Document:

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                                  EXHIBIT 10.34
                                  -------------

                           BUSINESS VENTURE AGREEMENT

                                       BY

                                       AND

                                      AMONG

                                   M-I L.L.C.,

                           ALLIS-CHALMERS CORPORATION,

                                       AND

                          MOUNTAIN COMPRESSED AIR, INC.
                          -----------------------------

                               DATED JUNE 27, 2003

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                                TABLE OF CONTENTS

SEC.     SECTION NAME                                                       PAGE
----     ------------                                                       ----

1.0      PURPOSE                                                               3

2.0      FORMATION, ORGANIZATION AND MANAGEMENT                                4

3.0      SCOPE OF AGREEMENT                                                   21

4.0      ADDITIONAL SUPPORT BY THE PARTIES                                    21

5.0      ACCOUNTING AND BUSINESS PRACTICES                                    23

6.0      AUDITS                                                               24

7.0      TERM AND TERMINATION                                                 24

8.0      ASSIGNMENT, INDEMNITIES AND INSURANCE                                31

9.0      FORCE MAJEURE                                                        36

10.0     GOVERNING LAW                                                        37

11.0     NON-BINDING ARBITRATION                                              37

12.0     CONFIDENTIALITY                                                      39

13.0     OTHER AGREEMENTS                                                     39

14.0     SEVERABILITY                                                         39

15.0     NOTICES                                                              40

16.0     GENERAL PROVISIONS                                                   41

17.0     NON-COMPETITION OF PARTIES                                           41

18.0     DEFINITIONS                                                          42

19.0     EMPLOYEES                                                            46

20.0     INCOME TAX RETURNS, TAX ACCOUNTING, TAX ELECTIONS                    48

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                           BUSINESS VENTURE AGREEMENT
                           --------------------------

         THIS BUSINESS VENTURE AGREEMENT (the "Agreement") is made and entered
into this the 27th day of June, 2003, by and among M-I L.L.C. ("M-I"), a
Delaware limited liability company, having an address of 5950 North Course
Drive, Houston, Texas 77072, Allis-Chalmers Corporation ("AC"), a Delaware
corporation, having an address of 7660 Woodway, Suite 200, Houston, Texas 77063
and Mountain Compressed Air, Inc. ("MCA"), a Texas corporation, having the same
address as AC.

                                   WITNESSETH:

         WHEREAS, M-I is engaged in the provision of compressed air services
business for drilling and workover in the energy industry throughout the world
("M-I Business"); and

         WHEREAS, AC is engaged through MCA, which is a wholly owned subsidiary
of OilQuip Rentals, Inc., a Delaware corporation, which is a wholly owned
subsidiary of AC, in the provision of compressed air services business in the
energy and other industries in the United States of America ("MCA Business");
and

         WHEREAS, AC, MCA and M-I desire to work together to develop business
for air compression in the drilling and workover and other markets throughout
the world.

         NOW THEREFORE, in consideration of the representations, covenants and
agreements contained herein, the Parties agree as follows:

         For purposes of this Agreement, capitalized terms not otherwise defined
herein shall have the meanings specified or referred to in Section 18 hereof.

1.0   PURPOSE OF THE BUSINESS VENTURE.
-------------------------------------
         AC, MCA and M-I hereby enter into a business venture for the purpose of
developing and expanding the business for air compression in the drilling and
workover markets worldwide. MCA and M-I will provide related products, services
and technology for sale and distribution to the energy and other industries (the
"Business" as further defined in Section 18 hereof), upon the terms and
conditions contained herein. MCA, AC and M-I each hereby warrants and agrees

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that it will act in good faith in all respects and will use its best commercial
efforts to further the purposes of the Business. Further, MCA, AC and M-I agree
that any liability incurred by the respective Parties before the Closing Date or
which relates to the period before the Closing Date shall remain the obligation
of the Party incurring the liability unless stated otherwise in this Agreement.

2.0   FORMATION, ORGANIZATION AND MANAGEMENT.
---------------------------------------------

         2.1 LEGAL ENTITY. AC, MCA and M-I shall carry out the purposes of this
Agreement and conduct the Business through AirComp L.L.C. (hereinafter "the
Company"), a limited liability company organized and formed under the laws of
the State of Delaware on May 31, 2003. The Company is owned fifty-five percent
(55%) by MCA and forty-five percent (45%) by M-I (individually called a
"Percentage Interest" and collectively called "Percentage Interests"), and
subject to the terms and provisions of this Agreement, MCA and M-I shall share
in the profits or losses of the Company in such Percentage Interests. MCA and
M-I will be the only members in the Company on the Closing Date.

         Either MCA or M-I shall be free hereafter to transfer its Percentage
Interest in the Company to an Affiliate, as hereinafter defined, or the Owners
may sell their Percentage Interests in accordance with Section 7 of the
Agreement.

         2.1.1 MANAGEMENT COMMITTEE. The Company shall be governed by a
Management Committee in accordance with this Agreement and any constitutive
documents evidencing its formation. Notwithstanding the foregoing, the Company
shall always be governed by a Management Committee comprised of six members (the
"Managers" or individually, a "Manager"), three of which shall be selected by
MCA and three of which shall be selected by M-I. The Chairman of the Management
Committee shall be selected by M-I and the terms of office of the Managers shall
be for a period of one (1) year unless otherwise replaced by M-I or MCA,
respectively. Each Manager may be re-appointed for successive one-year terms at
the discretion of and by the Party, as hereinafter defined, which originally
appointed such Manager, and any successors or substitutes to the Manager shall
be appointed by the Party which originally appointed such Manager.

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         2.1.2 MANAGEMENT COMMITTEE MEETINGS. Management Committee meetings may
be called at any time by any Manager or the President of the Company on not less
than three (3) days nor more than ninety (90) days notice before the date of the
meeting to each Manager, either personally, or by mail, telephone, fax or
delivery service at such time and place as designated in the notice to the
Managers, but in no event less than once every three (3) months within thirty
(30) days of the end of each fiscal quarter. In the event of a tie on any vote
taken by the Management Committee Managers, MCA will cast the tie-breaking vote
on all matters to come before and be decided by the Management Committee. The
President of the Company may be an ex officio member of the Management Committee
but will not have a vote on any matters to come before the Management Committee
and is not considered a Manager as defined above. At all Management Committee
meetings, the presence of at least one Manager appointed by each Party and
written proxies for all absent Managers are required to constitute a quorum. At
any meeting of the Managers, every Manager entitled to vote at such meeting
shall be entitled to vote in person or by proxy, executed in writing by such
Manager or by his duly authorized attorney-in-fact. Proxies shall be filed with
the Chairman immediately after the meeting has been called to order. Management
Committee meetings may be held by means of a telephone conference, video
conference or other electronic means. and, notwithstanding any other provision
herein, all actions of the Management Committee provided for herein may be taken
by unanimous written consent without a meeting. Any such action taken without a
meeting shall be effective only if the written consent or consents are in
writing, set forth the action so taken, and are signed by ALL the Managers.

         2.1.3 AUTHORITY AND LIABILITY OF THE MANAGERS TO THIRD PARTIES. No
Manager has the authority or power to act for or on behalf of the Company, to do
any act that would be binding on the Company or to incur any expenditures on
behalf of the Company without the approval of the Management Committee. No
Manager is liable for the debts, obligations or liabilities of the Company,
including under a judgment, decree or order of a court.

         2.1.4 COMPENSATION OF MANAGERS. Managers, as such, shall not receive
any salary from the Company for their services. This does not preclude any
Manager from serving the Company in some other capacity and receiving
compensation for such service.

         2.1.5 INDEMNIFICATION OF THE MANAGERS. The Managers shall be
indemnified and held harmless by the Company, including advancement of expenses,
but only to the extent that the Company's assets are sufficient therefor, from
and against all claims, liabilities, and expenses arising out of any management
of Company affairs, but excluding those caused by the gross negligence or

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willful misconduct of the Manager, subject to all limitations and requirements
imposed by the Delaware Limited Liability Company Act. These indemnification
rights are in addition to any rights that the Managers may have against third
parties. THE FOREGOING INDEMNIFICATION SPECIFICALLY INCLUDES THOSE CLAIMS THAT
ARISE OUT OF THE INDEMNIFIED PARTY'S SOLE, JOINT OR CONTRIBUTORY NEGLIGENCE, BUT
SPECIFICALLY EXCLUDES THOSE CLAIMS THAT ARISE OUT OF THE INDEMNIFIED PARTY'S
WILLFUL MISCONDUCT, FRAUD OR GROSS NEGLIGENCE. THE INDEMNIFIED PARTY WOULD NOT
HAVE ENTERED INTO THIS AGREEMENT IF NOT FOR THIS INDEMNIFICATION.

         2.1.6 FOREIGN QUALIFICATION. The Managers shall cause the Company to
comply, to the extent legally possible, with all requirements necessary to
qualify the Company as a foreign limited liability company in each jurisdiction
in which the Company conducts business. To the extent required by law or as the
Managers determine is otherwise advisable, the Managers shall execute,
acknowledge, swear to and deliver all certificates and other instruments
conforming with this Agreement that are necessary or appropriate to qualify,
continue and terminate the Company as a foreign limited liability company in all
jurisdictions in which the Company conducts business.

         2.2  CONTRIBUTION OF ASSETS.

         2.2.1. INITIAL CONTRIBUTIONS. At Closing, M-I shall contribute the
assets shown on Schedule 2.2.1.1, including the equipment in an "as is, where
is" condition without any representation as to the condition thereof, and the
debts shown on Schedule 2.2.1.2 (hereinafter collectively called the "M-I
Contributed Assets") to the Company. M-I hereby represents and warrants to the
Company and MCA, that (i) said M-I Contributed Assets shall be free of any and
all obligations, liens, encumbrances, claims or demands from any Person, except
those shown on Schedule 2.2.1.2, and (ii) to the best of its knowledge,
information and belief, that there are no claims or potential claims with
respect to the M-I Intellectual Property (hereinafter defined) arising out of
any use, reproduction or sale of the M-I Products (hereinafter defined) prior to
the Closing. At Closing, MCA shall contribute the assets shown on Schedule
2.2.1.3, including the equipment in an "as is, where is" condition without any

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representation as to the condition thereof, and the debts shown on Schedule
2.2.1.4, (hereinafter collectively called the "MCA Contributed Assets"). MCA
hereby represents and warrants to the Company and M-I, that (i) said MCA
Contributed Assets shall be free of any and all obligations, liens,
encumbrances, claims or demands from any Person, except those shown on Schedule
2.2.1.4, and (ii) to the best of its knowledge, information and belief, that
there are no claims or potential claims with respect to the MCA Intellectual
Property (hereinafter defined) arising out of any use, reproduction or sale of
the MCA Products (hereinafter defined) prior to the Closing. It is the express
intent of M-I and MCA that MCA shall be the majority owner of the Company
throughout the term of this Agreement, unless this Agreement is earlier
terminated pursuant to Section 7.

         2.2.2. ADJUSTMENTS. Unless otherwise agreed by the Management Committee
or as otherwise compelled by operation of applicable law, no adjustment to the
Percentage Interest of either MCA or M-I shall be made except as a result of a
transfer of its Percentage Interest or a portion thereof pursuant to the terms
of this Agreement.

         2.3 CLOSING.

         2.3.1 PLACE. The Closing shall take place at the offices of M-I,
located at 5950 North Course Drive, Houston, Texas, 77072, at such time and date
as may be mutually agreed upon by M-I AC, and MCA. The date of the Closing shall
be referred to in this Agreement as the "Closing Date."

         2.3.2. EFFECTIVE DATE. The Effective Date of the formation of the
business venture and the Company contemplated by this Agreement shall be on the
later of June 30, 2003, or the date that MCA has secured the financing described
in the Funding Agreement, attached hereto and incorporated by reference as
Exhibit A, and that each Party has complied with all other terms and provisions
of this Agreement at or prior to Closing.

          2.3.3 PROCEEDINGS AT CLOSING. All proceedings to be taken, all
payments to be made and all documents to be executed and delivered by Parties at
the Closing shall be deemed to have been taken, paid, executed and delivered
simultaneously, and no proceedings shall be deemed taken, no payments shall be
deemed made nor any documents executed or delivered until all have been taken,
paid, executed and delivered.

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         2.3.4 DOCUMENTS TO BE DELIVERED TO MCA AT CLOSING. At the Closing, M-I
shall execute (where necessary) and deliver, or shall cause to be executed
(where necessary) and delivered, to AC and/or MCA the following:

                  (a) bill of sale or other appropriate document of conveyance,
transfer or assignment with respect to M-I's ownership interest in the M-I
Contributed Assets, the form and substance of which shall be acceptable to MCA;

                  (b) certificates of title or other appropriate documents
transferring good title to all vehicles and other equipment comprising any part
of the M-I Contributed Assets to the Company as identified in Schedule 2.3.4 (b)
(with respect to vehicles, transfer of title does not have to be consummated for
sixty (60) days after Closing since it may require time to have certificates of
title transferred);

                  (c) assignments conveying all right, title and interest of M-I
in the M-I Assumed Contracts to the Company as identified in the attached
Schedule 2.3.4 (c), including any consents to assignment by the third parties
with whom M-I is contracted;

                  (d) assignments conveying all right, title and interest of M-I
in the M-I Real Estate Leases to the Company, as identified in the attached
Schedule 2.3.4 (d), including any consents to assignment by the third parties
with whom M-I is contracted;

                  (e) assignments (excluding foreign patents or applications
requiring legalization) in recordable form, where appropriate, conveying good
title to all M-I Intellectual Property relating to the M-I Business to the
Company, as identified in the attached Schedule 2.3.4 (e);

                  (f) releases of all liens, loans or encumbrances relating to
the M-I Contributed Assets;

                  (g) a document certifying that the signatory of this Agreement
has the authority to sign this Agreement on behalf of M-I; and

                  (h) such other documents and instruments as are customary
under such circumstances or as may be reasonably necessary to effectuate the
transactions contemplated hereby;

                  (i) an affidavit duly signed by an officer of M-I that the M-I
Contributed Assets represent everything reasonably necessary to conduct the
Business following Closing in a manner consistent with the business conducted
prior to Closing.

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         The assignments referenced in this Section 2.3.4 shall include all
rights to claims for Damages for past infringement of any M-I Intellectual
Property, or for any misappropriation of proprietary information relating to the
M-I Business, with the right to sue for and collect Damages for the benefit of
the Company and said assignments shall, with respect to any United States
patents or patent applications and trademarks or trademark applications, be in a
form and state of completed execution, suitable for recording transfer of title
to the Company. The assignments referenced in this Section 2.3.4 shall also
include the obligation by Company to defend any counter-suit for invalidity of
the M-I Intellectual Property or for misappropriation of proprietary information
relating to the M-I Business. Individual assignments in a form and state of
completed execution, excluding legalization if otherwise necessary, suitable for
acceptance by individual jurisdictions other than the United States for
recording transfer of title to the Company shall be provided as soon after the
Closing as is reasonably possible. M-I shall cause to be delivered to the
Company all files and other related materials (including but not limited to lab
notebooks, conceptive documents and test data) pertaining to such patents,
trademarks, and copyrights, and applications therefore, domestic and foreign,
and shall notify the Company of M-I's assumption of future responsibility for
the patents, trademarks, copyrights and pending applications thereon related to
the M-I Intellectual Property, it being the intention of the Parties that M-I
shall assume this responsibility on behalf of the Company for all such current
and future matters. In connection with M-I's handling of patents, trademarks and
pending applications thereon, M-I shall keep the Company promptly advised of any
and all M-I Office Actions, proposed responses, or proposed dispositive actions
and any proposed decision by M-I to abandon or allow to lapse any patent,
trademark registration or application therefore. However, M-I shall have sole
authority and discretion to act as it sees fit with respect to M-I's handling of
the patents, trademarks and pending applications. Provided that in the event M-I
decides to abandon any patent, trademark or pending applications therefore, the
Company shall be given the opportunity to maintain and/or prosecute any such
patent, trademark or pending applications therefore, and M-I, MCA and AC shall
thereafter have no ownership in or any license under such patent, trademark or
pending application therefore. Further M-I agrees that it will provide all
reasonable assistance to the Company in connection with the Company's handling
of the patents, trademarks and pending applications with respect to M-I
Intellectual Property.

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         2.3.5. DOCUMENTS TO BE DELIVERED TO M-I AT CLOSING. At the Closing, MCA
and/or AC shall execute (where necessary or as the case may be) and deliver, or
shall cause to be executed (where necessary) and delivered, to M-I the
following;

                  (a) bill of sale or other appropriate document of conveyance,
transfer or assignment with respect to MCA's ownership interest in the MCA
Contributed Assets, the form and substance of which shall be acceptable to M-I;

                  (b) certificates of title or other appropriate documents
transferring good title to all vehicles and other equipment comprising any part
of the MCA Contributed Assets to the Company as identified in Schedule 2.3.5 (b)
(with respect to vehicles, transfer of title does not have to be consummated for
sixty (60) days after Closing since it may require time to have the certificates
of title transferred);

                  (c) assignments conveying all right, title and interest of MCA
in the MCA Assumed Contracts to the Company as identified in the attached
Schedule 2.3.5 (c), including any consents to assignment by the third parties
with whom MCA is contracted;

                  (d) assignments conveying all right, title and interest of MCA
in the MCA Real Estate Leases to the Company, as identified in the attached
Schedule 2.3.5 (d), including any consents to assignment by the third parties
with whom MCA is contracted;

                  (e) assignments (excluding foreign patents or applications
requiring legalization) in recordable form, where appropriate, conveying good
title to all MCA Intellectual Property relating to the MCA Business to the
Company, as identified in the attached Schedule 2.3.5 (e);

                  (f) releases of all liens, loans or encumbrances relating to
the MCA Contributed Assets or bank documents showing the extent and terms of any
liens, loans or encumbrances thereon;

                  (g) a certified copy of the resolutions of the Board of
Directors of AC and MCA properly authorizing and approving this Agreement and
the transactions contemplated hereby; and

                  (h) such other documents and instruments as are customary
under such circumstances or as may be reasonably necessary to effectuate the
transactions contemplated hereby;

                  (i) affidavits from MCA and AC duly signed by an officer of
the respective company declaring that the MCA Contributed Assets represent
everything reasonably necessary to conduct the Business following Closing in a
manner consistent with the business conducted prior to Closing;

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                  (j) a signed employment contract between the Company and the
President of the Company as previously reviewed and agreed by MCA, AC and M-I;

                  (k) a Parent Company Guarantee, attached as Exhibit B,
executed by AC on behalf of MCA, in which AC guarantees that it shall be
responsible for MCA's performance of all MCA's obligations under this Agreement
and any exhibits or schedules hereto should MCA fail to perform such
obligations.

         The assignments referenced in this Section 2.3.5 shall include all
rights to claims for Damages for past infringement of any MCA Intellectual
Property, or for any misappropriation of proprietary information relating to the
MCA Business, with the right to sue for and collect Damages for the benefit of
the Company and said assignments shall, with respect to any United States
patents or patent applications and trademarks or trademark applications, be in a
form and state of completed execution, suitable for recording transfer of title
to the Company. The assignments referenced in this Section 2.3.5 shall also
include the obligation by Company to defend any counter-suit for invalidity of
the MCA Intellectual Property or for misappropriation of proprietary information
relating to the MCA Business. Individual assignments in a form and state of
completed execution, excluding legalization if otherwise necessary, suitable for
acceptance by individual jurisdictions other than the United States for
recording transfer of title to the Company shall be provided as soon after the
Closing as is reasonably possible. MCA shall cause to be delivered to the
Company all files and other related materials (including but not limited to lab
notebooks, conceptive documents and test data) pertaining to such patents,
trademarks, and copyrights, and applications therefore, domestic and foreign,
and shall notify the Company of MCA's assumption of future responsibility for
the patents, trademarks, copyrights and pending applications thereon related to
the MCA Intellectual Property, it being the intention of the Parties that MCA
shall assume this responsibility on behalf of the Company for all such current
and future matters. In connection with MCA's handling of patents, trademarks and
pending applications thereon, MCA shall keep the Company promptly advised of any
and all MCA Office Actions, proposed responses, or proposed dispositive actions
and any proposed decision by MCA to abandon or allow to lapse any patent,
trademark registration or application therefore. However, MCA shall have sole
authority and discretion to act as it sees fit with respect to MCA's handling of
the patents, trademarks and pending applications. Provided that in the event MCA
decides to abandon any patent, trademark or pending applications therefore, the

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Company shall be given the opportunity to maintain and/or prosecute any such
patent, trademark or pending applications therefore, and M-I, AC and MCA shall
thereafter have no ownership in or any license under such patent, trademark or
pending application therefore. Further MCA agrees that it will provide all
reasonable assistance to the Company in connection with the Company's handling
of the patents, trademarks and pending applications with respect to MCA
Intellectual Property.

         2.3.6. PRO-RATION OF TAXES. In the case of the Contributed Assets, any
ad valorem, property or similar Taxes shall be prorated on a per diem basis
through the Closing Date, with the Company being responsible for all of such
prorated Taxes attributable to the period or periods ending on or after the
Closing Date and M-I and MCA being responsible for the Taxes relating to their
Contributed Assets for the period ending on the Closing Date. Promptly upon
receipt, the Company or the Parties, as appropriate, shall provide the other
with copies of all bills for which the other Party or the Company is responsible
in whole or in part pursuant to this Section. The resulting amount payable by
the Parties or the Company shall be paid promptly upon demand by the Party
hereto to whom such payment is owed.

         2.3.7. POST-CLOSING AUDIT. Within 60 days of Closing Date, each Party
shall cause to have undertaken a physical audit of the assets of the other Party
contributed to the Company. Any differences between the assets counted in this
audit and the lists in the Schedules of this Agreement will be agreed between
the Parties and corresponding adjustments of fair market values will be made to
the balance sheet of the Company. To maintain the equity interest of each Party
in the Company, the differences will be reconciled by making charges or credits
to the intercompany loans of each Party.

         2.4 MANAGEMENT. MCA shall appoint the President of the Company, subject
to the approval of M-I, which approval shall not be unreasonably withheld. The
Management Committee shall have the power to terminate the President. The
President shall, under the supervision and direction of the Management Committee
of the Company, implement all policies, plans, programs, budgets and directives
of said Management Committee and generally manage all aspects of the day-to-day
activities of the Company in the conduct of the Business. The President shall
keep MCA and M-I advised of his activities to the same extent. The President
will implement or cause to be implemented the monthly planning, forecasting and
reporting requirements set forth in Schedule 2.4. The Parties shall cause the

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Management Committee of the Company to delegate the management of the Company's
day-to-day activities to the President. Notwithstanding any other provision
contained in this Agreement to the contrary, the President shall not have
authority to undertake and shall not undertake any of the following actions,
without either the unanimous written consent of the Management Committee of the
Company, or the Management Committee's pre-approval on a unanimous basis as
identified in a delegation of authority document with approval limits for the
Company:

                  a. EQUIPMENT. The purchase of equipment in excess of US$20,000
unless the equipment is specifically included in the annual profit plan or
budget, in which case the limit is US$100,000, and leases of any equipment for a
term longer than one (1) year or for an amount in excess of US$50,000;

                  b. INVENTORY LEVELS. The purchase of inventory which would
take the total inventory value for the Company above US$1,000,000;

                  c. ASSET SALES. Sale of any assets valued at over US$100,000
and of any other assets not sold in the ordinary course of business;

                  d. MATERIAL CONTRACTS OR UNUSUAL TRANSACTIONS. Entering into
Material Contracts (defined in Section 18 hereof) or transactions outside the
regular course of business or which are materially different (in size, terms, or
subject matter) from the usual and regular course of the Company's ordinary
business affairs;

                  e. BORROWING. Any borrowing, whether secured or unsecured (not
including the receipt of credit in the ordinary course of business in connection
with the purchased services or products).

                  f. SALARIES AND BENEFIT PLANS. Establishing or changing
salaries, wages, benefit plans and other compensation paid to officers and key
employees of the Company, except as specifically approved in the annual profit
plan or budget.

                  g. CAPITAL EXPENDITURES. Approval of capital expenses over
US$20,000 and capital expenses not included in the annual operations expenditure
budget.

                  h. ACTIVITIES OUTSIDE BUSINESS PURPOSE. Making changes to or
modifications in the purpose or objectives of the Company in the conduct of the
Business.

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                  i. CREATION OF LIENS. Creation of any liens, mortgages (other
than a lien resulting from application of the law) or any other fixed or
floating mortgages on all or any part of the Business, its property or assets.

                  j. APPROVAL OF BUSINESS ACCOUNTS. Approval of Business
Accounts, financial statements, distribution of profits, and/or cash, except as
specifically approved and instructed by the Management Committee.

                  k. ELECTION OF CORPORATE OFFICERS. Election of corporate
officers of the Company.

         2.5 START-UP COSTS. AC, MCA and M-I shall each pay its respective legal
fees associated with the negotiation, implementation and execution of this
Agreement and the Exhibits hereto. The costs and expenses incurred in the
organization of the Company, including any fees for translation or registration
of documents or notarial fees or legal fees shall be paid by each Party hereto
in accordance with its equity ownership ratio in the Company. In addition, all
bank fees, loan fees, financing fees, or other fees, including legal fees of
bank or financing sources or qualification to do business by the Company in such
states where it will transact business, shall be paid by the Company at Closing
or reimbursed by the Company to such Party who may have previously paid such
fees.

         2.6 FUNDING OF THE COMPANY. M-I and MCA agree to fund the Company by
making loans to the Company in proportion to their equity interest when required
by the Company following unanimous approval of the Management Committee. All
such loans shall bear interest at an annual percentage rate of five percent (5%)
or One-Year London Inter-Bank Offer Rate (LIBOR) plus two percent (2%),
whichever is the higher, payable quarterly until repaid in full. In no case
shall MCA, AC and M-I together be required to loan more than US$1,000,000 to the
Company in any one calendar year. Neither MCA nor AC together nor M-I
individually shall be expected to extend loans to the Company such that the
total outstanding loan exceeds US$2,000,000 each. The Company's initial funding
will be governed by the terms of the Funding Agreement, attached hereto as
Exhibit A. All fees and expenses related to the Funding Agreement shall be paid
for by the Company.

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         2.7 BUSINESS NAME. All activities of the Business shall be conducted
using the name AIRCOMP L.L.C., or any other name approved by the unanimous
consent of the Management Committee.

         2.8  FUTURE TECHNOLOGY.

         2.8.1 M-I, MCA and AC agree that any and all know-how, ideas,
inventions, improvements, developments, enhancements, discoveries, whether
patentable or not, arising out of or directly related to the Technology,
acquired by, conceived of, invented by, or developed by the Company during the
term of this Agreement shall be owned by the Company, and M-I, MCA and AC agree
to promptly notify the Company of any such future technology.

         2.8.2 In the event that M-I on behalf of the Company fails to prepare,
file or prosecute a patent application to an invention related to the Technology
and transferred to or developed through it, e.g. by M-I as per Section 2.8.1.
above, or in the event M-I on behalf of the Company, decides not to pursue or
decides to discontinue preparation, filing or prosecution of any such patent
application or any continuations, divisions, reissues, reexaminations or
counterparts thereof, or in the event that M-I on behalf of the Company fails to
pay any tax or other fee with respect to a patent or patent application related
to the Technology or included in the M-I Intellectual Property, M-I shall give
timely notice thereof to the Company, and the Company shall have the right to
obtain and protect the entire right, title and interest in and to such
application, continuation, division, reissue, reexamination or counterpart
thereof at the election and expense of the Company, all without further
compensation to M-I. Thereafter, M-I shall, upon the request of the Company,
promptly execute any and all assignments or other papers or instruments and
shall provide such assistance and do all acts that the Company, deems necessary
or useful to accomplish the above. M-I shall, nevertheless, have a perpetual
royalty-free worldwide license with regard to any such Intellectual Property.

         2.8.3 In the event that AC or MCA on behalf of the Company fails to
prepare, file or prosecute a patent application to an invention related to the
Technology and transferred to or developed through it, e.g. by AC or MCA as per
Section 2.8.1. above, or in the event AC or MCA on behalf of the Company,
decides not to pursue or decides to discontinue preparation, filing or
prosecution of any such patent application or any continuations, divisions,
reissues, reexaminations or counterparts thereof, or in the event that AC or MCA
on behalf of the Company fails to pay any tax or other fee with respect to a
patent or patent application related to the Technology or included in the MCA
Intellectual Property, AC or MCA shall give timely notice thereof to the

                                       15
<PAGE>

Company, and the Company shall have the right to obtain and protect the entire
right, title and interest in and to such application, continuation, division,
reissue, reexamination or counterpart thereof at the election and expense of the
Company, all without further compensation to AC or MCA. Thereafter, AC or MCA
shall, upon the request of the Company, promptly execute any and all assignments
or other papers or instruments and shall provide such assistance and do all acts
that the Company, deems necessary or useful to accomplish the above. MCA shall,
nevertheless, have a perpetual royalty-free worldwide license with regard to any
such Intellectual Property.

         2.9  DISTRIBUTIONS OF PROFITS OR CASH; CAPITAL ACCOUNTS.

         2.9.1 Upon the approval of and recommendation by the Management
Committee, after taking into consideration the cash requirements for debt
servicing, debt reduction, intercompany loans, equipment maintenance, capital
expenditures and working capital requirements of the Company, the Owners shall,
following unanimous consent of the Management Committee, either cause the
Company to distribute all available profits and/or cash, or distribute only a
portion of available profits and/or cash to the Owners in accordance with their
Percentage Interests. No distributions shall be made if prohibited by applicable
law or if the Company is then insolvent or would thereby be made insolvent or
would be rendered unable to carry on its business purposes as a result of such
distribution, or if the fair market value of the Company's assets after such
distribution would be insufficient to meet its liabilities. The value of any
non-cash assets, if any, to be distributed to the Owners shall be determined by
unanimous consent of the Management Committee. All distributions of non-cash
assets or mixed distributions of cash and non-cash assets shall be pro rata in
value.

         2.9.2. Upon the unanimous consent of the Management Committee, such
profits and/or cash, as determined above, shall be distributed at least
semi-annually within forty-five (45) days of the close of the second and fourth
quarters of the fiscal year of the Company.

         2.9.3 All distributions shall be made in direct proportion to the
respective Percentage Interests of each Owner in the Company. Any distribution
to an Owner shall reduce the amount of such Owner's Capital Account as defined
in Section 2.9.4, but no adjustment in Percentage Interest of any Owner shall be
made on account of any pro rata distribution.

                                       16
<PAGE>

         2.9.4 As used herein, the term "Capital Account" shall mean and refer
to the capital account of each Owner in the Company, reflecting the amount of
the contribution of such Owner to the capital of the Company pursuant to section
2.2.1., as adjusted from time to time pursuant to Section 2.2.2. and Section
2.9.4(c). A Capital Account shall be maintained for each Owner. Neither Owner
shall be required to make any contribution to the capital of the Company, except
pursuant to this Section and other terms of this Agreement.

                  (a) NO INTEREST ON CAPITAL ACCOUNT. Interest earned on the
Company funds shall inure solely to the benefit of the Company, and no interest
shall be paid upon any contributions to the capital of the Company, nor upon any
undistributed or reinvested income or profits of the Company.

                  (b) INITIAL CAPITAL ACCOUNTS. AC, MCA and M-I agree that, as
of the date of this Agreement, the initial Capital Account balance of each Owner
is:

         MCA       $11,709,000 (rounded to the nearest thousand)    55% interest

         M-I       $9,580,000 (rounded to the nearest thousand)     45% interest

The Parties acknowledge and agree that at and on the Closing Date, AC will not
maintain a Capital Account in the Company, nor own a Percentage Interest in the
Company.

                  (c) ADJUSTMENT TO CAPITAL ACCOUNTS. The Capital Account of
each Owner shall be maintained in accordance with the final Treasury Regulations
promulgated under Section 704(b) of the Internal Revenue Code of 1986 (as
amended from time to time, the "Code"), and from time to time shall be:

         (1) Increased by:

                           (i) the amount of cash and the Agreed Value of all
property contributed by such Owner to the Company (As used herein, the term
"Agreed Value" shall mean the fair market value of any property contributed to
the Company, as unanimously agreed to by the Management Committee, net of any
liabilities to which such property is subject),

                                       17
<PAGE>

                           (ii) the Owner's allocable share of income and gain
for federal income tax purposes,

                           (iii) that Owner's allocable share of income exempt
from tax described in section 705(a)(1)(B) of the Code,

                           (iv) the amount of any excess of such Owner's
allocable share of the total amount realized from the disposition of any
depletable Company property over such Owner's remaining adjusted tax basis in
such property as computed under the Treasury Regulations promulgated pursuant to
Section 704 of the Code,

                           (v) in the case of contributed property to which
Section 2.9.4(d)(2) applies that is sold (or deemed sold) or otherwise disposed
of, the amount of gain that would have been allocated to such Owner under
Section 2.9.4(d) if the adjusted basis of such contributed property on the date
it was contributed to the Company had been equal to the amount credited to the
contributing Owner's Capital Account pursuant to Section 2.9.4(c) and any
depreciation, depletion or amortization deemed to be allowable with respect to
such property prior to such sale or other disposition is the amount allocated to
the Owner's Capital Account pursuant to Section 2.9.4(c)(2)(v).

         (2) Decreased by:

                           (i) the amount of cash and the Agreed Value of
property distributed to such Owner,

                           (ii) that Owner's allocable share of losses and other
items of deduction for federal income tax purposes,

                           (iii) that Owner's allocable share of expenditures
described in Section 705(a)(2)(B) of the Code,

                           (iv) that Owner's depletion allowance with respect to
any depletable Company property (for the Owner's taxable year that ends
with or within the Company's taxable year) and the amount of any excess of such
Owner's remaining adjusted tax basis in, any depletable Company property over
such Owner's allocable share of the total amount realized from the sale or other
disposition of such property,

                                       18
<PAGE>

                           (v) in the case of contributed property to which
Section 2.9.4(d)(2) applies that is subject to an allowance for
depreciation, depletion or amortization, the amount of depreciation, depletion
or amortization that would have been allocated to such Owner under Section
2.9.4(d) if the adjusted basis of such contributed property on the date it was
contributed to the Company had been equal to the amount credited to the
contributing Owner's Capital Account pursuant to Section 2.9.4(c), and

                           (vi) in the case of contributed property to which
Section 2.9.4(d)(2) applies that is sold (or deemed sold) or otherwise
disposed of, the amount of loss that would have been allocated to such Owner
under Section 2.9.4(d) if the adjusted basis of such contributed property on the
date it was contributed to the Company had been equal to the amount credited to
the contributing Owner's Capital Account pursuant to Section 2.9.4(c) and any
depreciation, depletion or amortization deemed to be allowable with respect to
such property prior to such sale or other disposition is the amount allocated to
the Owner's Capital Account pursuant to Section 2.9.4(c)(2)(v).

         (3) In determining the amount of depreciation, depletion and
amortization deductions to be allocated and charged to the Capital Accounts of
the Owners pursuant to clause (v) of Section 2.9.4(c)(2), such amount shall be
determined in accordance with any method permissible under Treasury Regulation
Section 1.704-1(b)(2)(iv)(g)(3) that the Management Committee may select.

                  (d)      TAX ALLOCATIONS.

         (1) For federal income tax purposes, except as otherwise provided in
paragraphs (2) and (5) below, each item of amount realized, income, gain, loss,
deduction and credit of the Company shall be allocated between the Owners in
accordance with their respective Percentage Interests.

         (2) In the case of any property contributed to the Company by an Owner,
any gain, loss, amortization, depreciation, depletion and cost recovery
deduction attributable to such property shall first be allocated to the
contributing Owner in a manner consistent with the principles of Section 704(c)
of the Code to take into account the variation between the Agreed Value of such
property and its adjusted basis for federal income tax purposes at the time of
contribution, and any remaining items shall be allocated among the Owners in
accordance with their respective Percentage Interests.

         (3) It is intended that the allocations in paragraph (2) of this
Section 2.9.4(d) effect an allocation for federal income tax purposes pursuant
to Section 704(c) of the Code and comply with any limitations or restrictions
therein. Such allocations are designed to eliminate, to the extent possible,

                                       19
<PAGE>

disparities that otherwise exist between the balances of the Owners' Capital
Accounts as maintained pursuant to Section 2.9.4(c), and such balances had such
Capital Accounts been maintained strictly in accordance with tax accounting
principles. The Owners shall have complete discretion to make the allocations
pursuant to this Section 2.9.4(d) and the adjustments to Capital Accounts
pursuant to Section 2.9.4(c) in any reasonable manner consistent with the
intentions of the Owners as reflected in the provisions of this Agreement and
permitted or required by Section 704 of the Code or by final Treasury
regulations promulgated thereunder.

         (4) To the extent of any recapture income resulting from the sale or
other taxable disposition of a Company property or asset, the amount of any gain
from such disposition allocated to an Owner (or its successor in interest) for
Federal income tax purposes pursuant to the above provisions shall be deemed to
be recapture income to the extent such Owner has been allocated or has claimed
any deduction directly or indirectly giving rise to the treatment of such gain
as recapture income.

         (5) In the event of the transfer of an Owner's Percentage Interest
during a year, each item of Company amount realized, income, gain, loss,
deduction and credit attributable to the transferred Percentage Interest shall,
for Federal income tax purposes, be prorated between the transferor and the
transferee on a daily or other reasonable basis, as required by Section 706 of
the Code; provided, however, that gain or loss on the sale or other disposition
of all or a substantial portion of the assets of the Company shall be allocated
to the whole of the Owner's Percentage Interest on the date of sale.

         (6) In the event the Internal Revenue Service allocates income to an
Owner pursuant to Section 482 of the Code, or any successor provision in law,
with respect to any license transferred by the Company to such Owner (or its
predecessor in interest), the deduction resulting to the Company from such
Section 482 adjustment shall be specially allocated to the Owner recognizing the
correlative income adjustment.

         2.9.5. The Owners shall cause the Company to establish its fiscal year
as January 1 through December 31.

                                       20
<PAGE>

3.0      SCOPE OF AGREEMENT.
---------------------------

         The Business shall consist of the marketing, sales and operations of
Products, services and Technology contributed to the Company by AC, MCA and M-I
and as may hereafter be developed and/or contributed to the Company pursuant to
Section 2.8.1.

         3.1 THE TERRITORY, PURPOSES AND POWER. The Business will operate
worldwide. The purposes for which the Company is organized is to transact any or
all lawful business for which limited liability companies may be organized under
the Delaware Limited Liability Company Act. The Company shall have any and all
powers which are necessary or desirable to carry out the purpose and business of
the Company, to the extent the same may be legally exercised by limited
liability companies under the Delaware Limited Liability Company Act. The
Company shall carry out the foregoing activities pursuant to the arrangements
set forth in this Agreement.

         3.2 EXCLUSIVITY. While this Agreement remains in effect, each Party
including any Affiliate, and any other company, partnership or joint venture in
which a Party has an ownership interest or an income interest, shall offer the
Products, services, and the Technology of the Business in the Territory
exclusively through the Company.

         3.3 OTHER ACTIVITIES PERMITTED. Except as specifically set forth in
Section 3.2, nothing herein shall prohibit M-I and its Affiliates, or MCA and
its Affiliates, from conducting any and all aspects of its other businesses
throughout the world, provided, however, neither M-I and its Affiliates, nor MCA
and its Affiliates, shall engage in the business of providing compressed air
services.

4.0   ADDITIONAL SUPPORT BY THE PARTIES.
----------------------------------------

         4.1 SUPPORT BY MCA. MCA shall use reasonable efforts to provide
additional support, either through itself or through AC, to the Company as
follows:

                  a. TECHNICAL ASSISTANCE. MCA shall provide technical
assistance to the Company, as required by the Company to support its customer's
use of Products. Such technical assistance shall be provided at a rate to be
mutually agreed upon between MCA and the Management Committee of the Company.

                  b. ACCOUNTING AND ADMINISTRATIVE ASSISTANCE. MCA shall provide
such accounting and administrative assistance to the Company, as required by the
Company. Such accounting and administrative assistance shall be provided at a
rate to be mutually agreed upon between MCA and the Management Committee of the
Company.

                                       21
<PAGE>

                  c. TRAINING. MCA shall, to the extent deemed appropriate by
the President, provide experienced personnel to train employees of the Company
as needed to support the Business operations throughout the world. Such training
shall be provided at a cost to be mutually agreed upon between MCA and the
Management Committee of the Company.

                  d. RESEARCH. In addition to the research described in Section
2.8, Future Technology, MCA will provide research needed to address product or
systems improvements or for problem solving arising from field applications of
Technology.

                  e. SALES AND COMMUNICATIONS INFRASTRUCTURE. At the request of
the President, MCA shall provide the Company access to its drilling sales and
communications infrastructure for the purposes of identifying markets,
accumulating market data and supplying said data in furtherance of the Business.

                  f. SUPPORT EQUIPMENT. MCA shall lease to the Company such
support equipment which MCA has available and which is deemed by the President
to be reasonable or necessary to carry out the Business of the Company on such
terms as are mutually agreeable between the Company and MCA. Any such lease
agreement shall be presented to the Management Committee of the Company for
prior approval.

                  g. PURCHASING SERVICES. If MCA is in a position to purchase
goods or services on behalf of the Company at lower prices than those available
to the Company directly or through MCA under Section 2.4(b) above, MCA shall, to
the extent deemed appropriate by the President, provide such purchasing services
to the Company. MCA shall charge the Company a rate for such services to be
mutually agreed upon by MCA and the Management Committee of the Company.

         4.2 SUPPORT BY M-I. M-I shall use reasonable efforts to provide
additional support to the Company as follows:

                  a. TECHNICAL ASSISTANCE. M-I shall provide technical
assistance to the Company, as required by the Company to support its customer's
use of Products. Such technical assistance shall be provided at a rate to be
mutually agreed upon between M-I and the Management Committee of the Company.

                                       22
<PAGE>

                  b. TRAINING. M-I shall, to the extent deemed appropriate by
the President, provide experienced personnel to train employees of the Company
as needed to support the Business operations throughout the world. Such training
shall be provided at a cost to be mutually agreed upon between M-I and the
Management Committee of the Company.

                  c. RESEARCH. In addition to the research described in Section
2.8, Future Technology, M-I will provide research needed to address product or
systems improvements or for problem solving arising from field applications of
Technology.

                  d. SALES AND COMMUNICATIONS INFRASTRUCTURE. At the request of
the President, M-I shall provide the Company access to its world-wide drilling
sales and communications infrastructure for the purposes of identifying markets,
accumulating market data and supplying said data in furtherance of the Business.

                  e. SUPPORT EQUIPMENT. M-I shall lease to the Company such
support equipment which M-I has available and which is deemed by the President
to be reasonable or necessary to carry out the Business of the Company on such
terms as are mutually agreeable between the Company and M-I. Any such lease
agreement shall be presented to the Management Committee of the Company for
prior approval.

                  f. PURCHASING SERVICES. If M-I is in a position to purchase
goods or services on behalf of the Company at lower prices than those available
to the Company directly or through M-I under Section 2.4(b) above, M-I shall, to
the extent deemed appropriate by the President, provide such purchasing services
to the Company. M-I shall charge the Company a rate for such services to be
mutually agreed upon by M-I and the Management Committee of the Company.

5.0   ACCOUNTING AND BUSINESS PRACTICES.
----------------------------------------

         5.1 ACCOUNTING PRACTICES. The Parties agree that the Company shall
follow sound generally accepted accounting principles in accordance with
accepted professional standards and any applicable laws or regulations. The
Parties shall cause the Company to establish and maintain such detailed books of
account as may be reasonably necessary to satisfy the financial and tax
reporting obligations of the Parties.

         5.2 BUSINESS PRACTICES. The Parties agree to comply with all laws and
regulations applicable to any activities carried out in the name of or on behalf
of Company under the provisions of this Agreement and any amendments to it. Each
of the Parties warrants that it has not made nor will it make, with respect to
the operations of the Company hereunder, any payments, loans, gifts or promises

                                       23
<PAGE>

or offers of payment, loans or gifts, directly or indirectly, to or for the use
or benefit of any official or employee of any government or to any other person
if such Party knew or knows, or had/has reason to suspect, that any part of such
payment, loan or gift, or promise or offer, would violate the laws or
regulations of any government having jurisdiction over a Party hereto. The
Parties separately agree to respond promptly in reasonable detail to any notice
from the other Party or its auditors pertaining to the above-stated warranty and
shall furnish adequate documentary support for such response upon request.

6.0   AUDITS.
-------------

         6.1 ANNUAL ACCOUNTING. The preparation of audited financial statements
of the Business shall be completed each year within ninety (90) days following
the close of the Company's fiscal year by a firm of independent certified public
accountants or chartered accountants approved by M-I and MCA. The President
shall be responsible for arranging to have a signed copy of the audited
financial statements submitted to each member of the Management Committee of the
Company within five (5) days from completion of said financial statements. The
expense of the annual accounting of the Company shall be paid by the Company.
Any additional reports required to be provided by the Company to the Company's
lenders shall also be provided to each Party at the time such reports are
provided to such lender.

         6.2 SPECIAL AUDITS. Any Party may at any time request a special audit
of the books of account, records and affairs of the Company. The cost of any
such special audit shall be paid by the Party requesting it. The Company and the
Parties will cooperate with and use their best efforts to assist in such special
audit.

7.0  TERM AND TERMINATION.
--------------------------

         7.1 TERM. Except as otherwise stated herein, the term of this
Agreement, and of the Business to be conducted hereunder, shall be for an
initial period of five (5) years from the Effective Date. On the fourth
anniversary of the Closing Date, the Owners may mutually agree to an additional
term ("Additional Term") for an additional period of time. In the absence of
such an agreement, M-I may, by notice in writing on or within ninety (90) days
following the fourth anniversary of the Closing Date, have the exclusive right
to extend the Agreement for an additional term ("M-I Term") of up to two (2)
years.

                                       24
<PAGE>

         7.2 BUYOUT. At any time, either Owner may upon the written agreement of
the other Owner, purchase the other Owner's Percentage Interest in the Company
upon the terms and conditions contained in such written agreement.

         7.2.1 BUYOUT AT TERMINATION. At or before the fourth anniversary of the
Closing Date or one (1) year before the expiration of the M-I Term, or one (1)
year before the expiration of the Additional Term, the Owners shall agree in
writing on the appointment of a suitably qualified investment banking firm or
broker ("Investment Banker") to solicit buyers for a sale of 100% interest in
the Company. Upon the solicitation and receipt by the Investment Banker of a
bona fide written offer for the Company, if both Owners agree in writing to such
offer by a third party, then the Owners shall instruct the Investment Banker to
facilitate such sale in which case the Owners shall each sell their Percentage
Interest in the Company and receive the proceeds of the sale in accordance with
their respective Percentage Interest in the Company. If one Owner does not agree
to such offer by a third party, then the procedure detailed in Section 7.2.2
shall be followed. If following solicitation of buyers by the Investment Banker
for at least a period of ninety (90) days there are no offers forthcoming for
the Company during such period, the Investment Banker shall be instructed to
"auction" the Company as a "going concern" and sell the Company at the highest
bid received during an additional ninety (90) day period in which the Investment
Banker conducts the "auction." Both Owners agree that once the auction has been
instituted that they shall sell their Percentage Interests in the Company at the
highest bid given in the auction, provided that the bid is worth more than fifty
percent (50%) of the New Book Value of the Company at that time. In any event
both Owners may bid during the auction for the Company. All licenses for any M-I
Intellectual Property and MCA Intellectual Property granted by M-I and MCA,
respectively, to the Company shall terminate and be of no further effect upon
the sale of the Company.

         In the event that there is no bid worth more than fifty percent (50%)
of the Net Book Value of the Company at the auction or that there is no buyer
for the Company, the Owners may elect to (a) wind up the Company as described in
Section 7.2.5, (b) allow this Agreement to continue to the expiration of its
current Term and follow the procedures of Section 7.2.4, (c) extend this
Agreement for a further term which shall be treated as an Additional Term and

                                       25
<PAGE>

follow the procedures of Section 7.2.1, or (d) accept the highest auction bid if
there is one. In the event that the Owners cannot agree on one of the four above
options, the Company will continue to operate until the end of the then current
Term and then follow the procedures of Section 7.2.4.

         7.2.2 THIRD PARTY OFFER. If a third party not affiliated with either
Owner hereto ("Potential Buyer") makes a bona fide written offer to the Owners
to buy the Company, and one Owner ("Disagreeing Owner") elects not to accept
that offer, and that offer is more than ninety percent (90%) of the Net Book
Value of the Company, then the Agreeing Owner may notify in writing the
Disagreeing Owner that the Agreeing Owner is invoking the provisions of this
Section 7.2.2 and either

                  (a) the Disagreeing Owner shall be required to sell along with
                  the Agreeing Owner their Percentage Interests in the Company.
                  Such sale of the Company shall be at the price and on the
                  terms contained in the Potential Buyer's offer, or

                  (b) the Disagreeing Owner shall be required to buy the
                  Agreeing Owner's Percentage Interest in the Company at the
                  Potential Buyer's offer price multiplied by the Percentage
                  Interest of the Agreeing Owner in the Company, or

                  (c) if the Potential Buyer agrees to buy only the Agreeing
                  Owner's Percentage Interest and reaches an agreement with the
                  Disagreeing Owner on terms to operate the Company, then the
                  Disagreeing Owner must give its written consent to the sale of
                  the Agreeing Owner's Percentage Interest in the Company to the
                  Potential Buyer.

         In the event that the offer is less than ninety percent (90%) of the
Net Book Value of the Company, there will be no obligation on the part of the
Disagreeing Owner to comply with this Section 7.2.2.

         Each offer required to be made pursuant to this Section 7.2.2 shall be
made by a written notice, and which shall set forth the name or names of the
proposed purchaser, the payment of the purchase price which shall be all cash
and the scheduled date of consummation of such proposed sale. A copy of the
written offer from any proposed third party purchasers shall be attached to each
notice hereunder.

                                       26
<PAGE>

         7.2.3 OFFER TO BUY OR SELL BY AN OWNER. In the event that either Owner
("Offering Owner") is willing to make an offer, payable entirely in cash, to the
other Owner ("Offeree") to purchase all the Offeree's Percentage Interest in the
Company, or to sell the Offeree all of its Percentage Interest in the Company
for a purchase price payable entirely in cash, the Offering Owner shall notify
the Offeree in writing of its desire to do so, designating in such notice the
cash price at which it will either sell its Percentage Interest in the Company
to the Offeree or buy the Percentage Interest of the Offeree, and designating
the date ("Offer Date") of such notice (which date shall be the same date of
delivery of notice to the Offeree). Such price ("Purchase Price") shall be
stated in terms of the price attributable to one hundred percent (100%) of the
Company owned by the Owner. In the event that the Purchase Price is less than
ninety percent (90%) of the Net Book Value of the Company, then the offer shall
be deemed null and void and neither Owner shall be required to either sell or
buy the other Owner's Percentage Interest. In the event that the Purchase Price
is more than ninety percent (90%) of the Net Book Value of the Company, then the
Offering Owner shall then be obligated in accordance with the terms and
provisions of this Section 7.2.3 to either:

                  (a) to purchase the Percentage Interest of the Offeree at a
                  price equal to one hundred percent (100%) of the Purchase
                  Price above multiplied by the Percentage Interest owned by the
                  Offeree in the Company; or

                  (b) to sell to the Offeree the Offering Owner's Percentage
                  Interest in the Company at a price equal to one hundred
                  percent (100%) of the Purchase Price above multiplied by the
                  Percentage Interest owned by the Offering Owner in the
                  Company.

                  (c) ACCEPTANCE OF SALE OFFER. Within thirty (30) days
                  following the Offer Date, if the Offeree desires to purchase
                  the Offering Owner's Percentage Interest in the Company,
                  Offeree shall give written notice to the Company and Offering
                  Owner. In the event that the Offeree fails to so notify the
                  Company and the Offering Owner of its intent to purchase
                  within such thirty (30) day period, then the Offeree shall be
                  deemed to have notified Offering Owner of its intent to sell
                  its Percentage Interest in the Company.

                  (d) PURCHASE BY OFFERING OWNER. In the event that the Offeree
                  shall fail to elect to purchase all Offering Owner's
                  Percentage Interest in the Company pursuant to Section
                  7.2.3(c) above, the Offeree shall be deemed to have elected
                  (on the last day of such thirty (30) day period) to sell its

                                       27
<PAGE>

                  Percentage Interest in the Company to the Offering Owner, and
                  the Offeree shall sell, and Offering Owner shall buy, the
                  Offeree's Percentage Interest in the Company at the price and
                  upon the terms set forth in the Offering Owner's notice.

                  (e) CLOSING. Any sale or purchase of the Offering Owner's
                  Percentage Interest in the Company in accordance with this
                  Section 7.2.3 shall be closed at the principal office of the
                  Company, 10:00 a.m., Houston, Texas time, on or before the
                  ninetieth (90th) day after the Offer Date, and all requisite
                  documents, instruments and papers shall be signed at the
                  office's of the Company on the day fixed for Closing. All
                  expenses and fees, other than legal fees and expenses,
                  incurred in connection with any such Closing shall be paid
                  equally by the selling and purchasing Owners. Legal fees and
                  expenses relating to the purchase and sale shall be borne by
                  the Owner incurring such fees and expenses.

         7.2.4 TERMINATION OF BUSINESS FOR NO SALE. If the Company is not sold
to a third party and neither Owner has provided notice to the other of its
respective intent to purchase the other's Percentage Interest, the Business
shall terminate at the latest of either (a) five (5) years from the Effective
Date of this Agreement, (b) at the expiration of the M-I Term, or (c) at the
expiration of the Additional Term, and the Owners shall cause the Company to be
wound up. In the event the Owners agree that the Company should be wound up, the
Owners shall agree in writing on the appointment of an Investment Banker to
solicit buyers for a sale of 100% interest in the Company. Upon the solicitation
and receipt by the Investment Banker of a bona fide written offer for the
Company, if both Owners agree in writing to such offer by a third party, then
both Owners shall instruct the Investment Banker to facilitate such sale in
which case the Owners shall each sell their Percentage Interests in the Company
and receive the proceeds of the sale in accordance with their respective
Percentage Interest in the Company. If one Owner does not agree to such offer by
a third party, then the procedure detailed in Section 7.2.2 shall be followed.

         If following solicitation of buyers by the Investment Banker for at
least a period of ninety (90) days and there are no offers forthcoming for the
Company during such period, the Investment Banker shall be instructed to
"auction" the Company as a "going concern" and sell the Company at the highest
bid received during a period of an additional ninety (90) days. Both Owners

                                       28
<PAGE>

agree that once the auction has been instituted that they shall sell their
Percentage Interests in the Company at the highest bid given in the auction,
provided that the bid is worth more than fifty (50%) of the Net Book Value of
the Company at that time. In any event both Owners may bid during the auction
for the Company. All licenses for any Intellectual Property granted by the
Owners to the Company shall terminate and be of no further effect upon the
winding up of the Company.

         In the event that there is no bid worth more than fifty percent (50%)
of the Net Book Value of the Company at that time or that there is no buyer for
the Company, the Owners shall cause the Company to be wound up in a liquidation
as per Section 7.2.5.

         7.2.5 Winding-Up Process. In a winding-up and liquidation, ownership of
M-I Intellectual Property will revert to M-I, ownership of MCA Intellectual
Property will revert to MCA, and MCA and M-I shall own, in proportion to their
then Percentage Interests in the Company, an undivided interest in all of the
Company's other assets (including Intellectual Property and Technology but
excluding M-I Intellectual Property and MCA Intellectual Property) without any
further payments or amounts owed by either Owner to the other Owner with respect
to such ownership of the Company's other assets. All licenses for any
Intellectual Property, MCA Intellectual Property or M-I Intellectual Property
granted by the Owner to the Company shall terminate and be of no further effect
upon the winding up of the Company. Excluding the Owner's respective
Intellectual Property, the assets of the Company shall be applied or distributed
in liquidation in the following order of priority; provided, however, that if a
Owner shall have a negative balance in its Capital Account, such Owner shall
immediately, and prior to any distributions made pursuant to this Section 7.3,
pay to the Company in cash for distribution as provided in this Section 7.3 an
amount equal to the negative balance in said Owner's Capital Account:

         (a) In payment of debts and obligations of the Company owed to third
parties or to the Owners;

         (b) To the Owners in payment of any positive balances remaining in
their Capital Accounts as determined in accordance with Section 2.9.4 hereof;
and

         (c) Any remaining assets shall be distributed to the Owners in
accordance with their Percentage Interests.

                                       29
<PAGE>

All licenses for any Intellectual Property, MCA Intellectual Property or M-I
Intellectual Property granted by the Owners to the Company shall terminate and
be of no further effect upon the winding up of the Company.

         7.3 OTHER TERMINATION. Notwithstanding the language in Section 7.1,
either of the Owners may terminate this Agreement by notice in writing to the
other upon the occurrence of any of the following:

         7.3.1 MCA, AC or M-I ceases or threatens to cease wholly or
substantially to carry on its business because of an actual or contemplated
bankruptcy, reconstruction or amalgamation;

         7.3.2 MCA, AC or M-I becomes ultimately controlled by any person or
group of persons who, at the date of this Agreement, does not possess such
control. For these purposes "control" shall mean the right of the controlling
person whether by virtue of rights attaching to shares or otherwise to ensure
that the business and affairs of the controlled person are conducted in
accordance with the controlling person's wishes. Notwithstanding the foregoing,

         (a) an Owner may only terminate this Agreement if the third party
acquiring such control of one of the other Parties to this Agreement is a direct
competitor of the terminating Owner in one of the terminating Owner's then
current lines of business, and

         (b) neither MCA nor AC may terminate this Agreement if Schlumberger
Technology Corporation or one of its affiliates gets ultimate control of M-I.

         If the other Party or Parties to whom the change of "control" does not
apply has consented in writing to such change in "control," then such change
will not constitute grounds for termination under this Agreement;

         7.3.3 any Party commits a material breach of any term of this Agreement
which cannot effectively by remedied or which the Party fails effectively to
remedy within thirty (30) days of receipt of a written notice from another Party
specifying the breach and requiring remedy; or

         7.3.4 any governmental agency requires the divestiture of more than
Twenty-Five percent (25%) of the Company's Business in order to obtain the
agency's approval of a sale as provided for in Section 7.2.

         In the event of such termination, the Owners shall cause the Company to
be wound up and the Owners shall agree in writing on the appointment of an
Investment Banker to solicit buyers for a sale of 100% interest in the Company
or of the assets of the Company as described in Section 7.2.4.

                                       30
<PAGE>

         7.4 TERMINATION BECAUSE OF SALE. This Agreement will also be terminated
if an Owner or the Owners sell their combined or individual Percentage Interests
in the Company to a third party. The procedure upon such a sale will be governed
by a separate written agreement between the Owners.

         7.5 EFFECT OF TERMINATION. Termination of this Agreement shall not
affect any rights or obligations accrued by the Parties prior to such
termination.

8.0   ASSIGNMENT, INDEMNITIES AND INSURANCE.
--------------------------------------------

         8.1 ASSIGNMENT OR TRANSFER. Except as otherwise permitted in this
Agreement, neither this Agreement nor any rights or obligations under this
Agreement shall be assigned or transferred by AC, MCA or M-I without the prior
written consent of the other Parties. Any such attempted assignment or transfer
without such written consent shall be null and void, provided, however, that
while a Party shall remain fully obligated hereunder, it may nevertheless
perform all or any part of its obligations through one or more of its
Affiliates, and it may assign and transfer its Percentage Interest, if an Owner,
in the Company to an Affiliate.

         8.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 8.1,
this Agreement shall be binding upon and inure to the benefit of the permitted
successors and assigns of AC, MCA and M-I.

         8.3  INDEMNITIES.

         8.3.1 MCA INDEMNITY OBLIGATIONS.Subject to the provisions of this
Section 8.3.1, MCA shall indemnify and hold M-I and its Affiliates and the
officers, Management Committee Managers, stockholders, employees and agents of
M-I and its Affiliates ("M-I Indemnitees") harmless from and against Damages to
the M-I Indemnitees to the extent arising out of or based upon:

                  (i) the ownership, management, operation or use by MCA of the
MCA Contributed Assets or MCA Business on or prior to the Closing Date,
including without limitation any (A) liability claim on an MCA Product; (B)
Taxes with respect to the MCA Business during the period before the Closing; (C)
environmental liabilities and obligations of MCA relating to or arising from the

                                       31
<PAGE>

MCA Contributed Assets or MCA Business on or prior to the Closing Date,
including (i) payments, penalties, and fines imposed by governmental agencies,
(ii) the costs of clean-up and remediation, and (iii) third-party damages for
any environmental or contractual liabilities, now or at anytime hereafter
arising from MCA Contributed Assets or MCA Business on or prior to the Closing
Date; or (D) any commercial, contractual, employment liabilities or disputes now
or at anytime hereafter arising from the MCA Contributed Assets or MCA Business
on or prior to the Closing Date, including without limitation any breach of
MCA's or AC's obligations under Section 2.3.5.

                  (ii) any actual or threatened violation or noncompliance by AC
or MCA with any statute, ordinance or other law, federal, state, local or
foreign, or any rule or regulation of any Governmental Entity, including without
limitation any Environmental Laws, in connection with the ownership, management,
operation or use of the MCA Contributed Assets or the conduct of the MCA
Business in each case on or prior to the Closing Date;

                  (iii) any misrepresentation, breach of warranty or breach or
nonfulfillment of any covenant of AC or MCA in this Agreement, including the
Schedules hereto;

                  (iv) any claims of intellectual property infringement (e.g.
patent infringement) based on the Company's resale of MCA Products to the
Company's customers.

Notwithstanding, the foregoing such indemnification under this Section 8.3.1
shall not apply to any liabilities and obligations under the MCA Assumed
Contracts arising after the Closing Date.

         8.3.2 M-I INDEMNITY OBLIGATIONS. Subject to this Section 8.3.2, M-I
shall indemnify and hold AC, MCA and the officers, Board of Directors,
stockholders, employees and agents of AC and MCA ("MCA Indemnitees") harmless
from and against any Damages of the MCA Indemnitees to the extent arising out of
or based upon:

                  (i) the ownership, management, operation or use by M-I of the
M-I Contributed Assets or M-I Business on or prior to the Closing Date,
including without limitation any (A) liability claim on an M-I Product; (B)
Taxes with respect to the M-I Business during the period before the Closing; or
(C) environmental liabilities and obligations of M-I relating to or arising from
the M-I Contributed Assets or M-I Business on or prior to the Closing Date,
including (i) payments, penalties, and fines imposed by governmental agencies,
(ii) the costs of clean-up and remediation, and (iii) third-party damages for

                                       32
<PAGE>

any environmental or contractual liabilities, now or at anytime hereafter
arising from M-I Contributed Assets or M-I Business on or prior to the Closing
Date; or (D) any commercial, contractual, employment liabilities or disputes now
or at anytime hereafter arising from the M-I Contributed Assets or M-I Business
on or prior to the Closing Date, including without limitation any breach of
M-I's obligations under Section 2.3.4.

                  (ii) any actual or threatened violation or noncompliance by
M-I with any statute, ordinance or other law, federal, state, local or foreign,
or any rule or regulation of any Governmental Entity, including without
limitation any Environmental Laws, in connection with the ownership, management,
operation or use of the M-I Contributed Assets or the conduct of the M-I
Business in each case on or prior to the Closing Date;

                  (iii) any misrepresentation, breach of warranty or breach or
nonfulfillment of any covenant of M-I in this Agreement, including the Schedules
hereto;
                  (iv) any claims of intellectual property infringement (e.g.
patent infringement) based on the Company's resale of M-I Products to the
Company's customers.

Notwithstanding the foregoing such indemnification under this Section 8.3.2
shall not apply to any liabilities or obligations under the M-I Assumed
Contracts arising after the Closing Date.

         8.3.3 NOTICE, PARTICIPATION AND DURATION OF INDEMNITY RIGHTS.

         (a) If a claim, demand or action is asserted by a third Person against
a Person indemnified pursuant to this Section 8.3 ("Indemnitee"), and if such
Indemnitee intends to seek indemnity with respect thereto under this Section 8.3
(which claim, demand or action is herein called an "Indemnified Claim), the
Indemnitee shall promptly, and in any event within 30 days of the assertion of
such Indemnified Claim notify the Person from whom indemnification is sought
("Indemnitor") of such Indemnified claim. Failure to notify the Indemnitor
timely shall not relieve the Indemnitor of any liability which the Indemnitor
might have to the Indemnitee except to the extent (and only to the extent) such
failure materially prejudices the Indemnitor's position. Upon the assertion of
any Indemnified Claim, Indemnitor, at its option, may assume the defense of any
Indemnified Claim, and may assert any defense of Indemnitee or Indemnitor;
PROVIDED, HOWEVER, that Indemnitee shall have the right at its own expense to
participate jointly with Indemnitor in the defense of any such Indemnified
Claim. If Indemnitor elects to undertake the defense of any Indemnified Claim
hereunder, Indemnitee shall cooperate with Indemnitor in the defense or
settlement of the Indemnified Claim. The Indemnitor shall not be entitled to
settle any Indemnified Claim without the prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld, unless such
settlement involves only the payment of money and the claimant provides to the
Indemnitee, in form and substance satisfactory to such Indemnitee, a release
from all liability in respect of such Indemnified Claim.

                                       33
<PAGE>

         (b) If the Indemnitor, by the 30th day after receipt of notice of any
Indemnified Claim (or, if earlier, by the tenth day preceding the day on which
an answer or other pleading must be served to prevent judgment by default in
favor of the Person asserting the Indemnified Claim) does not elect to defend
against such Indemnified Claim, the Indemnitee will (upon further notice to the
Indemnitor) have the right to undertake the defense, compromise or settlement of
such Indemnified Claim on behalf of and for the account and risk of the
Indemnitor, subject to the right of the Indemnitor to assume the defense of such
Indemnified Claimed at any time prior to settlement, compromise or final
determination thereof.

         8.4 INDEMNIFICATION NOTWITHSTANDING INVESTIGATION OR NEGLIGENCE. NO
INVESTIGATION BY OR ON BEHALF OF M-I OR MCA OR THEIR RESPECTIVE AFFILIATES, NOR
ANY INFORMATION THAT THEY MAY HAVE OR OBTAIN, NOR NEGLIGENCE ON THE PART OF ANY
M-I OR MCA INDEMNITEE, WILL AFFECT THE INDEMNIFICATION PROVIDED IN THIS SECTION
8.

         8.5 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES. The
respective obligations of the Parties hereto to indemnify and hold harmless the
other Party, or any authorized representative thereof, imposed herein or any
certificate, agreement, document or other instrument delivered in connection
herewith shall survive the Closing and remain in full force and effect until the
later of (a) five (5) years after the Closing Date, (b) the termination of the
M-I Term, (c) the termination of the Additional Term (collectively called the
"Indemnification Period"), or (d) the final resolution of any bona fide claim
asserted before the end of such Indemnification Period, except as follows:

         (i) MCA's indemnification obligations and representations and
warranties shall survive indefinitely to the extent of claims (A) of fraud
perpetrated by MCA or its Affiliates and (B) except for liabilities and
obligations pursuant to the MCA Assumed Contracts with respect to the period
after the Closing, for liabilities and obligations of MCA otherwise relating to
or arising from the MCA Business or the MCA Contributed Assets with respect to
the period before the Closing, (including, but not limited to, liabilities for
environmental remediation and any claim for the violation of any Environmental
Law) provided that, the liability or obligation of MCA or its Affiliates for

                                       34
<PAGE>

breach of the representations in Section 2.3.5(i) and/or to perform any
covenants hereunder shall also survive for the Indemnification Period;

         (ii) MCA's indemnification obligations and representations and
warranties with respect to Taxes set forth in 8.3.1.(i) shall survive until the
expiration of any statute of limitations or prescription period, including
extensions thereof, during which any liability for Taxes may be assessed.

         (iii) M-I's indemnification obligations and representations and
warranties shall survive indefinitely to the extent of claims (A) of fraud
perpetrated by M-I or its Affiliates and (B) except for liabilities and
obligations pursuant to the M-I Assumed Contracts with respect to the period
after the Closing, for liabilities and obligations of M-I otherwise relating to
or arising from the M-I Business or the M-I Contributed Assets with respect to
the period before the Closing, (including, but not limited to, liabilities for
environmental remediation and any claim for the violation of any Environmental
Law) provided that, the liability or obligation of M-I or its Affiliates for
breach of the representations in Section 2.3.4(i) and/or to perform any
covenants hereunder shall also survive for the Indemnification Period;

         (iv) M-I's indemnification obligations and representations and
warranties with respect to Taxes set forth in 8.3.2.(i) shall survive until the
expiration of any statute of limitations or prescription period, including
extensions thereof, during which any liability for Taxes may be assessed.

         8.6 LIABILITY LIMITATION. Notwithstanding anything contained herein to
the contrary, the maximum liability any Party shall have to the other pursuant
to this Agreement shall be limited to Two Million Dollars (US$2,000,000.00) in
the aggregate.

         8.7 INSURANCE. M-I, AC and MCA shall each contract and maintain, in
effect at its own expense, the amount of insurance which it deems necessary to
cover the liabilities which it may incur under the terms of this Agreement
including the schedules hereto.

                                       35
<PAGE>

         8.8 WAIVER OF SUBROGATION. M-I, MCA and AC each agree to obtain from
its insurer a waiver of its right to subrogation with respect to the other
Parties for that which concerns any Damage resulting from the execution of this
Agreement.

         8.9 COMPANY INSURANCE. The Parties shall cause the Company to be
insured, at its own expense, in accordance with the insurance laws of the State
of Texas, unless more insurance is deemed prudent relative to international
practices generally accepted in the petroleum industry, including but not
limited to the following:

         A. Workers' Compensation and Employers Liability

         B. Comprehensive General Liability

         C. Comprehensive Automobile Liability

         D. Protection and Indemnity Insurance

         E. Marine, Vessel, Hull & Machinery Insurance

         F. All Risk Property Insurance

The above required coverages shall be in such amounts and forms as may be
approved from time to time by the Management Committee.

The coverages shall provide that the Parties and their Affiliates be named as
additional insureds and further provide that the insurers waive subrogation
rights in favor of the Parties and their Affiliates. The additional insured and
waiver provisions shall apply only with respect to and to the extent of
liabilities of the Company.

9.0   FORCE MAJEURE.
-------------------

         No Party shall be liable to the other Parties for any failure to
perform or comply with any obligation or condition of this Agreement if such
failure is caused by or arises out of acts of God; floods; fire; earthquake;
water; hurricanes; tornadoes; cyclones; riots; insurrections; war; civil
disturbances; acts or restrictions of civil or military or governmental officers
acting under claim of authority; inability to secure or delay in securing any
necessary governmental approval, permit, or license; any government request or
regulation; strikes; lockouts; differences with workmen or other labor
disturbances; breakages of equipment, tankage, or pipelines; or (without
limiting the foregoing) any acts or causes whatsoever beyond the control of the
Parties.

                                       36
<PAGE>

10.0   GOVERNING LAW.
--------------------

         This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware, excluding its conflict of laws provisions.

11.0   NON-BINDING ARBITRATION.
-------------------------------

                  (a) On the request of any Party hereto, whether made before or
         after the institution of any legal proceeding, any action, dispute,
         claim or controversy of any kind now existing or hereafter arising
         between any of the Parties hereto in any way arising out of, pertaining
         to or in connection with this Agreement (a "Dispute") shall be resolved
         by non-binding arbitration in accordance with the terms hereof. In the
         event of any Dispute, any Party may serve written notice of such
         Dispute on any other Party and each Party to such Dispute shall
         undertake in good faith to resolve such Dispute. If the Parties cannot
         agree to resolve such Dispute within fifteen (15) days after such
         written notice, any Party to such Dispute may, by further written
         notice (the "Arbitration Notice") to the other Party, commence an
         arbitration proceeding by bringing the Dispute to one arbitrator or to
         an arbitration panel selected as provided below.

                  (b) ARBITRATORS. Dispute shall be decided by a single
         arbitrator, unless the Parties cannot agree within ten (10) days on a
         single arbitrator, in which case they shall choose an arbitration panel
         comprised of three arbitrators, one arbitrator to be selected by the
         Party who sent the Arbitration Notice, a second arbitrator to be
         selected by the other Party, and the third arbitrator (the "Independent
         Arbitrator") who will be the Chairman of the arbitration panel, to be
         appointed by the first two arbitrators. In the event the first two
         arbitrators fail to agree on the appointment of the Independent
         Arbitrator within fifteen (15) days, the Independent Arbitrator shall
         be appointed on request of any Party hereto by any state district court
         judge in Harris County, Texas. Whether there is one arbitrator or a
         panel, each arbitrator shall be a third party and a business person
         knowledgeable in the subject matter of the Dispute. In the event that
         any arbitrator shall resign, be unable or otherwise fail to perform his
         or her duties, the Party appointing the arbitrator shall immediately
         notify the other Party of such resignation, inability or failure, and a

                                       37
<PAGE>

         replacement shall immediately be selected by the Party who selected
         such arbitrator in the instance, or, if the arbitrator to be replaced
         is the Independent Arbitrator, then the Parties shall attempt in good
         faith to appoint a mutually agreeable replacement Independent
         Arbitrator. If the Parties fail to agree on such replacement within
         fifteen (15) days, either Party may request any state district court
         judge in Harris County, Texas to appoint such replacement Independent
         Arbitrator.

         11.1 CONDUCT OF ARBITRATION. The arbitrator or the arbitration panel
shall conduct the arbitration in accordance with the Rules of Arbitration of the
American Arbitration Association then in effect, except to the extent such rules
are inconsistent with the provisions of this Section 11. The Parties shall
prepare in writing a statement of their positions, together with counterclaims,
with supporting facts, data, and affidavits, if any, and shall submit such
statement to the arbitrator, or arbitration panel within fifteen (15) days after
selection, but, in any event, within forty-five (45) days after service of the
Arbitration Notice. The arbitrator or the arbitration panel shall give all
Parties the opportunity to make an oral presentation to the arbitrator or the
arbitration panel in the presence of the other Party, if either Party so
requests. The Parties shall have, for a period of one-hundred twenty (120) days
after service of the Arbitration Notice (the "Discovery Period"), all rights of
discovery provided by the Texas Rules of Civil Procedures then obtaining,
except, unless otherwise agreed, that all responses to discovery requests shall
be served within ten (10) days of such discovery request and no discovery
request may be served after the date ten (10) days before the termination of the
Discovery Period. The arbitrator or the arbitration panel shall assume
jurisdiction over the Dispute, may order interim equitable relief (which shall
be specifically enforceable as if it were an Award, as hereinafter defined), and
shall be required to make a non-binding determination (the ""ward"). The Award
shall determine (i) whether each Party's obligations under this Agreement were
met, and (ii) what damages or remedies (which may include equitable relief) are
due under the terms of this Agreement. In addition, the arbitrator or the
arbitration panel shall award recovery of all costs and fees of arbitration to
the prevailing Party. The agreement to arbitrate contained in this Section 11

                                       38
<PAGE>

shall be specifically enforceable under the prevailing arbitration law, and
shall survive termination of this Agreement. Judgment upon the Award rendered by
the arbitrator or the arbitration panel may be entered in accordance with
applicable law in any court having jurisdiction therefor. Arbitration shall,
unless all the Parties otherwise agree in writing, take place in Houston, Texas.

12.0   CONFIDENTIALITY.
-----------------------

         All information, whether business or technical, of a confidential
nature developed or generated by the Company after the Closing Date shall be
considered the Company's Confidential Information. The Parties agree that the
Company's Confidential Information will only be used in the furtherance of the
Business and will be maintained in confidence by the Parties. The Parties
acknowledge that as a consequence of being a Party hereto or of being
represented on the Management Committee of the Company that one Party
("Receiving Party") may learn of business and financial information of the other
Party ("Disclosing Party") that the Disclosing Party considers confidential. The
Receiving Party agrees to maintain such information in strict confidence, not
disclose it to a third party, and not use it for its own purposes. A Receiving
Party shall not be bound by the covenants of the preceding sentence with respect
to information known to it on the date of this Agreement or that becomes public
hereafter through no fault of said Receiving Party.

13.0   OTHER AGREEMENTS.
-----------------------

         This Agreement and the Funding Agreement hereby cancel and supersede
any and all previous oral or written agreements between the Parties and their
Affiliates dealing with the same or a similar subject matter. All discussions
and negotiations about the subject matter hereof are merged herein. This
Agreement (including all Schedules and Exhibits attached hereto) constitutes the
only agreement between the Parties with respect to the subject matter hereof.
This Agreement shall not be modified, supplemented, explained, or waived by
parole evidence, custom, prior dealing between the Parties, or by any means
other than a written document signed by both Parties and dated subsequent to the
date hereof.

14.0   SEVERABILITY.
--------------------

         If any provision hereof, not of the essence of this Agreement, shall be
held by a court or tribunal of competent jurisdiction to be void or
unenforceable, such provisions shall be disregarded or be deemed modified to the
least extent necessary to make it valid and enforceable, while preserving to the
fullest extent possible the intention and bargain of the Parties as manifested

                                       39
<PAGE>

hereby. In such case, the remainder of the Agreement shall be unaffected and
shall remain in full force and effect and enforceable according to its terms. In
the event that either Party hereto considers that the application of the
provisions of this Section seriously disrupts its bargain, then such Party may
seek relief under the terms of Section 11.0 above.

15.0   NOTICES.
---------------

          All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
Party may designate by notice to the other Parties):

         MCA                                 M-I
                                             ---
         7660 Woodway, Suite 200             P. O. Box 42842
         Houston, Texas 77063                Attention:  General Counsel
         Attn:  Munawar H. Hidayatallah      Facsimile:  832-295-2501
         Facsimile:_713-369-0555             or by hand:
                                             5950 North Course Drive
                                             Houston, Texas 77072

         AC                                  With a copy to:
         7660 Woodway, Suite 200             Theodore F. Pound III
         Houston, Texas 77063                Wilson, Cribbs, Goren & Flaum, P.C.
         Attn:  Munawar H. Hidayatallah      2500 Fannin
         Chairman & Chief Executive Officer  Houston, Texas 77002
         Facsimile:_713-369-0555             Facsimile No: 713-229-8824

                                       40
<PAGE>

16.0   GENERAL PROVISIONS.
--------------------------

         16.1 NON-WAIVER. The failure of MCA or M-I to enforce, at any time, any
right either of them may have under this Agreement shall not be a waiver of such
right or of any other right.

         16.2 MANAGEMENT COMMITTEE. The initial Management Committee shall
consist of the following Managers:

         From MCA:         Munawar H. Hidayatallah
                           Jens H. Mortensen, Jr.
                           Todd C. Seward

         From M-I:         Richard E. Chandler, Jr.
                           Brian W. E. Darling
                           W. Frank Richter

         16.3  NO AGENCY.

         Each Party agrees that nothing contained in this Agreement creates nor
is intended to create any agency right in one Party or the others. As such, each
Party agrees that it does not have the right to bind in any way the other
Parties to any obligations, contract or commitment of the Company without the
express written consent of the Party intended to be bound.

17.0   NON-COMPETITION OF PARTIES.
---------------------------------

         17.1 Notwithstanding anything contained in this Agreement to the
contrary, AC, MCA and M-I each acknowledge that (i) the Business is national and
international in scope, (ii) the agreements and covenants in this Section 17 are
essential to protect the Business, and (iii) neither M-I nor AC nor MCA would
enter into this Agreement but for the covenants and agreements contained in this
Section 17. MCA and M-I covenant and agree that, during the term of this
Agreement and for a period of five (5) years thereafter, MCA and its Affiliates,
including AC, and M-I and its Affiliates will not own, manage, operate, join,
control or participate in, directly or indirectly, or be a partner or
stockholder of, any business engaged in any activity that is in competition in
any manner whatsoever with the Business as conducted by the Company, or has been
conducted by MCA in the MCA Business three (3) years prior to the date of this

                                       41
<PAGE>

Agreement, or has been conducted by M-I in the M-I Business three (3) years
prior to the date of the Agreement, nor shall either MCA or M-I render
assistance or advice to any Person that is so engaged, unless MCA or M-I
acquires the Percentage Interest of the other in the Company, in which case the
acquiring Owner may continue to operate the Company or unless the Company is
liquidated, in which case this Section 17.1 will not apply thereafter.

         17.2 AC, MCA and M-I acknowledge that any breach of the provisions of
this Section 17 by AC, MCA or M-I will cause irreparable harm to the Company for
which there may be no adequate remedy at law and for which the ascertainment of
damages would be difficult. Therefore, upon determination that AC, MCA or M-I is
breaching any of its obligations hereunder or under a separate non-competition
agreement, the Company or AC or MCA or M-I, as the case may be, shall be
entitled, in addition to, and without having to prove the adequacy of, any
remedies at law (including without limitation damages for prior breaches
hereof), to specific performance of the obligations of AC or MCA or M-I under
this Section 17 as well as injunctive relief (without being required to post
bond or other security).

18.0   DEFINITIONS.
-------------------

         "AFFILIATE" means any Person that, directly or indirectly, controls, or
is controlled by or under common control with, another Person. For purposes of
this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession
directly or indirectly, of the power to direct or cause the directions of the
management and policies of a person whether through the ownership of voting
securities or by contract or otherwise. Any new line of business which
Schlumberger Technology Corporation and its affiliates, except for M-I, enters
into after the Closing Date are specifically excluded from the definition of
Affiliate as it pertains to M-I. AC is specifically included within the
definition of Affiliate as it pertains to MCA.

         "BUSINESS" means those activities involving air compression services.

         "BUSINESS ACCOUNTS" shall mean any and all books and records or
financial statements which reflect the financial condition and/or performance of
the Business.

         "CLOSING" means the consummation of the transactions among AC, MCA and
M-I contemplated hereby.

         "CLOSING DATE" has the meaning ascribed thereto in Section 2.3.1.

         "COMPANY" has the meaning ascribed in Section 2.1.

                                       42
<PAGE>

         "CONFIDENTIAL INFORMATION" shall include those items set forth in
Section 12.0.

         "DAMAGES" means all judgments, good faith settlements, claims (whether
or not such claims are ultimately defeated), losses, penalties, fines,
liabilities (including strict liability), costs, and expenses, of whatever kind
or nature, contingent or otherwise, reasonable attorney's fees, costs and
expenses incurred in enforcing this Agreement or collecting any sums due
hereunder.

         "ENVIRONMENTAL LAWS" means any and all laws, statutes, ordinances,
rules, regulations or orders of any Governmental Entity (including common law
duties established by courts or other Governmental Entities) pertaining to the
protection of human health (provided, however, this definition is not intended
to include health and safety laws, including but not limited to OSHA) and the
environment in effect on the date of this Agreement in any jurisdiction,
federal, state, local or foreign, in which the Business is operated, including
without limitation the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the Federal
Water Pollution Control Act, as amended, the Resource Conservation and Recovery
Act, as amended, the Safe Drinking Water Act, as amended, and the Toxic
Substances Control Act, as amended.

         "GOVERNMENTAL ENTITY" means any court or any federal, state, local, or
foreign legislative body or governmental department, commission, board, bureau,
agency or authority.

         "INDEMNIFIED CLAIM" has the meaning ascribed thereto in Section 8.3.

         "INDEMNITEE" has the meaning ascribed thereto in Section 8.3.

         "INDEMNITOR" has the meaning ascribed thereto in Section 8.3.

         "INTANGIBLE ASSETS" means engineering, lab books, manuals, catalogs,
brochures, sales literature, promotional or other selling materials,
nonproprietary computer software, microfilm records, drawings, specifications,
nonproprietary technology, customer lists and all other nonproprietary rights of
any kind or character and wherever located which are owned by the Business and
used or being developed by and in connection with the Business.

         "INTELLECTUAL PROPERTY" means domestic or foreign patents, patents
pending, patent applications, inventions, disclosures, trademarks, trade
secrets, proprietary information, know-how, chemical formulation, service marks,
license rights, copyrights, whether registered or pending, that relate to the
Business after the Closing Date.

         "LEGAL PROCEEDING" means any judicial, administrative or arbitral
action, suit, proceeding (public or private), written claim or governmental
proceeding.

                                       43
<PAGE>

         "MATERIAL CONTRACTS" means contracts and agreements that provide for
payments or receipts by the Business of US$100,000 or more annually, excluding
all leases of real property.

         "MCA ASSUMED CONTRACTS" means (i) all product, service or sales
contracts relating to the MCA Business, (ii) the MCA Real Property Leases, (iii)
other contracts, agreements, and arrangements in any way connected to or
supporting the MCA Business.

         "MCA BUSINESS" has the meaning ascribed thereto in the Recitals. "MCA
CONTRIBUTED ASSETS" shall have the meaning ascribed to it in Section 2.2.

         "MCA INDEMNITEES" has the meaning ascribed thereto in Section 8.3.2(a).

         "MCA INTELLECTUAL PROPERTY" means domestic or foreign patents, patents
pending, patent applications, inventions, disclosures, trademarks, trade
secrets, proprietary information, know-how, chemical formulation, service marks,
license rights, copyrights, whether registered or pending, that relate to the
MCA Business and include those items set forth in Schedule 2.3.5(e).

         "MCA OFFICE ACTIONS" means any substantive correspondence from any
patent office or trademark office related to any MCA Intellectual Property.

         "MCA PRODUCT" OR "MCA PRODUCTS" shall mean all products that involve
MCA Intellectual Property which are supplied by MCA for resale or rental by the
Company to the oil and gas drilling industry.

         "MCA REAL ESTATE LEASES" means any leases which relate to the MCA
Business and include those items set forth in Schedule 2.3.5(d).

         "M-I ASSUMED CONTRACTS" means (i) all product, service or sales
contracts relating to the M-I Business, (ii) the M-I Real Property Leases, (iii)
other contracts, agreements, and arrangements in any way connected to or
supporting the M-I Business.

         "M-I BUSINESS" shall have the meaning ascribed to it in the Recitals.

         "M-I CONTRIBUTED ASSETS" shall have the meaning ascribed to it in
Section 2.2.

         "M-I INDEMNITEES" has the meaning ascribed thereto in Section 8.3.1(a).

         "M-I INTELLECTUAL PROPERTY" means domestic or foreign patents, patents
pending, patent applications, inventions, disclosures, trademarks, trade
secrets, proprietary information, know-how, chemical formulation, service marks,
license rights, copyrights, whether registered or pending, that relate to the
M-I Business and include those items set forth in Schedule 2.3.4(e).

         "M-I OFFICE ACTIONS" means any substantive correspondence from any
patent office or trademark office related to any M-I Intellectual Property.

                                       44
<PAGE>

         "M-I PRODUCT" OR "M-I PRODUCTS" shall mean all products that involve
M-I Intellectual Property which are supplied by M-I for resale or rental by the
Company to the oil and gas drilling industry.

         "M-I REAL ESTATE LEASES" means any leases which relate to the M-I
Business and include those items set forth in Schedule 2.3.4(d).

         "NET BOOK VALUE" means the accounting value of the assets less all the
liabilities, determined as of the date of the last audited financial statementof
the Company prior to the time that such Net Book Value shall be determined under
this Agreement.

         "OWNER" OR OWNERS" mean either M-I or MCA, or both M-I and MCA, as
applicable.

         "PARTY" OR PARTIES" mean either M-I or MCA or AC, or M-I, MCA and AC,
as applicable.

         "PERMITS" means all permits, licenses, franchises and authorizations
that are material to and that relate to the operation of the Business and the
ownership and operation of the Contributed Assets all as the same may exist on
the Closing Date.

         "PERSON" means an individual, partnership, joint venture, corporation,
bank, trust, unincorporated organization or a Governmental Entity.

         "PERSONALTY" means all tools, equipment (including without limitation
all computer equipment and hardware), rental equipment, machinery, vehicles and
other transportation equipment, furniture, spare parts, supplies and all other
tangible personal property of every kind and description (other than
Improvements and the Inventories), insofar as any of the foregoing is owned by
the Business.

         "PRODUCT" OR "PRODUCTS" shall mean all services that are supplied by
the Company for resale or rental to the oil and gas drilling industry.

         "TAXES" means any federal, state, local or foreign income, profit,
franchise (including without limitation those that are based on net worth,
capitalization, income or total assets), sales, use, transfer, real property
transfer, recording, value added, real or personal property or other taxes,
assessments, fees, levies, duties (including without limitations customs duties
and similar charges), deductions or other charges of any nature whatsoever
(including without limitation interest and penalties) imposed by any law, rule
or regulation.

                                       45
<PAGE>

         "TECHNOLOGY" means Intellectual Property, Intangible Assets, patents,
patents pending, trademarks, trade secrets, know how, copyrights, commercial
formulations, processes, proprietary technology, slogans, research and
development projects, all other proprietary rights of any kind or character,
wherever located, that are used, are being developed or are hereafter developed
in connection with the Business of the Company.

19.0   EMPLOYEES.
-----------------

         19.1 NO OBLIGATIONS UNDER PLANS. The Company is not assuming and will
not assume either hereunder or otherwise, any obligations to either MCA or M-I
former or existing employees with respect to or arising out of any Plan or with
respect to any employee benefit which MCA or M-I's former or existing employees
may receive from MCA or M-I, respectively, including, but not limited to, any
benefits that such employees may be entitled to pursuant to any employment
agreement, except as provided in Section 19.2.

         19.2  HIRED EMPLOYEES.

         19.2.1 M-I agrees that the Company will not be obligated to employ any
of M-I's former or present employees; provided, however, that the Company may
determine, in its sole discretion, to offer employment to the employees listed
on SCHEDULE 19.2.1 (the "M-I HIRED EMPLOYEES"), and M-I will use its reasonable
efforts to cause such M-I Hired Employees to make available their employment
services to the Company. Employment offered to the M-I Hired Employees shall be
offered on similar terms (in the aggregate) to those under which M-I employed
such M-I Hired Employees as of the Closing; PROVIDED that, the Company is making
no assurances as to the length of such employment or that the terms of
employment are substantially similar. The Company will credit the M-I Hired
Employees with service, for eligibility and vesting purposes, under the
Company's employee benefits plans substantially equal to the M-I Hired
Employee's service with M-I as of the Closing Date. Any severance obligations
due to M-I Hired Employees for previous employment with M-I shall be the sole
obligation and responsibility of M-I.

         19.2.2 MCA agrees that the Company will not be obligated to employ any
of MCA's former or present employees; provided, however, that the Company may
determine, in its sole discretion, to offer employment to the employees listed
on SCHEDULE 19.2.2 (the "MCA HIRED EMPLOYEES"), and MCA will use its reasonable
efforts to cause such MCA Hired Employees to make available their employment
services to the Company. Employment offered to the MCA Hired Employees shall be

                                       46
<PAGE>

offered on similar terms (in the aggregate) to those under which MCA employed
such MCA Hired Employees as of the Closing; PROVIDED that, the Company is making
no assurances as to the length of such employment or that the terms of
employment are substantially similar. The Company will credit the MCA Hired
Employees with service, for eligibility and vesting purposes, under the
Company's employee benefits plans substantially equal to the MCA Hired
Employee's service with MCA as of the Closing Date. Any severance obligations
due to MCA Hired Employees for previous employment with MCA shall be the sole
obligation and responsibility of MCA.

         19.2.3 The Company agrees to provide comprehensive medical insurance
benefits to the MCA Hired Employees and M-I Hired Employees (collectively "Hired
Employees" and individually "Hired Employee") and their dependents, if
applicable, which shall be determined without reference to waiting periods and
"pre-existing condition" exceptions, except for those waiting periods and
pre-existing conditions that were excluded under the applicable Party's health
insurance plan. The Company agrees to credit any deductibles, co-pays and out of
pocket expense maximums to the Company's medical insurance policies that provide
coverage to Hired Employees and their dependents, if applicable.

         19.2.4 For purposes of determining each Hired Employee's unused
calendar year 2003 vacation entitlement, the Hired Employee shall be deemed
transferred as of close of business on June 30, 2003. The Company shall not be
obligated to carry-over any unused calendar year 2003 or pre-calendar year 2003
vacation entitlement nor be obligated to make any payment in lieu of such unused
vacation entitlement. If any Hired Employee, who was allowed to carry-over
unused vacation entitlement from year-to-year while in the employment of M-I or
MCA or its Affiliate, as applicable,, has unused vacation entitlement at the
Closing Date, M-I or MCA, as applicable, shall be obligated to pay to such Hired
Employee wages in lieu of such unused carry-over vacation entitlement within ten
(10) days after the Closing Date.

         19.3     NO SOLICITATION.

         M-I and MCA each covenants and agrees that, commencing on the Closing
Date and continuing for a period of five (5) years thereafter, neither it nor
any of its Affiliates will directly or indirectly (a) attempt to solicit
employment from any Key Employee as set forth in SCHEDULE 19.3 or (b) attempt to
induce any Key Employee to terminate employment with the Company. However, the
preceding sentence shall not apply to those Key Employees who either are
terminated by the Company or independently respond to a general publication
solicitation for employment by M-I or MCA or one of their Affiliates.

                                       47
<PAGE>

         19.4 SEVERANCE OBLIGATIONS - NON-HIRED EMPLOYEES.

         The Company and its Affiliates shall not be obligated to assume or pay,
any obligation for severance (including vacation, thirteenth month, profit
sharing or any other benefit arising out of or related to employment with a
Party) or separation pay or benefits that becomes payable as a result of the
termination of employment of Non-Hired Employees of the Business.

         19.5 SEVERANCE OBLIGATIONS - HIRED EMPLOYEES.

         Any severance indemnity obligation (vacation, thirteenth month salary,
profit sharing or any other benefit arising out of or related to employment with
a Party) claimed by or awarded to a Hired Employee, as the result of the
termination of employment of the Hired Employee within two years after the
Closing Date, shall be allocated pro rata to the relevant Party and the Company
based on the Hired Employee's pre-Closing Date period of employment and
post-Closing Date period of employment. The relevant Party and the Company agree
that the total period of employment is the measure for said claim or award.

         19.6 SEVERANCE/TERMINATION OBLIGATIONS - CONSULTANTS AND CONTRACTORS.

         Each Party and its Affiliates agree to assume full responsibility for
and costs associated with the termination of any contracts, whether oral or
written, arising by virtue of the consulting or independent contracting services
performed for the benefit of the Party or its Affiliates.

20.0     INCOME TAX RETURNS, TAX ACCOUNTING, TAX ELECTIONS.
-----------------------------------------------------------

         20.1. PREPARATION OF TAX RETURNS.

         Federal, state and local income tax returns of the Company shall be
prepared by the Company. Copies of all tax returns of the Company shall be
furnished to MCA, AC and M-I for review and approval by the Management Committee
at least thirty (30) days prior to the statutory date for filing, including
extensions thereof, if any.

                                       48
<PAGE>

         20.2.  SECTION 754 ELECTION.

         In the event of a transfer of all or part of the interest of either of
the Parties, at the request of the transferee, the Management Committee will
cause the Company to elect, pursuant to Section 754 of the Code, or the
corresponding provision of subsequent law, to adjust the basis of property as
provided by Sections 734 and 743 of the Code.

         20.3.  TAX DECISIONS NOT SPECIFIED.

         Tax decisions and elections for the Company not provided for herein
shall be determined by the Management Committee, subject to the following
procedures. The Management Committee shall supervise the preparation of and
determine methods and elections to be used in filing tax returns provided,
however, that the Company shall provide notice of contemplated elections or
changes in methods used in the preparation of returns to the Parties, no later
than 90 days prior to the statutory date for filing, including extensions
thereof, and shall consult with the Parties regarding the decisions and
elections. The Parties shall have 10 days after the receipt of such notification
to make a written objection to the proposed election or method, and following
such objection, the Parties shall negotiate in good faith to resolve the
disagreement. Should the Parties fail to resolve any such dispute, the matter
shall be referred to an independent accounting firm whose determination shall be
final and binding on the Parties. If the Parties fails to provide timely written
objection as provided for herein, the method or election shall be considered
approved by the Parties.

         20.4  NOTICE OF TAX AUDIT.

         Prompt notice shall be given to the Parties by the Company upon receipt
of advice that the Internal Revenue Service or any other taxing authority
intends to examine the Company's tax returns for any period.

         In connection with any audit of a tax return of the Company, the
Management Committee shall control the supervision of and responses to such
audit and shall determine the method and conduct of any contest of a proposed
adjustment resulting from such audit; provided however, that the Party shall:
(i) consult in good faith with the Parties regarding the manner of responding to

                                       49
<PAGE>

such audit and the conduct of any contest of a proposed adjustment arising from
such audit, (ii) keep the Parties promptly informed of all developments arising
in connection with any such audit or contest, and (iii) not enter into any
settlement of any audit or contest with the Internal Revenue Service without the
written consent of the Parties, which shall not be unreasonably withheld.

         IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.

M-I L.L.C.                                   Mountain Compressed Air, Inc.

By:  /s/ Chirs Rivers                        By   /s/ Munawar H. Hidayatallah
         Chris Rivers                        Name:  Munawar H. Hidayatallah
         Vice President, CFO and Treasurer   Title: Chairman and Chief Executive
                                                    Officer

Allis-Chalmers Corporation

By: /s/ Munawar H. Hidayatallah
Name: Munawar H. Hidayatallah
Title:  Chairman and Chief Executive Officer

                                       50
<PAGE>

                                    Exhibit A

                                Funding Agreement

THIS FUNDING AGREEMENT (this "AGREEMENT"), dated as of the 27th day of June,
2003 (the "Closing"), is entered into by and among M-I L.L.C., a Delaware
limited liability company ("M-I"), Allis-Chalmers Corporation, a Delaware
corporation ("AC"), Mountain Compressed Air, Inc., a Texas corporation ("MCA"),
and AirComp L.L.C., a Delaware limited liability company ("Company"), all
collectively referred to herein as the "Parties").

WHEREAS, the Company is a joint venture company, 55% of which is owned by MCA
and 45% of which is owned by M-I pursuant to that certain Business Venture
Agreement ("Venture Agreement") among AC, MCA and M-I dated as of the date
hereof;

WHEREAS, the Company will need funding for its operations after the Closing;

WHEREAS, the Company is willing to obtain financing in the form of one or more
loans from Wells Fargo Bank Texas, N.A. (the "Bank") to fund its operations;

WHEREAS, MCA and/or its assignees are willing to secure payment of the financing
obtained by the Company from the Bank through MCA's outstanding limited
liability company interest in the Company (the "Guarantors"); and

WHEREAS, Company is willing to execute a promissory note in favor of M-I in
exchange for assets contributed to the Company by M-I.

         NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the Parties agree as follows:

         1. LOANS.

                  a.       SENIOR TERM LOAN. The Company shall obtain a loan of
                           Eight Million Dollars (US$8,000,000.00) on or around
                           the date of Closing, payable by the Company to the
                           Bank on or before the fourth anniversary of the date
                           of Closing (the "Senior Term Loan"). The Senior Term
                           Loan will be used by the Company in part to refinance
                           certain existing indebtedness of the Guarantors,
                           provide working capital, and for general corporate
                           purposes.

                  b.       DELAYED DRAW TERM LOAN. The Company shall obtain a
                           loan of One Million Dollars (US$1,000,000.00) on or
                           around the date of Closing, payable by the Company to
                           the Bank at its maturity date, which will be the end
                           of the draw period, such period being no less than
                           eighteen months after the date of Closing and no more
                           than four years after the date of Closing (the
                           "Delayed Draw Term Loan"). The Delayed Draw Term Loan
                           will be used in part by the Company for planned
                           purchases of capital equipment, upgrades, parts and
                           labor.

                  c.       REVOLVING LINE OF CREDIT. The Company shall obtain a
                           line of credit of One Million Dollars
                           (US$1,000,000.00) on or around the date of Closing,
                           payable by the Company to the Bank on or around the
                           fourth anniversary of the date of Closing (the
                           "Revolving Line of Credit"). The Revolving Line of
                           Credit will be used in part by the Company for
                           refinancing existing indebtedness of the Guarantors,
                           providing working capital, and for general corporate
                           purposes.

                                       51
<PAGE>

                  d.       MasterCard Credit Agreement. The Company shall obtain
                           credit not to exceed One Hundred Thousand Dollars
                           ($100,000.00) from the Bank's affiliate Wells Fargo
                           Bank, N.A., on or around the date of Closing,
                           pursuant to the Wells Fargo Commercial MasterCard
                           Customer Agreement (the "Credit Card Agreement").

                  e.       LOANS. The Senior Term Loan, Delayed Draw Term Loan,
                           Revolving Line of Credit and Credit Card Agreement
                           are hereinafter collectively referred to as the
                           "Loans," and individually referred to as the "Loan".
                           The terms of the Loans are defined by the Credit
                           Agreement between the Company and the Bank, attached
                           hereto as Attachment 1.

         2. PAYMENT OF LOANS. The Company agrees to repay the amount of the
Loans actually funded by the Bank when such repayment is due to the Bank
according to the terms of the individual credit agreements and other agreements
required by the Bank to evidence the Loans. The Loans shall bear interest at an
annual rate equal to a grid indexed to the London Inter-Bank Offer Rate
("LIBOR"), unless stated otherwise in the respective Loan documents.

         3. ASSIGNMENT. Neither this Agreement nor any rights created hereunder
shall be assignable by any of the Parties hereto without the consent of the
other Parties, which consent will not be unreasonably withheld.

         4. NOTICES. All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes if personally
delivered or within five days after the same is deposited with a reputable
international carrier or upon receipt of a facsimile transmission, to any Party
hereto at the address for such Party set forth below:

                  To M-I:

                  5950 North Course Drive
                  Houston, Texas  77072
                  Tel:  832-295-2774
                  Facsimile:  832-295-2501

                  To AC:

                  7660 Woodway, Suite 200
                  Houston, Texas 77063
                  Attn:  Munawar H. Hidayatallah
                  Chairman & Chief Executive Officer
                  Facsimile:  713-369-0555

                  To MCA:

                  7660 Woodway, Suite 200
                  Houston, Texas 77063
                  Attn:  Munawar H. Hidayatallah
                  Facsimile:  713-369-0555

                  To Company:

                  7660 Woodway, Suite 200
                  Houston, Texas 77063
                  Attn:  Munawar H. Hidayatallah
                  Facsimile:  713-369-0555

                                       52
<PAGE>

         5. ENTIRE AGREEMENT. This Agreement, together, with the Business
Venture Agreement by and among M-I, AC and MCA, having an Effective Date of June
30, 2003, and any attachments delivered therewith, constitute the entire
agreement between the Parties. No amendment, modification or termination of this
Agreement shall be deemed valid unless in writing and signed by the Parties
hereto.

         6. FURTHER ASSURANCES. The Parties hereby agree to take such further
actions and execute such additional documents as may be reasonably necessary to
effectuate the terms of this Agreement and the financing intent evidenced
hereby.

         7. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the Parties hereto and their respective successors and
assigns.

         8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to any
principles of conflicts of law.

         9. WAIVER OF BREACH. The failure of any Party hereto to enforce at any
time any of the provisions of this Agreement shall in no way be construed to
constitute a waiver of any such provision nor in any way to affect the validity
of this Agreement or any part hereof, including the right of any Party
thereafter to enforce each and every provision. The waiver by any Party to this
Agreement of any breach or violation of any provision of this Agreement by the
other Parties hereto shall not operate or be construed to be a waiver of any
subsequent breach of violation thereof.

         10. SEVERABILITY. The terms and conditions of this Agreement are hereby
deemed by the Parties to be severable, and the invalidity or unenforceability of
any one or more of the provisions of this Agreement shall not affect the
validity and enforceability of the other provisions hereof.

         11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be an original, but all of which shall be
deemed to be one and the same instrument, regardless of whether any one or more
Parties sign the same counterpart.

         12. SECURITY AND DEFAULT. MCA by its signature below and through its
execution of credit and security or other agreements required by the Bank
acknowledges and agrees that all outstanding limited liability company interests
in the Company which are owned by MCA and/or its assignees, including AC, (the
"MCA Interest") are collateral for, and secure, all of the Loans which Company
will obtain from the Bank. Should Company default in its repayment of any Loan
amount due to Bank at the time of the Loan's maturity date, MCA and AC (MCA's
Guarantor) jointly and severally agree to repay any such Loan amount and accrued
interest then due. Should MCA default in repayment of such amounts, then the
Bank may obtain the MCA Interest which secures the Loan and sell it to pay any
amounts due to the Bank on the Loans. M-I will have the right of first refusal
to purchase the MCA Interest from the Bank. Any excess money from the sale of
MCA Interest will be returned to MCA. If there is insufficient money from the
sale of MCA Interest to pay the amounts due under the Loans, then AC as MCA's
Guarantor will pay the difference.

         13. OTHER INDEBTEDNESS. The Company holds a loan of Four Million Eight
Hundred Eighteen Thousand Dollars (US $4,818,000.00) from M-I, payable by the
Company according to the terms of the promissory note, attached hereto as
Attachment 2 and incorporated herein by reference (the "Subordinated Debt"). M-I
agrees and acknowledges that the Subordinated Debt owed by the Company to M-I is
subordinate to the Loans defined in this Agreement and such Subordinated Debt
will be repaid in full with any outstanding accrued interest when the M-I
Percentage Interest, as defined in the Business Venture Agreement, is sold by
M-I. Annual interest on the Subordinated Debt will be fixed at five percent (5%)
per annum and such annual interest will be payable by the Company to M-I only if
the Company is in compliance with all the credit agreements and other agreements
securing the Loans.

                                       53
<PAGE>

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

                                          M-I L.L.C.:

                                 By:  /S/ Chris Rivers
                                 Name:  Crhis Rivers
                                 Title: Chief Financial Officer

                                          ALLIS-CHALMERS CORPORATION:

                                 By:  /s/ Munawar H. Hidayatallah
                                 Name:  Munawar H. Hidayatallah
                                 Title: Chairman and Chief Executive
                                        Officer

                                          MOUNTAIN COMPRESSED AIR, INC.:

                                 By:  /s/ Munawar H. Hidayatallah
                                 Name:  Munawar H. Hidayatallah
                                 Title:  Chairman and Chief Executive Officer

                                          AIRCOMP L.L.C.:

                                 By:  /s/ Terry Keane
                                 Name:  Terry Keane
                                 Title:  President and Chief Operating Officer

                                       54
<PAGE>

                                  ATTACHMENT 1

                                CREDIT AGREEMENT
                                ----------------
               [See Security Agreement attached as Exhibit 10.35]

                                       55
<PAGE>

                     LEGEND FOR SUBORDINATED NOTE - AIRCOMP

Payment of this note is subordinated to the payment of the indebtedness
described in that certain Subordination Agreement dated June 26, 2003 between
Aircomp L.L.C., M-I L.L.C., and Wells Fargo Texas, National Association pursuant
to the terms and conditions set forth therein.

                                  ATTACHMENT 2

                                 PROMISSORY NOTE

DATE:  June 27, 2003

MAKER:  AirComp L.L.C.

PAYEE: M-I L.L.C.

PLACE FOR PAYMENT:         P. O. Box 42842
                           Houston, Texas 77242

PRINCIPAL AMOUNT:          Four Million Eight Hundred Eighteen Thousand and
                           00/100 United States Dollars (USD $4,818,000.00)

TERMS OF PAYMENT:          The Principal amount shall be
                           due and payable when Payee sells the M-I
                           Percentage Interest which is defined in the
                           Business Venture Agreement by and among
                           Maker, Allis-Chalmers Corporation and
                           Mountain Compressed Air, Inc. dated June 27,
                           2003. Interest shall be calculated on the
                           unpaid principal and accrued interest amount
                           and any payment made shall be credited first
                           to the discharge of any interest owed and
                           then the balance to the reduction of the
                           principal outstanding.

ANNUAL INTEREST RATE ON UNPAID PRINCIPAL AMOUNT:  FIVE Percent (5%)

Maker hereby promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount, which is categorized as
an unpaid loan, plus interest at the rate stated above. Maker reserves the right
to prepay this note in any amount at any time prior to maturity without penalty.
All unpaid amounts shall be due by the closing of the sale of the M-I Percentage
Interest.

On default in the payment of this note, it shall become immediately due at the
election of Payee. Maker waives all demands for payment, presentations for
payment, notices of intention to accelerate maturity, protests, and notices of
protest.

If this note is given to an attorney for collection, or if suit is brought for
collection, or if it is collected through bankruptcy, or other judicial
proceeding, then Maker shall pay Payee reasonable attorney's fees in addition to
other amounts due. Nothing in this note shall authorize the collection of
interest in excess of the highest rate allowed by law.

This Note and the right to receive any payments hereon, including prepayments,
is subject to the terms of that certain Subordination Agreement dated as of June
27, 2003, by and among AirComp L.L.C., M-I L.L.C. and Wells Fargo Bank Texas,
National Association, reference to which instrument is here made and which
instrument is incorporated by reference for all purposes. This is not a
negotiable note. Any holder's rights in this Note are subject to the provisions
of the Subordination Agreement.

                                                          AirComp L.L.C.

                                                     By:  /s/ Terry Keane
                                                     Name:  Terry Keane
                                                     Title:  President

                                       56
<PAGE>

                                    Exhibit B

                            Parent Company Guarantee

We have taken due note that at the date hereof, M-I L.L.C. ("M-I") has entered
into a Business Venture Agreement (the "Agreement") with Allis-Chalmers
Corporation ("Allis-Chalmers") and Mountain Compressed Air, Inc. ("MCA"), a
wholly-owned subsidiary of OilQuip Rentals, Inc. ("OilQuip"), a wholly-owned
subsidiary of Allis-Chalmers, and that pursuant to that Agreement, M-I,
Allis-Chalmers and MCA have entered into a joint venture for the purpose of
developing and expanding the business for air compression in the drilling and
workover markets worldwide.

We hereby unconditionally, absolutely, irrevocably, and continuously guarantee
MCA's, its successors or assigns' payment of liabilities and/or performance and
fulfillment of any and all obligations, terms and conditions set forth under the
Agreement and the transactions therein provided. If MCA in any respect fails to
perform the obligations contained in the Agreement or commits any breach of the
Agreement, Allis-Chalmers will perform on simple demand from M-I or take
whatever steps are necessary to achieve performance of the obligations of MCA
under the Agreement and will be responsible for any obligations, damages, costs
and expenses, arising from the failure or breach for which MCA may be liable
under the Agreement. This guarantee shall continue with respect to MCA's
obligations under the Agreement, even if we sell MCA, wind up MCA or otherwise
cause MCA to cease to exist.

We hereby waive any right to require M-I to (a) proceed against MCA, its
successor or assigns, (b) have Allis-Chalmers joined with MCA, its successor or
assigns in any suit or proceeding arising out of this guarantee, or (c) pursue
any other remedy available to Seller before proceeding immediately and directly
against Allis-Chalmers.

This guarantee continues in force notwithstanding any alterations to or
deletions from the Agreement until all of MCA's obligations under the Agreement
have been performed.

We are not discharged or released from our undertakings hereunder by any waiver
or forbearance under the Agreement by M-I whether as to payment, time,
performance or otherwise.

IN WITNESS WHEREOF, we have caused this guarantee to be duly executed as of the
27th day of June 2003.

                                  Allis-Chalmers Corporation

                                  By: /s/ Munawar H. Hidayatallah
                                  Name:  Munawar H. Hidayatallah
                                  Title: Chairman and Chief Executive Officer

                                       57<PAGE>

                                                                       EXECUTION
                                                                     COUNTERPART

                                  Exhibit 10.35

                                CREDIT AGREEMENT

         THIS AGREEMENT is entered into as of June 27, 2003, by and between
AIRCOMP L.L.C., a Delaware limited liability company ("BORROWER"), and WELLS
FARGO BANK TEXAS, NATIONAL ASSOCIATION ("BANK").

                                    RECITALS
                                    --------

         Borrower has requested that Bank extend or continue credit to Borrower
as described below, and Bank has agreed to provide such credit to Borrower on
the terms and conditions contained herein.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree as follows:

                                    ARTICLE I
                                    ---------
                                  CREDIT TERMS
                                  ------------

         SECTION 1.1. LINE OF CREDIT.

         (a) LINE OF CREDIT. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including June 27, 2007, not to exceed at any time the aggregate
principal amount of One Million and No/00 Dollars ($1,000,000.00) ("LINE OF
CREDIT"), the proceeds of which shall be used to (i) refinance certain existing
indebtedness of Mountain Compressed Air, Inc., a Texas corporation ("MCA"), (ii)
provide working capital and for general corporate purposes of the Borrower, and
(iii) pay fees and expenses incurred in connection with the transactions
contemplated hereby. Borrower's obligation to repay advances under the Line of
Credit shall be evidenced by a promissory note substantially in the form of
EXHIBIT "A" attached hereto ("LINE OF CREDIT NOTE"), all terms of which are
incorporated herein by this reference.

         (b) LIMITATION ON BORROWINGS. The aggregate amount of all outstanding
borrowings under the Line of Credit, to a maximum of the principal amount set
forth above, shall not at any time exceed the lesser of (i) $1,000,000.00 minus
the aggregate face amount of all outstanding Letters of Credit or (ii) the
Borrowing Base minus the aggregate face amount of all outstanding Letters of
Credit. All borrowings under the Line of Credit shall be in an amount of at
least $10,000.00. There will be no minimum amount required on the borrowings
under the Line of Credit if borrowed through Bank's credit sweep products.

         (c) BASE BORROWINGS. Outstanding borrowings under the Line of Credit,
to a maximum of the principal amount set forth above, shall not at any time
exceed an aggregate of eighty percent (80%) of Borrower's Eligible Accounts
Receivable (the "BORROWING BASE"). All of the foregoing shall be determined by
Bank upon receipt and review of all collateral reports required hereunder and
such other documents and collateral information as Bank may from time to time
require. Borrower acknowledges that said Borrowing Base was established by Bank

<PAGE>

with the understanding that, among other items, the aggregate of all returns,
rebates, discounts, credits and allowances for the immediately preceding three
(3) months at all times shall be less than five percent (5%) of Borrower's gross
sales for said period. If such dilution of Borrower's accounts for the
immediately preceding three (3) months at any time exceeds five percent (5%) of
Borrower's gross sales for said period, or if there at any time exists any other
matters, events, conditions or contingencies which Bank reasonably believes may
affect payment of any portion of Borrower's accounts, Bank, in its sole
discretion, may reduce the foregoing advance rate against Eligible Accounts
Receivable to a percentage appropriate to reflect such additional dilution
and/or establish additional reserves against Borrower's Eligible Accounts
Receivable.

         As used herein, "Eligible Accounts Receivable" shall consist solely of
trade accounts created in the ordinary course of Borrower's business, upon which
Borrower's right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever, and in which Bank has a perfected
security interest of first priority, and shall not include:

                  (i) any account which is more than sixty (60) days past due or
         ninety (90) days from the invoice date;

                  (ii) that portion of any account for which there exists any
         right of setoff, defense or discount (except regular discounts allowed
         in the ordinary course of business to promote prompt payment) or for
         which any defense or counterclaim has been asserted;

                  (iii) any account which represents an obligation of any state
         or municipal government or of the United States government or any
         political subdivision thereof (except accounts which represent
         obligations of the United States government and for which the
         assignment provisions of the Federal Assignment of Claims Act, as
         amended or recodified from time to time, have been complied with to
         Bank's satisfaction);

                  (iv) any account which represents an obligation of an account
         debtor located in a foreign country, except to the extent any such
         account, in Bank's determination, is supported by a letter of credit or
         insured under a policy of foreign credit insurance, in each case in
         form, substance and issued by a party acceptable to Bank;

                  (v) any account which arises from the sale or lease to or
         performance of services for, or represents an obligation of, an
         employee, affiliate, partner, member, parent or subsidiary of Borrower
         including, without limitation, Business Venture Owners;

                  (vi) that portion of any account, which represents interim or
         progress billings or retention rights on the part of the account
         debtor;

                  (vii) any account which represents an obligation of any
         account debtor when twenty percent (20%) or more of Borrower's accounts
         from such account debtor are not eligible pursuant to (i) above;

                  (viii) that portion of any account from an account debtor
         which represents the amount by which Borrower's total accounts from
         said account debtor exceeds twenty-five percent (25%) of Borrower's
         total accounts; provided, however, such percentage may be increased if
         (i) Bank, in Bank's sole discretion, approves of such increase and (ii)
         Borrower insures against such increase with insurance in amounts
         acceptable to Bank, in Bank's sole discretion;

                                       2
<PAGE>

                  (ix) accounts with credit balances which have aged more than
         ninety (90) days;

                  (x) any account in which services have not been rendered or
         goods have not been shipped; or

                  (xi) any account deemed ineligible by Bank when Bank, in its
         sole discretion, deems the creditworthiness or financial condition of
         the account debtor, or the industry in which the account debtor is
         engaged, to be unsatisfactory.

         (d) LETTER OF CREDIT SUBFEATURE. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue or cause
an affiliate to issue standby letters of credit for the account of Borrower
(each, a "LETTER OF CREDIT" and collectively, "LETTERS OF CREDIT"); provided
however, that the aggregate undrawn amount of all outstanding Letters of Credit
shall not at any time exceed Two Hundred Thousand and No/00 Dollars
($200,000.00). The form and substance of each Letter of Credit shall be subject
to approval by Bank, in its sole discretion. Each Letter of Credit shall be
issued for a term not to exceed three hundred sixty-five (365) days, nor an
expiration date subsequent to the maturity date of the Line of Credit unless
such Letter of Credit is collateralized with liquid assets acceptable to Bank in
Bank's sole discretion. The undrawn amount of all Letters of Credit shall be
reserved under the Line of Credit and shall not be available for borrowings
thereunder. Each Letter of Credit shall be subject to the additional terms and
conditions of the Letter of Credit agreements, applications and any related
documents required by Bank in connection with the issuance thereof. Each drawing
paid under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any drawing is paid, then Borrower shall immediately pay to Bank the full
amount drawn, together with interest thereon from the date such drawing is paid
to the date such amount is fully repaid by Borrower, at the rate of interest
applicable to advances under the Line of Credit. In such event Borrower agrees
that Bank, in its sole discretion, may debit any account maintained by Borrower
with Bank for the amount of any such drawing. If Borrower does not pay to Bank
the sums due for such drawings, the unpaid amount thereof shall bear interest
equal to the Base Rate (as defined in the Line of Credit Note) plus three
percent (3%) for each day from and including the date such drawing was paid by
Bank to the date of repayment by Borrower.

         (e) BORROWING AND REPAYMENT. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above. Borrower may prepay principal on the Line of Credit without penalty on
one (1) business day's advance notice. Prepayments on the Line of Credit shall

                                       3
<PAGE>

be in a principal amount of $10,000.00. There will be no minimum amount required
on prepayments of the Line of Credit paid through Bank's credit sweep product.
If at any time the outstanding aggregate unpaid principal amount of the Line of
Credit Note plus the sum of the issued and outstanding Letters of Credit exceeds
the Borrowing Base, the Borrower shall (i) immediately prepay the Line of Credit
loans in an aggregate principal amount equal to the excess, together with
interest on the principal amount paid accrued to the date of such prepayment and
(ii) if a Borrowing Base deficiency remains after prepaying all of the Line of
Credit loans because of the issued and outstanding Letters of Credit, the
Borrower shall pay to the Bank an amount equal to such Borrowing Base deficiency
to be held as cash collateral as provided in Section 1.1(f). The parties
understand and agree that all payments due and payable to the Bank under the
Line of Credit Note including all fees of Bank, will be auto-debited from
Borrower's checking account number 4945074375 held at Bank.

         (f) CASH COLLATERAL ACCOUNT. Borrower shall maintain with Bank, and
Borrower hereby grants to Bank a security interest in, a non-interest bearing
deposit account over which Borrower shall have no control ("CASH COLLATERAL
ACCOUNT") and into which, upon an Event of Default, the proceeds of all
Borrower's accounts and other rights to payment in which Bank has a security
interest shall be deposited immediately upon an Event of Default, and if
requested by Bank, the Borrower shall deposit in the Cash Collateral Account an
amount in cash equal to the aggregate undrawn amount of all outstanding Letters
of Credit. Bank shall, and Borrower hereby authorizes Bank to, apply all such
proceeds immediately upon their receipt by Bank to repayment of all obligations
of the Borrower relating to the aggregate amount of the undrawn Letters of
Credit. Borrower's Cash Collateral Account number held at Bank is 4945080273.

         SECTION 1.2. TERM LOAN.

         (a) TERM LOAN. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make a loan to Borrower in the principal amount of Eight
Million and No/100 Dollars ($8,000,000.00) ("TERM LOAN"), the proceeds of which
shall be used to (i) refinance certain existing indebtedness of MCA, (ii)
provide working capital for general corporate purposes of the Borrower, and
(iii) pay fees and expenses incurred in connection with the transactions
contemplated hereby. Borrower's obligation to repay the Term Loan shall be
evidenced by a promissory note substantially in the form of EXHIBIT "B" attached
hereto ("TERM NOTE"), all terms of which are incorporated herein by this
reference. The initial advance of the Term Loan shall not exceed the lesser of
(i) sixty percent (60%) of the orderly liquidation value or (ii) eighty percent
(80%) of the forced liquidation value of Borrower's equipment.

         (b) REPAYMENT. Principal and interest on the Term Loan shall be repaid
in accordance with the provisions of the Term Note.

         (c) PREPAYMENT. If the Term Loan bears interest at the Base Rate (as
defined in the Term Note), then Borrower may prepay the Term Loan without
penalty on one (1) business days' advance notice. Such prepayments of the Term
Loan shall be in the principal amount of $100,000.00. If the Term Loan bears
interest at LIBOR (as defined in the Term Note), then Borrower may prepay the
Term Loan without penalty (except as provided in the Term Note) on three (3)
business days' advance notice. All prepayments will include interest accrued to
the prepayment date and all other fees and expenses due. All prepayments will be
applied in the inverse order of payment due on the Term Loan.

                                       4
<PAGE>

         SECTION 1.3. DELAYED DRAW TERM LOAN.

         (a) DELAYED DRAW. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including December 27, 2004, not to exceed the aggregate principal amount
of One Million and No/100 Dollars ($1,000,000.00) ("DELAYED DRAW TERM LOAN"),
the proceeds of which shall be used to finance the purchase of capital equipment
and planned upgrade of currently owned equipment, and which shall be converted
on December 27, 2004, to a term loan, as described more fully below and in the
Delayed Draw Term Note. Advances on the Delayed Draw Term Loan are not to exceed
one hundred percent (100%) of invoices on the purchases of miscellaneous parts
and labor. Borrower's obligation to repay advances under the Delayed Draw Term
Loan shall be evidenced by a promissory note substantially in the form of
EXHIBIT "C" attached hereto ("DELAYED DRAW TERM NOTE"), all terms of which are
incorporated herein by this reference.

         (b) LIMITATION ON BORROWINGS. Notwithstanding any of the other
provisions of this Agreement, the aggregate amount of all outstanding borrowings
under the Delayed Draw Term Loan shall not at any time exceed a maximum
principal amount of One Million and No/100 Dollars ($1,000,000.00). If the
Delayed Draw Term Loan bears interest at the Base Rate (as defined in the
Delayed Draw Term Note), then borrowings under the Delayed Draw Term Loan shall
be in amounts of at least $10,000.00. If the Delayed Draw Term Loan bears
interest at LIBOR (as defined in the Delayed Draw Term Note), then borrowings
under the Delayed Draw Term Loan shall be in amounts in multiples of at least
$100,000.00.

         (c) BORROWING AND REPAYMENT. Borrower may from time to time during the
period in which Bank will make advances under the Delayed Draw Term Loan borrow
and partially or wholly repay (subject to prepayment provisions contained herein
and in the Delayed Draw Term Note) its outstanding borrowings, provided that
amounts repaid may not be reborrowed, subject to all the limitations, terms and
conditions contained herein; provided however, that the total outstanding
borrowings under the Delayed Draw Term Loan shall not at any time exceed the
maximum principal amount available thereunder, as set forth above. All unpaid
interest on the Delayed Draw Term Note as of December 31, 2004 shall be paid on
such date. Thereafter, principal and interest on the outstanding principal
balance of the Delayed Draw Term Note shall be due and payable in ten (10)
installments of principal plus interest each, the first nine (9) of which shall
be in a principal amount equal to five percent (5%) of the outstanding principal
balance on the Delayed Draw Term Note at the end of the business day on December
31, 2004, plus interest each, with the first such installment being due and
payable on March 31, 2005, the next eight (8) such installments being paid on
the last day of each June, September, December and March thereafter, and the
tenth (10th) and final installment, if not sooner paid, shall be due and payable
on June 27, 2007, in an amount equal to the entire balance of principal and
accrued and unpaid interest then due and owing on the Delayed Draw Term Note.
Notwithstanding the foregoing, Borrower shall make annual pre-payments of the
outstanding principal balance of this Note equal to fifty percent (50%) of Free
Cash Flow (as such is defined in Section 5.7 hereof), commencing August 27,
2004, and such pre-payments shall be applied in inverse order of maturities,
first to prepayment of the Term Note, then to this Note, and then to any
outstanding balance under the Line of Credit Note, as applicable.

                                       5
<PAGE>

         (d) PREPAYMENT. If the Delayed Draw Term Loan bears interest at the
Base Rate (as defined in the Delayed Draw Term Note), then Borrower may prepay
the Delayed Draw Term Loan without penalty on one (1) business day's advance
notice. Such prepayments of the Delayed Draw Term Loan will be at least
$100,000.00. If the Delayed Draw Term Loan bears interest at LIBOR (as defined
in the Delayed Draw Term Note), then Borrower may prepay the Delayed Draw Term
Loan without penalty (except as provided in the Delayed Draw Term Note) on three
(3) business days' notice. Such prepayments of the Delayed Draw Term Loan will
be at least $100,000.00. All prepayments will include interest accrued to the
prepayment date and all other fees and expenses due. All prepayments will be
applied in the inverse order of payments due on the Delayed Draw Term Loan.

         SECTION 1.3B WELLS FARGO COMMERCIAL MASTERCARD CUSTOMER AGREEMENT

         The Wells Fargo Bank, National Association hereby agrees to provide
credit to Borrower, not to exceed Fifty Thousand and No/100 Dollars $50,000.00,
pursuant to the terms of the Wells Fargo Commercial MasterCard Customer
Agreement dated as of June 27, 2003 (the "WELLS FARGO COMMERCIAL MASTERCARD
Agreement"), a copy of which is attached hereto as EXHIBIT "E".

         SECTION 1.4. INTEREST/FEES.

         (a) INTEREST. The outstanding principal balance of the Line of Credit
shall bear interest at a rate of interest set forth in the Line of Credit Note.
The outstanding principal balance from the Term Loan shall bear interest at the
rate of interest set forth in the Term Note. The outstanding principal balance
of the Delayed Draw Term Note shall bear interest at the rate of interest set
forth in the Delayed Draw Term Note.

         (b) COMPUTATION AND PAYMENT. Interest shall be computed on the basis of
a 360-day year, actual days elapsed, unless such calculation would result in a
usurious rate, in which case interest shall be computed on the basis of a
365/366-day year, as the case may be, actual days elapsed. Interest shall be
payable at the times and place set forth in each promissory note or other
instrument or document required hereby.

         (c) UNUSED COMMITMENT FEES. Borrower shall pay to Bank a fee equal to
three-eighths of one percent (.375%) per annum (computed on the basis of a
360-day year, actual days elapsed) on the average daily unused amount of the
Delayed Draw Term Note, which fee shall be calculated on a quarterly basis by
Bank and shall be due and payable by Borrower quarterly in arrears within ten
(10) days after each billing is sent by Bank and at December 31, 2004. The
Borrower shall pay to Bank a fee equal to one-half of one percent (.50%) per
annum (computed on the basis of the 360-day year, actual days elapsed) on the
average daily unused amount of the Line of Credit Note, which fee shall be
calculated on a quarterly basis by Bank and shall be due and payable by Borrower
quarterly in arrears within ten (10) days after each billing is sent by Bank and
at maturity of the Line of Credit Note.

         (d) UPFRONT FEES. Borrower shall pay to Bank an Upfront Fee equal to
Twenty Thousand and No/100 Dollars ($20,000.00) with respect to the Line of
Credit which fee shall be due and payable by Borrower on the earlier to occur of
(i) June 30, 2003 or (ii) the date hereof, regardless of whether the Line of
Credit, the Term Loan and/or any Delayed Draw Term Loan closes. Borrower shall

                                       6
<PAGE>

pay to Bank an Upfront Fee equal to Eighty Thousand and No/100 Dollars
($80,000.00) with respect to the Term Loan which fee shall be due and payable by
Borrower on the earlier to occur of (i) June 30, 2003 or (ii) the date hereof,
regardless of whether the Line of Credit, the Term Loan, and/or any Delayed Draw
Term Loan closes. The Borrower shall pay to Bank an Upfront Fee equal to Ten
Thousand and No/100 Dollars ($10,000.00) with respect to the Delayed Draw Term
Loan which fee shall be due and payable by Borrower on the earlier to occur of
(i) June 30, 2003, or (ii) the date hereof, regardless of whether the Line of
Credit, the Term Loan, and/or any Delayed Draw Term Loan closes. The parties
hereto agree and understand that the Upfront Fees described herein are
non-refundable.

         (e) LETTER OF CREDIT FEES. Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to the Base Rate margin (as defined in
the Line of Credit Note) at the time of issuance thereof multiplied by the face
amount thereof, subject to a minimum issuance fee of $750.00 per Letter of
Credit, each such fee being payable at issuance and on each anniversary date
thereafter and (ii) fees upon the payment or negotiation of each drawing under
any Letter of Credit and fees upon the occurrence of any other activity with
respect to any Letter of Credit (including without limitation, the transfer,
payment, negotiation, amendment or cancellation of any Letter of Credit)
determined in accordance with Bank's standard fees and charges then in effect
for such activity, including, without limitation, amendment fees of $175.00 per
amendment, and courier fees of $25.00 each.

         SECTION 1.5. COLLECTION OF PAYMENTS. Borrower authorizes Bank to
collect all principal, interest and fees due under each credit subject hereto by
charging Borrower's deposit account number 4945074375 with Bank or any other
deposit account maintained by Borrower with Bank, for the full amount thereof.
Should there be insufficient funds in any such deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and
payable by Borrower.

         SECTION 1.6. COLLATERAL.

         As security for all indebtedness of Borrower to Bank and its affiliates
subject hereto, Borrower hereby grants to Bank security interests of first
priority in all Borrower's assets in all Borrower's obligations hereunder and
all other Loan Documents executed herewith, including the Wells Fargo Commercial
MasterCard Customer Agreement ("Card Agreement"), as Card Agreement may be
amended, modified, restated, extended, increased, and/or rearranged from time to
time (collectively the "INDEBTEDNESS"). Borrower and Bank acknowledge and agree
that the above sentence does not give Borrower the right to extend or increase
its obligations to Bank beyond the ones created on even date herewith without
MILLC's and MCA's written approval. As additional security for the Indebtedness
of Borrower to Bank hereunder, Borrower shall cause MCA and M-I L.L.C., a
Delaware limited liability company ("MILLC"), to grant to Bank security
interests of first priority in all of MCA's and MILLC's respective outstanding
limited liability company interests of the Borrower. Borrower shall also cause
MCA and MILLC (collectively referred to herein as the "BUSINESS VENTURES

                                       7
<PAGE>

OWNERS") to evidence any loans made by the Business Venture Owners as of the
date hereof, which constitute inter-company debt, by requiring the parties to
such loans to execute a promissory note in form and substance satisfactory to
Bank and to collaterally assign to and deliver possession of such promissory
notes to Bank. It is agreed and understood that the grant to Bank of security
interests in said promissory notes shall be at all times a first priority
security interest therein.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.

         SECTION 1.7. GUARANTIES. All indebtedness of Borrower to Bank hereunder
shall be guaranteed unconditionally, independently, and in addition to the
guaranty described in Subsection (iii) hereof by (i) MCA in an amount equal to
its pro-rata ownership interest in Borrower at the time of closing; (ii) MILLC
in an amount equal to its pro-rata ownership interest in Borrower at the time of
Closing; and jointly and severally by (iii) Munawar and Jayne Hidayatallah,
jointly and severally, in a principal amount not to exceed Two Million and
No/100 Dollars ($2,000,000.00).

         SECTION 1.8. SUBORDINATION OF DEBT. All obligations of Borrower to the
Business Venture Owners shall be subordinated in right of repayment to all
obligations of Borrower to Bank, as evidenced by and subject to the terms of
subordination agreements in form and substance satisfactory to Bank.

                                   ARTICLE II
                                   ----------
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

         Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to Bank
subject to this Agreement.

         SECTION 2.1. LEGAL STATUS. Borrower is a limited liability company,
duly organized and existing and in good standing under the laws of the State of
Delaware, and is qualified or licensed to do business (and is in good standing
as a foreign corporation, if applicable) in all jurisdictions in which such
qualification or licensing is required or in which the failure to so qualify or
to be so licensed could have a material adverse effect on Borrower.

         SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, security agreement, pledge agreement, guaranty
agreement, the Wells Fargo Commercial MasterCard Commercial MasterCard
Agreement, instrument and other document required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the "LOAN
DOCUMENTS") have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.

                                       8
<PAGE>

         SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Business Venture Agreement of
Borrower, or result in any breach of or default under any contract, obligation,
indenture or other instrument to which Borrower is a party or by which Borrower
may be bound.

         SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.

         SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial
statement of Borrower dated June 27, 2003, a true copy of which has been
delivered by Borrower to Bank prior to the date hereof, (a) is complete and
correct and presents fairly the financial condition of Borrower, (b) discloses
all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest in or otherwise encumbered any of its assets or properties
except in favor of Bank or as otherwise permitted by Bank in writing.

         SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year.

         SECTION 2.7. NO SUBORDINATION. Other than that certain Subordination
Agreement dated as of even date herewith, between Borrower, Bank and the
Business Venture Owners (the "SUBORDINATE AGREEMENT"), there is no agreement,
indenture, contract or instrument to which Borrower is a party or by which
Borrower may be bound that requires the subordination in right of payment of any
of Borrower's obligations subject to this Agreement to any other obligation of
Borrower.

         SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is now
engaged in compliance with applicable law.

         SECTION 2.9. ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

                                       9
<PAGE>

         SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

         SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower's operations and/or properties,
including without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
Borrower is the subject of any federal or state investigation evaluating whether
any remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment.
Borrower has no material contingent liability in connection with any release of
any toxic or hazardous waste or substance into the environment.

         SECTION 2.12. REAL PROPERTY COLLATERAL. The Borrower has no real
property.

         SECTION 2.13. NO CONSENT. The Borrower's execution, delivery and
performance of each of the Loan Documents, including this Agreement, to which
the Borrower is a party do not require the consent or approval of any other
person or entity which have not been obtained including, without limitation, any
regulatory authority or governmental body of the United States of America or any
state thereof or any political subdivision of United States of America or any
state thereof.

         SECTION 2.14. QUALIFIED COMMERCIAL LOAN. This Loan is a Qualified
Commercial Loan as defined in Chapter 306 in the Texas Finance Code. This Loan
is not secured by real property and is not to be used for the purpose of
financing a business licensed by the Motor Vehicle Board of the Texas Department
of Transportation under Section 4.01(a), Texas Vehicle Commission (Article
4413(36), Vernon's Statute). Borrower has been advised by the Bank to seek the
advice of an attorney and an accountant in connection with this Qualified
Commercial Loan and Borrower has had the opportunity to seek the advice of an
attorney and an accountant of Borrower's choice in connection with this
Qualified Commercial Loan.

                                   ARTICLE III
                                   -----------
                                   CONDITIONS
                                   ----------

         SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation
of Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's satisfaction of all of the following conditions:

         (a) APPROVAL OF BANK COUNSEL. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

                                       10
<PAGE>

         (b) DOCUMENTATION. Bank shall have received, in form and substance
satisfactory to Bank, each of the documents described on EXHIBIT "D" attached
hereto.

         (c) FINANCIAL CONDITION. There shall have been no material adverse
change, as determined by Bank on the assets, liabilities, financial condition,
business, operations or affairs of the Borrower or any guarantor, individually
or taken as a whole, different from those reflected in the latest financial
statements delivered to the Bank or from the facts represented or warranted in
any Loan Document, or (ii) the ability of the Borrower or any guarantor
hereunder to carry out its business as of the Closing Date or as proposed as of
the Closing Date to be conducted or meet their obligations under the Loan
Documents on a timely basis.

         (d) INSURANCE. Borrower shall have delivered to Bank evidence of
insurance coverage on all Borrower's property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank, including without
limitation, policies of fire and extended coverage insurance covering all real
property collateral required hereby, with replacement cost and mortgagee loss
payable endorsements, and such policies of insurance against specific hazards
affecting any such real property as may be required by governmental regulation
or Bank; and all containing provisions that such policies cannot be canceled
without thirty (30) days' prior notice to Bank.

         SECTION 3.2. CONDITIONS OF EACH BORROWING. The obligation of Bank to
make each extension of credit requested by Borrower hereunder shall be subject
to the fulfillment to Bank's satisfaction of each of the following conditions:

         (a) COMPLIANCE. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

         (b) DOCUMENTATION. Bank shall have received all additional documents
which may be required in connection with such extension of credit.

                                   ARTICLE IV
                                   ----------
                              AFFIRMATIVE COVENANTS
                              ---------------------

         Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:

         SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein, and immediately upon demand by Bank,
the amount by which the outstanding principal balance of any credit subject
hereto at any time exceeds any limitation on borrowings applicable thereto.

                                       11
<PAGE>

         SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time and with two (2)
business days' notice, to inspect, audit and examine such books and records, to
make copies of the same, and to inspect the properties of Borrower.

         SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the
following, in form and detail satisfactory to Bank:

         (a) not later than ninety (90) days after and as of the end of each
fiscal year, an audited financial statement of Borrower and MCA, on a
consolidated basis, prepared by a recognized independent accounting firm
acceptable to Bank, to include consolidated balance sheets and consolidated
statements of income, retained earnings and cash flow, in accordance with
generally accepted accounting principles, together with an unqualified opinion
and such firm's covenant compliance calculations certified by a senior financial
officer;

         (b) not later than one hundred and twenty days (120) days after and as
of the end of each fiscal year, audited consolidating financing statement of M-I
Group, ("M-I GROUP" is defined as M-I L.L.C., M-I Holdings B.V., M-I Drilling
Fluids Canada, Inc., M-I Holdings (BVI Ltd., and M-I Drilling Fluids de Mexico,
S.A. de C.V.), prepared by a recognized independent accounting firm acceptable
to Bank, to include consolidating balance sheets and consolidating statements of
income, retained earnings and cash flow, in accordance with generally accepted
accounting principles;

         (c) not later than one hundred and twenty days (120) days after and as
of the end of each fiscal year, unaudited consolidated financing statement of
MILLC, prepared by MILLC, to include consolidated balance sheets and
consolidated statements of income, retained earnings and cash flow, in
accordance with generally accepted accounting principles unaudited financing
statement for MILLC consolidated;

         (d) no later than thirty (30) days after the end of each calendar
month, unaudited consolidated financial statements of Borrower, prepared by
Borrower, to include consolidated balance sheets and consolidated statements of
income, retained earnings and cash flow, in accordance with generally accepted
accounting principles;

         (e) no later than thirty (30) days after the end of each calendar
month, collateral reports describing in reasonable detail the then location of
all collateral;

         (f) no later than sixty (60) days after and as of the end of each
fiscal year of Borrower prepared management reports to include forecasts of
Borrower's consolidated balance sheets and consolidated statements of income,
retained earnings and cash flow, in accordance with generally accepted
accounting principles;

                                       12
<PAGE>

         (g) not later than twenty-five (25) days after and as of the end of
each calendar month, a Borrowing Base certificate, attached hereto as SCHEDULE
I, listing ineligible accounts receivable, an aged listing of accounts
receivable and accounts payable, and a reconciliation of accounts, and not later
than twenty-five (25) days after and as of each calendar month, a list of the
names and addresses of all Borrower's account debtors;

         (h) not later than ninety (90) days after each calendar year, the
financial statements of Munawar Hidayatallah and Jayne Hidayatallah, signed and
certified to the Bank on Bank's form and such individuals' income tax returns
for such years; provided, however, if either Munawar Hidayatallah and/or Jayne
Hidayatallah file for an extension on their income tax returns, then such party
filing for such extension shall (i) contemporaneously deliver to Bank a copy of
the preliminary income tax return which such party delivers to the Internal
Revenue Service for such years and (ii) contemporaneously deliver to Bank the
final tax return it delivers to the Internal Revenue Service for such years.

         (i) contemporaneously with each annual and monthly financial statement
of Borrower required hereby, a certificate of the senior financial officer and
chief executive officer of Borrower that said financial statements are accurate
and that there exists no Event of Default nor any condition, act or event which
with the giving of notice or the passage of time or both would constitute an
Event of Default; and

         (j) from time to time such other information as Bank may reasonably
request.

         SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.

         SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request Schedules setting forth all
insurance then in effect.

         SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.

         SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except such (a) as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower has made provision, to Bank's satisfaction, for eventual payment
thereof in the event Borrower is obligated to make such payment.

                                       13
<PAGE>

         SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$25,000.00 in the aggregate.

         SECTION 4.9. NOTICE TO BANK. Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default; (b) any change in the name or
the organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property in
excess of an aggregate of $100,000.00

                                    ARTICLE V
                                    ---------
                               NEGATIVE COVENANTS
                               ------------------

         Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

         SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit
extended hereunder except for the purposes stated in Article I hereof.

         SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in any fiscal year in excess of an aggregate of $1,250,000.00.

         SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower to Bank,
and (b) any other liabilities of Borrower existing as of, and disclosed to Bank
on SCHEDULE 5.3 attached hereto; provided, however, Borrower may incur
additional indebtedness to the extent that (i) the aggregate additional
indebtedness is less than $100,000.00 or (ii) the additional indebtedness is
unsecured, and (iii) the additional indebtedness is expressly subordinated to
Bank, (iv) the proposed terms and conditions of incurring such additional
indebtedness is satisfactory to Bank in Bank's sole discretion, and (v) Borrower
is able to demonstrate pro forma compliance with all covenants set forth herein.

         SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.

                                       14
<PAGE>

         SECTION 5.5. GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank.

         SECTION 5.6. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances
to or investments in any person or entity, except any of the foregoing existing
as of, and disclosed to Bank prior to, the date hereof.

         SECTION 5.7. DISTRIBUTIONS. Declare or pay any distributions to its
members or the Business Venture Owners either in cash or any other property, nor
redeem, retire, repurchase or otherwise acquire any membership interest in
Borrower; provided, however, the Borrower may distribute funds or repay
inter-company loans so long as (a) Total Funded Debt to EBITDA is less than 1.5
to 1.0, (b) the Fixed Charge Coverage Ratio is greater than 2.0 to 1.0, after
having taken into effect such distribution, (c) such payments or distributions
do not exceed fifty percent (50%) of Free Cash Flow and (d) no Event of Default
has occurred nor would occur as a result of making such payments. Free Cash Flow
is defined as trailing twelve (12) months EBITDA less the sum of (i) interest
payments, (ii) scheduled quarterly principal repayments of the Term Loan and
Delayed Draw Loan, (iii) taxes, (iv) the Change in Adjusted Working Capital, and
(v) capital expenditures other than those financed under the Delayed Draw Term
Note for the same measurement period. Change in Adjusted Working Capital is
defined as the Adjusted Working Capital of the most recent reporting period and
less the adjusted working capital of the previous year-end. Adjusted Working
capital is defined as (i) current assets (according to generally accepted
accounting principles) less (ii) cash and marketable securities less current
liabilities according to generally accepted accounting principles less (iii)
interest-bearing debt or obligations that are classified as current liabilities.

         SECTION 5.8. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired, except any of the foregoing in favor of
Bank or which is existing as of, and disclosed to Bank in writing prior to, the
date hereof.

         SECTION 5.9. LIMITATIONS ON LEASES. Create, incur, assume or permit to
exist any obligation for the payment of rent or hire or property of any kind
whatsoever under leases or lease agreements including, without limitation,
operating leases which will cause the aggregate amount of all payments made by
Borrower pursuant to all such leases or lease agreements to exceed $100,000.00
in any fiscal year.

         SECTION 5.10. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any affiliate of Borrower unless such
transactions are in the ordinary course of its business and are upon fair and
reasonable terms no less favorable to it than Borrower would obtain in a
comparable arm's length transaction with a person not an affiliate.

                                       15
<PAGE>

         SECTION 5.11. SALES AND LEASEBACKS. Except as contemplated by the
Business Venture Agreement dated as of June 27, 2003, between the Business
Venture Owners and Allis-Chalmers Corporation, a Delaware corporation (the
"BUSINESS VENTURE AGREEMENT"), enter into any arrangement, directly or
indirectly with any person whereby Borrower shall sale or transfer any of its
property, whether now or hereafter acquired, and whereby Borrower shall then or
thereafter make release as lessee such property or any part thereof or other
property which Borrower intends to use for substantially the same purpose or
purposes that the property is sold or transferred.

         SECTION 5.12. LIENS. Create, incur, assume or suffer to exist any lien
upon any of its assets or revenues whether now owned or hereafter acquired,
other than (a) liens pursuant to any Loan Document, (b) liens existing on the
date hereof and listed on SCHEDULE 5.12 and any renewals or extensions thereof,
PROVIDED that the property covered thereby is not increased in any renewal or
extension of the obligations secured or benefited thereby if permitted by
SECTION 5.3, (c) liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
person or entity in accordance with generally accepted accounting principles,
(d) carriers', warehouseman's, mechanics', materialman's, repairman's or other
like liens arising in the ordinary course of business in respect of obligations
which are not overdue for a period of more than six (6) days or which are being
contested in good faith and by appropriate proceedings diligently conducted, as
adequate reserves with respect thereto are maintained on the books of the
Borrower, (e) easements, rights-of-way, restrictions, landlord's liens and other
similar encumbrances affecting real property which, in the aggregate, are not
material in amounts and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of Borrower; (f) purchase money liens not to exceed
$100,000.00 in the aggregate; and (g) liens to secure the additional
indebtedness of Borrower permitted pursuant to Section 5.3 hereof in an amount
not to exceed $100,000.00 in the aggregate.

         SECTION 5.13. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles consistently
applied and used consistently with prior practices (except to the extent
modified by the definitions herein.

         (a) Tangible Net Worth not at any time less than eighty-five percent
(85%) of Tangible Net Worth as of the date hereof plus seventy-five percent
(75%) of cumulative net income after the date hereof, excluding any fiscal
quarters in which net income is a negative, plus one hundred percent (100%) of
equity offerings after the date hereof, with "Tangible Net Worth" defined herein
as the aggregate of total members' equity plus subordinated debt less any
intangible assets.

         (b) Fixed Charge Coverage Ratio not less than 1.1 to 1.0 for the twelve
(12) month period ending on the last day of each fiscal quarter, beginning with
fiscal quarter ending September 30, 2003 through and including the fiscal
quarter ending June 30, 2004, and 1.2 to 1.0 thereafter, with EBITDA defined
herein as net income plus cash interest charges, plus cash taxes, plus
depreciation, amortization and non-cash charges on a trailing twelve (12) month
basis and with "Fixed Charge Coverage Ratio" defined herein as (i) EBITDA less
capital expenditures (other than those funded through the Delayed Draw Term
Loan) through the proceeds additional equity interests divided by (ii) the

                                       16
<PAGE>

aggregate of total interest charges (excluding any applicable paid-in-kind
("PIK") charges), scheduled principal payments, (including payments on
inter-company notes, loans or debt), equipment lease payments (operating or
capital), cash distributions paid, and cash taxes paid for the same period.
Through the June 30, 2004 compliance date, EBITDA and the expenses set forth
herein will be annualized.

         (c) Total Funded Debt to EBITDA Ratio not more than 4.5 to 1.0 through
and including December 31, 2003; 3.5 to 1.0 through and including June 30, 2004;
3.0 to 1.0 through and including December 31, 2005; and 2.5 to 1.0 thereafter,
with "Total Funded Debt to EBITDA Ratio" defined as Total Funded Debt divided by
twelve (12) trailing months EBITDA. "TOTAL FUNDED DEBT" is defined herein as all
interest-bearing obligations of Borrower with a secured or unsecured, senior or
subordinated period. Through the June 30, 2004 compliance date EBITDA will be
annualized to calculate the Total Funded Debt to EBITDA Ratio.

         SECTION 5.14. SUBORDINATED DEBT. Borrower shall not pay any principal
or interest on the subordinated debt described in the Subordination Agreement
except as expressly permitted therein.

                                   ARTICLE VI
                                   ----------
                                EVENTS OF DEFAULT
                                -----------------

         SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

         (a) Borrower shall fail to pay when due any principal, interest, fees
or other amounts payable under any of the Loan Documents and such failure
continues for a period of ten (10) days after the earlier of (i) notice thereof
being given by the Bank to the Borrower and the guarantors or (ii) such default
otherwise becoming known to the Borrower or the guarantors.

         (b) Any financial statement or certificate furnished to Bank in
connection with, or any representation or warranty made by Borrower, any
guarantor, or any other party under this Agreement or any other Loan Document
shall prove to be incorrect, false or misleading in any material respect when
furnished or made.

         (c) Any default by Borrower or any guarantor in the performance of or
compliance with any obligation, agreement or other provision contained herein or
in any other Loan Document provided, however, that with respect to Sections 4.2,
4.3, 4.6 and 4.7 hereof, such default must continue unremedied for a period of
thirty (30) days after the earlier of (i) notice thereof being given by the Bank
to the Borrower and the guarantors or (ii) such default otherwise becoming known
to the Borrower or the guarantors.

         (d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) including, without limitation, the Wells Fargo
Commercial MasterCard Agreement pursuant to which Borrower or any guarantor
hereunder has incurred any debt or other liability to any person or entity,
including Bank and its affiliates; provided, however, with respect to MILLC, any
payment default in excess of $20,000,000.00 under the terms of any contract or
any instrument (other than any of the Loan Documents) pursuant to which MILLC
has incurred any debt or other liability to any person or entity, including
Bank, shall be an Event of Default hereunder.

                                       17
<PAGE>

         (e) The filing of a notice of judgment lien against Borrower or any
guarantor hereunder; or the recording of any abstract of judgment against
Borrower or any guarantor hereunder in any county in which Borrower or such
guarantor has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower or any guarantor hereunder; or the entry of a judgment
against Borrower or any guarantor hereunder. Notwithstanding the foregoing,
there shall be an Event of Default upon the filing of notices of judgment lien,
the recording of abstracts of judgment, or the entries of judgment against
Borrower or any guarantor hereunder if the aggregate amount of all such
judgments exceeds $50,000.00 and such judgments are not released within sixty
(60) days of the filing, recording or entry of such judgment.

         (f) Borrower or any guarantor hereunder shall become insolvent, or
shall suffer or consent to or apply for the appointment of a receiver, trustee,
custodian or liquidator of itself or any of its property, or shall generally
fail to pay its debts as they become due, or shall make a general assignment for
the benefit of creditors; Borrower or any guarantor hereunder shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect
a plan or other arrangement with creditors or any other relief under the
Bankruptcy Reform Act, Title 11 of the United States Code, as amended or
recodified from time to time ("BANKRUPTCY CODE"), or under any state or federal
law granting relief to debtors, whether now or hereafter in effect; or any
involuntary petition or proceeding pursuant to the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors is filed or commenced against Borrower or any guarantor
hereunder, or Borrower or any such guarantor shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any such guarantor shall be adjudicated a bankrupt, or
an order for relief shall be entered against Borrower or any such guarantor by
any court of competent jurisdiction under the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors.

         (g) There shall exist or occur any event or condition which Bank in
good faith believes impairs, or is substantially likely to impair, the prospect
of payment or performance by Borrower or any Guarantor of its obligations under
any of the Loan Documents.

         (h) The death or incapacity of any guarantor hereunder. The dissolution
or liquidation of Borrower or any guarantor hereunder; or Borrower or any such
guarantor, or any of their directors, stockholders or members, shall take action
seeking to effect the dissolution or liquidation of Borrower or such guarantor.

         (i) Any change in ownership of Borrower or MCA or a change in the
ownership of MILLC which would result in neither Smith International Inc., nor
Schlumberger, Ltd., owning fifty-one percent (51%) or more of MILLC during the
term of this Agreement.

         (j) The sale, transfer, hypothecation, assignment or encumbrance,
whether voluntary, involuntary or by operation of law, without Bank's prior
written consent, of all or any part of or interest in any real property
collateral required hereby.

         (k) An event which is a material adverse change (as such term is used
in Section 3.1(c) hereof) shall have occurred and is continuing.

                                       18
<PAGE>

         (l) The determination by any court that any provision of any Loan
Document is invalid.

         (m) (i) ERISA event occurs with respect to a pension plan or
multiemployer plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the pension plan,
multiemployer plan or the PBGC in an aggregate amount in excess of $50,000.00,
or (ii) the Borrower or an ERISA affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a multiemployer
plan in an aggregate amount in excess of $100,000.00.

         (n) Borrower shall fail to deliver to Bank within sixty (60) days of
the date hereof any and all Agreements and Acknowledgments of Security
Interests, Waivers of Landlords or Mortgagees, and Assignment and Assumption
Agreements by such parties as Bank may require, and in form and substance
acceptable to Bank, in Bank's sole discretion.

         SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all principal and accrued and unpaid interest outstanding under each of the Loan
Documents, any term thereof to the contrary notwithstanding, shall at Bank's
option and without notice become immediately due and payable without
presentment, demand, or any notices of any kind, including without limitation
notice of nonperformance, notice of protest, protest, notice of dishonor, notice
of intention to accelerate or notice of acceleration, all of which are hereby
expressly waived by each Borrower; (b) the obligation, if any, of Bank to extend
any further credit under any of the Loan Documents shall immediately cease and
terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without
limitation the right to resort to any or all security for any credit subject
hereto and to exercise any or all of the rights of a beneficiary or secured
party pursuant to applicable law. All rights, powers and remedies of Bank may be
exercised at any time by Bank and from time to time after the occurrence of an
Event of Default, are cumulative and not exclusive, and shall be in addition to
any other rights, powers or remedies provided by law or equity.

                                   ARTICLE VII
                                   -----------
                                  MISCELLANEOUS
                                  -------------

         SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

         SECTION 7.2. NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

                                       19
<PAGE>

                  BORROWER:        AIRCOMP L.L.C.
                                   7660 Woodway, Suite 200
                                   Houston, Texas 77063

                  BANK:            WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
                                   1000 Louisiana, Third Floor
                                   Houston, Texas 77002

                  GUARANTORS:      M-I L.L.C.
                                   5950 North Course Drive
                                   Houston, Texas  77072

                                   MOUNTAIN COMPRESSED AIR, INC.
                                   7660 Woodway, Suite 200
                                   Houston, Texas 77063

                                   MUNAWAR HIDAYATALLAH
                                   338 Entrada Drive
                                   Santa Monica, CA  90402

                                   JAYNE HIDAYATALLAH
                                   338 Entrada Drive
                                   Santa Monica, CA  90402

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

         SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel to the extent
permissible), expended or incurred by Bank in connection with (a) the
negotiation and preparation of this Agreement and the other Loan Documents,
Bank's continued administration hereof and thereof, and the preparation of any
amendments and waivers hereto and thereto, (b) the enforcement of Bank's rights
and/or the collection of any amounts which become due to Bank under any of the
Loan Documents, (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity, and (d) up to

                                       20
<PAGE>

two (2) and no more than four (4) collateral audits performed by Bank per fiscal
year with respect to the collateral or any other matter relating to the loans
provided for in this Agreement and/or Borrower's compliance with the terms and
the provisions of this Agreement; provided, however, Borrower's out-of-pocket
costs and expense under this subsection (d) is estimated at $850.00 per
eight-hour day per collateral audit.

         SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, any
guarantor hereunder or the business of such guarantor, or any collateral
required hereunder.

         SECTION 7.5. AMENDMENT. This Agreement may be amended or modified only
in writing signed by each party hereto.

         SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

         SECTION 7.7. TIME. Time is of the essence of each and every provision
of this Agreement and each other of the Loan Documents.

         SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

         SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.

         SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.

         SECTION 7.11. SAVINGS CLAUSE. It is the intention of the parties to
comply strictly with applicable usury laws. Accordingly, notwithstanding any
provision to the contrary in the Loan Documents, in no event shall any Loan
Documents require the payment or permit the payment, taking, reserving,
receiving, collection or charging of any sums constituting interest under
applicable laws that exceed the maximum amount permitted by such laws, as the
same may be amended or modified from time to time (the "MAXIMUM RATE"). If any
such excess interest is called for, contracted for, charged, taken, reserved or

                                       21
<PAGE>

received in connection with any Loan Documents, or in any communication by Bank
or any other person to Borrower or any other person, or in the event that all or
part of the principal or interest hereof or 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 Loan Documents shall exceed the Maximum Rate, then in such
event it is agreed that: (a) the provisions of this paragraph shall govern and
control; (b) neither Borrower nor any other person or entity now or hereafter
liable for the payment of any Loan Documents shall be obligated to pay the
amount of such interest to the extent it is in excess of the Maximum Rate; (c)
any such excess interest which is or has been received by Bank, notwithstanding
this paragraph, shall be credited against the then unpaid principal balance
hereof or thereof, or if any of the Loan Documents has been or would be paid in
full by such credit, refunded to Borrower; and (d) the provisions of each of the
Loan Documents, and any other communication to Borrower, shall immediately be
deemed reformed and such excess interest reduced, without the necessity of
executing any other document, to the Maximum Rate. The right to accelerate the
maturity of the Loan Documents does not include the right to accelerate, collect
or charge unearned interest, but only such interest that has otherwise accrued
as of the date of acceleration. Without limiting the foregoing, all calculations
of the rate of interest contracted for, charged, taken, reserved or received in
connection with any of the Loan Documents which are made for the purpose of
determining whether such rate exceeds the Maximum 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 such Loan Documents, including
all prior and subsequent renewals and extensions hereof or thereof, all interest
at any time contracted for, charged, taken, reserved or received by Bank. The
terms of this paragraph shall be deemed to be incorporated into each of the
other Loan Documents.

         To the extent that either Chapter 303 or 306, or both, of the Texas
Finance Code apply in determining the Maximum Rate, Bank hereby elects to
determine the applicable rate ceiling by using the weekly ceiling from time to
time in effect, subject to Bank's right subsequently to change such method in
accordance with applicable law, as the same may be amended or modified from time
to time.

         SECTION 7.12. RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the
occurrence of an Event of Default, (a) Borrower hereby authorizes Bank, at any
time and from time to time, without notice, which is hereby expressly waived by
each Borrower, and whether or not Bank shall have declared any credit subject
hereto to be due and payable in accordance with the terms hereof, to set off
against, and to appropriate and apply to the payment of, Borrower's obligations
and liabilities under the Loan Documents (whether matured or unmatured, fixed or
contingent, liquidated or unliquidated), any and all amounts owing by Bank to
Borrower (whether payable in U.S. dollars or any other currency, whether matured
or unmatured, and in the case of deposits, whether general or special (except
trust and escrow accounts), time or demand and however evidenced), and (b)
pending any such action, to the extent necessary, to hold such amounts as
collateral to secure such obligations and liabilities and to return as unpaid
for insufficient funds any and all checks and other items drawn against any
deposits so held as Bank, in its sole discretion, may elect. Borrower hereby
grants to Bank a security interest in all deposits and accounts maintained with
Bank and with any other financial institution to secure the payment of all
obligations and liabilities of Borrower to Bank under the Loan Documents.

                                       22
<PAGE>

         SECTION 7.13. BUSINESS PURPOSE. Borrower represents and warrants that
each credit subject hereto is for a business, commercial, investment,
agricultural or other similar purpose and not primarily for a personal, family
or household use.

         SECTION 7.14. ARBITRATION.

         (a) ARBITRATION. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

         (b) GOVERNING RULES. Any arbitration proceeding will (i) proceed in a
location in Texas selected by the American Arbitration Association ("AAA"); (ii)
be governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. ss.91 or any
similar applicable state law.

         (c) NO WAIVER OF PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

         (d) ARBITRATOR QUALIFICATIONS AND POWERS. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Texas with a minimum of ten years experience

                                       23
<PAGE>

in the substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining
any claim. In any arbitration proceeding the arbitrator will decide (by
documents only or with a hearing at the arbitrator's discretion) any pre-hearing
motions which are similar to motions to dismiss for failure to state a claim or
motions for summary adjudication. The arbitrator shall resolve all disputes in
accordance with the substantive law of Texas and may grant any remedy or relief
that a court of such state could order or grant within the scope hereof and such
ancillary relief as is necessary to make effective any award. The arbitrator
shall also have the power to award recovery of all costs and fees, to impose
sanctions and to take such other action as the arbitrator deems necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.

         (e) DISCOVERY. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly limited
to matters directly relevant to the dispute being arbitrated and must be
completed no later than 20 days before the hearing date and within 180 days of
the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.

         (f) CLASS PROCEEDINGS AND CONSOLIDATIONS. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

         (g) PAYMENT OF ARBITRATION COSTS AND FEES. The arbitrator shall award
all costs and expenses of the arbitration proceeding.

         (h) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

         SECTION 7.15. ASSIGNMENTS AND PARTICIPATIONS.

                                       24
<PAGE>

         (a) Borrower may not assign its rights or obligations hereunder or
under the Notes or any Letters of Credit without the prior consent of Bank.
Should Borrower attempt to assign its rights hereunder, Bank's obligations
hereunder will immediately cease and Bank shall be entitled to all commitment
fees, up-front fees, documentation fees, appraisal fees, audit fees, and due
diligence fees referred to herein.

         (b) Bank may, upon the written consent of Borrower and MILLC, which
consent shall not unreasonably be withheld, if no Event of Default has occurred
and is continuing, assign to one or more assignees all or a portion of its
rights and obligations under this Agreement. Neither Borrower's nor MILLC's
consent will be required if the assignment is to an affiliate of Bank or to any
lender other than lenders who are in the oil and gas business or competitors of
the Business Venture Owners or the Borrower. Any such assignment will become
effective upon the execution and delivery to Bank of an Assignment Agreement
(the "Assignment") and the consent of Borrower and Guarantor, if required.
Promptly after receipt of an executed Assignment, Bank shall send to Borrower a
copy of such executed Assignment. Upon receipt of such executed Assignment,
Borrower, will, at its own expense, execute and deliver new notes to the
assignor and/or assignee, as appropriate, in accordance with their respective
interests as they appear. Upon the effectiveness of any assignment pursuant to
this Section, the assignee will have all the rights and interests of Bank under
this Agreement and the other Loan Documents. The assignor shall be relieved of
its obligations hereunder to the extent of such assignment.

         (c) Bank may transfer, grant or assign participations in all or any
part of Bank's interests hereunder pursuant to this Section to any person,
PROVIDED that: (i) Bank shall remain "Bank" for all purposes of this Agreement;
and (ii) no participant under any such participation shall have rights to
approve any amendment to or waiver of any of the Loan Documents except to the
extent such amendment or waiver would (x) forgive any principal owing on any
obligations or extend the final maturity of the commitments or loans, (y) reduce
the interest rate (other than as a result of waiving the applicability of any
post-default increases in interest rates) or fees applicable to any of the
commitments or loans or Letters of Credit in which such participant is
participating, or postpone the payment of any thereof, or (z) release any
guarantor of the obligations or release all or substantially all of the
collateral (except as provided in the Loan Documents) supporting any of the
commitments or loans or Letters of Credit in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the Loan Documents (the
participant's rights against Bank in respect of such participation to be those
set forth in the agreement with Bank creating such participation), and all
amounts payable by Borrower hereunder shall be determined as if Bank had not
sold such participation, PROVIDED that such participant shall be entitled to be
indemnified under Section 7.16 hereof.

         (d) Bank may furnish any information concerning Borrower in the
possession of Bank from time to time to assignees and participants (including
prospective assignees and participants).

         SECTION 7.16. INDEMNIFICATION. Borrower agrees:

         (a) to indemnify Bank, each assignee or participant hereunder, each of
their affiliates and each of their officers, directors, employees,
representatives, agents, attorneys, accountants and experts ("INDEMNIFIED
PARTIES") from, hold each of them harmless against and promptly upon demand pay
or reimburse each of them for, the Indemnity Matters (hereafter defined) which
may be incurred by or asserted against or involve any of them (whether or not

                                       25
<PAGE>

any of them is designated a party thereto) as a result of, arising out of or in
any way related to (i) any actual or proposed use by Borrower of the proceeds of
any of the Loans or Letters of Credit, (ii) the execution, delivery and
performance of the Loan Documents, (iii) the operations of the business of
Borrower, (iv) the failure of Borrower to comply with the terms of any Loan
Document or this Agreement, or with any applicable law, (v) any inaccuracy of
any representation or any breach of any warranty of Borrower or any Guarantor
set forth in any of the Loan Documents, (vi) the issuance, execution and
delivery or transfer of or payment or failure to pay under any Letter of Credit,
or (vii) the payment of a drawing under any Letter of Credit notwithstanding the
non-compliance, non-delivery or other improper presentation of the manually
executed draft(s) and certification(s), (viii) any assertion that any
Indemnified Party was not entitled to receive the proceeds received pursuant to
the Loan Documents or (ix) any other aspect of the Loan Documents, including,
without limitation, the reasonable fees and disbursements of counsel and all
other expenses incurred in connection with investigating, defending or preparing
to defend any such action, suit, proceeding (including any investigations,
litigation or inquiries) or claim and including all Indemnity Matters arising by
reason of the ordinary negligence of any Indemnified Party, but excluding all
Indemnity Matters arising solely by reason of claims between the Bank or any
assignee or participant, or any such party's shareholders against Bank or any
assignee or participant or by reason of the gross negligence or willful
misconduct on the part of the Indemnified Party. "Indemnity Matters" shall mean
any and all actions, suits, proceedings (including any investigations,
litigation or inquiries), claims, demands and causes of action made or
threatened against a person and, in connection therewith, all losses,
liabilities, damages (including, without limitation, consequential damages) or
reasonable costs and expenses of any kind or nature whatsoever incurred by such
person whether caused by the sole or concurrent negligence of such person
seeking indemnification.

         SECTION 7.17. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF
BANK IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.

         SECTION 7.18. CONFIDENTIALITY. In the event that the Borrower or
Business Venture Owner, or any affiliate thereof, provides to the Bank
Information (as defined below). The Bank shall thereafter maintain such
information in confidence in accordance with the standards of care and diligence
that it utilizes in maintaining its own confidential information. For the
purposes of this Section, "INFORMATION" means all information (including
information from Borrower's books and records) received from the Borrower or any
affiliate thereof relating to the Borrower or any affiliate thereof or its
business, other than any such information that is available to the Bank on a
nonconfidential basis prior to disclosure by such person or entity. This
obligation of confidence shall not apply to such portions of the information
which (i) are in the public domain, (ii) hereafter become part of the public
domain without the Bank breaching its obligation of confidence to the Borrower
or any affiliate thereof, (iii) are previously known by the Bank from some
source other than the Borrower or any affiliate thereof, (iv) are hereafter

                                       26
<PAGE>

developed by the Bank without using the Information, (v) are hereafter obtained
by or available to the Bank from a third party who owes no obligation of
confidence to the Borrower with respect to such information or through any other
means other than through disclosure by the Borrower or any affiliate thereof,
(vi) are disclosed with the Borrower's consent, (vii) must be disclosed either
pursuant to any governmental requirement or to any person or entity regulating
the activities of the Bank, or (viii) as may be required by law or regulation or
order of any governmental authority in any judicial, arbitration or governmental
proceeding. Further, the Bank may disclose any such Information to consultants,
any independent certified public accountants, any legal counsel employed by such
person or entity in connection with this Agreement or any Loan Document,
including without limitation, the enforcement or exercise of all rights and
remedies thereunder, or any assignee or participant (including prospective
assignees and participants) in the loans evidenced by the Notes; PROVIDED,
HOWEVER, that the Bank shall receive a confidentiality agreement from the person
or entity to whom such Information is disclosed such that said person or entity
shall have the same obligation to maintain the confidentiality of such
information as is imposed upon the Bank hereunder. The Borrower waives any and
all other rights it may have to confidentiality as against the Bank arising by
contract, agreement, statute or law except as expressly stated in this Section.
Notwithstanding anything herein to the contrary, confidential information shall
not include, and the Bank (and each employee, representative or other agent of
the Bank) may disclose to any and all persons or entities, without limitation of
any kind, the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are or have been provided to the Bank relating to such tax
treatment or tax structure; PROVIDED that with respect to any document or
similar item that in either case contains information concerning such tax
treatment or tax structure of the transactions contemplated hereby as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to such tax treatment or tax structure.

NOTICE: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES RELATING TO THE INDEBTEDNESS.

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

AIRCOMP L.L.C.                            WELLS FARGO BANK TEXAS,
                                          NATIONAL ASSOCIATION

By:   /S/ TERRY KEANE                     By:  /S/ ALAN SMITH
    -----------------------------              ------------------------------
      Terry Keane                              Alan Smith
      President                                Vice President

                                       27
<PAGE>

                                   EXHIBIT "A"
                                   -----------

                           Form of Line of Credit Note

$1,000,000.00                                                     Houston, Texas
                                                                   June 27, 2003

         FOR VALUE RECEIVED, the undersigned AIRCOMP L.L.C., a Delaware limited
liability company ("Borrower") promises to pay to the order of WELLS FARGO BANK
TEXAS, NATIONAL ASSOCIATION ("Bank") at its office at 1000 Louisiana, Third
Floor, Houston, Texas, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of ONE MILLION AND NO/100 DOLLARS
($1,000,000.00), or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

INTEREST:

         (a) INTEREST. The Borrower agrees to pay interest at the Bank's address
listed above on the unpaid principal note hereof and, to the extent permitted by
law, the accrued interest in respect hereof from time to time from the date
hereof until payment in full of the principal amount hereof and accrued interest
hereon, at the rates and on the dates set forth on the Addendum attached hereto
and incorporated herein for all purposes.

         (b) PAYMENT OF INTEREST. Interest accrued on this Note shall be payable
on the last day of each March, June, September and December, commencing on
September 30, 2003.

         (c) DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed, unless such calculation would
result in a usurious rate, in which case interest shall be computed on the basis
of a 365/366-day year, as the case may be, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note, but in no event at a rate greater than the Maximum Rate.

BORROWING AND REPAYMENT:

         (a) BORROWING AND REPAYMENT. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of any document executed in connection with or governing this Note;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced

                                 Exhibit "A"-1
<PAGE>

hereunder by the holder hereof less the amount of principal payments made hereon
by or for any Borrower, which balance may be endorsed hereon from time to time
by the holder. Borrower shall make annual pre-payments of the outstanding
principal balance of this Note equal to fifty percent (50%) of Free Cash Flow
(as such term is defined in Section 5.7 of the Credit Agreement), commencing
August 27, 2004, and such pre-payments shall be applied in inverse order of
maturities, first to prepayment of the Term Note (as defined in the Credit
Agreement) then to the Delayed Draw Term Note (as defined in the Credit
Agreement), and then to any outstanding balance under this Note, as applicable.
The outstanding principal balance of this Note shall be due and payable in full
on June 27, 2007.

         (b) ADVANCES. Advances hereunder, to the total amount of the principal
sum stated above, may be made by the holder at the oral or written request of
(i) Terry Keane, (ii) Scott Gildea, or (iii) George Roffe, any one acting alone,
who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received by
the holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.

         (c) APPLICATION OF PAYMENTS. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.

EVENTS OF DEFAULT:

         This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of even date herewith, as amended from time to time (the "Credit Agreement").
Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
"Event of Default" under this Note.

MISCELLANEOUS:

         (d) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
accrued and unpaid interest outstanding hereunder to be immediately due and
payable without presentment, demand, or any notices of any kind, including
without limitation notice of nonperformance, notice of protest, protest, notice
of dishonor, notice of intention to accelerate or notice of acceleration, all of
which are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate. Each Borrower shall pay to the holder immediately upon demand the
full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of the holder's in-house counsel to the extent permissible), expended or
incurred by the holder in connection with the enforcement of the holder's rights
and/or the collection of any amounts which become due to the holder under this

                                 Exhibit "A"-2
<PAGE>

Note, and the prosecution or defense of any action in any way related to this
Note, including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (e) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (f) GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THIS NOTE IS PERFORMABLE IN
HARRIS COUNTY, TEXAS. ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. BORROWER AND EACH THIRD PARTY OBLIGOR
HEREBY IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS
AND (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS IN
THESE IN INCONVENIENT FORM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK TO
BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR
OR WITH RESPECT TO ANY COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANYOTHER
JURISDICTION. THE ACTION OR PROCEEDING BY THE BORROWER OR ANY THIRD PARTY
OBLIGOR AGAINST LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN HARRIS
COUNTY, TEXAS.

         (g) SAVINGS CLAUSE. It is the intention of the parties to comply
strictly with applicable usury laws. Accordingly, notwithstanding any provision
to the contrary in this Note, or in any contract, instrument or document
evidencing or securing the payment hereof or otherwise relating hereto (each, a
"Related Document"), in no event shall this Note or any Related Document require
the payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws that exceed the
maximum amount permitted by such laws, as the same may be amended or modified
from time to time (the "Maximum Rate"). If any such excess interest is called
for, contracted for, charged, taken, reserved or received in connection with
this Note or any Related Document, or in any communication by Bank or any other
person to Borrower or any other person, or in the event that all or part of the
principal or interest hereof or 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 this Note shall
exceed the Maximum Rate, then in such event it is agreed that: (i) the
provisions of this paragraph shall govern and control; (ii) neither Borrower nor
any other person or entity now or hereafter liable for the payment of this Note
or any Related Document shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate; (iii) any such excess interest
which is or has been received by Bank, notwithstanding this paragraph, shall be
credited against the then unpaid principal balance hereof or thereof, or if this
Note or any Related Document has been or would be paid in full by such credit,
refunded to Borrower; and (iv) the provisions of this Note and each Related
Document, and any other communication to Borrower, shall immediately be deemed

                                 Exhibit "A"-3
<PAGE>

reformed and such excess interest reduced, without the necessity of executing
any other document, to the Maximum Rate. The right to accelerate the maturity of
this Note or any Related Document does not include the right to accelerate,
collect or charge unearned interest, but only such interest that has otherwise
accrued as of the date of acceleration. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Note and any Related Document which are made
for the purpose of determining whether such rate exceeds the Maximum 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 this Note or such
Related Document, including all prior and subsequent renewals and extensions
hereof or thereof, all interest at any time contracted for, charged, taken,
reserved or received by Bank. The terms of this paragraph shall be deemed to be
incorporated into each Related Document.

         To the extent that either Chapter 303 or 306, or both, of the Texas
Finance Code apply in determining the Maximum Rate, Bank hereby elects to
determine the applicable rate ceiling by using the weekly ceiling from time to
time in effect, subject to Bank's right subsequently to change such method in
accordance with applicable law, as the same may be amended or modified from time
to time.

         (h) RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the occurrence of
an Event of Default, (i) Borrower hereby authorizes Bank, at any time and from
time to time, without notice, which is hereby expressly waived by Borrower, and
whether or not Bank shall have declared this Note to be due and payable in
accordance with the terms hereof, to set off against, and to appropriate and
apply to the payment of, Borrower's obligations and liabilities under this Note
(whether matured or unmatured, fixed or contingent, liquidated or unliquidated),
any and all amounts owing by Bank to Borrower (whether payable in U.S. dollars
or any other currency, whether matured or unmatured, and in the case of
deposits, whether general or special (except trust and escrow accounts), time or
demand and however evidenced), and (ii) pending any such action, to the extent
necessary, to hold such amounts as collateral to secure such obligations and
liabilities and to return as unpaid for insufficient funds any and all checks
and other items drawn against any deposits so held as Bank, in its sole
discretion, may elect. Borrower hereby grants to Bank a security interest in all
deposits and accounts maintained with Bank and with any other financial
institution to secure the payment of all obligations and liabilities of Borrower
to Bank under this Note.

         (i) BUSINESS PURPOSE. Borrower represents and warrants that all loans
evidenced by this Note are for a business, commercial, investment, agricultural
or other similar purpose and not primarily for a personal, family or household
use.

         (j) CERTAIN TRI-PARTY ACCOUNTS. Borrower and Bank agree that Chapter
346 of the Texas Finance Code (which regulates certain revolving credit accounts
and revolving triparty accounts) shall not apply to any revolving loan accounts
created under this Note or maintained in connection herewith.

NOTICE: THIS NOTE AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS EVIDENCED
HEREBY CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS NOTE AND THE
INDEBTEDNESS EVIDENCED HEREBY.

                                 Exhibit "A"-4
<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

                                                     AIRCOMP L.L.C.

                                                     By:  /s/ Terry Keane
                                                     Name:  Terry Keane
                                                     Title:   President

                                 Exhibit "A"-5
<PAGE>

                         ADDENDUM TO LINE OF CREDIT NOTE
                         (BASE RATE PRICING ADJUSTMENTS)

         THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by AIRCOMP L.L.C., a Delaware limited liability company
("Borrower") and payable to WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
("Bank"), or order, dated as of June 27, 2003, in the principal amount of One
Million and No/100 Dollars ($1,000,000.00) (the "Note").

         The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:

INTEREST RATE ADJUSTMENTS:

         (a) Definitions. As used herein, the following terms shall have the
meanings set forth after each, and any other term defined herein:

         "Base Rate" shall mean the higher of (a) Prime Rate per annum in effect
         on that day, and (b) the Federal Fund Rate in effect on that day as
         announced by the Federal Reserve Bank of New York, plus 0.5% per annum.

         "Business Day" shall mean any day except a Saturday, Sunday, or any
         other day on which commercial banks in Texas are authorized or required
         to close by law.

         "Prime Rate" shall mean at any time the rate of interest most recently
         announced within the Bank at its principal office in San Francisco as
         its Prime Rate, with the understanding that the Bank's Prime Rate is
         one of its base 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 the Bank
         may designate.

         (b) INITIAL INTEREST RATES. The initial interest rates applicable to
this Note shall be the rates set forth in the "Interest" paragraph herein.

         (c) INTEREST RATE ADJUSTMENTS. In addition to any interest rate
adjustments resulting from changes in the Prime Rate, Bank shall adjust the Base
Rate margin used to determine the rates of interest applicable to this Note on a
quarterly basis, commencing with the calendar quarter ending September 30, 2003,
if required to reflect a change in Borrower's ratio of Total Funded Debt to
EBITDA (as defined in the Credit Agreement referenced herein), in accordance
with the following grid:

                                 Exhibit "A"-6
<PAGE>

                                                     APPLICABLE
    TOTAL FUNDED DEBT                                 BASE RATE
    to EBITDA                                          MARGIN
    ---------                                          ------

    less than 2.0 to 1.0                                1.50%

    greater than or equal to 2.0 to 1.0
    but less than 2.5 to 1.0                            1.75%

    greater than or equal to 2.5 to 1.0
    but less than 3.0 to 1.0                            2.00%

    greater than or equal to 3.0 to 1.0                 2.25%

Each such adjustment shall be effective on the first Business Day of the
calendar quarter following the quarter during which Bank receives and reviews
Borrower's most current calendar quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.

         IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.

                                                      AIRCOMP L.L.C.

                                                      By:  /s/ Terry Keane
                                                      Name:  Terry Keane
                                                      Title:   President

                                 Exhibit "A"-7
<PAGE>

                                   EXHIBIT "B"

                                Form of Term Note

$8,000,000.00                                                     Houston, Texas
                                                                   June 27, 2003

         FOR VALUE RECEIVED, the undersigned AIRCOMP L.L.C., a Delaware limited
liability company ("Borrower") promises to pay to the order of WELLS FARGO BANK
TEXAS, NATIONAL ASSOCIATION ("Bank") at its office at 1000 Louisiana, Third
Floor, Houston, Texas, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Eight Million and No/100 Dollars
($8,000,000.00), with interest thereon as set forth herein.

DEFINITIONS:

         As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

         (a) "Base Rate" means the higher of (i) Prime Rate per annum in effect
on that day, and (ii) Federal Fund Rate in effect on that day as announced by
the Federal Reserve Bank of New York, plus 0.5% per annum.

         (b) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in Texas are authorized or required by law to
close.

         (c) "Credit Agreement" means that certain Credit Agreement between Bank
and Borrower of even date herewith.

         (d) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one, two, three or six months, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than One Hundred Thousand and
No/100 Dollars ($100,000.00); and provided further, that no Fixed Rate Term
shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term
would end on a day which is not a Business Day, then such Fixed Rate Term shall
be extended to the next succeeding Business Day.

         (e) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/16 of 1%) and determined pursuant to the following formula:

                      LIBOR =                   Base LIBOR
                               ----------------------------------------------
                                      100% - LIBOR Reserve Percentage

                                 Exhibit "B"-1
<PAGE>

                  (i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

                  (ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

         (f) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base 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 Bank may designate.

         (g) "Total Funded Debt" shall have the meaning ascribed to it in the
Credit Agreement.

INTEREST:

         (a) Interest. The Borrower agrees to pay interest at the Bank's address
listed above on the unpaid principal note hereof and, to the extent permitted by
law, the accrued interest in respect hereof from time to time from the date
hereof until payment in full of the principal amount hereof and accrued interest
hereon, at the rates and on the dates set forth on the Addendum attached hereto
and incorporated herein for all purposes.

         (b) Selection of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Base Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Base Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At the time this
Note is disbursed or Borrower wishes to select a LIBOR option for all or a
portion of the outstanding principal balance hereof, and at the end of each
Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest
rate option selected by Borrower; (ii) the principal amount subject thereto; and
(iii) for each LIBOR selection, the length of the applicable Fixed Rate Term.
Any such notice may be given by telephone (or such other electronic method as
Bank may permit) so long as, with respect to each LIBOR selection, (A) if
requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option

                                 Exhibit "B"-2
<PAGE>

but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time this Note
is disbursed or at the end of any Fixed Rate Term, Borrower shall be deemed to
have made a Base Rate interest selection for this Note or the principal amount
to which such Fixed Rate Term applied.

         (c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

         (d) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed, unless such calculation would
result in a usurious rate, in which case interest shall be computed on the basis
of a 365/366-day year, as the case may be, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note, but in no event at a rate greater than the Maximum Rate.

BORROWINGS:

         (a) Borrower may from time to time from the date of this Note up to and
including June 27, 2007, borrow and partially or wholly repay its outstanding
borrowings, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that amounts repaid may not be reborrowed; and provided further, that
the total borrowings under this Note shall not exceed the principal amount
stated above. The unpaid principal balance of this obligation at any time shall
be the total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for any Borrower, which balance may be
endorsed hereon from time to time by the holder.

         (b) All Base Rate borrowings shall be in amounts of at least Ten
Thousand and No/100 Dollars ($10,000.00). All LIBOR borrowings shall be in
amounts of at least Five Hundred Thousand and No/100 Dollars ($500,000.00) and
in multiples of One Hundred Thousand and No/100 Dollars ($100,000.00)
thereafter.

                                 Exhibit "B"-3
<PAGE>

         (c) The amount and date of each Base Rate borrowing shall be designated
by an authorized representative of the Borrower requesting such borrowing in
form and substance satisfactory to Bank, at Bank's sole discretion, and such
borrowing request shall be received by the Bank at least one (1) Business Day
prior to the date of such loan, which date shall be a Business Day. Each Base
Rate loan shall be made at the office of the Bank and shall be funded prior to
2:00 p.m. Houston time, on the day so requested and immediately available fund
in the amount so requested.

         (d) The amount and date of each LIBOR borrowing shall be designated by
an authorized representative of the Borrower requesting such borrowing in form
and substance satisfactory to Bank, at Bank's sole discretion, and such
borrowing request shall be received by the Bank at least three (3) Business Days
prior to the date of such loan, which date shall be a Business Day. Each LIBOR
loan shall be made at the office of the Bank and shall be funded prior to 2:00
p.m. Houston time, on the day so requested and immediately available fund in the
amount so requested.

REPAYMENT AND PREPAYMENT:

         (a) REPAYMENT. Principal shall be payable on the last day of each
March, June, September and December in installments of Two Hundred Eighty-Five
Thousand Seven Hundred Fourteen and 28/100 Dollars ($285,714.28) each,
commencing on September 30, 2003, and continuing up to and including March 31,
2007, with a final installment consisting of all remaining unpaid principal due
and payable in full on June 27, 2007. Notwithstanding the foregoing, Borrower
shall make annual pre-payments of the outstanding principal balance of this Note
equal to fifty percent (50%) of Free Cash Flow (as such term is defined in
Section 5.7 of the Credit Agreement), commencing August 27, 2004, and such
pre-payments shall be applied in inverse order of maturities, first to this
Note, then to the Delayed Draw Term Loan (as defined in the Credit Agreement),
and then to any outstanding balance under the Line of Credit Note (as defined in
the Credit Agreement), as applicable.

         (b) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Base Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

         (c) Prepayment.

         BASE RATE. Borrower may prepay this Note provided that all terms in the
Credit Agreement and herein are complied with (including the payment of any
prepayment penalties required in the Credit Agreement). As provided herein,
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to the Base Rate at any time and in the minimum amount of
One Hundred Thousand and No/100 Dollars ($100,000.00); PROVIDED HOWEVER, if the
outstanding principal balance is such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
hereof.

                                 Exhibit "B"-4
<PAGE>

         LIBOR. Borrower may prepay this Note provided that all terms in the
Credit Agreement and herein are complied with (including the payment of any
prepayment penalties required in the Credit Agreement). As provided herein,
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of One
Hundred Thousand and No/100 Dollars ($100,000.00); PROVIDED, HOWEVER, that if
the outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto,
Borrower shall pay to Bank immediately upon demand a fee which is the sum of the
discounted monthly differences for each month from the month of prepayment
through the month in which such Fixed Rate Term matures, calculated as follows
for each such month:

                  (i) DETERMINE the amount of interest which would have accrued
each month on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.

                  (ii) SUBTRACT from the amount determined in (i) above the
amount of interest which would have accrued for the same month on the amount
prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the
date of prepayment for new loans made for such term and in a principal amount
equal to the amount prepaid.

                  (iii) If the result obtained in (ii) for any month is greater
than zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank.

In addition, if Borrower makes an optional or required prepayment of a LIBOR
loan before the end of the related interest period, or fails to borrow, convert,
or extend a LIBOR loan after giving notice thereof, of if a LIBOR loan is
converted to Base Rate Loan as a result of certain changes and circumstances,
Borrower will reimburse Bank for any related funding losses and losses of
anticipated earnings.

All prepayments of principal on this Note, whether such prepayment is in
relation to a Base Rate option or a LIBOR option shall be applied first to
reduce the balloon payment due upon maturity hereof, if applicable, and second
to reduce the most remote of the principal installment or installments then
unpaid.

EVENTS OF DEFAULT:

         This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of even date herewith, as amended from time to time (the "Credit Agreement").
Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
"Event of Default" under this Note.

                                 Exhibit "B"-5
<PAGE>

MISCELLANEOUS:

         (a) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
accrued and unpaid interest outstanding hereunder to be immediately due and
payable without presentment, demand, or any notices of any kind, including
without limitation notice of nonperformance, notice of protest, protest, notice
of dishonor, notice of intention to accelerate or notice of acceleration, all of
which are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate. Each Borrower shall pay to the holder immediately upon demand the
full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of the holder's in-house counsel to the extent permissible), expended or
incurred by the holder in connection with the enforcement of the holder's rights
and/or the collection of any amounts which become due to the holder under this
Note, and the prosecution or defense of any action in any way related to this
Note, including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (b) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (c) GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THIS NOTE IS PERFORMABLE IN
HARRIS COUNTY, TEXAS. ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. BORROWER AND EACH THIRD PARTY OBLIGOR
HEREBY IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS,
AND (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK TO BRING
ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR OR WITH
RESPECT TO ANY COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER
JURISDICTION. ANY ACTION OR PROCEEDING BY THE BORROWER OR ANY THIRD PARTY
OBLIGOR AGAINST LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN HARRIS
COUNTY, TEXAS.

         (d) SAVINGS CLAUSE. It is the intention of the parties to comply
strictly with applicable usury laws. Accordingly, notwithstanding any provision
to the contrary in this Note, or in any contract, instrument or document
evidencing or securing the payment hereof or otherwise relating hereto (each, a
"Related Document"), in no event shall this Note or any Related Document require

                                 Exhibit "B"-6
<PAGE>

the payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws that exceed the
maximum amount permitted by such laws, as the same may be amended or modified
from time to time (the "Maximum Rate"). If any such excess interest is called
for, contracted for, charged, taken, reserved or received in connection with
this Note or any Related Document, or in any communication by Bank or any other
person to Borrower or any other person, or in the event that all or part of the
principal or interest hereof or 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 this Note shall
exceed the Maximum Rate, then in such event it is agreed that: (i) the
provisions of this paragraph shall govern and control; (ii) neither Borrower nor
any other person or entity now or hereafter liable for the payment of this Note
or any Related Document shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate; (iii) any such excess interest
which is or has been received by Bank, notwithstanding this paragraph, shall be
credited against the then unpaid principal balance hereof or thereof, or if this
Note or any Related Document has been or would be paid in full by such credit,
refunded to Borrower; and (iv) the provisions of this Note and each Related
Document, and any other communication to Borrower, shall immediately be deemed
reformed and such excess interest reduced, without the necessity of executing
any other document, to the Maximum Rate. The right to accelerate the maturity of
this Note or any Related Document does not include the right to accelerate,
collect or charge unearned interest, but only such interest that has otherwise
accrued as of the date of acceleration. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Note and any Related Document which are made
for the purpose of determining whether such rate exceeds the Maximum 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 this Note or such
Related Document, including all prior and subsequent renewals and extensions
hereof or thereof, all interest at any time contracted for, charged, taken,
reserved or received by Bank. The terms of this paragraph shall be deemed to be
incorporated into each Related Document.

         To the extent that either Chapter 303 or 306, or both, of the Texas
Finance Code apply in determining the Maximum Rate, Bank hereby elects to
determine the applicable rate ceiling by using the weekly ceiling from time to
time in effect, subject to Bank's right subsequently to change such method in
accordance with applicable law, as the same may be amended or modified from time
to time.

         (e) RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the occurrence of
an Event of Default, (i) Borrower hereby authorizes Bank, at any time and from
time to time, without notice, which is hereby expressly waived by Borrower, and
whether or not Bank shall have declared this Note to be due and payable in
accordance with the terms hereof, to set off against, and to appropriate and
apply to the payment of, Borrower's obligations and liabilities under this Note
(whether matured or unmatured, fixed or contingent, liquidated or unliquidated),
any and all amounts owing by Bank to Borrower (whether payable in U.S. dollars
or any other currency, whether matured or unmatured, and in the case of
deposits, whether general or special (except trust and escrow accounts), time or
demand and however evidenced), and (ii) pending any such action, to the extent
necessary, to hold such amounts as collateral to secure such obligations and
liabilities and to return as unpaid for insufficient funds any and all checks

                                 Exhibit "B"-7
<PAGE>

and other items drawn against any deposits so held as Bank, in its sole
discretion, may elect. Borrower hereby grants to Bank a security interest in all
deposits and accounts maintained with Bank and with any other financial
institution to secure the payment of all obligations and liabilities of Borrower
to Bank under this Note.

         (f) BUSINESS PURPOSE. Borrower represents and warrants that all loans
evidenced by this Note are for a business, commercial, investment, agricultural
or other similar purpose and not primarily for a personal, family or household
use.

NOTICE: THIS NOTE AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS EVIDENCED
HEREBY CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS NOTE AND THE
INDEBTEDNESS EVIDENCED HEREBY.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

                                                      AIRCOMP L.L.C.

                                                      By:  /s/ Terry Keane
                                                      Name:  Terry Keane
                                                      Title:   President

                                 Exhibit "B"-8
<PAGE>

                              ADDENDUM TO TERM NOTE
                      (BASE RATE/LIBOR PRICING ADJUSTMENTS)

         THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by AIRCOMP L.L.C., a Delaware limited liability company
("Borrower") and payable to WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
("Bank"), or order, dated as of even date herewith, in the principal amount of
Eight Million and No/100 Dollars ($8,000,000.00) (the "Note").

         The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:

INTEREST RATE ADJUSTMENTS:

         (a) INITIAL INTEREST RATES. The initial interest rates applicable to
this Note shall be the rates set forth in the "Interest" paragraph herein.

         (b) INTEREST RATE ADJUSTMENTS. In addition to any interest rate
adjustments resulting from changes in the Base Rate, Bank shall adjust the Base
Rate and LIBOR margins used to determine the rates of interest applicable to
this Note on a quarterly basis, commencing with the calendar quarter ending
September 30, 2003, if required to reflect a change in Borrower's ratio of Total
Funded Debt to EBITDA (as defined in the Credit Agreement referenced herein), in
accordance with the following grid:

<TABLE>
<CAPTION>
                                                        APPLICABLE          APPLICABLE
                 TOTAL FUNDED DEBT TO EBITDA         BASE RATE MARGIN      LIBOR MARGIN
                 ---------------------------         ----------------      ------------
   <S>                                                        <C>                <C>
   less than 2.0 to 1.0                                        .25%              2.00%
   greater than or equal to 2.0 to 1.0
   but less than 2.5 to 1.0                                    .50%              2.25%
   greater than or equal to 2.5 to 1.0
   but less than 3.0 to 1.0                                    .75%              2.50%
   greater than or equal to 3.0 to 1.0                        1.0%               2.75%
</TABLE>

Each such adjustment shall be effective on the first Business Day of the
calendar quarter following the quarter during which Bank receives and reviews
Borrower's most current calendar quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.

         (c) With respect to LIBOR loans, each interest payment shall be payable
on the last day of each Fixed Rate Term (as defined in the Credit Agreement)
elected by the Borrower and upon maturity of the Note; provided, however, in the
event Borrower elects a six-month Fixed Rate Term, then such installments of
interest shall be due and payable on the last day of the third month of such
Fixed Rate Term.

                                 Exhibit "B"-9
<PAGE>

         (d) With respect to Base Rate loans, each interest payment shall be
payable on the last day of each March, June, September and December commencing
on September 30, 2003, through and including maturity of this Note.

         IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.

                                                         AIRCOMP L.L.C.

                                                         By:  /s/ Terry Keane
                                                         Name:  Terry Keane
                                                         Title:   President

                                 Exhibit "B"-10
<PAGE>

                                   EXHIBIT "C"
                                   -----------

                         Form of Delayed Draw Term Note

$1,000,000.00                                                     Houston, Texas
                                                                   June 27, 2003

         FOR VALUE RECEIVED, the undersigned AIRCOMP L.L.C., a Delaware limited
liability company ("Borrower") promises to pay to the order of WELLS FARGO BANK
TEXAS, NATIONAL ASSOCIATION ("Bank") at its office at 1000 Louisiana, Third
Floor, Houston, Texas, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of One Million and No/100 Dollars
($1,000,000.00), with interest thereon as set forth herein.

DEFINITIONS:

         As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:

         (a) "Base Rate" shall mean the higher of (a) Prime Rate per annum in
effect on that day, and (b) the Federal Fund Rate in effect on that day as
announced by the Federal Reserve Bank of New York, plus 0.5% per annum.

         (b) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in Texas are authorized or required by law to
close.

         (c) "Credit Agreement" means that certain Credit Agreement between Bank
and Borrower of even date herewith.

         (d) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one, two, three or six months, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than One Hundred Thousand And
No/100 Dollars ($100,000.00); and provided further, that no Fixed Rate Term
shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term
would end on a day which is not a Business Day, then such Fixed Rate Term shall
be extended to the next succeeding Business Day.

         (e) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/16 of 1%) and determined pursuant to the following formula:

                    LIBOR =                   Base LIBOR
                             ----------------------------------------------
                             100% - LIBOR Reserve Percentage

                                 Exhibit "C"-1
<PAGE>

                  (i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

                  (ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

         (f) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base 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 Bank may designate.

         (g) "Total Funded Debt" shall have the meaning ascribed to it in the
Credit Agreement.

INTEREST:

         (a) INTEREST. The Borrower agrees to pay interest at the Bank's address
listed above on the unpaid principal note hereof and, to the extent permitted by
law, the accrued interest in respect hereof from time to time from the date
hereof until payment in full of the principal amount hereof and accrued interest
hereon, at the rates and on the dates set forth on the Addendum attached hereto
and incorporated herein for all purposes.

         (b) SELECTION OF INTEREST RATE OPTIONS. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Base Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Base Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At the time this
Note is disbursed or Borrower wishes to select a LIBOR option for all or a
portion of the outstanding principal balance hereof, and at the end of each
Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest
rate option selected by Borrower; (ii) the principal amount subject thereto; and
(iii) for each LIBOR selection, the length of the applicable Fixed Rate Term.
Any such notice may be given by telephone (or such other electronic method as
Bank may permit) so long as, with respect to each LIBOR selection, (A) if
requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such

                                 Exhibit "C"-2
<PAGE>

notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time this Note
is disbursed or at the end of any Fixed Rate Term, Borrower shall be deemed to
have made a Base Rate interest selection for this Note or the principal amount
to which such Fixed Rate Term applied.

         (c) TAXES AND REGULATORY COSTS. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation made by Bank among its operations shall be conclusive and
binding upon Borrower.

         (d) DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed, unless such calculation would
result in a usurious rate, in which case interest shall be computed on the basis
of a 365/366-day year, as the case may be, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note, but in no event at a rate greater than the Maximum Rate.

BORROWINGS:

         (a) Borrower may from time to time from the date of this Note up to and
including December 27, 2004, borrow and partially or wholly repay its
outstanding borrowings, subject to all of the limitations, terms and conditions
of this Note and of any document executed in connection with or governing this
Note; provided however, that amounts repaid may not be reborrowed; and provided
further, that the total borrowings under this Note shall not exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for any Borrower, which
balance may be endorsed hereon from time to time by the holder.

         (b) All Base Rate and LIBOR borrowings shall be in amounts of at least
Ten Thousand and No/100 Dollars ($10,000.00).

                                 Exhibit "C"-3
<PAGE>

         (c) The amount and date of each Base Rate borrowing shall be designated
by an authorized representative of the Borrower requesting such borrowing in
form and substance satisfactory to Bank, at Bank's sole discretion, and such
borrowing request shall be received by the Bank at least one (1) Business Day
prior to the date of such loan, which date shall be a Business Day. Each Base
Rate loan shall be made at the office of the Bank and shall be funded prior to
2:00 p.m. Houston time, on the day so requested and immediately available fund
in the amount so requested.

         (d) The amount and date of each LIBOR borrowing shall be designated by
an authorized representative of the Borrower requesting such borrowing in form
and substance satisfactory to Bank, at Bank's sole discretion, and such
borrowing request shall be received by the Bank at least three (3) Business Days
prior to the date of such loan, which date shall be a Business Day. Each LIBOR
loan shall be made at the office of the Bank and shall be funded prior to 2:00
p.m. Houston time, on the day so requested and immediately available fund in the
amount so requested.

REPAYMENT AND PREPAYMENT:

         (a) REPAYMENT. The Delayed Draw Term Note shall be repaid pursuant to
Section 1.3(c) of the Credit Agreement.

         (b) APPLICATION OF PAYMENTS. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Base Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

         (c) Prepayment.

         BASE RATE. Borrower may prepay this Note provided that all terms in the
Credit Agreement and herein are complied with (including the payment of any
prepayment penalties required in the Credit Agreement). As provided herein,
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to the Base Rate at any time and in the minimum amount of
One Hundred Thousand and No/100 Dollars ($100,000.00); PROVIDED HOWEVER, if the
outstanding principal balance is such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
hereof.

         LIBOR. Borrower may prepay this Note provided that all terms in the
Credit Agreement and herein are complied with (including the payment of any
prepayment penalties required in the Credit Agreement). As provided herein,
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of One
Hundred Thousand and No/100 Dollars ($100,000.00) and in One Hundred Thousand
and No/100 Dollars ($100,000.00) multiples thereafter); PROVIDED, HOWEVER, that
if the outstanding principal balance of such portion of this Note is less than
said amount, the minimum prepayment amount shall be the entire outstanding

                                 Exhibit "C"-4
<PAGE>

principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the Fixed Rate Term applicable
thereto, Borrower shall pay to Bank immediately upon demand a fee which is the
sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:

                  (i) DETERMINE the amount of interest which would have accrued
each month on the amount prepaid at the interest rate applicable to such amount
had it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.

                  (ii) SUBTRACT from the amount determined in (i) above the
amount of interest which would have accrued for the same month on the amount
prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the
date of prepayment for new loans made for such term and in a principal amount
equal to the amount prepaid.

                  (iii) If the result obtained in (ii) for any month is greater
than zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank.

In addition, if Borrower makes an optional or required prepayment of a LIBOR
loan before the end of the related interest period, or fails to borrow, convert,
or extend a LIBOR loan after giving notice thereof, of if a LIBOR loan is
converted to Base Rate Loan as a result of certain changes and circumstances,
Borrower will reimburse Bank for any related funding losses and losses of
anticipated earnings.

All prepayments of principal on this Note, whether such prepayment is in
relation to a Base Rate option or a LIBOR option shall be applied first to
reduce the balloon payment due upon maturity hereof, if applicable, and second
to reduce the most remote of the principal installment or installments then
unpaid.

EVENTS OF DEFAULT:

         This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of even date herewith, as amended from time to time (the "Credit Agreement").
Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
"Event of Default" under this Note.

MISCELLANEOUS:

         (a) REMEDIES. Upon the occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
accrued and unpaid interest outstanding hereunder to be immediately due and
payable without presentment, demand, or any notices of any kind, including
without limitation notice of nonperformance, notice of protest, protest, notice

                                 Exhibit "C"-5
<PAGE>

of dishonor, notice of intention to accelerate or notice of acceleration, all of
which are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate. Each Borrower shall pay to the holder immediately upon demand the
full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of the holder's in-house counsel to the extent permissible), expended or
incurred by the holder in connection with the enforcement of the holder's rights
and/or the collection of any amounts which become due to the holder under this
Note, and the prosecution or defense of any action in any way related to this
Note, including without limitation, any action for declaratory relief, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (b) OBLIGATIONS JOINT AND SEVERAL. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (c) GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THIS NOTE IS PERFORMABLE IN
HARRIS COUNTY, TEXAS. ANY ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
NOTE AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT IN HARRIS COUNTY, TEXAS. BORROWER AND EACH THIRD PARTY OBLIGOR
HEREBY IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS,
AND (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE BANK TO BRING
ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ANY THIRD PARTY OBLIGOR OR WITH
RESPECT TO ANY COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER
JURISDICTION. ANY ACTION OR PROCEEDING BY THE BORROWER OR ANY THIRD PARTY
OBLIGOR AGAINST LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED IN HARRIS
COUNTY, TEXAS.

         (d) SAVINGS CLAUSE. It is the intention of the parties to comply
strictly with applicable usury laws. Accordingly, notwithstanding any provision
to the contrary in this Note, or in any contract, instrument or document
evidencing or securing the payment hereof or otherwise relating hereto (each, a
"Related Document"), in no event shall this Note or any Related Document require
the payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws that exceed the
maximum amount permitted by such laws, as the same may be amended or modified
from time to time (the "Maximum Rate"). If any such excess interest is called
for, contracted for, charged, taken, reserved or received in connection with
this Note or any Related Document, or in any communication by Bank or any other
person to Borrower or any other person, or in the event that all or part of the
principal or interest hereof or 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 this Note shall
exceed the Maximum Rate, then in such event it is agreed that: (i) the
provisions of this paragraph shall govern and control; (ii) neither Borrower nor

                                 Exhibit "C"-6
<PAGE>

any other person or entity now or hereafter liable for the payment of this Note
or any Related Document shall be obligated to pay the amount of such interest to
the extent it is in excess of the Maximum Rate; (iii) any such excess interest
which is or has been received by Bank, notwithstanding this paragraph, shall be
credited against the then unpaid principal balance hereof or thereof, or if this
Note or any Related Document has been or would be paid in full by such credit,
refunded to Borrower; and (iv) the provisions of this Note and each Related
Document, and any other communication to Borrower, shall immediately be deemed
reformed and such excess interest reduced, without the necessity of executing
any other document, to the Maximum Rate. The right to accelerate the maturity of
this Note or any Related Document does not include the right to accelerate,
collect or charge unearned interest, but only such interest that has otherwise
accrued as of the date of acceleration. Without limiting the foregoing, all
calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Note and any Related Document which are made
for the purpose of determining whether such rate exceeds the Maximum 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 this Note or such
Related Document, including all prior and subsequent renewals and extensions
hereof or thereof, all interest at any time contracted for, charged, taken,
reserved or received by Bank. The terms of this paragraph shall be deemed to be
incorporated into each Related Document.

         To the extent that either Chapter 303 or 306, or both, of the Texas
Finance Code apply in determining the Maximum Rate, Bank hereby elects to
determine the applicable rate ceiling by using the weekly ceiling from time to
time in effect, subject to Bank's right subsequently to change such method in
accordance with applicable law, as the same may be amended or modified from time
to time.

         (e) RIGHT OF SETOFF; DEPOSIT ACCOUNTS. Upon and after the occurrence of
an Event of Default, (i) Borrower hereby authorizes Bank, at any time and from
time to time, without notice, which is hereby expressly waived by Borrower, and
whether or not Bank shall have declared this Note to be due and payable in
accordance with the terms hereof, to set off against, and to appropriate and
apply to the payment of, Borrower's obligations and liabilities under this Note
(whether matured or unmatured, fixed or contingent, liquidated or unliquidated),
any and all amounts owing by Bank to Borrower (whether payable in U.S. dollars
or any other currency, whether matured or unmatured, and in the case of
deposits, whether general or special (except trust and escrow accounts), time or
demand and however evidenced), and (ii) pending any such action, to the extent
necessary, to hold such amounts as collateral to secure such obligations and
liabilities and to return as unpaid for insufficient funds any and all checks
and other items drawn against any deposits so held as Bank, in its sole
discretion, may elect. Borrower hereby grants to Bank a security interest in all
deposits and accounts maintained with Bank and with any other financial
institution to secure the payment of all obligations and liabilities of Borrower
to Bank under this Note.

         (f) BUSINESS PURPOSE. Borrower represents and warrants that all loans
evidenced by this Note are for a business, commercial, investment, agricultural
or other similar purpose and not primarily for a personal, family or household
use.

                                 Exhibit "C"-7
<PAGE>

NOTICE: THIS NOTE AND ALL OTHER DOCUMENTS RELATING TO THE INDEBTEDNESS EVIDENCED
HEREBY CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS NOTE AND THE
INDEBTEDNESS EVIDENCED HEREBY.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

                                                       AIRCOMP L.L.C.

                                                       By:  /s/ Terry Keane
                                                       Name:  Terry Keane
                                                       Title:   President

                                 Exhibit "C"-8
<PAGE>

                       ADDENDUM TO DELAYED DRAW TERM NOTE
                      (BASE RATE/LIBOR PRICING ADJUSTMENTS)

         THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by AIR COMP, L.L.C., a Delaware limited liability company
("Borrower") and payable to WELLS FARGO BANK TEXAS, NATIONAL ASSOCIATION
("Bank"), or order, dated as of even date herewith, in the principal amount of
One Million and No/100 Dollars ($1,000,000.00) (the "Note").

         The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:

INTEREST RATE ADJUSTMENTS:

         (a) Initial Interest Rates. The initial interest rates applicable to
this Note shall be the rates set forth in the "Interest" paragraph herein.

         (b) Interest Rate Adjustments. In addition to any interest rate
adjustments resulting from changes in the Base Rate, Bank shall adjust the Base
Rate and LIBOR margins used to determine the rates of interest applicable to
this Note on a quarterly basis, commencing with the calendar quarter ending
September 30, 2003, if required to reflect a change in Borrower's ratio of Total
Funded Debt to EBITDA (as defined in the Credit Agreement referenced herein, in
accordance with the following grid:

                                              APPLICABLE            APPLICABLE
    TOTAL FUNDED DEBT                          BASE RATE               LIBOR
    TO EBITDA                                   MARGIN                MARGIN
    ---------                                   ------                ------

    less than 2.0 to 1.0                         .25%                  2.00%

    greater than or equal to 2.0 to 1.0
    but less than 2.5 to 1.0                     .50%                  2.25%

    greater than or equal to 2.5 to 1.0
    but less than 3.0 to 1.0                     .75%                  2.50%

    greater than or equal to 3.0 to 1.0         1.00%                  2.75%

Each such adjustment shall be effective on the first Business Day of the
calendar quarter following the quarter during which Bank receives and reviews
Borrower's most current quarter-end financial statements in accordance with any
requirements established by Bank for the preparation and delivery thereof.

         (c) With respect to LIBOR loans, each interest payment shall be payable
on the last day of each Fixed Rate Term (as defined in the Credit Agreement)
elected by the Borrower and upon maturity of the Note; provided, however, in the
event Borrower elects a six-month Fixed Rate Term, then such installments of
interest shall be due and payable on the last day of the third month of such
Fixed Rate Term.

                                 Exhibit "C"-9
<PAGE>

         (d) With respect to Base Rate loans, each interest payment shall be
payable on the last day of each March, June, September and December commencing
on September 30, 2003, through and including maturity of this Note.

         IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.

                                                        AIRCOMP L.L.C.

                                                        By:  /s/ Terry Keane
                                                        Name:  Terry Keane
                                                        Title:   President

                                 Exhibit "C"-10

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