Document:

<PAGE>   1
                                                                   EXHIBIT 10.29

                           REVOLVING CREDIT AGREEMENT

                                     among

                                SOUTHDOWN, INC.,
                                    Borrower

                 WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
                     Administrative Agent and Lead Arranger

                             SUNTRUST BANK, ATLANTA
                               Syndication Agent

                            THE BANK OF NOVA SCOTIA
                              Documentation Agent

                                      and

                            THE BANKS NAMED HEREIN,
                                     Banks

                                  $250,000,000

                         DATED AS OF DECEMBER 17, 1999

<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              Page
<S>                                                                           <C>
SECTION 1 DEFINITIONS AND TERMS  ..........................................    1

     1.1  Definitions .....................................................    1

     1.2  Number and Gender of Words; Other References ....................   12

     1.3  Accounting Principles ...........................................   12

SECTION 2 BORROWING PROVISIONS ............................................   12

     2.1  Commitment ......................................................   12

     2.2  Termination of Commitment .......................................   12

     2.3  Borrowing Procedure .............................................   13

SECTION 3 TERMS OF PAYMENT ................................................   13

     3.1  Loan Accounts, Notes, and Payments ..............................   13

     3.2  Interest and Principal Payments .................................   14

     3.3  Interest Options ................................................   15

     3.4  Quotation of Rates. .............................................   15

     3.5  Default Rate ....................................................   15

     3.6  Interest Recapture ..............................................   15

     3.7  Interest Calculations  ..........................................   15

     3.8  Maximum Rate  ...................................................   16

     3.9  Interest Periods ................................................   17

     3.10 Conversions  ....................................................   17

     3.11 Order of Application. ...........................................   18

     3.12 Sharing of Payments, Etc. .......................................   18

     3.13 Offset ..........................................................   18

     3.14 Booking Borrowings ..............................................   18

SECTION 4 CHANGE IN CIRCUMSTANCES .........................................   19

     4.1  Increased Cost and Reduced Return ...............................   19

     4.2  Limitation on Types of Loans ....................................   20

     4.3  Illegality  .....................................................   21

     4.4  Treatment of Affected Loans  ....................................   21

     4.5  Replacement of Banks ............................................   21

     4.6  Taxes  ..........................................................   22

     4.7  Funding Losses ..................................................   23

     4.8  Additional Interest on Eurodollar Rate Borrowings ...............   23

SECTION 5 FEES.............................................................   24

     5.1  Treatment of Fees ...............................................   24

     5.2  Fees of Administrative Agent ....................................   24

     5.3  Commitment Fee  .................................................   24

SECTION 6 CONDITIONS PRECEDENT  ...........................................   24

     6.1  Conditions Precedent to Initial Borrowings ......................   24

          (a) The Agreement  ..............................................   24

          (b) Notes  ......................................................   24

          (c) Articles of Incorporation  ..................................   24
</TABLE>

                                                      REVOLVING CREDIT AGREEMENT

<PAGE>   3
<TABLE>
<S>                                                                             <C>
          (d) Bylaws. .....................................................     25

          (e) Good Standing and Authority .................................     25

          (f) Incumbency ..................................................     25

          (g) Resolutions .................................................     25

          (h) Certificate Regarding Closing ...............................     25

          (i) Opinion of Counsel to the Borrower ..........................     25

          (j) Payment of Fees and Expenses ................................     25

          (k) Current Financials ..........................................     25

          (l) Sixth Amendment to Existing Credit Agreement ................     26

          (m) Other. ......................................................     26

     6.2  Conditions Precedent to Each Borrowing ..........................     26

SECTION 7 REPRESENTATIONS AND WARRANTIES ..................................     26

     7.1  Financial Condition .............................................     26

     7.2  No Change .......................................................     26

     7.3  Corporate Existence; Compliance with Law ........................     26

     7.4  Corporate Power; Authorization; Enforceable Obligations. ........     27

     7.5  No Legal Bar; No Contravention ..................................     27

     7.6  No Material Litigation ..........................................     27

     7.7  No Default.......................................................     27

     7.8  Ownership of Property; Liens ....................................     27

     7.9  Taxes ...........................................................     27

     7.10 Federal Regulations .............................................     28

     7.11 Compliance with ERISA ...........................................     28

     7.12 Investment Company Act, etc .....................................     29

     7.13 Environmental Matters ...........................................     29

     7.14 Year 2000 Compliance ............................................     29

     7.15 Purpose of Facility .............................................     30

     7.16 Pari Passu Obligations; Senior Indebtedness .....................     30

     7.17 Full Disclosure .................................................     30

SECTION 8 COVENANTS .......................................................     30

     8.1  Financial Statements ............................................     30

     8.2  Certificates; Other Information .................................     31

     8.3  Payment of Obligations ..........................................     31

     8.4  Conduct of Business and Maintenance of Existence ................     31

     8.5  Maintenance of Property; Insurance ..............................     32

     8.6  Inspection of Property; Books and Records; Discussions ..........     32

     8.7  Notices .........................................................     32

     8.8  Year 2000 Compliance ............................................     33

     8.9  Compliance with Laws ............................................     33

     8.10 Limitation on Liens .............................................     33

     8.11 Prohibition of Fundamental Changes ..............................     34

     8.12 Subsidiary Debt..................................................     35

     8.13 Subsidiary Dividends ............................................     35

     8.14 Compliance with ERISA. ..........................................     36

     8.15 Assignment. .....................................................     37

     8.16 Financial Covenants. ............................................     37

          (a) Leverage Ratio ..............................................     37
</TABLE>

                                                      Revolving Credit Agreement
                                      (ii)
<PAGE>   4

<TABLE>
<S>                                                                         <C>
          (b) Consolidated Net Worth .....................................    37

          (c) Interest Coverage Ratio ....................................    37

     8.17  Transactions with Affiliates ..................................    37

SECTION 9  EVENT OF DEFAULT ..............................................    37

     9.1   Payment of Obligation .........................................    37

     9.2   Misrepresentation .............................................    38

     9.3   Covenants .....................................................    38

     9.4   Default Under Other Debt ......................................    38

     9.5   Debtor Relief .................................................    38

     9.6   Attachment ....................................................    38

     9.7   Employee Benefit Plans. .......................................    38

     9.8   Judgments .....................................................    39

     9.9   Change of Control .............................................    39

SECTION 10 RIGHTS AND REMEDIES. ..........................................    39

     10.1  Remedies Upon Event of Default. ...............................    39

     10.2  Borrower Waivers. .............................................    40

     10.3  Performance by Administrative Agent ...........................    40

     10.4  Delegation of Duties and Rights ...............................    40

     10.5  Not in Control ................................................    40

     10.6  Course of Dealing .............................................    41

     10.7  Cumulative Rights .............................................    41

     10.8  Application of Proceeds .......................................    41

     10.9  Limitation of Rights ..........................................    41

     10.10 Expenditures by Banks. ........................................    41

     10.11 Indemnification ...............................................    42

SECTION 11 AGREEMENT AMONG BANKS. ........................................    42

     11.1  Administrative Agent. .........................................    42

     11.2  Expenses ......................................................    44

     11.3  Proportionate Absorption of Losses ............................    44

     11.4  Delegation of Duties; Reliance ................................    44

     11.5  Limitation of Liability. ......................................    44

     11.6  Event of Default; Collateral ..................................    45

     11.7  Limitation of Liability .......................................    46

     11.8  Relationship of Banks .........................................    46

     11.9  Benefits of Agreement. ........................................    46

     11.10 Agents; Arranger. .............................................    46

     11.11 Obligation Several ............................................    46

SECTION 12 MISCELLANEOUS .................................................    46

     12.1  Headings ......................................................    46

     12.2  Nonbusiness Days ..............................................    46

     12.3  Communications. ...............................................    46

     12.4  Form and Number of Documents ..................................    47

     12.5  Exceptions to Covenants .......................................    47

     12.6  Survival ......................................................    47

     12.7  Governing Law. ................................................    47
</TABLE>

                                                      REVOLVING CREDIT AGREEMENT
                                     (iii)
<PAGE>   5

<TABLE>
<S>                                                                           <C>
     12.8  Invalid Provisions .............................................     47

     12.9  Entirety. ......................................................     47

     12.10 Jurisdiction; Venue; Service of Process; Jury Trial ...........      48

     12.11 Amendments, Consents, Conflicts, and Waivers. .................      48

     12.12 Multiple Counterparts .........................................      49

     12.13 Successors and Assigns; Assignments and Participations ........      49

     12.14 Discharge Only Upon Payment in Full; Reinstatement in Certain
           Circumstances .................................................      52

     12.15 Confidentiality. ..............................................      52

     12.16 Representations of Banks. .....................................      52
</TABLE>

SCHEDULES

Schedule 2.1   -    Banks and Committed Sums

EXHIBITS

Exhibit A      -    Form of Note

Exhibit B-1    -    Form of Notice of Borrowing

Exhibit B-2    -    Form of Notice of Conversion

Exhibit C      -    Form of Compliance Certificate

Exhibit D      -    Form of Assignment and Acceptance Agreement

Exhibit E      -    Form of Opinion of Borrower's Counsel

                                                      REVOLVING CREDIT AGREEMENT
                                      (iv)
<PAGE>   6

                           REVOLVING CREDIT AGREEMENT

         THIS AGREEMENT is entered into as of December 17, 1999, among
SOUTHDOWN, INC., a Louisiana corporation ("BORROWER"), Banks (hereinafter
defined) and WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION, as a Bank and as
Administrative Agent (hereinafter defined) for itself and the other Banks, as
hereinafter defined.

                                    RECITALS

         A. Borrower has requested that Banks extend credit to Borrower,
providing for a revolving loan facility in the aggregate principal amount of
$250,000,000, for working capital and general corporate purposes (including,
repurchasing Borrower's subordinated notes and Borrower's common stock).

         B. Upon and subject to the terms and conditions of this Agreement,
Banks are willing to extend such credit to Borrower.

         Accordingly, in consideration of the mutual covenants contained herein,
Borrower, Administrative Agent and Banks agree as follows:

SECTION 1 DEFINITIONS AND TERMS.

         1.1  Definitions. As used herein:

         ACQUIRED INDEBTEDNESS means Debt of a Person existing at the time such
Person becomes a Subsidiary or assumed in connection with the acquisition of
assets from such Person, and not incurred in connection with, or anticipation
of, such Person becoming a Subsidiary or such acquisition.

         ADMINISTRATIVE AGENT means Wells Fargo Bank (Texas), National
Association, and its permitted successor or successors as administrative agent
for Banks under this Agreement.

         AFFILIATE of any Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, such Person, and, for purposes of this definition only, "control,"
"controlled by," and "under common control with" mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of voting securities, by contract, or otherwise).

         AGENTS means, collectively, the Administrative Agent and any other
agent that may now or hereafter be named as an agent for the Banks.

         AGREEMENT means this Revolving Credit Agreement (as the same may
hereafter be amended, modified, supplemented, or restated from time to time).

         APPLICABLE LENDING OFFICE means, for each Bank and for each Type of
Borrowing, the "Lending Office" of such Bank (or an affiliate of such Bank)
designated on Schedule 2.1 attached hereto or such other office that such Bank
(or an affiliate of such Bank) may from time to time specify to Administrative
Agent and Borrower by written notice in accordance with the terms hereof.

         APPLICABLE MARGIN means the percentage set forth in the table below for
the Type of Borrowing or commitment fees (as the case may be) which corresponds
to Borrower's Leverage Ratio:

                                                      REVOLVING CREDIT AGREEMENT
<PAGE>   7

<TABLE>
<CAPTION>
                                                      APPLICABLE MARGIN

                                  COMMITMENT                EURODOLLAR          BASE RATE
      LEVERAGE RATIO                 FEE                  RATE BORROWINGS       BORROWINGS
-------------------------       ---------------           ---------------       ----------
<S>                               <C>                     <C>                   <C>
        Category 1                        .375%                    1.50%              .25%
greater than or equal to
         2.5:1.0

        Category 2                         .30%                    1.25%             0.00%
less than 2.5:1.0 but
greater than or equal to
        1.75:1.0

        Category 3                         .25%                    1.00%             0.00%
less than 1.75:1.0 but
greater than or equal to
         1.0:1.0

        Category 4                         .25%                     .75%             0.00%
      less than 1.0
</TABLE>

         The Applicable Margin shall be based upon the Borrower's Leverage Ratio
which will be calculated quarterly as at the end of each fiscal quarter of the
Borrower based upon the four (4) immediately preceding fiscal quarters,
including the quarter then ended. The Applicable Margin shall be redetermined
quarterly as of the date Administrative Agent is scheduled to receive quarterly
financial statements pursuant to SECTION 8.1 hereof (or in the case of the
fourth fiscal quarter in each fiscal year, a certification by the chief
financial officer or treasurer of Borrower).

         ARRANGER means Wells Fargo.

         ASSIGNMENT AND ACCEPTANCE is defined in SECTION 12.13.

         BANKS means, on any date of determination, the financial institutions
named on SCHEDULE 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the assignments made in accordance with Section
12.13(c) of this Agreement), and subject to the terms and conditions of this
Agreement, their respective successors and assigns, but not any Participant who
is not otherwise a party to this Agreement.

         BASE LIBOR RATE means the average of the rate per annum at which Dollar
deposits are offered to the Administrative Agent in the London interbank
eurocurrency market on the second Business Day prior to the commencement of an
Interest Period at or about 11:00 A.M. (London time), for delivery on the first
day of such Interest Period, for a term comparable to the number of days in such
Interest Period and in an amount approximately equal to the principal amount to
which such Interest Period shall apply.

         BASE RATE means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.

                                                      REVOLVING CREDIT AGREEMENT
                                       2
<PAGE>   8

         BASE RATE BORROWING means a Borrowing bearing interest at the sum of
the Base Rate plus the Applicable Margin for Base Rate Borrowings.

         BORROWER is defined in the preamble to this Agreement and includes any
permitted successors of Borrower.

         BORROWING means any amount disbursed by one or more Banks to Borrower
under the Loan Documents, whether such amount constitutes an original
disbursement of funds or the continuation of an amount outstanding.

         BORROWING DATE is defined in SECTION 2.3(a).

         BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by Law to be closed in Houston, Texas, San Francisco, California
or New York, New York, and (b) in addition to the foregoing, in respect of any
Eurodollar Rate Borrowing, a day on which dealings in United States dollars are
conducted in the London interbank market and commercial banks are open for
international business in London.

         CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.

         CAPITAL STOCK of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of, or rights,
warrants, or options to purchase, corporate stock or any other equity interest
(however designated) of or in such Person.

         CHANGE OF CONTROL means and refers to the occurrence of one or more of
the following events: (a) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Borrower to any Person or related group for purposes of Section
13(d) of the Exchange Act (a "Group"), together with any Affiliates thereof, (b)
the shareholders of Borrower shall approve any plan or proposal for the
liquidation or dissolution of Borrower (other than a liquidation or dissolution
pursuant to a Reincorporation Merger), (c) any Person or Group, together with
any Affiliates thereof, shall, as a result of a tender or exchange offer, a
merger, consolidation or similar transaction, open market purchases, privately
negotiated purchases, or otherwise, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Borrower representing at least thirty percent (30%) of the Voting
Stock of Borrower, or (d) a majority of the members of the Board of Directors
shall not constitute Continuing Directors. For purposes of this definition,
"Board of Directors" does not include any committee thereof.

         CLOSING DATE means the date upon which this Agreement has been executed
by Borrower, Banks, and Administrative Agent and all conditions precedent
specified in SECTION 6.1 have been satisfied or waived.

         CODE means the Internal Revenue Code of 1986, as amended, together with
rules and regulations promulgated thereunder.

         COMMITMENT means an amount (subject to reduction or cancellation as
herein provided) equal to $250,000,000.

         COMMITMENT USAGE means, at the time of any determination thereof, the
aggregate Principal Debt.

                                                      REVOLVING CREDIT AGREEMENT
                                       3
<PAGE>   9

         COMMITTED SUM means, as the case may be, the amount stated beside each
Bank's name on the most-recently amended SCHEDULE 2.1 to the Agreement (which
amount is subject to increase, reduction, or cancellation in accordance with
this Agreement).

         COMPANIES means, at any date of determination thereof, Borrower and
each of its Subsidiaries, and "COMPANY" means any of the Companies.

         COMPLIANCE CERTIFICATE means a certificate signed by a Responsible
Officer, substantially in the form of EXHIBIT C.

         CONSEQUENTIAL LOSS means any loss or expense (excluding loss of
profits) which any Bank may incur in respect of a Eurodollar Rate Borrowing as a
consequence of (a) any failure or refusal of Borrower to accept or utilize such
Borrowing after Borrower shall have requested it under this Agreement, or (b)
any prepayment or payment of such Borrowing or conversion of such Borrowing to a
Borrowing of another Type, in each case, prior to the last day of the Interest
Period therefor.

         CONSOLIDATED DEBT means Debt of Borrower and its Consolidated
Subsidiaries.

         CONSOLIDATED EBITDA means, for the relevant period, the sum of: (a) the
Consolidated Net Income for such period, (b) Consolidated Interest Expense, (c)
all taxes measured by income to the extent included in the determination of such
Consolidated Net Income and (d) all amounts treated as expenses for depreciation
and the amortization of intangibles of any kind for such period to the extent
included in the determination of such Consolidated Net Income for the relevant
period; provided, however, that Consolidated Net Income shall be computed for
the purposes of this definition (i) without regard to non-recurring costs
incurred in connection with any acquisition or non-cash write-ups and
write-downs, and (ii) without giving effect to extraordinary losses or
extraordinary gains for such period.

         CONSOLIDATED INTEREST EXPENSE means, for the relevant period, for
Borrower and its Subsidiaries, without duplication, the amount of all costs,
fees and expenses paid by Borrower and its Subsidiaries in such period which are
classified as interest expense on the consolidated financial statements of
Borrower and its Subsidiaries, all determined in accordance with GAAP.

         CONSOLIDATED NET INCOME means, for any period, the net income (or net
loss) of the Borrower and its Subsidiaries for such period taken as a single
accounting period determined in accordance with GAAP.

         CONSOLIDATED NET WORTH means, on any date of determination, all amounts
that would be included under shareholders' equity on a consolidated balance
sheet of Borrower as determined in accordance with GAAP.

         CONSOLIDATED SUBSIDIARY means, at any date any Subsidiary or other
entity the accounts of which are consolidated with Borrower in its consolidated
financial statements prepared in accordance with GAAP.

         CONTINUING DIRECTOR means and refers to (a) any member of Borrower's
board of directors who was a director of Borrower on the Closing Date, and (b)
any person who becomes a member of the board of directors after the Closing Date
if such person was appointed or nominated for election to the board of directors
by a majority of the Continuing Directors, but excluding any such person
originally proposed for election in opposition to the Continuing Directors in an
actual or threatened election contest relating to the election of the directors
of Borrower (as such terms are used in Rule 14a-11 under the Exchange Act) and
whose initial assumption of office resulted from such contest or the settlement
thereof.

                                                      REVOLVING CREDIT AGREEMENT
                                       4
<PAGE>   10

         CONTRACTUAL OBLIGATION means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument, or undertaking
to which such Person is a party or by which it or any of its property is bound.

         CURRENT FINANCIALS means, at the time of any determination thereof, the
more recently delivered to Banks of either (a) the consolidated Financial
Statements of Borrower and its consolidated Subsidiaries for the fiscal year
ended December 31, 1998, and the nine-month period ended September 30, 1999; or
(b) the Financial Statements required to be delivered under SECTIONS 8.1(a) or
8.1(b), as the case may be.

         DEBT means (without duplication), for any Person, the sum of the
following: (a) all liabilities, obligations, and indebtedness of such Person
which in accordance with GAAP should be classified upon such Person's balance
sheet as liabilities in respect of (i) money borrowed, including, without
limitation, the Principal Debt, (ii) obligations of such Person under Capital
Leases, (iii) obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations, and obligations
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business and deferred federal and state income
taxes), and (iv) all non-contingent obligations (and, for purposes of SECTIONS
8.10 AND 9.4 and letters of credit, banker's acceptances and other similar
instruments issued to support Debt, all contingent obligations) of such Person
to reimburse any bank or other Person in respect of letters of credit, banker's
acceptances and similar instruments; (b) all obligations of the type referred to
in CLAUSES (a)(i) through (a)(iv) preceding of other Persons for the payment of
which such Person is responsible or liable as obligor, guarantor, or otherwise;
and (c) all obligations of the type referred to in CLAUSES (a)(i) through CLAUSE
(a)(iv) and CLAUSE (b) preceding of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured. For
all purposes of this Agreement, Debt of any Person shall include the Debt of any
partnership or joint venture in which such Person is a general partner or a
joint venturer, unless such Debt is expressly made non-recourse to such Person.

         DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments or similar Laws from time to time
in effect affecting the Rights of creditors generally.

         DEFAULT RATE means rate of interest equal to the lesser of: (a) (i) for
all amounts not paid when due other than Eurodollar Rate Borrowings, at the Base
Rate plus the Applicable Margin plus two (2) percentage points; and (ii) as to
all Eurodollar Rate Borrowings, not paid when due, at the Base LIBOR Rate plus
the Applicable Margin plus two (2) percentage points; and (b) the Maximum Rate.

         DISTRIBUTION for any Person means, with respect to any shares of any
capital stock or other equity securities issued by such Person, (a) the
retirement, redemption, purchase, or other acquisition for value of any such
securities, (b) the declaration or payment of any dividend on or with respect to
any such securities, and (c) any other payment by such Person with respect to
such securities.

         DOCUMENTATION AGENT means The Bank of Nova Scotia and its permitted
successors or assigns as "Documentation Agent" under this Agreement.

         DOLLARS and the symbol $ shall mean lawful money of the United States
of America.

                                                      REVOLVING CREDIT AGREEMENT
                                       5
<PAGE>   11

         ELIGIBLE ASSIGNEE means (a) a Bank or (b) a commercial bank or other
financial institution, insurance company, pension fund or mutual fund approved
by Administrative Agent (which approval will not be unreasonably withheld) and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with SECTION 12.13, Borrower, such approval
not to be unreasonably withheld or delayed by Borrower; provided, however, that
neither Borrower nor any Affiliate of Borrower shall qualify as an Eligible
Assignee.

         ENVIRONMENTAL CLAIM means any written notice, claim, demand, action,
suit, complaint, proceeding or other communication by any person alleging
liability or potential liability arising out of, relating to, based on or
resulting from (i) the presence, discharge, emission, release or threatened
release of any Hazardous Materials at any location, or (ii) circumstances
forming the basis of any violation or alleged violation of any Environmental Law
or Environmental Permit.

         ENVIRONMENTAL LAW means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA"), the
Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Safe Drinking Water Act (42 U.S.C. Section 201 and
Section 300f et seq.) and the Rivers and Harbors Act (33 U.S.C. Section 401 et
seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.) and analogous
state and local Laws, as any of the foregoing may have been and may be amended
or supplemented from time to time, and any analogous future enacted or adopted
Law, or (d) the Release or threatened Release of Hazardous Substances.

         ENVIRONMENTAL LIABILITIES means all liabilities in connection with or
relating to the business, assets, presently or previously owned, leased or
operated property, activities (including, without limitation, off-site disposal)
or operations of the Borrower and each Subsidiary, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.

         ENVIRONMENTAL PERMITS means all permits, licenses, registrations, and
other governmental authorizations required for any of the Companies to conduct
its business and operations under Environmental Laws.

         ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.

         ERISA AFFILIATE means any Person or trade or business (whether or not
incorporated) which is a member of Borrower's or any Company's controlled group
or affiliated service group with Borrower or any Company within the meaning of
Section 414(b), (c), (m) or (o) of the Code.

         EURODOLLAR RATE BORROWING means a Borrowing bearing interest at the sum
of the Base LIBOR Rate plus the Applicable Margin for Eurodollar Rate
Borrowings.

         EVENT OF DEFAULT is defined in SECTION 9.

                                                      REVOLVING CREDIT AGREEMENT
                                        6
<PAGE>   12

         EXCHANGE ACT means and refers to the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute, and the rules and
regulations thereunder.

         EXHIBIT means an exhibit to this Agreement unless otherwise specified.

         EXISTING CREDIT AGREEMENT means the Third Amended and Restated Credit
Agreement dated as of November 3, 1995 among Borrower, various lenders, and
Wells Fargo Bank, N.A., as Administrative Agent and various lenders as amended
and as may be further amended, extended, modified, or restated.

         FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers on such day as
published by the Federal Reserve Bank of New York on the Business Day
immediately following such day; provided, however, that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the immediately
preceding Business Day as published on the immediately following Business Day,
and (b) if such rate is not published for any Business Day, then the Federal
Funds Rate shall be the average of the quotations for such day on such
transactions received by Administrative Agent from three (3) federal funds
brokers of recognized standing selected by Administrative Agent.

         FEDERAL RESERVE BOARD means the Board of Governors of the Federal
Reserve System or any successor thereto.

         FINANCIAL STATEMENTS means balance sheets, statements of operations,
statements of shareholders' investments, and statements of cash flows prepared
in accordance with GAAP, which statements of operations and statements of cash
flows shall be in comparative form to the corresponding period of the preceding
fiscal year, and which balance sheets and statements of shareholders'
investments shall be in comparative form to the prior fiscal year-end figures.

         FOREIGN PENSION PLAN shall mean any plan that (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by Borrower or any Company primarily for
the benefit of employees of Borrower or any Company residing outside the United
States, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and which plan is not
subject to ERISA or the Code.

         GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which are applicable from time to time.

         GOVERNMENTAL AUTHORITY means any domestic or foreign (a) local, state,
municipal, or federal judicial, executive, or legislative instrumentality, (b)
private arbitration board or panel, or (c) central bank.

         HAZARDOUS SUBSTANCE means (a) any substance that is designated, defined
or classified as a hazardous waste, hazardous material, pollutant, contaminant
or toxic or hazardous substance under any Environmental Law, including without
limitation, any hazardous substance within the meaning of Section 101(14) of
CERCLA, (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste
oil, diesel fuel, jet fuel, and other petroleum hydrocarbons, (c) regulated
asbestos and asbestos-containing materials in any form, (d) polychlorinated
biphenyls, or (e) urea formaldehyde foam.

                                                      REVOLVING CREDIT AGREEMENT
                                       7
<PAGE>   13

         INTEREST PERIOD is determined in accordance with SECTION 3.9.

         LAWS means all applicable statutes, laws, treaties, ordinances, tariff
requirements, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, or interpretations of any Governmental Authority.

         LEVERAGE RATIO means and refers to, as of the last day of any fiscal
quarter of the Borrower, the ratio of (a) the aggregate amount of Consolidated
Debt as of such day, to (b) Consolidated EBITDA for the four immediately
preceding fiscal quarters (including such quarter).

         LIEN means and refers to any lien, mortgage, pledge, security interest,
charge, or encumbrance of any kind or any other type of preferential arrangement
that has the practical effect of creating a security interest (including any
conditional sale or other title retention agreement or any lease in the nature
thereof).

         LITIGATION means any action by or before any Governmental Authority.

         LOAN DOCUMENTS means (a) this Agreement, certificates delivered
pursuant to this Agreement, and Exhibits and Schedules hereto, (b) all
agreements, documents, or instruments in favor of Agents or Lenders (or
Administrative Agent on behalf of Banks) delivered pursuant to this Agreement or
otherwise delivered in connection with all or any part of the Obligation, and
(c) all renewals, extensions, or restatements of, or amendments or supplements
to, any of the foregoing.

         MAJORITY BANKS means for all purposes under the Loan Documents, (i) on
any date of determination occurring prior to the date upon which the Commitment
has been terminated, those Banks with Committed Sums aggregating more than 50%
of the Commitment; and (ii) on any date of determination occurring on or after
the date upon which the Commitment has been terminated, those Banks who
collectively hold more than 50% of the Principal Debt.

         MATERIAL ADVERSE EVENT means any set of one or more circumstances or
events which, individually or collectively, result in any (a) material
impairment of the ability of the Borrower to perform any of its payment or other
material obligations under the Loan Documents or the ability of Administrative
Agent or any Bank to enforce any such obligations or any of their respective
Rights under the Loan Documents, or (b) material and adverse effect on the
business, properties, condition (financial or otherwise) or results of
operations of the Companies, in each case considered as a whole.

         MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Bank, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under applicable Law, such Bank is permitted to contract for, charge, take,
reserve, or receive on the Obligation.

         MOODY'S means Moody's Investors Service, Inc. or any successor thereto.

         MULTIEMPLOYER PLAN means and refers to a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or a "multiemployer pension plan" as
defined in Section 3(37) of ERISA or Section 414 of the Code, or any similar
type of plan established and regulated under the laws of any foreign country,
that is maintained for employees of the Companies or any ERISA Affiliate of any
Company.

         NON-RECOURSE DEBT means (a) Debt (other than Capital Lease Obligations)
of a special purpose Subsidiary created or acquired after the Closing Date
incurred in connection with the acquisition or construction by such Subsidiary
in the ordinary course of business of fixed assets used in the manufacture and
distribution of building products and (b) any renewals and refinancings of such
Debt; provided that (i)

                                                      REVOLVING CREDIT AGREEMENT
                                       8
<PAGE>   14

the holders of such Debt described in clauses (a) and (b) agree that they will
look solely to the fixed assets so acquired with such Debt, (ii) any Liens
securing such Debt are permitted pursuant to Section 8.10, (iii) such Debt is
not Debt, in whole or part, of any other Company, (iv) such Debt is not secured
by any Lien upon any property or assets of any other Company, and (v) such Debt
is not supported in any way by any other Company, including any undertakings or
guarantees, and provided further that no such Debt of such Subsidiary shall be
considered "Non-Recourse Debt" if (y) any default with respect to such Debt
would allow or require any other Debt which is owed by such Subsidiary or one or
more of the other Companies to be accelerated or otherwise made payable in
advance of its stated maturity, and (z) any other Company owes Debt to such
Subsidiary.

         NOTES means, at the time of any determination thereof, all outstanding
and unpaid Revolving Notes.

         NOTICE OF BORROWING is defined in SECTION 2.3(a).

         NOTICE OF CONVERSION is defined in SECTION 3.10.

         OBLIGATION means all present and future indebtedness, liabilities, and
obligations, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed by Borrower to Administrative Agent, any other Agent, or any
Bank arising from, by virtue of, or pursuant to any Loan Document, together with
all interest accruing thereon, fees, costs, and reasonable expenses (including,
without limitation, all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents.

         PARTICIPANT is defined in SECTION 12.13(e).

         PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.

         PERMITTED LIENS means Liens permitted under SECTION 8.10 as described
in such Section.

         PERSON means any individual, entity, or Governmental Authority.

         PLAN means any pension plan as defined in Section 3(2) of ERISA, which
is maintained or contributed to by (or to which there is an obligation to
contribute of) the Companies or an ERISA Affiliate, and each such plan for the
five year period immediately following the latest date on which Companies or an
ERISA Affiliate maintained, contributed to or had an obligation to contribute to
such plan.

         PRIME RATE means the rate of interest announced within Wells Fargo
Bank, N.A. at its principal office in San Francisco as its "prime rate", with
the understanding that the "prime rate" is one of Wells Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Wells Fargo may designate.

         PRINCIPAL DEBT means, on any date of determination, the aggregate
unpaid principal balance of all Borrowings under the Revolving Facility.

         PRO RATA or PRO RATA PART means on any date of determination for any
Bank, (a) at any time prior to the termination of the Commitment, the proportion
that such Bank's Committed Sum bears to the

                                                      REVOLVING CREDIT AGREEMENT
                                       9
<PAGE>   15

Commitment, or (b) at any time on or after the termination of the Commitment,
the proportion that the sum of the Principal Debt owed to such Bank bears to the
sum of the Principal Debt.

         REGISTER is defined in SECTION 12.13(c).

         REGULATION D means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.

         REGULATION U means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.

         REINCORPORATION MERGER is defined in SECTION 8.11.

         RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposal,
deposit, dispersal, migrating, or other movement into the air, ground, or
surface water, or soil.

         REPORTABLE EVENT shall have the meaning specified in Section 4043 of
ERISA or the regulations issued thereunder in connection with a Plan that is
subject to Title IV of ERISA, excluding events for which the notice requirement
is waived under subsections .22, .23, .25 and .27 of PBGC Regulation 4043.

         REPRESENTATIVES means representatives, officers, directors, employees,
attorneys, and agents.

         RESERVE PERCENTAGE means and refers to, as of the date of determination
thereof, for any Bank, the maximum percentage (rounded upward, if necessary to
the nearest one-hundredth (1/100th) of one percent (1%)), as determined by such
Bank in accordance with its usual procedures (which determination shall be
conclusive in the absence of manifest error), that is in effect on such date as
prescribed by the Federal Reserve Board for determining the reserve requirements
(including supplemental, marginal, and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as "eurocurrency
liabilities") of that Bank, but so long as such Bank shall not be required or
directed, under applicable regulations of the Federal Reserve Board, to maintain
such reserves, the Reserve Percentage shall be zero.

         RESPONSIBLE OFFICER means the president, chief executive officer, chief
financial officer, treasurer, controller or chief operating officer of Borrower,
or such other officer of Borrower designated by a Responsible Officer in a
writing delivered to Administrative Agent.

         REVOLVING FACILITY means the credit facility described in and subject
to the limitations of this Agreement.

         REVOLVING NOTE means a promissory note in substantially the form of
EXHIBIT A, and all renewals and extensions of all or any part thereof.

         RIGHTS means rights, remedies, powers, privileges, and benefits.

         S&P means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., a New York corporation.

         SCHEDULE means, unless specified otherwise, a schedule attached to this
Agreement, as the same may be supplemented and modified from time to time in
accordance with the terms of the Loan Documents.

                                                      REVOLVING CREDIT AGREEMENT
                                       10
<PAGE>   16

         SIGNIFICANT SUBSIDIARY means, at any time, any Subsidiary that,
together with its Subsidiaries, (a) accounted for more than 5% of the revenue of
the Companies determined on a consolidated basis for the then most recently
completed fiscal year of the Borrower, or (b) was the owner of more than 5% of
the assets of the Companies determined on a consolidated basis at the end of
such fiscal year of the Borrower, all as shown in the case of (a) and (b) on the
consolidated financial statements of the Borrower and its Subsidiaries for such
fiscal year.

         SUBORDINATED INDENTURE means the Indenture dated as of March 19, 1996,
among the Borrower, as issuer, and State Street Bank and Trust Company, as
Trustee, as amended, pursuant to which the Borrower's Subordinated Notes were
issued.

         SUBORDINATED NOTES means the Borrower's Series B 10% Senior
Subordinated Notes, due in 2006.

         SUBSIDIARY means, with respect to any Person: (a) any corporation in
which such Person, directly or indirectly through its Subsidiaries, owns more
than fifty percent (50%) of the stock of any class or classes having by the
terms thereof the ordinary voting power to elect a majority of the directors of
such corporation; and (b) any partnership, association, joint venture, or other
entity in which such Person, directly or indirectly through its Subsidiaries,
has more than fifty person (50%) equity interest at the time.

         SUCCESSOR CORPORATION is defined in SECTION 8.11.

         SYNDICATION AGENT means, collectively, Suntrust Bank and its respective
permitted successors or assigns as "SYNDICATION AGENT" under this Agreement.

         TAXES means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon such Person, its income, or any of its
properties, franchises, or assets.

         TERMINATION DATE means the earliest of (a) December 17, 2001, and (b)
the day on which the Obligation becomes due and payable in full under, and in
accordance with, this Agreement.

         TYPE means any type of Borrowing determined with respect to the
interest option applicable thereto.

         UNFUNDED CURRENT LIABILITY means with respect to any Plan, the amount,
if any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contribution).

         UNMATURED EVENT OF DEFAULT means the occurrence of any event or
existence of any circumstance which, with the giving of notice or lapse of time
or both, would become a Event of Default.

         VOTING STOCK means, with respect to any Person, Capital Stock of any
class or classes if the holders of such Capital Stock are ordinarily, in the
absence of contingencies, entitled to vote for the election of the directors (or
other persons performing similar functions) of such Person even if the right to
so vote has been suspended by the happening of such a contingency.

         WELLS FARGO means Wells Fargo Bank (Texas), National Association in its
individual capacity as a Bank and its successors and assigns.

                                                      REVOLVING CREDIT AGREEMENT
                                       11
<PAGE>   17

         WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Borrower or
one or more of its Wholly-owned Subsidiaries.

         1.2 Number and Gender of Words; Other References. Unless otherwise
specified, in the Loan Documents (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
provisions, (c) monetary references are to currency of the United States of
America, (d) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (e)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (f) references to "including" mean including without
limiting the generality of any description preceding that word, (g) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Law include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.

         1.3 Accounting Principles. All accounting and financial terms used in
the Loan Documents and the compliance with each financial covenant therein shall
be determined in accordance with GAAP, and, all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period.

SECTION 2 BORROWING PROVISIONS.

         2.1 Commitment. Subject to and in reliance upon the terms, conditions,
representations, and warranties in the Loan Documents, each Bank severally and
not jointly agrees to lend to Borrower such Bank's Pro Rata Part of one or more
Borrowings under the Revolving Facility not to exceed such Bank's Committed Sum
under the Revolving Facility, which, subject to the Loan Documents, Borrower may
borrow, repay, and reborrow under this Agreement; provided that (i) each such
Borrowing must occur on a Business Day and no later than the Business Day
immediately preceding the Termination Date; (ii) each such Borrowing shall be in
an amount not less than (A) $1,000,000 or a greater integral multiple of
$100,000 (if a Base Rate Borrowing) or (B) $5,000,000 or a greater integral
multiple of $1,000,000 (if a Eurodollar Rate Borrowing); and (iii) on any date
of determination, the Commitment Usage shall never exceed the Commitment.

         2.2 Termination of Commitment. Without premium or penalty, and upon
giving not less than three Business Days prior written and irrevocable notice to
Administrative Agent, Borrower may terminate in whole or in part the unused
portion of the Commitment; provided that: (a) each partial termination shall be
in an aggregate amount of not less than $10,000,000 or a greater integral
multiple of $1,000,000; (b) the amount of the Commitment may not be reduced
below the Commitment Usage after giving effect to any loan repayments on the
date of such reduction; and (c) each reduction shall be allocated Pro Rata among
the Banks in accordance with their respective Pro Rata Parts. Promptly after
receipt of such notice of termination or reduction, Administrative Agent shall
notify each Bank of the proposed cancellation or reduction. Such termination or
partial reduction of the Commitment shall be effective on the Business Day
specified in Borrower's notice (which date must be at least three Business Days
after Borrower's delivery of such notice). In the event that the Commitment is
reduced to zero at a time when there shall be no Principal Debt, this Agreement
shall be terminated to the extent specified in SECTION 12.14, and all

                                                      REVOLVING CREDIT AGREEMENT
                                       12
<PAGE>   18

commitment fees and other fees then earned and unpaid hereunder and all other
amounts of the Obligation relating to the Revolving Facility then due and owing
shall be immediately due and payable, without notice or demand by Administrative
Agent or any Bank.

         2.3 Borrowing Procedure. The following procedures apply to Borrowings:

                  (a) Each Borrowing shall be made on Borrower's notice (a
         "NOTICE OF BORROWING," substantially in the form of EXHIBIT B-1) to
         Administrative Agent requesting that Banks fund a Borrowing on a
         certain date (the "BORROWING DATE"), which notice (i) shall be
         irrevocable and binding on Borrower, (ii) shall specify the Borrowing
         Date, amount, Type, and (for a Borrowing comprised of Eurodollar Rate
         Borrowings) Interest Period, and (iii) must be received by
         Administrative Agent no later than 11:00 a.m. Houston, Texas time on
         the third Business Day preceding the Borrowing Date for any Eurodollar
         Rate Borrowing or no later than 11:00 a.m. Houston, Texas time on the
         Borrowing Date for any Base Rate Borrowing. Administrative Agent shall
         timely notify each Bank with respect to each Notice of Borrowing.

                  (b) Each Bank shall remit its Pro Rata Part of each requested
         Borrowing to Administrative Agent's principal office in Houston, in
         funds which are or will be available for immediate use by
         Administrative Agent by 12:00 noon. Houston time on the Borrowing Date
         therefor. Subject to receipt of such funds, Administrative Agent shall
         (unless to its actual knowledge any of the conditions precedent
         therefor have not been satisfied by Borrower or waived by Majority
         Banks) make such funds available to Borrower by causing such funds to
         be deposited to Borrower's account as designated to Administrative
         Agent by Borrower. Notwithstanding the foregoing, unless Administrative
         Agent shall have been notified by a Bank prior to a Borrowing Date that
         such Bank does not intend to make available to Administrative Agent
         such Bank's Pro Rata Part of the applicable Borrowing, Administrative
         Agent may assume that such Bank has made such proceeds available to
         Administrative Agent on such date, as required herein, and
         Administrative Agent may (unless to its actual knowledge any of the
         conditions precedent therefor have not been satisfied by Borrower or
         waived by Majority Banks), in reliance upon such assumption (but shall
         not be required to), make available to Borrower a corresponding amount
         in accordance with the foregoing terms, but, if such corresponding
         amount is not in fact made available to Administrative Agent by such
         Bank on such Borrowing Date, Administrative Agent shall be entitled to
         recover such corresponding amount on demand (i) from such Bank,
         together with interest at the Federal Funds Rate during the period
         commencing on the date such corresponding amount was made available to
         Borrower and ending on (but excluding) the date Administrative Agent
         recovers such corresponding amount from such Bank, or (ii) if such Bank
         fails to pay such corresponding amount forthwith upon such demand, then
         from Borrower, together with interest at a rate per annum equal to the
         applicable rate for such Borrowing during the period commencing on such
         Borrowing Date and ending on (but excluding) the date Administrative
         Agent recovers such corresponding amount from Borrower. No Bank shall
         be responsible for the failure of any other Bank to make its Pro Rata
         Part of any Borrowing.

SECTION 3 TERMS OF PAYMENT.

         3.1 Loan Accounts, Notes, and Payments.

                  (a) Principal Debt shall be evidenced by the Revolving Notes,
         one payable to each Bank in the stated principal amount of its
         Committed Sum.

                                                      REVOLVING CREDIT AGREEMENT
                                       13
<PAGE>   19

                  (b) The Principal Debt owed to each Bank shall be further
         evidenced by one or more loan accounts or records maintained by such
         Bank in the ordinary course of business. The loan accounts or records
         maintained by the Administrative Agent (including, without limitation,
         the Register) and each Bank shall be conclusive evidence absent
         manifest error of the amount of the Borrowings made by Borrower from
         each Bank under the Revolving Facility and the interest and principal
         payments thereon. Any failure to so record or any error in doing so
         shall not, however, limit or otherwise affect the obligation of
         Borrower under the Loan Documents to pay any amount owing with respect
         to the Obligation.

                  (c) Each payment or prepayment on the Obligation is due and
         must be paid at Administrative Agent's principal office in Houston in
         funds which are or will be available for immediate use by
         Administrative Agent by 11:00 a.m., Houston, Texas time on the day due.
         Payments made after 11:00 a.m., Houston, Texas, time shall be deemed
         made on the Business Day next following. Administrative Agent shall pay
         to each Bank any payment or prepayment to which such Bank is entitled
         hereunder on the same day Administrative Agent shall have received the
         same from Borrower; provided such payment or prepayment is received by
         Administrative Agent prior to 11:00 a.m. Houston, Texas time, and
         otherwise before 12:00 noon Houston time on the Business Day next
         following. If and to the extent Administrative Agent shall not make
         such payments to Banks when due as set forth in the preceding sentence,
         such unpaid amounts shall accrue interest, payable by Administrative
         Agent, at the Federal Funds Rate from the due date until (but not
         including) the date on which Administrative Agent makes such payments
         to Banks.

         3.2 Interest and Principal Payments.

                  (a) Interest on each Eurodollar Rate Borrowing shall be due
         and payable as it accrues on the last day of its respective Interest
         Period and on the Termination Date, as applicable; provided that if any
         Interest Period is a period greater than three (3) months, then accrued
         interest shall also be due and payable on the date three (3) months
         after the commencement of such Interest Period. Interest on each Base
         Rate Borrowing shall be due and payable as it accrues on the last
         Business Day of each March, June, September, and December, and on the
         Termination Date.

                  (b) The Commitment shall be permanently canceled and reduced
         to $0 on the Termination Date, and Borrower shall pay on such
         Termination Date all outstanding Principal Debt, together with all
         accrued and unpaid interest and fees.

                  (c) On any date of determination, if the Commitment Usage
         exceeds the Commitment then in effect then Borrower shall make a
         mandatory prepayment of the Principal Debt in at least the amount of
         such excess, together with (i) all accrued and unpaid interest on the
         principal amount so prepaid and (ii) any Consequential Loss arising as
         a result thereof.

                  (d) After giving Administrative Agent advance written notice
         of the intent to prepay, Borrower may voluntarily prepay all or any
         part of the Principal Debt from time to time and at any time, in whole
         or in part, without premium or penalty; provided that: (i) such notice
         must be received by Administrative Agent by 11:00 a.m. Houston, Texas
         time on (A) the third Business Day preceding the date of prepayment of
         a Eurodollar Rate Borrowing, and (B) on the date of prepayment in the
         case of prepayment of a Base Rate Borrowing; (ii) each such partial
         prepayment must be in a minimum amount of at least $1,000,000 or a
         greater integral multiple of $100,000 thereof (if a Base Rate
         Borrowing) and must be in a minimum of at least $5,000,000 or a greater
         integral multiple of $1,000,000 thereof (if a Eurodollar Rate
         Borrowing); (iii) all accrued interest

                                                      REVOLVING CREDIT AGREEMENT
                                       14
<PAGE>   20

         on the Obligation must also be paid in full, to the date of such
         prepayment; and (iv) Borrower shall pay any related Consequential Loss
         within ten (10) days after demand therefor. Each notice of prepayment
         shall specify the prepayment date, the Type of Borrowing(s) and
         amount(s) of such Borrowing(s) to be prepaid and shall constitute a
         binding obligation of Borrower to make a prepayment on the date stated
         therein.

         3.3 Interest Options. Except where specifically otherwise provided,
Borrowings shall bear interest at a rate per annum equal to the lesser of (a) as
to the respective Type of Borrowing (as designated by Borrower in accordance
with this Agreement), (i) the Base Rate plus the Applicable Margin for Base Rate
Borrowings or (ii) the Base LIBOR Rate plus the Applicable Margin for Eurodollar
Rate Borrowings, as the case may be, and (b) the Maximum Rate. Each change in
the Base Rate or the Maximum Rate subject to the terms of this Agreement, will
become effective, without notice to Borrower or any other Person, upon the
effective date of such change.

         3.4 Quotation of Rates. It is hereby acknowledged that a Responsible
Officer or other appropriately designated officer of Borrower may call
Administrative Agent on or before the date on which a Notice of Borrowing is to
be delivered by Borrower in order to receive an indication of the rates then in
effect, but such indicated rates shall neither be binding upon Administrative
Agent or Banks nor affect the rate of interest which thereafter is actually in
effect when the Notice of Borrowing is given.

         3.5 Default Rate. At the option of Majority Banks and to the extent
permitted by Law, all past-due Principal Debt and accrued interest thereon shall
bear interest from maturity (whether stated or by acceleration) at the Default
Rate until paid, regardless whether such payment is made before or after entry
of a judgment.

         3.6 Interest Recapture. If the designated rate applicable to any
Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall
be limited to the Maximum Rate, but any subsequent reductions in such designated
rate shall not reduce the rate of interest thereon below the Maximum Rate until
the total amount of interest accrued thereon equals the amount of interest which
would have accrued thereon if such designated rate had at all times been in
effect. In the event that at maturity (stated or by acceleration), or at final
payment of the Principal Debt, the total amount of interest paid or accrued is
less than the amount of interest which would have accrued if such designated
rates had at all times been in effect, then, at such time and to the extent
permitted by Law, Borrower shall pay an amount equal to the difference, if any,
by which (a) the lesser of the amount of interest which would have accrued if
such designated rates had at all times been in effect and the amount of interest
which would have accrued if the Maximum Rate had at all times been in effect,
exceeds (b) the amount of interest actually paid or accrued on the Principal
Debt.

         3.7 Interest Calculations.

                  (a) All payments of interest shall be calculated on the basis
         of actual number of days (including the first day but excluding the
         last day) elapsed but computed as if each calendar year consisted of
         (i) 360 days in the case of a Eurodollar Rate Borrowing or a Base Rate
         Borrowing calculated with reference to the Federal Funds Rate (unless
         such calculation would result in the interest on the Borrowings
         exceeding the Maximum Rate in which event such interest shall be
         calculated on the basis of a year of 365 or 366 days, as the case may
         be) and (ii) 365 or 366 days, as the case may be, in the case of a Base
         Rate Borrowing calculated with reference to the Prime Rate. All
         interest rate determinations and calculations by Administrative Agent
         shall be conclusive and binding absent manifest error.

                                                      REVOLVING CREDIT AGREEMENT
                                       15
<PAGE>   21

                  (b) The provisions of this Agreement relating to calculation
         of the Base Rate and the Base LIBOR Rate are included only for the
         purpose of determining the rate of interest or other amounts to be paid
         hereunder that are based upon such rate.

         3.8 Maximum Rate.

                  (a) It is the intention of the parties hereto to comply with
         applicable usury laws, if any; accordingly, notwithstanding any
         provision to the contrary in this Agreement, the Notes or in any of the
         other Loan Documents securing the payment hereof or otherwise relating
         hereto, in no event shall this Agreement, the Notes or such other Loan
         Documents require or permit the payment, taking, reserving, receiving,
         collection, or charging of any sums constituting interest under
         applicable laws which exceed the maximum amount permitted by such laws.
         If any such excess interest is called for, contracted for, charged,
         taken, reserved, or received in connection with the Loans evidenced by
         the Notes or in any of the Loan Documents, or in any communication by
         the Administrative Agent, or any Bank or any other Person to Borrower
         or any other Person, or in the event all or part of the principal or
         interest thereof shall be prepaid or accelerated, so that under any of
         such circumstances or under any other circumstance whatsoever the
         amount of interest contracted for, charged, taken, reserved, or
         received on the amount of principal actually outstanding from time to
         time under the Notes or any other Loan Document shall exceed the
         maximum amount of interest permitted by applicable usury laws, then in
         any such event it is agreed as follows: (i) the provisions of this
         paragraph shall govern and control, (ii) neither Borrower nor any other
         Person now or hereafter liable for the payment of the Notes or any
         obligation arising under this Agreement shall be obligated to pay the
         amount of such interest to the extent such interest is in excess of the
         maximum amount of interest permitted by applicable usury laws, (iii)
         any such excess which is or has been received notwithstanding this
         paragraph shall be credited against the then unpaid principal balance
         of the Notes or other obligations arising under this Agreement, as
         applicable, or, if the Notes or other obligations arising under this
         Agreement, as applicable, have been or would be paid in full, refunded
         to Borrower, and (iv) the provisions of this Agreement, the Notes and
         the other Loan Documents, and any communication to Borrower, shall
         immediately be deemed reformed and such excess interest reduced,
         without the necessity of executing any other document, to the maximum
         lawful rate allowed under applicable laws as now or hereafter construed
         by courts having jurisdiction hereof or thereof. Without limiting the
         foregoing, all calculations of the rate of the interest contracted for,
         charged, collected, taken, reserved, or received in connection with the
         Notes, this Agreement or any other Loan Document which are made for the
         purpose of determining whether such rate exceeds the maximum lawful
         rate shall be made to the extent permitted by applicable laws by
         amortizing, prorating, allocating and spreading during the period of
         the full term of the Borrowings or other obligations arising under this
         Agreement, as applicable, including all prior and subsequent renewals
         and extensions, all interest at any time contracted for, charged,
         taken, collected, reserved, or received. The terms of this paragraph
         shall be deemed to be incorporated in every document and communication
         relating to the Notes, the Borrowings or any other Loan Document.

                  (b) Texas Finance Code, Chapter 346 (formerly Tex. Rev. Civ.
         Stat., Title 79, Chapter 15), which regulates certain revolving loan
         accounts and revolving triparty accounts, shall not apply to any
         revolving loan accounts created under the Notes, this Agreement or the
         other Loan Documents or maintained in connection therewith.

                                                      REVOLVING CREDIT AGREEMENT
                                       16
<PAGE>   22

                  (c) To the extent that the interest rate laws of the State of
         Texas are applicable to the Borrowings or any other obligations arising
         under this Agreement, the applicable interest rate ceiling is the
         weekly ceiling (formerly the indicated rate ceiling) determined in
         accordance with Tex. Rev. Civ. Stat., Title 79, Article 5069-1D.003,
         also codified at Texas Finance Code, SECTION 303.301 (formerly Article
         5069-1.01(a)(1)), and, to the extent that this Agreement, the Notes or
         any other Loan Document is deemed an open end account as such term is
         defined in Tex. Rev. Civ. Stat., Title 79, Article 5069-1B.002(14),
         also codified at Texas Finance Code SECTION 3.01.001(3) (formerly
         Article 5069-1.01(f)), the Administrative Agent and the Banks retain
         the right to modify the interest rate in accordance with applicable
         law.

         3.9 Interest Periods. When Borrower requests any Eurodollar Rate
Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD")
applicable thereto, which shall be, at Borrower's option, in respect of any
Eurodollar Rate Borrowing, one, two, three, or six months; provided, however,
that: (a) the initial INTEREST PERIOD for a Eurodollar Rate Borrowing shall
commence on the date of such Borrowing (including the date of any conversion
thereto), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
applicable thereto expires; (b) if any Interest Period for a Eurodollar Rate
Borrowing begins on a day for which there is no numerically corresponding
Business Day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the next Business Day immediately following what
otherwise would have been such numerically corresponding day in the calendar
month at the end of such Interest Period (unless such date would be in a
different calendar month from what would have been the month at the end of such
Interest Period, or unless there is no numerically corresponding day in the
calendar month at the end of the Interest Period; whereupon, such Interest
Period shall end on the last Business Day in the calendar month at the end of
such Interest Period); (c) no Interest Period may be chosen with respect to any
portion of the Principal Debt which would extend beyond the scheduled repayment
date (including any dates on which mandatory prepayments are required to be
made) for such portion of the Principal Debt; and (d) no more than an aggregate
of ten Interest Periods shall be in effect at one time.

         3.10 Conversions. Borrower may (a) convert all or part of any
Eurodollar Rate Borrowing on the last day of an Interest Period to a Base Rate
Borrowing, (b) convert all or part of any Base Rate Borrowing at any time to a
Eurodollar Rate Borrowing, and (c) elect a new Interest Period (in the case of a
Eurodollar Rate Borrowing), by giving notice (a "NOTICE OF CONVERSION,"
substantially in the form of EXHIBIT B-2) of such intent no later than 11:00
a.m. Houston, Texas time on the third Business Day prior to the date of
conversion or the last day of the Interest Period, as the case may be (in the
case of a conversion to a Eurodollar Rate Borrowing or an election of a new
Interest Period), and no later than 11:00 a.m. Houston, Texas time on the last
day of the Interest Period (in the case of a conversion to a Base Rate
Borrowing); provided that the principal amount converted to, or continued as, a
Eurodollar Rate Borrowing shall be in an amount not less than $5,000,000 or a
greater integral multiple of $1,000,000. Administrative Agent shall timely
notify each Bank with respect to each Notice of Conversion. Absent Borrower's
Notice of Conversion or election of a new Interest Period, a Eurodollar Rate
Borrowing shall be deemed converted to a Base Rate Borrowing effective as of the
expiration of the Interest Period applicable thereto. No Eurodollar Rate
Borrowing may be either made or continued as a Eurodollar Rate Borrowing, and no
Base Rate Borrowing may be converted to a Eurodollar Rate Borrowing, if the
interest rate for such Eurodollar Rate Borrowing would exceed the Maximum Rate.

                                                      REVOLVING CREDIT AGREEMENT
                                       17
<PAGE>   23

         3.11 Order of Application.

                  (a) So long as no Event of Default or Unmatured Event of
         Default has occurred and is continuing, payments and prepayments of the
         Obligation shall be applied in the order and manner as Borrower may
         direct; provided that, each such payment or prepayment (other than
         payments of fees payable solely to any Agent or a specific Bank) shall
         be allocated among Banks in proportion to their respective Pro Rata
         Parts appropriate for the Revolving Facility in respect of which such
         payments were made.

                  (b) If a Event of Default or Unmatured Event of Default has
         occurred and is continuing (or if Borrower fails to give directions as
         permitted under SECTION 3.11(a)), any payment or prepayment (including
         proceeds from the exercise of any Rights) shall be applied in the
         following order: (i) to the ratable payment of all fees and expenses
         for which the Administrative Agent or Banks have not been paid or
         reimbursed in accordance with the Loan Documents (as used in this
         SECTION 3.11(b), a "ratable payment" for any Bank or the Administrative
         Agent shall be, on any date of determination, that proportion which the
         portion of the total fees and indemnities owed to such Bank or the
         Administrative Agent bears to the total aggregate fees and indemnities
         owed to all Banks or Agents on such date of determination); (ii) to the
         Pro Rata payment of all accrued and unpaid interest on the Principal
         Debt; (iii) to the Pro Rata payment of the remaining Principal Debt in
         such order as Majority Banks may elect (provided that, Majority Banks
         will apply such proceeds in an order that will minimize any
         Consequential Loss); and (iv) to the payment of the remaining
         Obligation in the order and manner Majority Banks deem appropriate.

         3.12 Sharing of Payments, Etc. If any Bank shall obtain any payment
(whether voluntary, involuntary, or otherwise, including, without limitation, as
a result of exercising its Rights under SECTION 3.13) which is in excess of its
ratable share of any such payment, such Bank shall purchase from the other Banks
such participations as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Bank, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery. Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section may to the fullest
extent permitted by Law, exercise all of its Rights of payment (including the
Right of offset) with respect to such participation as fully as if such Bank
were the direct creditor of Borrower in the amount of such participation.

         3.13 Offset. Upon the occurrence and during the continuance of an Event
of Default and (i) the making by the Majority Banks of the request specified in
SECTION 10.1 or (ii) the acceleration of the Obligation pursuant to SECTION
10.1, each Bank is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to exercise (for the benefit of all
Banks in accordance with SECTION 3.12) the Rights of offset and/or banker's Lien
against each and every account and other property, or any interest therein,
which Borrower may now or hereafter have with, or which is now or hereafter in
the possession of, such Bank to the extent of the full amount of the Obligation
owed to such Bank.

         3.14 Booking Borrowings. To the extent permitted by Law, any Bank may
make, carry, or transfer its Borrowings at, to, or for the account of any of its
branch offices or the office of any of its Affiliates; provided that no
Affiliate shall be entitled to receive any greater payment under

                                                      REVOLVING CREDIT AGREEMENT
                                       18
<PAGE>   24

SECTION 4 than the transferor Bank would have been entitled to receive with
respect to such Borrowings.

SECTION 4 CHANGE IN CIRCUMSTANCES.

         4.1 Increased Cost and Reduced Return.

                  (a) If, after the date hereof, the adoption of any applicable
         law, rule, or regulation or any change in any applicable law, rule, or
         regulation, or any change in the interpretation or administration
         thereof by any Governmental Authority, or compliance by any Bank (or
         its Applicable Lending Office) with any request or directive (whether
         or not having the force of law) of any such Governmental Authority:

                           (i) shall subject such Bank (or its Applicable
                  Lending Office) to any Tax or other charge with respect to any
                  Eurodollar Rate Borrowing, its Notes, or its obligation to
                  loan Eurodollar Rate Borrowings, or change the basis of
                  taxation of any amounts payable to such Bank (or its
                  Applicable Lending Office) under this Agreement or its Notes
                  in respect of any Eurodollar Rate Borrowings (other than with
                  respect to taxes imposed on the overall net income of such
                  Bank by any jurisdiction within which such Bank is
                  incorporated or organized or has its principal office, or
                  within which such Applicable Lending Office is located, or by
                  any other jurisdiction in which such Bank is deemed to be
                  doing business that is unrelated this Agreement);

                           (ii) shall impose, modify, or deem applicable any
                  reserve, special deposit, assessment, or similar requirement
                  (other than the Reserve Percentage utilized in the
                  determination of additional interest in accordance with
                  SECTION 4.8) relating to any extensions of credit or other
                  assets of, or any deposits with or other liabilities or
                  commitments of, such Bank (or its Applicable Lending Office),
                  including the commitment of such Bank hereunder; or

                           (iii) shall impose on such Bank (or its Applicable
                  Lending Office) or the London interbank market any other
                  condition affecting this Agreement or its Notes or any of such
                  extensions of credit or liabilities or commitments;

         and the result of any of the foregoing is to increase the cost to such
         Bank (or its Applicable Lending Office) of making, converting into,
         continuing, or maintaining any Eurodollar Rate Borrowings or to reduce
         any sum received or receivable by such Bank (or its Applicable Lending
         Office) under this Agreement or its Notes with respect to any
         Eurodollar Rate Borrowing, then Borrower shall pay to such Bank within
         ten (10) days of demand such amount or amounts as will compensate such
         Bank for such increased cost or reduction as provided in SECTION 4.1(c)
         below. If any Bank requests compensation by Borrower under this SECTION
         4.1(a), Borrower may, by notice to such Bank (with a copy to
         Administrative Agent), suspend the obligation of such Bank to loan or
         continue Borrowings of the Type with respect to which such compensation
         is requested, or to convert Borrowings of any other Type into
         Borrowings of such Type, until the event or condition giving rise to
         such request ceases to be in effect (in which case the provisions of
         SECTION 4.4 shall be applicable); provided, that such suspension shall
         not affect the right of such Bank to receive the compensation so
         requested.

                                                      REVOLVING CREDIT AGREEMENT
                                       19
<PAGE>   25

                  (b) If, after the date hereof, any Bank shall have determined
         that the adoption of any applicable Law regarding capital adequacy or
         any change therein or in the interpretation or administration thereof
         by any Governmental Authority charged with the interpretation or
         administration thereof, or any request or directive regarding capital
         adequacy (whether or not having the force of law) of any such
         Governmental Authority has or would have the effect of reducing the
         rate of return on the capital of such Bank or any corporation
         controlling such Bank as a consequence of such Bank's obligations
         hereunder to a level below that which such Bank or such corporation
         could have achieved but for such adoption, change, request, or
         directive (taking into consideration its policies with respect to
         capital adequacy), then from time to time upon demand Borrower shall
         pay to such Bank such additional amount or amounts as will compensate
         such Bank for such reduction.

                  (c) Each Bank shall promptly notify Borrower and
         Administrative Agent of any event of which it has knowledge, occurring
         after the date hereof, which will entitle such Bank to compensation
         pursuant to this SECTION 4.1 and will designate a different Applicable
         Lending Office if such designation will avoid the need for, or reduce
         the amount of, such compensation and will not, in the judgment of such
         Bank, be otherwise disadvantageous to it. Any Bank claiming
         compensation under this Section shall furnish to Borrower and
         Administrative Agent a statement setting forth in reasonable detail the
         additional amount or amounts to be paid hereunder which shall be
         presumed correct in the absence of manifest error. In determining such
         amount, such Bank may use any reasonable averaging and attribution
         methods. Notwithstanding the foregoing SUBSECTIONS (a) and (b) of this
         SECTION 4.1 the Borrower shall only be obligated to compensate any Bank
         for any amount arising or accruing during (i) any time or period
         commencing not more than 90 days prior to the date on which such Bank
         notifies the Administrative Agent and the Borrower that it proposes to
         demand such compensation and (ii) any time or period during which,
         because of the retroactive application of such statute, regulation or
         other such basis, such Bank did not know that such amount would arise
         or accrue.

         4.2 Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Borrowing:

                  (a) Administrative Agent determines (which determination shall
         be conclusive) that by reason of circumstances affecting the relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Base LIBOR Rate for such Interest Period; or

                  (b) Majority Banks determine (which determination shall be
         conclusive) and notify Administrative Agent that the Base LIBOR Rate
         will not adequately and fairly reflect the cost to the Banks of funding
         Eurodollar Rate Borrowings for such Interest Period;

then Administrative Agent shall give Borrower prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, the Banks shall be under no obligation to fund additional Eurodollar
Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, and Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Eurodollar
Rate Borrowings, either prepay such Borrowings or convert such Borrowings into
Base Rate Borrowings in accordance with the terms of this Agreement.

                                                      REVOLVING CREDIT AGREEMENT
                                       20
<PAGE>   26

         4.3 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Bank or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Borrowings hereunder, then
such Bank shall promptly notify Borrower thereof and such Bank's obligation to
make or continue Eurodollar Rate Borrowings and to convert other Base Rate
Borrowings into Eurodollar Rate Borrowings shall be suspended until such time as
such Bank may again make, maintain, and fund Eurodollar Rate Borrowings (in
which case the provisions of SECTION 4.4 shall be applicable).

         4.4 Treatment of Affected Loans. If the obligation of any Bank to fund
Eurodollar Rate Borrowings or to continue, or to convert Base Rate Borrowings
into Eurodollar Rate Borrowings, shall be suspended pursuant to SECTIONS 4.1,
4.2, or 4.3 hereof, such Bank's Eurodollar Rate Borrowings shall be
automatically converted into Base Rate Borrowings on the last day(s) of the then
current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case of a
conversion required by SECTION 4.3 hereof, on such earlier date as such Bank may
specify to Borrower with a copy to Administrative Agent) and, unless and until
such Bank gives notice as provided below that the circumstances specified in
SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to such conversion no longer
exist:

                  (a) to the extent that such Bank's Eurodollar Rate Borrowings
         have been so converted, all payments and prepayments of principal that
         would otherwise be applied to such Bank's Eurodollar Rate Borrowings
         shall be applied instead to its Base Rate Borrowings; and

                  (b) all Borrowings that would otherwise be made or continued
         by such Bank as Eurodollar Rate Borrowings shall be made or continued
         instead as Base Rate Borrowings, and all Borrowings of such Bank that
         would otherwise be converted into Eurodollar Rate Borrowings shall be
         converted instead into (or shall remain as) Base Rate Borrowings.

If such Bank gives notice to Borrower (with a copy to Administrative Agent) that
the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise
to the conversion of such Bank's Eurodollar Rate Borrowings pursuant to this
SECTION 4.4 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings made
by other Banks are outstanding, such Bank's Base Rate Borrowings shall be
automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings
held by the Banks and by such Bank are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Committed Sums.

         4.5 Replacement of Banks. If any Bank requests compensation under
SECTIONS 4.1 or if Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to SECTION 4.6 (collectively, "ADDITIONAL
AMOUNTS"), then Borrower may, at its sole expense and effort, upon written
notice to such Bank and Administrative Agent, require such Bank to assign and
delegate, without recourse, all its interests, Rights, and obligations under
this Agreement and the other Loan Documents to an Eligible Assignee that shall
assume such obligations; provided that, (i) Borrower shall have received the
prior written consent of Administrative Agent to any such assignment; (ii) such
Bank shall have received payment from Borrower of any Additional Amounts owed to
such Bank by Borrower for periods prior to the replacement of such Bank and any
costs incurred as a result of such replacement of a Bank; (iii) such assignment
will result in reduction or elimination of the Additional Amounts; and (iv) such
assignment and acceptance shall be made in accordance with, and subject to the
requirements and restrictions contained in, SECTION 12.13(b),

                                                      REVOLVING CREDIT AGREEMENT
                                       21
<PAGE>   27

other than the restrictions imposed by SECTION 12.13(b)(iv). A Bank shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Bank or otherwise, the circumstances entitling such
Borrowing to require such assignment and delegation cease to apply.

         4.6 Taxes.

                  (a) Any and all payments by Borrower to or for the account of
         any Bank or Administrative Agent hereunder or under any other Loan
         Document shall be made free and clear of and without deduction for any
         and all present or future Taxes, excluding, in the case of each Bank
         and Administrative Agent, Taxes imposed on its income or gross receipts
         and franchise Taxes imposed on it by any jurisdiction within which such
         Bank (or its Applicable Lending Office) or Administrative Agent (as the
         case may be) is incorporated or organized, or any political subdivision
         thereof, or by any other jurisdiction in which such Bank or
         Administrative Agent, as the case may be, is deemed to be doing
         business under the Tax Laws thereof (all such Non-Excluded Taxes
         referred to as "NON-EXCLUDED TAXES"). If Borrower shall be required by
         law to deduct any Non-Excluded Taxes from or in respect of any sum
         payable under this Agreement or any other Loan Document to any Bank or
         Administrative Agent, (i) the sum payable shall be increased as
         necessary so that after making all required deductions (including
         deductions applicable to additional sums payable under this SECTION
         4.6) such Bank or Administrative Agent receives an amount equal to the
         sum it would have received had no such deductions been made, (ii)
         Borrower shall make such deductions, (iii) Borrower shall pay the full
         amount deducted to the relevant taxation authority or other authority
         in accordance with applicable law, and (iv) Borrower shall furnish to
         Administrative Agent, at its address listed in SCHEDULE 2.1, the
         original or a certified copy of a receipt evidencing payment thereof.

                  (b) In addition, Borrower agrees to pay any and all present or
         future stamp or documentary taxes or charges or similar levies which
         arise from any payment made under this Agreement or any other Loan
         Document or from the execution or delivery of, or otherwise with
         respect to, this Agreement or any other Loan Document (hereinafter
         referred to as "OTHER TAXES").

                  (c) BORROWER AGREES TO INDEMNIFY EACH BANK AND ADMINISTRATIVE
         AGENT FOR THE FULL AMOUNT OF NON-EXCLUDED TAXES THAT SHOULD HAVE BEEN
         WITHHELD BY BORROWER AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION,
         ANY NON-EXCLUDED TAXES THAT SHOULD HAVE BEEN WITHHELD BY BORROWER OR
         OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
         UNDER THIS SECTION 4.6) PAID BY SUCH BANK OR ADMINISTRATIVE AGENT (AS
         THE CASE MAY BE) AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST, AND
         EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO.

                  (d) Each Bank organized under the laws of a jurisdiction
         outside the United States, on or prior to the date of its execution and
         delivery of this Agreement in the case of each Bank listed on the
         signature pages hereof and on or prior to the date on which it becomes
         a Bank in the case of each other Bank, and from time to time thereafter
         if requested in writing by Borrower or Administrative Agent (but only
         so long as such Bank remains lawfully able to do so), shall provide
         Borrower and Administrative Agent with (i) two duly completed,
         accurate, and signed copies of Internal Revenue Service Form 1001 or
         4224, as

                                                      REVOLVING CREDIT AGREEMENT
                                       22
<PAGE>   28

         appropriate, or any successor form prescribed by the Internal Revenue
         Service, certifying that such Bank is entitled to benefits under an
         income tax treaty to which the United States is a party which reduces
         the rate of withholding tax on payments of interest or certifying that
         the income receivable pursuant to this Agreement is effectively
         connected with the conduct of a trade or business in the United States,
         (ii) a duly completed, accurate and signed Internal Revenue Service
         Form W-8 or W-9, as appropriate, or any successor form prescribed by
         the Internal Revenue Service, and (iii) any other form or certificate
         required by any taxing authority (including any certificate required by
         Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
         that such Bank is entitled to an exemption from or a reduced rate of
         tax on payments pursuant to this Agreement or any of the other Loan
         Documents.

                  (e) For any period with respect to which a Bank has failed to
         provide Borrower and Administrative Agent with the appropriate form
         pursuant to SECTION 4.6(d) (unless such failure is due to a change in
         Law, other than any change in the nature of an anti-treaty shopping or
         limitation on benefits or similar provision, occurring subsequent to
         the date on which a form originally was required to be provided), such
         Bank shall not be entitled to indemnification under SECTION 4.6(a) or
         4.6(b) with respect to Taxes imposed by the United States; provided,
         however, that should a Bank, which is otherwise exempt from or subject
         to a reduced rate of withholding tax, become subject to Taxes because
         of its failure to deliver a form required hereunder, Borrower shall
         take such steps as such Bank shall reasonably request to assist such
         Bank to recover such Taxes.

                  (f) If Borrower is required to pay additional amounts to or
         for the account of any Bank pursuant to this SECTION 4.6, then such
         Bank will agree to use reasonable efforts to change the jurisdiction of
         its Applicable Lending Office so as to eliminate or reduce any such
         additional payment which may thereafter accrue if such change, in the
         judgment of such Bank, is not otherwise disadvantageous to such Bank.

                  (g) Within thirty (30) days after the date of any payment of
         Non-Excluded Taxes, Borrower shall furnish to Administrative Agent the
         original or a certified copy of a receipt evidencing such payment.

                  (h) Without prejudice to the survival of any other agreement
         of Borrower hereunder, the agreements and obligations of Borrower
         contained in this SECTION 4.6 shall survive the termination of the
         Commitment and the payment in full of the Notes.

         4.7 Funding Losses. Upon the request of any Bank, Borrower shall pay to
such Bank such amount or amounts as shall be sufficient (in the reasonable
opinion of such Bank) to compensate it for any Consequential Loss; provided
that, in each case, the Person claiming such Consequential Loss has furnished
Borrower with a reasonably detailed statement of such loss, which statement
shall be conclusive in the absence of manifest error.

         4.8 Additional Interest on Eurodollar Rate Borrowings. The Borrower
shall pay to the Administrative Agent for the account of each Bank any costs
which such Bank determines are attributable to such Bank's compliance with
regulations of the Federal Reserve Board requiring the maintenance of reserves
(including supplemental, marginal, and emergency reserves) with respect to
eurocurrency funding (currently referred to as "eurocurrency liabilities"). Such
costs shall be paid to the Administrative Agent for the account of such Bank in
the form of additional interest on the unpaid principal amount of each
Eurodollar Rate Borrowing of such Bank, from the date of such Borrowing until
such principal amount is paid in full, at an interest rate per annum (rounded
upwards,

                                                      REVOLVING CREDIT AGREEMENT
                                       23
<PAGE>   29

if necessary, to the nearest 1/16th of 1%) equal at all times to the remainder
obtained by subtracting (i) the Base LIBOR Rate for the applicable period for
such Borrowing from (ii) the rate obtained by dividing such Base LIBOR Rate by a
percentage equal to one-hundred percent (100%) minus the Reserve Percentage of
such Bank for such period, payable on each date on which interest is payable on
such Borrowing. Such additional interest shall be determined by such Bank and
notified to the Borrower and the Administrative Agent. A certificate setting
forth the amount of such additional interest, submitted to the Borrower and the
Administrative Agent by such Bank, shall be conclusive and binding for all
purposes, absent manifest error.

SECTION 5 FEES.

         5.1 Treatment of Fees. Except as otherwise provided by Law, the fees
described in this SECTION 5: (a) do not constitute compensation for the use,
detention, or forbearance of money, (b) are in addition to, and not in lieu of,
interest and expenses otherwise described in this Agreement, (c) shall be
payable in accordance with SECTION 3.1, (d) shall be non-refundable, (e) shall,
to the fullest extent permitted by Law, bear interest, if not paid when due, at
the Default Rate, and (f) shall be calculated on the basis of actual number of
days (including the first day but excluding the last day) elapsed, but computed
as if each calendar year consisted of 365 or 366 days, as the case may be.

         5.2 Fees of Administrative Agent. Borrower shall pay to Administrative
Agent solely for its account, the fees described in the separate letter
agreement between Borrower and Administrative Agent which payments shall be made
on the dates specified, and in amounts calculated in accordance with, such
letter agreement.

         5.3 Commitment Fee. Following the Closing Date, Borrower shall pay to
Administrative Agent, for the ratable account of Banks, a commitment fee,
payable in installments in arrears, on the last Business Day of each March,
June, September, and December and on the Termination Date, commencing December
31, 1999. Each installment shall be in an amount equal to the Applicable Margin
for the Commitment Fee multiplied by the amount of the average daily unused
Commitment, in each case during the period from and including the last payment
date to and excluding the payment date for such installment; provided that each
such installment shall be calculated in accordance with SECTION 5.1(f). Solely
for the purposes of this SECTION 5.3, "ratable" shall mean, for any period of
calculation, with respect to any Bank, that proportion which (x) the average
daily Committed Sum of such Bank during such period bears to (y) the amount of
the average daily Commitment during such period.

SECTION 6 CONDITIONS PRECEDENT.

         6.1 Conditions Precedent to Initial Borrowings. The obligation of each
Bank to fund the initial Borrowing hereunder is subject to the condition that
the Administrative Agent shall have received all of the following, in form and
substance satisfactory to the Administrative Agent and each Bank:

                  (a) The Agreement. The Agreement (together with all Schedules
         and Exhibits thereto) executed by Borrower, each Bank and
         Administrative Agent.

                  (b) Notes. A Revolving Note in the form of EXHIBIT A payable
         to each Bank.

                  (c) Articles of Incorporation. A copy of the Articles of
         Incorporation of Borrower, accompanied by certificates that such copy
         is correct and complete, one dated a

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                                       24
<PAGE>   30

         Current Date (as used herein, the term "CURRENT DATE" means any date
         not more than 60 days prior to the Closing Date), issued by the
         Secretary of State of Louisiana, and one dated the Closing Date, by the
         Secretary or Assistant Secretary of Borrower.

                  (d) Bylaws. A copy of the Bylaws of Borrower and all
         amendments thereto, accompanied by a certificate that such copy is
         correct and complete, dated the Closing Date and executed by the
         Secretary or Assistant Secretary of Borrower.

                  (e) Good Standing and Authority. Certificates of the Louisiana
         Secretary of State, dated a Current Date, to the effect that Borrower
         is in good standing with respect to the payment of franchise and
         similar Taxes (to the extent such information is available) and is duly
         qualified to transact business in such jurisdiction.

                  (f) Incumbency. Certificates of incumbency dated as of the
         Closing Date with respect to officers of Borrower who execute or attest
         any of the Loan Documents on behalf of Borrower, executed by the
         Secretary or an Assistant Secretary of Borrower.

                  (g) Resolutions. Copies of resolutions duly adopted by the
         Board of Directors of Borrower approving this Agreement and the other
         Loan Documents and authorizing the transactions contemplated in such
         Loan Documents, accompanied by a certificate of the Secretary or an
         Assistant Secretary of Borrower dated as of the Closing Date certifying
         that such copy is a true and correct copy of resolutions duly adopted
         at a meeting of (which may be held by conference telephone or similar
         communications equipment by means of which all Persons participating in
         a meeting can hear each other if permitted by applicable Law and, if
         required by such Law, by its Bylaws), or by the unanimous written
         consent of (if permitted by applicable Law and, if required by such
         Law, by its Bylaws), the Board of Directors of Borrower, and that such
         resolutions constitute all the resolutions adopted with respect to such
         transactions, have not been amended, modified, or revoked in any
         respect (except as any such resolution may be modified by any such
         other resolution), and are in full force and effect as of the Closing
         Date.

                  (h) Certificate Regarding Closing. Certificate executed by a
         Responsible Officer of Borrower regarding the absence of any Material
         Adverse Effect as of the Closing Date.

                  (i) Opinion of Counsel to the Borrower. The opinion of counsel
         to the Borrower, addressed to Administrative Agent and Banks,
         substantially in the form of EXHIBIT E.

                  (j) Payment of Fees and Expenses. Payment of all fees and
         other compensation required to be paid to each Agent or the Banks
         pursuant to this Agreement or pursuant to any other written agreement
         on or prior to the Closing Date; and payment of all fees payable on or
         prior to the Closing Date to Administrative Agent as provided for in
         SECTION 5 together with reimbursements to Administrative Agent for all
         fees and expenses incurred in connection with the negotiation,
         preparation, and closing of the transactions evidenced by the Loan
         Documents (including reasonable attorneys' fees and expenses).

                  (k) Current Financials. True and correct copies of the Current
         Financials have been delivered to Administrative Agent.

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                                       25
<PAGE>   31

                  (l) Sixth Amendment to Existing Credit Agreement. Evidence
         that the Sixth Amendment to the Existing Credit Agreement has been
         executed by all required parties thereto and that all conditions
         precedent to the effectiveness thereof have been satisfied.

                  (m) Other. Such other approvals, opinions or documents as the
         Administrative Agent or Majority Banks may request.

         6.2 Conditions Precedent to Each Borrowing. In addition to the
conditions stated in SECTION 6.1, Banks will not be obligated to fund any
Borrowing pursuant to SECTION 2.1, unless on the date of such Borrowing (and
after giving effect thereto): (a) Administrative Agent shall have timely
received therefor a Notice of Borrowing; (b) all of the representations and
warranties of the Borrower set forth in the Loan Documents are true and correct
in all material respects on and as of the date of Borrowing as if made on and as
of such date; (c) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing on such date or after giving effect to the Borrowing
requested; and (d) the funding of such Borrowings is permitted by Law. Each
Notice of Borrowing delivered to Administrative Agent shall constitute the
representation and warranty by Borrower to Administrative Agent that the
statements in CLAUSES (b), (c) and (d) above are true and correct in all
respects. Each condition precedent in this Agreement is material to the
transactions contemplated in this Agreement, and time is of the essence in
respect of each thereof. Subject to the prior approval of Majority Banks, Banks
may fund any Borrowing without all conditions being satisfied, but, to the
extent permitted by Law, the same shall not be deemed to be a waiver of the
requirement that each such condition precedent be satisfied as a prerequisite
for any subsequent funding unless Majority Banks specifically waive each such
item in writing.

SECTION 7 REPRESENTATIONS AND WARRANTIES. To induce Banks to enter into this
Agreement and to make the loans herein provided for, Borrower hereby represents
and warrants to the Administrative Agent and to each Bank that:

         7.1 Financial Condition. The Current Financials present fairly the
consolidated financial condition of Borrower and its consolidated Subsidiaries,
and the consolidated results of their operations and cash flows, as of and for
the portion of the fiscal year ending on the date or dates thereof (subject only
to year-end audit adjustments). All such Financial Statements including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein) Neither Borrower nor any of its consolidated Subsidiaries had, as of
the dates of the consolidated balance sheets referred to above, any Contingent
Obligation, contingent liabilities, or liability for Taxes, long-term leases, or
unusual forward or long-term commitments, which are material to Borrower and its
consolidated Subsidiaries taken as a whole and are not reflected in the
foregoing statements or in the notes thereto and are required by GAAP to be so
reflected.

         7.2 No Change. Since September 30, 1999, there has been no material
adverse change in the business, operations, assets, or financial or other
condition of the Companies taken as a whole.

         7.3 Corporate Existence; Compliance with Law. Each of (a) the Borrower
and its Significant Subsidiaries (i) is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be, and (ii) has the corporate, company or
partnership power, as the case may be, and authority and the legal right to own
and operate its property, to lease the property it operates, and to conduct the
business in which it is currently engaged, and (b) the Companies (i) is duly
qualified as a foreign corporation and in good

                                                      REVOLVING CREDIT AGREEMENT
                                       26
<PAGE>   32

standing under the Laws of each jurisdiction where its ownership, lease, or
operation of property or the conduct of its business requires such
qualification, except to the extent that failure to be so qualified is not
reasonably likely, in the aggregate, to be a Material Adverse Event, and (ii) is
in compliance with all Laws except to the extent that the failure to comply
therewith is not reasonably likely, in the aggregate, to be a Material Adverse
Event.

         7.4 Corporate Power; Authorization; Enforceable Obligations. Borrower
has the corporate power and authority and the legal right to make, deliver, and
perform the Loan Documents and to borrow hereunder and has taken all necessary
corporate action to authorize the Borrowings on the terms and conditions of the
Loan Documents and to authorize the execution, delivery, and performance of the
Loan Documents. The execution, delivery, and performance of the Loan Documents
will not contravene any provision of the charter or bylaws. No approval,
consent, exemption or authorization of, filing with, or other act by, or in
respect of, any Governmental Authority, is necessary or required in connection
with the Borrowings hereunder or with the execution, delivery, performance,
validity, or enforceability of the Loan Documents. The Loan Documents have been
duly executed and delivered on behalf of Borrower and constitute legal, valid,
and binding obligations of Borrower enforceable against Borrower in accordance
with their respective terms, except as enforceability may be limited by
applicable Debtor Relief Laws and by equitable principles regardless of whether
considered in a proceeding in equity or at law.

         7.5 No Legal Bar; No Contravention. The execution, delivery, and
performance of the Loan Documents, the Borrowings hereunder, and the use of the
proceeds thereof, will not (a) violate any Laws (including, without limitation,
Regulation U, the Securities Act of 1933 and the Securities Exchange Act of
1934), or any Contractual Obligation of any Company, or (b) conflict with or
result in a default under, any Contractual Obligation, judgment, injunction,
order, decree or other instrument binding upon any Company or result in or
require the creation or imposition of any Lien (other than Liens permitted in
accordance with SECTION 8.10) on any of its or their respective properties or
revenues pursuant to any Laws or Contractual Obligation.

         7.6 No Material Litigation. No Litigation, investigation, or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Borrower, threatened by or against any Company or against any of
its or their respective properties or revenues (a) with respect to the Loan
Documents or any of the transactions contemplated hereby or (b) which is
reasonably likely to constitute a Material Adverse Event.

         7.7 No Default. No Company is in default under or with respect to any
Contractual Obligation in any respect which could be a Material Adverse Event.
No Event of Default or Unmatured Event of Default has occurred and is
continuing.

         7.8 Ownership of Property; Liens. The Companies taken, as a whole, have
good and indefeasible title to all their material assets reflected in the
Current Financials as being owned by them (except as sold or otherwise disposed
of in the ordinary course of business after the date of such Current Financials)
free of any Lien, except Liens permitted in accordance with SECTION 8.10.

         7.9 Taxes. Each of the Companies has filed or caused to be filed all
Tax returns which to the knowledge of Borrower are required to be filed (except
for state and local Tax returns where such failure to qualify and such failure
to file is not reasonably likely, in the aggregate for all such jurisdictions,
to be a Material Adverse Event), and has paid all Taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other Taxes, fees

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                                       27
<PAGE>   33

or other charges imposed on it or any of its property by any Governmental
Authority (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
appropriate Companies, as the case may be, and those that could not reasonably
be expected to be a Material Adverse Event); and no Tax liens have been filed
and, to the knowledge of Borrower, no claims are being asserted with respect to
any such Taxes, fees or other charges which, in either case, is reasonably
likely to be a Material Adverse Event.

         7.10 Federal Regulations. No Company is engaged or will engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect. No part of the proceeds of any
Borrowings hereunder will be used for any purpose which violates, or results in
a violation of, the provisions of the Regulations of such Board of Governors.
"Margin Stock" (as defined in Regulation U) constitutes less than 25% of those
assets of the Companies which are subject to any limitation on sale, pledge, or
other restriction hereunder.

         7.11 Compliance with ERISA.

         (i) Each Plan (and each related trust, insurance contract or fund) is
in substantial compliance with its terms and with all applicable laws, including
ERISA and the Code; each Plan (and each related trust, if any) which is intended
to be qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has
occurred; no Plan which is Multiemployer Plan is insolvent or in reorganization;
no Plan has an Unfunded Current Liability; no Plan (which is not a Multiemployer
Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been timely made; neither any
Company nor any ERISA Affiliate has incurred any material liability to, or on
account of, a Plan pursuant to Sections 406, 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Sections 401(a)(29), 4971 or
4975 of the Code or expects to incur any such material liability under any of
the foregoing sections with respect to any Plan; no condition exists which
presents a material risk to any Company or any ERISA Affiliate of incurring a
material liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee or administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending, expected or threatened that
could reasonably be expected to be a Material Adverse Event; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of any Company and its ERISA
Affiliates to all Plans which are Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
Plan, would not exceed $25,000,000; each group health plan (as defined by
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has
covered employees or former employees of Companies or any ERISA Affiliate has at
all times been operated in material compliance with the provisions of Part 6 of
subtitle B of Title I of ERISA and Section 4980B of the Code; no lien imposed
under the Code or ERISA on the assets of any Company or any ERISA Affiliate
exists or is likely to arise on account of any Plan and neither

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                                       28
<PAGE>   34

any Company nor any ERISA Affiliate maintains or contributes to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan the obligations with respect to which could
reasonably be expected, either individually or in the aggregate, to cause a
Material Adverse Event.

         (ii) Each Foreign Pension Plan, if any, has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities, except where failure to do so could not reasonably be expected to
be a Material Adverse Event. All contributions required to be made with respect
to a Foreign Pension Plan have been timely made, except the failure of which to
make could not reasonably be expected to be a Material Adverse Event. Neither
any Company nor its subsidiaries has incurred any obligation in connection with
the termination of or withdrawal from any Foreign Pension Plan, except such
obligation that could not reasonably be expected to be a Material Adverse Event.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of the Borrower's most
recently ended fiscal year on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the assets of such Foreign
Pension Plan allocable to such benefit liabilities, except if any such excess
could not reasonably be expected to be a Material Adverse Event.

         7.12 Investment Company Act, etc. None of the Borrower, any Person
controlling the Borrower, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. None of the Companies is
subject to regulation under (i) the Public Utility Holding Company Act of 1935,
(ii) the Federal Power Act, (iii) the Interstate Commerce Act, (iv) any state
public utilities code, or (v) any Federal or state statute or regulation,
limiting, in the case of CLAUSES (iii), (iv) and (v), its ability to incur Debt
for borrowed money.

         7.13 Environmental Matters. Except as to matters which, individually,
or in the aggregate, are not reasonably likely to result in a Material Adverse
Event,

                  (a) The Companies have obtained all Environmental Permits with
         respect to the business in which they are engaged (the "BUSINESS") and
         with respect to the facilities and properties owned, leased, or
         operated by the Companies (the "PROPERTIES"), and the Business and all
         operations at the Properties are in compliance with all Environmental
         Permits and are otherwise in compliance with all Environmental Laws;

                  (b) No Company has received any Environmental Claim with
         respect to any of the Properties or the Business or otherwise, nor does
         Borrower have knowledge or reason to believe that any such
         Environmental Claim will be received or is threatened; and

                  (c) There are no past or present actions, activities, events,
         conditions, or circumstances, including, without limitation, the
         Release, threatened Release, emission, discharge, generation,
         treatment, storage, or disposal of Hazardous Substances at any
         location, that could reasonably be expected to give rise to liability
         of any Company under any Environmental Law or any contract or
         agreement.

         7.14 Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by

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                                       29
<PAGE>   35

suppliers and vendors) that could be materially adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by the Borrower
or any of its Subsidiaries (or its suppliers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and time
line for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented in all material respects that plan in accordance with that
timetable.

         7.15 Purpose of Facility. Borrower will use all proceeds of Borrowings
for one or more of the following purposes: (i) to repurchase Borrower's
Subordinated Notes, (ii) to repurchase Borrower's common stock, and (iii) for
working capital and for general corporate purposes.

         7.16 Pari Passu Obligations; Senior Indebtedness. The claims and rights
of the Banks and the Administrative Agent against Borrower under this Agreement
and the Notes will not be subordinate to, and will rank at least pari passu
with, the claims and rights of any other unsecured creditors of Borrower with
respect to indebtedness which is not in any manner subordinated in right of
payment or security in any respect to the Obligation. The Obligation is
permitted in accordance with the terms of the Subordinated Indenture and
constitutes "Designated Senior Indebtedness" and "Senior Indebtedness" as such
terms are defined in the Subordinated Indenture. The Borrower hereby
specifically designates the Obligation as "Designated Senior Indebtedness" for
purposes of the Subordinated Indenture. This Agreement and the other Loan
Documents represent a "Bank Credit Facility" for purposes of the Subordinated
Indenture. So long as the Subordinated Indenture is in full force and effect,
all Borrowings are and will be made in compliance with the restrictions
contained in the Subordinated Indenture.

         7.17 Full Disclosure. All information furnished to the Banks in writing
prior to the date hereof in connection with the transactions contemplated hereby
does not, collectively, contain any misstatement of a material fact or omit to
state a fact necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading in any material
respect on and as of the date hereof.

SECTION 8 COVENANTS. Borrower covenants and agrees (and agrees to cause each
other Company to the extent any covenant is applicable to such Company) to
perform, observe, and comply with each of the following covenants, from the
Closing Date and so long thereafter as Banks are committed to fund Borrowings
under this Agreement and thereafter until the payment in full of the Principal
Debt and payment in full of all interest, fees, and other amounts of the
Obligation then due and owing, unless Borrower receives a prior written consent
to the contrary by Administrative Agent as authorized by Majority Banks:

         8.1 Financial Statements. Borrower shall furnish to the Administrative
Agent in sufficient quantity for each Bank:

                  (a) As soon as available, but in any event within 95 days
         after the end of each fiscal year of Borrower, Financial Statements,
         showing the consolidated financial condition and results of operation
         calculated for Borrower and its consolidated Subsidiaries as at the end
         of such year, certified without a "going concern" or like qualification
         or exception, or qualification arising out of the scope of the audit,
         by independent certified public accountants of a nationally recognized
         standing; and

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                                       30
<PAGE>   36

                  (b) As soon as available, but in any event not later than 50
         days after the end of each of the first three quarterly-periods of each
         fiscal year of Borrower, the unaudited Financial Statements showing the
         consolidated financial condition and results of operation calculated
         for Borrower and its consolidated Subsidiaries as at the end of each
         such quarter and the portion of the fiscal year through such date,
         certified by a Responsible Officer (subject to year-end audit
         adjustments);

all such Financial Statements to be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
such accountants or Responsible Officer, as the case may be, and disclosed
therein).

         8.2 Certificates; Other Information. Borrower shall furnish to the
Administrative Agent in sufficient quantity for each Bank:

                  (a) Concurrently with the delivery of the Financial Statements
         referred to in SECTION 8.1(a) and (b), a certificate of a Responsible
         Officer (i) stating that, to the best of such officer's knowledge, the
         Companies during such period have observed or performed all of the
         covenants and other agreements applicable to such Companies, and that
         such officer has obtained no knowledge of any Event of Default or
         Unmatured Event of Default, except as specified in such certificate,
         and (ii) showing in reasonable detail the calculations supporting such
         statement in respect of SECTION 8.16;

                  (b) Within five Business Days after the same are sent, copies
         of all Financial Statements and annual reports which Borrower sends to
         its stockholders, and within five days after the same are filed, copies
         of all Financial Statements and reports which Borrower may make to, or
         file with, the Securities and Exchange Commission or any successor; and

                  (c) Promptly, such additional financial and other information
         as any Bank may from time to time reasonably request.

         8.3 Payment of Obligations. Each Company shall pay, discharge, or
otherwise satisfy all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any property
belonging to it, prior to the date on which penalties attach thereto, and all
lawful material claims which, if unpaid, might become a Lien upon the property
of such Company; provided that none of the Companies shall be required to pay
any such tax, assessment, charge, levy or claim (i) the payment of which is
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
applicable Companies, as the case may be, (ii) not yet delinquent or (iii) the
non-payment of which, if taken in the aggregate, could not reasonably be
expected to be a Material Adverse Event.

         8.4 Conduct of Business and Maintenance of Existence. None of the
Companies shall engage in any business if, as a result thereof, the business of
the Companies, taken as a whole, would not be substantially the same as that
conducted on the Closing Date. For purposes of this SECTION 8.4, the business of
the manufacture and distribution of building products shall be deemed to be
within the types of business conducted by the Companies on the Closing Date.
Each Company shall preserve, renew and keep in full force and effect its
corporate or partnership existence, as the case may be, and take all reasonable
action to maintain all rights, privileges, and franchises necessary or desirable
in the normal conduct of its business (other than those rights, privileges, and
franchises the

                                                      REVOLVING CREDIT AGREEMENT
                                       31
<PAGE>   37

failure of which to maintain could not reasonably be expected to be a Material
Adverse Event); provided that nothing in this Section shall prohibit (i) the
merger of a Subsidiary into the Borrower or the merger or consolidation of a
Subsidiary with or into another Person, (ii) the sale or other disposition
(whether by merger or otherwise) of the capital stock or assets of any
Subsidiary, if such transaction complies with the provisions of SECTION 8.11 or
(iii) the termination of the corporate existence of any Subsidiary if the
Borrower in good faith determines that such termination is in the best interest
of the Borrower and is not materially disadvantageous to the Banks and if, with
respect to each of the foregoing CLAUSES (i), (ii) and (iii), after giving
effect thereto, no Event of Default or Unmatured Event of Default shall have
occurred and be continuing. Company shall comply with all Contractual
Obligations and Laws, except to the extent that the failure to comply therewith
would not, in the aggregate, be a Material Adverse Event.

         8.5 Maintenance of Property; Insurance. Each Company shall (i) keep all
property useful and necessary in its business in good working order and
condition, except when failure to do so could reasonably be expected to be a
Material Adverse Event; (ii) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business; and (iii) furnish
to each Bank, upon written request, full information as to the insurance
carried.

         8.6 Inspection of Property; Books and Records; Discussions. Each
Company shall (i) keep proper books of record and account in which full, true,
and correct entries in conformity with GAAP and all Laws shall be made of all
dealings and transactions in relation to its business and activities; and (ii)
permit representatives of any Bank to visit and inspect any of its properties at
any reasonable time and as often as may reasonably be desired, and to discuss
the business, operations, properties, and financial and other condition of
Borrower and its Subsidiaries with officers and employees of the Companies and
with its independent certified public accountants.

         8.7 Notices. Borrower shall promptly give notice to Administrative
Agent and each Bank of:

                  (a) The occurrence of any Event of Default or Unmatured Event
         of Default;

                  (b) Any (i) default or event of default under any Contractual
         Obligation of any Company or (ii) Litigation, investigation, or
         proceeding which may exist at any time between any Company and any
         Governmental Authority, which in either case, is reasonably likely to
         be a Material Adverse Event;

                  (c) Any Litigation or proceeding affecting any Company (i) in
         which the potential loss not covered by insurance could reasonably be
         expected to be $50,000,000 or more or (ii) in which injunctive or
         similar relief is sought which is reasonably likely to be a Material
         Adverse Event;

                  (d) The occurrence of a Material Adverse Event.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Borrower proposes to take with respect thereto.

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                                       32
<PAGE>   38

         8.8 Year 2000 Compliance. Borrower will promptly notify the
Administrative Agent in the event Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant on a timely basis, except to the extent that such failure is
not reasonably expected to be a Material Adverse Event.

         8.9 Compliance with Laws. The Companies will comply with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, including laws relating to pension funds and
Environmental Laws, which, if violated, could reasonably be expected to be a
Material Adverse Event.

         8.10 Limitation on Liens. The Companies shall not, directly or
indirectly, create, incur, assume, or suffer to exist any Lien upon any of its
property, assets, or revenues, whether now owned or hereafter acquired, except:

                  (a) Liens for Taxes not yet due or which are being contested
         in good faith and by appropriate proceedings if adequate reserves with
         respect thereto are maintained on the books of the appropriate
         Companies in accordance with GAAP;

                  (b) carriers', warehousemen's, mechanics', materialmen's,
         repairmen's, or other like Liens arising in the ordinary course of
         business which are not overdue for a period of more than 30 days or
         which are being contested in good faith and for which adequate reserves
         in accordance with GAAP, if any, have been set aside;

                  (c) pledges or deposits in connection with workmen's
         compensation, unemployment insurance, and other social security
         legislation;

                  (d) easements, rights-of-way, mineral reservations,
         restrictions, and other similar encumbrances, defects or irregularities
         of title which do not in any case (i) secure Debt or (ii) materially
         detract from the value of the property subject thereto or interfere
         with the ordinary conduct of the business of the Companies;

                  (e) Liens (other than any Lien imposed by ERISA) incurred or
         deposits made in the ordinary course of business in connection with
         workers' compensation, unemployment insurance, and other types of
         social security;

                  (f) statutory or common law banker's liens in the nature of
         rights of setoff arising in the ordinary and usual course of business
         of the Companies;

                  (g) any Lien upon assets existing at the time of acquisition
         thereof or to secure the payment of all or any part of the purchase
         price thereof or to secure any Debt incurred prior to, at the time of,
         or within 90 days after, the acquisition of such assets for the purpose
         of financing all or any part of the purchase price thereof, so long as
         such Lien is limited to the assets so acquired;

                  (h) Liens securing Acquired Indebtedness if such Liens secured
         such Acquired Indebtedness at the time such Acquired Indebtedness
         becomes an obligation of any Company and such Liens were not incurred
         in connection with, or in anticipation of, such Acquired Indebtedness
         becoming an obligation of a Company; provided, however, that such Liens
         shall

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                                       33
<PAGE>   39

         not extend to or cover any assets of any Company other than the assets
         that secured the Acquired Indebtedness prior to such Acquired
         Indebtedness becoming an obligation of a Company;

                  (i) Liens arising out of the refinancing, extension, renewal
         or refunding of any Debt secured by any Lien permitted by the foregoing
         CLAUSES (g) and (h), provided that such Debt is not increased and is
         not secured by any additional assets;

                  (j) Liens in the nature of deposits with a trustee or other
         depository in connection with a redemption, payment, acquisition,
         repurchase or retirement for value of the Subordinated Notes; and

                  (k) Liens, in addition to those otherwise specified in this
         Section, which in the aggregate do not secure obligations in excess of
         10% of Consolidated Net Worth.

         8.11 Prohibition of Fundamental Changes. No Company shall, directly or
indirectly, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or convey, transfer, lease or otherwise dispose of,
whether in one transaction or a series of transactions, all or substantially all
of its assets, whether now owned or hereafter acquired, to or in favor of any
Person, except that:

                  (a) Any corporation (including any Subsidiary of Borrower) may
         be merged or consolidated with or into Borrower (provided that,
         Borrower shall be the continuing or surviving corporation) or with any
         one or more Subsidiaries of Borrower (provided that, (i) if any such
         transaction shall be between a corporation (including any Subsidiary of
         Borrower) and a Wholly-owned Subsidiary of Borrower, the continuing or
         surviving corporation shall be a Wholly-owned Subsidiary of Borrower
         and (ii) immediately after each such transaction and after giving
         effect thereto, Borrower is in compliance with this Agreement and no
         Event of Default or Unmatured Event of Default shall have occurred and
         be continuing);

                  (b) Borrower may be merged into a corporation ( the "SUCCESSOR
         CORPORATION") solely for the purpose of changing the Borrower's
         domicile (a "REINCORPORATION MERGER") as provided in Rule 145 (a) (2)
         of the Securities Act of 1933, as amended from time to time, and such
         Successor Corporation shall:

                           (i) immediately after giving effect to such merger
                  have-then-effective ratings (or implied ratings) published by
                  Moody's and S&P applicable to such Successor Corporation's
                  senior, unsecured, non-credit-enhanced, long term indebtedness
                  for borrowed money, which ratings shall be Baa3 or higher (if
                  assigned by Moody's) or BBB- or higher (if assigned by S&P);

                           (ii) be a corporation organized and existing under
                  the laws of the United States of America, any state thereof or
                  the District of Columbia, and shall expressly assume, by
                  amendment to this Agreement acceptable to the Majority Banks
                  executed by the Borrower and such Successor Corporation and
                  delivered to the Administrative Agent, the due and punctual
                  payment of the principal of, and interest on, the Borrowings
                  made hereunder and other amounts payable under this Agreement
                  and the performance and observance of every covenant hereof on
                  the part of the Borrower to be performed or observed and this
                  Agreement shall remain in full force and effect;

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                                       34
<PAGE>   40

                           (iii) immediately after giving effect to such merger,
                  no Event of Default and no Unmatured Event of Default, shall
                  have occurred and be continuing;

                           (iv) immediately after giving effect to such merger,
                  all of the representations and warranties of the Borrower set
                  forth in the Loan Documents shall be true and correct in all
                  material respects as if made by such Successor Corporation;
                  and

                           (v) the Borrower shall have delivered to the
                  Administrative Agent a certificate signed by a Responsible
                  Officer and a written opinion of counsel satisfactory to the
                  Administrative Agent (who may be counsel to the Borrower),
                  each stating that such transaction and such amendment to this
                  Agreement comply with this Section and that all conditions
                  precedent herein provided for relating to such transaction
                  have been satisfied; and

                  (c) any Subsidiary may enter into any transaction of merger or
         consolidation or amalgamation, or liquidate, wind up, or dissolve
         itself (or suffer any liquidation or dissolution), or convey, transfer,
         lease or otherwise dispose of, whether in one transaction or a series
         of transactions, all or substantially all of its assets, whether now
         owned or hereafter acquired, to or in favor of any Person; provided
         that, immediately after each such transaction and after giving effect
         thereto, Borrower is in compliance with this Agreement and no Event of
         Default and no Unmatured Event of Default shall have occurred and be
         continuing.

         8.12 Subsidiary Debt. No Subsidiary of Borrower will incur or at any
time be liable with respect to any Debt, or to issue or have outstanding any
preferred stock, except: (i) Debt or preferred stock outstanding on the date
hereof; (ii) Debt or preferred stock of a Subsidiary issued to and held by the
Company or a Wholly-Owned Subsidiary; (iii) Debt or preferred stock of any
Person existing at the time such Person becomes a Subsidiary of the Company and
not created in contemplation of such event; (iv) refinancing, extension, renewal
or refunding of any Debt or preferred stock permitted by the foregoing clauses
(i) through (iii); (v) Non-Recourse Debt; and (vi) Debt or preferred stock in
addition to that set forth in clauses (i) through (v), if, after giving effect
thereto, the aggregate outstanding principal amount of Debt of all Subsidiaries
pursuant to this clause (vi) does not exceed 10% of Consolidated Net Worth.

         8.13 Subsidiary Dividends. No Company shall be a party to or enter into
any agreement, instrument or other document which prohibits or restricts in any
way, or to otherwise, directly or indirectly, create or cause or suffer to exist
or become effective any encumbrance or restriction on the ability of any
Subsidiary of Borrower to (i) pay dividends or make any other distributions in
respect of its capital stock or any other equity interest or participation in
any Subsidiary, or pay or repay any Debt owed to Borrower or any Subsidiary,
(ii) make loans or advances to Borrower or (iii) transfer any of its properties
or assets to Borrower or any Subsidiary (subject to the rights of any holder of
a Lien on any such properties or assets which Lien is a Permitted Lien) other
than (a) customary restrictions contained in purchase and sale agreements with
respect to the sale of assets or Capital Stock that relate to such assets or
Capital Stock for the period from and after the date of the execution and
delivery of such purchase and sale agreement until the date of the closing
thereunder, (b) restrictions on Subsidiaries not Wholly-owned by Borrower that
are acquired or created after the Closing Date, and (c) encumbrances or
restrictions binding upon any Person at the time such Person becomes a
Subsidiary (unless the agreement creating such encumbrance or

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                                       35
<PAGE>   41

restriction was entered into in connection with, or in contemplation of, such
Person becoming a Subsidiary) provided that such encumbrances or restrictions
shall not encumber or restrict any assets of the Borrower or its other
Subsidiaries other than such Subsidiary.

         8.14 Compliance with ERISA. As soon as possible and, in any event,
within ten (10) days after any Company or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following that will or could
reasonably be expected to be a Material Adverse Event, Borrower will deliver to
each of the Banks a certificate of the chief financial officer of the Borrower
setting forth the full details as to such occurrence and the action, if any,
that a Company or any ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given or filed by a Company, the
Plan administrator or any ERISA Affiliate to or with the PBGC or any other
governmental agency, or a Plan participant or any notices received by any
Company or such ERISA Affiliate from the PBGC or any other government agency, or
a Plan participant with respect thereto: that a Reportable Event has occurred
(except to the extent that Borrower has previously delivered to the Banks a
certificate and notices (if any) concerning such event); that a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event
described in subsection .62, .63, .64, .65, .66, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability; that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that any Company or any ERISA
Affiliate will or may incur any material liability with respect to, or on
account of, the termination of or withdrawal from a Plan under Sections 4062,
4063, 4064, 4069, 4201, 4204, or 4212 of ERISA or with respect to a Plan under
Sections 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or
502(l) of ERISA; or that Companies or an ERISA Affiliate will or may incur a
material liability with respect to a group health as defined in Section 607(1)
of ERISA or under Section 4980B of the Code; or that a Company or an ERISA
Affiliate will or may incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Companies will
deliver to each of the Banks copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. At the written request of any Bank, Companies will
also deliver to such Banker a complete copy of the annual report (and related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service on the Form 5500 series. In addition to any
certificates or notices delivered to the Banks pursuant to the first sentence
hereof, copies of any records, documents or other information required to be
furnished to the PBGC or any other governmental agency, and any material notices
received by Companies or any ERISA Affiliate with respect to any Plan shall be
delivered to the Banks no later than ten (10) days after the date such records,
documents and/or information has been furnished to the PBGC or any other
governmental agency or such notice has been received by Companies or the

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                                       36
<PAGE>   42

ERISA Affiliate, as applicable. Each of the Companies shall insure that all
Foreign Pension Plans administered by it or into which it makes payments obtains
or retains (as applicable) registered status under and as required by applicable
law and is administered in a timely manner in all respects in compliance with
all applicable laws except where the failure to do any of the foregoing could
not, either individually or in the aggregate, reasonably be expected to cause a
Material Adverse Event.

         No Company or ERISA Affiliate shall, directly or indirectly, (a)
terminate any Plan so as to result in any liability to PBGC; (b) engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan which would result in a liability for an excise tax
or civil penalty in connection therewith; (c) incur or suffer to exist any
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, involving any Plan; (d) allow or suffer to exist any event or
condition, which presents a risk of incurring a material liability to PBGC by
reason of termination of any such Plan; or (e) incur or likely incur withdrawal
liability under a Multiemployer Plan or incur liability respecting the
insolvency or reorganization of a Multiemployer Plan; and, in each of CLAUSES
(a) through (e) hereof, such liability, deficiency or risk, as the case may be,
when taken together with all other contingencies and facts relating to the
Companies under this Section, is a Material Adverse Event.

         8.15 Assignment. Borrower shall not assign or transfer any of its
Rights, duties, or obligations under any of the Loan Documents except pursuant
to a Reincorporation Merger in accordance with SECTION 8.11(b).

         8.16 Financial Covenants.

                  (a) Leverage Ratio. Borrower shall not permit, as of the final
         day of any fiscal quarter of the Borrower, its Leverage Ratio,
         calculated based upon the four (4) immediately preceding fiscal
         quarters, including the quarter then ended, to be greater than
         3.00:1.00.

                  (b) Consolidated Net Worth. Borrower shall not permit, at any
         time its Consolidated Net Worth to be less than Six Hundred Million
         Dollars ($600,000,000).

                  (c) Interest Coverage Ratio. Borrower shall not permit, as of
         the last day of any fiscal quarter of the Borrower, the ratio of: (i)
         Consolidated EBITDA for the twelve-month period ending on such date to
         (ii) Consolidated Interest Expense for such period to be less than 3.00
         to 1.00.

         8.17 Transactions with Affiliates. No Company shall enter into any
material transaction with any of its Affiliates (other than transactions between
or among Companies), other than transactions in the ordinary course of business
and upon fair and reasonable terms not materially less favorable than such
Company could obtain or could become entitled to in an arm's-length transaction
with a Person that was not its Affiliate.

SECTION 9 EVENT OF DEFAULT. The term "EVENT OF DEFAULT" means the occurrence of
any one or more of the following events:

         9.1 Payment of Obligation. Borrower shall fail to pay all or any part
of the principal of the Obligation when the same becomes due (whether by its
terms, by acceleration, or as otherwise provided in the Loan Documents) or shall
fail to pay any other part of the Obligation (including,

                                                      REVOLVING CREDIT AGREEMENT
                                       37
<PAGE>   43

without limitation, interest and fees) within three Business Days of when the
same becomes due (whether by its terms, by acceleration, or as otherwise
provided in the Loan Documents).

         9.2 Misrepresentation. Any representation or warranty made or deemed
made by any Company in any Loan Document shall prove to have been incorrect in
any respect material to the Companies taken as a whole on or as of the date made
or deemed made.

         9.3 Covenants. The failure or refusal of Borrower (and, if applicable,
any other Company) to punctually and properly perform, observe, and comply with:

                  (a) Any covenant, agreement, or condition contained in
         SECTIONS 8.7 AND 8.10 through 8.17; and

                  (b) Any other covenant, agreement, or condition contained in
         any Loan Document (other than the covenant to pay the Obligations
         addressed in SECTION 9.1 or the covenants addressed in SECTION 9.3(a))
         and such failure or refusal shall continue unremedied for a period of
         30 days after notice thereof shall have been given to the Borrower by
         the Administrative Agent or any Bank.

         9.4 Default Under Other Debt. An Event of Default as defined in the
Existing Credit Agreement shall occur or the Companies shall (i) default in any
payment of principal of or interest on any Debt (other than the Obligation),
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Debt was created; provided that, such
Debt shall be in the amount of $50,000,000 or more; or (ii) default in the
observance or performance of any other agreement or condition relating to any
such Debt or contained in any instrument or agreement evidencing, securing, or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Debt (or a trustee or agent on behalf of such holder
or holders) to cause, with the giving of notice if required, such Debt or other
indebtedness to become due prior to its stated maturity.

         9.5 Debtor Relief. Any Company (a) voluntarily seeks, consents to, or
acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or
claimant, (b) becomes a party to or is made the subject of any proceeding
provided for by any Debtor Relief Law, other than as a creditor or claimant,
that could suspend or otherwise adversely affect the Rights of Administrative
Agent or any Bank granted in the Loan Documents (unless, in the event such
proceeding is involuntary, such proceeding remains undismissed, undischarged, or
unbonded for a period of 60 days); and (c) any Company shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due.

         9.6 Attachment. There shall be commenced against any Company any case,
proceeding, or other action seeking issuance of a warrant of attachment,
execution, distraint, or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, stayed, or bonded pending appeal within
60 days from the entry thereof; or any Company shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any such proceedings.

         9.7 Employee Benefit Plans. The following shall occur: (a) Any Plan
shall fail to satisfy the minimum funding standard required for any plan year or
part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver
of such standard or extension of any amortization period

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                                       38
<PAGE>   44

is sought or granted under Section 412 of the Code or Section 303 or 304 of
ERISA, Reportable Event shall have occurred, a contributing sponsor ( as defined
in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be
subject to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b) (1) thereof) and an event described in
subsections .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulations Section 4043
shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have had
or is likely to have a trustee appointed to administer such Plan, any Plan which
is subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any Plan
shall have an Unfunded Current Liability, a contribution required to be made
with respect to a Plan or a Foreign Pension Plan has not been timely made,
Company or any ERISA Affiliate has incurred or is likely to incur any liability
to or on account of a Plan under Sections 406, 409, 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Sections 401(a)(29), 4971 or 4975 of
the Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B of the Code) under Section 4980B of the Code, or any
Company or ERISA Affiliate has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plan (as defined in Section
3(1) of ERISA that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans, a "default" within the meaning of Section 4219(c)(5) of ERISA
shall have occurred with respect to any Plan, any applicable law, rule or
regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a "Change of Law"), or, as a
result of a Change in Law, an event occurs following a Change in Law with
respect to or otherwise affecting any Plan, insolvency or reorganization of a
Multiemployer Plan, or any other event or condition shall occur or exist with
respect to a Plan; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, either individually and/or in the aggregate, is, or could reasonably
be expected to cause, a Material Adverse Event.

         9.8 Judgments. One or more judgments or decrees shall be entered
against any of the Companies involving in the aggregate a liability (not covered
by insurance or not paid) of $50,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, or stayed within 60 days from
the entry thereof.

         9.9 Change of Control. A Change of Control shall occur.

SECTION 10 RIGHTS AND REMEDIES.

         10.1 Remedies Upon Event of Default.

                  (a) If an Event of Default exists under SECTION 9.5 or 9.6,
         the commitment to extend credit hereunder shall automatically terminate
         and the entire unpaid balance of the Obligation under the Revolving
         Facility shall automatically become due and payable without any action
         or notice of any kind whatsoever.

                  (b) If any Event of Default exists, Administrative Agent
         (subject to the terms of SECTION 11) shall upon the request of Majority
         Banks or Majority Banks may, do any one or more of the following: (i)
         if the maturity of the Obligation under the Revolving Facility has not
         already been accelerated under SECTION 10.1(a), declare the entire
         unpaid balance of the

                                                      REVOLVING CREDIT AGREEMENT
                                       39
<PAGE>   45

         Obligation, or any part thereof, immediately due and payable, whereupon
         it shall be due and payable; (ii) terminate the commitments of Banks to
         extend credit hereunder; (iii) reduce any claim to judgment; (iv) to
         the extent permitted by Law, exercise (or request each Bank to, and
         each Bank shall be entitled to, exercise) the Rights of offset or
         banker's Lien against the interest of Borrower in and to every account
         and other property of Borrower which are in the possession of
         Administrative Agent or any Bank to the extent of the full amount of
         the Obligation (to the extent permitted by Law, Borrower being deemed
         directly obligated to each Bank in the full amount of the Obligation
         for such purposes); and (v) exercise any and all other legal or
         equitable Rights afforded by the Loan Documents, the Laws of the State
         of Texas, or any other applicable jurisdiction as Administrative Agent
         shall deem appropriate, or otherwise, including, but not limited to,
         the Right to bring suit or other proceedings before any Governmental
         Authority either for specific performance of any covenant or condition
         contained in any of the Loan Documents or in aid of the exercise of any
         Right granted to Administrative Agent or any Bank in any of the Loan
         Documents.

         10.2 Borrower Waivers. To the extent permitted by Law, Borrower hereby
waives presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration, and notice of protest and nonpayment, and
agrees that its liability with respect to the Obligation (or any part thereof),
shall not be affected by any renewal or extension in the time of payment of the
Obligation (or any part thereof), by any indulgence, or by any release or change
in any security for the payment of the Obligation (or any part thereof).

         10.3 Performance by Administrative Agent. If any covenant, duty, or
agreement of any Company is not performed in accordance with the terms of the
Loan Documents, after the occurrence and during the continuance of an Event of
Default, Administrative Agent may, at its option (but subject to the approval of
Majority Banks), perform or attempt to perform such covenant, duty, or agreement
on behalf of such Company. In such event, any amount expended by Administrative
Agent in such performance or attempted performance shall be payable by the
Borrower, to Administrative Agent on demand, shall become part of the
Obligation, and shall bear interest at the Default Rate from the date of such
expenditure by Administrative Agent until paid. Notwithstanding the foregoing,
it is expressly understood that Administrative Agent does not assume and shall
never have, except by its express written consent, any liability or
responsibility for the performance of any covenant, duty, or agreement of any
Company.

         10.4 Delegation of Duties and Rights. Banks may perform any of their
duties or exercise any of their Rights under the Loan Documents by or through
their respective Representatives (provided, that such delegation does not
release any Bank of any of its obligations hereunder).

         10.5 Not in Control. Nothing in any Loan Document shall, or shall be
deemed to (a) give any Agent or any Bank the Right to exercise control over the
assets (including real property), affairs, or management of any Company, (b)
preclude or interfere with compliance by any Company with any Law, or (c)
require any act or omission by any Company that may be harmful to Persons or
property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that any Agent or any Bank acquiesces in any non-compliance by
any Company with any Law or document, or that any Agent or any Bank does not
expect the Companies to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Laws. No Agent or Bank has any
fiduciary relationship with or fiduciary duty to Borrower or any

                                                      REVOLVING CREDIT AGREEMENT
                                       40
<PAGE>   46

Company arising out of or in connection with the Loan Documents, and the
relationship between Agents and Banks, on the one hand, and Borrower, on the
other hand, in connection with the Loan Documents is solely that of debtor and
creditor. The power of Agents and Banks under the Loan Documents is limited to
the Rights provided in the Loan Documents, which Rights exist solely to assure
payment and performance of the Obligation and may be exercised in a manner
calculated by Agents and Banks in their respective good faith business judgment.

         10.6 Course of Dealing. The acceptance by Administrative Agent or Banks
at any time and from time to time of partial payment on the Obligation shall not
be deemed to be a waiver of any Event of Default then existing. No waiver by
Administrative Agent, Majority Banks, or Banks of any Event of Default shall be
deemed to be a waiver of any other then-existing or subsequent Event of Default.
No delay or omission by Administrative Agent, Majority Banks, or Banks in
exercising any Right under the Loan Documents shall impair such Right or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such Right preclude other or further exercise
thereof, or the exercise of any other Right under the Loan Documents or
otherwise.

         10.7 Cumulative Rights. All Rights available to Administrative Agent
and Banks under the Loan Documents are cumulative of and in addition to all
other Rights granted to Administrative Agent and Banks at law or in equity,
whether or not the Obligation is due and payable and whether or not
Administrative Agent or Banks have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.

         10.8 Application of Proceeds. Any and all proceeds ever received by
Administrative Agent or Banks from the exercise of any Rights pertaining to the
Obligation shall be applied to the Obligation in the order and manner set forth
in SECTION 3.11.

         10.9 Limitation of Rights. Notwithstanding any other provision of this
Agreement or any other Loan Document, any action taken or proposed to be taken
by Administrative Agent or any Bank under any Loan Document which would affect
the operational, voting, or other control of any Company, shall be pursuant to
any applicable state Law, and the applicable rules and regulations thereunder.

         10.10 Expenditures by Banks. Borrower shall promptly pay within fifteen
(15) Business Days after request therefor (a) all reasonable costs, fees, and
expenses paid or incurred by any Agent incident to any Loan Document (including,
but not limited to, the reasonable fees and expenses of counsel to
Administrative Agent and the allocated cost of internal counsel in connection
with the negotiation, preparation, delivery, execution, coordination, and
administration of the Loan Documents and any related amendment, waiver, or
consent) and (b) following the occurrence and continuation of a Event of
Default, all reasonable costs and expenses of Banks and Administrative Agent
incurred by Administrative Agent or any Bank in connection with the enforcement
of the obligations of any Company arising under the Loan Documents (including,
without limitation, costs and expenses incurred in connection with any workout
or bankruptcy) or the exercise of any Rights arising under the Loan Documents
(including, but not limited to, reasonable attorneys' fees including allocated
cost of internal counsel, court costs and other costs of collection), all of
which shall be a part of the Obligation and shall bear interest at the Default
Rate from the date due until the date repaid by Borrower.

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<PAGE>   47

         10.11 Indemnification. Borrower agrees to indemnify and hold harmless
each Agent, Arranger, and each Bank and each of their respective Affiliates and
their respective officers, directors, employees, agents, attorneys, and advisors
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities, costs, and expenses (including attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Borrowings
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED
PARTY), except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct; provided, that the Borrower shall have no obligation
hereunder to any Agent or any Bank with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of any Agent or any such
Bank. In the case of an investigation, litigation, or other proceeding to which
the indemnity in this SECTION 10.11 applies, except as provided above, such
indemnity shall be effective whether or not such investigation, litigation, or
proceeding is brought by Borrower, its directors, shareholders or creditors or
an Indemnified Party or any other person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated. Borrower agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Loan Documents, any
of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Borrowings. Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this SECTION 10.11 shall survive the payment in full of the
Borrowings and all other amounts payable under this Agreement.

SECTION 11 AGREEMENT AMONG BANKS.

         11.1 Administrative Agent.

                  (a) Each Bank hereby appoints Wells Fargo Bank (Texas),
         National Association (and Wells Fargo Bank (Texas), National
         Association hereby accepts such appointment) as its nominee and agent,
         in its name and on its behalf: (i) to act as nominee for and on behalf
         of such Bank in and under all Loan Documents; (ii) to arrange the means
         whereby the funds of Banks are to be made available to Borrower under
         the Loan Documents; (iii) to take such action as may be requested by
         any Bank under the Loan Documents (when such Bank is entitled to make
         such request under the Loan Documents and after such requesting Bank
         has obtained the concurrence of such other Banks as may be required
         under the Loan Documents); (iv) to receive all documents and items to
         be furnished to Banks under the Loan Documents; (v) to be the secured
         party, mortgagee, beneficiary, and similar party in respect of, and to
         receive, as the case may be, any collateral for the benefit of Banks;
         (vi) to timely distribute, and Administrative Agent agrees to so
         distribute, to each Bank all material information, requests, documents,
         and items received from Borrower under the Loan Documents; (vii) to
         promptly distribute to each Bank its ratable part of each payment or
         prepayment (whether voluntary, as proceeds of collateral upon or after
         foreclosure, as proceeds of insurance thereon, or otherwise) in
         accordance with the terms of the Loan Documents; (viii) to deliver to
         the appropriate Persons requests, demands, approvals, and consents
         received from Banks; and (ix) to execute, on behalf of Banks, such
         releases or other documents or instruments as are permitted by the Loan
         Documents or as directed by Banks

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                                       42
<PAGE>   48

         or Majority Banks (when entitled to so authorize) from time to time;
         provided, however, Administrative Agent shall not be required to take
         any action which exposes Administrative Agent to personal liability or
         which is contrary to the Loan Documents or applicable Law.

                  (b) Administrative Agent may resign at any time as
         Administrative Agent under the Loan Documents by giving written notice
         thereof to Banks and Borrower. Should the initial or any successor
         Administrative Agent ever cease to be a party hereto or should the
         initial or any successor Administrative Agent ever resign as
         Administrative Agent, then Majority Banks shall elect the successor
         Administrative Agent from among the Banks (other than the resigning
         Administrative Agent) with the consent of the Borrower (unless an Event
         of Default has occurred and is continuing), which consent is not to be
         unreasonably withheld or delayed by the Borrower. If no successor
         Administrative Agent shall have been so appointed by Majority Banks,
         within 30 days after the retiring Administrative Agent's giving of
         notice of resignation, then the retiring Administrative Agent may, on
         behalf of Banks, appoint a successor Administrative Agent with the
         consent of the Borrower (unless an Event of Default has occurred and is
         continuing), which consent is not to be unreasonably withheld or
         delayed by the Borrower, which shall be a commercial bank having a
         combined capital and surplus of at least $1,000,000,000. Upon the
         acceptance of any appointment as Administrative Agent under the Loan
         Documents by a successor Administrative Agent, such successor
         Administrative Agent shall thereupon succeed to and become vested with
         all the Rights of the retiring Administrative Agent, and the retiring
         Administrative Agent shall be discharged from its duties and
         obligations of Administrative Agent under the Loan Documents and each
         Bank shall execute such documents as any Bank may reasonably request to
         reflect such change in and under the Loan Documents. After any retiring
         Administrative Agent's resignation as Administrative Agent under the
         Loan Documents, the provisions of this SECTION 11 shall inure to its
         benefit as to any actions taken or omitted to be taken by it while it
         was Administrative Agent under the Loan Documents.

                  (c) Administrative Agent, in its capacity as a Bank, shall
         have the same Rights under the Loan Documents as any other Bank and may
         exercise the same as though it were not acting as Administrative Agent;
         the term "Bank" shall, unless the context otherwise indicates, include
         Administrative Agent; and any resignation by Administrative Agent
         hereunder shall not impair or otherwise affect any Rights which it has
         or may have in its capacity as an individual Bank. Each Bank and
         Borrower agree that Administrative Agent is not a fiduciary for Banks
         or for Borrower but simply is acting in the capacity described herein
         to alleviate administrative burdens for both Borrower and Banks, that
         Administrative Agent has no duties or responsibilities to Banks or
         Borrower except those expressly set forth herein, and that
         Administrative Agent in its capacity as a Bank has all Rights of any
         other Bank.

                  (d) Administrative Agent and its Affiliates may now or
         hereafter be engaged in one or more loan, letter of credit, leasing, or
         other financing transactions with Borrower, act as trustee or
         depositary for Borrower, or otherwise be engaged in other transactions
         with Borrower (collectively, the "OTHER ACTIVITIES") not the subject of
         the Loan Documents. Without limiting the Rights of Banks specifically
         set forth in the Loan Documents, Administrative Agent and its
         Affiliates shall not be responsible to account to Banks for such other
         activities, and no Bank shall have any interest in any other
         activities, any present or future guaranties by or for the account of
         Borrower which are not contemplated or included in the Loan Documents,
         any present or future offset exercised by Administrative Agent and

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                                       43
<PAGE>   49

         its Affiliates in respect of such other activities, any present or
         future property taken as security for any such other activities, or any
         property now or hereafter in the possession or control of
         Administrative Agent or its Affiliates which may be or become security
         for the obligations of Borrower arising under the Loan Documents by
         reason of the general description of indebtedness secured or of
         property contained in any other agreements, documents or instruments
         related to any such other activities; provided that, if any payments in
         respect of such guaranties or such property or the proceeds thereof
         shall be applied to reduction of the obligations of Borrower arising
         under the Loan Documents, then each Bank shall be entitled to share in
         such application ratably.

         11.2 Expenses. Upon demand by Administrative Agent, each Bank shall pay
its Pro Rata Part of any reasonable expenses (including, without limitation,
court costs, reasonable attorneys' fees and other costs of collection) incurred
by Administrative Agent in connection with any of the Loan Documents if and to
the extent Administrative Agent does not receive reimbursement therefor from
other sources within 60 days after incurred; provided that, each Bank shall be
entitled to receive its Pro Rata Part of any reimbursement for such expenses, or
part thereof, which Administrative Agent subsequently receives from such other
sources.

         11.3 Proportionate Absorption of Losses. Except as otherwise provided
in the Loan Documents, nothing in the Loan Documents shall be deemed to give any
Bank any advantage over any other Bank insofar as the Obligation arising under
the Loan Documents is concerned, or to relieve any Bank from absorbing its Pro
Rata Part of any losses sustained with respect to the Obligation (except to the
extent such losses result from unilateral actions or inactions of any Bank that
are not made in accordance with the terms and provisions of the Loan Documents).

         11.4 Delegation of Duties; Reliance. Administrative Agent may perform
any of its duties or exercise any of its Rights under the Loan Documents by or
through its Representatives. Administrative Agent and its Representatives shall
(a) be entitled to rely upon (and shall be protected in relying upon) any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telecopy, telegram, telex or teletype message, statement, order, or other
documents or conversation believed by it or them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinion of counsel selected by Administrative Agent, (b) be
entitled to deem and treat each Bank as the owner and holder of the Principal
Debt owed to such Bank for all purposes until, subject to SECTION 12.13, written
notice of the assignment or transfer thereof shall have been given to and
received by Administrative Agent (and any request, authorization, consent, or
approval of any Bank shall be conclusive and binding on each subsequent holder,
assignee, or transferee of the Principal Debt owed to such Bank or portion
thereof until such notice is given and received), (c) not be deemed to have
notice of the occurrence of a Event of Default unless a responsible officer of
Administrative Agent, who handles matters associated with the Loan Documents and
transactions thereunder, has actual knowledge thereof or Administrative Agent
has been notified thereof by a Bank or Borrower, and (d) be entitled to consult
with legal counsel (including counsel for Borrower), independent accountants and
other experts selected by Administrative Agent and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts.

         11.5 Limitation of Liability.

                  (a) None of the Agents or any of their respective
         Representatives shall be liable for any action taken or omitted to be
         taken by it or them under the Loan Documents in good

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                                       44
<PAGE>   50

         faith and reasonably believed by it or them to be within the discretion
         or power conferred upon it or them by the Loan Documents or be
         responsible for the consequences of any error of judgment, except for
         fraud, gross negligence, or willful misconduct; and none of the Agents,
         or any of their respective Representatives has a fiduciary relationship
         with any Bank by virtue of the Loan Documents (provided that nothing
         herein shall negate the obligation of Administrative Agent to account
         for funds received by it for the account of any Bank).

                  (b) Unless indemnified to its satisfaction against loss, cost,
         liability, and expense, no Agent shall be compelled to do any act under
         the Loan Documents or to take any action toward the execution or
         enforcement of the powers thereby created or to prosecute or defend any
         suit in respect of the Loan Documents. If Administrative Agent requests
         instructions from Banks or Majority Banks, as the case may be, with
         respect to any act or action (including, but not limited to, any
         failure to act) in connection with any Loan Document, such Agent shall
         be entitled (but shall not be required) to refrain (without incurring
         any liability to any Person by so refraining) from such act or action
         unless and until it has received such instructions. In no event,
         however, shall any Agent or any of its respective Representatives be
         required to take any action which it or they determine could incur for
         it or them criminal or onerous civil liability. Without limiting the
         generality of the foregoing, no Bank shall have any right of action
         against any Agent as a result of such Agent's acting or refraining from
         acting hereunder in accordance with the instructions of Majority Banks.

                  (c) No Agent shall be responsible in any manner to any Bank or
         any Participant for, and each Bank represents and warrants that it has
         not relied upon any Agent in respect of, (i) the creditworthiness of
         any Company and the risks involved to such Bank, (ii) the
         effectiveness, enforceability, genuineness, validity, or the due
         execution of any Loan Document, (iii) any representation, warranty,
         document, certificate, report, or statement made therein or furnished
         thereunder or in connection therewith, (iv) the existence, priority, or
         perfection of any Lien hereafter granted or purported to be granted
         under any Loan Document, or (v) observation of or compliance with any
         of the terms, covenants, or conditions of any Loan Document on the part
         of any Company. Each Bank agrees to indemnify Agents and their
         respective Representatives and hold them harmless from and against (but
         limited to such Bank's Pro Rata Part of) any and all liabilities,
         obligations, losses, damages, penalties, actions, judgments, suits,
         costs, reasonable expenses, and reasonable disbursements of any kind or
         nature whatsoever which may be imposed on, asserted against, or
         incurred by them in any way relating to or arising out of the Loan
         Documents or any action taken or omitted by them under the Loan
         Documents, to the extent such Agents and their respective
         Representatives are not reimbursed for such amounts by any Company
         (provided that, no Agent or its Representatives shall have the right to
         be indemnified hereunder for its or their own fraud, gross negligence,
         or willful misconduct).

         11.6 Event of Default; Collateral. Upon the occurrence and continuance
of a Event of Default, Banks agree to promptly confer in order that Majority
Banks or Banks, as the case may be, may agree upon a course of action for the
enforcement of the Rights of Banks; and Administrative Agent shall be entitled
to refrain from taking any action (without incurring any liability to any Person
for so refraining) unless and until Administrative Agent shall have received
instructions from Majority Banks. In actions with respect to any property of
Borrower, Administrative Agent is acting for the ratable benefit of each Bank.
Any and all agreements to subordinate (whether made heretofore or hereafter)
other indebtedness or obligations of Borrower to the Obligation shall be
construed as being for the ratable benefit of each Bank. If Administrative Agent
acquires any

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                                       45
<PAGE>   51

security for the Obligation or any guaranty of the Obligation upon or in lieu of
foreclosure, the same shall be held for the Pro Rata benefit of all Banks.

         11.7 Limitation of Liability. To the extent permitted by Law (a) no
Agent (acting in their respective agent capacities) shall incur any liability to
any other Bank or Participant, including any liability caused by such Agent's
negligence, except for acts or omissions resulting from its own fraud, gross
negligence or wilful misconduct, and (b) no Agent, Bank, or Participant shall
incur any liability to any other Person for any act or omission of any other
Bank, Agent, or Participant.

         11.8 Relationship of Banks. Nothing herein shall be construed as
creating a partnership or joint venture among Agents and Banks.

         11.9 Benefits of Agreement. Except for the representations and
covenants in SECTION 11.1(c) in favor of Borrower, none of the provisions of
this SECTION 11 shall inure to the benefit of any Company or any other Person
other than Banks; consequently, neither any Company nor any other Person shall
be entitled to rely upon, or to raise as a defense, in any manner whatsoever,
the failure of any Agent or Bank to comply with such provisions.

         11.10 Agents; Arranger. None of the Banks identified in this Agreement
or the cover page hereof as "Syndication Agent" or "Documentation Agent" or
"Arranger" shall have any rights, powers, obligations, liabilities,
responsibilities, or duties under this Agreement other than those applicable to
all Banks as such. Without limiting the foregoing, none of the Banks so
identified as a "Syndication Agent" or "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary relationship with any Bank.

         11.11 Obligation Several. The obligations of Banks hereunder are
several, and each Bank hereunder shall not be responsible for the obligations of
the other Banks hereunder, nor will the failure of one Bank to perform any of
its obligations hereunder relieve the other Banks from the performance of their
respective obligations hereunder.

SECTION 12 MISCELLANEOUS.

         12.1 Headings. The headings, captions, and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.

         12.2 Nonbusiness Days. In any case where any payment or action is due
under any Loan Document on a day which is not a Business Day, such payment or
action may be delayed until the next-succeeding Business Day, but interest and
fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that, if in the case of
any such payment in respect of a Eurodollar Rate Borrowing the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.

         12.3 Communications. Unless specifically otherwise provided, whenever
any Loan Document requires or permits any consent, approval, notice, request, or
demand from one party to another, such communication must be in writing (which
may be by telecopy) to be effective and shall be deemed to have been given (a)
if by telex, when transmitted to the telex number, if any, for such party, and
the appropriate answer back is received, (b) if by telecopy, when transmitted to
the telecopy number for such party (and all such communications sent by telecopy
shall be confirmed

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                                       46
<PAGE>   52

promptly thereafter by telephone or personal delivery or mailing in accordance
with the provisions of this section; provided, that any requirement in this
parenthetical shall not affect the date on which such telecopy shall be deemed
to have been delivered), (c) if by mail, on the third Business Day after it is
enclosed in an envelope, properly addressed to such party, properly stamped,
sealed, and deposited in the appropriate official postal service, or (d) if by
any other means, when actually delivered to such party. Until changed by notice
pursuant hereto, the address (and telex and telecopy numbers, if any) for
Administrative Agent and each Bank is set forth on SCHEDULE 2.1, and for
Borrower is the address set forth by Borrower's signature on the signature page
of this Agreement.

         12.4 Form and Number of Documents. Each agreement, document,
instrument, or other writing to be furnished under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.

         12.5 Exceptions to Covenants. No Company shall take any action or fail
to take any action which is permitted as an exception to any of the covenants
contained in any Loan Document if such action or omission would result in the
breach of any other covenant contained in any of the Loan Documents.

         12.6 Survival. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents shall survive
all closings under the Loan Documents and, except as otherwise indicated, shall
not be affected by any investigation made by any party. All rights of, and
provisions relating to, reimbursement and indemnification of any Agent or any
Bank shall survive termination of this Agreement and payment in full of the
Obligation.

         12.7 GOVERNING LAW. THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN
DOCUMENTS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE
LOAN DOCUMENTS.

         12.8 Invalid Provisions. If any provision in any Loan Document is held
to be illegal, invalid, or unenforceable, such provision shall be fully
severable; the appropriate Loan Document shall be construed and enforced as if
such provision had never comprised a part thereof; and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom. Administrative Agent, Banks, and
Borrower agree to negotiate, in good faith, the terms of a replacement provision
as similar to the severed provision as may be possible and be legal, valid, and
enforceable.

         12.9 Entirety. THE RIGHTS AND OBLIGATIONS OF THE COMPANIES, BANKS, AND
AGENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED
BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM
TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY COMPANY, ANY
BANK, OR ANY AGENT (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS THEY
RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE FINAL
AGREEMENT BETWEEN THE COMPANIES, BANKS, AND AGENTS AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.

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                                       47
<PAGE>   53

         12.10 Jurisdiction; Venue; Service of Process; Jury Trial. EACH PARTY
HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE SOUTHERN DISTRICT OF TEXAS, AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR
IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS
AS PROVIDED BY TEXAS LAW, (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN
DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES
ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES
THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS
ADDRESS SET FORTH HEREIN, AND (E) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY. The scope of each of the foregoing waivers is intended to
be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including, without
limitation, contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. Borrower and each other party to this Agreement
acknowledge that this waiver is a material inducement to the agreement of each
party hereto to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and each will continue to rely
on each of such waivers in related future dealings. Borrower and each other
party to this Agreement warrant and represent that they have reviewed these
waivers with their legal counsel, and that they knowingly and voluntarily agree
to each such waiver following consultation with legal counsel. THE WAIVERS IN
THIS SECTION 12.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER Loan
Document. In the event of Litigation, this Agreement may be filed as a written
consent to a trial by the court.

         12.11 Amendments, Consents, Conflicts, and Waivers.

                  (a) Except as otherwise specifically provided, (i) this
         Agreement may only be amended, modified or waived by an instrument in
         writing executed jointly by Borrower and Majority Banks, and, in the
         case of any matter affecting Administrative Agent, by Administrative
         Agent, and may only be supplemented by documents delivered or to be
         delivered in accordance with the express terms hereof, and (ii) the
         other Loan Documents may only be the subject of an amendment,
         modification, or waiver if Borrower and Majority Banks, and, in the
         case of any matter affecting Administrative Agent, Administrative
         Agent, have approved same. Without the consent of Administrative Agent
         and Majority Banks, no provision of SECTION 11 may be amended,
         modified, or waived.

                  (b) Any amendment to or consent or waiver under this Agreement
         or any Loan Document which purports to accomplish any of the following
         must be by an instrument in writing executed by Borrower and executed
         (or approved, as the case may be) by each Bank, and, in the case of any
         matter affecting Administrative Agent, by Administrative Agent: (i)
         extends the due date or decreases the amount of any scheduled payment
         of the Obligation arising under Loan Documents beyond the date
         specified in the Loan Documents; (ii) reduces

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                                       48
<PAGE>   54

         the interest rate or decreases the amount of interest, fees, or other
         sums payable to Administrative Agent or Banks hereunder (except such
         reductions as are contemplated by this Agreement); (iii) reduces the
         percentage specified in the definition of "MAJORITY BANKS"; (iv)
         changes this CLAUSE (b) or any other matter specifically requiring the
         consent of all Banks hereunder; or (v) consents to the assignment or
         transfer by Borrower of any of its rights and obligations under this
         Agreement (except pursuant to a Reincorporation Merger in accordance
         with SECTION 8.11(b)). Without the consent of such Bank, no Bank's
         "COMMITTED SUM" under the Revolving Facility may be increased.

                  (c) Any conflict or ambiguity between the terms and provisions
         herein and terms and provisions in any other Loan Document shall be
         controlled by the terms and provisions herein.

                  (d) No course of dealing nor any failure or delay by
         Administrative Agent, any Bank, or any of their respective
         Representatives with respect to exercising any Right of Administrative
         Agent or any Bank hereunder shall operate as a waiver thereof. A waiver
         must be in writing and signed by Administrative Agent and Majority
         Banks (or by all Banks, if required hereunder) to be effective, and
         such waiver will be effective only in the specific instance and for the
         specific purpose for which it is given.

         12.12 Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. It is not necessary that each Bank execute
the same counterpart so long as identical counterparts are executed by Borrower,
each Bank, and Administrative Agent. This Agreement shall become effective when
counterparts hereof shall have been executed and delivered to Administrative
Agent by each Bank, Administrative Agent, and Borrower, or, when Administrative
Agent shall have received telecopied, telexed, or other evidence satisfactory to
it that such party has executed and is delivering to Administrative Agent a
counterpart hereof.

         12.13 Successors and Assigns; Assignments and Participations.

                  (a) This Agreement shall be binding upon, and inure to the
         benefit of the parties hereto and their respective successors and
         assigns, except that (i) Borrower may not, directly or indirectly,
         assign or transfer, or attempt to assign or transfer, any of its
         Rights, duties or obligations under any Loan Documents without the
         express written consent of all Banks, and (ii) except as permitted
         under this Section, no Bank may transfer, pledge, assign, sell any
         participation in, or otherwise encumber its portion of the Obligation.

                  (b) Each Bank may assign to one or more Eligible Assignees all
         or a portion of its Rights and obligations under this Agreement and the
         other Loan Documents (including, without limitation, all or a portion
         of its Borrowings and its Note); provided, however, that:

                           (i) each such assignment shall be to an Eligible
                  Assignee;

                           (ii) except in the case of an assignment to another
                  Bank or an assignment of all of a Bank's Rights and
                  obligations under this Agreement and the other Loan

                                                      REVOLVING CREDIT AGREEMENT
                                       49
<PAGE>   55

                  Documents, any such partial assignment shall be in an amount
                  at least equal to $10,000,000;

                           (iii) each such assignment by a Bank shall be of a
                  constant, and not varying, percentage of all of its Rights and
                  obligations under this Agreement and its Note;

                           (iv) the parties to such assignment shall execute and
                  deliver to the Administrative Agent for its acceptance an
                  Assignment and Acceptance Agreement in the form of EXHIBIT D
                  (the "ASSIGNMENT AND ACCEPTANCE") hereto, together with any
                  Notes subject to such assignment and a processing fee of
                  $3,000; and

                           (v) no such assignment may be made to an Eligible
                  Assignee that is a pension or welfare plan as defined in
                  Section 3 of ERISA, or other entity that holds the assets of
                  any such plan, except that such an assignment to or on behalf
                  of a pension or welfare plan or other entity that holds the
                  assets of any such plan shall be permitted so long as the
                  acquisition and holding by the assignee of any Note or
                  interest in the Borrowings do not constitute a prohibited
                  transaction under ERISA or are exempt from the prohibited
                  transaction restrictions of ERISA and the Code pursuant to one
                  or more prohibited transaction statutory or administrative
                  exemptions.

         Upon execution, delivery, and acceptance of such Assignment and
         Acceptance, the assignee thereunder shall be a party hereto and, to the
         extent of such assignment, have the obligations, Rights, and benefits
         of a Bank under the Loan Documents and the assigning Bank shall, to the
         extent of such assignment, relinquish its rights and be released from
         its obligations under the Loan Documents. Upon the consummation of any
         assignment pursuant to this Section, Borrower shall issue appropriate
         Notes to the assignor and the assignee, reflecting the transaction
         evidenced by such Assignment and Acceptance. If the assignee is not
         incorporated under the laws of the United States of America or a state
         thereof, it shall deliver to Borrower and Administrative Agent
         certification as to exemption from deduction or withholding of Taxes in
         accordance with SECTION 4.6.

                  (c) Administrative Agent shall maintain at its address
         referred to in SECTION 12.3 a copy of each Assignment and Acceptance
         delivered to and accepted by it and a register for the recordation of
         the names and addresses of the Banks and their respective Committed
         Sums, and principal amount of the Borrowings owing to each Bank from
         time to time (the "REGISTER"). The entries in the Register shall be
         conclusive and binding for all purposes, absent manifest error, and
         Borrower, Administrative Agent and Banks may treat each Person whose
         name is recorded in the Register as a Bank hereunder for all purposes
         of the Loan Documents. The Register shall be available for inspection
         by Borrower or any Bank at any reasonable time and from time to time
         upon reasonable prior notice. Upon the consummation of any assignment
         in accordance with this SECTION 12.13, SCHEDULE 2.1 shall automatically
         be deemed amended (to the extent required) by Administrative Agent to
         reflect the name, address, and respective Committed Sums of the
         assignor and assignee.

                  (d) Upon its receipt of an Assignment and Acceptance executed
         by the parties thereto, together with any Notes subject to such
         assignment and payment of the processing fee, Administrative Agent
         shall, if such Assignment and Acceptance has been completed and

                                                      REVOLVING CREDIT AGREEMENT
                                       50
<PAGE>   56

         is in substantially the form of EXHIBIT D hereto, (i) accept such
         Assignment and Acceptance, (ii) record the information contained
         therein in the Register and (iii) give prompt notice thereof to the
         parties thereto.

                  (e) Subject to the provisions of this Section and in
         accordance with applicable Law, any Bank may, in the ordinary course of
         its commercial banking business and in accordance with applicable Law,
         at any time sell to one or more Persons (each a "PARTICIPANT")
         participating interests in its portion of the Obligation. In the event
         of any such sale to a Participant, (i) such Bank shall remain a "Bank"
         under this Agreement and the Participant shall not constitute a "Bank"
         hereunder, (ii) such Bank's obligations under this Agreement shall
         remain unchanged, (iii) such Bank shall remain solely responsible for
         the performance thereof, (iv) such Bank shall remain the holder of its
         share of the Principal Debt for all purposes under this Agreement, (v)
         Borrower and Administrative Agent shall continue to deal solely and
         directly with such Bank in connection with such Bank's Rights and
         obligations under the Loan Documents, and (vi) such Bank shall be
         solely responsible for any withholding taxes or any filing or reporting
         requirements relating to such participation and shall hold Borrower and
         Administrative Agent and their respective successors, permitted
         assigns, officers, directors, employees, agents, and representatives
         harmless against the same. Participants shall have no Rights under the
         Loan Documents, other than certain voting Rights as provided below.
         Subject to the following, each Bank shall be entitled to obtain (on
         behalf of its Participants) the benefits of SECTION 4 with respect to
         all participations in its part of the Obligation outstanding from time
         to time so long as Borrower shall not be obligated to pay any amount in
         excess of the amount that would be due to such Bank under SECTION 4
         calculated as though no participations have been made. No Bank shall
         sell any participating interest under which the Participant shall have
         any Rights to approve any amendment, modification, or waiver of any
         Loan Document, except to the extent such amendment, modification, or
         waiver extends the due date for payment of any amount in respect of
         principal (other than mandatory prepayments), interest, or fees due
         under the Loan Documents, or reduces the interest rate or the amount of
         principal or fees applicable to the Obligation (except such reductions
         as are contemplated by this Agreement), provided that, in those cases
         where a Participant is entitled to the benefits of SECTION 4 or a Bank
         grants Rights to its Participants to approve amendments to or waivers
         of the Loan Documents respecting the matters previously described in
         this sentence, such Bank must include a voting mechanism in the
         relevant participation agreement or agreements, as the case may be,
         whereby a majority of such Bank's portion of the Obligation (whether
         held by such Bank or Participant) shall control the vote for all of
         such Bank's portion of the Obligation. Except in the case of the sale
         of a participating interest to another Bank, the relevant participation
         agreement shall not permit the Participant to transfer, pledge, assign,
         sell participations in, or otherwise encumber its portion of the
         Obligation, unless the consent of the transferring Bank (which consent
         will not be unreasonably withheld) has been obtained. No Bank shall
         sell any participating interest to a Participant that is a pension or
         welfare plan as defined in SECTION 3 of the ERISA or other entity that
         holds the assets of any such plan, except that such a sale to or on
         behalf of a pension or welfare plan or other entity that holds the
         assets of any such plan shall be permitted so long as the acquisition
         and holding by the Participant of its participating interest do not
         constitute a prohibited transaction under ERISA or are exempt from the
         prohibited transaction restrictions of ERISA and the Code pursuant to
         one or more prohibited transaction statutory or administrative
         exemptions.

                                                      REVOLVING CREDIT AGREEMENT
                                       51
<PAGE>   57

                  (f) Notwithstanding any other provision set forth in this
         Agreement, any Bank may at any time assign and pledge all or any
         portion of its Borrowings and its Note to any Federal Reserve Bank as
         collateral security pursuant to Regulation A and any Operating Circular
         issued by such Federal Reserve Bank. No such assignment shall release
         the assigning Bank from its obligations hereunder.

                  (g) Any Bank may furnish any information concerning the
         Companies in the possession of such Bank from time to time to Eligible
         Assignees and Participants (including prospective Eligible Assignees
         and Participants), subject, however, to SECTION 12.15.

         12.14 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Borrower's obligations under the Loan Documents shall remain in
full force and effect until termination of the Commitment and payment in full of
the Principal Debt and of all interest, fees, and other amounts of the
Obligation then due and owing, except that SECTION 4, SECTION 10, and SECTION
12, and any other provisions under the Loan Documents expressly intended to
survive by the terms hereof or by the terms of the applicable Loan Documents,
shall survive such termination. If at any time any payment of the principal of
or interest on any Note or any other amount payable by Borrower under any Loan
Document is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy, or reorganization of Borrower or otherwise, the
obligations of Borrower under the Loan Documents with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.

         12.15 Confidentiality. Administrative Agent and each Bank (each, a
"LENDING PARTY") agrees to keep confidential any material information furnished
or made available to it by the Borrower pursuant to this Agreement; provided
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party so long as such Persons are bound by the
confidentiality requirements of this Section, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement, (g) in connection
with any litigation to which such Lending Party or any of its affiliates may be
a party, (h) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this Section, agreed to
in writing by any actual or proposed participant or assignee; provided, however,
that before any disclosure is permitted under SUBSECTION (g), such Lending Party
or its affiliate shall, if not legally prohibited, notify and consult with the
Borrower concerning the information it proposes to disclose, to enable the
Borrower to take such action as may be appropriate under the circumstances to
protect the confidentiality of the information in question, provided further,
however, that such Lending Party or its affiliate shall not be required to
comply with the foregoing proviso, if doing so could adversely affect such
Lending Party or affiliate.

         12.16 Representations of Banks. Each Bank represents that it, in good
faith, has not relied upon any assets of the Companies consisting of stock (as
such term is defined in Regulation U of the Board of Governors of the Federal
Reserve System) as collateral in the extension of or maintenance of this
Revolving Facility.

                                                      REVOLVING CREDIT AGREEMENT
                                       52
<PAGE>   58

                    [REMAINDER OF PAGE INTENTIONALLY BLANK.
                            SIGNATURE PAGES FOLLOW.]

                                                      REVOLVING CREDIT AGREEMENT
                                       53
<PAGE>   59

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date hereinabove set forth.

                            SOUTHDOWN, INC.
                            a Louisiana corporation

                            By: /s/ DENNIS M. THIES
                               -------------------------------------------------
                            Name:   Dennis M. Thies
                            Title:  Executive Vice President -
                                    Finance and Chief Financial Officer

                            Address for Notices:

                            Southdown, Inc.
                            1200 Smith Street, Suite 2400
                            Houston, Texas 77002
                            Attn: Treasurer
                            Telephone: (713) 650-6200
                            Facsimile: (713) 653-6950

                            and with a copy to:

                            Southdown, Inc.
                            1200 Smith Street, Suite 2400
                            Houston, Texas 77002
                            Attn: General Counsel
                            Telephone: (713) 650-6200
                            Facsimile: (713) 650-8010

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   60

                                        WELLS FARGO BANK (TEXAS),
                                        NATIONAL ASSOCIATION, in its individual
                                        capacity and as Administrative Agent

                                        By: /s/ ANN RHOADS
                                           -------------------------------------
                                             Name: Ann Rhoads
                                             Title: Vice President

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   61

                                          SUNTRUST BANK, ATLANTA

                                          By: /s/ JOHN A. FIELDS, JR.
                                             -----------------------------------
                                             Name: John A. Fields, Jr.
                                             Title: Vice President

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   62

                                        THE BANK OF NOVA SCOTIA

                                        By: /s/ F.C.H. ASHBY
                                           -----------------------------------
                                           Name: F.C.H. Ashby
                                           Title: Senior Manager Loan Operations

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   63

                                        BANK ONE, TEXAS, N.A.

                                        By: /s/ GREG SMOTHERS
                                           -----------------------------------
                                           Name: Greg Smothers
                                           Title: Vice President

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   64

                               CREDIT AGRICOLE INDOSUEZ

                               By: /s/ PATRICK COCQUEREL
                                   ---------------------------------------------
                                  Name:  Patrick Cocquerel
                                  Title: First Vice President, Managing Director
                                         Head of Houston Representative Office

                               By: /s/ MICHAEL R. QUIRAY
                                   ---------------------------------------------
                                   Name:  Michael R. Quiray
                                   Title: Vice President
                                          Senior Relationship Manager

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]

<PAGE>   65

                                             PARIBAS

                                             By: /s/ ROSINE K. MATHEWS
                                                --------------------------------
                                                   Name: Rosine K. Mathews
                                                   Title: Vice President

                                             By: /s/ LARRY ROBINSON
                                                --------------------------------
                                                   Name: Larry Robinson
                                                   Title: Vice President

          [THIS IS A SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT]<PAGE>   1
                                                                   EXHIBIT 10.33

                                   AGREEMENT

                             KOSMOS CEMENT COMPANY
--------------------------------------------------------------------------------
                       KOSMOSDALE - BATTLETOWN, KENTUCKY

                                   AGREEMENT

                                    BETWEEN

                             KOSMOS CEMENT COMPANY
                          OPERATED BY SOUTHDOWN, INC.

                                      AND

                   INTERNATIONAL BROTHERHOOD OF BOILERMAKERS,
                 CEMENT, LIME, GYPSUM & ALLIED WORKERS DIVISION
                                  LODGE D-595

                                   1999-2004

                                                    [KOSMOS CEMENT COMPANY LOGO]

<PAGE>   2

                               TABLE OF CONTENTS
<TABLE>
<S>           <C>                                                                <C>
ARTICLE I     - RECOGNITION ......................................................1

ARTICLE II    - UNION AND COMPANY COOPERATION ....................................1

ARTICLE III   - THE BASE CREW ....................................................2

ARTICLE IV    - UNION SECURITY ...................................................2

ARTICLE V     - MANAGEMENT RIGHTS ................................................5

ARTICLE VI    - WAGES ............................................................5

ARTICLE VII   - VACATIONS ........................................................6

ARTICLE VIII  - JURY DUTY - WITNESS PAY ..........................................7

ARTICLE IX    - COPIES ...........................................................8

ARTICLE X     - GRIEVANCE PROCEDURE ..............................................8

ARTICLE XI    - NON-BARGAINING UNIT EMPLOYEES ....................................9

ARTICLE XII   - STRIKES AND LOCKOUTS ............................................10

ARTICLE XIII  - HOLIDAYS ........................................................10

ARTICLE XIV   - SENIORITY .......................................................11

ARTICLE XV    - LAYOFF/RECALL ...................................................12

ARTICLE XVI   - JOB BIDDING .....................................................13

ARTICLE XVII  - INCAPACITATED EMPLOYEE ..........................................14

ARTICLE XVIII - WORKWEEK AND OVERTIME ...........................................15

ARTICLE XIX   - BEREAVEMENT LEAVE ...............................................16

ARTICLE XX    - ANNUAL RESERVE TRAINING LEAVE ...................................16

ARTICLE XXI   - SAFETY AND HEALTH ...............................................17
</TABLE>
<PAGE>   3
<TABLE>
<S>           <C>                                                             <C>
ARTICLE XXII  - BULLETIN BOARD ...............................................17

ARTICLE XXIII - FURNISHING OF TOOLS ..........................................17

ARTICLE XXIV  - TRAINING COMMITTEE ...........................................17

ARTICLE XXV   - OVERTIME LUNCH ALLOWANCE .....................................18

ARTICLE XXVI  - BENEFIT PLANS ................................................18

ARTICLE XXVII - TERMS OF AGREEMENT ...........................................20

SCHEDULE A - PAY PROCEDURES ..................................................21
         A1 - GAINSHARING ....................................................21
         A2 - LEADPERSONS ....................................................21
         A3 - JOB GROUPINGS ..................................................21
         A4 - PROGRESSION SCHEDULES ..........................................23

LETTERS OF AGREEMENT .........................................................25
</TABLE>
<PAGE>   4

     This Agreement, dated May 1, 1999 is made by and between the KOSMOS CEMENT
COMPANY, Louisville, Kentucky, and the INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT, LIME, GYPSUM, AND ALLIED WORKERS DIVISION LOCAL LODGE NO.
D595, referred to respectively as the "Company" and the "Union."

ARTICLE I - RECOGNITION

1.1 The Company recognizes the Union as the sole bargaining agent for its
employees as is defined in paragraph 1.2 who work at the Company's operations at
Louisville and Battletown, Kentucky, for the purpose of collective bargaining
with respect to rates of pay, hours, and other conditions of employment.

1.2 The term "employee" as used in this Agreement shall include all permanent
production and maintenance employees including lead men, but excluding all
clerical employees, guards and supervisors as defined in the Act and all other
employees.

1.3 Union officers and members shall refrain from any union solicitation on
company time.

1.4 All provisions of this Agreement shall be applied to all employees without
regard to race, color, sex, religious creed, age, national origin, or veteran
status. The Company and the Union will comply with all Federal and State laws
concerning the rights of employees, including the Americans with Disability Act
and the Family and Medical Leave Act.

ARTICLE II - UNION AND COMPANY COOPERATION

2.1 The Union agrees that it will cooperate with the Company in all matters of
industrial relations including carrying out Equal Employment Opportunity
obligations and will support the Company's efforts to assure a fair day's work
on the part of its members and that it will actively strive to eliminate
absenteeism and other practices which restrict production. It further agrees
that its members will abide by the rules of the Company in its effort to prevent
accidents, to eliminate waste in production, conserve materials and supplies,
improve the quality of workmanship, and strengthen goodwill between the Company
and its employees.

2.2 The Union agrees that it will use its best efforts to assist the Company in
enhancing the competitiveness of the Company, and augmenting or increasing
revenue generation. For example, the Union will support, through community
involvement and pro-active measures, the efforts of the Company to obtain
permits and/or other necessary certifications to remain competitive in the
market place.

                                       1
<PAGE>   5

2.3 The parties hereto intend by this Agreement to provide a stabilized and
mutually beneficial relationship between them and to insure the production of
quality products on schedule and at competitive costs during the life of this
Agreement. The Company and the Union will also establish an active Employee
Participation Program to facilitate ideas and develop and implement programs to
improve the overall operations and enhance employee involvement.

ARTICLE III - THE BASE CREW

3.1 The parties agree that due to business conditions and the need for effective
plant operations, it is necessary to utilize outside contract labor to perform
work in the operation. Base Crew employees will perform most of the work to be
done at the plant with the remainder to be performed by various numbers and
types of outside contractors. The parties recognize that the Company is in the
primary business of manufacturing cement and other products requiring similar
process (utilizing hazardous waste as fuel). The parties further recognize that
the business is limited in scope and that the Company should avoid, to the
extent possible, getting into other businesses such as special projects, special
maintenance other than routine preventive maintenance, laborer work, janitorial
work, trucking and the like, where other business concerns may have more
expertise, competence, economies of scale or other advantages. Therefore, the
Union agrees that the Company has the right to subcontract these and other types
of work. The base crew concept is intended to enhance the job security of our
permanent employees.

3.2 In an effort to provide the employees of Kosmos Cement Company with positive
labor relations and maximum job security, the parties agree that the Company
will operate the facility as efficiently and economically as possible, and it is
not the intention of the Company to permanently displace members of the
bargaining unit through the use of contract employees.

ARTICLE IV - UNION SECURITY

4.1 All employees covered by this Agreement, who as of May 1, 1991, are members
of the Union in good standing, and all employees who thereafter become members,
shall, as a condition of continued employment, remain members of the Union in
good standing for the duration of the Agreement. All new employees covered by
the Agreement shall, as a condition of employment, become members of the Union
on or immediately after successful completion of their probationary period. The
Company will notify the Union of all permanent new hires' addresses, telephone
numbers, and Social Security numbers.

                                       2
<PAGE>   6

4.2 The Company agrees that during all reasonable times when the plant is
operating a duly accredited representative of the Union shall be entitled access
to the premises during the regular working hours for the purpose of assisting in
the adjustment of pending grievances, provided that the designated
representative of the Company is properly notified in advance and the Union
representative establishes proper identification. If it is necessary to go into
the work area of the plant (for example, to view a particular operation relative
to a pending grievance), then the appropriate Company official shall accompany
the Union representative so that both parties see the same thing so as to aid in
resolving the grievance.

4.3 The Union Grievance Committee representing the employees in matters other
than negotiations shall consist of not more than three (3) employees.

4.4 Any employee elected or appointed to a full time position with the
International Brotherhood of Boilermakers, Cement, Lime, Gypsum and Allied
Workers Division may be granted a leave of absence up to one (1) year provided
thirty (30) days written notice is given to the Company prior to the beginning
of such leave. During such leave, seniority shall accumulate. Insurance benefits
shall be suspended upon the commencement of such leave and will be in effect the
first day of returning to work with the Company. Upon returning to work such
employee shall be reinstated to his or her former job within the bargaining unit
by means of the then-existing bidding procedure. The Company agrees to consent
to the absence of no more than one (1) employee at any time under this
paragraph.

4.5 Up to two (2) employees may be excused from work for up to two (2) weeks in
a calendar year for the purpose of attending an International Union meeting or
convention. The leave shall be granted provided the Company receives fifteen
(15) days advance written notice.

4.6 Check-off: During the term of this Agreement, the Company will continue to
check off monthly dues, and initiation fees, each as designated by the Treasurer
of the Local Union, as membership dues in the Union on the basis of and for the
term of individually signed check-off authorization cards, a copy of which is
reproduced below, or hereafter submitted to the Company. The Company shall
promptly remit any and all amounts so deducted to the Treasurer of the Local
Union with a list of the employees from whom the deduction was checked off. On
or before the last Friday of each calendar month the Union shall submit to the
Company a summary list of cards transmitted in each month. Dues for a given
month shall be deducted weekly; deductions on the basis of authorization cards
submitted to the Company shall commence with respect to dues for the month in
which the Company receives such authorization cards. Unless the Company is
otherwise notified, the only Union membership dues to be deducted for payment to
the Union from the pay of the employee who has furnished an authorization shall
be the monthly Union dues. The Company will deduct initiation fees when notified
as designated by the Treasurer of the Local Union. The Union shall indemnify the
Company and hold it harmless against any and all suits, claims, demands and
liabilities that shall arise out of or by reason of any action that shall be
taken or not taken by the Company for the purpose of complying with the
foregoing provisions of this Article, or in reliance on any list or certificate
which shall have been furnished to the Company by the Union under any such
provisions.

                                       3
<PAGE>   7

                             CHECK-OFF AUTHORIZATION
                        FOR INTERNATIONAL BROTHERHOOD OF
                          BOILERMAKERS, CEMENT DIVISION

I hereby authorize ______________________ (Name of Employer) to deduct from any
wages earned or to be earned by me, as your employee, and assign to Local Lodge
No. _______, of the International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers and Helpers, the sum of money determined by the
Union in succeeding calendar weeks, beginning with the week next following
thereof, until such weekly deductions shall total the sum of my Initiation or
Reinstatement Fees, and thereafter the sum of money set by the Union per month
in payment of my Membership Dues, in accordance with its Constitution and
Bylaws, and became due to it as my Membership Dues in said Union.

This assignment, authorization and description shall be irrevocable for the
period of one (1) year, or until the termination of the current Agreement
between the Employer and the Union, whichever occurs sooner; and I agree and
direct that this assignment, authorization and direction shall be automatically
renewed and shall be irrevocable for successive periods of one (1) year each, or
for the period each succeeding applicable Agreement between the Employer and the
Union, whichever is shorter, unless written notice is given by me to the
Employer and the Union not more than twenty (20) days and not less than ten (10)
days prior to the expiration of each period of one (1) year, or of each
applicable collective agreement between the Employer and the Union, whichever
occurs sooner.

Executed as ___________ this _________ day of ________, 1991.

                                       4
<PAGE>   8

ARTICLE V - MANAGEMENT RIGHTS

5.1 The Union recognizes that the management of the plant, river, and quarry
operations, the direction of the working forces, including the right to hire,
discipline for just cause, the right to make and change and enforce (after
posting) rules for the maintenance of discipline and safety; the exclusive
rights to determine partial or permanent discontinuance or shutdown of
operations (the Company's only obligation when exercising this right is to
bargain with the Union over the effects of that decision); the right to promote,
or transfer employees; the right to transfer and relieve employees from duty
because of lack of work or other legitimate reason, and the right to establish
and change the working schedules and duties of employees are vested in the
Company, except as otherwise provided in the Agreement. The listing of specific
rights in this Agreement is not intended to be nor shall be considered
restrictive of or a waiver of any of the rights of management not listed and not
specifically surrendered herein, whether or not such rights have been exercised
by the Company in the past.

ARTICLE VI - WAGES

6.1 It is agreed that for the duration of this Agreement, the wage groups and
the rates of pay shall be those set in Schedule "A".

6.2 (1) All scheduled work beginning between 5:00 A.M. and 12:59 P.M. inclusive,
shall be considered 1st shift work.

    (2) All scheduled work beginning between 1:00 P.M. and 8:59 P.M. inclusive,
shall be considered 2nd shift work.

    (3) All scheduled work beginning between 9:00 P.M. and 4:59 A.M. inclusive,
shall be considered 3rd shift work.

6.3 Each employee regularly scheduled to work on the 2nd shift shall be paid a
premium of sixty cents ($.60) for all hours worked by him or her on that shift.
Each employee regularly scheduled to work on the 3rd shift shall be paid
seventy-five ($.75) for all hours worked by him or her on that shift. These
premium rates do not apply to day workers even though they may work over into a
premium pay shift. If, however, the day worker is scheduled to take the place of
a regular scheduled shift worker, then the premium rate applies. Employees
called out will receive the appropriate shift premium for hours worked prior to
their normal shift.

6.4 All consecutive hours (exclusive of meal periods) worked by an employee who
normally begins work at a time specified in the preceding paragraphs, shall be
deemed to be worked by him or her on the shift on which he or she begins work.

6.5 All regular hours worked on Sunday, not compensated for by an overtime rate
shall be paid for at one and one-quarter (1 1/4) times the rate for work being
performed.

                                       5
<PAGE>   9

ARTICLE VII - VACATIONS

7.1 Each employee meeting all the requirements of paragraph 7.2 of this Article
shall be eligible for vacation in accordance with the following schedule:

         Continuous Service                          Vacation Weeks
         ------------------                          --------------

         1 Year of Service                           2 Weeks
         5 Years of Service                          3 Weeks
         10 Years of Service                         4 Weeks
         25 or more Years of Service                 5 Weeks

7.2 An employee must have been actively employed at some time during the
calendar year to be eligible for vacation with pay during that calendar year. An
employee shall receive a full vacation provided that such employee has actually
worked at least one thousand two hundred (1,200) hours during the year preceding
his or her most recent anniversary date. Employees who work less than one
thousand two hundred (1,200) hours in the preceding year will receive their
vacation pay prorata with one/twelfth of their vacation entitlement paid for
every one hundred of hours of actual work performed. An employee shall be
considered as having worked for the purpose of vacation eligibility on the basis
of an eight (8) hour day and forty (40) hour week during absence from work
because of a work related illness or injury for a period not to exceed four
hundred (400) hours.

7.3 Vacations will not be cumulative, and the final right to allotment of
vacation period is exclusively reserved to the Company in order to ensure the
orderly operation of the plant. When requested vacation periods conflict,
preference shall be given to the employee with the most plant seniority. In the
event a paid holiday falls during an employee's vacation period, the employee
shall receive holiday pay in addition to vacation pay.

7.4 The Company determines the number of employees by classification allowed on
vacation on any given week. Management will schedule vacation in a fair and
equitable manner. Vacation scheduling will begin on November 15th of the
previous year and be concluded by December 15th. The final schedule will be
posted by the Company no later than January 1st.

7.5 Vacation must be scheduled by week or weeks (a week is seven (7) calendar
days). Employees may request vacation pay in lieu of the time off provided they
produce a good and sufficient reason to the Company and it is mutually agreed by
the Company and the Union.

7.6 Vacation pay will based on forty (40) hours for each week of entitlement at
the employee's highest rate held for at least thirty (30) weeks in the previous
calendar year.

7.7 Prime Months Vacation Scheduling.

    (1) Prime months for vacation scheduling are June, July, and August.

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<PAGE>   10

    (2) Employees may request a vacation of up to two (2) consecutive weeks
        during prime months in their classification based on plant seniority.
        The Company will approve a vacation request provided there are openings
        in the schedule and it does not adversely affect the efficient
        operations of the plant or quarry.

    (3) Once all employees in a job classification have had an opportunity to
        request a prime month vacation provided there are openings and it does
        not adversely impact operations, the Company will consider second
        requests.

7.8 One (1) week of vacation can be taken one day at a time provided:

    (1) The employee makes a request at least seventy-two (72) hours in advance,
        and,

    (2) The request is granted by the Company.

    (3) Employee may use the above to cover a day of sickness provided the
        Company is notified as soon as possible but no later than 30 minutes
        before the start of the shift.

    It is the intent to arrange absences so that the Company will not incur
    penalties, and, as such, the Company reserves the right to disallow any
    request for a one day vacation.

ARTICLE VIII - JURY DUTY - WITNESS PAY

8.1 It is agreed that the Company shall make up the wage loss incurred by a
regular employee (as distinguished from a probationary employee) because of jury
service by payment of the difference between the amount received for such jury
service on the day such employee would have been regularly scheduled to work and
his or her regular rate of pay computed on the same basis as vacation pay. Any
employee reporting for jury duty will not be required to work his or her regular
shift that calendar day. The employee will be excused for the entire day without
loss of pay. Hours spent on jury duty service and paid for hereunder shall be
considered as time actually worked for the 40 hour overtime requirements.
Further as outlined above, the Company shall make up the wage loss incurred by
an employee when subpoenaed as a witness in an action when the employee or the
Union or the Company are neither the plaintiff nor the defendant.

8.2 To receive pay from the Company under this provision, the employee must
provide the Company with a statement signed by an official of the court
certifying as to the employee's service as a juror or court witness or
appearance in court for such purposes, the date or dates of attendance, and the
compensation paid him or her exclusive of any transportation and/or subsistence
allowance.

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ARTICLE IX - COPIES

9.1 The Labor Agreement and Summary Plan Descriptions for the Pension Plan,
401K, and Insurance Plan will be printed at Company expense. The Company will
provide each member with a copy of the booklet.

ARTICLE X - GRIEVANCE PROCEDURE

10.1 Should differences arise during the term of this Agreement between the
Company and the Union, or an individual employed by the Company, as to the
meaning and application of the provisions of this Agreement, an earnest effort
shall be made by the parties to settle such differences promptly and in the
following manner:

    (1) STEP I. The complaint, within three (3) days of its occurrence, or the
occurrence of the matter out of which the complaint arises, may be taken up by
the employee involved, with or without Union representation, with his or her
supervisor. The employee shall state the specific article(s) and paragraph(s) of
the Contract that is alleged to have been violated in order for the grievance to
be considered and processed.

    (2) STEP II. If no satisfactory settlement is reached in Step I, the matter
shall be reduced to writing and presented to the Plant Manager within five (5)
days from the date of the meeting with the supervisor. The employee shall state
the specific article(s) and paragraph(s) of the Contract that is alleged to have
been violated in order for the grievance to be considered and processed. At the
time of presentation, or within five (5) days, the Plant Manager or his designee
will meet with the grievance committee to hear and discuss the grievance. The
Company shall answer the grievance in writing within five (5) days after said
meeting.

    (3) STEP III. If no agreement is reached in Step II, the Committee may,
within five (5) days of the receipt of the above answer, refer the matter to
higher officials of the Company and the Union, who may attend a meeting to be
held at a time mutually agreed to by the parties.

    (4) STEP IV. Any grievance not settled in Step III above may be referred to
the Dispute Resolution Panel. This panel will consist of one (1) official of the
International Union, one (1) official of the Corporate Human Resources
Department, and one (1) individual mutually agreed upon by these two (2)
officials. Notice to refer a grievance to the Dispute Resolution Panel shall be
given in writing within fifteen (15) days after being notified of the decision
rendered in Step III or the matter will be considered closed. Only one (1)
grievance may be submitted to or be under review by the Dispute Resolution Panel
at any one (1) time unless by prior mutual written consent of the parties. The
Dispute Resolution Panel shall have no power to add to or subtract from or
change, modify or amend any of the provisions of this Agreement. The decision
rendered by the Dispute Resolution Panel will be final and binding upon the
Union, the Company, the grievant, and all the

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<PAGE>   12

employees covered by this Agreement. The Dispute Resolution Panel shall
interpret and apply the terms of this Agreement; they shall not substitute their
discretion and judgement for that of the Company. Disputes shall be settled by
majority vote. The actual vote cast by each party shall not be revealed. It is
expressly agreed that the Dispute Resolution Panel shall not have the authority
to decide any matter involving the exercise of a right reserved to management
under this Agreement. The expenses incident to the services of the third party,
including the cost of the meeting room, etc. shall be shared equally by the
Company and the Union.

10.2 Any grievance growing out of a discharge or suspension must be submitted in
writing by the aggrieved employee directly to the Union and from the Union to
the Director of Human Resources or Plant Manager within forty-eight (48) hours
from the time the Union is notified in writing of the discharge or suspension or
it will not be recognized and action taken shall be final.

10.3 The time limits referred to in the foregoing paragraphs exclude Saturdays,
Sundays and holidays.

10.4 Any grievance not presented or appealed within the time limits provided,
unless mutually agreed in writing to extend the time, shall be considered
settled on the basis of the decision which was not appealed and shall be final
and binding on the parties involved.

10.5 Grievances presented in any of the regular steps set forth and not answered
within the specified time shall be considered as having been appealed to the
next step of the grievance procedure.

10.6 The Company will schedule grievance meetings at mutually convenient times
and the Union Grievance Committee as defined in Article 4.3 will not lose
regularly scheduled pay for time spent in grievance meetings.

ARTICLE XI - NON-BARGAINING UNIT EMPLOYEES

11.1 It is understood and agreed that during the normal course of operations it
may be necessary for non-bargaining unit employees to perform some bargaining
unit work from time to time. Such work will be incidental to the normal duties
of said non-bargaining unit employees, as long as such work does not permanently
displace or replace a bargaining unit employee. Such work shall include work
involving corrective action which must be performed expeditiously; instruction
or training of employees; demonstration; inspection or testing of equipment;
work of an emergency nature; and development work for new processes and/or
procedures.

11.2 Temporary employees will be used to perform work that is incidental to the
manufacturing of cement. This will include but not be limited to clean-up,
janitorial duties, lawn and ground maintenance and short-term projects, etc. In
addition, the parties recognize that temporary employees may be used for other
assignments such as to address temporary surges in business, to

                                       9
<PAGE>   13

facilitate the scheduling of permanent employees for training and development
opportunities, to enhance the job security of permanent employees, etc.
Temporary employees will not be permitted to work for the plant or the quarry
more than 180 consecutive calendar days.

11.3 The Company will not expand beyond three (3) temporary employees without
first notifying the Union committee in writing. Any new temporary employees
added cannot be utilized for longer than 180 calendar days without mutual
agreement between the parties.

ARTICLE XII - STRIKES AND LOCKOUTS

12.1 The Union agrees that there shall be no picketing or strikes by the Union
or by its members, of any kind or degree whatsoever, or walkout, suspension of
work, slowdowns, limiting of production, or any other interference or stoppage,
total or partial, of the Company's operations for any reason whatsoever, such
reasons including, but not limited to, unfair labor practices by the Company or
any other Employer. It is further agreed that neither the Union or its members
shall engage in the above prohibited conduct in support of picketing, strikes or
any labor dispute actions engaged in by any other organization or person. In
addition to any other recourse or remedy available to the Company for violation
of the terms of this Article by the Union and/or any Union member, the Company
may discharge or otherwise discipline any employee who authorizes, causes,
engages in, sanctions, recognizes, or assists in any violation of this Article.
The Company will not engage in any lockouts during the term of this Agreement.

ARTICLE XIII - HOLIDAYS

13.1 The Company recognizes the following nine (9) paid holidays per year: New
Year's Day, Good Friday, Memorial Day, 4th of July, Labor Day, Thanksgiving, Day
after Thanksgiving, Christmas Eve, and Christmas Day. Beginning with the
calendar year 2002 an additional holiday will be observed on President's Day.

13.2 Holiday pay will be equal to eight (8) hours pay at the employee's straight
time hourly rate. Such holiday pay will not be paid if the employee is absent
from work on the holiday if scheduled to work on the holiday or if the employee
is absent on the scheduled day preceding or following the holiday unless such
absences are excused by Management. In no event shall a holiday be paid for
unless an employee has also actually worked at least one (1) day during the
fifteen (15) day period immediately preceding or immediately following the
holiday. If a ten (10) hour shift employee is scheduled off for a holiday
falling during his or her regular four (4) days of work, he or she will receive
ten (10) hours of holiday pay.

13.3 If an employee is required to work on a holiday, he or she will receive
eight (8) hours pay for the holiday (holiday pay) plus one and one-half (1-1/2)
times the employee's regular hourly rate for the first eight (8) hours actually
worked on the holiday. The employee will receive two and one-half (2-1/2) times
the employee's regular hourly rate for hours worked in excess of eight (8) on
the holiday.

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<PAGE>   14

13.4 The eight (8) hours holiday pay shall be counted toward the calculation of
overtime pay paid for working in excess of forty (40) hours per week.

13.5 Since the employee is receiving one and one-half (1-1/2) times the
employee's regular hourly rate for hours actually worked on the holiday, such
hours actually worked on the holiday shall not be counted toward the calculation
of overtime pay received for working in excess of forty (40) hours per week.

13.6 When a holiday falls on Sunday, it will normally be observed on the
following Monday.

ARTICLE XIV - SENIORITY

14.1 Seniority shall consist of an employee's length of continuous service with
the Company since the employee's last day of hire at its facility located at
Louisville and/or Battletown, Kentucky.

14.2 Each new employee shall be considered as a probationary employee for the
first ninety (90) calendar days of full time employment after which the
employee's seniority shall date back to his or her date of hire. There shall be
no seniority among probationary employees. Such employees shall not have
recourse to the grievance procedure of this Agreement and may be laid off or
discharged as exclusively determined by the Company.

14.3 Seniority and the employment relationship shall be automatically terminated
when an employee:

     1. is discharged;

     2. is terminated upon permanent shutdown of the Company's facilities;

     3. is laid off for a period of twenty-four (24) months or the length of his
        or her seniority as of his or her last day of work, whichever period is
        shorter;

     4. voluntarily quits which shall be deemed to include:

        a) failure to notify the Company of the employee's intention to return
        to work after layoff within three (3) working days, and to actually
        report to work within seven (7) working days (unless this latter period
        is extended in writing by the Company) after he or she has been notified
        by certified mail (either by delivery or attempted delivery) at his or
        her last address appearing on the Company's records to report to work;

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<PAGE>   15

        b) an absence for two (2) consecutive scheduled work days without
        notifying the Company or reporting to work unless excused by Management
        in advance;

        c) the employee fails to return to work on the first regularly scheduled
        work day following the termination of any leave of absence or any other
        leave approved by the Company unless excused by Management.

     5. retires.

14.4 When a vacancy occurs for which a laid off employee is qualified, he or she
will be given notice of recall at his or her last address as shown on Company
records. The employee must notify the Company of the employee's intention to
return to work after layoff within three (3) working days and must actually
report to work within seven (7) working days after he or she has been notified.
This may be extended for an additional seven (7) days if the employee has
another job which requires a two (2) week resignation notice.

14.5 An employee on continuous absence due to disability shall accrue seniority
and retain recall rights for a period not to exceed twenty-four (24) months. An
employee absent because of disability shall only be returned to work after he or
she is physically able to perform the job. However, should such an employee be
declared totally and permanently disabled prior to twenty-four (24) months, such
employee's name shall be removed from the payroll and a notice to this effect
will be sent to his or her last address as shown on Company records.

14.6 Seniority lists agreed to by and between the Company and the Union shall be
posted on the bulletin board as of May 1 and November 1 of each year.
Corrections shall be made in the seniority lists when it is proved an employee
is placed in the wrong position on said list, but all requests for corrections
must be made within thirty (30) days from date of posting or the list shall be
valid as posted. The Union will be given a copy of the seniority list.

14.7 All employees have the obligation to notify the Company of their current
address and telephone number and immediately advise the Company of any changes.

ARTICLE XV - LAYOFF/RECALL

15.1 The Company recognizes that all employees shall retain the right to
seniority preference in cases of layoffs and recall. The last employee hired
shall be the first laid off and the last laid off the first rehired. Such
preferences in the cases of layoffs and recall shall take into consideration the
employee's ability to perform the available work and the efficient operations of
the operation. It is recognized that, in periods where business conditions
necessitate that the level of production be reduced to a point where only a
minimum of employees is required, it shall be necessary, in some cases, to
deviate from strict plant seniority in order that some positions be available to
service and adjust the equipment when production requirements increase. In the
event of a layoff which is scheduled to last five (5) or more days, the Company
will layoff employees in Job Groups one (1)

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<PAGE>   16

through four (4) by plant seniority. Any such employee who displaces the least
senior person in a position must be qualified to perform in that position within
a reasonable period of time not to exceed five (5) days of being placed on the
job. If the Company does not layoff in accordance with seniority, the Company
will meet with the Union to explain the reasons prior to the layoff.

15.2 In the event that an employee is displaced by the installation of
mechanical equipment, change in production methods, the installation of new or
larger equipment, the combining of jobs, the elimination of jobs, or by a more
senior person, the employee may elect to exercise his or her plant seniority to
displace the least senior person in a position the employee is qualified to
perform within a reasonable period of time not to exceed thirty (30) days of
being placed on the job.

15.3 In the event the Company determines it is necessary to permanently change
the shift schedule or off days of an employee, the affected employee may
exercise seniority to displace a less senior employee within the same
classification.

ARTICLE XVI - JOB BIDDING

16.1 When the Company determines a permanent vacancy exists, other than a
minimum pay job and it cannot be filled from senior employees within the same
job classification, the Company will post a notice of such fact, such notice to
remain posted for a period of five (5) days, not including Saturdays, Sundays,
or holidays. Any employee on vacation during the posting period (not to exceed
two (2) weeks) will have forty-eight (48) hours from the time the employee was
scheduled to return from vacation to determine if any bids were posted during
the vacation and to submit a job bid for consideration. This notice shall state
rates of pay, hours, current shifts and off days, and job requirements.
Employees who wish the job shall be considered in the manner provided herein in
paragraph 16.2 and the successful applicant's name should the job be awarded,
will be posted within fourteen (14) days after the bid is removed from the
bulletin board, no more than thirty (30) days where testing is required. The
successful bidder will be placed on the job as needed. If a successful bidder is
not assigned to the job within ninety (90) days following the awarding of the
bid, and the Company still intends to fill the job, the employee shall receive
the applicable rate of the new job and any time accumulated after the awarding
of the job bid shall be credited towards the progression schedule. If there are
no qualified bidders, the Company may assign the least senior qualified employee
who does not hold a bid job to the vacancy.

16.2 The following factors shall apply in the awarding of all jobs:

     (1) Qualifications of the Applicant (which shall include: ability to
         perform the work, aptitude, skills, experience, training for the job,
         score on the mechanical aptitude examination published by The
         Psychological Corporation, and attendance);

     (2) Physical ability to perform the essential functions of the job;

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<PAGE>   17

     (3) Experience gained through holding jobs under the bid system, outside
         schooling, as well as skills, knowledge, training and ability acquired
         by an employee prior to employment with the Company, will be given
         consideration in awarding jobs. Experience gained through temporary
         reassignments will not be given consideration in awarding jobs, except
         to qualify the senior bidder

     (4) In the event that the three previous criterion are equal the position
         will be filled by the most senior applicant.

    If the employee selected shall fail to qualify after a fair trial period, in
the exclusive judgement of the Company he or she shall be returned to his or her
former position and the next bidder shall be given consideration. No employee
with a formal disciplinary action in the record within the last 12 months may be
considered for promotion. A verbal warning shall not be considered a formal
disciplinary action for this purpose. Employees may bid for a job below their
current classification only once in a 36 month period.

16.3 Temporary Reassignment. An employee who is temporarily assigned by his or
her supervisor to perform work of a higher paid job classification will be paid
the rate of such higher job classification for time actually worked. An employee
temporarily assigned by his or her supervisor to perform work in an equal or
lower paid classification will be paid the base hourly wage rate of his or her
permanent classification. When making temporary assignments from the laborer
classification, the Company will upgrade the senior available employee who is
not already upgraded from the classification.

16.4 In no event shall the Company be requested or required to post any job
temporarily vacated by reason of vacations, illness, or injury. The Company, at
its discretion, may create temporary jobs not to exceed one hundred twenty (120)
work days, which may be extended by mutual agreement between the Company and the
Union. Should the Company determine that any temporary job become permanent, the
Company shall post the job as provided in this Article.

16.5 In the event that two (2) or more existing positions are combined, the
affected employees in the classification will be assigned, if needed, in the new
combined job by seniority and ability to perform the work. Any vacancies created
by this action will be bid in accordance with Article 16.1.

ARTICLE XVII - INCAPACITATED EMPLOYEE

17.1 Any employee who becomes incapacitated and, on the basis of competent
medical opinion, cannot perform the duties of his or her regular job may be
placed in a vacant or other job by mutual agreement between the Local Management
and the Local Union Committee providing the employee can perform the job within
a reasonable training program. In placing an incapacitated employee under this
provision, the Parties will take into consideration the fair placement of any
employee who may be displaced by such assignment.

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ARTICLE XVIII - WORKWEEK AND OVERTIME

18.1 During the life of this Agreement it is understood that the work day shall
be twenty-four (24) hours commencing with the beginning of the employee's
morning shift and the work week shall be seven (7) days beginning with the
beginning of the morning shift on Monday. One and one-half (1-1/2) times the
employee's regular hourly rate shall be paid for all hours worked in excess of
forty (40) hours per week.

18.2 One and one-half (1-1/2) times the employee's regular hourly rate shall be
paid for all hours worked in excess of eight (8) in a day and two (2) times the
employees regular hourly rate shall be paid for all hours worked in excess of
twelve (12) in a work day for employees scheduled to work a normal eight (8)
hour day. One and one-half (1-1/2) times the employee's regular hourly rate
shall be paid for all hours worked in excess of ten (10) in a day and two (2)
times the employee's regular hourly rate shall be paid for all hours worked in
excess of fourteen (14) in a work day for employees scheduled to work a normal
ten (10) hour day. Daily overtime shall not be counted toward the calculation of
overtime pay received for working in excess of forty (40) hours per week.

18.3 Callouts.

    (1) If an employee is called out after his or her regular shift and after
leaving the plant, or on off days, he or she shall be paid a minimum of four (4)
hours pay at one and one-half (1-1/2) times the employee's regular rate.
However, such hours shall not be counted toward the calculation of overtime pay
paid for working in excess of forty (40) hours per week.

    (2) If such employee is notified twelve (12) hours or more in advance of his
or her shift, the four (4) hour minimum will not apply.

    (3) If an employee is called out within four (4) hours of his or her
scheduled shift start, he or she shall receive a minimum of four (4) hours pay
at one and one-half (1-1/2) times the employee's regular rate in addition to
regular pay for scheduled hours worked.

18.4 Weekly manning schedule shall be posted no later than 10:00 A.M. on Fridays
barring unforeseen circumstances outside the Company's control.

18.5 Employees who have not been notified of a schedule change after the Friday
posting and who report to work shall be guaranteed a minimum of four (4) hours
pay if no work is available. If an employee is assigned to work, he or she shall
be scheduled a minimum of eight (8) hours of work during the work day. This
provision shall not apply if failure to provide work is due to circumstances
outside the Company's control such as but not limited to fire, flood, storm,
major equipment failure, or utility failure. Every reasonable effort shall be
made to notify employees in advance of their reporting to work.

18.6 Report Pay. If an employee shows up for work at his or her scheduled time
and is not put to work (sent home for lack of available work) he or she shall
receive four (4) hours pay. An employee

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<PAGE>   19

who works will be paid for hours worked but not less than four (4) hours pay if
sent home by the Company. This provision shall not apply if failure to provide
work is due to circumstances outside the Company's control such as, but not
limited to, fire, flood, storm, major equipment failure or utility failure.

18.7 The current Overtime Distribution Policy will be posted by the Company.
This policy may be amended by a mutual agreement between the parties. The
overtime list will be maintained by the Company. It is agreed that employees may
not refuse to work mandatory overtime unless a reasonable excuse is given as
determined by the company.

ARTICLE XIX - BEREAVEMENT LEAVE

19.1 When an employee who has completed the probationary period is absent from
work to arrange for and/or attend the funeral of his or her parent, stepfather,
stepmother, wife or husband, son or daughter, or stepchildren, brother, sister,
grandfather, grandmother, grandchildren, father-in-law, mother-in-law, spouse's
grandparents, spouse's brother, spouse's sister, the Company will pay up to the
next three (3) scheduled work days (up to the next four (4) scheduled days off
with pay if the employee is required to travel beyond a radius of five hundred
(500) miles), for eight (8) hours at the employee's regular hourly rate for each
scheduled workday the employee is absent.

19.2 Funeral leave will be granted within seven (7) days of the death or service
only for absences occurring on the employee's regularly scheduled workdays and
will not apply to employees on layoff or other non-working status. Hours paid
under this Article will be counted as hours worked for the purpose of computing
overtime. To be eligible for benefit under the Article, the employee must supply
reasonable documentary evidence of covered death, family relationship, and
attendance at the funeral or service.

19.3 Employees who normally work a ten (10) hour, four (4) day work week will be
compensated in accordance with paragraph 19.1 for up to ten (10) hours at the
employee's regular hourly rate for each scheduled workday absent provided the
employee would have worked ten (10) hours on those days of absence. The maximum
funeral leave allowance for ten (10) hour shift employees will be thirty (30)
hours of pay per bereavement.

ARTICLE XX - ANNUAL RESERVE TRAINING LEAVE

20.1 Employees who are members of organized reserve components of the Armed
Forces, including the National Guard, will be allowed leave of absence annually
for the purpose of attending required military training encampments or cruises.
The Company will pay any employee who goes on such leave of absence the
difference between the employee's straight time pay for up to (2) two weeks and
the employee's military pay including longevity pay but excluding all allowances
such as rent, subsistence, uniform and travel. Payment will be made when the
employee returns from

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reserve training on presentation of satisfactory proof of the amount of pay
received.

ARTICLE XXI - SAFETY AND HEALTH

21.1 A joint Safety and Health Committee shall be established consisting of
members, appointed by the Company and the Union. The committee will consist of
not more than four (4) members from the Union and four (4) members from the
Company plus the Plant Manager or his representative. Meetings will be held
regularly to address safety and health concerns and make recommendations to the
Plant Manager.

ARTICLE XXII - BULLETIN BOARD

22.1 The Union agrees to post only notices concerning elections, meetings,
reports and other official Union business and notices of social and recreational
activities on the Company bulletin board. A copy of each notice will be supplied
to the Plant Manager at the time of its posting. The Union agrees further that
it will post no matter which is in the disinterest of the Company. However,
notwithstanding the above, it is understood that the Company's decision
concerning the use of the bulletin board shall be final.

ARTICLE XXIII - FURNISHING OF TOOLS

23.1 The Company shall furnish all special tools and equipment. Maintenance
employees shall furnish their own tools; in case of breakage, loss, or worn out
tools, the Company will replace or repair such tools. All breakage or loss shall
be reported immediately to the Company.

ARTICLE XXIV - TRAINING COMMITTEE

24.1 A joint Union Management Training Committee will be established consisting
of an equal number of representatives from the Union and the Management. Other
representatives may be invited to participate in the meetings from time to time
by mutual agreement as needed.

24.2 The purpose of the Committee will be to assist management by making
recommendations as to the selections, evaluations and progression of employees
in training and the overall successful administration of the plant training
program. The Committee shall meet quarterly or otherwise as necessary to
accomplish this objective.

24.3 A trainee will not be disqualified from the program without first being
advised of and placed in a probationary status unless the trainee's conduct
requires immediate removal. The Parties recognize it may be necessary to rotate
shift assignments to enable employees to obtain the necessary work experience.
Employees placed on probationary status shall not advance in pay.

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ARTICLE XXV - OVERTIME LUNCH ALLOWANCE

25.1 Any employee who works more than ten (10) consecutive hours or twelve (12)
consecutive hours for employees on ten (10) hour shifts where such overtime
hours are unscheduled, shall be given a lunch allowance. Any employee called out
who works more than four (4) consecutive hours outside his or her normal shift
will receive a lunch allowance. No lunch allowance will be provided if such
overtime hours are scheduled with twelve (12) hours advance notice. The lunch
allowance will not exceed $7. Effective May 1, 2002 the lunch allowance will not
exceed $8.

ARTICLE XXVI - BENEFIT PLANS

26.1 During the term of this Agreement the Company will provide employees with
participation in the Southdown, Inc. Medical Plan, the Southdown, Inc. Group
Dental Benefit Plan, the Southdown, Inc. Life Insurance and Accidental Death and
Dismemberment Plan, the Southdown, Inc. Long Term Disability Plan, the
Southdown, Inc. Pension Plan, the Southdown, Inc. Retirement Savings Plan, and
the Southdown, Inc. Voluntary Life Insurance Plan, and continue said plans for
the life of this Agreement unless the parties agree mutually to modify the
provisions of these plans. Effective May 1, 1999, gainsharing earnings will be
included as part of base pay for pension calculation purposes.

26.2 During the life of and for the term of this Agreement dated May 1, 1999,
the Company will provide post retirement medical insurance coverage to all
eligible employees covered under this bargaining unit who retire after having
achieved age 62 with at least 15 years of company service. The provisions of
this coverage will be the same as the benefits and eligibility requirements
provided for in the Southdown Inc. Retiree Medical Insurance Plan which are
subject to modification.

26.3     SICKNESS AND ACCIDENT BENEFITS

If an employee with at least one (1) year of service is absent from work due to
disability, sickness and accident benefits are payable. The disability must
prevent the employee from performing the duties of the job because of a
non-occupational sickness or injury. This benefit is payable if confined to a
hospital or home.

After a waiting period of three (3) work days, disability benefits are payable
at a rate of twenty five dollars ($25) per day for the fourth and fifth work day
of absence, then at a rate of fifty-five dollars ($55) per day for a maximum of
five days per week. The waiting period will be waived if the employee is
hospitalized as an in-patient and the daily benefits will be paid immediately at
the fifty-five dollar ($55) rate. A disabled employee may receive weekly
sickness and accident benefits during the period of disability not to exceed
five (5) months. It is the employee's responsibility to make application for
this benefit and the attending physician must document the nature of the
disability and expected date of return to work.

                                       18
<PAGE>   22

No benefits shall be payable for the following:

        1.  disability which you are not under the direct care of a licensed
            physician.

        2.  sickness or injury which is purposefully self-inflicted while sane
            or insane.

        3.  disability due to an injury arising out of the course of employment.

        4.  disability due to disease which benefits are payable under Worker's
            Compensation, Occupational Disease or similar law.

This benefit terminates upon retirement or upon termination of employment.

Any employee currently not participating in the long term disability (LTD) plan
and who applies for LTD coverage no later than July 1, 1996 and is rejected or
shows evidence of prior rejection, will be eligible for up to fifty two (52)
weeks of sickness and accident benefits.

                                       19
<PAGE>   23

ARTICLE XXVII - TERMS OF AGREEMENT

27.1 After ratification by the members of the Local Union, this Agreement shall
become effective and remain in force and effect and be binding upon the parties
hereto from May 1, 1999, to and including April 30, 2004, and it shall continue
to be in full force and effect thereafter from year to year until either party
on or before February 28 of any year, beginning February 28, 2004, gives written
notice to the other party of its desire or intention either to alter and modify
or terminate the same. If such notice is given, the parties hereto shall begin
negotiations not later than April 1 in such year.

    IN WITNESS WHEREOF, the Union has caused this Agreement to be executed in
its name, after due authorization by a vote of a majority of its members, and
the Company has caused it to be executed in its name, by its duly authorized
representatives.

INTERNATIONAL BROTHERHOOD OF                   KOSMOS CEMENT COMPANY
BOILERMAKERS, CEMENT, LIME,
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL LODGE NO. D595

-----------------------                        ---------------------------------
By: J. C. Todd                                 By: Bernard M. Reuland

-----------------------                        ---------------------------------
By: Timothy E. McCoy                           By: Stuart E. Tomlinson

-----------------------                        ---------------------------------
By: David L. Swarens                           By: Steven K. Martin

-----------------------                        ---------------------------------
By: Gary W. Killen                             By: Paul J. Anderson

-----------------------
By: Patrick M. Granzow

-----------------------
By: William G. Bennett

-----------------------
By: Buddy Joe Singleton

-----------------------
By: James E. Pack

Signed this 1st day of May, 1999.              Signed this 1st day of May, 1999.

                                       20
<PAGE>   24

                           SCHEDULE A - PAY PROCEDURES

A1 - GAINSHARING: The employees will participate in a gainsharing program
developed by the Company.

A2 - LEADPERSONS: Leadpersons may only be appointed at the sole discretion of
management. They shall be paid $1.25 per hour in addition to their normal rate
of pay while they are designated as leadpersons to perform certain
quasi-supervisory tasks incidental to their normal hands-on work.

A3 - JOB GROUPINGS: The following positions shall be grouped together for pay
purposes:

JOB GROUP ONE - GENERAL PLANT WORKER

Sweeper
Bobcat Operator
Laborer

*Not withstanding other provisions of this Agreement, this will be a bid job.

JOB GROUP TWO - UTILITY WORKER

River Watchman
Storeroom Attendant
Maintenance Lift Truck Driver
Shipper/Packer*/Loader
Root Catcher

*The Company will continue the current practice of providing an incentive to
packhouse employees of $3/1,000 bags of product packed per day.

JOB GROUP THREE - MATERIAL HANDLERS

Quarry Lube Serviceman
Crusher Operator
Clay Feeder
Clay Dryer Operator
Drill Operator
Quarry Driver
Quarry Barge Loader
Quarry Front-end Loader
Material Handler
Quarry Dozer Operator
Quarry Road Maintenance

                                       21
<PAGE>   25

JOB GROUP FOUR - PROCESS/HEAVY EQUIPMENT

Process Attendant
Quarry Mobile Equipment Operator
Derrick Operator
Quarry Blaster

JOB GROUP FIVE - LABORATORY

Laboratory Technicians

JOB GROUP SIX - SKILLED REPAIRMAN

Mechanical Repairman*
Electrical Repairman*
Garage Mechanic

*Requires Department of Labor Journeyman's Certificate to achieve Journeyman's
rate.

JOB GROUP SEVEN - INSTRUMENTS & CONTROL

Instrument Technician**
Control Room Operator
Machinist/Tool & Die Maker ***

**Must be Journeyman Electrical Repairman.
***Must be Journeyman Mechanical Repairman and requires Machinist Journeyman's
Certificate to achieve Journeyman's rate.

                                       22
<PAGE>   26

A4 - PROGRESSION SCHEDULES: The following wage schedules reflect a fifty cent
($.50) increase effective 5/1/99 a forty-five cent ($.45) increase effective
5/1/00, a forty-five cent ($.45) increase effective 5/1/01, a fifty cent ($.50)
increase effective 5/1/02, and a fifty cent ($.50) increase effective 5/1/03.

<TABLE>
<CAPTION>
                             5/1/99     5/1/00     5/1/01     5/1/02     5/1/03
                            -------    -------    -------    -------    -------
<S>                         <C>        <C>        <C>        <C>        <C>
JOB GROUP ONE

Starting Rate               $ 11.20    $ 11.65    $ 12.10    $ 12.60    $ 13.10
End of 6 Months Worked      $ 11.85    $ 12.30    $ 12.75    $ 13.25    $ 13.75

JOB GROUP TWO

Starting Rate               $ 11.85    $ 12.30    $ 12.75    $ 13.25    $ 13.75
End of 6 Months Worked      $ 12.75    $ 13.20    $ 13.65    $ 14.15    $ 14.65
End of 12 Months Worked     $ 13.70    $ 14.15    $ 14.60    $ 15.10    $ 15.60
End of 18 Months Worked     $ 14.00    $ 14.45    $ 14.90    $ 15.40    $ 15.90

JOB GROUP THREE

Starting Rate               $ 13.55    $ 14.00    $ 14.45    $ 14.95    $ 15.45
End of 6 Months Worked      $ 14.40    $ 14.85    $ 15.30    $ 15.80    $ 16.30
End of 12 Months Worked     $ 14.90    $ 15.35    $ 15.80    $ 16.30    $ 16.80
End of 18 Months Worked     $ 15.40    $ 15.85    $ 16.30    $ 16.80    $ 17.30

JOB GROUP FOUR

Starting Rate               $ 14.10    $ 14.55    $ 15.00    $ 15.50    $ 16.00
End of 6 Months Worked      $ 14.45    $ 14.90    $ 15.35    $ 15.85    $ 16.35
End of 12 Months Worked     $ 14.85    $ 15.30    $ 15.75    $ 16.25    $ 16.75
End of 18 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 24 Months Worked     $ 15.65    $ 16.10    $ 16.55    $ 17.05    $ 17.55
End of 30 Months Worked     $ 16.05    $ 16.50    $ 16.95    $ 17.45    $ 17.95
End of 36 Months Worked     $ 16.55    $ 17.00    $ 17.45    $ 17.95    $ 18.45

JOB GROUP FIVE

Starting Rate               $ 14.35    $ 14.80    $ 15.25    $ 15.75    $ 16.25
End of 6 Months Worked      $ 14.75    $ 15.20    $ 15.65    $ 16.15    $ 16.65
End of 12 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 18 Months Worked     $ 15.75    $ 16.20    $ 16.65    $ 17.15    $ 17.65
End of 24 Months Worked     $ 16.20    $ 16.65    $ 17.10    $ 17.60    $ 18.10
End of 30 Months Worked     $ 16.50    $ 16.95    $ 17.40    $ 17.90    $ 18.40
End of 36 Months Worked     $ 16.85    $ 17.30    $ 17.75    $ 18.25    $ 18.75
End of 42 Months Worked     $ 17.20    $ 17.65    $ 18.10    $ 18.60    $ 19.10
</TABLE>

                                       23
<PAGE>   27

<TABLE>
<CAPTION>
                             5/1/99     5/1/00     5/1/01     5/1/02     5/1/03
                            -------    -------    -------    -------    -------
<S>                         <C>        <C>        <C>        <C>        <C>
JOB GROUP SIX

Starting Rate               $ 14.65    $ 15.10    $ 15.55    $ 16.05    $ 16.55
End of 6 Months Worked      $ 14.95    $ 15.40    $ 15.85    $ 16.35    $ 16.85
End of 12 Months Worked     $ 15.25    $ 15.70    $ 16.15    $ 16.65    $ 17.15
End of 18 Months Worked     $ 15.55    $ 16.00    $ 16.45    $ 16.95    $ 17.45
End of 24 Months Worked     $ 15.85    $ 16.30    $ 16.75    $ 17.25    $ 17.75
End of 30 Months Worked     $ 16.15    $ 16.60    $ 17.05    $ 17.55    $ 18.05
End of 36 Months Worked     $ 16.45    $ 16.90    $ 17.35    $ 17.85    $ 18.35
End of 42 Months Worked     $ 16.75    $ 17.20    $ 17.65    $ 18.15    $ 18.65
End of 48 Months Worked     $ 17.40    $ 17.85    $ 18.30    $ 18.80    $ 19.30

JOB GROUP SEVEN

Starting Rate               $ 17.40    $ 17.85    $ 18.30    $ 18.80    $ 19.30
End of 6 Months Worked      $ 17.60    $ 18.05    $ 18.50    $ 19.00    $ 19.50
End of 12 Months Worked     $ 17.75    $ 18.20    $ 18.65    $ 19.15    $ 19.65
End of 18 Months Worked     $ 17.90    $ 18.35    $ 18.80    $ 19.30    $ 19.80
End of 24 Months Worked     $ 18.10    $ 18.55    $ 19.00    $ 19.50    $ 20.00
End of 30 Months Worked     $ 18.25    $ 18.70    $ 19.15    $ 19.65    $ 20.15
End of 36 Months Worked     $ 18.45    $ 18.90    $ 19.35    $ 19.85    $ 20.35
End of 42 Months Worked     $ 18.60    $ 19.05    $ 19.50    $ 20.00    $ 20.50
End of 48 Months Worked     $ 18.80    $ 19.25    $ 19.70    $ 20.20    $ 20.70
</TABLE>

Requires satisfactory progress in each 6 month period worked in above designated
classifications.

                                       24
<PAGE>   28

                                                November 22, 1999

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

When bargaining unit employees are working side-by-side with outside contractors
and there is a need to work overtime to continue or complete the job, the
bargaining unit employees will be offered the overtime to work with the outside
contractors provided they are qualified to perform the work.

                                                Sincerely,

                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      S. E. Tomlinson
         P. J. McIntyre
         T. E. McCoy

                                       25
<PAGE>   29

                                                November 22, 1999

                                                LETTER OF UNDERSTANDING
                                                CURRENT PRACTICES

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

This will confirm our discussions during 1999 contract negotiations. The Company
will continue our current policies regarding safety procedures, uniforms, and
employee travel expenses at our Louisville and Quarry operations during the life
of this Agreement for the following:

o   Supply to employees personal protective safety equipment required by the
    Company such as hard hats, safety shoes not to exceed two (2) pairs per year
    up to $220 per year, hearing protection, safety glasses, and respirators.
    Effective May 1, 2002 the safety shoe allowance will not exceed $230 per
    year.

o   License for reimbursement for blasting and welding certification as required
    by the Company.

o   Current uniform arrangements.

o   Reasonable reimbursement for meals and other expenses while traveling on
    Company business.

                                                Sincerely,

                                                B. M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       26
<PAGE>   30

                                              November 22, 1999

                                              SENIORITY PROVISIONS FOR SAME DATE
                                              HIRE AND PROSPECTIVE EMPLOYEES

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

Confirming our Agreement reached during the Kosmos negotiations in Louisville,
Kentucky, the initial plant seniority roster as referenced in Article 14.6 of
the Labor Agreement will be ranked in seniority order by the lottery system for
current employees hired on the same date. This seniority roster will be used for
prospective application of provisions in the Labor Agreement.

Prospective same date hires will be placed on the seniority list according to
the date and time of their initial employment application.

                                              Sincerely,

                                              Bernard M. Reuland
                                              Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       27
<PAGE>   31

                                                November 22, 1999

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

This will confirm our discussion during 1999 negotiations covering Louisville
Operations regarding the Dispute Resolution Panel.

The Parties agree to select by mutual agreement three (3) impartial
representatives who will be available to serve for the term of this Agreement
for a reasonable fee when called upon to serve on the Panel. When necessary for
the Panel to meet to resolve a grievance in accordance with Article 10.1(4), the
Parties will mutually select one of these impartial representatives to serve on
the Panel.

It is understood that following the discussions and hearing of the grievance,
the Panel will determine the outcome of the grievance. The outcome of the
grievance will be determined by majority vote of the Panel and communicated by a
brief written description of the disposition of the grievance by the impartial
representative. The individual vote of the Panel will not be disclosed, only the
fact that a majority was reached. If additional information is needed prior to
making a determination on the result of the grievance, it must be gathered and
the decision will be made within three (3) working days. The Company or Union
representatives may call upon various witnesses to be present at the hearing and
the cost incurred or lost-time pay involved for the witness will be the
responsibility of the Party calling the witness.

The Company or Union Representative may cancel the use of any third party
representative with thirty (30) days notice to the other Party and another
impartial representative will be selected in accordance with the above.

                                                Sincerely,

                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. M. McIntyre
         S. E. Tomlinson

                                       28
<PAGE>   32

                                                November 22, 1999

                                                LETTER OF UNDERSTANDING

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

    At the request of either party, an employee discharge grievance may be
appealed to arbitration. In the event the parties are unable to agree upon an
Arbitrator within seven (7) days after arbitration is invoked, then they shall
jointly petition the Federal Mediation and Conciliation Service, which shall
submit a panel of seven (7) qualified arbitrators, and the parties shall select
a single arbitrator from such panel. The arbitrator shall be appointed by mutual
consent of the parties hereto. If the arbitrators included in this panel are
unacceptable to either party, a second panel shall be requested from the Federal
Mediation and Conciliation Service and a single arbitrator selected from this
panel.

    Any grievance referred to arbitration shall be heard as soon as possibly and
a decision rendered within thirty (30) days of the hearing or the date of the
postmark of the post hearing briefs, provided the parties mutually agree to
submit post hearing brief. The Arbitrator shall have no power to add or subtract
from or change or modify or amend any provisions of this Agreement.

    The decision rendered by the Arbitrator will be final and binding upon the
Union, the Company, the grievant, and all employees covered by this Agreement.
The arbitrator selected pursuant to this Article shall interpret and apply the
terms of this Agreement; he/she shall not substitute his/her discretion and
judgement for that of the Company.

    It is expressly agreed that no arbitrator shall have the authority to decide
any matter involving the exercise of a right reserved to management under this
Agreement.

    Each party hereto shall pay the expense incurred in the presentation of its
own case, and the expenses incident to the services of the Arbitrator, including
the cost of the transcript and hearing room, shall be paid by the party
requesting arbitration.

                                                Sincerely,

                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       29
<PAGE>   33

                                               November 22, 1999

                                               LETTER OF UNDERSTANDING - WORKING
                                               SPOUSE

Mr. J. C. Todd
International Representative
Cement, Lime, Gypsum, and Allied Workers Division
International Brotherhood of Boilermakers
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J. C.:

Pursuant to our discussions during the 1999 Kosmosdale Labor Contract
negotiations, if an employee's spouse is eligible for health care coverage under
another employer's group health plan, that spouse will not be eligible to
participate in the Southdown Medical Plan. If the premium which the spouse is
required to pay exceeds $30.00 per month for individual coverage under that
plan, the Company will offset the cost in excess of $30.00 per month by reducing
the employee" monthly contribution to the Southdown Plan. The offset will not be
greater than the total monthly premium the employee is required to pay for the
Southdown Plan. Affected employees will provide reasonable documentation to
substantiate the cost of spousal coverage.

                                               Sincerely,

                                               Bernard M. Reuland
                                               Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       30
<PAGE>   34

                                                November 22, 1999

                                                LETTER OF UNDERSTANDING -
                                                LEADPERSONS

Mr. J. C. Todd
International Representative
Cement, Lime, Gypsum, and Allied Workers Division
International Brotherhood of Boilermakers
80 Sweetbriar Trail
Fayetteville, GA  30215

Dear J.C.:

LEADPERSONS

The term "leadperson" as used herein refers to a job on which the employee has
the responsibility of directing the work of a group of employees working side by
side of the group directed. The direction generally consists of activities such
as the following:

Plan work to be performed by the group.
Determine "on the job" working procedures.

1. Arrange for necessary tools, supplies, facilities and paperwork.

2. Relay instructions from the supervisor.

3. Report unsafe conditions to the supervisor.

Such activities do not include any disciplinary action nor mandatory overtime
scheduling.

                                                Sincerely,

                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       31
<PAGE>   35

                                                November 22, 1999

                                                LETTER OF UNDERSTANDING
                                                TEMPORARY UPGRADES

Mr. J. C. Todd
International Representative
International Brotherhood of Boilermakers
Cement, Lime, Gypsum and Allied Workers Division
80 Sweetbriar Trail
Fayetteville, GA 30215

Dear J.C.:

This will confirm our discussions during 1999 contract negotiations.

Employees with Department of Labor Journeyman's Certificates that do not hold
permanent positions in job classifications covered by the Journeyman's
Certificate, shall receive the journeyman rate when temporarily upgraded to
these job classifications.

Skilled Repairmen in progression shall receive the 42 month rate when working on
outages for only the hours worked while employees outside the classification are
temporarily upgraded to the 42 month rate and are working side by side with the
outage crew. An outage for the purpose of this letter is defined as a period of
time when the kiln is not producing clinker.

                                                Sincerely,

                                                Bernard M. Reuland
                                                Director, Employee Relations

BMR:lav

cc:      T. E. McCoy
         P. J. McIntyre
         S. E. Tomlinson

                                       32

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