties. Each of the
Borrower and the Guarantor shall, and shall cause each of the Material
Subsidiaries to, maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its property and business against
such liabilities, casualties, risks and contingencies (including business
interruption insurance) and in such types and amounts as is customary in the
case of Persons engaged in the same or similar businesses and similarly
situated.

         SECTION 7.04. Payment of Taxes and other Claims. Each Obligor shall,
and shall cause each of the Material Subsidiaries to, pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, all taxes,
assessments and governmental charges levied or imposed upon such Obligor or such
Material Subsidiary, as applicable, or upon the income, profits or property of
such Obligor or such Material Subsidiary, as applicable, except for (i) such
taxes, assessments as would not, individually or in the aggregate, have a
Material Adverse Effect

                                       47
<PAGE>

and (ii) any such tax, assessment or governmental charge whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP.

         SECTION 7.05. Existence. Except as expressly permitted pursuant to
Section 8.02, such Obligor shall do all things necessary to preserve and keep in
full force and effect the corporate existence, rights and franchises of such
Obligors.

         SECTION 7.06. ERISA Information and Compliance. Except with respect to
matters described in clauses (a), (c) and (d) below which would not reasonably
be expected to have a Material Adverse Effect, the Borrower shall promptly
furnish to Administrative Agent: (a) immediately upon receipt, a copy of any
notice of complete or partial withdrawal liability under ERISA and any notice
from the PBGC under ERISA of an intent to terminate or appoint a trustee to
administer any Plan, (b) if requested by the Administrative Agent, promptly
after the filing thereof with the United States Secretary of Labor or the PBGC
or the Internal Revenue Service, copies of each annual and other report with
respect to each Plan or any trust created thereunder, (c) immediately upon
becoming aware of the occurrence of any Reportable Event, or of any "prohibited
transaction", as such term is defined in Section 4975 of the Code, in connection
with any Plan or any trust created thereunder, a written notice signed by a
Responsible Officer of the Borrower or the applicable ERISA Affiliate specifying
the nature thereof, what action the Borrower or the applicable ERISA Affiliate
is taking or proposes to take with respect thereto, and, when known, any action
taken by the PBGC, the Internal Revenue Service, the Department of Labor or any
other applicable Governmental Authority with respect thereto, (d) promptly after
the filing or receiving thereof by the Borrower or any ERISA Affiliate, any
notice of the institution of any proceedings or other actions which may result
in the termination of any Plan, and (e) each request for waiver of the funding
standards or extension of the amortization periods required by ERISA or Section
412 of the Code promptly after the request is submitted by the Borrower or any
ERISA Affiliate to the Secretary of the Treasury, the Department of Labor, the
Internal Revenue Service or any other applicable Governmental Authority. The
Borrower covenants that it shall and shall cause each ERISA Affiliate to comply,
with respect to each Plan and Multiemployer Plan, with all applicable provisions
of ERISA and the Code, except to the extent that any failure to comply would not
reasonably be expected to have a Material Adverse Effect.

         SECTION 7.07. Subsidiaries. The Borrower covenants that the
Subsidiaries identified on Schedule 6.01 are the only Material Subsidiaries as
of the Execution Date. Should any Subsidiary, subsequent to the date hereof,
become a Material Subsidiary, the Borrower shall deliver to the Administrative
Agent and the Lenders a revised Schedule 6.01 as provided in Section 7.01(e).

                                  ARTICLE VIII
                               NEGATIVE COVENANTS

         Each of the Borrower and the Guarantor covenants and agrees with the
Administrative Agent and the Lenders that prior to the termination of this
Agreement it shall duly and faithfully perform, and cause its Subsidiaries to
perform, each and all of the following covenants:

                                       48
<PAGE>

         SECTION 8.01. Material Change in Business. The Borrower shall not, and
shall not permit its Material Subsidiaries to, engage in any material business
substantially different from those carried on by the Borrower and its
consolidated Subsidiaries taken as a whole on the date hereof.

         SECTION 8.02. Consolidation, Merger, or Sale of Assets, Etc. The
Borrower shall not, and shall not permit the Guarantor or any other consolidated
Subsidiary to (A) wind up, liquidate or dissolve its affairs, or (B) amalgamate
or consolidate with, or merge into, or sell, lease or otherwise dispose of all
or substantially all of its assets to, any other Person, or permit any other
Person to amalgamate or consolidate with, or merge into, or sell, lease or
otherwise dispose of all or substantially all of its assets to, it, except that
this Section 8.02 shall not prohibit any Redomestication or any of the following
transactions, or any agreement to effect the same:

                  (a) if, immediately before and after giving effect thereto, no
Event of Default or Default shall have occurred and be continuing, any
amalgamation, consolidation or merger, or sale or other disposition of assets
(other than by lease) involving the Borrower or any of its consolidated
Subsidiaries, provided that

                  (i) in any such transaction involving the Borrower, either

                           (x) the entity that constituted the Borrower
                  immediately prior thereto is the surviving, resulting or
                  continuing Person in such merger, amalgamation or
                  consolidation, or the transferee in such sale or other
                  disposition (in any such case, the "Survivor"), or

                           (y) if the entity that constituted the Borrower
                  immediately prior thereto is not the Survivor, the Survivor
                  shall execute and deliver to the Administrative Agent an
                  instrument, in form and substance satisfactory to it, whereby
                  the Survivor shall become a party to this agreement and assume
                  all rights and obligations of the Borrower hereunder, or

                  (ii) in any such transaction involving the Guarantor, either

                           (x) the entity that constituted the Guarantor
                  immediately prior thereto is the Survivor, or

                           (y) the Guarantor shall have amalgamated or merged
                  with and into the Borrower and the Borrower shall be the
                  Survivor, or

                           (z) if neither the entity that constituted the
                  Guarantor immediately prior thereto nor the Borrower is the
                  Survivor, the Survivor shall execute and deliver to the
                  Administrative Agent an instrument, in form and substance
                  satisfactory to it, whereby the Survivor shall become a party
                  to this agreement and assume all rights and obligations of the
                  Guarantor hereunder),

                  (iii) in any such transaction not involving the Borrower or
         the Guarantor, a Wholly-Owned Subsidiary of the Borrower is the
         Survivor, and

                                       49
<PAGE>
                  (iv) in the case of any transaction specified in the foregoing
         clause (i), (ii) or (iii) (A) the Borrower, the Guarantor (except in a
         case specified in clause (ii)(y)) and their Subsidiaries shall be in
         compliance, on a pro forma basis after giving effect to such
         transaction, with the covenants contained in this Article VIII
         recomputed as of the last day of the most recently ended fiscal quarter
         of the Borrower, the Guarantor and their Subsidiaries as if such
         transaction had occurred on the first day of each relevant period for
         testing such compliance, (B) (with respect to any amalgamation,
         consolidation or merger, or sale or other disposition of assets, with
         or to a Person not a consolidated Subsidiary of the Borrower) the
         Borrower shall have delivered to the Administrative Agent an officer's
         certificate to such effect, together with all relevant financial
         information and calculations demonstrating such compliance and (C) if
         neither the Borrower nor the Guarantor is the Survivor the
         Administrative Agent shall have received an opinion reasonably
         satisfactory in form, scope and substance to the Administrative Agent,
         of counsel reasonably satisfactory to the Administrative Agent,
         addressing such matters in connection with such transaction as the
         Administrative Agent or such Lender may reasonably request, and such
         other documentation as the Administrative Agent may reasonably request;

                  (b) any winding up, liquidation or dissolution of any
consolidated Subsidiary if immediately before and after giving effect thereto,
no Event of Default or Default shall have occurred and be continuing and if in
the reasonable judgment of the Board of Directors (or other managing group) of
such Subsidiary, such winding up, liquidation or dissolution is in the best
interests of the Borrower and its consolidated Subsidiaries taken as a whole and
is not materially disadvantageous to any Lender, provided, however, with respect
to any winding up, liquidation or dissolution of the Guarantor (i) the owner of
all of the Capital Stock of the Guarantor immediately prior to such event shall
be the Borrower or a Wholly-Owned Subsidiary of the Borrower and (ii) if such
owner is not the Borrower (A) such owner shall be the New Parent or a direct or
indirect Wholly-Owned Subsidiary of the New Parent, and (B) such owner shall
execute and deliver to the Administrative Agent (1) a guaranty of the
Obligations in form and substance reasonably satisfactory to the Administrative
Agent, (2) an opinion, reasonably satisfactory in form, scope and substance to
the Administrative Agent, of counsel reasonably satisfactory to the
Administrative Agent, addressing such matters in connection with such event as
the Administrative Agent or any Lender may reasonably request and (3) such other
documentation as the Administrative Agent may reasonably request;

                  (c) transactions and transfers of assets among or between
Obligors, or among and between Obligors and Wholly-Owned Subsidiaries or among
and between Wholly-Owned Subsidiaries; and

                  (d) dispositions not otherwise permitted hereunder which are
made for fair market value; provided that (i) at the time of any disposition, no
Default or Event of Default shall exist or shall result from such disposition,
(ii) the aggregate sales price from such disposition shall be paid in cash or
otherwise on payment terms satisfactory to the applicable Obligor or Subsidiary,
and (iii) the aggregate book value of all assets of the Borrower and its
consolidated Subsidiaries, taken as a whole, shall not be reduced at any time to
an amount which is less than 80% of the aggregate book value of all assets of
the Borrower and its consolidated Subsidiaries,

                                       50
<PAGE>
taken as a whole, on December 31, 2002, as reflected on the Borrower's
consolidated balance sheet dated December 31, 2002.

         SECTION 8.03. Liens. Each Obligor shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of either Obligor or any such Subsidiary whether now
owned or hereafter acquired, except Permitted Liens.

         SECTION 8.04. Indebtedness.

                  (a) Each of the Borrower and the Guarantor shall not create,
incur or assume, or permit any of its Subsidiaries to create, incur or assume
any Indebtedness, unless each of the Borrower, the Guarantor, and their
Subsidiaries shall be in compliance, on a pro forma basis after giving effect to
such transactions, with the covenants contained in this Article VIII recomputed
as of the last day of the most recently ended fiscal quarter of each of the
Borrower, the Guarantor, and their Subsidiaries as if the transaction in
question had occurred on the first day of each relevant period for testing such
compliance.

                  (b) In addition to, and notwithstanding Section 8.04(a), the
aggregate principal amount of all Indebtedness of all foreign Subsidiaries of
the Borrower at any time outstanding to any Person other than the Borrower and
its Subsidiaries shall not exceed 12% of the Borrower's Net Worth at such time.

                  (c) In addition to, and notwithstanding Section 8.04(a), no
domestic Subsidiary of the Borrower (other than the Guarantor) shall incur any
Indebtedness (other than Domestic Intercompany Debt) after the Execution Date,
if after giving effect to such incurrence the aggregate outstanding Indebtedness
(other than Domestic Intercompany Debt) of all such Subsidiaries would exceed
$100,000,000.

         SECTION 8.05. Ownership of the Guarantor. Except to the extent
permitted under Section 8.02(a)(ii)(y) or Section 8.02(b), the Persons who are
the shareholders of the Borrower shall at any time cease to own, beneficially
and of record, directly or indirectly, 100% of the Capital Stock (except for
directors' qualifying shares) of the Guarantor.

         SECTION 8.06. Financial Covenants..

                  (a) The Borrower shall not permit its Consolidated
Indebtedness to exceed 50% of its Total Capitalization at the end of any fiscal
quarter.

                  (b) The Borrower shall not permit its Interest Coverage Ratio
at the end of any fiscal quarter to be less than 3.0 to 1.0.

         SECTION 8.07. Limitation on Transactions with Affiliates. Each of the
Borrower and the Guarantor shall not, and shall not permit any of their
consolidated Subsidiaries to, directly or indirectly, conduct any business or
enter into, renew, extend or permit to exist any transaction (including the
purchase, sale, lease or exchange of any assets or the rendering of any service)
or series of related transactions with any Person who is not either (i) the
Borrower or one of the Borrower's consolidated Subsidiaries or a Person that
becomes, pursuant to a Redomestication, a

                                       51
<PAGE>
part of the consolidated group that includes the Borrower, or (ii)
Weatherford\Al-Rushaid Limited, Weatherford Saudi Arabia Limited, W1
Receivables, L.P. or Universal Compression Holdings, Inc., on terms that are
less favorable to the Borrower or such consolidated Subsidiary, as the case may
be, than would be available in a comparable arm's length transaction.
Notwithstanding the foregoing, the restrictions set forth in this covenant shall
not apply to (i) the payment of reasonable and customary regular fees to
directors of the Borrower or the Guarantor who are not employees of the Borrower
or the Guarantor; (ii) loans and advances to officers and employees of the
Borrower or the Guarantor and their respective Subsidiaries for travel,
entertainment and moving and other relocation expenses made in direct
furtherance and in the ordinary course of business of the Borrower, the
Guarantor, and their respective Subsidiaries; (iii) any other transaction with
any employee, officer or director of the Borrower, the Guarantor or any of their
respective Subsidiaries pursuant to employee benefit or compensation
arrangements entered into in the ordinary course of business and approved by, as
applicable, the Board of Directors of the Borrower, the Board of Directors of
the Guarantor, or the Board of Directors of such Subsidiary permitted by this
Agreement; and (iv) customary underwriting or similar transactions with an
investment banking Affiliate.

         SECTION 8.08. Restrictions on Subsidiary Dividends. Each of the
Borrower and the Guarantor shall not and shall not permit any of its
consolidated Subsidiaries to enter into any agreement or contract which limits
or restricts in any way the payment of any dividends or distributions by any
consolidated Subsidiary of either Obligor to such Obligor or to another
consolidated Subsidiary of such Obligor.

         SECTION 8.09. Debentures. Except as expressly permitted in writing by
the Required Lenders, neither Obligor shall amend, modify or obtain or grant a
waiver of any provision of the October 1997 Debentures, the October 1997
Debenture Indenture, the May 1996 Debentures, the May 1996 Debenture Indenture
or the Zero Coupon Debentures or the Indenture pursuant to which they were
issued if such amendment, modification or waiver would be adverse to the
Lenders.

         SECTION 8.10. The Debenture Indentures. No Obligor shall take any
action that could result in the Obligations' failing to be classified as (a)
"Designated Senior Indebtedness" (as such phrase is used in the October 1997
Debenture Indenture) or (b) pari passu with Indebtedness under the May 1996
Debenture Indenture.

                                   ARTICLE IX
                         EVENTS OF DEFAULT AND REMEDIES

         SECTION 9.01. Events of Default and Remedies. If any of the following
events ("Events of Default") shall occur and be continuing:

                  (a) (i) the principal of any Loan or Note or any reimbursement
obligation in respect of any LC Disbursement shall not be paid on the date on
which such payment is due, or (ii) any payment of interest on any such Loan,
Note or reimbursement obligation or any other amount due hereunder or any other
Loan Document shall not be paid within five calendar days following the date on
which such payment of interest or such other amount is due; or

                                       52
<PAGE>

                  (b) any representation or warranty made or, for purposes of
Article V, deemed made by or on behalf of either Obligor herein, at the
direction of either Obligor or by either Obligor in any other Loan Document or
in any document, certificate or financial statement delivered in connection with
this Agreement or any other Loan Document shall prove to have been incorrect in
any material respect when made or deemed made or reaffirmed, as the case may be;
or

                  (c) either Obligor shall fail to perform or observe any
covenant contained in Article VIII or fails to give any notice required by
Section 7.01(d), (e) or (f); or

                  (d) either Obligor shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement (other than those
specified in Section 9.01(a), Section 9.01(b) or Section 9.01(c)) or any other
Loan Document to which it is a party and, in any event, such failure shall
remain unremedied for 30 calendar days after the earlier of (i) written notice
of such failure shall have been given to a Responsible Officer of the Borrower
by the Administrative Agent or any Lender or, (ii) a Responsible Officer of
either Obligor becomes aware of such failure; or

                  (e) the Borrower or any of its Subsidiaries (i) fails to make
(whether as primary obligor or as guarantor or other surety) any principal
payment of or interest or premium, if any, on any Indebtedness or the October
1997 Debentures beyond any period of grace provided with respect thereto (not to
exceed 30 days), provided that the aggregate amount of all Indebtedness as to
which such a payment default shall occur and be continuing is equal to or
exceeds $50,000,000, or (ii) defaults under any agreement or any instrument
which governs the rights and remedies of Persons holding Indebtedness of the
Borrower or any of its Subsidiaries with an aggregate face amount which is equal
to or exceeds $50,000,000; or

                  (f) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of either Obligor or any Material
Subsidiary in an involuntary case or proceeding under any applicable federal,
state or foreign bankruptcy, insolvency, reorganization or other similar law or
(ii) a decree or order adjudging either Obligor or any Material Subsidiary
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
either Obligor or any Material Subsidiary under any applicable federal, state or
foreign law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of either Obligor or any Material
Subsidiary of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, the continuance of any such decree or order for
relief or any such other decree or order that shall be unstayed and in effect
for a period of 60 consecutive days; or

                  (g) the commencement by either Obligor or any Material
Subsidiary of a voluntary case or proceeding under any applicable federal, state
or foreign bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either Obligor or any Material Subsidiary to the entry of a decree or
order for relief in respect of either Obligor or such Material Subsidiary in an
involuntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by either Obligor or any Material

                                       53
<PAGE>

Subsidiary of a petition or answer or consent seeking reorganization or relief
under any applicable federal, state or foreign law, or the consent by either
Obligor or any Material Subsidiary to the filing of such petition or the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of such Obligor or such
Material Subsidiary or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the consent to, approval of
or the admission by either Obligor or any Material Subsidiary in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by either Obligor or any Material Subsidiary in furtherance of
any such action; or

                  (h) a judgment or order shall be entered against either
Obligor or any Material Subsidiary, which with other outstanding judgments and
orders entered against the Obligors and the Material Subsidiaries equals or
exceeds $50,000,000 in the aggregate (to the extent not covered by insurance as
to which the respective insurer has acknowledged coverage), and (i) within 60
days after entry thereof such judgment shall not have been discharged or
execution thereof stayed pending appeal or, within 60 days after the expiration
of any such stay, such judgment shall not have been discharged, or (ii) any
enforcement proceeding shall have been commenced (and not stayed) by any
creditor upon such judgment;

                  (i) any Loan Document shall (other than with the consent of
the Administrative Agent and the Lenders), at any time after its execution and
delivery and for any reason, cease to be in full force and effect in any
material respect, or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by either Obligor or either Obligor
shall deny that it has any or further liability or obligation thereunder; or

                  (j) any Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA) which
(individually or collectively) exceeds $50,000,000, whether or not waived, or a
waiver of the minimum funding standard or extension of any amortization period
is sought or granted under Section 412 of the Code with respect to a Plan; any
proceeding shall have occurred or is reasonably likely to occur by the PBGC
under Section 4069(a) of ERISA to impose liability on the Borrower, any
consolidated Subsidiary or an ERISA Affiliate which (individually or
collectively) exceeds $50,000,000; any required contribution to a Plan or
Multiemployer Plan in excess of $50,000,000 shall not have been made within 15
days of the date such contribution is due; or the Borrower, any consolidated
Subsidiary or any ERISA Affiliate has incurred or is reasonably likely to incur
a liability to or on account of a Plan or Multiemployer Plan under Section 515,
4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall result (individually or
collectively) from any such event or events a material risk of either (i) the
imposition of a Lien(s) upon, or the granting of a security interest(s) in, the
assets of the Borrower, any consolidated Subsidiary and/or an ERISA Affiliate
securing an amount(s) equal to or exceeding $50,000,000, or (ii) the Borrower,
any consolidated Subsidiary and/or an ERISA Affiliate incurring a liability(ies)
or obligation(s) with respect thereto equal to or exceeding $50,000,000;

then, and in every such event (other than an event with respect to either
Obligor described in clause (f) or (g) of this Section 9.01), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:

                                       54
<PAGE>

                  (i) terminate the Commitments, and thereupon the Commitments
         shall terminate immediately, and

                  (ii) declare the Loans then outstanding to be due and payable
         in whole (or in part, in which case any principal not so declared to be
         due and payable may thereafter be declared to be due and payable), and
         thereupon the principal of the Loans so declared to be due and payable,
         together with accrued interest thereon and all fees and other
         obligations of the Borrower accrued hereunder, shall become due and
         payable immediately, without presentment, demand, protest or other
         notice of any kind, all of which are hereby waived by the Obligors, and
         in case of any event with respect to either Obligor described in clause
         (f) or (g) of this Section 9.01, the Commitments shall automatically
         terminate and the principal of the Loans then outstanding, together
         with accrued interest thereon and all fees and other obligations of the
         Borrower accrued hereunder, shall automatically become due and payable,
         without presentment, demand, protest or other notice of any kind, all
         of which are hereby waived by the Borrower.

         SECTION 9.02. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to either Obligor (any such notice
being expressly waived by each Obligor), to set off and apply any and all
deposits (general or special, time or demand, provisional or final but excluding
the funds held in accounts clearly designated as escrow or trust accounts held
by either Obligor for the benefit of Persons which are not Affiliates of either
Obligor), whether or not such setoff results in any loss of interest or other
penalty, and including all certificates of deposit, at any time held, and any
other funds or property at any time held, and other indebtedness at any time
owing by such Lender to or for the credit or the account of either Obligor
against any and all of the Obligations irrespective of whether or not such
Lender or the Administrative Agent shall have made any demand under this
Agreement, the Notes or any other Loan Document. Should the right of any Lender
to realize funds in any manner set forth above be challenged and any application
of such funds be reversed, whether by court order or otherwise, the Lenders
shall make restitution or refund to the applicable Obligor, as the case may be,
pro rata in accordance with their Commitments. Each Lender agrees to promptly
notify the Borrower and the Administrative Agent after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Administrative Agent
and the Lenders under this Section are in addition to other rights and remedies
(including other rights of setoff) which the Administrative Agent or the Lenders
may have. This Section is subject to the terms and provisions of Section
4.01(a).

         SECTION 9.03. Other Remedies. No remedy conferred herein or in any of
the other Loan Documents is to be exclusive of any other remedy, and each and
every remedy contained herein or in any other Loan Document shall be cumulative
and shall be in addition to every other remedy given hereunder and under the
other Loan Documents now or hereafter existing at law or in equity or by statute
or otherwise.

         SECTION 9.04. Application of Moneys During Continuation of Event of
Default.

                  (a) So long as an Event of Default of which the Administrative
Agent shall have given notice to the Lenders shall continue, all moneys received
by the Administrative

                                       55
<PAGE>

Agent (i) from either Obligor under the Loan Documents shall, except as
otherwise required by law, be distributed by the Administrative Agent on the
dates selected by the Administrative Agent as follows:

                  first, to payment of the unreimbursed expenses for which the
                  Administrative Agent or any Lender is to be reimbursed
                  pursuant to Section 12.03 and to any unpaid fees owing to the
                  Administrative Agent;

                  second, to the ratable payment of accrued but unpaid interest
                  on the Loans;

                  third, to the ratable payment of unpaid principal of the
                  Loans;

                  fourth, to the ratable payment of all other amounts payable by
                  the Obligors hereunder;

                  fifth, to secure the repayment and discharge of the
                  outstanding amount of all LC Exposure;

                  sixth, to the ratable payment of all other Obligations, until
                  all Obligations shall have been paid in full; and

                  finally, to payment to the Obligors, or their respective
                  successors or assigns, or as a court of competent jurisdiction
                  may direct, of any surplus then remaining from such proceeds.

                  (b) The term "unpaid" as used in this Section 9.04 shall mean
all Obligations outstanding as of any such distribution date as to which prior
distributions have not been made, after giving effect to any adjustments which
are made pursuant to Section 9.02 of which the Administrative Agent shall have
been notified. For purposes of the foregoing, reimbursement obligations with
respect to the LC Exposure on outstanding Letters of Credit shall be deemed
"paid" for purposes of this Section 9.04 when amounts sufficient to secure such
reimbursement obligations have been delivered to the Administrative Agent.

                                    ARTICLE X
                              ADMINISTRATIVE AGENT

         Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

         The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

                                       56
<PAGE>

         The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default or an Event of Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing as directed by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 12.05), and (c) except
as expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 12.05) or in the
absence of its own gross negligence, willful misconduct or unlawful acts. The
Administrative Agent shall be deemed not to have knowledge of any Default or
Event of Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

         The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for either Obligor), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

         The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Affiliates. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Affiliates of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

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<PAGE>

         Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Sections 12.03 and
12.04 shall continue in effect for the benefit of such retiring Administrative
Agent, its sub-agents and their respective Affiliates in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

         Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it shall, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.

                                   ARTICLE XI
                                    GUARANTY

         SECTION 11.01. Guaranty.

                  (a) In consideration of, and in order to induce the Lenders to
make Loans to, and the Issuing Bank to issue Letters of Credit for the account
of, the Borrower, the Guarantor hereby absolutely, unconditionally and
irrevocably guarantees in favor of all of the Lenders and the Issuing Bank, the
punctual payment and performance when due, whether at stated maturity, by
acceleration or otherwise, of the Borrower Obligations and all covenants of the
Borrower, now or hereafter existing under this Agreement and the other Loan
Documents to which the Borrower is a party, whether for principal, LC Exposure
interest (including interest accruing or becoming owing both prior to and
subsequent to the commencement of any proceeding against or with respect to the
Borrower under any applicable Bankruptcy Code or insolvency law, fees,
commissions, expenses (including reasonable attorneys' fees and expenses)),
indemnities, or otherwise (all such obligations being, as applicable, the
"Guaranteed Obligations"). The Guarantor agrees to pay any and all expenses
incurred by each Lender and the Administrative Agent in enforcing this Guaranty
against the Guarantor.

                                       58
<PAGE>

                  (b) This Guaranty is an absolute, unconditional, present and
continuing guaranty of payment and not of collection and is in no way
conditioned upon any attempt to collect from the Borrower or any other action,
occurrence or circumstance whatsoever.

         SECTION 11.02. Continuing Guaranty.

                  (a) The Guarantor guarantees that the Guaranteed Obligations
shall be paid strictly in accordance with the terms of this Agreement and the
other Loan Documents. The Guarantor agrees that, to the maximum extent permitted
by applicable law, the Guaranteed Obligations and Loan Documents to which the
Borrower is a party may be extended or renewed, and indebtedness thereunder
repaid and reborrowed in whole or in part, without notice to or assent by the
Guarantor, and that the Guarantor shall remain bound upon this Guaranty
notwithstanding any extension, renewal or other alteration of any of the
Guaranteed Obligations or such Loan Documents or any repayment and reborrowing
of Loans to the Borrower. The obligations of the Guarantor under this Guaranty
are absolute and unconditional irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of the Borrower under this
Agreement or any other Loan Document or any substitution, release or exchange of
any other guarantee of or security for the Obligations. To the maximum extent
permitted by applicable law, except as otherwise expressly provided in this
Agreement or any other Loan Document to which the Guarantor is a party, the
obligations of the Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms hereof under any circumstances whatsoever, including:

                  (i) any modification, amendment, supplement, renewal,
         extension for any period, increase, decrease, alteration or
         rearrangement of all or any part of the Guaranteed Obligations, or of
         this Agreement or any other Loan Document executed in connection
         herewith, or any contract or understanding among the Borrower, the
         Administrative Agent, the Issuing Bank and/or the Lenders, or any other
         Person, pertaining to the Guaranteed Obligations;

                  (ii) any adjustment, indulgence, forbearance or compromise
         that might be granted or given by the Lenders to the Guarantor, the
         Borrower or any other Person liable on the Guaranteed Obligations;

                  (iii) the insolvency, bankruptcy, arrangement, adjustment,
         composition, liquidation, disability, dissolution or lack of power of
         the Guarantor, the Borrower or any other Person at any time liable for
         the payment of all or part of the Guaranteed Obligations; or any
         dissolution or winding up of the Guarantor or the Borrower, or any
         sale, lease or transfer of any or all of the assets of the Guarantor or
         the Borrower, or any changes in the shareholders of the Guarantor or
         the Borrower, or any reorganization of the Guarantor or the Borrower;

                  (iv) the invalidity, illegality or unenforceability of all or
         any part of the Guaranteed Obligations, or any document or agreement
         executed in connection with the Guaranteed Obligations, for any reason
         whatsoever, including the fact that (A) the Guaranteed Obligations, or
         any part thereof, exceed the amount permitted by law, (B) the act of
         creating the Guaranteed Obligations, or any part thereof is ultra
         vires, (C) the

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<PAGE>

         officers or representatives executing the documents or otherwise
         creating the Guaranteed Obligations acted in excess of their authority,
         (D) the Guaranteed Obligations or any part thereof violate applicable
         usury laws, (E) the Guarantor or the Borrower has valid defenses,
         claims, and offsets (whether at law or in equity, by agreement or by
         statute) which render the Guaranteed Obligations wholly or partially
         uncollectible from the Guarantor or the Borrower, (F) the creation,
         performance, or repayment of the Guaranteed Obligations (or execution,
         delivery and performance of any document or instrument representing any
         part of the Guaranteed Obligations or executed in connection with any
         of the Guaranteed Obligations, or given to secure the repayment of the
         Guaranteed Obligations) is illegal, uncollectible, legally impossible
         or unenforceable, or (G) this Agreement, any other Loan Document, or
         any other document or instrument pertaining to any of the Guaranteed
         Obligations has been forged or otherwise is irregular or not genuine or
         authentic;

                  (v) any full or partial release of the liability of the
         Guarantor or the Borrower on the Guaranteed Obligations or any part
         thereof, or any other Person now or hereafter liable, whether directly
         or indirectly, jointly, severally, or jointly and severally, to pay,
         perform, guarantee, or assure the payment of the Guaranteed Obligations
         or any part thereof; it being recognized, acknowledged, and agreed by
         the Guarantor that the Guarantor may be required to pay the Guaranteed
         Obligations in full without assistance or support of any other Person,
         and that the Guarantor has not been induced to enter into this Guaranty
         on the basis of a contemplation, belief, understanding or agreement
         that any other Person shall be liable to perform the Guaranteed
         Obligations or that the Administrative Agent or any Lender shall look
         to any other Person to perform the Guaranteed Obligations;

                  (vi) the taking or accepting of any other security, collateral
         or guaranty, or other assurance of payment, for all or any part of the
         Guaranteed Obligations;

                  (vii) any release, surrender, exchange, subordination,
         deterioration, waste, loss or impairment of any collateral, property or
         security, at any time existing in connection with, or assuring or
         securing payment of, all or any part of the Guaranteed Obligations;

                  (viii) the failure of the Administrative Agent, the Lenders,
         the Issuing Bank or any other Person to exercise diligence or
         reasonable care in the preservation, protection, enforcement, sale or
         other handling or treatment of all or any part of such collateral,
         property or security;

                  (ix) the fact that any collateral, security or Lien
         contemplated or intended to be given, created or granted as security
         for the repayment of the Guaranteed Obligations shall not be properly
         perfected or created, or shall prove to be unenforceable or subordinate
         to any other Lien; it being recognized and agreed by the Guarantor that
         the Guarantor is not entering into this Guaranty in reliance on, or in
         contemplation of the benefits of, the validity, enforceability,
         collectibility or value of any of the collateral for the Guaranteed
         Obligations;

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<PAGE>

                  (x) any payment by the Borrower or the Guarantor to the
         Administrative Agent or any Lender is held to constitute a preference
         under bankruptcy or insolvency laws, or for any other reason either the
         Administrative Agent or any Lender is required to refund such payment
         or pay such amount to the Borrower, the Guarantor, or any other Person;
         or

                  (xi) any other action taken or omitted to be taken with
         respect to this Agreement, any other Loan Document, the Guaranteed
         Obligations, or the security and collateral therefor, whether or not
         such action or omission prejudices the Guarantor or increases the
         likelihood that the Guarantor shall be required to pay the Guaranteed
         Obligations pursuant to the terms hereof;

it being the unambiguous and unequivocal intention of the Guarantor that the
Guarantor shall be obligated to pay the Guaranteed Obligations when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether or not otherwise
or particularly described herein, except for the full and final payment and
satisfaction of the Guaranteed Obligations after the termination of all of the
Commitments.

                  (b) The Guarantor further agrees that, to the fullest extent
permitted by law, as between the Guarantor, or the one hand, and the Lenders and
the Administrative Agent, on the other hand, (i) the maturity of the Borrower
Obligations may be accelerated as provided in Section 9.01 for the purposes of
this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing the acceleration of the Borrower Obligations as against the Borrower
and (ii) in the event of any purported acceleration (whether by declaration or
automatic) of the Borrower Obligations as provided in Section 9.01, the Borrower
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of this Guaranty.

         SECTION 11.03. Effect of Debtor Relief Laws. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Guaranteed Obligations, the Administrative
Agent or any Lender is for any reason compelled to surrender or voluntarily
surrenders, such payment or proceeds to any Person (a) because such payment or
application of proceeds is or may be avoided, invalidated, declared fraudulent,
set aside, determined to be void or voidable as a preference, fraudulent
conveyance, fraudulent transfer, impermissible set-off or a diversion of trust
funds or (b) for any other reason, including (i) any judgment, decree or order
of any court or administrative body having jurisdiction over the Administrative
Agent, the Issuing Bank, any Lender or any of their respective properties or
(ii) any settlement or compromise of any such claim effected by the
Administrative Agent or any Lender with any such claimant (including the
Borrower), then the Guaranteed Obligations or any part thereof intended to be
satisfied shall be reinstated and continue, and this Guaranty shall continue in
full force as if such payment or proceeds have not been received,
notwithstanding any revocation thereof or the cancellation of any instrument
evidencing any of the Guaranteed Obligations or otherwise; and the Guarantor
shall be liable to pay the Administrative Agent, the Issuing Bank and the
Lenders, and hereby does indemnify the Administrative Agent, the Issuing Bank
and the Lenders and hold them harmless for the amount of such payment or
proceeds so surrendered and all reasonable expenses (including reasonable
attorneys' fees, court costs and

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<PAGE>

expenses attributable thereto) incurred by the Administrative Agent, the Issuing
Bank or any such Lender in the defense of any claim made against it that any
payment or proceeds received by the Administrative Agent, the Issuing Bank or
any such Lender in respect of all or part of the Guaranteed Obligations must be
surrendered. The provisions of this paragraph shall survive the termination of
this Guaranty and any satisfaction and discharge of the Borrower by virtue of
any payment, court order, or any law.

         SECTION 11.04. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and waives presentment, demand for
payment, notice of intent to accelerate, notice of dishonor or nonpayment and
any requirement that the Administrative Agent, the Issuing Bank or any Lender
institute suit, collection proceedings or take any other action to collect any
of the Guaranteed Obligations, including any requirement that the Administrative
Agent, the Issuing Bank or any Lender protect, secure, perfect or insure any
Lien against any property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any collateral (it being the
intention of the Administrative Agent, the Issuing Bank, the Lenders, and the
Guarantor that this Guaranty is to be a guaranty of payment and not of
collection). It shall not be necessary for the Administrative Agent, the Issuing
Bank or any Lender, in order to enforce any payment by the Guarantor hereunder,
to institute suit or exhaust its rights and remedies against the Guarantor, the
Borrower or any other Person, including others liable to pay the Guaranteed
Obligations, or to enforce its rights against any security ever given to secure
payment thereof. The Guarantor hereby expressly waives to the maximum extent
permitted by applicable law each and every right to which it may be entitled by
virtue of the suretyship laws of the State of Texas or any other state in which
it may be located, including any and all rights it may have pursuant to Rule 31,
Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and
Remedies Code and Chapter 34 of the Texas Business and Commerce Code. The
Guarantor hereby waives marshaling of assets and liabilities, notice by the
Administrative Agent, the Issuing Bank or any Lender of any indebtedness or
liability to which such Person applies or may apply any amounts received by it,
and of the creation, advancement, increase, existence, extension, renewal,
rearrangement or modification of the Guaranteed Obligations. The Guarantor
expressly waives, to the extent permitted by applicable law, the benefit of any
and all laws providing for exemption of property from execution or for valuation
and appraisal upon foreclosure.

         SECTION 11.05. Agreement to Defer Exercise of Subrogation.
Notwithstanding any payment or payments made by the Guarantor hereunder, or any
setoff or application by the Administrative Agent or any Lender of any security
or of any credits or claims, the Guarantor will not assert or exercise any
rights of the Administrative Agent or any Lender or of itself against the
Borrower to recover the amount of any payment made hereunder by the Guarantor to
the Administrative Agent or any Lender by way of any claim, remedy or
subrogation, reimbursement, exoneration, contribution, indemnity, participation
or otherwise arising by contract, by statute, under common law or otherwise, and
the Guarantor shall not have any right to exercise any right of recourse to or
any claim against assets or property of the Borrower for such amounts, in each
case unless and until the Obligations of the Borrower guaranteed hereby have
been fully and finally satisfied. Until such time (but not thereafter), the
Guarantor hereby agrees not to exercise any claim, right or remedy which it may
now have or hereafter acquire against the Borrower that arises under this
Agreement or any other Loan Document or from the

                                       62
<PAGE>

performance by the Guarantor of the Guaranty hereunder including any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification or participation in any claim, right or remedy of the
Administrative Agent or any Lender against the Borrower or the Guarantor, or any
security that the Administrative Agent or any Lender now has or hereafter
acquires pursuant hereto securing the Obligations of the Borrower under this
Agreement, whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise. If any amount shall be paid
to the Guarantor by the Borrower after payment in full of the Obligations, and
the Obligations shall thereafter be reinstated in whole or in part and the
Administrative Agent or any Lender forced to repay any sums received by any of
them in payment of the Obligations, this Guaranty shall be automatically
reinstated and such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Borrower
by virtue of any payment, court order or any federal or state law.

         SECTION 11.06. Full Force and Effect. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Guaranteed
Obligations under this Agreement and the other Loan Documents to which the
Borrower is a party and all other amounts payable under this Guaranty have been
paid in full (after the termination of the Commitments). All rights, remedies
and powers provided in this Guaranty may be exercised, and all waivers contained
in this Guaranty may be enforced, only to the extent that the exercise or
enforcement thereof does not violate any provisions of applicable law which may
not be waived.

                                   ARTICLE XII
                                  MISCELLANEOUS

         SECTION 12.01. Waiver; Amendments. No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by either Obligor therefrom shall in any event be
effective unless the same shall be permitted by Section 12.05, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

         SECTION 12.02. Notices.

                  (a) All notices and other communications provided for herein,
including any modifications of, or waivers or consents under, this Agreement
(collectively, "Communications") shall be given or made on a Business Day by
telecopy (confirmed by mail)

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<PAGE>

or other writing and telecopied or mailed or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof (or provided for in an Assignment and Assumption); or, as to any party
hereto, at such other address as shall be designated by such party in a notice
(given in accordance with this Section 12.02) (i) as to the Borrower, to the
Administrative Agent, (ii) as to the Administrative Agent, to the Borrower, and
to each Lender, and (iii) as to any Lender, to the Borrower and to the
Administrative Agent. Except as otherwise provided in this Agreement, all such
Communications shall be deemed to have been duly given (a) when transmitted by
telecopier, (b) when personally delivered, (c) one Business Day after deposit
with an overnight mail or delivery service, postage prepaid or (d) five Business
Days' after deposit in a receptacle maintained by the United States Postal
Service, postage prepaid, registered or certified mail, return receipt
requested, in each case given or addressed as aforesaid. Notwithstanding the
foregoing, Communications to the Administrative Agent pursuant to Article II,
Article III, Article IV or Article X shall not be effective until received by
the Administrative Agent.

         (b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

                                       64
<PAGE>

         SECTION 12.03. Expenses, Etc. Whether or not any Loan is ever made, the
Borrower shall pay or reimburse within 10 days after written demand (a) the
Administrative Agent for paying the reasonable fees and expenses of legal
counsel to the Administrative Agent, together with the reasonable fees and
expenses of each local counsel to the Administrative Agent, in connection with
the preparation, negotiation, execution and delivery of this Agreement
(including the exhibits and schedules hereto), the other Loan Documents and the
making of the Loans hereunder, and any modification, supplement or waiver of any
of the terms of this Agreement or any other Loan Document; (b) the
Administrative Agent for reasonable out-of-pocket expenses incurred in
connection with the preparation, documentation, administration and syndication
of any of the Loan Documents (including the advertising, marketing, printing,
publicity, duplicating, mailing and similar expenses) or any of the Obligations;
(c) the Administrative Agent, the Issuing Bank or any Lender for paying all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any other Loan Document or any other document referred to herein or therein; and
(d) following the occurrence and during the continuation of an Event of Default,
any Lender, the Issuing Bank or the Administrative Agent for paying all amounts
reasonably expended, advanced or incurred by such Lender, the Issuing Bank or
the Administrative Agent to collect the Obligations or to enforce, protect,
preserve or defend the rights of the Lenders, the Issuing Bank or the
Administrative Agent under this Agreement or any other Loan Document, together
with interest thereon at the Past Due Rate applicable to the Loans on each such
amount from the due date of payment until the date of reimbursement to such
Lender or the Administrative Agent.

         SECTION 12.04. Indemnity.

                  (a) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank, the Lenders and each Affiliate thereof and their respective
directors, officers, employees and agents (each such Person being an
"Indemnitee") from, and hold each Indemnitee harmless against, any and all
losses, liabilities, claims or damages (including reasonable legal fees and
expenses) to which any Indemnitee may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from (i) any
investigation, litigation or other proceeding (including any threatened
investigation or proceeding) relating to this Agreement, any Letter of Credit,
Loan, or any other Loan Document or (ii) any actual or proposed use by the
Borrower or any Subsidiary of the proceeds of any extension of credit by any
Lender hereunder and the Borrower shall reimburse each Indemnitee, upon demand
for any expenses (including reasonable legal fees) incurred in connection with
any such investigation, litigation or other proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence, willful misconduct or unlawful conduct of such Indemnitee.

                  (b) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS
THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH INDEMNITEE HEREUNDER SHALL
BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS
OR DAMAGES ARISING OUT OF OR RESULTING FROM THE SOLE OR CONCURRENT ORDINARY
NEGLIGENCE OF SUCH INDEMNITEE. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER
OBLIGATIONS OF THE BORROWER HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS TO
WHICH IT IS A PARTY, THE OBLIGATIONS OF THE BORROWER

                                       65
<PAGE>

UNDER THIS SECTION 12.04 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND THE PAYMENT OF THE OTHER OBLIGATIONS OR THE ASSIGNMENT
OF THE NOTES.

         SECTION 12.05. Amendments, Etc. No amendment or modification of this
Agreement, the Notes or any other Loan Document shall in any event be effective
against the Borrower unless the same shall be agreed or consented to in writing
by the Borrower or the Guarantor. No amendment, modification or waiver of any
provision of this Agreement, the Notes or any other Loan Document, nor any
consent to any departure by the Borrower therefrom, shall in any event be
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Required Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby or the Issuing
Bank, as the case may be, do any of the following: (a) increase the Commitment
of any of the Lenders (or reinstate any termination or reduction of the
Commitment) or subject any of the Lenders or the Issuing Bank to any additional
obligations; (b) reduce the principal of, or interest on, any Loan, fee or other
amount due hereunder; (c) postpone or extend the Maturity Date, the Termination
Date, the Availability Period or any scheduled date fixed for any payment of
principal of, or interest on, any Loan, fee or other sum to be paid hereunder or
waive any Event of Default described in Section 9.01(a); (d) change the
percentage of any of the Commitments or of the aggregate unpaid principal amount
of Obligations, or the percentage of Lenders, which shall be required for the
Lenders or any of them to take any action under this Agreement (including, to
change the definition of "Required Lenders"); (e) change Section 4.01(b) in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender; (f) change any provision contained
in Sections 12.03 or 12.04 or Section 12.05, or (g) release any Person from
liability under a guaranty. Notwithstanding anything in this Section 12.05 to
the contrary, no amendment, modification, waiver or consent shall be made with
respect to Article X without the consent of the Administrative Agent to the
extent it affects the Administrative Agent, as the Administrative Agent. Subject
to the foregoing, the amendment or waiver of any provisions of Article VI, VII,
VIII or IX may be effected with the consent of the Required Lenders.

         SECTION 12.06. Successors and Assigns.

                  (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that (i) neither Obligor may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by such
Obligor without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

                                       66
<PAGE>

                  (b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:

                           (A) the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee; and

                           (B) the Administrative Agent, such consent not to be
unreasonably withheld, provided that no consent of the Administrative Agent
shall be required for an assignment of any Commitment to an assignee that is a
Lender with a Commitment immediately prior to giving effect to such assignment,
or to an Affiliate of any such Lender.

                  (ii) Assignments shall be subject to the following additional
conditions:

                           (A) except in the case of an assignment to a Lender
or an Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Commitment or Loans of any Type, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default under clause (a), (f) or (g) of Article IX has occurred and is
continuing;

                          (B) each partial assignment shall be made as an

assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, provided that this clause shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of Commitments
or Loans;

                           (C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500;

                           (D) the assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire;

                           (E) except in connection with assignments made while
an Event of Default has occurred and is continuing, all prospective assignees of
a Lender shall be required, as a condition to the effectiveness of such
Assignment, to execute and deliver the forms required under Section 4.02(e) for
any Lender, and no Assignment shall be effective in connection herewith unless
and until such forms are so delivered; and

                           (F) no assignment shall be made to any Lender if
after giving effect to such assignment, such Lender's Commitment Percentage
would exceed 30%.

                                       67
<PAGE>

         For purposes of this Section 12.06, the term "Approved Fund" has the
following meaning:

         "Approved Fund" means any Person (other than a natural person) that is
         engaged in making, purchasing, holding or investing in bank loans and
         similar extensions of credit in the ordinary course of its business and
         that is administered or managed by (a) a Lender, (b) an Affiliate of a
         Lender or (c) an entity or an Affiliate of an entity that administers
         or manages a Lender.

                  (iii) Subject to acceptance and recording thereof pursuant to
         paragraph (b)(iv) of this Section, from and after the effective date
         specified in each Assignment and Assumption the assignee thereunder
         shall be a party hereto and, to the extent of the interest assigned by
         such Assignment and Assumption, have the rights and obligations of a
         Lender under this Agreement, and the assigning Lender thereunder shall,
         to the extent of the interest assigned by such Assignment and
         Assumption, be released from its obligations under this Agreement (and,
         in the case of an Assignment and Assumption covering all of the
         assigning Lender's rights and obligations under this Agreement, such
         Lender shall cease to be a party hereto but shall continue to be
         entitled to the benefits of Sections 12.03 and 12.04). Any assignment
         or transfer by a Lender of rights or obligations under this Agreement
         that does not comply with this Section 12.06 shall be treated for
         purposes of this Agreement as a sale by such Lender of a participation
         in such rights and obligations in accordance with paragraph (c) of this
         Section.

                  (iv) The Administrative Agent, acting for this purpose as an
         agent of the Borrower, shall maintain at one of its offices a copy of
         each Assignment and Assumption delivered to it and a register for the
         recordation of the names and addresses of the Lenders, and the
         Commitment of, and principal amount of the Loans and LC Disbursements
         owing to, each Lender pursuant to the terms hereof from time to time
         (the "Register"). The entries in the Register shall be presumed
         correct, in the absence of manifest error, and the Obligors, the
         Administrative Agent, the Issuing Bank and the Lenders may treat each
         Person whose name is recorded in the Register pursuant to the terms
         hereof as a Lender hereunder for all purposes of this Agreement,
         notwithstanding notice to the contrary. The Register shall be available
         for inspection by the Obligors, the Issuing Bank and any Lender, at any
         reasonable time and from time to time upon reasonable prior notice.

                  (v) Upon its receipt of a duly completed Assignment and
         Assumption executed by an assigning Lender and an assignee, the
         assignee's completed Administrative Questionnaire (unless the assignee
         shall already be a Lender hereunder), the processing and recordation
         fee referred to in paragraph (b) of this Section and any written
         consent to such assignment required by paragraph (b) of this Section,
         the Administrative Agent shall accept such Assignment and Assumption
         and record the information contained therein in the Register. No
         assignment shall be effective for purposes of this Agreement unless it
         has been recorded in the Register as provided in this paragraph.

                  (c) (i) Any Lender may, without the consent of the Borrower,
the Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other

                                       68
<PAGE>

entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the proviso to Section 12.05 that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 4.02 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.02 as though it were a Lender, provided such Participant agrees to be
subject to Section 4.01(b), and to deliver the forms required by Section
4.02(e), as though it were a Lender.

                  (i) A Participant shall not be entitled to receive any greater
         payment under Sections 2.11 and 4.02 than the applicable Lender is
         entitled to receive with respect to the participation sold to such
         Participant, unless the sale of the participation to such Participant
         is made with the Borrower's prior written consent. A Participant that
         would be a Foreign Lender if it were a Lender shall not be entitled to
         the benefits of Section 4.02 unless the Borrower is notified of the
         participation sold to such Participant and such Participant agrees, for
         the benefit of the Borrower, to comply with Section 4.02(d) and Section
         4.02(e) as though it were a Lender.

                  (ii) Anything in this Section 12.06 to the contrary
         notwithstanding, no Participant shall be entitled to benefits under
         this Agreement if the Lender from whom such Participant purchased its
         participation would not be entitled to the same benefits, and no
         Participant shall be entitled to rights and benefits hereunder in
         excess of such Participant's pro rata interest in the applicable
         Lender's rights hereunder, the rights of a Participant hereunder being
         determined solely by and based upon the Lender from whom the
         Participant purchased its interest hereunder.

                  (d) Notwithstanding any other provision herein, any Lender
may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 12.06, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Obligors furnished to such Lender by or on behalf of either Obligor subject,
however to the provisions of Section 12.07.

                  (e) Any Lender 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 Lender 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 Lender

                                       69
<PAGE>

from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.

                  (f) All transfers of any interest in any Note hereunder shall
be in compliance with all federal, state and other securities laws, if
applicable. Notwithstanding the foregoing sentence, however, the parties to this
Agreement do not intend that any transfer under this Section 12.06 be construed
as a "purchase" or "sale" of a "security" within the meaning of any applicable
federal or state securities laws.

         SECTION 12.07. Confidentiality. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by either Obligor to
it pursuant to or in connection with this Agreement (including any information
obtained pursuant to Section 7.01 other than information on EDGAR or on the
worldwide web), confidential from anyone other than Persons employed or retained
by such Lender who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans or the LC Exposure; provided
that nothing herein shall prevent any Lender from disclosing such information
(a) to any other Lender, (b) pursuant to subpoena or upon the order of any court
or administrative agency, (c) upon the request or demand of any regulatory
agency or authority having or claiming jurisdiction over such Lender, (d) which
has been publicly disclosed, (e) to the extent reasonably required in connection
with any litigation to which the Administrative Agent, any Lender, either
Obligor or their respective Affiliates may be a party, (f) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document, (g) to such Lender's legal counsel and
independent auditors and (h) to any actual or proposed participant or assignee
of all or part of its rights hereunder which has agreed in writing to be bound
by the provisions of this Section 12.07. Each Lender shall promptly notify the
Borrower of any information that it is required or requested to deliver pursuant
to clause (b) or (c) of this Section 12.07 and, if no Obligor is a party to any
such litigation, clause (e) of this Section 12.07. Notwithstanding anything
herein to the contrary, confidential information shall not include, and each
Lender (and each Person employed or retained by such Lender who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans and LC Exposure) may disclose to any Person, without
limitation of any kind, the "tax treatment" and "tax structure" (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of the Loan and
Letter of Credit transactions contemplated by the Loan Documents and all
materials of any kind (including opinions or other tax analyses) related thereto
that are or have been provided to such Lender relating to such tax treatment or
tax structure; provided that with respect to any document or similar item that
in either case contains information concerning such tax treatment or tax
structure of the Loan and Letter of Credit transactions contemplated hereby as
well as other information, this sentence shall only apply to such portions of
the documents or similar item that relate to such tax treatment or tax
structure.

         SECTION 12.08. Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing by
the Obligors in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents until two years and one day after payment in full of the Obligations
and the termination of the Commitments of the Lenders, and shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not, provided, that the undertaking of the Lenders to
make Loans and extend credit

                                       70
<PAGE>

to the Borrower shall not inure to the benefit of any successor or assign of the
Borrower, except a successor or assign that becomes such in accordance with, as
provided in Section 8.02.

         SECTION 12.09. Governing Law. This Agreement, all Notes, the other Loan
Documents and all other documents executed in connection herewith and therewith
and the rights and obligations of the parties hereto and thereto, shall be
deemed to be contracts and agreements executed by the Obligors, the
Administrative Agent, the Issuing Bank and the Lenders under the laws of the
State of New York and of the United States of America and for all purposes shall
be construed in accordance with, and governed by, the laws of said state and, to
the extent controlling, of the United States of America.

         SECTION 12.10. Independence of Covenants. All covenants contained in
this Agreement and in the other Loan Documents shall be given independent effect
so that if a particular action or condition is not permitted by any of such
covenants, the fact that such action or condition would be permitted by an
exception to, or otherwise be within the limitations of, another covenant, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.

         SECTION 12.11. Binding Effect. This Agreement shall become effective on
the Effective Date.

         SECTION 12.12. Separability. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision shall not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void shall be deemed
to have been stricken herefrom and the remainder shall have the same force and
effectiveness as if such part or parts had never been included herein.

         SECTION 12.13. Conflicts Between This Agreement and the Other Loan
Documents. In the event of any conflict between, or inconsistency with, the
terms of this Agreement and the terms of any of the other Loan Documents, the
terms of this Agreement shall control.

         SECTION 12.14. Limitation of Interest. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

                                       71
<PAGE>

         SECTION 12.15. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

         SECTION 12.16. Submission to Jurisdiction. (a) ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
ANY APPELLATE COURT FROM EITHER THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OBLIGOR, THE ADMINISTRATIVE AGENT, EACH LENDER AND THE ISSUING
BANK HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING. EACH OBLIGOR, TO THE EXTENT IT IS NOT
QUALIFIED TO DO BUSINESS IN NEW YORK, HEREBY IRREVOCABLY DESIGNATES, APPOINTS
AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111
EIGHTH AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
SUCH OBLIGOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK
ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE
ADMINISTRATIVE AGENT. EACH OBLIGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 12.02, AND AT ITS
REGISTERED OFFICE, IF DIFFERENT. SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EITHER OBLIGOR IN ANY
OTHER JURISDICTION.

                  (b) EACH OF THE OBLIGORS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                       72
<PAGE>

         SECTION 12.17. Waiver of Jury Trial. EACH OBLIGOR, THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE ISSUING BANK (a) IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (b) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (c) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (d) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.

         SECTION 12.18. Judgment Currency. The obligation of each Obligor to
make payments on any Obligation to the Lenders or to any Agent hereunder in any
currency (the "first currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency (the "second currency") except to the extent to which such tender
or recovery shall result in the effective receipt by the applicable Lender or
the applicable Agent of the full amount of the first currency payable, and
accordingly the primary obligation of each Obligor shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in the
second currency of the amount (if any) by which such effective receipt shall
fall short of the full amount of the full currency payable and shall not be
affected by a judgment being obtained for any other sum due hereunder.

         SECTION 12.19. Final Agreement of the Parties. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                                       73
<PAGE>

                  Executed as of the date first above written.

                                         BORROWER:

                                         WEATHERFORD INTERNATIONAL LTD.

                                         By:    /s/ BURT M. MARTIN
                                                --------------------------------
                                         Name:  Burt M. Martin
                                                --------------------------------
                                         Title: Senior Vice President, General
                                                --------------------------------
                                                Counsel and Secretary
                                                --------------------------------

                                         Notice Information:

                                         c/o Weatherford International, Inc.
                                         515 Post Oak Blvd.
                                         Houston, Texas  77027
                                         Attention: General Counsel
                                         Telephone: (713) 693-4000
                                         Telecopy:  (713) 693-4484

The COMMON SEAL of                  )
Weatherford International Ltd.      )
was hereunto affixed                )
in the presents of:                 )

-------------------------------------
Name

-------------------------------------
Title

                                       74
<PAGE>

                                         GUARANTOR:

                                         WEATHERFORD INTERNATIONAL, INC.

                                         By:    /s/ BURT M. MARTIN
                                                --------------------------------
                                         Name:  Burt M. Martin
                                                --------------------------------
                                         Title: Senior Vice President
                                                --------------------------------

                                         Notice Information:

                                         515 Post Oak Blvd.
                                         Houston, Texas  77027
                                         Attention: General Counsel
                                         Telephone: (713) 693-4000
                                         Telecopy:  (713) 693-4484

                                       75
<PAGE>

                                         ADMINISTRATIVE AGENT:

                                         JPMORGAN CHASE BANK,
                                         as Administrative Agent

                                         By:    /s/ [ILLEGIBLE]
                                                --------------------------------
                                         Name:
                                                --------------------------------
                                         Title:
                                                --------------------------------

                                         Notice Information:

                                         1111 Fannin, 10th Floor
                                         Houston, Texas  77002
                                         Telephone: (713) 750-2366
                                         Telecopy:  (713) 427-6307

                                         With a copy to:

                                         600 Travis, 20th Floor
                                         Houston, Texas  77002
                                         Telephone: (713) 216-5968
                                         Telecopy:  (713) 216-4117

                                       76
<PAGE>

                                         LENDERS:

                                         JPMORGAN CHASE BANK

                                         By:    /s/ [ILLEGIBLE]
                                                --------------------------------
                                         Name:
                                                --------------------------------
                                         Title:
                                                --------------------------------

                                         Notice Information:

                                         1111 Fannin, 10th Floor
                                         Houston, Texas  77002
                                         Telephone: (713) 750-2366
                                         Telecopy:  (713) 427-6307

                                         With a copy to:

                                         600 Travis, 20th Floor
                                         Houston, Texas  77002
                                         Telephone: (713) 216-5968
                                         Telecopy:  (713) 216-4117

                                       77
<PAGE>

                                         BANK ONE, NA

                                         By:     /s/ Pete Torres
                                                --------------------------------
                                         Name:   Pete Torres
                                                --------------------------------
                                         Title:  Director
                                                --------------------------------

                                         Notice Information:

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

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

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

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

                                       78
<PAGE>

                                         WELLS FARGO BANK TEXAS, N.A.

                                         By:     /s/ T. Alan Smith
                                                --------------------------------
                                                T. Alan Smith
                                                Vice President

                                         Notice Information:

                                         1000 Louisiana, 3rd Floor
                                         Mail Code: T5002-031
                                         Houston, Texas  77002
                                         Telephone:
                                                   ------------------------
                                         Telecopy:
                                                   ------------------------

                                       79
<PAGE>

                                         ABN AMRO BANK N.V.

                                         By:    /s/ STUART W. MURRAY
                                                --------------------------------
                                         Name:  Stuart W. Murray
                                                --------------------------------
                                         Title: Group Vice President
                                                --------------------------------

                                         By:    /s/ JOHN D. REED
                                                --------------------------------
                                         Name:  John D. Reed
                                                --------------------------------
                                         Title: Vice President
                                                --------------------------------

                                         Notice Information:

                                         4400 Post Oak Parkway
                                         Suite 1500
                                         Houston, Texas  77027
                                         Telephone  (832) 681-7158
                                         Telecopy:  (832) 681-7141

                                       80
<PAGE>

                                         THE BANK OF NOVA SCOTIA

                                         By:    /s/ WILLIAM E. ZARRETT
                                                --------------------------------
                                         Name:  William E. Zarrett
                                                --------------------------------
                                         Title: Managing Director
                                                --------------------------------

                                         Notice Information:

                                         600 Peachtree Street N.E.
                                         Suite 2700
                                         Atlanta, Georgia   30308
                                         Telephone: (404) 877-1504
                                         Telecopy:  (404) 888-8998

                                       81
<PAGE>

                                         SCOTIABANC INC.

                                         By:    /s/ WILLIAM E. ZARRETT
                                                --------------------------------
                                         Name:  William E. Zarrett
                                                --------------------------------
                                         Title: Managing Director
                                                --------------------------------

                                         Notice Information:

                                         600 Peachtree Street N.E.
                                         Suite 2700
                                         Atlanta, Georgia   30308
                                         Telephone: (404) 877-1504
                                         Telecopy:  (404) 888-8998

                                       82
<PAGE>

                                         WACHOVIA BANK,
                                         NATIONAL ASSOCIATION

                                         By: /s/ PHILIP TRINDER
                                             -----------------------------------
                                             Philip Trinder
                                             Vice President

                                         Notice Information:

                                         1001 Fannin Street, Suite 2255
                                         Houston, Texas   77030
                                         Attention: Philip Trinder
                                         Telephone: (713) 346-2718
                                         Telecopy:  (713) 650-1071

                                       83
<PAGE>

                                         SUNTRUST BANK

                                         By:    /s/ [ILLEGIBLE]
                                                --------------------------------
                                         Name:
                                                --------------------------------
                                         Title:
                                                --------------------------------

                                         Notice Information:

                                         303 Peachtree Street, 10th Floor
                                         Atlanta, Georgia   30308
                                         Telephone: (404) 532-0274
                                         Telecopy:  (404) 827-6270

                                       84
<PAGE>

                                         ROYAL BANK OF CANADA

                                         By:  /s/ JASON YORK
                                              ----------------------------------
                                              Jason York
                                              Manager

                                         Notice Information:

                                         2800 Post Oak Boulevard
                                         5700 Williams Tower
                                         Houston, Texas   77056
                                         Telephone: (713) 403-5679
                                         Telecopy:  (713) 403-5624

                                       85
<PAGE>

                                         DEUTSCHE BANK AG
                                         NEW YORK BRANCH

                                         By:    /s/ PHILLIPE SANDMEIER
                                                --------------------------------
                                         Name:  Phillipe Sandmeier
                                                --------------------------------
                                         Title: Director
                                                --------------------------------

                                         By:    /s/ OLIVER RIEDINGER
                                                --------------------------------
                                         Name:  Oliver Riedinger
                                                --------------------------------
                                         Title: Vice President
                                                --------------------------------

                                         Notice Information:

                                         31 West 52 Street, Floor 23
                                         New York, NY  10019
                                         Attention:  Global Banking Division,
                                            Energy and Utilities
                                         Telephone: (212) 469-7896
                                         Telecopy:  (212) 469-5711

                                       86
<PAGE>

                                         THE ROYAL BANK OF SCOTLAND plc

                                         By:    /s/ PAUL McDONAGH
                                                --------------------------------
                                         Name:  Paul McDonagh
                                                --------------------------------
                                         Title: Sr. Vice President
                                                --------------------------------

                                         Notice Information:

                                         600 Travis, Suite 6070
                                         Houston, Texas  77002
                                         Telephone:  (713) 221-2436
                                         Telecopy:   (713) 221-2430
                                         Attention:  Paul McDonagh/
                                         Iris Munoz, Assistant Vice President

                                       87
<PAGE>
                                         MORGAN STANLEY BANK

                                         By:    /s/ JAAP L. TONCKENS
                                                --------------------------------
                                         Name:  Jaap L. Tonckens
                                                --------------------------------
                                         Title: Morgan Stanley Bank
                                                --------------------------------

                                         Notice Information:

                                         1633 Broadway
                                         25th Floor
                                         New York, New York  10019
                                         Telephone:   (212) 537-1470
                                         Telecopier:  (212) 537-1867

                                       88
<PAGE>
                                         THE BANK OF TOKYO - MITSUBISHI, LTD.

                                         By:    /s/ KELTON GLASSCOCK
                                                --------------------------------
                                         Name:  Kelton Glasscock
                                                --------------------------------
                                         Title: Vice President & Manager
                                                --------------------------------

                                         Notice Information:

                                         1100 Louisiana
                                         Suite 2800
                                         Houston, Texas  77002-5216
                                         Telephone: (713) 655-3805
                                         Telecopy:  (713) 658-0116

                                       89
<PAGE>

                                         NORDEA BANK NORGE ASA

                                         By:    /s/ GUNNAR NEEGARD
                                                --------------------------------
                                         Name:  Gunnar Neegard
                                                --------------------------------
                                         Title: Head of Credit
                                                --------------------------------

                                         By:    /s/ ANNE STARK-JOHANSEN
                                                --------------------------------
                                         Name:  Anne Stark-Johansen
                                                --------------------------------
                                         Title: Head of Shipping Corporate
                                                --------------------------------

                                         Notice Information:

                                         P.O. Box 1166 Sentrum
                                         NO-0107 Oslo
                                         Norway
                                         Telephone:  + 42 22 48 50 00
                                         Telecopy:   + 47 22 48 66 68

                                       90
<PAGE>

                                         DEN NORSKE BANK ASA

                                         By:    /s/ NILS FYKSE
                                                --------------------------------
                                         Name:  Nils Fykse
                                                --------------------------------
                                         Title: Senior Vice President
                                                --------------------------------

                                         By:    /s/ PETER M. DODGE
                                                --------------------------------
                                         Name:  Peter M. Dodge
                                                --------------------------------
                                         Title: First Vice President
                                                --------------------------------

                                         Notice Information:

                                         200 Park Avenue, 31st Floor
                                         New York, NY  10166-0396
                                         Telephone: (212) 681-3873/3872
                                         Telecopy:  (212) 681-3900

                                       91
<PAGE>

                                         STANDARD CHARTERED BANK

                                         By:    /s/ ANDREW NG
                                                --------------------------------
                                         Name:  Andrew Ng
                                                --------------------------------
                                         Title: Vice President
                                                --------------------------------

                                         By:    /s/ DAVID B. EDWARDS
                                                --------------------------------
                                         Name:  David B. Edwards
                                                --------------------------------
                                         Title: Sr. Vice President
                                                --------------------------------

                                         Notice Information:

                                         One Madison Avenue
                                         New York, New York  10010-3603
                                         Telephone: (212) 667-0367
                                         Telecopy:  (212) 667-0251

                                       92
<PAGE>

                                  EXHIBIT 1.01

                            ASSIGNMENT AND ASSUMPTION

                  This Assignment and Assumption (the "Assignment and
Assumption") is dated as of the Effective Date set forth below and is entered
into by and between [INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME
OF ASSIGNEE], (the "Assignee"). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, the "Credit Agreement"), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

                  For an agreed consideration, the Assignor hereby irrevocably
sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases
and assumes from the Assignor, subject to and in accordance with the Standard
Terms and Conditions and the Credit Agreement, as of the Effective Date inserted
by the Administrative Agent as contemplated below (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement
and any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees, and
swingline loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

1.       Assignor:
                                  --------------------------------------------

2.       Assignee:
                                  --------------------------------------------
                                  [and is an Affiliate/Approved Fund or
                                  [IDENTIFY LENDER](1)]

3.       Borrower(s):
                                  --------------------------------------------

4.       Administrative Agent:    JPMorgan Chase Bank, as the administrative
                                  under the Credit Agreement

----------

(1)     Select as applicable.

                                       93
<PAGE>
5.       Credit Agreement:        The $500,000,000 Credit Agreement dated as of
                                  May 14, 2003 among Weatherford International
                                  Ltd., Weatherford International, Inc., the
                                  Lenders thereto and JPMorgan Chase Bank, as
                                  Administrative Agent,

6.       Assigned Interest:

<Table>
<Caption>
     Aggregate Amount of
     Commitment/Revolving                Amount of              Percentage Assigned of
     Credit Exposure for           Commitment/Revolving          Commitment/Revolving
         All Lenders             Credit Exposure Assigned         Credit Exposure(2)
----------------------------    ---------------------------    -------------------------
<S>                             <C>                            <C>

$                               $                                              %

$                               $                                              %

$                               $                                              %
</Table>

7.       Effective Date:          _________________, 20___ [TO BE INSERTED BY
                                  ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
                                  EFFECTIVE DATE OF RECORDATION OF TRANSFER IN
                                  THE REGISTER THEREFOR.]

----------

(2)      Set forth, to at least 9 decimals, as a percentage of the
         Commitment/Revolving Credit Exposure of all Lenders thereunder.

                                       94
<PAGE>

The terms set forth in this Assignment and Assumption are hereby agreed to:

                                    ASSIGNOR:

                                    [NAME OF ASSIGNOR]

                                    By:
                                          --------------------------------------
                                    Name:
                                          --------------------------------------
                                    Title:
                                          --------------------------------------

                                    ASSIGNEE:

                                    [NAME OF ASSIGNEE]

                                    By:
                                          --------------------------------------
                                    Name:
                                          --------------------------------------
                                    Title:
                                          --------------------------------------

                                       95
<PAGE>
                                                                         ANNEX 1

                          [________________________](3)

                        STANDARD TERMS AND CONDITIONS FOR

                            ASSIGNMENT AND ASSUMPTION

         1. Representations and Warranties.

         1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.

         1.2 Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 7.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, are based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

         2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest,

----------

(3)      Describe Credit Agreement at option of Administrative Agent.

                                       96
<PAGE>

fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.

         3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

                                       97
<PAGE>

                                  EXHIBIT 2.06

                                     FORM OF

                                 PROMISSORY NOTE

                                                            _____________, 200__

         WEATHERFORD INTERNATIONAL LTD., a Bermuda exempted company (the
"Borrower"), for value received, promises and agrees to pay to
____________________________________ (the "Lender"), or order, at the principal
office of JPMorgan Chase Bank, as Administrative Agent, at One Chase Manhattan
Plaza, New York, New York 10081, the principal sum of such Lender's Commitment,
or such lesser amount as shall equal the aggregate unpaid principal amount of
the Loans owed to the Lender under the Credit Agreement, as hereafter defined,
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 as provided in the
Credit Agreement for such Loans, at such office, in like money and funds, for
the period commencing on the date of each such Loan until such Loan shall be
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.

         This note evidences the Loans owed to the Lender under that certain
Credit Agreement dated as of May 14, 2003, by and among the Borrower,
Weatherford International, Inc., a Delaware corporation (the "Guarantor"),
JPMorgan Chase Bank, individually and as Administrative Agent and the other
financial institutions parties thereto (including the Lender) (such Credit
Agreement, together with all amendments or supplements thereto, being the
"Credit Agreement"), and shall be governed by the Credit Agreement. Capitalized
terms used in this note and not defined in this note, but which are defined in
the Credit Agreement, have the respective meanings herein as are assigned to
them in the Credit Agreement.

         The Lender is hereby authorized by the Borrower to endorse on Schedule
A (or a continuation thereof) attached to this note, the Type of each Loan owed
to the Lender, the amount and date of each payment or prepayment of principal of
each such Loan received by the Lender and the Interest Periods and interest
rates applicable to each Loan, provided that any failure by the Lender to make
any such endorsement shall not affect the obligations of the Borrower under the
Credit Agreement or under this note in respect of such Loans.

         This note may be held by the Lender for the account of its applicable
lending office and, except as otherwise provided in the Credit Agreement, may be
transferred from one lending office of the Lender to another lending office of
the Lender from time to time as the Lender may determine.

         Except only for any notices which are specifically required by the
Credit Agreement, the Borrower and any and all co-makers, endorsers, guarantors
and sureties severally waive notice (including but not limited to notice of
intent to accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability, and consent that the
time of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability on
or with respect to this note shall not be affected by any release of or change
in any guaranty or security at any time existing or by any

                                       98
<PAGE>

failure to perfect or maintain perfection of any lien against or security
interest in any such security or the partial or complete unenforceability of any
guaranty or other surety obligation, in each case in whole or in part, with or
without notice and before or after maturity.

         The Credit Agreement provides for the acceleration of the maturity of
this note upon the occurrence of certain events and for prepayment of Loans upon
the terms and conditions specified therein. Reference is made to the Credit
Agreement for all other pertinent purposes.

         This note is issued pursuant to and is entitled to the benefits of the
Credit Agreement, including, without limitation, the Guaranty of the Guarantor
contained in Article XI of the Credit Agreement.

         This note shall be construed in accordance with and be governed by the
law of the State of New York and the United States of America from time to time
in effect.

                                             WEATHERFORD INTERNATIONAL LTD.

                                             By:
                                                   -----------------------------
                                             Name:
                                                   -----------------------------
                                             Title:
                                                   -----------------------------

The COMMON SEAL of                  )
Weatherford International Ltd.      )
was hereunto affixed                )
in the presents of:                 )

------------------------------------
Name

------------------------------------
Title

                                       99
<PAGE>

                                   SCHEDULE A

                                       TO

                                 PROMISSORY NOTE

This note evidences the Loans owed to the Lender under the Credit Agreement, in
the principal amount set forth below and the applicable Interest Periods and
rates for each such Loan, subject to the payments of principal set forth below:

                                    SCHEDULE

                                       OF

                  LOANS AND PAYMENTS OF PRINCIPAL AND INTEREST

<Table>
<Caption>
                                                              Amount of
                                                              Principal                                    Notation
                 Interest                     Principal        Paid or                      Balance of       Made
     Date         Period         Rate      Amount of Loan      Prepaid     Interest Paid      Loans           by
     ----        --------        ----      --------------     ---------    -------------    ----------     --------
<S>              <C>             <C>       <C>                <C>          <C>              <C>            <C>

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

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

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

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

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

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

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

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

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

------------     --------      --------    --------------     ---------    -------------    ----------     --------
</Table>

                                      100
<PAGE>

                                  EXHIBIT 7.01

                         FORM OF COMPLIANCE CERTIFICATE

         The undersigned hereby certifies that such officer is the
__________________________ of Weatherford International Ltd., a Bermuda exempted
company (the "Borrower"), and that such officer is authorized to execute this
certificate on behalf of the Borrower pursuant to the Credit Agreement (the
"Credit Agreement") dated as of May 14, 2003 (as restated, amended, modified,
supplemented and in effect from time to time, the "Credit Agreement"), among the
Borrower, Weatherford International, Inc., a Delaware corporation (the
"Guarantor"), the Lenders and JPMorgan Chase Bank, as Administrative Agent; and
that a review of the Borrower and the Guarantor have been made under such
officer's supervision with a view to determining whether the Borrower and the
Guarantor have fulfilled all of their respective obligations under the Credit
Agreement, the Notes and the other Loan Documents; and on behalf of the Borrower
further certifies, represents and warrants that to the knowledge of such
officer, after due inquiry (each capitalized term used herein having the same
meaning given to it in the Credit Agreement unless otherwise specified):

                  (a) The Borrower and the Guarantor have fulfilled, in all
         material respects, their respective obligations under the Credit
         Agreement, the Notes and the other Loan Documents.

                  (b) The representations and warranties made in each Loan
         Document are true and correct in all material respects on and as of the
         time of delivery hereof, with the same force and effect as if made on
         and as of the time of delivery hereof.

                  (c) The financial statements delivered to the Administrative
         Agent concurrently with this Compliance Certificate have been prepared
         in accordance with GAAP consistently followed throughout the period
         indicated and fairly present the financial condition and results of
         operations of the applicable Persons as at the end of, and for, the
         period indicated (subject, in the case of quarterly financial
         statements, to the absence of footnotes and normal changes resulting
         from year-end adjustments).

                  (d) No Default or Event of Default has occurred and is
         continuing. In this regard, the compliance with the provisions of
         Sections 8.04 and 8.06 of the Credit Agreement (or if any Default or
         Event of Default does exist, attached is a description of such event)
         is as follows:

                           (i) Section 8.04(b) - Indebtedness of Foreign
                  Subsidiaries

<Table>
<Caption>
                                 Actual                  Required
                                 ------                  --------
<S>                                                     <C>

                                $_____                   $_______(1)
</Table>

----------

(1)   Not more than 12% of the Borrower's Net Worth.

                                      101
<PAGE>

                           (ii) Section 8.04(c) - Indebtedness of Domestic
                  Subsidiaries

<Table>
<Caption>
                                 Actual                  Required
                                 ------                  --------
<S>                                                     <C>

                                $_____                   Not more than $100,000,000
</Table>

                           (iii) Section 8.06(a) - Consolidated Indebtedness to
                  Total Capitalization

<Table>
<Caption>
                                 Actual                  Required
                                 ------                  --------
<S>                                                     <C>

                                $_____                      50%
</Table>

                           (iv) Section 8.06(b) - Interest Coverage Ratio

<Table>
<Caption>
                                 Actual                  Required
                                 ------                  --------
<S>                                                   <C>

                                _____ to 1.00          3.00 to 1.00
</Table>

Attached are calculations demonstrating such compliance.

         DATED as of _____________________.

                                             --------------------------------
                                             [SIGNATURE OF AUTHORIZED OFFICER
                                             OF THE BORROWER]

                                      102
<PAGE>

                                  SCHEDULE 1.01

                                     LENDERS

JPMorgan Chase Bank

Bank One, NA

ABN AMRO Bank, N.V.

Wells Fargo Bank Texas, N.A.

The Bank of Nova Scotia

Wachovia Bank, National Association

SunTrust Bank

Royal Bank of Canada

Deutsche Bank AG New York Branch

The Royal Bank of Scotland plc

Morgan Stanley Bank

The Bank of Tokyo-Mitsubishi, Ltd.

Nordea Bank Norge ASA

Den norske Bank ASA

Scotiabanc Inc.

Standard Chartered Bank

                                      103
<PAGE>

                                  SCHEDULE 2.01

                                   COMMITMENTS

<Table>
<Caption>
                       BANK                                 ALLOCATION
                       ----                                 ----------
<S>                                                      <C>

JPMorgan Chase Bank                                       $    47,000,000
Bank One, NA                                              $    47,000,000
ABN AMRO Bank N.V.                                        $    42,000,000
Wells Fargo Bank Texas, N.A.                              $    42,000,000
Wachovia Bank, National Association                       $    35,000,000
SunTrust Bank                                             $    35,000,000
Royal Bank of Canada                                      $    35,000,000
Deutsche Bank AG New York Branch                          $    35,000,000
The Bank of Nova Scotia                                   $    25,200,000
The Royal Bank of Scotland plc                            $    25,000,000
Morgan Stanley Bank                                       $    25,000,000
The Bank of Tokyo-Mitsubishi, Ltd.                        $    25,000,000
Nordea Bank Norge ASA                                     $    25,000,000
Den norske Bank ASA                                       $    25,000,000
Scotiabanc Inc.                                           $    16,800,000
Standard Chartered Bank                                   $    15,000,000
                                                          ---------------
           TOTAL                                          $   500,000,000
                                                          ===============
</Table>

                                      104
<PAGE>

                                  SCHEDULE 6.01

                        LISTING OF MATERIAL SUBSIDIARIES

                                AS OF 12/31/2002

<Table>
<Caption>
                                                                                                            % OF CAPITAL
                                                                                                           STOCK DIRECTLY
                               JURISDICTION OF     JURISDICTION QUALIFIED           DIRECT OWNERS             OWNED BY
       NAME OF COMPANY          INCORPORATION          TO DO BUSINESS             OF CAPITAL STOCK          EACH OBLIGOR
       ---------------         ---------------     ----------------------         ----------------         --------------
<S>                            <C>                 <C>                           <C>                       <C>

Orwell Group Limited                 U.K.                                       Weatherford U.K. Ltd            None

Weatherford Artificial Lift     Delaware, USA    Alabama, Alaska, Arkansas,  Weatherford International,         100%
Systems, Inc.                                      California, Colorado,                Inc.
                                                 Florida, Illinois, Kansas,
                                                    Louisiana, Michigan,
                                                  Mississippi, Montana, New
                                                    Mexico, North Dakota,
                                                   Ohio, Oklahoma, Texas,
                                                    Utah, West Virginia,
                                                           Wyoming

Weatherford U.K. Ltd.                U.K.                                    Weatherford Eurasia Limited        None

Weatherford Bermuda Holdings       Bermuda                Barbados            Weatherford International         100%
Ltd                                                                                      Ltd

                                                    Provinces of British
                                                   Columbia, Saskatchewan,
                                                   Manitoba, Nova Scotia,      Weatherford Investment
Weatherford Canada Ltd.        Alberta, Canada     Newfoundland, Northwest      (Luxembourg) S.a.r.l.           None
                                                    Territories, State Of
                                                         California

                                                                              Weatherford Canada Ltd -
                                                    Provinces of British                82.7%
                                                   Columbia, Saskatchewan,      Weatherford ER Amalco
Weatherford Canada             Alberta, Canada     Manitoba, Nova Scotia,           Inc. - 16.3%            Weatherford
Partnership                                        Newfoundland, Northwest     Weatherford Artificial    Canada Ltd. 82.7%
                                                         Territories         Lift Systems Canada Ltd. -
                                                                                         1%

Weatherford Eurasia B.V.         Netherlands                                   Weatherford/Lamb, Inc.           None

Weatherford Eurasia Limited          U.K.                                      Weatherford Investment           None
                                                                                (Luxembourg) S.a.r.l.

Weatherford Holding GmbH           Germany        Austria, Denmark, Libya,     Weatherford Investment           None
                                                           Tunisia              (Luxembourg) S.a.r.l.

Weatherford International,      Delaware, USA               Texas            Weatherford U.S. Holdings,         None
Inc.                                                                                   L.L.C.

Weatherford Investment            Luxembourg                                   Weatherford Luxembourg           None
(Luxembourg) S.a.r.l.                                                                 S.a.r.l.

Weatherford Luxembourg            Luxembourg                                  Weatherford/Lamb, Inc. -          None
                                                                                       90.7%
S.a.r.l.                                                                       Weatherford Artificial
                                                                              Lift Systems, Inc. - 9.3%

Weatherford Oil Tool GmbH          Germany        Algeria, Libya, Tunisia,    Weatherford Holding GmbH          None
                                                     Dubai, Egypt, Oman,
                                                          Pakistan

                                                  Dubai (UAE), Egypt, Oman,
Weatherford Oil Tool Middle     British Virgin     Pakistan, Qatar, Saudi
East Ltd.                          Islands          Arabia, Syria, Sudan,      Weatherford/Lamb, Inc.           None
                                                  Iran, Turkmenistan, Yemen

Weatherford U.S. Holdings,      Delaware, USA                                    Weatherford Bermuda            None
L.L.C.                                                                              Holdings Ltd.

                                                  Alabama, Alaska, Arizona,
                                                    Arkansas, California,
                                                   Colorado, Connecticut,
                                                  Florida, Georgia, Hawaii,
                                                  Illinois, Indiana, Iowa,
                                                      Kansas, Kentucky,
                                                   Michigan, Mississippi,
                                                 Montana, Nebraska, Nevada,   WEUS Holding, Inc. - 99%
Weatherford U.S., L.P.          Louisiana, USA     New Jersey, New Mexico,     WUS Holding, L.L.C. 1%           None
                                                   New York, North Dakota,
                                                   Ohio, Oklahoma, Oregon,
                                                     Pennsylvania, South
                                                    Dakota, Texas, Utah,
                                                 Virginia, Washington, West
                                                   Virginia, Wyoming, New
                                                           Zealand

Weatherford/Lamb, Inc.          Delaware, USA               Texas                WEUS Holding, Inc.             None

                                                   Illinois, Montana, New
                                                 Jersey, North Dakota, West
                                                    Virginia, Azerbaijan,    Weatherford International,
WEUS Holding, Inc.              Delaware, USA       Kazakhstan, Astrakhan               Inc.                    100%
                                                 (Russia), Moscow (Russia),
                                                  Western Siberia (Russia)
</Table>

                                      105<PAGE>
                                                                    EXHIBIT 10.1

                                JOINT VENTURE AND
                          JOINT CONTRIBUTION AGREEMENT

         THIS JOINT VENTURE AND JOINT CONTRIBUTION AGREEMENT (the "AGREEMENT")
is made and entered into effective as of June 26, 2003, by and among Active IQ
Technologies, Inc., a Minnesota corporation ("ACTIVE IQ"), Hawk Precious
Minerals Inc., a corporation organized under the laws of the Canadian Province
of Ontario ("HAWK"), and Hawk Precious Minerals USA, Inc., a Minnesota
corporation and wholly owned subsidiary of Hawk ("HAWK SUB"), in connection with
the formation and organization of a joint-venture limited liability company to
be organized under the laws of the State of Minnesota (the "COMPANY").

                                  INTRODUCTION

         A. Hawk is a party to those certain Heads of Agreement by and among
Hawk and Kwagga Gold (Proprietary) Limited, a corporation existing under the
laws of the Republic of South Africa (such entity is hereinafter referred to as
"KWAGGA"), and AfriOre International (Barbados) Limited, dated June 4, 2003 (the
"KWAGGA AGREEMENT").

         B. Pursuant to the Kwagga Agreement, Hawk has obtained certain rights
with respect to certain lands located in the Republic of South Africa, including
the right to fund and participate in all operations conducted on, and at least a
35% interest in the profits derived from, such lands for the purpose of
exploring for and exploiting base and/or precious metals discovered therein, if
any (such purpose shall be hereinafter referred to as the "PROJECT").

         C. Hawk wishes to assign its rights in, to and under the Kwagga
Agreement, and thereby acquire a partner in its participation in the Project, in
exchange for agreements to assume Hawk's obligations to contribute capital to
the enterprise by and between Hawk and Kwagga, and for an issuance of certain
securities of Active IQ, as described herein, pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended.

         D. For the above purposes, Hawk and Active IQ have entered into a
Letter of Intent dated June 4, 2003 (the "LETTER OF INTENT") outlining the terms
and conditions for the formation and operation of a joint-venture limited
liability company to be organized under the laws of the State of Minnesota, the
members of which shall be Active IQ and Hawk Sub (Active IQ and Hawk Sub are
collectively referred to hereinafter as the "MEMBERS"); in exchange for the
contributions and transactions described herein, each Member will receive a 50%
membership interest in the Company in the form of membership units (the "UNITS")
pursuant to the terms of this Agreement.

         E. The parties wish to enter into an Agreement with respect to the
formation of and contribution of capital and property to the Company, in the
form of this Agreement, in order to effect the transactions contemplated by the
Letter of Intent.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing facts and premises
which are hereby made a part of this Agreement, the mutual promises of the
Members contained herein, the mutual benefits to be gained by the performance of
this Agreement, and for other good and valuable consideration the receipt and

<PAGE>

sufficiency of which are hereby acknowledged, the Members, intending to be
legally bound, hereby agree as follows:

                                   ARTICLE 1
                     CONTRIBUTIONS AND MEMBERSHIP INTERESTS

         1.1 Contribution by Active IQ.

                  (a) Subject to the terms and conditions of this Agreement,
         Active IQ shall make a contribution to the Company in an amount equal
         to Two Million One Hundred Thousand Dollars and No/100 ($2,100,000.00)
         (the "ACTIVE IQ CONTRIBUTION") in the following manner:

                           (i) Five Hundred Thousand Dollars and No/100
                  ($500,000.00) at the Closing (as defined in Section 2.1);

                           (ii) One Million Dollars and No/100 ($1,000,000.00)
                  on or prior to the First Funding Date (as defined in Section
                  3.3 of the Member Control Agreement, as defined below); and

                           (iii) Six Hundred Thousand Dollars and No/100
                  ($600,000.00) on or prior to the Second Funding Date (as
                  defined in Section 3.3 of the Member Control Agreement, as
                  defined below).

                  (b) The above-described installments of the Active IQ
         Contribution shall be payable on the respective dates for contribution,
         in U.S. dollars, by wire transfer of immediately available funds to an
         account mutually agreed upon by the Members prior to Closing.

                  (c) On the Closing Date (as defined in Section 2.1) and in
         exchange for the Active IQ Contribution, Active IQ shall receive
         2,100,000 million Units of the Company in the manner provided in
         Section 2.2(c) of this Agreement, and described in Section 3.2 of the
         member control agreement by and among the Members and Company, dated
         June 26, 2003 (the "MEMBER CONTROL AGREEMENT"), a copy of which Member
         Control Agreement is attached hereto as Exhibit A to this Agreement and
         hereby incorporated by reference as a part of this Agreement.

         1.2 Contribution by Hawk Sub.

                  (a) Subject to the terms and conditions of this Agreement,
         Hawk Sub shall make a contribution to the Company of all of its rights,
         title and interest in, to and under the Kwagga Agreement, as the same
         shall have been assigned on or prior to the Closing Date by Hawk to
         Hawk Sub pursuant to Section 1.3 below.

                  (b) Subject to the terms and conditions of this Agreement,
         Hawk Sub shall make a contribution to the Company of all of its rights,
         title and interest in, to and under the Oxide Zone Rights (as such term
         is defined in Section 3.1(k) below) (the contributions by Hawk Sub of
         the Kwagga Agreement, described above in paragraph (a), and Oxide Zone
         Rights described in this paragraph (b), are collectively referred to
         hereinafter as the "HAWK SUB CONTRIBUTION;" and are referred to
         collectively with the Active IQ Contribution as THE "CONTRIBUTIONS"),
         as the same shall have been assigned on or prior to the Closing Date by
         Hawk to Hawk Sub pursuant to Section 1.3 below. The parties acknowledge
         and understand that Hawk Sub's contribution of the Oxide Zone Rights
         will, initially upon the Effective Date, consist of rights to obtain a
         mining lease as, if and when Hawk (i) obtains such a mining lease with

                                       2

<PAGE>

         respect to the property located near Hawk Junction, Ontario or (ii)
         determines that it is otherwise legally entitled to assign an ownership
         interest in the Oxide Zone Rights.

                  (c) On the Closing Date and in exchange for the Hawk Sub
         Contribution, Hawk Sub shall receive 2,100,000 million Units of the
         Company in the manner provided in Section 2.2(c) of this Agreement, and
         described in Section 3.2 of the Member Control Agreement.

                  (d) In addition to the issuance of Company Units described
         above, Hawk Sub shall receive, as additional consideration and
         incentive for the Hawk Sub Contribution hereunder, the issuance of
         common stock of Active IQ, $0.01 par value per share (the "COMMON
         STOCK"), described in Section 1.5 below.

         1.3 Hawk Agreement to Assign. Subject to the terms and conditions of
this Agreement, Hawk hereby agrees to assign the Kwagga Agreement and the Oxide
Zone Rights (as and to the extent contemplated in Section 1.2) to Hawk Sub on or
prior to the Closing, and to cause Hawk Sub to make the Hawk Sub Contribution
described in Section 1.2 above. The assignments of the Kwagga Agreement and the
Oxide Zone Rights shall be effected by the execution and delivery of assignments
in the form attached hereto as Exhibit B.

         1.4 Third Party Consents. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not constitute an assignment of or an
agreement to assign any asset, claim or right or any benefit arising under or
resulting from any such asset, claim or right if an attempted assignment thereof
or an agreement to assign such asset, claim or right, without the consent of a
third party, would (a) constitute a breach or other contravention of the rights
of such third party, (b) be ineffective with respect to any party to an
agreement concerning such asset, claim or right, or (c) in any way adversely
affect the rights of the Company under such asset, claim or right. To the extent
any asset, claim or right may not be assigned to the Company by reason of the
absence of any such consent, the Company shall not be required to assume any
duties, obligations or liabilities arising under such asset, claim or right.

         1.5 Private Placement of Active IQ Common Stock. On the Closing Date
and subject to the terms and conditions of this Agreement, Active IQ shall issue
Three Million Seven Hundred Fifty Thousand (3,750,000) original-issue shares of
Common Stock (the "SHARES") to Hawk Sub as additional consideration to enter
into this Agreement and make the Hawk Sub Contribution as described in Section
1.2(d) (the issuance of the Shares is referred to hereinafter as the "PRIVATE
PLACEMENT"). Active IQ shall deliver the Shares to Hawk Sub on a
delivery-against-payment basis on the Closing Date, and shall cause a
certificate representing the Shares to be executed and delivered to Hawk Sub, at
the address set forth in Section 8.1 below, no later than 14 calendar days after
the Closing Date.

         All parties understand and acknowledge that the Private Placement, and
Active IQ's obligation to issue Shares to Hawk Sub, are expressly conditioned on
the representations and warranties of Hawk Sub set forth in Section 3.2.

                                   ARTICLE 2
                                    CLOSING

         2.1 Closing.

                  (a) The closing of the Contributions described herein shall
         take place at the offices of Maslon Edelman Borman & Brand, LLP, 3300
         Wells Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota
         55402, at 10:00 a.m., Minneapolis time, on June 26, 2003, or as soon as
         practicable thereafter but in no event to occur after June 27, 2003
         (the "CLOSING"), or at such other place or different time or day as may

                                       3

<PAGE>

         be mutually acceptable to the parties to this Agreement; provided,
         however, that all conditions to the Closing, as provided in this
         Agreement, have been met to the reasonable satisfaction of, or waived
         by, the particular party whose rights have been compromised by the
         failure to meet any such condition. The date and time on which the
         Closing occurs shall be referred to herein as the "CLOSING DATE."

                  (b) On the Closing Date, the Parties shall execute and deliver
         (as appropriate) this Agreement and all of the Ancillary Documents, as
         defined in Section 2.2 below, contemplated by this Agreement and shall
         perform the Contributions. After all of the appropriate documents have
         been executed and the required Contributions have been performed, the
         Company shall register the above-referenced number of Units in the
         respective names of Active IQ and Hawk Sub in the Company's required
         records under the Minnesota limited liability company act (the "LLC
         ACT").

         2.2 Ancillary Documents. At the Closing, the parties will enter into
the following agreements, execute and deliver the following instruments, and/or
cause the following instruments to be executed and delivered (collectively, the
"ANCILLARY DOCUMENTS"):

                  (a) Assignments of Kwagga Agreement. Hawk shall deliver, or
         shall have delivered prior to the Closing Date, an assignment of the
         Kwagga Agreement pursuant to which all of Hawk's right, title and
         interest in, to and under the Kwagga Agreement are assigned to Hawk
         Sub, in form and substance agreeable to Active IQ in its sole
         discretion; and Hawk Sub shall deliver an assignment of the Kwagga
         Agreement pursuant to which all of Hawk Sub's right, title and interest
         in, to and under the Kwagga Agreement are assigned to the Company, in
         form and substance agreeable to Active IQ in its sole discretion.

                  (b) Assignments of Oxide Zone Rights. Hawk shall deliver, or
         shall have delivered prior to the Closing Date, an assignment of (or
         agreement to assign) the Oxide Zone Rights pursuant to which all of
         Hawk's right, title and interest in, to and under such Oxide Zone
         Rights are assigned to Hawk Sub, in form and substance agreeable to
         Active IQ in its sole discretion; and Hawk Sub shall deliver to the
         Company an assignment of all of Hawk Sub's rights with respect to the
         Oxide Zone Rights, in form and substance agreeable to Active IQ in its
         sole discretion.

                  (c) Written Action by the Board of Directors of the Company.
         Those individual persons selected by the respective Members to serve as
         directors of the Company shall execute a written action of the
         Company's board of directors, in a form mutually agreed upon by the
         parties, completing the process of organizing the Company under the LLC
         Act, including but not limited to the valuation and acceptance of the
         Contributions by each of the Members to the Company, the adoption of
         Company bylaws, and the issuance of Units to Active IQ and Hawk Sub in
         exchange for the Contributions.

                  (d) Member Control Agreement. The Members shall execute and
         deliver a Member Control Agreement with respect to the Company, in a
         form mutually agreed upon by the parties, governing the relationship
         among the Members and the Company and, inter alia, the restrictions on
         the transfer of Company Units.

                  (e) Resignations. Active IQ shall cause to be delivered the
         written resignations of a sufficient number of directors serving on the
         board of directors of Active IQ, such resignations to be effective
         immediately prior to the Closing, in furtherance of the representation
         and warranty of Active IQ contained in Section 3.3(l) herein.

                                       4

<PAGE>

                  (f) Active IQ Management. The board of directors of Active IQ
         shall execute a written action pursuant to which the board of directors
         shall: (i) appoint two additional directors to serve on Active IQ's
         board of directors, both of whom shall be chosen by Hawk; (ii) appoint
         a third additional director, who shall be agreed upon by Hawk and
         Active IQ prior to Closing, to serve on Active IQ's board of directors;
         and (iii) appoint three new corporate officers to the positions of
         Chief Executive Officer, Chief Financial Officer and Secretary, all as
         mutually agreed upon by Hawk, Hawk Sub and Active IQ.

         2.3 Wire Transfer of Active IQ Contribution. On the Closing Date, the
first installment of the Active IQ Contribution, described in Section 1.1(a)(i),
shall be payable by wire transfer of immediately available funds to an account
mutually agreed upon by the Members prior to Closing.

                                   ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

         To induce the parties to enter into this Agreement and to make the
Contributions and engage in the other transactions described herein, the parties
hereby represent and warrant to each other party to this Agreement as follows:

         3.1 Representations and Warranties of Hawk and Hawk Sub. Hawk and Hawk
Sub hereby jointly and severally represent and warrant to Active IQ:

                  (a) Organization; Good Standing, Etc. Hawk is a corporation
         duly organized, validly existing and in good standing under the laws of
         the Canadian Province of Ontario, and has the requisite power and
         authority to carry on its business as it is now being conducted and as
         it is proposed to be conducted. Hawk Sub is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Minnesota, and has the requisite power and authority to carry
         on its business as it is now being conducted and as it is proposed to
         be conducted.

                  (b) Charter Documents. Copies of the articles of
         incorporation, certificate of incorporation and bylaws, including all
         amendments thereto (collectively, the "CHARTER DOCUMENTS"), of Hawk
         have been delivered to legal counsel for Active IQ prior to the
         execution of this Agreement, and are true and complete copies of the
         duly and legally adopted Charter Documents in effect as of the date of
         this Agreement. Copies of the corresponding Charter Documents (i.e.,
         articles of organization, certificate of organization and bylaws),
         including all amendments thereto have to have been delivered to legal
         counsel for Active IQ prior to the execution of this Agreement, and are
         true and complete copies of the duly and legally adopted Charter
         Documents in effect as of the date of this Agreement.

                  (c) Due Authorization. This Agreement and the Ancillary
         Documents have been duly authorized by all necessary corporate action
         on behalf of Hawk, have been duly executed and delivered by authorized
         officers of Hawk, are valid and binding agreements on the part of Hawk
         and are enforceable against Hawk in accordance with their respective
         terms. Similarly, this Agreement and the Ancillary Documents have been
         duly authorized by all necessary company action on behalf of Hawk Sub,
         have been duly executed and delivered by authorized officers of Hawk
         Sub, are valid and binding agreements on the part of Hawk Sub and are
         enforceable against Hawk Sub in accordance with their respective terms.

                  (d) No Conflict. Neither the execution and the delivery of
         this Agreement or the Ancillary Documents, nor the consummation or
         performance of any of the transactions contemplated by this Agreement
         or any of the Ancillary Documents (such transactions collectively

                                       5

<PAGE>

         referred to hereinafter as the "CONTEMPLATED TRANSACTIONS") will
         directly or indirectly (with or without notice or lapse of time): (i)
         contravene, conflict with or result in a violation of or default under
         any provision of the Charter Documents of Hawk or Hawk Sub or any
         resolution adopted by the shareholders of Hawk or Hawk Sub; (ii)
         contravene, conflict with or result in a violation of or default under,
         or give any Governmental Body (as defined below) or other Person (as
         defined below) the right to challenge any of the Contemplated
         Transactions or to exercise any remedy or obtain any relief under, any
         legal requirement or any order to which Hawk or Hawk Sub is subject;
         (iii) contravene, conflict with or result in a violation of or default
         under any of the terms or requirements of, or give any Governmental
         Body the right to revoke, withdraw, suspend, cancel, terminate or
         modify any Governmental Authorization (as defined below) held by Hawk
         or Hawk Sub or that otherwise relates to the business of Hawk or Hawk
         Sub; or (iv) contravene, conflict with or result in a violation or
         breach of or default under any provision of, or give any Person the
         right to declare a default or exercise any remedy under, or to
         accelerate the maturity or performance of, or to cancel, terminate or
         modify any contract or other arrangement to which Hawk or Hawk Sub is a
         party or by which Hawk or Hawk Sub is bound. Except as set forth on
         Schedule 3.1(d) hereof, neither Hawk nor Hawk Sub will be required to
         give any notice to or obtain any consent from any Person in order for
         Hawk or Hawk Sub to consummate the Contemplated Transactions.
         Furthermore, neither the assignment of the Kwagga Agreement by Hawk or
         Hawk Sub, or Hawk Sub Contribution will cause a violation of any laws
         regarding fraudulent transfer or conveyance, or similar laws to which
         Hawk or Hawk Sub are subject.

                  For the purposes of this Agreement, the term "GOVERNMENTAL
         AUTHORIZATION" means any approval, certificate, consent, franchise,
         license, permit, registration, variance, waiver or other authorization
         issued, granted, given or otherwise made available by or under the
         authority of any Governmental Body or pursuant to any legal
         requirement. The term "GOVERNMENTAL BODY" means any (i) nation, state,
         city, town, village, district or other jurisdiction of any nature; (ii)
         federal, state, provincial, local, municipal, foreign or other
         government; or (iii) governmental or quasi-governmental agency, branch,
         department, official or entity and any court or other tribunal; (iv)
         multi-national organization or body; or (v) body entitled to exercise
         any administrative, executive, judicial, legislative, police,
         regulatory or taxing authority or power of any nature. Finally, the
         term "PERSON" means any individual, partnership, corporation, limited
         liability company, association, joint-stock company, trust, joint
         venture, unincorporated organization or association or a governmental
         entity (or any department, agency or political subdivision thereof).

                  (e) Rights, Title and Interest; Encumbrances. After the Hawk
         Sub Contribution, the Company will own all of the rights, title and
         interest originally vested in and held by Hawk and Hawk Sub with
         respect to the Kwagga Agreement, and neither (i) the Kwagga Agreement,
         or (ii) any of the rights of Hawk or Hawk Sub in, to and under the
         Kwagga Agreement, subject to any pledge, lease, lien, charge, security
         interest, encumbrance or restriction of any kind.

                  (f) Litigation; Governmental Proceedings. Except as set forth
         on Schedule 3.1(f) hereof, there are no legal actions, suits,
         arbitrations or other legal, administrative or governmental proceedings
         or investigations (any of the foregoing are a "PROCEEDING") pending or
         threatened against Hawk, Hawk Sub or any of their respective properties
         or business, or any officer or director of Hawk or Hawk Sub in their
         capacity as such, and neither Hawk, Hawk Sub nor any officer or
         director of such parties are aware of any facts that are reasonably
         expected to result in or form the basis for any such Proceeding.
         Neither Hawk nor Hawk Sub are in default with respect to any judgment,
         order or decree of any court or any Governmental Body.

                                       6

<PAGE>

                  (g) Compliance with Applicable Laws and Other Instruments. The
         properties, business and operations of Hawk and Hawk Sub have been and
         are being conducted in all material respects in accordance with all
         applicable laws, rules and regulations of all Governmental Bodies to
         which such parties are subject. Neither the execution nor delivery of,
         nor the performance of or compliance with, this Agreement or Ancillary
         Documents, nor the consummation of the Contemplated Transactions will,
         with or without the giving of notice or passage of time (or both),
         result in any breach of, or constitute a default under any agreement or
         other instrument to which the Hawk or Hawk Sub are a party or by which
         they or any of their respective properties, assets or rights is bound
         or affected. Neither Hawk nor Hawk Sub is in violation of its Charter
         Documents, nor are the Parties in violation of, or in default under,
         any lien, indenture, mortgage, lease, agreement, instrument, commitment
         or arrangement in any material respect. Hawk and Hawk Sub are not
         subject to any restriction that would prohibit them from entering into
         or performing their obligations under this Agreement or the Ancillary
         Agreements.

                  (h) Licenses. Immediately prior to and immediately following
         the Closing, Hawk and Hawk Sub do and will possess, from the
         appropriate Governmental Bodies, all licenses, permits, authorizations,
         approvals, franchises and rights that (i) are necessary for them to
         engage in the business they currently conduct, and (ii) if not
         possessed by them or the Company, would not have a material adverse
         effect on the Company. Neither Hawk nor Hawk Sub have any reasonable
         basis to conclude that they, or, after the Hawk Sub Contribution, the
         Company, will not be able to obtain any license, permit, authorization,
         approval, franchise and right that may be required for the Company to
         assert any rights under the Kwagga Agreement and the Project.

                  (i) Absence of Restrictive Agreements. Other than Kwagga, no
         Person, other than Hawk or Hawk Sub has any claim of any kind
         whatsoever in respect of the Kwagga Agreement. Furthermore, there are
         no agreements or other obligations by which Hawk or Hawk Sub is bound,
         which restrict the ability of Hawk or Hawk Sub to enter into this
         Agreement, to form, organize or operate the Company, or to perform any
         of the Contemplated Transactions.

                  (j) No Brokers or Finders. Except for Boston Financial
         Partners, no Person has or will have, as a result of any contractual
         undertaking by Hawk or Hawk Sub, any right, interest or valid claim
         against Hawk or Hawk Sub for any commission, fee or other compensation
         as a finder or broker, or in any similar capacity, in connection with
         the Contemplated Transactions, specifically including the Kwagga
         Agreement.

                  (k) Oxide Zone Rights. Hawk and Hawk Sub are, pursuant to
         Sections 1.2 and 1.3, assigning their entire rights, title and interest
         in, under and to, and otherwise associated and in connection with, any
         mining claims insofar as they relate, and are limited to, that portion
         of the mineral resource located on the "Holdsworth Property" (as such
         term is described in the Report on the Holdsworth Gold Prospect Wawa
         Area, Ontario, for Hawk Junction Capital Corp., dated October 2002, and
         authored by Seymour M. Sears, P. Geo., hereinafter referred to as the
         "REPORT," a copy of which all parties to this Agreement acknowledge to
         have received prior to Closing) and comprising the "Black Sand Zone"
         overlying the "Algoma Iron Formation" (as both terms are described in
         the Report). The foregoing rights are herein referred to as the "OXIDE
         ZONE RIGHTS." Furthermore, Hawk represents and warrants that the Oxide
         Zone Rights comprise a portion of, at the very least, a mining claim
         giving it the right to explore for valuable mineral deposits and apply
         for an exclusive mining lease with respect to the property located near
         Hawk Junction, Ontario.

                                       7

<PAGE>

         3.2 Representations and Warranties of Hawk Sub. Hawk Sub hereby
represents and warrants to and covenants and agrees with Active IQ as follows:

                  (a) Member Control Agreement. Hawk Sub understands and
         acknowledges that by performing the Hawk Sub Contribution and executing
         and delivering the Member Control Agreement, Hawk Sub will become bound
         by the terms of the Member Control Agreement, including those
         provisions restricting a Member's ability to buy, sell or otherwise
         transfer their Company Units.

                  (b) Investment Representations with regard to Private
         Placement. Hawk Sub hereby represents and warrants to the Company and
         to Active IQ, respectively, with respect to the Hawk Sub Contribution
         and the concomitant investments by Hawk Sub in Company Units and the
         Shares (such Units and Shares are collectively referred to herein as
         the "SECURITIES"), as follows:

                           (i) Hawk Sub is acquiring the Securities for its own
                  account, for investment purposes only and not with a view
                  towards or in connection with the public sale or distribution
                  thereof in violation of the Securities Act of 1933, as amended
                  (the "SECURITIES ACT");

                           (ii) Hawk Sub understands that the Securities are
                  being offered and sold by the Company and Active IQ in
                  reliance on an exemption from the registration requirements of
                  the Securities Act and equivalent state securities and "blue
                  sky" laws, and that both the Company and Active IQ are relying
                  upon the accuracy of, and Hawk Sub's compliance with, Hawk
                  Sub's representations, warranties and covenants set forth in
                  this Agreement to determine the availability of such exemption
                  and the eligibility of Hawk Sub to purchase the Securities;

                           (iii) Hawk Sub understands that the Securities have
                  not been approved or disapproved by the United States
                  Securities and Exchange Commission (the "COMMISSION") or any
                  state securities commission;

                           (iv) Hawk Sub understands that there will be no
                  market for the Units, that there are significant restrictions
                  on the transferability of the Securities, and that, for these
                  and other reasons, Hawk Sub may be unable to liquidate an
                  investment in the Securities for an indefinite period of time;
                  and

                  (c) Restrictions on Resale; Rule 144. Hawk Sub understands and
         acknowledges that, upon issuance pursuant to Section 1.5, the
         Securities will not be registered under the Securities Act or any state
         securities laws by reason of the availability of an exemption from the
         registration requirements of the Securities Act pursuant to Section
         4(2) thereof or Rules 505 or 506 promulgated under the Securities Act
         and applicable state securities laws, and that the reliance of Active
         IQ upon these exemptions is predicated in part upon this representation
         by Hawk Sub. Hawk Sub further understands and acknowledges that the
         Securities may not be transferred or resold without (i) registration
         under the Securities Act and any applicable state securities laws or
         (ii) an exemption from the requirements of the Securities Act and
         applicable state securities laws. Hawk Sub understands and acknowledges
         that (i) an exemption from such registration is not presently available
         pursuant to Securities Act Rule 144 promulgated by the Commission, (ii)
         Active IQ makes no commitment to become or remain eligible for Rule
         144, and (iii) Hawk Sub may not sell any Securities acquired hereunder
         pursuant to Rule 144 prior to the expiration of a one-year period (or
         such shorter period as the Commission may hereafter adopt) after the
         acquisition of such Securities.

                                       8

<PAGE>

                  (d) Restrictive Legend. Hawk Sub acknowledges and agrees that,
         upon issuance of the Shares pursuant to this Agreement, certificates
         representing the Shares shall have endorsed thereon legends in
         substantially the following form (and a stop-transfer order may be
         placed against transfer of the Shares until such legend has been
         removed):

                           THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                           BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                           AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
                           LAWS OF ANY STATE. THE SHARES HAVE BEEN ACQUIRED FOR
                           INVESTMENT AND WITHOUT A VIEW TO THEIR DISTRIBUTION
                           AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF IN THE
                           ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
                           THE SHARES UNDER THE SECURITIES ACT OR, IN THE
                           OPINION OF COUNSEL SATISFACTORY TO THE ISSUING
                           CORPORATION, AN EXEMPTION FROM REGISTRATION IS
                           AVAILABLE UNDER APPLICABLE SECURITIES LAWS.

         3.3 Representations and Warranties of Active IQ. Active IQ hereby
represents and warrants to Hawk Sub:

                  (a) Member Control Agreement. Active IQ understands and
         acknowledges that by performing the Active IQ Contribution and
         executing and delivering the Member Control Agreement, Active IQ will
         become bound by the terms of the Member Control Agreement, including
         those provisions restricting a Member's ability to buy, sell or
         otherwise transfer their Company Units.

                  (b) Organization; Good Standing, Etc. Active IQ is a
         corporation duly organized, validly existing and in good standing under
         the laws of the State of Minnesota, and has the requisite power and
         authority to carry on its business as it is now being conducted and as
         it is proposed to be conducted.

                  (c) Charter Documents. Copies of Active IQ's Charter Documents
         have been delivered to legal counsel for Hawk prior to the execution of
         this Agreement, and are true and complete copies of the duly and
         legally adopted Charter Documents in effect as of the date of this
         Agreement.

                  (d) Due Authorization. This Agreement and the Ancillary
         Documents have been duly authorized by all necessary corporate action
         on behalf of Active IQ, have been duly executed and delivered by
         authorized officers of Active IQ, are valid and binding agreements on
         the part of Active IQ and are enforceable against Active IQ in
         accordance with their respective terms.

                  (e) Capitalization. As of June 26, 2004, the Company's
         authorized capital stock consists of 150,000,000 shares of capital
         stock; of which 13,307,181 shares of Common Stock are issued and
         outstanding. All of the issued and outstanding shares of Common Stock
         have been duly authorized and validly issued and are fully paid and
         nonassessable. As of the date of this Agreement, the Company has
         outstanding stock options to purchase 2,805,545 shares of Common Stock,
         and outstanding warrants to purchase 9,269,301 shares of Common Stock.

                                       9

<PAGE>

                  (f) Valid Issuance. The Shares to be issued to Hawk Sub in the
         Private Placement, when issued and paid for pursuant to the terms of
         this Agreement (i.e., upon the performance by Hawk Sub of the Hawk Sub
         Contribution), will be duly authorized and validly issued and
         outstanding, fully paid, nonassessable and free and clear of all
         pledges, liens, encumbrances and restrictions other than those
         restrictions relating to the Securities Act.

                  (g) Litigation; Governmental Proceedings. Except as set forth
         on Schedule 3.3(g) hereof, there are no Proceedings pending or
         threatened against Active IQ or any of their respective properties or
         business, or any officer or director of Active IQ in their capacity as
         such, and neither Active IQ nor any of its officers or directors are
         aware of any facts that are reasonably expected to result in or form
         the basis for any such Proceeding. Active IQ is not in default with
         respect to any judgment, order or decree of any court or any
         Governmental Body.

                  (h) No Conflict. Neither the execution and the delivery of
         this Agreement or the Ancillary Documents, nor the consummation or
         performance of any of the Contemplated Transactions will directly or
         indirectly (with or without notice or lapse of time): (i) contravene,
         conflict with or result in a violation of or default under any
         provision of the Charter Documents of Active IQ or any resolution
         adopted by the shareholders of Active IQ; (ii) contravene, conflict
         with or result in a violation of or default under, or give any
         Governmental Body or other Person the right to challenge any of the
         Contemplated Transactions or to exercise any remedy or obtain any
         relief under, any legal requirement or any order to which Active IQ is
         subject; (iii) contravene, conflict with or result in a violation of or
         default under any of the terms or requirements of, or give any
         Governmental Body the right to revoke, withdraw, suspend, cancel,
         terminate or modify any Governmental Authorization held by Active IQ or
         that otherwise relates to the business of Active IQ; or (iv)
         contravene, conflict with or result in a violation or breach of or
         default under any provision of, or give any Person the right to declare
         a default or exercise any remedy under, or to accelerate the maturity
         or performance of, or to cancel, terminate or modify any contract or
         other arrangement to which Active IQ is a party or by which Active IQ
         is bound. Except as set forth on Schedule 3.3(h) hereof, Active IQ will
         not be required to give any notice to or obtain any consent from any
         Person in order for Active IQ to consummate the Contemplated
         Transactions.

                  (i) Compliance with Applicable Laws and Other Instruments. The
         properties, business and operations of Active IQ have been and are
         being conducted in all material respects in accordance with all
         applicable laws, rules and regulations of all Governmental Bodies.
         Neither the execution nor delivery of, nor the performance of or
         compliance with, this Agreement or Ancillary Documents, nor the
         consummation of the Contemplated Transactions will, with or without the
         giving of notice or passage of time (or both), result in any breach of,
         or constitute a default under any agreement or other instrument to
         which Active IQ is a party or by which it or any of its properties,
         assets or rights is bound or affected. Active IQ is not in violation of
         its Charter Documents, nor is it in violation of, or in default under,
         any lien, indenture, mortgage, lease, agreement, instrument, commitment
         or arrangement in any material respect. Active IQ is not subject to any
         restriction that would prohibit it from entering into or performing its
         obligations under this Agreement or the Ancillary Agreements.

                  (j) No Brokers or Finders. Except for Boston Financial
         Partners and Wayne W. Mills (the fees for which, if any, will be paid
         by Hawk) no Person has or will have, as a result of any contractual
         undertaking by Active IQ, any right, interest or valid claim against
         Active IQ for any commission, fee or other compensation as a finder or
         broker, or in any similar capacity, in connection with the Contemplated
         Transactions.

                                       10

<PAGE>

                  (k) Absence of Restrictive Agreements. There are no agreements
         or other obligations by which Active IQ is bound, which restrict the
         ability of Active IQ to enter into this Agreement, to form, organize or
         operate the Company, or to perform any of the Contemplated
         Transactions.

                  (l) Board of Directors; Management. As of the Closing, Active
         IQ's board of directors shall consist of no more than two persons.
         Three additional directors shall be appointed to serve on the board of
         directors of Active IQ pursuant to the written action described in
         Section 2.2(f).

                                    ARTICLE 4
                              CONDITIONS TO CLOSING

         The obligation of each party to this Agreement to close the
Contemplated Transactions is subject to the fulfillment or waiver, on or prior
to the Closing Date, of the conditions set forth in this Article 4, as follows:

         4.1 Representations and Warranties. Each party's obligation to close
the Contemplated Transactions is subject to the truth and accuracy, in all
respects, of the representations and warranties of each other party, made to and
for the benefit such party, under this Agreement as of the Closing Date with the
same effect as though made on and as of such date.

         4.2 Ancillary Documents. Each party's obligation to close the
Contemplated Transactions is subject to the execution and delivery, at the
Closing, of all Ancillary Documents by all parties thereto.

         4.3 Supporting Documents. Legal counsel for each of the parties to this
Agreement shall have received the following: (a) a copy of resolutions of the
other parties' board of governors or directors, as the case may be, authorizing
and approving the execution, delivery and performance of this Agreement and any
Ancillary Documents to which it is a party; all such resolutions shall be
certified by a corporate or company officer of the delivering party; and (b)
copies of Charter Documents, certified by the governmental agencies responsible
for the filing and certification of such Charter Documents.

         4.4 Consents and Approvals. No party shall be obligated to close the
Contemplated Transactions unless, on or prior to the Closing Date, the parties
shall have received all consents and approvals necessary to consummate the
Contemplated Transactions.

         4.5 Certificate of Officers. Each party's obligation to close the
Contemplated Transactions is subject to the delivery, by each other party who
made a representation and warranty to and for the benefit of such party, of a
certificate, dated as of the Closing Date, executed by the delivering party's
Chief Executive Officer or similar officer, certifying to the delivering party's
satisfaction of the conditions specified in Sections 4.1 through 4.4.

         4.6 Composition of Board of Directors. Each party's obligation to close
the Contemplated Transactions is subject to the mutual agreement of Hawk and
Active IQ with respect to the third new director to be appointed by mutual
agreement of such parties pursuant to the written action of the board of
directors of Active IQ to be delivered at Closing, as contemplated by Section
2.2(f).

                                       11

<PAGE>

                                    ARTICLE 5
                                    COVENANTS

         5.1 No Publicity. The parties agree that, except as required by
applicable law, they will not make any press releases or other announcements
prior to or at the time of Closing with respect to the Contemplated Transactions
without the prior approval of the other Party, which approval will not be
unreasonably withheld or delayed.

         5.2 Claims of Shareholders or Equity Interest Holders. The parties
agree that any Proceeding brought by a shareholder or equity interest holder of
any of the parties against another party to this Agreement as a result of the
Contemplated Transactions shall be defended by the party whose shareholder or
equity interest holder brings the Proceeding.

         5.3 Stop Transfer Instructions; Legends. Active IQ agrees that no
instruction, other than the instructions referred to in this Section 5.3 and
customary stop-transfer instructions prior to the registration and sale of the
Shares pursuant to an effective Securities Act registration statement, shall be
given to its transfer agent for the Shares. The Shares shall otherwise be freely
transferable on the Company's books and records as and to the extent provided in
this Agreement and applicable law. Nothing contained in this Section 5.3 shall
affect in any way Hawk Sub's (or any subsequent transferee's) obligations and
agreement to comply with all applicable securities laws upon resale of any
Shares. If at any time Hawk Sub provides Active IQ with an opinion of counsel
reasonably satisfactory to Active IQ that registration of the resale by Hawk Sub
of any Shares is not required under the Securities Act and that the removal of
restrictive legends is permitted under applicable law, then Active IQ shall
permit the transfer of such Shares and promptly instruct its transfer agent to
issue one or more certificates for Common Stock without any restrictive legends
endorsed thereon.

         5.4 Oxide Zone Rights. Hawk agrees to use reasonable efforts to
promptly determine the precise nature and extent of its mining claim with
respect to the Oxide Zone Rights, specifically including whether the mining
claim is patented or unpatented.

                                    ARTICLE 6
                               REGISTRATION RIGHTS

         6.1 Piggyback Registration.

                  (a) Active IQ covenants to and agrees with Hawk Sub that, if
         at any time following the commencement of the Registration Period, as
         defined in paragraph (c) below, (i) Active IQ proposes to file a
         registration statement under the Securities Act (expressly excluding
         amendments to currently filed but not yet effective registration
         statements, if any and any inappropriate forms for piggyback
         registration such as Forms S-4, S-8 or their successor forms) with
         respect to any class of security in connection with either a primary
         registration on behalf of Active IQ itself or a secondary registration
         on behalf of holders of securities, and (ii) the registration statement
         may be used for registration of the Shares, then Active IQ will give
         written notice to Hawk Sub at least 30 days prior to the filing of such
         registration statement and will include in such registration statement
         the Shares to the extent that Hawk Sub provides a written request for
         inclusion therein within 20 days after receipt of the Active IQ's
         written notice.

                  (b) Active IQ will use its best efforts, through its officers,
         directors, auditors and counsel, to cause to become effective such
         registration statement as promptly as practicable. At such time after
         the filing of the registration statement when the Commission indicates,
         either orally or in writing, that it is willing to entertain requests
         for acceleration of effectiveness of such registration statement,

                                       12

<PAGE>

         Active IQ shall promptly request that the effectiveness of such
         registration statement be accelerated; provided, however, that Active
         IQ shall not have an obligation to register Shares if such Shares are
         already then covered by an existing registration statement.

                  (c) For purposes of this Article 6, the term "REGISTRATION
         PERIOD" shall mean the period of time following the Closing after which
         (i) Active IQ has raised an aggregate of at least $2.0 million in gross
         proceeds from one or more public offerings of equity securities,
         including for this purpose so-called "PIPE" transactions, and (ii) the
         closing sales price of Active IQ Common Stock is at least One Dollar
         and No/100 ($1.00) per share of Common Stock for a minimum of 20
         consecutive trading days.

         6.2 Subsequently Issued Shares. The piggyback registration rights of
Hawk Sub set forth in Section 6.1 above shall include any shares of Active IQ
Common Stock issued to Hawk Sub in connection with the purchase and sale of all
of Hawk Sub's remaining membership interest in the Company pursuant to Section
8.7 of the Member Control Agreement, and all such shares of Common Stock shall
be considered "Shares" for all purposes of this Article 6.

         6.3 Certain Limitations.

                  (a) Notwithstanding anything else to the contrary contained in
         this Article 6, if a greater number of shares of Common Stock are
         offered for participation in a proposed offering than, in the
         reasonable opinion of the managing underwriter of such proposed
         offering, if any, can be accommodated without adversely affecting the
         proposed offering, then the amount of Shares (including shares of
         Common Stock registrable under Section 6.2 above) shall be
         proportionately reduced together with the securities of other selling
         shareholders participating in the registration to the extent deemed
         satisfactory by the managing underwriter.

                  (b) Active IQ's obligation to include any Shares in a
         registration statement is contingent upon the cooperation of Hawk Sub
         in the preparation and filing of any such registration statement, such
         cooperation to include the furnishing of information concerning Hawk
         Sub for inclusion in such registration statement.

         6.4 Fees and Expenses. Active IQ shall bear all expenses and fees
incurred in connection with the preparation, filing and amendments, if any, of
any registration statement under which Hawk Sub exercises its rights to
piggyback registration under this Article 6; provided, however, that Hawk Sub
shall pay all fees, disbursements and expenses of any counsel or expert it
retains and all underwriting discounts and commissions, filing fees and any
transfer or other taxes relating to the Shares included in a registration
statement of Active IQ.

         6.5 Length of Effectiveness. Active IQ shall prepare and file with the
Commission such amendments (including post-effective amendments) to any
registration statement under which Shares are being registered, and supplements
thereto, as may be necessary to keep such registration statement continuously
effective and in compliance with the provisions of the Securities Act applicable
thereto so as to permit the prospectus forming part of the registration
statement to be current and useable by Hawk Sub for resales of the Shares for a
two-year period after the date on which such registration statement is first
declared effective by the Commission, or, if shorter, two years after the date
of issuance of the Shares or when all the Shares covered by the registration
statement have been sold pursuant thereto in accordance with the plan of
distribution provided in the prospectus, transferred pursuant to Rule 144 under
the Securities Act, or otherwise transferred in a manner that results in the
delivery of new securities not subject to transfer restrictions under the
Securities Act.

                                       13

<PAGE>

                                    ARTICLE 7
                                 INDEMNIFICATION

         7.1 Indemnification. Each party shall indemnify and hold harmless (each
an "INDEMNIFYING PARTY") the others (the party or parties to be indemnified in
any particular case is collectively referred to hereinafter as an "INDEMNIFIED
PARTY") from, against and in respect of any and all Damages, as defined below,
losses, deficiencies, liabilities, costs and expenses resulting from, relating
to or arising out of any (a) misrepresentation, (b) breach of a representation
or warranty or (c) non-fulfillment of any agreement or covenant hereunder on the
part of such Indemnifying Party. Moreover, each Indemnifying Party will
indemnify and hold harmless an Indemnified Party hereto from, against and in
respect of any and all actions, suits, proceedings, demands, assessments,
judgments, costs (including reasonable attorneys' fees) and legal and other
expenses incident to any of the foregoing or to the enforcement of this Section.

         As used in this Article 7, the term "DAMAGES" means all actual damages
suffered or incurred by an Indemnified Party, including without limitation all
compensatory damages, but excluding any consequential or punitive damages.

         7.2 Survival. All of the indemnity obligations herein shall survive the
Closing for a period of three years from the Closing Date.

         7.3 Claims for Indemnification. All claims for indemnification under
this Agreement shall be asserted and resolved as follows:

                  (a) Third Party Claims. In the event that any claim or demand
         for which one party would be liable to the other hereunder is asserted
         against or sought to be collected by a third party (a "THIRD PARTY
         CLAIM"), the Indemnified Party shall promptly notify the Indemnifying
         Party in writing of such Third Party Claim, specifying the nature of
         such claim or demand and the amount or the estimated amount thereof to
         the extent then feasible (which estimate shall not be conclusive of the
         final amount of such claim or demand) (the "CLAIM NOTICE"); provided,
         however, that failure of an Indemnified Party to give notice as
         provided in this Section 7.3(a) shall relieve the Indemnifying Party of
         its obligations hereunder to the extent that the Indemnifying Party
         actually has been prejudiced by such failure to give notice.
         Thereafter, the Indemnified Party shall deliver to the Indemnifying
         Party, as promptly as practicable and, in any event, within ten days
         after such Indemnified Party's receipt thereof, copies of all notices
         and other documents relating to the Third Party Claim.

                  In addition:

                           (i) The Indemnifying Party will have 30 days from its
                  receipt of the Claim Notice (the "NOTICE PERIOD") to assume or
                  cause the assumption of the defense thereof with counsel
                  selected by the Indemnifying Party (provided such counsel is
                  not reasonably objected to by the Indemnified Party).

                           (ii) Should the Indemnifying Party elect to assume or
                  cause the assumption of the defense of a Third Party Claim,
                  the Indemnifying Party will not be liable to the Indemnified
                  Party for any legal expenses subsequently incurred by the
                  Indemnified Party in connection with the defense thereof
                  unless the Indemnifying Party has agreed in writing to pay
                  such fees and expenses.

                           (iii) If the Indemnifying Party assumes the defense
                  of a Third Party Claim, then, as long as the Indemnifying
                  Party is reasonably contesting such claim in good faith, the

                                       14

<PAGE>

                  Indemnified Party shall not admit any liability with respect
                  to, or settle, compromise or discharge any Third Party Claim
                  without the Indemnifying Party's prior written consent, and
                  the Indemnified Party will agree to any settlement, compromise
                  or discharge of the Third Party Claim the Indemnifying Party
                  may recommend which releases the Indemnified Party in
                  connection with such Third Party Claim. Notwithstanding the
                  foregoing, the Indemnified Party shall have the right to pay
                  or settle any such claim, provided that in such event it shall
                  waive any right to indemnity therefor by the Indemnifying
                  Party. If the Indemnifying Party assumes the defense of a
                  Third Party Claim, then the Indemnifying Party shall not,
                  without the Indemnified Party's prior written consent, settle
                  or compromise any Third Party Claim or consent to the entry of
                  any judgment which does not include as an unconditional term
                  thereof the delivery by the claimant or plaintiff to the
                  Indemnified Party of a written release from all liability in
                  respect of such Third Party Claim.

                           (iv) The amount that an Indemnifying Party shall be
                  obligated to reimburse an Indemnified Party in connection with
                  any Third Party Claim shall be reduced by the amount of the
                  insurance benefits, if any, obtained by the Indemnified Party
                  (or for its benefit) by reason of the matter giving rise to
                  such Claim.

                           (v) The amount that any Indemnifying Party shall be
                  obligated to reimburse an Indemnified Party in connection with
                  any Third Party Claim shall be reduced by an amount equal to
                  any income tax benefits obtained by such party (or for its
                  benefit) as a result of the event giving rise to the
                  Indemnifying Party's obligation to make the reimbursement,
                  after taking into account (1) any insurance benefits described
                  in the preceding paragraph and (2) the income tax treatment of
                  the Indemnified Party's receipt of such insurance benefits and
                  reimbursement.

                  (b) Other Claims. In the event that a party should have a
         claim against another party hereunder which does not involve a Third
         Party Claim, the Indemnified Party shall promptly notify the
         Indemnifying Party in writing of the claim, specifying the nature of
         such claim or demand and the amount or the estimated amount thereof to
         the extent then feasible (which estimate shall not be conclusive of the
         final amount of such claim or demand); provided, however, that failure
         of an Indemnified Party to give notice as provided in this Section
         7.3(b) shall relieve the Indemnifying Party of its obligations
         hereunder to the extent that the Indemnifying Party actually has been
         prejudiced by such failure to give notice. If the Indemnifying Party
         does not notify the Indemnified Party within 30 days after receipt of
         notice thereof that the Indemnifying Party disputes such claims, the
         amount of such claim shall be conclusively deemed a liability of the
         Indemnified Party hereunder.

                                    ARTICLE 8
                               GENERAL PROVISIONS

         8.1 Notices. All notices required to be given by this Agreement shall
be made in writing either: (a) by personal or commercial courier delivery to the
party requiring notice and securing a written receipt, or (b) by mailing the
notice to the last known address of the party requiring notice, by registered
mail, return-receipt requested. Notice shall be treated as given when personally
received or, if sent as provided above, the effective date of the notice shall
be the date of the written receipt received upon delivery in clause (a) above or
(except in the event of a mail strike) the date the notice is sent pursuant to
clause (b) above.

                                       15

<PAGE>

         Such notices will be given to a party at the address set forth below:

      If to Active IQ:                       Active IQ Technologies, Inc.
                                             800 Nicollet Mall, Suite 2690
                                             Minneapolis, Minnesota  55402
                                             Attention:  Chief Executive Officer

      If to Hawk:                            Hawk Precious Minerals Inc.
                                             404 - 347 Bay Street
                                             Toronto, Ontario
                                             M5H 2R7
                                             Attention:  President

      If to Hawk Sub:                        Hawk Precious Minerals USA, Inc.
                                             404 - 347 Bay Street
                                             Toronto, Ontario
                                             M5H 2R7
                                             Attention:  Chief Executive Officer

         Any party to this Agreement may, at any time by giving five days prior
written notice to the other parties, designate any other address in substitution
of the foregoing address. All notices, offers, demands, certificates or other
communications required or permitted under this Agreement shall be in writing,
signed by the Person giving the same.

         8.2 Consent and Waiver. No consent under and no waiver of any provision
of this Agreement on any one occasion shall constitute a consent under or waiver
of any other provision on said occasion or on any other occasion, nor shall it
constitute a consent under or waiver of the consented-to or waived provision on
any other occasion. No consent or waiver shall be enforceable unless it is in
writing and signed by the party against whom such consent or waiver is sought to
be enforced.

         8.3 Entire Agreement. Except for the Articles of Organization of the
Company, the Company bylaws, the Member Control Agreement with respect to the
Company, and any other Ancillary Documents, this Agreement constitutes the
entire agreement among the parties with respect to the Company and the joint
venture contemplated hereby. It supersedes any prior agreement or understanding
among them, and it may not be modified or amended in any manner other than as
set forth herein.

         8.4 Oral Changes, Waivers, Etc. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only pursuant to a written statement signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.

         8.5 Governing Law; Jurisdiction and Venue. This Agreement and the
rights of the parties hereunder shall be governed by, interpreted and enforced
in accordance with the laws of the State of Minnesota without regard to the
principles of conflicts-of-law. Each of the parties hereto consents to the
exclusive jurisdiction of the federal courts whose districts encompass any part
of the City of Minneapolis or the state courts of the State of Minnesota sitting
in the City of Minneapolis in connection with any dispute arising in connection
with the Contemplated Transactions. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may effectively do so, any
defense of an inconvenient forum or improper venue to the maintenance of such
action or proceeding in any such court and any right of jurisdiction on account
of its place of residence or domicile. Each party hereto irrevocably and
unconditionally consents to the service of any and all process in any such
action or proceeding in such courts by the mailing of copies of such process by
certified or registered airmail at its address specified in Section 8.1. Each
party hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.

                                       16

<PAGE>

         8.6 Binding Effect. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the parties and
their legal representatives, heirs, administrators, executors, successors and
permitted assigns.

         8.7 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural and pronouns stated in either the masculine, the
feminine, or the neuter gender shall include the masculine, feminine and neuter.

         8.8 Interpretation. All references herein to Articles, Sections and
paragraphs refer to Articles, Sections and paragraphs of this Agreement, unless
the context of such reference indicates otherwise. All Article, Section and
paragraph headings are for reference purposes only and shall not affect the
interpretation of this Agreement.

         8.9 Severability. If any provision of this Agreement or the application
of such provision to any Person or circumstances, shall be held invalid, the
remainder of the Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

         8.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement binding
on all parties. Facsimile and electronically transmitted signatures shall be
valid and binding to the same extent as original signatures. Each party shall
become bound by this Agreement immediately upon signing and delivering any
counterpart, independently of the signature of any other party. Nevertheless, in
making proof of this Agreement, it will be necessary to produce only one copy
signed by the party to be charged.

         8.11 Further Assurances. Each party hereby agrees to execute and
deliver such additional documents and instruments and to perform such additional
acts as may be necessary or appropriate to effectuate, carry out and perform all
of the terms, provisions and conditions of this Agreement and the Contemplated
Transactions.

         8.12 No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the parties hereto and their
respective successors and assigns, and no other Person will have any rights,
interest or claims hereunder or be entitled to any benefits under or on account
of this Agreement as a third-party beneficiary or otherwise; provided, however,
that all representations and warranties of the parties contained in Article 3
shall also inure to the benefit of the Company upon the Closing.

         8.13 Incorporation by Reference. Each of the exhibits, schedules and
other appendices attached to this Agreement and referred to herein is hereby
incorporated into this Agreement by reference, unless this Agreement expressly
otherwise provides.

         8.14 Discretion. Whenever a Person may take action under this Agreement
is his, her or its "sole discretion," "sole and absolute discretion" or
"discretion," or under a grant of similar authority or latitude, such Person
shall be entitled to consider any factors and interests as it desires, including
its own interests.

         8.15 Arbitration. If any controversy or claim arising out of this
Agreement cannot be settled by the parties hereto and, if applicable, the
Company (the "disputants"), the controversy or claim shall be resolved pursuant

                                       17

<PAGE>

to informal arbitration by an arbitrator selected under and conducted pursuant
to the Commercial Rules of the American Arbitration Association (as then in
effect for expedited proceedings) and located in Minneapolis, Minnesota; and the
arbitration shall be conducted in that same location under such rules.
Notwithstanding the foregoing, no disputant shall be required to seek
arbitration regarding any cause of action that would entitle such disputant to
injunctive relief. Each of the disputants shall be entitled to present evidence
and argument to the arbitrator. The arbitrator shall have the right only to
interpret and apply the provisions of this Agreement (including other applicable
agreements) and may not change any of such provisions. The arbitrator shall
permit reasonable pre-hearing discovery of facts, to the extent necessary to
establish a claim or a defense to a claim, subject to supervision by the
arbitrator.

         The determination of the arbitrator shall be conclusive and binding
upon the parties and a court judgment upon the same may be entered in any court
having competent jurisdiction thereof. The arbitrator shall give written notice
to the disputants stating the arbitrator's determination, and shall furnish to
each disputant a signed copy of such determination. The expenses of arbitration
shall be borne equally by the opposing disputants or as the arbitrator shall
otherwise equitably determine.

         8.16 Litigation Expense. If any disputant (as defined in Section 8.15,
and including all disputants opposing one or more other disputants as one party)
is made or shall become a party to any litigation (including arbitration)
commenced by or against another disputant involving the enforcement of any of
the rights or remedies of such disputant, or arising on account of a default of
the other disputant in its performance of any of the other disputant's
obligations hereunder, then the prevailing disputant in such litigation shall
receive from the other disputant all costs incurred by the prevailing disputant
in such litigation, plus reasonable attorneys' fees to be fixed by the court or
arbitrator (as applicable), with interest thereon from the date of judgment or
arbitrator's decision at the rate of ten percent (10%) or, if less, the maximum
rate permitted by law.

                                       18

<PAGE>

         IN WITNESS WHEREOF, the undersigned have set their hands to this Joint
Venture and Joint Contribution Agreement to be effective as of the date first
set forth above.

                                ACTIVE IQ TECHNOLOGIES, INC.

                                /s/ Kenneth W. Brimmer
                                ------------------------------------------------
                                KENNETH W. BRIMMER, Chief Executive Officer

                                HAWK PRECIOUS MINERALS INC.

                                /s/ H. Vance White
                                ------------------------------------------------
                                H. VANCE WHITE, President

                                HAWK PRECIOUS MINERALS USA, INC.

                                /s/ H. Vance White
                                ------------------------------------------------
                                H. VANCE WHITE, Chief Executive Officer

<PAGE>

Pursuant to Item 601(b)(2) of Regulation S-K, certain Schedules and Exhibits
have been omitted from this Agreement. The Registrant will furnish a copy of any
omitted Schedule or Exhibit to the Commission upon request.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}]]