QUAKER STATE CORP, 10-Q, 1996-11-13

QUAKER STATE CORP
10-Q, 1996-11-13
PETROLEUM REFINING

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

Mark One
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
- -------- OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996.

TRANSITION REPORT PURSUANT TO SECTION 13 OR
- -------- 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to ______________________
Commission File Number 1-2677

QUAKER STATE CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 25-0742820
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)

225 East John Carpenter Freeway
Irving, Texas 75062
(Address of Principal Executive Offices)
(Zip Code)

(972)868-0400
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No
----- -----

As of October 31, 1996, 35,938,188 shares of Capital Stock, par value
$1.00 per share, of the registrant were outstanding.

<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quaker State Corporation and Subsidiaries

<TABLE>
<CAPTION>
QUARTER NINE MONTHS
------------------------ ---------------------------
9/30/96 9/30/95 9/30/96 9/30/95
- -----------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA, UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES
Sales and operating revenues $ 309,985 $ 277,109 $ 890,595 $ 774,340
Other, net 1,700 2,241 5,790 6,723
- -----------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 311,685 279,350 896,385 781,063

COSTS AND EXPENSES
Cost of sales and operating costs 209,951 188,937 611,329 543,159
Selling, general and administrative 77,814 72,433 219,030 186,931
Depreciation and amortization 9,398 8,330 26,234 22,900
Interest 3,118 1,777 7,059 4,895
Unusual item - 1,204 - 17,004
- -----------------------------------------------------------------------------------------------------------------------
TOTAL COSTS AND EXPENSES 300,281 272,681 863,652 774,889
- -----------------------------------------------------------------------------------------------------------------------
Pretax income from continuing operations 11,404 6,669 32,733 6,174
Provision for income taxes 4,650 2,596 13,100 2,408
- -----------------------------------------------------------------------------------------------------------------------
Income from continuing operations 6,754 4,073 19,633 3,766
Income from discontinued operations - 11,255 - 13,933
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 6,754 $ 15,328 $ 19,633 $ 17,699
=======================================================================================================================

PER SHARE:
Income from continuing operations $ 0.19 $ 0.13 $ 0.58 $ 0.12
Income from discontinued operations - 0.34 - 0.43
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE $ 0.19 $ 0.47 $ 0.58 $ 0.55
=======================================================================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING 36,067 32,878 34,002 32,018
=======================================================================================================================
=======================================================================================================================
DIVIDENDS PAID PER SHARE $ 0.10 $ $0.10 $ $0.30 $ $0.30
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.

1
<PAGE> 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Quaker State Corporation and Subsidiaries

<TABLE>

<CAPTION>
1996 1995
- ---------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, UNAUDITED)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 30,546 $ 876
- ---------------------------------------------------------------------------------------------------------------------

CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of property and equipment 2,914 3,962
Capital expenditures (40,429) (26,066)
Proceeds from sale of discontinued operations -- 62,817
Acquisitions, net of cash acquired (75,633) (30,996)
Other, net (7,920) --
- ---------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (121,068) 9,717
- ---------------------------------------------------------------------------------------------------------------------

CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid (10,159) (9,583)
Proceeds from long-term debt 102,170 31,829
Payments on long-term debt (30,650) (32,700)
- ---------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 61,361 (10,454)
- ---------------------------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents (29,161) 139
Cash and cash equivalents at beginning of period 30,659 29,805
- ---------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,498 $ 29,944
=====================================================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.

2
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
Quaker State Corporation and Subsidiaries

<TABLE>
<CAPTION>
9/30/96 12/31/95
- ------------------------------------------------------------------------------------------------------------
(IN THOUSANDS EXCEPT SHARE DATA) (unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,498 $ 30,659
Accounts and notes receivable, net 163,020 129,267
Inventories 98,259 80,284
Other current assets 44,429 36,796
- ------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 307,206 277,006
- ------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net of accumulated
depreciation of $226,429 and $210,851 228,596 203,259
Other assets 325,777 236,758
- ------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 861,579 $ 717,023
============================================================================================================

LIABILITIES
Current liabilities:
Accounts payable $ 62,081 $ 53,465
Accrued liabilities 95,605 84,225
Installments on long-term debt, payable within one year 13,024 7,243
- ------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 170,710 144,933
- ------------------------------------------------------------------------------------------------------------
Long-term debt, less current installments 184,258 118,519
Other long-term liabilities 179,991 181,416
- ------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 534,959 444,868
- ------------------------------------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY
Capital stock, $1.00 par value; authorized shares, 95,000,000;
issued shares, 35,929,453 at 9/30/96 and
32,824,157 at 12/31/95 35,929 32,824
Additional capital 181,404 139,068
Retained earnings 112,982 103,519
Other, net (3,695) (3,256)
- ------------------------------------------------------------------------------------------------------------
Total stockholders' equity 326,620 272,155
- ------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 861,579 $ 717,023
============================================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.

3
<PAGE> 5
SEGMENT INFORMATION
Quaker State Corporation and Subsidiaries

<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
-------------------- -----------------------
9/30/96 9/30/95 9/30/96 9/30/95
- -------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Lubricant and lubricant services $ 244,558 $ 233,556 $ 730,601 $ 679,508
Consumer products 44,590 22,677 92,764 22,677
Truck-Lite 20,788 20,656 67,055 70,273
Docks 752 701 2,477 2,363
Intersegment sales (703) (481) (2,302) (481)
- -------------------------------------------------------------------------------------------------------------
TOTAL OPERATING REVENUES $ 309,985 $ 277,109 $ 890,595 $ 774,340
=============================================================================================================

Operating profits
Lubricant and lubricant services $ 11,987 $ 9,911 $ 35,139 $ 26,925
Consumer products 4,751 1,978 11,770 1,978
Truck-Lite 1,536 1,350 5,557 8,693
Docks 260 144 878 625
- -------------------------------------------------------------------------------------------------------------
TOTAL OPERATING PROFITS 18,534 13,383 53,344 38,221
- -------------------------------------------------------------------------------------------------------------
Interest expense (3,118) (1,808) (7,059) (4,831)
Corporate other income 732 1,093 2,308 3,670
General corporate expense (4,744) (4,795) (15,860) (13,882)
Unusual item - (1,204) - (17,004)
- -------------------------------------------------------------------------------------------------------------
PRETAX INCOME $ 11,404 $ 6,669 $ 32,733 $ 6,174
=============================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.

4
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quaker State Corporation and Subsidiaries (unaudited)

1. In the opinion of management of Quaker State Corporation (the company), the
accompanying financial statements include all adjustments which are
necessary for a fair statement of the results for such periods. All of
these adjustments are of a normal recurring nature. The December 31, 1995
condensed consolidated balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the financial statements included as part of the 1995
Annual Report on Form 10-K. Certain items in 1995 periods have been
reclassified to conform to the 1996 presentation.

As of January 1, 1996, the company began reporting the results of its fast
lube subsidiary, Q Lube, Inc. (Q Lube) as a component of its core
lubricant and lubricant services business. Prior to that, Q Lube had been
reported as a separate segment. In July 1996, the company formed a new
consumer products segment, which is comprised of Slick 50, Inc. (Slick 50)
and Blue Coral, Inc. (Blue Coral). Slick 50 results, which were previously
reported in lubricant and lubricant services, have been reclassified to the
consumer products segment.

2. In June 1996, the company acquired all of the stock of Blue Coral for $46.1
million in cash, 2,956,328 shares of capital stock with a market value of
$43.5 million and the payment of $25.2 million to satisfy Blue Coral
indebtedness outstanding prior to the closing. Blue Coral is a leading
manufacturer, marketer and distributor of high quality automotive
appearance products. The acquisition has been accounted for under the
purchase method. Accordingly, the operating results of Blue Coral are
included in the accompanying condensed consolidated financial statements
from the date of acquisition. The purchase price allocation to assets and
liabilities is preliminary. The acquisition has resulted in a preliminary
excess of purchase price over fair market value of assets of approximately
$83.5 million recorded in the Condensed Consolidated Balance Sheet at
September 30, 1996.

The following schedule is prepared on a pro forma basis as though Blue
Coral and Slick 50 had been acquired as of the beginning of 1995, after
including the impact of adjustments, such as amortization of intangible
assets, additional interest expense and related tax effects.

<TABLE>
<CAPTION>
For the nine months ended September 30
(in thousands except per share data) 1996 1995
----------------------------------------------------------------------------
<S> <C> <C>
Sales and operating revenues $ 944,275 $ 883,316
Income from continuing operations $ 20,102 $ 2,643
Income per share from continuing operations $ .56 $ .07
----------------------------------------------------------------------------
</TABLE>

3. The effective tax rate for the three and nine months ended September 30,
1996 of 40% for continuing operations is higher than the 35% federal rate
due to the impact of state and foreign taxes and nondeductible intangible
asset amortization.

5
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quaker State Corporation and Subsidiaries (unaudited)

4. Inventories are stated at the lower of cost or market. Cost is determined
on the last-in, first-out (LIFO) basis for all crude oil, the majority of
company lubricants and vehicular lighting products; and on the first-in,
first-out (FIFO) basis for consumer products. The reserve to reduce the
carrying value of inventories from FIFO basis to LIFO basis amounted to
$22.5 million at September 30, 1996 and $18.9 million at December 31, 1995.
Inventories consist of:

<TABLE>
<CAPTION>
(in thousands) 9/30/96 12/31/95
---------------------------------------------------------------------
<S> <C> <C>
Crude oil, lubricants and related materials $ 71,724 $ 60,202
Vehicular lighting products 12,033 14,727
Automotive consumer products 14,502 5,355
---------------------------------------------------------------------
Total $ 98,259 $ 80,284
=====================================================================
</TABLE>

5. In December 1993, the United States commenced a lawsuit against the company
in the U.S. District Court for the Northern District of West Virginia. The
complaint alleges that the company violated the federal Resource
Conservation and Recovery Act and the federal Clean Air Act at the Congo
refinery on various dates starting in 1980 and seeks civil penalties not to
exceed $25,000 per day for each violation. A tentative settlement has been
reached that will require the company to pay civil penalties and to
complete supplemental environmental projects with a total value of $2.9
million. This settlement is provided for in the company's current
environmental reserves.

In addition, the company and certain of its subsidiaries have received
notices from the U.S. Environmental Protection Agency (EPA) and others that
each is a "potentially responsible party" relative to certain waste
disposal sites identified by the EPA and may be required to share in the
cost of cleanup. The company has accrued for all matters which are probable
and can be reasonably estimated.

In the June 30, 1996 Quarterly Report on Form 10-Q the company disclosed,
among other things, that its subsidiary Quaker State-Slick 50, Inc. (QS
Slick 50) and several of its subsidiaries had been named as defendants in
four separate proceedings alleging that QS Slick 50 made false, misleading,
deceptive and/or unsubstantiated advertising claims relating to Slick 50(R)
engine treatment. Two additional purported class action suits were filed
during the third quarter of 1996. These complaints seek compensatory and
punitive damages, restitution and injunctive relief, attorneys' fees, court
costs and interest on behalf of the purported classes. The company intends
to vigorously defend these lawsuits.

Contingent liabilities of an indeterminate amount exist in connection with
suits and claims arising in the ordinary course of business.

In the opinion of management, all matters discussed above are adequately
accrued for or covered by insurance, or, if not so provided for, are
without merit or the disposition is not anticipated to have a material
effect on the company's financial position; however, one or more of these
matters could have a material effect on future quarterly or annual results
of operations when resolved.

6
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quaker State Corporation and Subsidiaries (unaudited)

6. In April 1996, the company replaced its $45 million line of credit with a
$90 million credit agreement, which was increased to $140 million in
September 1996. This credit agreement provides for loans from time to time
not in excess of $140 million outstanding at any time, and provides for
various interest rate elections by the company. The credit agreement
expires in September 2001. The company utilized $71.3 million of the
credit agreement in the acquisition of Blue Coral in June 1996. As of
September 30, 1996, the company had $83 million available for borrowing
under the credit agreement.

On September 30, 1996, the company entered into a $165 million credit
agreement, which expires in September 1997. The credit agreement provides
for loans from time to time not in excess of $165 million outstanding at
any time, and provides for various interest rate elections by the company.
As of October 2, 1996, the credit agreement was fully utilized, in
connection with the Medo acquisition (see Note 7). The company intends to
replace this credit agreement with equity and/or long-term financing prior
to September 1997.

The company has various other uncommitted lines of credit which it borrows
under from time to time at various interest rates. As of September 30,
1996, the company had borrowings of $20 million outstanding on one such
line of credit.

7. On October 2, 1996, the company acquired all of the stock of Medo
Industries, Inc. and its affiliated companies (Medo) for $160 million in
cash. The cash consideration for the transaction included the payment of
certain Medo indebtedness totaling $17.7 million prior to closing. Medo is
engaged in the design, manufacture and marketing of air freshener products
primarily for use in automobiles. The acquisition has been accounted for
under the purchase method. Accordingly, the operating results of Medo are
not included in the accompanying condensed consolidated financial
statements for the three and nine months ended September 30, 1996. The
operating results of Medo will be included in the new consumer products
segment.

7
<PAGE> 9
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition

The condensed consolidated financial statements, segment information and
related notes for Quaker State Corporation (the company) included in this Form
10-Q, should be read as an integral part of this analysis.

Certain of the matters discussed herein are forward-looking statements that
involve risks and uncertainties, including, but not limited to, economic
conditions, product demand, competitive products and pricing, availability of
raw materials, changes in inventory due to shifts in market demand,
environmental and trade regulations, litigation and other risks indicated in
filings with the Securities and Exchange Commission. Such factors could cause
actual results to differ significantly from estimates.

In June 1996, the company acquired all of the stock of Blue Coral, Inc. (Blue
Coral) for $46.1 million in cash, 2,956,328 shares of capital stock with a
market value of $43.5 million and the payment of $25.2 million to satisfy Blue
Coral indebtedness outstanding prior to the closing. Blue Coral is a leading
manufacturer, marketer and distributor of high quality automotive appearance
products. The acquisition has been accounted for under the purchase method.
Accordingly, the operating results of Blue Coral are included in the
accompanying condensed consolidated financial statements from the date of
acquisition. The purchase price allocation to assets and liabilities is
preliminary. The acquisition has resulted in a preliminary excess of purchase
price over fair market value of assets of approximately $83.5 million recorded
in the Condensed Consolidated Balance Sheet at September 30, 1996. The Blue
Coral acquisition diluted earnings in the third quarter by $0.02 per share, due
to the seasonality of the business. It is projected that Blue Coral will have a
similar effect on earnings in the fourth quarter.

On October 2, 1996, the company acquired all of the stock of Medo Industries,
Inc. and its affiliated companies (Medo) for $160 million in cash. The cash
consideration for the transaction included the payment of certain Medo
indebtedness totaling $17.7 million prior to closing. Medo is engaged in the
design, manufacture and marketing of air freshener products primarily for use
in automobiles. The acquisition has been accounted for under the purchase
method. Accordingly, the operating results of Medo are not included in the
accompanying condensed consolidated financial statements for the three and nine
months ended September 30, 1996.

Effective July 1, 1996 the company formed a new consumer products segment, as a
result of combining the Blue Coral and Slick 50 operating results. Slick 50's
results which were previously reported in the lubricant and lubricant services
segment have been reclassified to the consumer products segment. The operating
results of Medo will be included in the consumer products segment.

8
<PAGE> 10
Management's Discussion and Analysis of Results of Operations and Financial
Condition, continued

The company reported net income of $6.8 million or $.19 per share for the
quarter ended September 30, 1996, compared to a net income of $15.3 million or
$.47 per share for the quarter ended September 30, 1995. The Blue Coral
acquisition diluted earnings in the quarter ended September 30, 1996 by $0.02.
The quarter ended September 30, 1995 included $11.3 million, or $.34 per share,
of income from discontinued operations. In addition, the quarter ended
September 30, 1995 included a restructuring charge of $1.2 million, $722,000
after-tax. The weighted average shares of capital stock outstanding for the
quarter ended September 30, 1996 increased 3.2 million shares compared to the
same period in 1995, primarily as a result of issuing shares in connection with
the acquisition of Blue Coral in June 1996. Sales and operating revenues from
continuing operations were $310 million for the quarter ended September 30,
1996, up $32.9 million from $277.1 million for the quarter ended September 30,
1995. Sales and operating revenues include $20.7 million from Blue Coral for
the quarter ended September 30, 1996. Operating profit from continuing
operations for the quarter ended September 30, 1996 increased 38% to $18.5
million from $13.4 million for the quarter ended September 30, 1995.

Lubricant and lubricant services operating profit was $12 million for the
quarter ended September 30, 1996, up 21% compared to $9.9 million operating
profit before the restructuring charge for the quarter ended September 30,
1995. Revenues for the quarter ended September 30, 1996 were $244.6 million,
up $11 million from $233.6 million for the quarter ended September 30, 1995.
Branded and private label motor oil sales volumes for the quarter ended
September 30, 1996 increased 8% and 13%, respectively, compared to the same
quarter in 1995. Car counts for the quarter ended September 30, 1996 were up
1% and the average ticket price was up 1% at the company's Q Lube operations,
compared to the same quarter in 1995. As of January 1, 1996, the company began
reporting the results of its fast lube subsidiary, Q Lube, as a component of
its core lubricant and lubricant services business. Prior to that, Q Lube had
been reported as a separate segment.

The new Consumer Products segment recorded revenues of $44.6 million for the
quarter ended September 30, 1996, compared to $22.7 million for the same
quarter last year. Operating profit for the quarter ended September 30, 1996
was $4.8 million compared to $2 million for the quarter ended September 30,
1995. The increases are due to increased volume at Slick 50 and the
acquisition of Blue Coral.

Truck-Lite operating profit for the quarter ended September 30, 1996 was $1.5
million, up 14% compared to $1.4 million for the quarter ended September 30,
1995. Revenues were basically flat with $20.8 million in 1996 compared to
$20.7 million for the quarter ended September 30, 1995.

For the quarter ended September 30, 1996, corporate income was $732,000
compared to $1,093,000 for the quarter ended September 30, 1995. The decrease
is primarily due to additional interest income received in 1995. Interest
expense increased for the quarter ended September 30, 1996 as a result of the
issuance of $100 million of Notes in October 1995 and the increased debt due to
the Blue Coral acquisition.

9
<PAGE> 11
Management's Discussion and Analysis of Results of Operations and Financial
Condition, continued

Net income for the nine months ended September 30, 1996 was $19.6 million or
$.58 per share, compared to net income of $17.7 million or $.55 per share for
the nine months ended September 30, 1995. The nine months ended September 30,
1995 included $13.9 million, or $.43 per share, of income from discontinued
operations. In addition, the nine months ended September 30, 1995 included a
restructuring charge of $17 million, or $10.2 million after-tax. The weighted
average shares of capital stock outstanding for the nine months ended September
30, 1996 increased two million shares compared to the same period in 1995,
primarily as a result of issuing shares in connection with the acquisitions of
Blue Coral and Slick 50. Sales and operating revenues from continuing
operations were $890.6 million for the nine months ended September 30, 1996, up
$116.3 million from $774.3 million for the nine months ended September 30,
1995. The increase in sales and operating revenues is attributable to
increased motor oil volume and the inclusion of Slick 50 for a full nine months
and Blue Coral for three months. Operating profit from continuing operations
for the nine months ended September 30, 1996 increased 40% to $53.3 million
from $38.2 million for the nine months ended September 30, 1995.

Lubricant and lubricant services operating profit was $35.1 million for the
nine months ended September 30, 1996, up 31% compared to $26.9 million for the
nine months ended September 30, 1995. Revenues for the nine months ended
September 30, 1996 were $730.6 million, up $51.1 million from $679.5 million
for the nine months ended September 30, 1995. Branded and private label motor
oil sales volumes for the nine months ended September 30, 1995 increased 6% and
15%, respectively, compared to the same nine month period in 1995. In addition,
1995 operating results included $1.5 million of LIFO inventory profits. Car
counts for 1996 were up 4% and the average ticket price was up 4% at the
company's Q Lube operations as compared to the same nine month period in 1995.

The new Consumer Products segment recorded revenues of $92.8 million for the
nine months ended September 30, 1996 compared to $22.7 million for the same
period last year. Operating profit for the nine months ended September 30, 1996
was $11.8 million compared to $2 million for the quarter ended September 30,
1995. The increase is due to the inclusion of Slick 50 for nine months and
Blue Coral for three months in 1996.

Truck-Lite operating profit for the nine months ended September 30, 1996 was
$5.6 million, down 36% compared to $8.7 million for the nine months ended
September 30, 1995. Revenues were down $3.2 million to $67.1 million from
$70.3 million for the nine months ended September 30, 1995. For the nine
months, Truck-Lite suffered from softening of the overall truck market. The
operating profit and revenue declines are attributable to Truck-Lite changing
its product mix to emphasize truck and trailer lighting coupled with overall
industry declines in truck and trailer builds.

For the nine months ended September 30, 1996, corporate income was $2.3 million
compared to $3.7 million for the nine months ended September 30, 1995. The
decrease is primarily due to additional royalty and interest income received in
1995. Interest expense increased for the nine months ended September 30, 1996
as a result of the issuance of $100 million of Notes in October 1995 and the
increased debt due to the Blue Coral acquisition. Corporate expenses for the
nine months ended September 30, 1996 increased to $15.9 million from $13.9
million for the same period in 1995, due to the increased benefit and lease
costs and higher than expected transition costs.

10
<PAGE> 12
Management's Discussion and Analysis of Results of Operations and Financial
Condition, continued

The effective tax rate for the quarter and nine months ended September 30, 1996
of 40% for continuing operations is higher than the 35% federal rate due to the
impact of state and foreign income taxes and nondeductible intangible asset
amortization.

In April 1996, the company replaced its $45 million line of credit with a $90
million credit agreement, which was increased to $140 million in September
1996. This credit agreement provides for loans from time to time not in excess
of $140 million outstanding at any time, and provides for various interest rate
elections by the company. The credit agreement expires September 2001. The
company utilized $71.3 million of the credit agreement in the acquisition of
Blue Coral in June 1996. As of September 30, 1996, the company had $83 million
available under the credit agreement.

On September 30, 1996, the company entered into a $165 million credit
agreement, which expires in September 1997. The credit agreement provides for
loans from time to time not in excess of $165 million outstanding at any time,
and provides for various interest rate elections by the company. As of October
2, 1996, the credit agreement was fully utilized, in connection with the Medo
acquisition. The company expects to replace this credit agreement with equity
and/or long-term financing prior to September 1997.

The company has various other uncommitted lines of credit which it borrows
under from time to time at various interest rates. As of September 30, 1996,
the company had borrowings of $20 million outstanding on one such line of
credit.

Cash and cash equivalents decreased by $29.2 million over the nine months ended
September 30, 1996. The decrease was comprised of $30.5 million net cash
provided by operations, $121.1 million net cash used in investing activities
and $61.4 million net cash provided by financing activities.

Cash used in investing activities of $121.1 million was primarily due to the
$75.6 million cash used in acquisition of businesses, a substantial portion of
which related to Blue Coral, and $40.4 million of capital expenditures. Cash
provided by financing activities of $61.4 million was primarily due to $10.2
million of cash used for payment of dividends and net borrowings of $71.5
million, a substantial portion of which was used to acquire Blue Coral.

The company plans to open approximately 50 new Q Lube locations over the next
twelve to fifteen months, 25 to 30 of which will be free standing units. The
remaining units are expected to come from the company's strategic alliances
with Monro Muffler and Discount Auto. This expansion is dependent on
identifying appropriate locations, availability of capital and economic
conditions.

On October 24, 1996 the Board of Directors of the company authorized a
quarterly dividend of $.10 per share, payable to shareholders of record as of
November 15, 1996.

11
<PAGE> 13
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In its quarterly report on Form 10-Q for the quarter ended June 30, 1996, the
company disclosed that the company's subsidiary, Quaker State-Slick 50, Inc.
(QS Slick 50) and several of its subsidiaries were named as defendants in four
separate proceedings alleging false, misleading, deceptive and/or
unsubstantiated advertising claims relating to Slick 50(R) engine treatment.
Two additional purported class action suits were filed during the third quarter
of 1996. One additional suit filed by Neal Hargett, et. al., in U.S. District
Court, for the Northern District of Alabama, on September 24, 1996, alleges
conspiracy, fraud, misrepresentation, breach of contract and breach of
warranty. A suit filed by Christina Kerksieck, et. al., in the Superior Court
for San Francisco County, California on October 11, 1996 alleges violations of
the California Consumer Legal Remedies Act, California Business and Professions
Code, false advertising, unfair competition, fraud, deceit and negligent
misrepresentation. These complaints seek compensatory and punitive damages,
imposition of a constructive trust, restitution and injunctive relief,
attorneys' fees, court costs and interest on behalf of the purported classes.
The company intends to vigorously defend these lawsuits.

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Item 6. Exhibits and Reports on Form 8-K

(a) 3 Bylaws of the Company, as amended and restated on July 25,
1996, filed herewith.

4(a) Indenture between Quaker State and Chemical Bank, as Trustee,
related to $100,000,000 of 6.625% Notes due 2005, dated
October 24, 1995, filed herewith.

4(b) Amended and restated $140 million Credit Agreement, dated
April 17, 1996 and amended and restated September 27, 1996,
between Quaker State and Morgan Guaranty Trust Company of New
York, as Agent, with a list of omitted Schedules and Exhibits
filed herewith.

4(c) $165 million Credit Agreement between Quaker State and Texas
Commerce Bank National Association, as Agent, dated as of
September 30, 1996, with a list of omitted Schedules and
Exhibits filed herewith.

10(a) Amendment to Employment Agreement with Herbert M. Baum dated
May 10, 1996, filed herewith.

10(b) First Amendment to the 1994 Stock Incentive Plan, dated
October 24, 1996, filed herewith.

10(c) Third Amendment to the 1986 Stock Option Plan, dated October
24, 1996, filed herewith.

10(d) First Amendment to the 1994 Non-Employee Directors' Stock
Option Plan, dated October 24, 1996, filed herewith.

10(e) 1996 Directors' Fee Plan, as amended and restated October 24,
1996 to be effective January 1,1997, filed herewith.

11 Computation of net income per share for the quarters and nine
month periods ending September 30, 1996 and 1995, filed
herewith.

27 Financial Data Schedule, filed herewith.

(b) A current report on Form 8-K was filed by Quaker State on July 13,
1996 and amended on September 11, 1996. Quaker State reported under
Item 2 the completion of the acquisition of Blue Coral Inc. Financial
statements for Blue Coral Inc. and pro forma financial information
related to this acquisition were included in an amendment to this
report on Form 8-K filed on September 11, 1996.

A current report on Form 8-K was filed by Quaker State on October 10,
1996. Quaker State reported under Item 2 the completion of the
acquisition of Medo Industries Inc. and its affiliated companies
(Medo). The report included financial statements for Medo. Interim
financial and pro forma financial information related to the
acquisition will be filed by an amendment to this report to be filed
not later than 60 days following the required date for filing.

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<PAGE> 15
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

QUAKER STATE CORPORATION
(Registrant)

Date November 13, 1996 By /s/ Herbert M. Baum
------------------ ----------------------------
Herbert M. Baum
Chairman of the Board and
Chief Executive Officer

Date November 13, 1996 By /s/ C. A. Conrad
------------------ ----------------------------
Conrad A. Conrad
Vice Chairman and
Chief Financial Officer

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<PAGE> 16
QUAKER STATE CORPORATION

EXHIBIT LIST

The following Exhibits are required to be filed with this quarterly report on
Form 10-Q.

Exhibit No. and Document

3 Bylaws of the Company, as amended and restated on July 25,
1996, filed herewith.

4(a) Indenture between Quaker State and Chemical Bank, as Trustee,
related to $100,000,000 of 6.625% Notes due 2005, dated
October 24, 1995, filed herewith.

4(b)) Amended and restated $140 million Credit Agreement, dated
April 17, 1996 and amended and restated September 27, 1996,
between Quaker State and Morgan Guaranty Trust Company of New
York, as Agent with a list of omitted Schedules and Exhibits,
filed herewith.

4(c) $165 million Credit Agreement between Quaker State and Texas
Commerce Bank National Association, as Agent, dated as of
September 30, 1996 with a list of omitted Schedules and
Exhibits, filed herewith.

10(a) Amendment to Employment Agreement with Herbert M. Baum dated
May 10, 1996, filed herewith.

10(b) First Amendment to the 1994 Stock Incentive Plan, dated
October 24, 1996, filed herewith.

10(c) Third Amendment to the 1986 Stock Option Plan, dated October
24, 1996, filed herewith.

10(d) First Amendment to the 1994 Non-Employee Directors' Stock
Option Plan, dated October 24, 1996, filed herewith.

10(e) 1996 Directors' Fee Plan, as amended and restated October 24,
1996 to be effective January 1,1997, filed herewith.

11 Computation of net income per share for the quarters and nine
month periods ending September 30, 1996 and 1995, filed
herewith.

27 Financial Data Schedule, filed herewith.

<PAGE> 1
EXHIBIT 3

QUAKER STATE CORPORATION

BYLAWS

As amended and restated on July 25, 1996

ARTICLE I

STOCKHOLDERS

Section 1.1. Time and Place of Meetings. All meetings of the
stockholders for the election of directors or for any other purpose shall be
held at such time and place, within or without the State of Delaware, as may be
designated by the Board of Directors, or in the absence of a designation by the
Board of Directors, by the Chairman of the Board, the Chief Executive Officer,
the President or the Secretary, and as may be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.

Section 1.2. Annual Meetings. The annual meeting of the stockholders
of the Corporation for the election of directors and for the transaction of
such other business as properly may come before such meeting shall be held at
such place, either within or without the State of Delaware, and at 1:00 p.m.
local time on the last Thursday of May (or, if such day is a legal holiday,
then on the next succeeding business day), or at such other date and time as
may be fixed from time to time by resolution of the Board of Directors and set
forth in the notice of meeting or a duly executed waiver of notice thereof. At
the annual meeting, the stockholders shall elect by a plurality vote the
directors to succeed those whose terms expire at that meeting and shall
transact such other business as may properly be brought before the meeting.

Section 1.3. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may only be called by the Chairman of the Board,
by the Board of Directors pursuant to a resolution adopted by a majority of the
total number of authorized directors, by the President or by the Secretary.

Section 1.4. Notice of Meetings; Waiver. The Secretary or any
Assistant Secretary shall cause written notice of the place, date and hour of
each meeting of the stockholders, and, in the case of a special meeting, the
purpose or purposes for which such meeting is called, to be given personally or
by mail, not less than ten nor more than sixty days prior to the meeting, to
each stockholder of record entitled to vote at such meeting.
<PAGE> 2
Section 1.5. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting.

Section 1.6. Voting. Every holder of record of shares entitled to
vote at a meeting of stockholders shall be entitled to one vote for each share
outstanding in the name of such stockholder on the books of the Corporation at
the close of business on the record date for the meeting. Except as otherwise
required by law or by the Certificate of Incorporation, the vote of a majority
of the shares represented in person or by proxy at any meeting at which a
quorum is present shall be sufficient for the transaction of any business at
such meeting. No vote of the stockholders need be taken by written ballot
unless otherwise required by law.

Section 1.7. Adjournment. If a quorum is not present at any meeting
of the stockholders, the stockholders present in person or by proxy shall have
the power to adjourn any such meeting from time to time until a quorum is
present. Notice of any adjourned meeting of the stockholders of the
Corporation need not be given if the place, date and hour thereof are announced
at the meeting at which the adjournment is taken, provided, however, that if
the adjournment is for more than thirty days, or if after the adjournment a new
record date for the adjourned meeting is fixed, a notice of the adjourned
meeting, conforming to the requirements of Section 1.4 hereof, shall be given
to each stockholder of record entitled to vote at such meeting. At any
adjourned meeting at which a quorum is present, any business may be transacted
that might have been transacted on the original date of the meeting.

Section 1.8. Proxies. Any stockholder entitled to vote at any
meeting of the stockholders or to express consent to or dissent from corporate
action without a meeting may authorize another person or persons to vote at any
such meeting and express such consent or dissent for him by proxy. No such
proxy shall be voted or acted upon after the expiration of three years from the
date of such proxy, unless it provides for a longer period. Every proxy shall
be revocable at the pleasure of the stockholder executing it, except in those
cases where applicable law provides that a proxy shall be irrevocable. A
stockholder may revoke any proxy that is not irrevocable by attending the
meeting and voting in person, by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
Secretary.

Section 1.9. Nomination of Directors. Only persons who are nominated
in accordance with the procedures set forth in this Section 1.9 shall be
eligible for election as directors of the Corporation.

(a) Nominations of persons for election to the Board of Directors of
the Corporation may be made at any annual meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder of the Corporation
entitled to vote for the election of directors at the meeting who was a
stockholder of record at the time of giving of notice provided for in this
Section 1.9(a) and who complies with the notice procedures set forth in this
Section 1.9(a). Any such nomination by a stockholder shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely
notice for an annual meeting, a stockholder's notice shall be delivered to the
Secretary of the Corporation at the principal

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<PAGE> 3
executive offices of the Corporation not less than 60 days nor more than 90
days prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which public announcement (as defined in
Article I, Section 1.10) of the date of such meeting is first made.
Notwithstanding anything in the foregoing sentence to the contrary, in the
event that the number of directors to be elected to the Board of Directors of
the Corporation is increased and there is no public announcement naming all of
the nominees for director or specifying the size of the increased Board of
Directors made by the Corporation at least 70 days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's notice
required by this Section 1.9(a) shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary of the Corporation at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation. Such stockholder's notice shall set forth in writing (i) as to
each person whom the stockholder proposes to nominate for election or
re-election as a director (A) the name, age, business address and residence of
such person, (B) the principal occupation or employment of such person, (C) the
number of shares of stock of the Corporation that are beneficially owned by
such person, and (D) any other information relating to such person that is
required to be disclosed in connection with the solicitation of proxies for the
election of directors, or as otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including, without limitation, such person's written consent
to being named in a proxy statement as a nominee and to serving as a director
if elected); and (ii) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination is made (A) the name
and address of such stockholder, as they appear on the Corporation's books, and
of such beneficial owner and (B) the class and number of shares of the
Corporation which are owned beneficially and of record by such stockholder and
such beneficial owner.

(b) Nominations of persons for election to the Board of Directors of
the Corporation may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting
(i) by or at the direction of the Board of Directors or (ii) provided that the
Board of Directors has determined that one or more directors shall be elected
at such special meeting, by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
Section 1.9(b), who shall be entitled to vote at the meeting and who complies
with the notice procedures set forth in this Section 1.9(b). To be timely
notice for a special meeting, a stockholder's notice must be delivered to the
Secretary of the Corporation at the principal executive offices of the
Corporation not earlier than the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the 10th day following the day on which public announcement
(as defined in Article I, Section 1.10) is first made of the date of the
special meeting and of the nominee(s) proposed by the Board of Directors to be
elected at such meeting.

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(c) At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the
Secretary of the Corporation that information pertaining to the nominee which
is required to be set forth in a stockholder's notice of nomination. The
Chairman of the Board, or in his or her absence the Chief Executive Officer,
the President, any Vice President or the Secretary, shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and in that event
the defective nomination shall be disregarded.

Section 1.10. Transaction of Business. To be properly brought before
an annual meeting of stockholders, business must be (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, (b) otherwise properly brought before the meeting by or at
the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder of the Corporation who was a stockholder of
record at the time of giving of notice provided for in this Section 1.10, who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in this Section 1.10. For business to be properly brought before an
annual meeting by a stockholder, if such business is related to any matter
other than the election of directors of the Corporation, the stockholder must
have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered in
accordance with the procedures in Section 1.9(a) applicable to a stockholder's
nomination of directors at an annual meeting. Such stockholder's notice shall
set forth in writing as to each matter the stockholder proposes to bring before
the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting, the reasons for conducting such business at
the annual meeting, and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (ii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the proposal is made (A) the name and address of
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (B) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this Section 1.10. The Chairman of the Board, or in
his or her absence the Chief Executive Officer, the President, any Vice
President or the Secretary, shall, if the facts warrant, determine and declare
to the meeting that business was not properly brought before the meeting in
accordance with the provisions of this Section 1.10, and in that event the
business shall not be transacted. For purposes of this Section 1.10 and
Article I, Section 1.9, "public announcement" shall mean disclosure in a press
release reported by the Dow Jones News Service, Associated Press or comparable
national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Exchange Act. In addition to the provisions of this Section 1.10, a
stockholder also shall comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in these Bylaws shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.

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<PAGE> 5
Section 1.11. Inspectors of Elections. Prior to any meeting of the
stockholders, the Board of Directors shall appoint one or more persons to act
as inspectors of elections, and may designate one or more alternate inspectors.
In the event no inspector or alternate is able to act, the person presiding at
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of the duties of an inspector,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspector shall:

(a) ascertain the number of shares outstanding and the voting power
of each;

(b) determine the shares represented at a meeting and the validity of
proxies and ballots;

(d) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors; and

(e) certify his or her determination of the number of shares
represented at the meeting, and his or her count of all votes and ballots.

The inspector may appoint or retain other persons or entities to assist in the
performance of the duties of inspector.

When determining the shares represented and the validity of proxies
and ballots, the inspector shall be limited to an examination of the proxies,
any envelopes submitted with those proxies, any information provided in
accordance with Section 1.8 of these Bylaws, ballots and the regular books and
records of the Corporation. The inspector may consider other reliable
information for the limited purpose of reconciling proxies and ballots
submitted by or on behalf of banks, brokers or their nominees or a similar
person which represent more votes than the holder of a proxy is authorized by
the record owner to cast or more votes than the stockholder holds of record.
If the inspector considers other reliable information as outlined in this
section, the inspector, at the time of his or her certification pursuant to
paragraph (e) of this section shall specify the precise information considered,
the person or persons from whom the information was obtained, when this
information was obtained, the means by which the information was obtained, and
the basis for the inspector's belief that such information is accurate and
reliable.

Section 1.12. Opening and Closing of Polls. The date and time for
the opening and the closing of the polls for each matter to be voted upon at a
meeting of stockholders shall be announced at the meeting. The inspector of
the election shall be prohibited from accepting any ballots, proxies or votes
or any revocations thereof or changes thereto after the closing of the polls,
unless the Court of Chancery upon application by a stockholder shall determine
otherwise.

Section 1.13. Consent of Stockholders in Lieu of Meeting. (a)
Unless otherwise provided in the Certificate of Incorporation, any action
required or permitted to be taken at

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<PAGE> 6
any annual or special meeting of the stockholders of the Corporation may,
subject to the provisions of this Section 1.13, be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing,
setting forth the actions so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Corporation. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.

(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered to the Corporation, written consents signed by
a sufficient number of holders to take such action are delivered to the
Corporation.

(c) The record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be fixed by the Board of
Directors. Any stockholder seeking to have the stockholders authorize or take
corporate action by written consent without a meeting shall, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date. Upon receipt of such a request, the Secretary of the Corporation
shall, as promptly as practicable, direct the Chairman of the Board, the Chief
Executive Officer or the President to call a special meeting of the Board of
Directors to be held as promptly as practicable, but in any event not more than
10 days following the date of receipt of such a request. At such a meeting,
the Board of Directors shall fix a record date, which shall not precede the
date upon which the resolution fixing the record date is adopted by the Board
of Directors, and which shall not be more than 10 days after the date on which
the resolution fixing the record date is adopted by the Board of Directors.
Notice of the record date shall be published in accordance with the rules and
policies of any stock exchange on which securities of the Corporation are then
listed or, if the securities of the Corporation are not listed on a stock
exchange, then in accordance with the rules and policies of the National
Association of Securities Dealers Automatic Quotation National Market System.
If no record date has been so fixed by the Board of Directors, the record date
for determining the stockholders entitled to consent to corporate action in
writing without a meeting, where no prior action by the Board of Directors is
required by the Delaware General Corporation Law, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation. If no date has been fixed by the Board
of Directors and prior action by the Board of Directors is required by the
Delaware General Corporation Law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be
at the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.

(d) In the event of the delivery to the Corporation of a written
consent or consents purporting to represent the requisite voting power to
authorize or take corporate action and/or related revocations, the Secretary of
the Corporation shall provide for the safekeeping of such consents and
revocations and shall, as promptly as practicable, engage inspectors for the
purpose of promptly performing a ministerial review of the validity of the

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consents and revocations. No action by written consent without a meeting shall
be effective until such inspectors have completed their review, determined that
the requisite number of valid and unrevoked consents has been obtained to
authorize or take actions specified in the consents and certified such
determination for entry in the records of the Corporation for the purpose of
recording the proceedings of meetings of the stockholders.

(e) For purposes of this Section 1.13, delivery to the Corporation
shall be effected by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1. General Powers. Except as may otherwise be provided by
law, by the Certificate of Incorporation or by these Bylaws, the property,
affairs and business of the Corporation shall be managed by or under the
direction of the Board of Directors, and the Board of Directors may exercise
all the powers of the Corporation.

Section 2.2. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be fourteen, which number may
be modified from time to time by resolution of the Board of Directors, provided
that the number of Directors shall in no event be less than one. Each Director
(whenever elected) shall hold office until his or her successor has been duly
elected and qualified, or until his or her earlier death, resignation or
removal.

Section 2.3. Election of Directors. Except as otherwise provided in
Section 2.12 of these Bylaws, the Directors shall be elected at each annual
meeting of the stockholders. If the annual meeting for the election of
Directors is not held on the date designated therefor, the Directors shall
cause the meeting to be held as soon thereafter as convenient. At each meeting
of the stockholders for the election of Directors, provided a quorum is
present, the Directors shall be elected by a plurality of the votes validly
cast in such election.

Section 2.4. Annual and Regular Meetings. The annual meeting of the
Board of Directors for the purpose of electing officers and for the transaction
of such other business as may come before the meeting shall be held as soon as
practical following adjournment of the annual meeting of the stockholders at
the place of such annual meeting of the stockholders. Notice of such annual
meeting of the Board of Directors need not be given. The Board of Directors
from time to time may by resolution provide for the holding of regular meetings
and fix the place (which may be within or without the State of Delaware) and
the date and hour of such meetings. Notice of regular meetings need not be
given.

Section 2.5. Special Meetings; Notice. Special meetings of the Board
of Directors shall be held whenever called by the Chairman of the Board, the
Chief Executive Officer or

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the President or, in the event of their absence or disability, by any Vice
President or the Secretary, or by the Secretary upon the request of four
Directors, at such place (within or without the State of Delaware), date and
hour as may be specified in the respective notices or waivers of notice of such
meetings. Special meetings of the Board of Directors may be called on 24
hours' notice, if notice is given to each Director personally, by telephone or
by electronic means, or on five days' notice, if notice is mailed to each
Director, addressed to the Director at his or her usual place of business.

Section 2.6. Quorum; Voting. At all meetings of the Board of
Directors, the presence of a majority of the total authorized number of
Directors shall constitute a quorum for the transaction of business. Except as
otherwise required by law, the Certificate of Incorporation or these Bylaws,
the vote of a majority of the Directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors.

Section 2.7. Adjournment. A majority of the Directors present,
whether or not a quorum is present, may adjourn any meeting of the Board of
Directors to another time or place. No notice need be given of any adjourned
meeting unless the time and place of the adjourned meeting are not announced at
the time of adjournment, in which case notice conforming to the requirements of
Section 2.5 shall be given to each Director.

Section 2.8. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all members of the Board of Directors consent thereto in
writing, and such writing or writings are filed with the minutes of proceedings
of the Board of Directors.

Section 2.9. Regulations; Manner of Acting. To the extent consistent
with applicable law, the Certificate of Incorporation and these Bylaws, the
Board of Directors may adopt such rules and regulations for the conduct of
meetings of the Board of Directors and for the management of the property,
affairs and business of the Corporation as the Board of Directors may deem
appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.

Section 2.10. Meeting by Telephonic Communications. Members of the
Board of Directors may participate in a meeting of the Board of Directors by
means of conference telephone or similar communications equipment through which
all persons participating in the meeting can hear each other. Participation in
a meeting pursuant to this provision shall constitute presence in person at
such meeting.

Section 2.11. Resignations; Retirement. Any Director may resign at
any time by delivering a written notice of resignation, signed by such
Director, to the Chairman of the Board, the Chief Executive Officer, the
President or the Secretary. Unless otherwise specified therein, such
resignation shall take effect upon delivery. A Director who is not and never
has been an officer of the Corporation, and any Director who has served as
Chief Executive Officer of the Corporation, shall retire from the Board of
Directors not later than the date of the annual meeting of stockholders next
following his or her 70th birthday. A Director who is or has been an officer
of the Corporation other than the Chief Executive Officer shall retire from the
Board of Directors not later than the earlier of the date of the

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annual meeting of stockholders next following his or her 65th birthday or the
date of his or her retirement as an employee of the Corporation.

Section 2.12. Vacancies and Newly Created Directorships. If any
vacancy shall occur in the Board of Directors, by reason of death, resignation,
retirement, removal or otherwise, or if the authorized number of Directors
shall be increased, the Directors then in office shall continue to act, and any
such vacancy or newly created directorship may be filled by a majority of the
Directors then in office, although less than a quorum. A Director elected to
fill a vacancy or a newly created directorship shall hold office until his
successor has been elected and qualified or until his or her earlier death,
resignation, retirement or removal. Any such vacancy or newly created
directorship may also be filled at any time by vote of the stockholders.

Section 2.13. Compensation and Stock Ownership. The Board of
Directors shall fix from time to time by resolution the compensation, if any,
which each Director shall be entitled to receive for service as such.
Beginning no later than one year following election to the Board of Directors,
a Director shall own at least 1,000 shares of the Corporation's capital stock
at all times while serving as a Director.

ARTICLE III

EXECUTIVE COMMITTEE AND OTHER COMMITTEES

Section 3.1. How Constituted. The Board of Directors may, by
resolution adopted by a majority of the whole Board, designate one or more
Committees, including an Executive Committee, each such Committee to consist of
such number of Directors as from time to time may be fixed by the Board of
Directors. The Board of Directors may designate one Director as Chairman of
any such Committee. Thereafter, members and Chairmen of each such Committee
may be designated at the annual meeting of the Board of Directors. Any such
Committee may be abolished or re-designated from time to time by the Board of
Directors. Each member of any such Committee (whether designated at an annual
meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold
office until his or her successor shall have been designated or until he or she
shall cease to be a Director, or until his or her earlier death, resignation,
retirement or removal.

Section 3.2. Powers. During the intervals between the meetings of
the Board of Directors, the Executive Committee, except as otherwise provided
in this section, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the property, affairs and business
of the Corporation, including the power to declare dividends and to authorize
the issuance of stock. Each such other Committee, except as otherwise provided
in this section, shall have and may exercise such powers of the Board of
Directors as may be provided by resolution or resolutions of the Board of
Directors. The power and authority of the Executive Committee and any such
other Committee shall be subject to the provisions of Section 141(c) of the
Delaware General Corporation Law and any successor provisions. The Executive
Committee shall have, and any such other Committee may be granted by the Board
of Directors, power to authorize the seal of the Corporation to be affixed to
any or all papers which may require it.

9
<PAGE> 10
Section 3.3. Proceedings and Minutes. Each such Committee may fix
its own rules of procedure and may meet at such place (within or without the
State of Delaware), at such time and upon such notice, if any, as it shall
determine from time to time. Each such Committee shall keep minutes of its
proceedings and shall report such proceedings to the Board of Directors at the
meeting of the Board of Directors next following any such proceedings.

Section 3.4. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members constituting a majority of the total
authorized membership of such Committee shall constitute a quorum for the
transaction of business. The act of the majority of the members present at any
meeting at which a quorum is present shall be the act of such Committee. Any
action required or permitted to be taken at any meeting of any such Committee
may be taken without a meeting, if all members of such Committee shall consent
to such action in writing and such writing or writings are filed with the
minutes of the proceedings of the Committee. The members of any such Committee
shall act only as a Committee, and the individual members of such Committee
shall have no power as such.

Section 3.5. Meeting by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment through which all persons participating in the meeting can hear each
other. Participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting.

Section 3.6. Absent or Disqualified Members. In the event of the
absence or disqualification of a member of any Committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.

Section 3.7. Resignations. Any member (and any alternate member) of
any Committee may resign at any time by delivering a written notice of
resignation, signed by such member, to the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.

Section 3.8. Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by
resolution adopted by a majority of the whole Board of Directors.

Section 3.9. Vacancies. If any vacancy shall occur in any Committee,
by reason of disqualification, death, resignation, retirement, removal or
otherwise, the remaining members (and any alternate members) shall continue to
act, and any such vacancy may be filled by the Board of Directors.

10
<PAGE> 11
Section 3.10. Compensation. The Board of Directors shall fix from
time to time by resolution the compensation, if any, which each Director shall
be entitled to receive for service as a member or as Chairman of any Committee.

ARTICLE IV

OFFICERS

Section 4.1. Number. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors also may elect
a Chairman of the Board, a Chief Executive Officer and one or more Vice
Chairmen, Assistant Secretaries and Assistant Treasurers. Any number of
offices may be held by the same person. The President and the Chief Executive
Officer, if any, shall be chosen from the members of the Board of Directors,
but no other officer need be a Director of the Corporation.

Section 4.2. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual
meeting, officers may be elected at any regular or special meeting of the Board
of Directors. Each officer shall hold office until his or her successor has
been elected and qualified, or until his or her earlier death, resignation,
retirement or removal.

Section 4.3. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any
officer may resign at any time by delivering a written notice of resignation,
signed by such officer, to the Board of Directors, the Chairman of the Board,
the Chief Executive Officer, the President or the Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any
vacancy occurring in any office of the Corporation by death, resignation,
retirement, removal or otherwise, may be filled by the Board of Directors, by
the Chief Executive Officer or if there be none, by the President, subject to
ratification by the Board of Directors at its next regular meeting.

Section 4.4. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and
perform such duties as may be specified in these Bylaws, as may be specified
from time to time by the Board of Directors in a resolution that is not
inconsistent with these Bylaws, or as are customarily incident to the
respective officers' offices, except that in any event, each officer shall
exercise such powers and perform such duties as may be required by law.

Section 4.5. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors and
shall have such other duties and responsibilities as may be assigned by the
Board of Directors. The Chairman of the Board may delegate to any qualified
person authority to chair any meeting of the stockholders, either on a
temporary or a permanent basis.

11
<PAGE> 12
Section 4.6. Chief Executive Officer. The Chief Executive Officer
shall be responsible for the active management and direction of the business
and affairs of the Corporation. In case of the inability or failure of the
Chairman of the Board to perform the duties of that office, the Chief Executive
Officer shall perform the duties of the Chairman of the Board, unless otherwise
determined by the Board of Directors.

Section 4.7. President. In the event that no Chief Executive Officer
has been elected by the Board of Directors, the President shall perform the
duties of the Chief Executive Officer, unless otherwise determined by the Board
of Directors.

Section 4.8. Vice Chairman. Any Vice Chairman shall perform such
duties and exercise such powers as may be assigned from time to time by the
Chairman of the Board or the Chief Executive Officer, or if there be no Chief
Executive Officer, by the President.

Section 4.9. Vice President. Each Vice President shall perform such
duties and exercise such powers as may be assigned from time to time by the
Chief Executive Officer, or if there be none, by the President.

Section 4.10. Secretary and Assistant Secretaries. The Secretary
shall have the following powers and duties:

(a) The Secretary shall attend all meetings of the stockholders and
of the Board of Directors, shall keep or cause to be kept a record of all
proceedings of such meetings and shall perform like duties for any Committee of
the Board of Directors upon the request of the Chairman of the Board, the Chief
Executive Officer or the President.

(b) The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and the Board of Directors in accordance with the
provisions of these Bylaws and as required by law.

(c) The Secretary shall be the custodian of the records and of the
seal of the Corporation and cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of the
Corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed, the Secretary or any Assistant Secretary may
attest the same.

(d) The Secretary shall properly maintain all books, reports,
statements, certificates and all other documents and records of the Corporation
required by law, the Certificate of Incorporation or these Bylaws, except those
for which some other officer or agent of the Corporation has been made
responsible or is otherwise accountable.

(e) The Secretary shall have charge of the stock books and records of
the Corporation and shall maintain or cause to be maintained the stock transfer
books for shares of stock of the Corporation of each class issued and
outstanding.

12
<PAGE> 13
(f) The Secretary shall sign certificates representing shares of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.

(g) Any Assistant Secretary shall assist the Secretary in performing
the duties and exercising the authority of the Secretary. In case of the
inability or failure of the Secretary to perform the duties of that office, an
Assistant Secretary shall perform the duties of the Secretary, unless otherwise
determined by the Board of Directors.

Section 4.11. Treasurer and Assistant Treasurers. The Treasurer
shall have the following powers and duties:

(a) The Treasurer shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records of
all receipts of the Corporation.

(b) The Treasurer shall cause the moneys and other valuable effects
of the Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositories as shall be selected in accordance with Section 7.4 of these
Bylaws.

(c) The Treasurer shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 7.2 of these
Bylaws) upon the authorized depositaries of the Corporation and cause to be
taken and preserved proper vouchers for all moneys disbursed.

(d) Any Assistant Treasurer shall assist the Treasurer in performing
the duties and exercising the authority of the Treasurer. In case of the
inability or failure of the Treasurer to perform the duties of that office, an
Assistant Treasurer shall perform the duties of the Treasurer, unless otherwise
determined by the Board of Directors.

Section 4.12. Additional Officers. The Board of Directors may
appoint such other officers as it may deem appropriate, and the Chief Executive
Officer or if there be none, the President, may appoint such other officers as
he or she may deem appropriate, subject to ratification by the Board of
Directors at its next regular meeting. Such other officers shall hold their
offices for such terms and shall exercise such powers and perform such duties
as may be determined from time to time by the Board of Directors, the Chief
Executive Officer, or if there be none, the President. The Board of Directors
from time to time may delegate to any officer the power to appoint subordinate
officers and to prescribe their respective rights, terms of office, authorities
and duties. Any such officer may remove any such subordinate officer appointed
by him or her, for or without cause.

Section 4.13. Security. The Board of Directors may require any
officer, agent or employee of the Corporation to provide security for the
faithful performance of his or her duties, in such amount and of such character
as may be determined from time to time by the Board of Directors.

13
<PAGE> 14

ARTICLE V

CAPITAL STOCK

Section 5.1. Certificates of Stock; Uncertificated Shares. The
shares of the Corporation shall be represented by certificates, provided that
the Board of Directors may provide by resolution or resolutions that some or
all of any or all classes or series of the stock of the Corporation shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock in the Corporation represented by certificates
and upon request every holder of uncertificated shares shall be entitled to
have a certificate signed by, or in the name of the Corporation, by the Chief
Executive Officer or the President, and by the Secretary or an Assistant
Secretary, representing the number of shares registered in certificate form.
Such certificate shall be in such form as the Board of Directors may determine,
to the extent consistent with applicable law, the Certificate of Incorporation
and these Bylaws.

Section 5.2. Lost, Stolen or Destroyed Certificates. The Secretary
may direct that a new certificate be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon delivery to the Secretary of an affidavit of the owner or
owners of such certificate, setting forth such allegation. The Secretary may
require the owner of such lost, stolen or destroyed certificate, or his or her
legal representative, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of any such new
certificate.

Section 5.3. Transfer of Stock. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares, duly
endorsed or accompanied by appropriate evidence of succession, assignment or
authority to transfer, the Corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books. Within a reasonable time after the transfer of uncertificated
stock, the Corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to the General Corporation Law of the State of Delaware.
Subject to the provisions of the Certificate of Incorporation and these Bylaws,
the Board of Directors may prescribe such additional rules and regulations as
it may deem appropriate relating to the issue, transfer and registration of
shares of the Corporation.

Section 5.4. Record Date. In order to determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date on which the resolution fixing the
record date is adopted by the Board of Directors, and which shall not be more
than sixty nor less than ten days before the date of such meeting. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting,
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.

14
<PAGE> 15
In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange or stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.

Section 5.5. Transfer Agent and Registrar. The Board of Directors,
the Chief Executive Officer, the President or the Secretary may appoint one or
more transfer agents and one or more registrars, and may require all
certificates representing shares to bear the signature of any such transfer
agents or registrars.

ARTICLE VI

OFFICES

Section 6.1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle.

Section 6.2. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.

ARTICLE VII

GENERAL PROVISIONS

Section 7.1. Dividends. Subject to any applicable provisions of law
and the Certificate of Incorporation, dividends upon the outstanding shares of
capital stock of the Corporation may be declared by the Board of Directors at
any regular or special meeting of the Board of Directors, and any such dividend
may be paid in cash, property, or shares of the Corporation's capital stock.

Section 7.2. Execution of Instruments. The Chief Executive Officer,
the President, any Vice Chairman, any Vice President, the Secretary or the
Treasurer may enter into any contract or execute and deliver any instrument in
the name and on behalf of the Corporation. The Board of Directors, the Chief
Executive Officer or the President may authorize any other officer to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or limited to
specific contracts or instruments.

15
<PAGE> 16
Section 7.3. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors, the Chief Executive
Officer, the President or any Vice Chairman. Such authorization may be
general or confined to specific instances. Loans so authorized may be effected
at any time for the Corporation from any bank, trust company or other
institution, or from any firm, corporation or individual. All bonds,
debentures, notes and other obligations or evidences of indebtedness of the
Corporation issued for such loans shall be made, executed and delivered as the
Board of Directors, the Chief Executive Officer, the President or any Vice
Chairman shall authorize. When so authorized by the Board of Directors, the
Chief Executive Officer, the President or any Vice Chairman, any part of or all
the properties, including contract rights, assets, business or goodwill of the
Corporation, whether then owned or thereafter acquired, may be mortgaged,
pledged, hypothecated or conveyed or assigned in trust as security for the
payment of such bonds, debentures, notes and other obligations or evidences of
indebtedness of the Corporation, and of the interest thereon, by instruments
executed and delivered in the name of the Corporation.

Section 7.4. Deposits. Any funds of the Corporation may be deposited
from time to time in such banks, trust companies or other depositaries as may
be determined by the Board of Directors, the Chief Executive Officer, the
President or any Vice Chairman, or by such officers as may be authorized by the
Board of Directors, the Chief Executive Officer or the President to make such
determination.

Section 7.5. Sale, Transfer, etc. of Securities. To the extent
authorized by the Board of Directors, by the Chief Executive Officer or by the
President, any Vice President, the Secretary, the Treasurer or any other
officers designated by the Board of Directors, the Chief Executive Officer or
the President may sell, transfer, endorse, and assign any shares of stock,
bonds or other securities owned by or held in the name of the Corporation, and
may make, execute and deliver in the name of the Corporation, under its
corporate seal, any instruments that may be appropriate to effect any such
sale, transfer, endorsement or assignment.

Section 7.6. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the Chief Executive Officer, the
President, any Vice President or the Secretary shall have full power and
authority on behalf of the Corporation to attend any meeting of stockholders of
any corporation in which the Corporation may hold stock, and to act, vote (or
execute proxies to vote) and exercise in person or by proxy all other rights,
powers and privileges incident to the ownership of such stock. Such officers
acting on behalf of the Corporation shall have full power and authority to
execute any instrument expressing consent to or dissent from any action of any
such corporation without a meeting. The Board of Directors may by resolution
from time to time confer such power and authority upon any other person or
persons.

Section 7.7. Fiscal Year. The fiscal year of the Corporation shall
commence on January 1 of each year and shall terminate on December 31.

Section 7.8. Seal. The seal of the Corporation shall be circular in
form and shall contain the name of the Corporation, the year of its
incorporation and the words "Corporate

16
<PAGE> 17
Seal" and "Delaware." The form of such seal shall be subject to alteration by
the Board of Directors. The seal may be used by causing it or a facsimile
thereof to be impressed, affixed or reproduced, or may be used in any other
lawful manner.

ARTICLE VIII

AMENDMENT OF BYLAWS

Section 8.1. Amendment. These Bylaws may be amended, altered or
repealed:

(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained in
the notice or waiver of notice of such meeting; or

(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.

ARTICLE IX

BUSINESS COMBINATIONS

Section 9.1. Business Combinations. Pursuant to authority granted in
subsection (b)(2) of Section 203 of subchapter VI, Chapter 1, Title 8 of the
Delaware Code Relating to the General Corporate Law, the Board of Directors
elects not to be governed by the aforesaid Section 203 entitled "Business
Combinations with Interested Stockholders."

ARTICLE X

CONSTRUCTION

Section 10.1. Construction. In the event of any conflict between the
provisions of these Bylaws as in effect from time to time and the provisions of
the Certificate of Incorporation of the Corporation as in effect from time to
time, the provisions of such Certificate of Incorporation shall be controlling.

<PAGE> 1
EXHIBIT 4(a)

________________________________________________________________________________

QUAKER STATE CORPORATION

CHEMICAL BANK
Trustee

________________

Indenture

Dated as of October 23, 1995

________________

$100,000,000

6 5/8% Notes Due 2005

________________________________________________________________________________

<PAGE> 2
QUAKER STATE CORPORATION

Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . 514
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C> <C>
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>

______________

Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.

-ii-
<PAGE> 4
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE ONE

Definitions and Other Provisions of
General Application

SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate; control . . . . . . . . . . . . . . . . . . . . . . . 2
Attributable Debt . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order . . . . . . . . . . . . . . . . . 3
Comparable Treasury Issue . . . . . . . . . . . . . . . . . . . . 3
Comparable Treasury Price . . . . . . . . . . . . . . . . . . . . 4
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 4
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 4
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 5
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . 5
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . 6
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . 6
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-i-
<PAGE> 5
<TABLE>
<S> <C> <C>
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . 8
Principal Property . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Reference Treasury Dealer . . . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 9
Sale and Leaseback Transaction . . . . . . . . . . . . . . . . . . . . 9
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register;
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . 9
Senior Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Treasury Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 10
U.S. Government Obligation . . . . . . . . . . . . . . . . . . . . . . 10
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 102. Compliance Certificates and
Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 103. Form of Documents
Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 11

SECTION 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . 12

SECTION 105. Notices, Etc., to Trustee and
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . 13

SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . 14

SECTION 108. Effect of Headings and
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . 14

SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-ii-
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE TWO

Security Forms

SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 204. Form of Trustee's
Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 205. Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE THREE

The Securities

SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

SECTION 303. Execution, Authentication,
Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 305. Registration, Registration of
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

SECTION 306. Mutilated, Destroyed,
Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 307. Payment of Interest;
Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-iii-
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 29

SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE FOUR

Satisfaction and Discharge

SECTION 401. Satisfaction and
Discharge of Indenture . . . . . . . . . . . . . . . . . . . . 30

SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . 32

ARTICLE FIVE

Remedies

SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 32

SECTION 502. Acceleration of Maturity;
Rescission and Annulment . . . . . . . . . . . . . . . . . . . 35

SECTION 503. Collection of Indebtedness and
Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . 37

SECTION 505. Trustee May Enforce Claims
Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 37

SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . 38

SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . 38

SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-iv-
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . 39

SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . 40

SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . 40

SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . 40

SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . 41

SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . 41

ARTICLE SIX

The Trustee

SECTION 601. Certain Duties and
Responsibilities . . . . . . . . . . . . . . . . . . . . . . . 42

SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . 42

SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . 43

SECTION 604. Not Responsible for Recitals
or Issuance of Securities . . . . . . . . . . . . . . . . . . . 44

SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . 44

SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . 45

SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . 45

SECTION 608. Disqualification; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 609. Corporate Trustee Required;
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 46

SECTION 610. Resignation and Removal;
Appointment of Successor . . . . . . . . . . . . . . . . . . . 46
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-v-
<PAGE> 9
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

SECTION 611. Acceptance of Appointment by
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

SECTION 612. Merger, Conversion, Consolidation
or Succession to Business . . . . . . . . . . . . . . . . . . . 48

SECTION 613. Preferential Collection of
Claims Against Company . . . . . . . . . . . . . . . . . . . . 49

SECTION 614. Appointment of Authenticating
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

ARTICLE SEVEN

Holders' Lists and Reports by Trustee and Company

SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders . . . . . . . . . . . . . . . . . . . 51

SECTION 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . . . . . . . 52

SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . 52

SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE EIGHT

Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 801. Company May Consolidate, Etc.,
Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . 53

SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . 54

ARTICLE NINE

Supplemental Indentures

SECTION 901. Supplemental Indentures Without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-vi-
<PAGE> 10
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

SECTION 902. Supplemental Indentures with
Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 55

SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . 56

SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . 57

SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . 57

SECTION 906. Reference in Securities to
Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 57

ARTICLE TEN

Covenants

SECTION 1001. Payment of Principal, Premium
and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 57

SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . 58

SECTION 1003. Money for Security Payments to
Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . 58

SECTION 1004. Statement by Officers as to
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . 60

SECTION 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . 61

SECTION 1008. Restrictions on Liens . . . . . . . . . . . . . . . . . . . . . . 61

SECTION 1009. Restrictions on Sale and Leaseback
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 62

SECTION 1010. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . 63
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-vii-
<PAGE> 11
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>

ARTICLE ELEVEN

Defeasance and Covenant Defeasance

SECTION 1101. Company's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 63

SECTION 1102. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . 64

SECTION 1103. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 64

SECTION 1104. Conditions to Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . 65

SECTION 1105. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . 67

SECTION 1106. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . 68

ARTICLE TWELVE

Redemption of Securities

SECTION 1201. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . 69

SECTION 1202. Applicability of Article . . . . . . . . . . . . . . . . . . . . 69

SECTION 1203. Election to Redeem; Notice
to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 69

SECTION 1204. Selection by Trustee of
Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . 69

SECTION 1205. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 70

SECTION 1206. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . 71

SECTION 1207. Securities Payable on
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . 71

SECTION 1208. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . 71
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-viii-
<PAGE> 12
<TABLE>
<CAPTION>
Page
----
<S> <C>

TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
</TABLE>

___________

Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.

-ix-
<PAGE> 13
INDENTURE, dated as of October 23, 1995, between QUAKER STATE
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
255 Elm Street, Oil City, Pennsylvania 16301, and CHEMICAL BANK, a banking
corporation duly organized and existing under the laws of the State of New
York, as Trustee (herein called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of
its 6 5/8% Notes Due 2005 (herein called the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.

All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

ARTICLE ONE

Definitions and Other Provisions
of General Application

SECTION 101. Definitions.

For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE> 14
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
this instrument; and

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

"Act", when used with respect to any Holder, has the meaning
specified in Section 104.

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

"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the then present value
(discounted at the actual rate of interest of such transaction) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).

"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.

"Authorized Newspaper" means a newspaper of general
circulation in the relevant area, printed in the

-2-
<PAGE> 15
English language and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are required hereunder they may be made
(unless otherwise expressly provided herein) on the same or different days of
the week and in the same or in different Authorized Newspapers.

"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board to which the powers
of that board have been lawfully delegated.

"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.

"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The Borough of
Manhattan, The City of New York are authorized or obligated by law, regulation
or executive order to close.

"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Securities that would be utilized, at
the time of selection and in accordance with customary

-3-
<PAGE> 16
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Securities. "Independent
Investment Banker" means CS First Boston Corporation or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Trustee
after consultation with the Company.

"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the
third Business Day preceding such redemption date.

"Consolidated", when used with respect to any of the terms
defined in this Indenture, refers to such terms as reflected in a consolidation
of the accounts of the Company and its Subsidiaries in accordance with GAAP.

"Corporate Trust Office" means the principal office of the
Trustee in The Borough of Manhattan, The City of New York at which at any
particular time its corporate trust business shall be administered.

"corporation" means a corporation, association, company,
joint-stock company or business trust.

"Covenant Defeasance" has the meaning specified in Section
1103.

-4-
<PAGE> 17
"Defaulted Interest" has the meaning specified in Section 307.

"Defeasance" has the meaning specified in Section 1102.

"Depositary" means, with respect to Securities issuable or
issued in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities, which such Depositary initially shall be The
Depository Trust Company, a limited-purpose trust company organized under the
New York Banking Law ("DTC").

"Event of Default" has the meaning specified in Section 501.

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

"Funded Debt" means Indebtedness of the Company and its
Restricted Subsidiaries, whether incurred, assumed or guaranteed, which by its
terms matures more than one year from the date of creation thereof, or which is
extendable or renewable at the sole option of the obligor so that it may become
payable more than one year from such date.

"GAAP" means, unless otherwise specified in this Indenture,
such accounting principles as are generally accepted in the United States as of
the date of the relevant calculation.

"Global Security" means a Security that evidences all or part
of the Securities, is registered in the name of the Depositary or its nominee
and bears the legend set forth in Section 205.

"Holder" means a Person in whose name a Security is registered
in the Security Register.

"Indebtedness" of any Person means, without duplication,
notes, bonds, debentures or other evidences of indebtedness for borrowed money
and all indebtedness under purchase money mortgages or other purchase money
liens or conditional sales or similar title retention agreements, in each case
where such indebtedness has been created, incurred, assumed or guaranteed by
such Person or where such person is otherwise liable therefor, and indebtedness
for borrowed money secured by any mortgage, pledge or other lien or encumbrance
upon property owned by such Person even

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<PAGE> 18
though such Person has not assumed or become liable for the payment of such
indebtedness.

"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.

"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.

"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien
(statutory or other), or preference, priority, or other security or similar
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any agreement to give or grant a Lien or any
lease, conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing).

"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

"Net Tangible Assets" means the total amounts of assets (less
depreciation and valuation reserves and other reserves and items deductible
from gross book value of specific asset accounts under generally accepted
accounting principles) which under GAAP would be included on a balance sheet
after deducting therefrom (a) all liability items except Funded Debt and
stockholders' equity and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in each
such case would be so included on such balance sheet.

"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.

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<PAGE> 19
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be acceptable to the Trustee.

"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;

(ii) Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities; provided
that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;

(iii) Securities as to which Defeasance has been effected
pursuant to Section 1102; and

(iv) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned

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<PAGE> 20
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor.

"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.

"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.

"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

"Principal Property" means any refinery, processing or
manufacturing plant (together with any pipeline, terminal or other facility
related to such refinery or processing or manufacturing plant and necessary for
its economic operation), blending, packaging or bulk materials handling
facility, distribution center, service center or store located in the United
States or Canada, and owned or leased by the Company or a Subsidiary or any
interest of the Company or any Subsidiary in such property (in each case
including the real estate related thereto), except any such property which the
Company's Board of Directors, in its good faith opinion, reasonably determines
not to be of material importance to the business of the Company and its
Subsidiaries, as evidenced by a Board Resolution.

"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

"Reference Treasury Dealer" means each of CS First Boston
Corporation and J.P. Morgan Securities Inc. and their

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<PAGE> 21
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.

"Regular Record Date" for the interest payable on any Interest
Payment Date means the April 1 or October 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.

"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

"Restricted Subsidiary" means any Subsidiary that owns or
leases any Principal Property.

"Sale and Leaseback Transaction" has the meaning specified in
Section 1009.

"Securities" means the 6 5/8% Notes Due 2005 of the Company
authenticated and delivered under this Indenture.

"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.

"Senior Funded Debt" means all Funded Debt, except Funded Debt
the payment of which is subordinated to the payment of the Securities.

"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.

"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment
of interest is due and payable.

"Subsidiary" means a corporation, partnership or other
business entity of which more than 50% of the outstanding voting stock of which
is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other

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<PAGE> 22
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, managers or
trustees, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.

"Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.

"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

"U.S. Government Obligation" has the meaning specified in
Section 1104.

"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

SECTION 102. Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in
the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirement set
forth in this Indenture.

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<PAGE> 23
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.

SECTION 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the informa-

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<PAGE> 24
tion with respect to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.

Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

SECTION 104. Acts of Holders; Record Dates.

(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may be proved in
any manner which the Trustee deems sufficient.

(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action, authorized or permitted to be given or taken by Holders. If not
set by the Company prior to the first solicitation of a Holder made by any
Person in respect of any such action, or, in the case of any such vote, prior
to such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be
provided pursuant to

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<PAGE> 25
Section 701) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the relevant
action.

(d) The ownership of Securities shall be proved by the
Security Register.

(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

SECTION 105. Notices, Etc., to Trustee and Company.

Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration Department, or

(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in

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<PAGE> 26
writing and mailed, first-class postage prepaid, to each Holder affected by
such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

In case, by reason of suspension of publication of any
Authorized Newspaper, or by reason of any other cause, it shall be impossible
to make publication of any notice in an Authorized Newspaper or Authorized
Newspapers as required by this Indenture, then such method of publication or
notification as shall be made with the approval of the Trustee shall constitute
a sufficient publication of such notice.

SECTION 107. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

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<PAGE> 27
SECTION 108. Effect of Headings and Table of Contents.

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

SECTION 109. Successors and Assigns.

All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.

SECTION 110. Separability Clause.

In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

SECTION 111. Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law.

This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws as applied in such state.

SECTION 113. Legal Holidays.

In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at
the Stated Maturity, provided that no interest shall accrue for the period from

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<PAGE> 28
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.

ARTICLE TWO

Security Forms

SECTION 201. Forms Generally.

The Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.

The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.

SECTION 202. Form of Face of Security.

The form of the face of the Global Securities shall be as set
forth below and include the legend(s) set forth in Section 205 (if a Security
is issued in definitive form, the form of such definitive security will be in
substantially the form of the face of the Global Security, except that the
legend(s) set forth in Section 205 shall be omitted):

QUAKER STATE CORPORATION

6 5/8% Notes Due 2005

No. __________ $________
CUSIP No. 747410AB4

QUAKER STATE CORPORATION, a corporation duly organized and
existing under the laws of the State of

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<PAGE> 29
Delaware (herein called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________________, or registered assigns, the principal sum
of _____________________ Dollars on October 15, 2005 and to pay interest
thereon from October 23, 1995 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on April 15
and October 15 in each year, commencing April 15, 1996, at the rate of 6 5/8%
per annum, until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 1 or October 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.

Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in The Borough of Manhattan, The City of New York, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.

Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse

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<PAGE> 30
hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.

Dated: October 23, 1995

QUAKER STATE CORPORATION

By
-----------------------------------

Attest:

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

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<PAGE> 31
SECTION 203. Form of Reverse of Security.

The form of the reverse of the Securities shall be as set
forth below:

This Security is one of a duly authorized issue of securities
of the Company designated as its 6 5/8% Notes Due 2005 (herein called the
"Securities"), limited in aggregate principal amount to $100,000,000, issued
and to be issued under an Indenture, dated as of October 23, 1995 (herein
called the "Indenture"), between the Company and CHEMICAL BANK, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered.

This Security will be redeemable in whole or in part, at the
option of the Company at any time, at a Redemption Price equal to the greater
of (i) 100% of the principal amount on the Redemption Date and (ii) the sum of
the present values of the remaining scheduled payments of principal and
interest hereon discounted, on a semiannual basis, at the Treasury Yield plus
15 basis points, in either case together with accrued interest to the
Redemption Date. Interest shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months.

In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
by the Company with certain conditions set forth in the Indenture.

If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights

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<PAGE> 32
of the Holders of the Securities under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in The Borough of Manhattan,
The City of New York, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.

The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.

No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

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<PAGE> 33
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

SECTION 204. Form of Trustee's Certificate of
Authentication.

This is one of the Securities referred to in the within-mentioned Indenture.

CHEMICAL BANK,
as Trustee

By
-----------------------------------
Authorized Officer

SECTION 205. Global Securities.

Except as provided in Section 305, the Securities shall be
issued in the form of one or more Global Securities. Every Global Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form, in capital letters and bold-face type:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR
IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

If the Depository is the Depository Trust Company, the Global
Security authenticated and delivered hereunder shall also bear a legend in
substantially the following form, in capital letters and bold-face type:

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<PAGE> 34
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

ARTICLE THREE

The Securities

SECTION 301. Title and Terms.

The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $100,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
304, 305, 306, 906 or 1208.

The Securities shall be known and designated as the "6 5/8%
Notes Due 2005" of the Company. Their Stated Maturity shall be October 15,
2005 and they shall bear interest at the rate of 6 5/8% per annum, from October
23, 1995 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be, payable semi-annually on
April 15 and October 15, commencing April 15, 1996, to the Person in whose name
the Security or any Predecessor Security is registered at the close of business
on the April 1 or the October 1 next preceding such Interest Payment Date,
until the principal thereof is paid or made available for payment.

The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company in The
Borough of Manhattan, The City of New York maintained for such purpose and at
any other office or agency maintained by the Company for such purpose;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.

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The Securities, in whole or any specified part, shall be
defeasible pursuant to Section 1302 or Section 1303 or both such Sections.

The Securities shall be issuable in the form of one or more
Global Securities, shall bear the legend specified in Section 205 and shall be
registered in the name of The Depository Trust Company or its nominee, as
Depositary.

SECTION 302. Denominations.

Upon the occurrence of an event specified in Section 305(2),
Securities shall be issuable only in registered form without coupons and only
in denominations of $1,000 and any integral multiple thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by
its Chairman of the Board, one of its Vice Chairmen, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities for original issue in an aggregate principal amount of up to
$100,000,000 as provided in this Indenture and not otherwise.

Each Security shall be dated the date of its authentication.

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No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.

SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities or a
permanent Global Security, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities or a permanent Global Security in lieu of which they are issued and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as evidenced by their
execution of such Securities.

If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities may be
exchangeable for definitive Securities or beneficial interests in a permanent
Global Security, as the case may be, upon surrender of the temporary Securities
at any office or agency of the Company designated pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities or beneficial interests in a
permanent Global Security, as the case may be.

SECTION 305. Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 1002 being herein

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sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate
principal amount.

At the option of the Holder, Securities (except Global
Securities) may be exchanged for other Securities of any authorized
denominations and of a like aggregate principal amount and of a like Stated
Maturity and with like terms and conditions, upon surrender of the Securities
to be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.

All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.

Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304 or 906 not involving
any transfer.

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The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.

The provisions of Clauses (1), (2), (3) and (4) below shall
apply only to Global Securities:

(1) Each Global Security authenticated under this
Indenture shall be registered in the name of the Depositary designated
for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Security for all purposes of
this Indenture.

(2) Notwithstanding any other provision in this
Indenture, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole
or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (A)
such Depositary (i) has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security and is not
replaced by a successor Depositary approved by the Trustee within 90
days or (ii) at any time has ceased to be a clearing agency registered
under the Exchange Act, or (B) the Company in its sole discretion
determines not to have all of the Securities represented by a Global
Security and notifies the Trustee thereof or (C) there shall have
occurred and be continuing an Event of Default with respect to such
Global Security.

(3) Subject to Clause (2) above, any exchange of a Global
Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion
thereof shall be registered in such names as the Depositary for such
Global Security shall direct.

(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a
Global Security or any portion thereof, whether pursuant to this
Section, Section 304, 306, 906 or 1208 or otherwise, shall be
authenticated and

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delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

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The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of Interest; Interest Rights Preserved.

Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not

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less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by
the Trustee.

Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 308. Persons Deemed Owners.

Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Section 307) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and

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neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled
by it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be destroyed by the Trustee and
a certificate of such destruction delivered to the Company unless the Trustee
is otherwise directed by a Company Order.

SECTION 310. Computation of Interest.

Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.

ARTICLE FOUR

Satisfaction and Discharge

SECTION 401. Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

(1) either

(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have

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been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or

(B) all such Securities not theretofore delivered to
the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their
Stated Maturity within one year, or

(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as
the case may be;

(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for

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relating to the satisfaction and discharge of this Indenture have been
complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section or if money or U.S. Government Obligations have been deposited
with the Trustee pursuant to Section 1104, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of Trust Money.

Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 401, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
1102 or 1103 and all money received by the Trustee in respect of U.S.
Government Obligations deposited with the Trustee pursuant to Section 1102 or
1103, shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money
has been deposited with or received by the Trustee.

ARTICLE FIVE

Remedies

SECTION 501. Events of Default.

"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

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(1) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or

(2) default in the payment of the principal of (or premium,
if any, on) any Security at its Stated Maturity; or

(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or

(4) a default in the payment of principal at Maturity
(subject to any applicable grace period) of any Indebtedness for money
borrowed by the Company or any Subsidiary that has an outstanding
principal balance of $15,000,000 or more, whether such Indebtedness now
exists or shall hereafter be created, or the acceleration of such
indebtedness without such acceleration having been rescinded or
annulled within a period of 10 days after there shall have been given,
by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities a written notice specifying such
default and requiring the Company to cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; provided, however, that, subject to the provisions
of Sections 601 and 602, the Trustee shall not be deemed to have
knowledge of such default unless either (A) a Responsible Officer of
the Trustee shall have actual knowledge of such default or (B) the

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Trustee shall have received written notice thereof from the Company,
from any Holder, from the holder of any such indebtedness or from the
trustee under any such mortgage, indenture or other instrument; or

(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or

(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit

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of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action.

SECTION 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default (other than an Event of Default
specified in Section 501(5) or 501(6)) occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities may declare the principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal shall become immediately due and payable. If an Event of
Default specified in Section 501(5) or 501(6) occurs, the principal amount of
all the Securities shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and
payable.

At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if

(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay

(A) all overdue interest on all Securities,

(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Securities,

(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities, and

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(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel and all other amounts due the Trustee under Section
607;

and

(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company covenants that if

(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Stated Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.

If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or

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agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.

SECTION 504. Trustee May File Proofs of Claim.

In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.

No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and all other amounts due the Trustee under Section 607, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.

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SECTION 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under
Section 607; and

SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively; and

THIRD: To the Company any remaining amounts.

SECTION 507. Limitation on Suits.

No Holder of any Security shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless

(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;

(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against

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the costs, expenses and liabilities to be incurred in compliance with
such request;

(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and

(5) no direction inconsistent with such written request has
been given to the Trustee during such 60- day period by the Holders of
a majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.

SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.

Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the

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Trustee and the Holders shall continue as though no such proceeding had been
instituted.

SECTION 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

SECTION 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

SECTION 512. Control by Holders.

The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that

(1) such direction shall not be in conflict with any rule of
law or with this Indenture, be unduly prejudicial to any other Holders
of Securities or involve the Trustee in any personal liability, and

(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.

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SECTION 513. Waiver of Past Defaults.

The Holders of at least a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default

(1) in the payment of the principal of (or premium, if any)
or interest on any Security, or

(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.

Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

SECTION 514. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company; and provided further, that the provisions of this Section shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest
on any Security on or after the Stated Maturities expressed in such Security.

SECTION 515. Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or

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plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

ARTICLE SIX

The Trustee

SECTION 601. Certain Duties and Responsibilities.

The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice of Defaults.

The Trustee shall give the Holders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(3), no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default.

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SECTION 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;

(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;

(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation
into the facts or

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matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and

(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.

SECTION 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

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SECTION 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.

SECTION 607. Compensation and Reimbursement.

The Company agrees

(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);

(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and

(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.

As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Securities.

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When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or (6), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.

SECTION 608. Disqualification; Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.

SECTION 609. Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000 and its
Corporate Trust Office in The Borough of Manhattan, The City of New York. If
such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Company may not, nor may any
Person directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

SECTION 610. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 611.

(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may

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petition any court of competent jurisdiction for the appointment of a successor
Trustee.

(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.

(d) If at any time:

(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or

(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor

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Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 611, any Holder who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.

SECTION 611. Acceptance of Appointment by Successor.

Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company, subject nevertheless to its lien, if any,
provided for in Section 607, shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any

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corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 613. Preferential Collection of Claims Against Company.

If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).

SECTION 614. Appointment of Authenticating Agent.

The Trustee may appoint an Authenticating Agent or Agents
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer or partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of

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this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.

An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.

If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternative certificate of authentication in the
following form:

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This is one of the Securities described in the
within-mentioned Indenture.

CHEMICAL BANK,
As Trustee

By ,
----------------------------------
As Authenticating Agent

By
-----------------------------------
Authorized Officer

ARTICLE SEVEN

Holders' Lists and Reports by Trustee and Company

SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.

The Company will furnish or cause to be furnished to the
Trustee

(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and

(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;

provided, however, that if and so long as the Trustee shall be the Security
Registrar for the Securities, no such list need be finished.

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SECTION 702. Preservation of Information; Communications to Holders.

(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.

(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

SECTION 703. Reports by Trustee.

(a) Within 60 days of the reporting date in each year,
commencing in 1996, the Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. The term "reporting date" as used in this Section means May
15.

(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.

SECTION 704. Reports by Company.

The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided

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that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.

ARTICLE EIGHT

Consolidation, Merger, Conveyance, Transfer or Lease

SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:

(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;

(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing;

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(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by Section 1008, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured
thereby; and

(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.

SECTION 802. Successor Substituted.

Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

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ARTICLE NINE

Supplemental Indentures

SECTION 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or

(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or

(3) to cure any defect or ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture which shall not
be inconsistent with the provisions of this Indenture, provided that
such action pursuant to this Clause (3) shall not adversely affect the
interests of the Holders in any material respect.

SECTION 902. Supplemental Indentures with Consent of Holders.

With the consent of the Holders of a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture; provided, however, that

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no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or premium, if any, or the rate of interest thereon, or
change the place of payment where, or the coin or currency in which,
any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date), or

(2) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or

(3) modify any of the provisions of this Section, Section 513
or Section 1010, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby.

It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

SECTION 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, in addition to the Officer's Certificate and Opinion of Counsel required
by Section 102, an Opinion of Counsel stating that the execution of such
supplemental

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indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

SECTION 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

SECTION 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.

SECTION 906. Reference in Securities to Supplemental Indentures.

Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.

ARTICLE TEN

Covenants

SECTION 1001. Payment of Principal, Premium and Interest.

The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.

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SECTION 1002. Maintenance of Office or Agency.

The Company will maintain in The Borough of Manhattan, The
City of New York an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more
other offices or agencies (in or outside The Borough of Manhattan, The City of
New York) where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in The Borough of
Manhattan, State of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

SECTION 1003. Money for Security Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (and premium, if any)
or interest on any of the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
such amount, such sum to be held as provided by the Trust Indenture Act,

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and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its action or failure so to act.

The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent as such.

The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

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SECTION 1004. Statement by Officers as to Default.

The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

The Company shall promptly, and in any event within 10 days of
the occurrence thereof, give notice to the Trustee of any default or Event of
Default hereunder.

SECTION 1005. Existence.

Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
The Company will do or cause to be done all things necessary
to preserve and keep in full force and effect the existence, rights (charter
and statutory) and franchises of each of its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company.

SECTION 1006. Maintenance of Properties.

The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection

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therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.

SECTION 1007. Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.

SECTION 1008. Restrictions on Liens.

So long as any of the Securities are Outstanding, the Company
will not, and will not permit any Restricted Subsidiary to, issue, assume,
incur or guarantee any Indebtedness secured by a Lien on or with respect to any
Principal Property of the Company or any Restricted Subsidiary, or upon any
shares of capital stock or Indebtedness of any Restricted Subsidiary, whether
now owned or leased or hereafter acquired, without in any such case effectively
providing that the Securities shall be secured equally and ratably with (or
prior to) such Indebtedness, except that the foregoing restrictions shall not
apply to: (a) Liens existing as of the date of this Indenture, (b) Liens to
secure the payment of all or any part of the purchase price or cost of
construction or improvements in respect of property or properties acquired by
the Company or a Restricted Subsidiary after the date of this Indenture
securing Indebtedness incurred prior to, at the time of, or within 270 days
after, the acquisition of any such property or the completion of any such
construction or improvements and which secure indebtedness not in excess of the
amount expended in the acquisition of, or construction or improvements on, such
properties, (c) Liens upon any

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property owned or leased by any Restricted Subsidiary when it becomes a
Restricted Subsidiary, (d) Liens existing on any property at the time of its
acquisition by the Company or a Restricted Subsidiary (including acquisition
through merger or consolidation), (e) Liens securing Indebtedness of a
Restricted Subsidiary to the Company or to another Restricted Subsidiary and
(f) the extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in the foregoing
clauses (a) through (e), or of any Indebtedness secured thereby, but only if
the principal amount of Indebtedness secured by the Lien immediately prior
thereto is not increased and the Lien is not extended to other property.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary may
issue, assume, incur or guarantee Indebtedness secured by Liens which otherwise
would be subject to the foregoing restrictions, in an aggregate amount which,
together with all other such Indebtedness outstanding secured by Liens as
provided above (not including Indebtedness excluded as provided in clauses (a)
through (f) above) and all Attributable Debt in respect of Sale and Leaseback
Transactions which would not be permitted by either clause (a), (b) or (c)
under in Section 1009, does not exceed 15% of Consolidated Net Tangible Assets.

SECTION 1009. Restrictions on Sale and Leaseback Transactions.

So long as any of the Securities are Outstanding, the Company
will not, nor will it permit any Restricted Subsidiary to, enter into any
arrangement with any Person (other than the Company or a Restricted Subsidiary)
providing for the leasing by the Company or any Restricted Subsidiary of any
Principal Property, whether now owned or hereafter acquired, which has been or
is to be sold or transferred by the Company or such Restricted Subsidiary to
such Persons with the intention of taking back a lease on such property (a
"Sale and Leaseback Transaction") unless (a) such transaction involves a lease
or right to possession or use for a temporary period not to exceed three years
following such sale, by the end of which it is intended that the use of such
property by the lessee will be discontinued, (b) the Company or such Restricted
Subsidiary would, on the effective date of such transaction, be entitled to
issue, assume or guarantee Indebtedness secured by a Lien on such property at
least equal in an amount to the Attributable Debt in respect thereof, without
equally and ratably securing the Securities as set forth in this Indenture, or
(c) if the proceeds of such sale (i) are equal to or greater

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than the fair market value (as determined by the Board of Directors of the
Company) of such property and (ii) are applied within 270 days after the
receipt of the proceeds of sale or transfer to either the purchase or
acquisition of fixed assets or equipment used in the operation of the business
or the construction of fixed improvements on real property or to the repayment
of Securities or Senior Funded Debt of the Company or any Restricted
Subsidiary. The preceding restrictions shall not apply to any Sale and
Leaseback Transaction between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries. Notwithstanding the foregoing, the Company or
any Restricted Subsidiary may enter into Sale and Leaseback Transactions in
addition to any permitted by the two immediately preceding sentences and
without any obligation to retire any Securities or other Indebtedness, provided
that, at the time of entering into such Sale and Leaseback Transactions, and
after giving effect thereto, the amount of Attributable Debt in respect of such
Sale and Leaseback Transaction, together with all such other Attributable Debt
outstanding and all Indebtedness outstanding secured by Liens (not including
Indebtedness excluded as provided in clauses (a) through (f) in Section 1008),
does not exceed 15% of Consolidated Net Tangible Assets.

SECTION 1010. Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1008 and 1009, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such covenant or condition shall remain in full force
and effect.

ARTICLE ELEVEN

Defeasance and Covenant Defeasance

SECTION 1101. Company's Option to Effect Defeasance or Covenant Defeasance.

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The Company may elect, at its option at any time, to have
Section 1102 or Section 1103 applied to any Securities designated pursuant to
Section 301 as being defeasible pursuant to such Section 1102 or 1103, in
accordance with any applicable requirements provided pursuant to Section 301
and upon compliance with the conditions set forth below in this Article. Any
such election shall be evidenced by a Board Resolution or in another manner
specified as contemplated by Section 301 for such Securities.

SECTION 1102. Defeasance and Discharge.

Upon the Company's exercise of its option (if any) to have
this Section applied to any Securities the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1104 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject to the following which
shall survive until otherwise terminated or discharged hereunder: (1) the
rights of Holders of such Securities to receive, solely from the trust fund
described in Section 1104 and as more fully set forth in such Section, payments
in respect of the principal and any premium and interest on such Securities
when payments are due, (2) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002, 1003 and 1208, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this
Article. Subject to compliance with this Article, the Company may exercise its
option (if any) to have this Section applied to any Securities notwithstanding
the prior exercise of its option (if any) to have Section 1103 applied to such
Securities.

SECTION 1103. Covenant Defeasance.

Upon the Company's exercise of its option (if any) to have
this Section applied to any Securities (1) the Company shall be released from
its obligations under Section 801(3), Sections 1006 through 1010, inclusive,
and any covenant provided pursuant to Section 901(2) for the benefit of the
Holders of such Securities and (2) the occurrence of

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any event specified in Sections 501(3) (with respect to any of Section 801(3),
Sections 1006 through 1010, inclusive, and any such covenants provided pursuant
to Section 901(2) and 501(4) shall be deemed not to be or result in an Event of
Default, in each case with respect to such Securities as provided in this
Section on and after the date the conditions set forth in Section 1104 are
satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 501(3)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of
any reference in any such Section to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.

SECTION 1104. Conditions to Defeasance or Covenant Defeasance.

The following shall be the conditions to the application of
Section 1102 or Section 1103 to any Securities:

(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee which
satisfies the requirements contemplated by Section 609 and agrees to
comply with the provisions of this Article applicable to it) as trust
funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefits of the Holders of such Securities, (A) money in an amount, or
(B) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, in each
case sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal and any premium and interest on
such Securities on the respective Stated Maturities, in accordance
with the terms of this Indenture and such Securities. As used herein,
"U.S. Government Obligation" means (x) any security which is (i) a
direct

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obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged
or (ii) an obligation of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in Clause
(x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal or interest evidenced by such
depositary receipt.

(2) In the event of an election to have Section 1102
apply to any Securities the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (A) the Company has
received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this instrument, there has
been a change in the applicable Federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities will not recognize gain
or loss for Federal income tax purposes as a result of the deposit,
Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case
if such deposit, Defeasance and discharge were not to occur.

(3) In the event of an election to have Section 1103
apply to any Securities the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to
Federal income tax on the same amount, in

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the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.

(4) The Company shall have delivered to the Trustee an
Officer's Certificate to the effect that such Securities, if then
listed on any securities exchange, will not be delisted as a result of
such deposit.

(5) No event which is, or after notice or lapse of time
or both would become, an Event of Default with respect to such
Securities or any other Securities shall have occurred and be
continuing at the time of such deposit or, with regard to any such
event specified in Sections 501(5) and (6), at any time on or prior to
the 90th day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until after such 90th
day).

(6) Such Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest within the meaning of
the Trust Indenture Act (assuming all Securities are in default within
the meaning of such Act).

(7) Such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by
which it is bound.

(8) Such Defeasance or Covenant Defeasance shall not
result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment Company Act
unless such trust shall be registered under such Act or exempt from
registration thereunder.

(9) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.

SECTION 1105. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.

Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations

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(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 1106, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 1104 in respect of any Securities shall be held in trust and applied
by the Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law.

The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1104 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.

Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1104 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

SECTION 1106. Reinstatement.

If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 1102 or 1103 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1105 with
respect to such Securities in accordance with this Article; provided,

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however, that if the Company makes any payment of principal of or any premium
or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.

ARTICLE TWELVE

Redemption of Securities

SECTION 1201. Right of Redemption.

The Securities may be redeemed at the election of the Company,
as a whole or from time to time in part, at any time, at the Redemption Price
specified in the form of Security hereinbefore set forth, together with accrued
interest to the Redemption Date.

SECTION 1202. Applicability of Article.

Redemption of Securities at the election of the Company, as
permitted by any provision of this Indenture, shall be made in accordance with
such provision and this Article.

SECTION 1203. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities as
permitted by any provision of this Indenture shall be evidenced by a Board
Resolution. In case of any redemption at the election of the Company of less
than all the Securities, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed.

SECTION 1204. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities
not previously called for redemption, by such method as the

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Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to $1,000 or any integral multiple thereof)
of the principal amount of Securities of a denomination larger than $1,000.

The Trustee shall promptly notify the Company and each
Security Registrar in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

SECTION 1205. Notice of Redemption.

Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price,

(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption
of any Securities, the principal amounts) of the particular Securities
to be redeemed,

(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date, and

(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.

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Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

SECTION 1206. Deposit of Redemption Price.

Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.

SECTION 1207. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.

SECTION 1208. Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder

-71-
<PAGE> 84
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, such new
Security so issued shall be a new Global Security.

* * * *

-72-
<PAGE> 85
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

QUAKER STATE CORPORATION

By /s/ Paul E. Konney
-----------------------------------
Name: Paul E. Konney
Title: Vice President,
General Counsel
and Secretary

Attest:

/s/ Ellen M. Beatty
- ---------------------------
Name: Ellen M. Beatty
Title: Treasurer

CHEMICAL BANK

By /s/ Frank Grippo
-----------------------------------
Name: Frank Grippo
Title: Vice President

Attest:

/s/ Glen G. McKeever
- ---------------------------
Name: Glen G. McKeever
Title: Assistant Secretary

-73-
<PAGE> 86
STATE OF TEXAS ) ss.:
COUNTY OF DALLAS)

On the 19th day of October, 1995, before me personally came
Paul E. Konney, to me known, who, being by me duly sworn, did depose and say
that he is Vice President, General Counsel and Secretary of Quaker State
Corporation, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.

/s/ Linda G. Neal
-----------------------------------

[Notarial Seal]

LINDA G. NEAL
Notary Public, State of Texas
My Commission Expires 6-04-97

-74-
<PAGE> 87
STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK )

On the 20th day of October, 1995, before me personally came
Frank Grippo, to me known, who, being by me duly sworn, did depose and say that
he is a Vice President of Chemical Bank, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

/s/ Annabella DeLuca
-----------------------------------
[NOTARIAL SEAL] Annabella DeLuca
Notary Public, State of New York
No. 01DE5013759
Qualified in Kings County
Certificate Filed in New York County
Commission Expires July 15, 1997

-75-

<PAGE> 1
EXHIBIT 4(b)

[EXECUTION COPY]

$140,000,000

AMENDED AND RESTATED
CREDIT AGREEMENT

dated as of

April 17, 1996

and amended and restated as of

September 27, 1996

among

Quaker State Corporation,

The Banks Listed Herein

and

Morgan Guaranty Trust Company of New York,
as Agent

_________________________

J.P. Morgan Securities Inc.
as Arranger
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
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----
<S> <C>
ARTICLE 1

DEFINITIONS

1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.3. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE 2

THE CREDITS

2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.2. Notice of Committed Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.3. Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4. Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.8. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.9. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.10. Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.11. Mandatory Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.12. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.13. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.14. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.15. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.16. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

ARTICLE 3

CONDITIONS

3.1. Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2. Corporate and Governmental Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . 33
4.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>

i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
4.4. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.7. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.9. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.10. Regulatory Restrictions on Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE 5

COVENANTS

5.1. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.3. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.4. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.5. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.6. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.7. Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.9. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10. Debt to Total Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.11. Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.12. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE 6

DEFAULTS

6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

ARTICLE 7

THE AGENT

7.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.9. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

ARTICLE 8
</TABLE>

ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
CHANGE IN CIRCUMSTANCES

8.1. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . 49
8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . . . 54

ARTICLE 9

MISCELLANEOUS

9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.3. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.4. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.5. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.8. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.9. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.12. Loans Outstanding on the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Schedule 4.6 - Certain ERISA Liabilities

Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
</TABLE>

iii
<PAGE> 5

AGREEMENT dated as of September 27, 1996 among QUAKER STATE
CORPORATION, the BANKS listed on the signature pages hereof and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent.

WHEREAS the parties hereto have entered into a Credit
Agreement dated as of April 17, 1996, and wish, upon satisfaction of the
conditions set forth in Section 3.1 hereof, to amend and restate such Credit
Agreement as set forth herein (such amendment and restatement, the "Amendment";
such Credit Agreement, as in effect from time to time prior to the
effectiveness of the Amendment, the "Original Agreement"; and the Original
Agreement as amended and restated by the Amendment and as further amended from
time to time thereafter, this "Agreement");

THEREFORE the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:

"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.

"Adjusted CD Rate" has the meaning set forth in Section
2.7(b).

"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.7(c).

"Amendment" has the meaning set forth in the WHEREAS clause
hereof.

"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.

"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other
<PAGE> 6
than the Borrower or a Subsidiary) which is controlled by or is under common
control with a Controlling Person. As used herein, the term "control" means
possession, directly or indirectly, of the power to vote 10% or more of any
class of voting securities of a Person or to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.

"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the
case of its Money Market Loans, its Money Market Lending Office.

"Assessment Rate" has the meaning set forth in Section 2.7(b).

"Assignee" has the meaning set forth in Section 9.6(c).

"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.

"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.

"Base Rate Loan" means (i) a Committed Loan which bears
interest at the Base Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or the provisions of Article 8 or
(ii) an overdue amount which was a Base Rate Loan immediately before it became
overdue.

"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

"Borrower" means Quaker State Corporation, a Delaware
corporation, and its successors.

2
<PAGE> 7
"Borrower's 1995 Form 10-K" means the Borrower's annual report
on Form 10-K for 1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.

"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.

"Borrowing" has the meaning set forth in Section 1.3.

"CD Base Rate" has the meaning set forth in Section 2.7(b).

"CD Loan" means (i) a Committed Loan which bears interest at a
CD Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD Loan
immediately before it became overdue.

"CD Margin" means a rate per annum determined in accordance
with the Pricing Schedule.

"CD Rate" means a rate of interest determined pursuant to
Section 2.7(b) on the basis of an Adjusted CD Rate.

"CD Reference Banks" means Texas Commerce Bank National
Association, NationsBank of Texas, N.A. and Morgan Guaranty Trust Company of
New York.

"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.9.

"Committed Loan" means a loan made by a Bank pursuant to
Section 2.1; provided that, if any such loan or loans (or portions thereof) are
combined or subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting from
such combination or to each of the separate principal amounts resulting from
such subdivision, as the case may be.

"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.

3
<PAGE> 8
"Consolidated EBITDA" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income for such period, the aggregate amount of
(i) Consolidated Interest Expense, (ii) income tax expense and (iii)
depreciation, amortization and other similar non-cash charges.

"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis for such period.

"Consolidated Net Income" means, for any fiscal period, the
net income of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period, exclusive of the effect of any
extraordinary or other non-recurring gain (but not loss).

"Consolidated Rental Expense" means, for any period, the
aggregate rental expense of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis for such period.

"Consolidated Stockholders' Equity" means at any date
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries at such date.

"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.

"Consolidated Tangible Net Worth" means at any date the
Consolidated Stockholders' Equity less consolidated Intangible Assets, all
determined as of such date. For purposes of this definition "Intangible
Assets" means the amount (to the extent reflected in determining such
Consolidated Stockholders' Equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve months after the acquisition of such
business) subsequent to December 31, 1995 in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary, (ii) all Investments in
unconsolidated Subsidiaries and all equity investments in Persons which are not
Subsidiaries and (iii) all unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
anticipated future

4
<PAGE> 9
benefit of tax loss carry-forwards, copyrights, organization or developmental
expenses and other intangible assets.

"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.9 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person and (vii) all Debt of others Guaranteed
by such Person.

"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

"Derivatives Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.

"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
by law to close.

"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one

5
<PAGE> 10
hand, and its CD Loans, on the other hand, in which case all references herein
to the Domestic Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may require.

"Domestic Loans" means CD Loans or Base Rate Loans or both.

"Domestic Reserve Percentage" has the meaning set forth in
Section 2.7(b).

"Effective Date" means the date the Amendment becomes
effective in accordance with Section 3.1.

"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to the environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.

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

"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.

"Euro-Dollar Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office, branch or affiliate of

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<PAGE> 11
such Bank as it may hereafter designate as its Euro-Dollar Lending Office by
notice to the Borrower and the Agent.

"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.

"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.

"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section 2.7(c) on the basis of an Adjusted London Interbank Offered
Rate.

"Euro-Dollar Reference Banks" means the principal London
offices of Texas Commerce Bank National Association (or any of its affiliates),
NationsBank of Texas, N.A. and Morgan Guaranty Trust Company of New York.

"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.7(c).

"Event of Default" has the meaning set forth in Section 6.1.

"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions as determined by the
Agent.

"Fixed Charge Coverage Ratio" means, at any date, the ratio of
(i) the sum of (A) Consolidated EBITDA plus (B) Consolidated Rental Expense, in
each case for the four consecutive fiscal quarters of the Borrower and its
Consolidated Subsidiaries ending on such date to (ii) the sum of Consolidated
Interest Expense and Consolidated Rental Expense for such period.

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<PAGE> 12
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
Money Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.1) or any combination of the foregoing.

"Group of Loans" means at any time a group of Loans consisting
of (i) all Committed Loans which are Base Rate Loans at such time, (ii) all
Euro-Dollar Loans having the same Interest Period at such time or (iii) all CD
Loans having the same interest period at such time, provided that, if a
Committed Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Article 8, such Loan shall be included in the same Group or
Groups of Loans from time to time as it would have been in if it had not been
so converted or made.

"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.

"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.

"Indemnitee" has the meaning set forth in Section 9.3(b).

"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or on the date specified in the applicable
Notice of Interest Rate Election and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable notice; provided that:

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<PAGE> 13
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;

(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and

(2) with respect to each CD Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing or on the
date specified in the applicable Notice of Interest Rate Election and ending
30, 60, 90 or 180 days thereafter, as the Borrower may elect in the applicable
notice provided that:

(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and

(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.

(3) with respect to each Money Market LIBOR Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such whole number of months thereafter as the Borrower may
elect in accordance with Section 2.3; provided that:

(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;

9
<PAGE> 14
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and

(4) with respect to each Money Market Absolute Rate Loan, the
period commencing on the date of borrowing specified in the applicable Notice
of Borrowing and ending such number of days thereafter (but not less than 30
days) as the Borrower may elect in accordance with Section 2.3; provided that:

(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and

(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.

"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.

"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).

"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.

"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind. For the purposes
of this Agreement, the Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

"Loan" means a Domestic Loan, a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans,

10
<PAGE> 15
Euro-Dollar Loans or Money Market Loans or any combination of the foregoing.

"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(c).

"Material Adverse Effect" means (i) a material adverse effect
upon the business, financial position, results of operations or prospects of
the Borrower and its Consolidated Subsidiaries, considered as a whole or (ii)
an adverse effect on the rights and remedies of the Agent and the Banks
hereunder or under any Note.

"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$10,000,000.
"Material Financial Obligations" means a principal or face
amount of Debt and/or payment or collateralization obligations in respect of
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $10,000,000.

"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.

"Material Subsidiary" means, at any time, any Subsidiary of
the Borrower whose total revenues (or, in the case of a Subsidiary which has
subsidiaries, consolidated total revenues) as shown by the latest financial
statements delivered by the Borrower pursuant to Section 4.4(a), 5.1(a) or
5.1(b), as the case may be, are at least 15% of the consolidated total revenues
of the Borrower and its Consolidated Subsidiaries (as shown on such financial
statements) at such time.

"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d).

"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.

"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent

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<PAGE> 16
designate separate Money Market Lending Offices for its Money Market LIBOR
Loans, on the one hand, and its Money Market Absolute Rate Loans, on the other
hand, in which case all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such offices, as the
context may require.

"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.1).

"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.

"Money Market Margin" has the meaning set forth in Section
2.3(d)(ii)(C).

"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.3.

"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.

"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.

"Notice of Borrowing" means a Notice of Committed Borrowing
(as defined in Section 2.2) or a Notice of Money Market Borrowing (as defined
in Section 2.3(f)).

"Notice of Interest Rate Election" has the meaning set forth
in Section 2.10.

"Parent" means, with respect to any Bank, any Person
controlling such Bank.

"Participant" has the meaning set forth in Section 9.6(b).

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<PAGE> 17
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity
or organization, including a government or political subdivision or an agency
or instrumentality thereof.

"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees of
any Person which was at such time a member of the ERISA Group.

"Pricing Schedule" means the Schedule attached hereto
identified as such.

"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.

"Quarterly Dates" means each March 31, June 30, September 30
and December 31.

"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and "Reference Bank"
means any one of such Reference Banks.

"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the
aggregate unpaid principal amount of the Loans.

"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock (except dividends
payable solely in shares of its capital stock) or (ii) any payment on account
of the purchase, redemption, retirement or acquisition of (a) any

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<PAGE> 18
shares of the Borrower's capital stock or (b) any option, warrant or other
right to acquire shares of the Borrower's capital stock (but not including
payments of principal, premium (if any) or interest made pursuant to the terms
of convertible debt securities prior to conversion).

"Revolving Credit Period" means the period from and including
the Effective Date to but not including the Termination Date.

"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by such Person;
unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.

"Termination Date" means September 27, 2001, or, if such day
is not a Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which
case the Termination Date shall be the next preceding Euro-Dollar Business Day.

"Total Capital" means, at any date, the sum of (x)
Consolidated Debt plus (y) Consolidated Stockholders Equity (including for this
purpose any amount attributable to stock which is required to be redeemed or is
redeemable at the option of the holder, if certain events or conditions occur
or exist or otherwise), in each case determined at such date.

"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.

"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.

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<PAGE> 19
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies
the Agent that the Borrower wishes to amend any covenant in Article 5 to
eliminate the effect of any change in generally accepted accounting principles
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.

SECTION 1.3. Types of Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article 2 on the same date, all of which Loans are of the
same type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. Borrowings are classified for purposes
of this Agreement either by reference to the pricing of Loans comprising such
Borrowing (e.g., a "Fixed Rate Borrowing" is a Euro-Dollar Borrowing, a CD
Borrowing or a Money Market Borrowing (excluding any such Borrowing consisting
of Money Market LIBOR Loans bearing interest at the Base Rate pursuant to
Section 8.1), and a "Euro-Dollar Borrowing" is a Borrowing comprised of
Euro-Dollar Loans) or by reference to the provisions of Article 2 under which
participation therein is determined (i.e., a "Committed Borrowing" is a
Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.3 in which the Bank participants are determined on the basis of their
bids in accordance therewith).

ARTICLE 2

THE CREDITS

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<PAGE> 20
SECTION 2.1. Commitments to Lend. (a) During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to make loans to the Borrower pursuant to this Section
from time to time in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding shall not exceed the
amount of its Commitment. Each Borrowing under this Section shall be in an
aggregate principal amount of $5,000,000 or any larger multiple of $1,000,000
(except that any such Borrowing may be in the aggregate amount available in
accordance with Section 3.2) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing limits,
the Borrower may borrow under this Section, prepay Loans to the extent
permitted by Section 2.12 and reborrow at any time during the Revolving Credit
Period under this Section.

SECTION 2.2. Notice of Committed Borrowing. The Borrower
shall give the Agent notice (a "Notice of Committed Borrowing") not later than
10:30 A.M. (New York City time) on (x) the date of each Base Rate Borrowing,
(y) the second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro- Dollar Borrowing, specifying:

(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;

(ii) the aggregate amount of such Borrowing;

(iii) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate, a CD Rate or a Euro-Dollar Rate;
and

(iv) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.

SECTION 2.3. Money Market Borrowings. (a) The Money Market
Option. In addition to Committed Borrowings pursuant to Section 2.1, the
Borrower may, as set forth in this Section, request the Banks during the
Revolving Credit Period to make offers to make Money Market Loans to the
Borrower. The Banks may, but shall have no obligation to, make such offers and
the Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section.

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<PAGE> 21
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received not later
than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective) specifying:

(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,

(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000,

(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and

(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.

The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.

(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to the Banks by
telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request relates
in accordance with this Section.

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<PAGE> 22
(d) Submission and Contents of Money Market Quotes. (i)
Each Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d) and
must be submitted to the Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.1 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (x) one hour
prior to the deadline for the other Banks, in the case of a LIBOR Auction or
(y) 15 minutes prior to the deadline for the other Banks, in the case of an
Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote so
made shall be irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.

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

(A) the proposed date of Borrowing,

(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment of the quoting Bank, (x) must
be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed
the principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to the
principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,

(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified

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<PAGE> 23
to the nearest 1/10,000th of 1%) to be added to or subtracted from
such base rate,

(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market Loan,
and

(E) the identity of the quoting Bank.

A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.

(iii) Any Money Market Quote shall be disregarded if it:

(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection
(d)(ii) above;

(B) contains qualifying, conditional or similar language;

(D) arrives after the time set forth in subsection (d)(i).

(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Money Market Loans
for which offers have been received for each Interest Period specified in the
related Money Market Quote Request, (B) the respective principal amounts and
Money Market Margins or Money Market Absolute Rates, as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money Market Quote may be
accepted.

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<PAGE> 24
(f) Acceptance and Notice by Borrower. Not later than 10:30
A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify
the Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "Notice
of Money Market Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept any
Money Market Quote in whole or in part; provided that:

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

(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000;

(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be; and

(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.

(g) Allocation by Agent. If offers are made by two or more
Banks with the same Money Market Margins or Money Market Absolute Rates, as the
case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as possible
(in multiples of $1,000,000, as the Agent may deem appropriate) in proportion
to the aggregate principal amounts of such offers. Determinations by the Agent
of the amounts of Money Market Loans shall be conclusive in the absence of
manifest error.

SECTION 2.4. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Agent shall

20
<PAGE> 25
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.

(b) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Bank participating therein shall make available
its share of such Borrowing, in Federal or other funds immediately available in
New York City, to the Agent at its address referred to in Section 9.1. Unless
the Agent determines that any applicable condition specified in Article 3 has
not been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.

(c) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has made such share available to the Agent on the date of such Borrowing
in accordance with subsections (b) and (c) of this Section and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so
made such share available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the Agent, at
(i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.7 and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.

SECTION 2.5. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.

(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference

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<PAGE> 26
in this Agreement to the "Note" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.

(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.

SECTION 2.6. Maturity of Loans. (a)Each Loan shall mature,
and the principal amount thereof shall be due and payable, on the Termination
Date.

(b) Each Money Market Loan included in any Money Market
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.

SECTION 2.7. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and, with respect to the principal amount of any
Base Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on each date a
Base Rate Loan is so converted. Any overdue principal of or interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the rate otherwise applicable
to Base Rate Loans for such day.

(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to such Interest Period; provided that if
any CD Loan shall, as a result of clause (2)(b) of the definition of Interest
Period, have an

22
<PAGE> 27
Interest Period of less than 30 days, such CD Loan shall bear interest during
such Interest Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest Period on the last
day thereof and, if such Interest Period is longer than 90 days, at intervals
of 90 days after the first day thereof. Any overdue principal of or interest
on any CD Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the higher of (i) the rate
applicable to Base Rate Loans for such day and (ii) the sum of the CD Margin
plus the Adjusted CD Rate applicable to such Loan at the date such payment was
due.

The "Adjusted CD Rate" applicable to any Interest Period means
a rate per annum determined pursuant to the following formula:

[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]

ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate

__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%

The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period.

"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)

23
<PAGE> 28
for a member bank of the Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of new non-personal time deposits in
dollars in New York City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted CD Rate shall be
adjusted automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.

"Assessment Rate" means for any day the annual assessment rate
in effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.

(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the Adjusted London Interbank Offered Rate applicable
to such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.

The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.

The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days
before the first day of such Interest Period in an amount approximately equal
to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.

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<PAGE> 29
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage.

(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
three months as the Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by (y)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.1 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day) and (ii) the sum of 2% plus the Euro-Dollar Margin for such day plus the
Adjusted London Interbank Offered Rate applicable to such Loan at the date such
payment was due.

(e) Subject to Section 8.1, each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.7(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.3. Each Money
Market Absolute Rate Loan shall bear interest on

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<PAGE> 30
the outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by
the Bank making such Loan in accordance with Section 2.3. Such interest shall
be payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of three months after
the first day thereof. Any overdue principal of or interest on any Money
Market Loan shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the Base Rate for such day.

(f) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.

(g) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.1 shall
apply.

SECTION 2.8. Fees. (a) The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate
(determined daily in accordance with the Pricing Schedule). Such facility fee
shall accrue (i) from and including the Effective Date to but excluding the
date of termination of the Commitments in their entirety, on the daily
aggregate amount of the Commitments (whether used or unused) and (ii) from and
including such date of termination to but excluding the date the Loans shall be
repaid in their entirety, on the daily aggregate outstanding principal amount
of the Loans. Such facility fee shall be payable quarterly in arrears on each
Quarterly Date and on the date of termination of the Commitments in their
entirety (and, if later, the date the Loans shall be repaid in their entirety).

(b) On the Effective Date the Borrower shall pay to the Agent
for the account of the Banks ratably in accordance with their respective
Commitments (as in effect immediately after the effectiveness of the Amendment)
an amendment fee in an amount equal to .05% of the aggregate amount of the
Commitments (as in effect immediately after the effectiveness of the
Amendment).

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<PAGE> 31
SECTION 2.9. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may, upon at
least three Domestic Business Days' notice to the Agent, (i) terminate the
Commitments at any time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of $5,000,000 or a
larger multiple of $1,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the Loans.

SECTION 2.10. Method of Electing Interest Rates. (a) The
Loans included in each Committed Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in
each case to the provisions of Article 8), as follows:

(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to CD Loans as of any Domestic Business Day or
to Euro-Dollar Loans as of any Euro-Dollar Business Day;

(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or elect to
continue such Loans as CD Loans for an additional Interest Period,
subject to Section 2.14 in the case of any such conversion or
continuation effective on any day other than the last day of the then
current Interest Period applicable to such Loans; and

(iii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or CD Loans or elect to
continue such Loans as Euro-Dollar Loans for an additional Interest
Period, subject to Section 2.14 in the case of any such conversion or
continuation effective on any day other than the last day of the then
current Interest Period applicable to such Loans.

Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent not later than 10:00 A.M. (New York City time) on
the third Euro-Dollar Business Day before the conversion or continuation
selected in such notice is to be effective (unless the relevant Loans are to be
converted to Domestic Loans of the other type or are CD Rate Loans to be
continued as CD Rate Loans for an additional Interest Period, in which case
such notice shall be delivered to the Agent not later

27
<PAGE> 32
than 10:00 A.M. (New York City time) on the second Domestic Business Day before
such conversion or continuation is to be effective). A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
is allocated ratably among the Loans comprising such Group and (ii) the portion
to which such Notice applies, and the remaining portion to which it does not
apply, are each $5,000,000 or any larger multiple of $1,000,000.

(b) Each Notice of Interest Rate Election shall specify:

(i) the Group of Loans (or portion thereof) to which such
notice applies;

(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall
comply with the applicable clause of subsection (a) above;

(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being
converted are to be Fixed Rate Loans, the duration of the next
succeeding Interest Period applicable thereto; and

(iv) if such Loans are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the
duration of such additional Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.

(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Agent shall promptly notify
each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower.

(d) An election by the Borrower to change or continue the
rate of interest applicable to any Group of Loans pursuant to this Section
shall not constitute a "Borrowing" subject to the provisions of Section 3.2.

SECTION 2.11. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together

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<PAGE> 33
with accrued interest thereon) shall be due and payable on such date.

SECTION 2.12. Optional Prepayments. (a) The Borrower may,
upon at least one Domestic Business Day's notice to the Agent, prepay any Group
of Base Rate Loans (or any Money Market Borrowing bearing interest at the Base
Rate pursuant to Section 8.1), in whole at any time, or from time to time in
part in amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by
paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Group.

(b) The Borrower may not prepay all or any portion of the
principal amount of any Fixed Rate Loan (except, solely with respect to Money
Market Loans, as provided in subsection (a) above) prior to the maturity
thereof.

(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.

SECTION 2.13. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.1. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the Money Market Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day. If the date for any payment of

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<PAGE> 34
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.

(b) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.

SECTION 2.14. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan
is converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.7(d), or if the Borrower fails to
borrow, prepay, convert or continue any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.4(a), 2.12(c) or 2.10(c) the
Borrower shall reimburse each Bank within 15 days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties,
but excluding loss of margin for the period after any such payment or
conversion or failure to borrow, prepay, convert or continue, provided that
such Bank shall have delivered to the Borrower a certificate as to the amount
of such loss or expense, which certificate shall be conclusive in the absence
of manifest error.

SECTION 2.15. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day) (i.e. (interest
rate divided by 365 (or 366 days in a leap year)) times (actual number of days
elapsed). All other interest and fees shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the first
day but excluding the last day) (i.e. (interest rate or fee rate divided by
360) times (actual number of days elapsed ).

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<PAGE> 35
SECTION 2.16. Change of Control. If a Change of Control
shall occur (i) the Borrower will, within ten days after the occurrence
thereof, give each Bank notice thereof and shall describe in reasonable detail
the facts and circumstances giving rise thereto and (ii) each Bank may, by
three Domestic Business Days' notice to the Borrower and the Agent given not
later than 60 days after such Change of Control, terminate its Commitment,
which shall thereupon be terminated, and declare the Note held by it (together
with accrued interest thereon) and any other amounts payable hereunder for its
account to be, and such Note and such other amounts shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

For purposes of this Section, the following terms have the
following meanings:

A "Change of Control" shall occur if (i) any person or group
of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 45% or more in
voting power of the outstanding Voting Stock of the Borrower or (ii)
during any period of 12 consecutive calendar months, individuals who
were either (x) directors of the Borrower on the first day of such
period or (y) elected to fill vacancies caused by the ordinary course
resignation or retirement of any other director and whose nomination
or election was approved by a vote of at least a majority of the
directors then still in office who were directors of the Borrower on
the first day of such period, shall cease to constitute a majority of
the board of directors of the Borrower.

"Voting Stock" means capital stock of any class or classes
(however designated) having ordinary voting power for the election of
directors of the Borrower, other than stock having such power only by
reason of the happening of a contingency.

ARTICLE 3

CONDITIONS

SECTION 3.1. Effectiveness. The Amendment shall become
effective on the date that the Agent shall have

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<PAGE> 36
received (i) funds to be applied as set forth in Section 9.12; (ii) for the
account of each Bank, (x) all accrued but unpaid fees under Section 2.8(a) of
the Original Agreement for the period up to but excluding the Effective Date
and (y) all fees payable under Section 2.8(b); and (iii) each of the following
documents, each dated the Effective Date unless otherwise indicated:

(a) a duly executed Note for the account of each Bank dated
on or before the Effective Date complying with the provisions of
Section 2.5;

(b) an opinion of the Director, Corporate Legal Services of
the Borrower, substantially in the form of Exhibit E hereto and
covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;

(c) an opinion of Davis Polk & Wardwell, special counsel for
the Agent, substantially in the form of Exhibit F hereto and covering
such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request; and

(d) all documents the Agent may reasonably request relating
to the existence of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent.

The Agent shall promptly notify the Borrower and the Banks of the Effective
Date, and such notice shall be conclusive and binding on all parties hereto.
On the Effective Date the Original Agreement will be automatically amended and
restated in its entirety to read as set forth herein. On and after the
Effective Date the rights and obligations of the parties hereto shall be
governed by this Amended Agreement; provided that the rights and obligations of
the parties hereto with respect to the period prior to the Effective Date shall
continue to be governed by the provisions of the Original Agreement. The Notes
delivered to each Bank under the Original Agreement shall be canceled and Notes
under this Amended Agreement shall be given in substitution therefor. Each
Bank shall promptly after the Effective Date deliver to the Borrower for
cancellation the Note delivered to such Bank under the Original Agreement.

SECTION 3.2. Borrowings. The obligation of any Bank to make
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:

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<PAGE> 37
(a) the fact that the Effective Date shall have occurred on
or prior to October 15, 1996;

(b) receipt by the Agent of a Notice of Borrowing as required
by Section 2.2 or 2.3, as the case may be;

(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;

(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and

(e) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the
date of such Borrowing.

Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(c), (d) and (e) of this Section.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

SECTION 4.1. Corporate Existence and Power. The Borrower is
a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.

SECTION 4.2. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the corporate powers of the Borrower, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon

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the Borrower or any of its Subsidiaries or result in the creation or imposition
of any Lien on any asset of the Borrower or any of its Subsidiaries.

SECTION 4.3. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and by general principles of equity.

SECTION 4.4. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of December
31, 1995 and the related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Coopers & Lybrand L.L.P. and
incorporated by reference in the Borrower's 1995 Form 10-K, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position
of the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.

(b) The unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of June 3, 1996 and the related unaudited
consolidated statements of income and cash flows for the nine months then
ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such nine
month period (subject to normal year-end adjustments).

(c) Since June 30, 1996 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole
(including without limitation any such material adverse change caused by any
action, suit or proceeding disclosed in the Borrower's periodic reports filed
with the Securities and Exchange Commission from time to time).

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SECTION 4.5. Litigation. Except as set forth in the
Borrower's periodic reports filed with the Securities and Exchange Commission
from time to time, there is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.

SECTION 4.6. Compliance with ERISA. To the best of the
Borrower's knowledge, each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Internal
Revenue Code with respect to each Plan. To the best of the Borrower's
knowledge, no member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) except as set forth in
Schedule 4.6, incurred any liability in excess of $10,000,000 under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.

SECTION 4.7. Environmental Matters. In the ordinary course
of its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a condition of any license, permit or contract, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted

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<PAGE> 40
thereat, any costs or liabilities in connection with off-site disposal of
wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On
the basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.

SECTION 4.8. Taxes. The Borrower and its Subsidiaries have
filed (or have made timely requests for an extension to file) all United States
Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary, other than any such taxes the non-payment of which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.

SECTION 4.9. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted
(except for any governmental licenses, authorizations, consents or approvals
the absence of which could not reasonably be expected to have a Material
Adverse Effect).

SECTION 4.10. Regulatory Restrictions on Borrowing. The
Borrower is not an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or otherwise subject to
any regulatory scheme which restricts its ability to incur debt.

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<PAGE> 41
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

ARTICLE 5

COVENANTS

The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid:

SECTION 5.1. Information. The Borrower will deliver to each
of the Banks:

(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
income and cash flows for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Coopers & Lybrand L.L.P. or other independent public
accountants of nationally recognized standing;

(b) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash flows for such
quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in the case of such statements of
income and cash flows, in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer
or the chief accounting officer of the Borrower;

(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer

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<PAGE> 42
or the chief accounting officer of the Borrower (i) setting forth in
reasonable detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Sections 5.9
through 5.13, inclusive, on the date of such financial statements and
(ii) stating whether any Default exists on the date of such
certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to
take with respect thereto;

(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe
that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;

(e) within ten days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;

(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;

(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;

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<PAGE> 43
receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or which the Borrower reasonably believes could result in the
imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth details as to such occurrence
and action, if any, which the Borrower or applicable member of the
ERISA Group is required or proposes to take; and

(i) from time to time such additional information regarding
the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.

SECTION 5.2. Payment of Obligations. The Borrower will pay
and discharge, and will cause each Subsidiary to pay and discharge, at or
before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.

SECTION 5.3. Maintenance of Property; Insurance. (a) The
Borrower will keep, and will cause each Subsidiary to keep, all material
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.

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<PAGE> 44
(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all their respective material properties in at least
such amounts, against at least such risks and with such risk retention as are
usually maintained, insured against or retained, as the case may be, in the
same general area by companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.

SECTION 5.4. Conduct of Business and Maintenance of
Existence. The Borrower will preserve, renew and keep in full force and
effect, and will cause each Subsidiary to preserve, renew and keep in full
force and effect their respective corporate existence and their respective
material rights, privileges and franchises necessary or desirable in the normal
conduct of business (except for any rights, privileges or franchises the
non-maintenance of which could not reasonably be expected to have a Material
Adverse Effect); provided that nothing in this Section 5.4 shall prohibit (i)
the merger of a Subsidiary into the Borrower or the merger or consolidation of
a Subsidiary with or into another Person if the corporation surviving such
consolidation or merger is a Subsidiary and if, in each case, after giving
effect thereto, no Default shall have occurred and be continuing or (ii) the
termination of the corporate existence of any Subsidiary if the Borrower in
good faith determines that such termination is in the best interest of the
Borrower and is not materially disadvantageous to the Banks.

SECTION 5.5. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except (i) where the necessity
of compliance therewith is contested in good faith by appropriate proceedings
or (ii) where noncompliance could not reasonably be expected to have a Material
Adverse Effect.

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to permit, representatives of any Bank at such Bank's expense to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often as
may reasonably be desired.

SECTION 5.7. Mergers and Sales of Assets. The Borrower will
not (i) consolidate or merge with or into any other Person, (ii) sell, lease or
otherwise transfer, directly or indirectly, all or substantially all of the
assets of the Borrower to any other Person or Persons; provided that the
Borrower may merge with another Person if (x) the Borrower is the corporation
surviving such merger and (y) after giving effect to such merger, no Default
shall have occurred and be continuing.

SECTION 5.8. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.

SECTION 5.9. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:

(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $26,000,000;

(b) any Lien existing on any asset of any person at the time
such person becomes a Subsidiary and not created in contemplation of
such event;

(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;

(d) any Lien on any asset of any person existing at the time
such person is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;

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(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition;

(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section, provided that such Debt is
not increased and is not secured by any additional assets;

(g) Liens existing as of the date hereof or arising
hereafter, in each case arising in the ordinary course of its business
and which (i) do not secure Debt or Derivatives Obligations, (ii) do
not secure any obligation in an amount exceeding $10,000,000 and (iii)
do not in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the operation of its
business;

(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $10,000,000;
and

(i) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at
any date not to exceed 20% of Consolidated Tangible Net Worth at such
date.

SECTION 5.10. Debt to Total Capital. The ratio of
Consolidated Debt to Total Capital shall not exceed at any time .6:1.

SECTION 5.11. Debt of Subsidiaries. The Borrower will not
permit any of its Material Subsidiaries to incur or at any time be liable with
respect to any Debt except:

(a) Debt owed to the Borrower or to a wholly owned
Subsidiary;

(b) Debt secured by a Lien permitted by Section 5.9(c) and
any refinancing, extension, renewal or refunding thereof;

(c) Debt of any Person existing at the time such Person is
merged or consolidated with or into any Material Subsidiary and not
incurred in contemplation of such merger or consolidation;

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(d) Debt of any Person existing at the time such Person
becomes a Material Subsidiary, regardless of whether such Debt was
incurred in contemplation of such event; and

(e) Debt not otherwise permitted by the foregoing clauses in
an aggregate principal or face amount at any time outstanding not to
exceed $35,000,000.

SECTION 5.12. Fixed Charge Coverage Ratio. As of the last
day of each fiscal quarter of the Borrower, the Fixed Charge Ratio will not be
less than 1.4:1.

SECTION 5.13. Transactions with Affiliates. The Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, pay
any funds to or for the account of, make any investment (whether by acquisition
of stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any Debt,
or otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary Affiliate than could have been obtained from a
third party who was not an Affiliate; provided that the foregoing provisions of
this Section shall not prohibit any such Person from declaring or paying any
lawful dividend or other payment ratably in respect of all of its capital stock
of the relevant class so long as, after giving effect thereto, no Default shall
have occurred and be continuing.

ARTICLE 6

DEFAULTS

SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:

(a) the Borrower shall fail to pay any principal of any Loan
when due or any interest, any fees or any other amount payable
hereunder within 5 days of the due date thereof;

(b) the Borrower shall fail to observe or perform any
covenant contained in Article 5, other than those contained in
Sections 5.1 through 5.6;

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(c) the Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been
given to the Borrower by the Agent at the request of any Bank;

(d) any representation, warranty, certification or statement
made by the Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect
when made (or deemed made);

(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period;

(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;

(g) the Borrower or any Material Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;

(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Material Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of

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<PAGE> 49
60 days; or an order for relief shall be entered against the Borrower
or any Material Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;

(i) except with respect to any liability disclosed in
Schedule 4.6; any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Material Plan under Section 4041(c) of ERISA
shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist under Section
4042(a) of ERISA by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of ERISA,
with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment
obligation in excess of $10,000,000; or

(j) judgments or orders for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Subsidiary
and such judgments or orders shall continue unsatisfied and unstayed
for a period of 10 days;

then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% of the aggregate principal amount of
the Loans, by notice to the Borrower declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of
any of the Events of Default specified in clause 6.1(g) or 6.1(h) above with
respect to the Borrower, without any notice to the Borrower or any other act by
the Agent or the Banks, the Commitments shall thereupon terminate and the Loans
(together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice

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<PAGE> 50
of any kind, all of which are hereby waived by the Borrower.

Notwithstanding anything contained in the foregoing paragraph,
if at any time within 60 days after the Notes have been declared due pursuant
to the preceding paragraph, the Borrower shall pay all arrears of interest and
all payments on account of principal which shall have become due otherwise than
by acceleration and all Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to Section 9.5, then the Required Banks by written notice to the Borrower to
be delivered by the Agent, may at their option rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Default or impair any right of the Banks
consequent thereon.

SECTION 6.2. Notice of Default. The Agent shall give notice
to the Borrower under Section 6.1(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.

ARTICLE 7

THE AGENT

SECTION 7.1. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.

SECTION 7.2. Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent.

SECTION 7.3. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with

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respect to any Default, except as expressly provided in Article 6.

SECTION 7.4. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.

SECTION 7.5. Liability of Agent. Neither the Agent nor any
of its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or willful misconduct. Neither the
Agent nor any of its affiliates nor any of their respective directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article 3,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of this Agreement, the Notes or any
other instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex,
facsimile transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties. Without limiting the generality of
the foregoing, the use of the term "agent" in this Agreement with reference to
the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine or any applicable law.
Instead, such term is used merely as a matter of market custom and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

SECTION 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such

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indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.

SECTION 7.7. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.

SECTION 7.8. Successor Agent. The Agent may resign at any
time by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.

SECTION 7.9. Agent's Fee. The Borrower shall pay to the
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and the Agent.

ARTICLE 8

CHANGE IN CIRCUMSTANCES

SECTION 8.1. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of

48
<PAGE> 53
any Interest Period for any CD Loan, Euro-Dollar Loan or Money Market LIBOR
Loan:

(a) the Agent is advised by the Reference Banks that deposits
in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or

(b) in the case of CD Loans or Euro-Dollar Loans, Banks
having 50% or more of the aggregate principal amount of the affected
Loans advise the Agent that the Adjusted CD Rate or the Adjusted
London Interbank Offered Rate, as the case may be, as determined by
the Agent will not adequately and fairly reflect the cost to such
Banks of funding their CD Loans or Euro-Dollar Loans, as the case may
be, for such Interest Period,

the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to continue or
convert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as the case
may be, shall be suspended and (ii) each outstanding CD Loan or Euro-Dollar
Loan, as the case may be, shall be converted into a Base Rate Loan on the last
day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.

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<PAGE> 54
its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans
and such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower, whereupon until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant to this Section,
such Bank shall designate a different Euro-Dollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
notice is given, each Euro-Dollar Loan of such Bank then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such Euro-Dollar Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Bank shall determine that it may not lawfully continue to maintain and fund
such Loan to such day.

SECTION 8.3. Increased Cost and Reduced Return. (a) If on
or after (x) the date hereof, in the case of any Committed Loan or any
obligation to make Committed Loans or (y) the date of the related Money Market
Quote, in the case of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency
shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (ii) with
respect to any Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or shall impose on any Bank (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans,

50
<PAGE> 55
its Note or its obligation to make Fixed Rate Loans and the result of any of
the foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.

(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.

(c) Each Bank will promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.

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<PAGE> 56
SECTION 8.4. Taxes. (a) For the purposes of this Section
8.4, the following terms have the following meanings:

"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or similar taxes imposed
on it, by a jurisdiction under the laws of which such Bank or the Agent (as the
case may be) is organized or in which its principal executive office is located
or, in the case of each Bank, in which its Applicable Lending Office is located
and (ii) in the case of each Bank, any United States withholding tax imposed on
such payments but only to the extent that such Bank is subject to United States
withholding tax at the time such Bank first becomes a party to this Agreement.

"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Note
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note.

(b) Any and all payments by the Borrower to or for the
account of any Bank or the Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) such Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.1, the
original or a certified copy of a receipt evidencing payment thereof.

(c) The Borrower agrees to indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties,

52
<PAGE> 57
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be paid within 15 days after such Bank or the Agent (as
the case may be) makes demand therefor.

(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Bank remains lawfully able to do so),
shall provide the Borrower and the Agent with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts the Bank
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States.

(e) For any period with respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate form pursuant to Section
8.4(d) (unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form originally was required to
be provided), such Bank shall not be entitled to indemnification under Section
8.4(b) or (c) with respect to Taxes imposed by the United States; provided that
if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.

(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.

SECTION 8.5. Base Rate Loans Substituted for Affected Fixed
Rate Loans. If (i) the obligation of any Bank to make, or convert outstanding
Loans to, Euro-Dollar Loans has been suspended pursuant to Section 8.2 or (ii)
any

53
<PAGE> 58
Bank has demanded compensation under Section 8.3 or 8.4 with respect to its CD
Loans or Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:

(a) all Loans which would otherwise be made by such Bank as
(or continued as or converted into) CD Loans or Euro-Dollar Loans, as
the case may be, shall instead be Base Rate Loans (on which interest
and principal shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks); and

(b) after each of its CD Loans or Euro-Dollar Loans, as the
case may be, has been repaid (or converted to a Base Rate Loan), all
payments of principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate Loans
instead.

If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable to the related CD
Loans or Euro-Dollar Loans of the other Banks.

ARTICLE 9

MISCELLANEOUS

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<PAGE> 59
number specified in this Section and the appropriate answerback is received,
(ii) if given by facsimile transmission, when transmitted to the facsimile
number specified in this Section and confirmation of receipt is received, (iii)
if given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (iv) if given by
any other means, when delivered at the address specified in this Section;
provided that notices to the Agent under Article 2 or Article 8 shall not be
effective until received.

SECTION 9.2. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 9.3. Expenses; Indemnification. (a) The Borrower
shall pay (i) all out-of-pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including (without duplication) the reasonable fees
and disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.

(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.

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SECTION 9.4. Sharing of Set-Offs. Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.

SECTION 9.5. Amendments and Waivers . Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Loan or any fees hereunder, (iii) postpone the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder or for any scheduled
reduction or termination of any Commitment or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement.

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<PAGE> 61
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.

(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice
to the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii), or (iii) of Section 9.5 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).

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<PAGE> 62
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction or withholding of
any United States federal income taxes in accordance with Section 8.4.

(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.

(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Section
8.3 or 8.4 than such Bank would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.2, 8.3 or 8.4
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.

SECTION 9.7. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

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<PAGE> 63
by law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.

SECTION 9.9. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).

SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 9.11. Confidentiality. The Agent and each Bank
agrees to keep any information delivered or made available by the Borrower
pursuant to this Agreement confidential from anyone other than persons employed
or retained by such Bank who are engaged in evaluating, approving, structuring
or administering the credit facility contemplated hereby; provided that nothing
herein shall prevent any Bank from disclosing such information (a) to any other
Bank or to the Agent, (b) subject to provisions substantially similar to those
contained in this Section, to any other Person if reasonably incidental to the
administration of the credit facility contemplated hereby, (c) upon the order
of any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank prohibited by this
Agreement, (f) in connection with any litigation to which the Agent, any Bank
or its subsidiaries or Parent may be a party, (g) to the extent necessary in
connection with the exercise of any remedy hereunder, (h) to such Bank's or
Agent's legal counsel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or

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proposed Participant or Assignee. The Agent or any Bank, as the case may be,
shall give prompt notice of any disclosure made by it pursuant to clauses (c)
or (f) of this Section; provided that the Agent or such Bank shall be required
to give such notice with respect to any disclosure made by it pursuant to
clause (f) solely to the extent that the interests of the Agent or such Bank,
as the case may be, and the Borrower in the relevant litigation are not adverse
in any material respect.

SECTION 9.12. Loans Outstanding on the Effective Date.
Notwithstanding anything to the contrary herein, on the Effective Date, the
Banks shall, provided the conditions to borrowing hereunder are met on such
day, fund Loans hereunder ratably in accordance with their respective
Commitments (as in effect immediately after the effectiveness of the
Amendment). The Borrower shall reimburse each Bank in accordance with Section
2.14 for any funding losses incurred in connection with the prepayment of any
Loans on the Effective Date.

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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.

QUAKER STATE CORPORATION

By /s/ CONRAD A. CONRAD
-----------------------------------
Title: Conrad A. Conrad
Address: 225 E. John
Carpenter Frwy
Irving, TX 75062
Telex:
Facsimile:

Commitments:

$35,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK

By /s/ JOHN G. KOWALCZUK
-----------------------------------
Title: Vice President

$25,000,000 ABN AMRO BANK N.V.,
HOUSTON AGENCY
By: ABN AMRO NORTH AMERICA
INC., as Agent

By /s/ MICHAEL W. DePRIEST
-----------------------------------
Title: Vice President & Director

By /s/ GORDON D. CHANG
-----------------------------------
Title: Vice President & Director

$25,000,000 NATIONSBANK OF TEXAS, N.A.

By /s/ DALE T. WILSON
-----------------------------------
Title: Vice President

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<PAGE> 66

$25,000,000 TEXAS COMMERCE BANK NATIONAL
ASSOCIATION

By /s/ MATTHEW H. HILDRETH
-----------------------------------
Title: Vice President

$15,000,000 BANK OF AMERICA ILLINOIS

By /s/ RICHARD D. BLUTH
-----------------------------------
Title: Authorized Officer

$15,000,000 THE SANWA BANK LIMITED,
DALLAS AGENCY

By /s/ MATTHEW G. PATRICK
-----------------------------------
Title: Vice President

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<PAGE> 67

Total Commitments
=================
$140,000,000

MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent

By /s/ JOHN G. KOWALCZUK
-----------------------------------
Title: Vice President
Address: 60 Wall Street
New York, NY 10260
Telex: 177615 MGTUT
Facsimile: (212) 648-5014

63
<PAGE> 68
LIST OF OMITTED SCHEDULES AND EXHIBITS

1. Pricing Schedule
2. Schedule 4.6 Potential Liability Under Title IV of ERISA
3. Exhibit A -- Note
4. Exhibit B -- Money Market Quote Request
5. Exhibit C -- Invitation for Money Market Quotes
6. Exhibit D -- Money Market Quote
7. Exhibit E -- Opinion of Counsel for Borrower
8. Exhibit F -- Opinion of Davis Polk & Wardwell
9. Exhibit G -- Assignment and Assumption Agreement

<PAGE> 1

EXHIBIT 4(c)
================================================================================

$165,000,000

CREDIT AGREEMENT

dated as of

September 30, 1996

among

QUAKER STATE CORPORATION,

[QUAKER STATE LOGO]

The Banks Listed Herein

and

TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Agent

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

[CHASE LOGO] CHASE SECURITIES INC.,
as Arranger
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1

DEFINITIONS

SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.3. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE 2

THE CREDIT

SECTION 2.1. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.2. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.3. Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.4. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.5. Maturity of Loans; Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.6. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.7. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.8. Optional Termination or Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.9. Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Mandatory Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.14. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.15. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE 3

CONDITIONS

SECTION 3.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.2. Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Corporate and Governmental Authorization, No Contravention . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.4. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.6. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.7. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>

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<TABLE>
<S> <C> <C>
SECTION 4.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.9. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.10. Regulatory Restrictions on Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.11. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.12. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4.13. Debt Rating; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.14. Use of Proceeds; Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE 5

COVENANTS

SECTION 5.1. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.2. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.3. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.4. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.5. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.6. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.7. Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.8. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.9. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.10. Debt to Total Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.11. Debt of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.12. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE 6

DEFAULTS

SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE 7

THE AGENT

SECTION 7.1. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.5. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.6. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.7. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.8. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.9. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>

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<TABLE>
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ARTICLE 8

CHANGE IN CIRCUMSTANCES

SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.2. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 8.5. Base Rate Loans Substituted for Affected LIBOR Loans . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE 9

MISCELLANEOUS

SECTION 9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.2. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.3. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.4. Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.5. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.7. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.8. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.9. Counterparts; Integration; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.10. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.12. Maximum Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.13. Non-Application of Chapter 15 of Texas Credit Code . . . . . . . . . . . . . . . . . . . . . . . . . 39

</TABLE>

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<PAGE> 5
INDEX TO SCHEDULES AND EXHIBITS

Schedules

Schedule 2.6 Pricing Schedule
Schedule 4.6 Potential Liability under Title IV of ERISA

Exhibits

Exhibit A - Note
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Administrative Questionnaire

iv
<PAGE> 6
CREDIT AGREEMENT (the "Agreement") dated as of September 30,
1996 among QUAKER STATE CORPORATION, the BANKS listed on the signature pages
hereof and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:

"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.6(b).

"Administrative Questionnaire" means, with respect to each
Bank other than Texas Commerce, an administrative questionnaire in the form
attached hereto as Exhibit C and submitted to the Agent (with a copy to the
Borrower) duly completed by such Bank.

"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to vote 10% or more of any class of voting securities of a Person or to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

"Agent" means Texas Commerce Bank National Association in its
capacity as agent for the Banks hereunder, and its successors in such capacity.

"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its LIBOR Loans, its LIBOR Lending office.

"Assignee" has the meaning set forth in Section 9.6(c).

"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.6(c), and their
respective successors.

"Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the higher of (i) the
Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day. The Base Rate may not be any Bank's best or favored rate
and a Bank may make other loans to other Persons at rates lower than the Base
Rate.

CREDIT AGREEMENT, PAGE 1
<PAGE> 7
"Base Rate Loan" means (i) a Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election or the provisions of Article 8 or (ii) an overdue amount which
was a Base Rate Loan immediately before it became overdue.

"Borrower" means Quaker State Corporation, a Delaware
corporation, and its successors.

"Borrower's 1995 Form 10-K" means the Borrower's annual
report on Form 10-K for 1995, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.

"Borrowing" has the meaning set forth in Section 1.3.

"Closing Date" means the date on or after the Effective Date
on which the Agent shall have received the documents specified in or pursuant
to Section 3.1.

"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof or in its
Assignment and Assumption Agreement in the form attached as Exhibit B, as
applicable, as such amount may be reduced from time to time pursuant to
Sections 2.8 and 2.10.

"Consolidated Debt" means, at any date, the Debt of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date.

"Consolidated EBITDA" means, for any fiscal period,
Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income for such period, the aggregate amount of
(i) Consolidated Interest Expense, (ii) income tax expense and (iii)
depreciation, amortization and other similar non-cash charges.

"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined
on a consolidated basis for such period.

CREDIT AGREEMENT, PAGE 2
<PAGE> 8
"Consolidated Rental Expense" means, for any period, the
aggregate rental expense of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis for such period.

"Consolidated Stockholders' Equity" means, at any date,
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries at such date.

"Consolidated Subsidiary" means, at any date, any Subsidiary
or other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.

"Consolidated Tangible Net Worth" means, at any date, the
Consolidated Stockholders' Equity less consolidated Intangible Assets, all
determined as of such date. For purposes of this definition "Intangible
Assets" means the amount (to the extent reflected in determining such
Consolidated Stockholders' Equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of assets of a going
concern business made within twelve months after the acquisition of such
business) subsequent to December 31, 1995 in the book value of any asset owned
by the Borrower or a consolidated Subsidiary, (ii) all Investments in
unconsolidated Subsidiaries and all equity investments in Persons which are not
Subsidiaries and (iii) all unamortized debt discount and expense, unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss carry-forwards, copyrights, organization
or developmental expenses and other intangible assets.

"Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.9 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect of
amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person and (vii) all Debt of others Guaranteed
by such Person.

"Debt Offering" means the first public offering by Borrower of
Debt securities after the Closing Date.

"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

CREDIT AGREEMENT, PAGE 3
<PAGE> 9
transaction, cross-currency rate swap transaction, currency option or any other
similar transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.

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

"Domestic Lending office" means, as to each Bank, its office
located at its address set forth on the signature pages hereto as its "Domestic
Lending Office" or in its Administrative Questionnaire as its Domestic Lending
Office or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Agent.

"Effective Date" means the date this Agreement becomes
effective in accordance with Section 9.9.

"Equity Offering" means the first public offering by Borrower
of equity securities after the Closing Date but excluding any public offering
of stock of Borrower if (a) the stock of Borrower offered to be sold in such
offering is held by third parties, (b) the offering is made under the terms of
registration rights agreements between Borrower and such third parties and (c)
no proceeds of the offering are received by the Borrower.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.

"Event of Default" has the meaning set forth in Section 6.1.

"Federal Funds Rate" means, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as released on the
next succeeding Domestic Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so released for any day which is a Domestic Business
Day,

CREDIT AGREEMENT, PAGE 4
<PAGE> 10
the arithmetic average (rounded upwards to the next 1/100th of 1%), as
determined by the Agent, of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent. If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Rate for any reason, including the
inability of the Agent to obtain sufficient quotations in accordance with the
terms thereof, the Base Rate shall be determined without regard to the Federal
Funds Rate until the circumstances giving rise to such inability no longer
exist.

"Fee and Procedure Letter" means that certain Fee and
Procedure Letter dated August 23, 1996 among Borrower, Texas Commerce and Chase
Securities Inc. which was agreed to by the Borrower on August 30, 1996, as the
same may be modified.

"Group of Loans" means at any time a group of Loans consisting
of (i) all Loans which are Base Rate Loans at such time or (ii) all LIBOR Loans
having the same Interest Period at such time; provided that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time
to time as it would have been in if it had not been so converted or made.

"Indemnitee" has the meaning set forth in Section 9.3(b).

"Interest Period" means, with respect to each LIBOR Loan, the
period commencing on the date of borrowing specified in the applicable Notice
of Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:

CREDIT AGREEMENT, PAGE 5
<PAGE> 11
(a) any Interest Period which would otherwise end on a
day which is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day unless such LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end
on the next preceding LIBOR Business Day;

(b) any Interest Period which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
LIBOR Business Day of a calendar month; and

"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.

"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, Guarantee, time deposit or
otherwise (but not including any demand deposit).

"LIBOR Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.

"LIBOR Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth on the signature pages
hereto as its "LIBOR Lending Office" or in its Administrative Questionnaire as
its LIBOR Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its LIBOR Lending Office by notice to the
Borrower and the Agent.

"LIBOR Loan" means (i) a Loan which bears interest at a LIBOR
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a LIBOR Loan immediately before it
became overdue.

"LIBOR Margin" means a rate per annum determined in accordance
with the Pricing Schedule.

"LIBOR Rate" means a rate of interest determined pursuant to
Section 2.6(b) on the basis of an Adjusted London Interbank Offered Rate.

"LIBOR Reserve Percentage" has the meaning set forth in
Section 2.6(b).

CREDIT AGREEMENT, PAGE 6
<PAGE> 12
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.

"Loan" means a loan made by a Bank pursuant to Section 2.1;
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "Loan"
shall refer to the combined principal amount resulting from such combination or
to each of the separate principal amounts resulting from such subdivision, as
the case may be. As a result, the term "Loan" shall also mean a Base Rate Loan
or a LIBOR Loan and "Loans" means Base Rate Loans, LIBOR Loans or any
combination of the foregoing, all as the context may require.

"London Interbank Offered Rate" has the meaning set forth in
Section 2.6(b).

"Material Financial Obligations" means a principal or face
amount of Debt and/or payment or collateralization obligations in respect of
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, exceeding in the
aggregate $10,000,000.

"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $10,000,000.

"Morgan Credit Agreement" means the Amended and Restated
Credit Agreement dated as of September 30, 1996 among the Borrower, the banks
party thereto and Morgan Guaranty Trust Company of New York, as agent, as the
same may be modified.

CREDIT AGREEMENT, PAGE 7
<PAGE> 13
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.

"Notice of Borrowing" has the meaning set forth in Section
2.2.

"Notice of Interest Rate Election" has the meaning set forth
in Section 2.9.

"Parent" means, with respect to any Bank, any Person
controlling such Bank.

"Participant" has the meaning set forth in Section 9.6(b).

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

"Permanent Takeout Date" means the first date after which the
following two events shall have occurred: (i) the Equity Offering and (ii) the
Debt Offering.

"Pricing Schedule" means the Schedule 2.6 attached hereto.

"Prime Rate" means, as of any day, the rate of interest per
annum then most recently publicly announced by Texas Commerce as its prime rate
in effect for such day at its principal office in Houston, Texas.

"Quarterly Dates" means each March 31, June 30, September 30
and December 31.

"Reference Bank" means the principal London office of Texas
Commerce (or any of its affiliates).

"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

CREDIT AGREEMENT, PAGE 8
<PAGE> 14
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments shall
have been terminated, holding Notes evidencing at least 66 2/3% of the
aggregate unpaid principal amount of the Loans.

"Revolving Credit Period" means the period from and including
the Closing Date to but not including the Termination Date.

"Termination Date" means (A) the earlier of (i) September 25,
1997 or (ii) the Permanent Takeout Date or, (B) if the day described in clause
(A) is not a LIBOR Business Day, the next succeeding LIBOR Business Day unless
such LIBOR Business Day falls in another calendar month or would cause the
Commitments hereunder to be in existence longer than 364 days, in which case
the Termination Date shall be the next preceding LIBOR Business Day.

"Texas Commerce" means Texas Commerce Bank National
Association in its individual capacity.

"Total Capital" means, at any date, the sum of (x)
Consolidated Debt plus (y) Consolidated Stockholders' Equity (including for
this purpose any amount attributable to stock which is required to be redeemed
or is redeemable at the option of the holder, if certain events or conditions
occur or exist or otherwise), in each case determined at such date.

"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.

SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the financial statements of the
Borrower and its Consolidated Subsidiaries described in Section 4.4 (a);
provided that, if the Borrower notifies the Agent that the Borrower wishes to
amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles

CREDIT AGREEMENT, PAGE 9
<PAGE> 15
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.

ARTICLE 2

THE CREDIT

SECTION 2.1. Commitments to Lend. (a) During the
Revolving Credit Period, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make loans to the Borrower pursuant
to this Section from time to time in amounts such that the aggregate principal
amount of Loans by such Bank at any one time outstanding shall not exceed the
amount of its Commitment. Each Borrowing under this Section shall be in an
aggregate principal amount of $15,000,000 or any larger multiple of $5,000,000
(except that any such Borrowing may be in the aggregate amount available in
accordance with Section 3.2) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing limits,
the Borrower may borrow under this Section, prepay Loans to the extent
permitted by Section 2.11 and reborrow at any time during the Revolving Credit
Period under this Section.

SECTION 2.2. Notice of Borrowing. The Borrower shall give
the Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (Houston,
Texas time) on (x) the date of each Base Rate Borrowing and (y) the third LIBOR
Business Day before each LIBOR Borrowing, specifying:

(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a LIBOR Business
Day in the case of a LIBOR Borrowing;

(ii) the aggregate amount of such Borrowing;

(iii) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate or a LIBOR Rate; and

(iv) in the case of a LIBOR Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.

CREDIT AGREEMENT, PAGE 10
<PAGE> 16
SECTION 2.3. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Agent shall promptly notify each Bank of
the contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.

(b) Not later than 12:00 Noon (Houston, Texas time) on
the date of each Borrowing, each Bank participating therein shall make
available its share of such Borrowing, in Federal or other funds immediately
available in Houston, Texas, to the Agent at its address referred to in Section
9.1. Unless the Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Agent will make the funds so received
from the Banks available to the Borrower at the Agent's aforesaid address.

(c) Unless the Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Agent such Bank's share of such Borrowing, the Agent may assume that
such Bank has made such share available to the Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this Section and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank shall
not have so made such share available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum, equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.6 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan included in such Borrowing
for purposes of this Agreement.

SECTION 2.4. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank in an amount equal
to the aggregate unpaid principal amount of such Bank's Loans.

(b) Each Bank may, by notice to the Borrower and the
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.

(c) Upon receipt of each Bank's Note pursuant to Section
3.1(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may,
if such Bank so elects in connection with any transfer or enforcement of its
Note, endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; Provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower

CREDIT AGREEMENT, PAGE 11
<PAGE> 17
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by
the Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.

SECTION 2.5. Maturity of Loans; Mandatory Prepayment.
Each Loan shall mature, and the principal amount thereof shall be due and
payable, on the Termination Date. Borrower shall prepay the principal amount
of the Loans on each date the proceeds of either the Equity Offering or the
Debt Offering are received by the Borrower, such prepayment to be in an amount
equal to the proceeds so received on such a date, net of underwriting
discounts, commissions and other reasonable costs associated therewith. If at
any time the outstanding principal amount of the Loans exceeds the aggregate
amount of the Commitments, Borrower shall make a prepayment on the Loans in an
amount equal to the excess. Any prepayment of the Loans under this Section 2.5
shall be accompanied with accrued interest thereon to the date of prepayment
and any amount payable under Section 2.13. Each such prepayment shall be
applied to prepay ratably the Loans of the several Banks included in the Group
of Loans being prepaid.

SECTION 2.6. Interest Rates. (a) Each Base Rate Loan
shall bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and, with respect to the principal amount of any
Base Rate Loan converted to a LIBOR Loan, on each date a Base Rate Loan is so
converted. Any overdue principal of or interest on any Base Rate Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans
for such day.

(b) Each LIBOR Loan shall bear interest on the
outstanding principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the LIBOR Margin
for such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.

The "Adjusted London Interbank Offered Rate"
applicable to any Interest Period means a rate per annum equal to the
quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London Interbank Offered
Rate by (ii) 1.00 minus the LIBOR Reserve Percentage.

The "London Interbank Offered Rate" applicable to any
Interest Period means the rate per annum (rounded upward, if
necessary, to the next higher 1/16 of 1%) at which deposits in dollars
are offered to the Reference Bank in the London interbank market at
approximately 11:00 A.M. (London time) two LIBOR Business Days before
the first day of such Interest Period in an amount approximately equal
to the principal amount of the LIBOR Loan of the Reference Bank to
which such Interest Period is to apply and for a period of time
comparable to such Interest Period.

CREDIT AGREEMENT, PAGE 12
<PAGE> 18
"LIBOR Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement for a
member bank of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR
Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank
to United States residents). The Adjusted London Interbank Offered
Rate shall be adjusted automatically on and as of the effective date
of any change in the LIBOR Reserve Percentage.

(c) Any overdue principal of or interest on any LIBOR
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the LIBOR Margin for
such day plus the quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (x) the average (rounded upward, if necessary,
to the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three LIBOR Business Days,
then for such other period of time not longer than three months as the Agent
may select) deposits in dollars in an amount approximately equal to such
overdue payment due to the Reference Bank are offered to the Reference Bank in
the London interbank market for the applicable period determined as provided
above by (y) 1.00 minus the LIBOR Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.1 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such
day) and (ii) the sum of 2% plus the LIBOR Margin for such day plus the
Adjusted London Interbank Offered Rate applicable to such Loan at the date such
payment was due.

(d) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.

(e) The Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If the
Reference Bank does not furnish a timely quotation, the provisions of Section
8.1 shall apply.

SECTION 2.7. Fees. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate
(determined daily in accordance with the Pricing Schedule). Such facility fee
shall accrue (i) from and including the Closing Date to but excluding the date
of termination of the Commitments in their entirety, on the daily aggregate
amount of the Commitments (whether used or unused) and (ii) from and including
such date of termination to but excluding the date the Loans shall be repaid in
their entirety, on the daily aggregate outstanding principal amount of the
Loans. Such facility fee shall be payable quarterly in arrears on each
Quarterly Date and on the date of termination of the Commitments in their
entirety (and, if later, the date the Loans shall be repaid in their entirety).

CREDIT AGREEMENT, PAGE 13
<PAGE> 19
SECTION 2.8. Optional Termination or Reduction of
Commitments. During the Revolving Credit Period, the Borrower may, upon at
least three Domestic Business Days' notice to the Agent, (i) terminate the
Commitments at any time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of $25,000,000 or a
larger multiple of $10,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the Loans.

SECTION 2.9. Method of Electing Interest Rates. (a) The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified by the Borrower in the applicable Notice of Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans (subject in each case to the
provisions of Article 8), as follows:

(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to LIBOR Loans as of any LIBOR Business
Day; and

(ii) if such Loans are LIBOR Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as LIBOR Loans for an additional Interest Period, subject to
Section 2.13 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.

Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent not later than 10:00 A.M. (Houston, Texas
time) on the third LIBOR Business Day before the conversion or continuation
selected in such notice is to be effective (unless the relevant Loans are to be
converted to Base Rate Loans, in which case such notice shall be delivered to
the Agent not later than 10:00 A.M. (Houston, Texas time) on the Domestic
Business Day such conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the remaining portion to
which it does not apply, are each $15,000,000 or any larger multiple of
$5,000,000.

(b) Each Notice of Interest Rate Election shall specify:

(i) the Group of Loans (or portion thereof) to which such
notice applies;

(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall comply with
the applicable clause of subsection (a) above;

(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being converted are
to be LIBOR Loans, the duration of the next succeeding Interest Period
applicable thereto; and

CREDIT AGREEMENT, PAGE 14
<PAGE> 20
(iv) if such Loans are to be continued as LIBOR Loans for
an additional Interest Period, the duration of such additional
Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.

(c) Upon receipt of a Notice of Interest Rate Election
from the Borrower pursuant to subsection (a) above, the Agent shall promptly
notify each Bank of the contents thereof and such notice shall not thereafter
be revocable by the Borrower.

SECTION 2.10. Mandatory Termination and Reduction of
Commitments. (a) The Commitments shall terminate on the Termination Date.

(b) The Commitments shall irrevocably be reduced on each
date the proceeds of either the Equity Offering or the Debt Offering are
received by the Borrower and shall be reduced on each such date by an amount
equal to the proceeds so received on such date, net of underwriting discounts,
commissions and other reasonable costs associated therewith.

SECTION 2.11. Optional Prepayments. (a) The Borrower may,
upon at least one Domestic Business Day's notice to the Agent, prepay any Group
of Loans, in whole at any time, or from time to time in part in amounts
aggregating $10,000,000 or any larger multiple of $5,000,000, by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment and any amount payable under Section 2.13. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group.

(b) Upon receipt of a notice of prepayment pursuant to
this Section, the Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.

SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (Houston, Texas time) on the
date when due, in Federal or other funds immediately available in Houston,
Texas, to the Agent at its address referred to in Section 9.1. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Base Rate Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the LIBOR Loans shall be due on a day which is
not a LIBOR Business Day, the date for payment thereof shall be extended to the
next succeeding LIBOR Business Day unless such LIBOR Business Day falls in
another calendar month, in which case the date for payment thereof shall be the

CREDIT AGREEMENT, PAGE 15
<PAGE> 21
next preceding LIBOR Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.

SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any LIBOR Loan or any LIBOR Loan is
converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than
the last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.6(c), or if the Borrower fails to
borrow, prepay, convert or continue any LIBOR Loans after notice has been given
to any Bank in accordance with Section 2.3(a), 2.11(b) or 2.9(c) the Borrower
shall reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to
borrow, prepay, convert or continue, provided that such Bank shall have
delivered to the Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error.

SECTION 2.14. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day) (i.e. (interest
rate divided by 365 (or 366 days in a leap year)) times (actual number of days
elapsed)). All other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day) (i.e. (interest rate or fee rate divided
by 360) times (actual number of days elapsed )).

SECTION 2.15. Change of Control. If a Change of Control
shall occur (i) the Borrower will, within ten days after the occurrence
thereof, give each Bank notice thereof and shall describe in reasonable detail
the facts and circumstances giving rise thereto and (ii) each Bank may, by
three Domestic Business Days' notice to the Borrower and the Agent given not
later than 60 days after such Change of Control, terminate its Commitment,
which shall thereupon be terminated, and declare the Note held by it (together
with accrued interest thereon) and any other amounts payable hereunder for its
account to be, and such Note and such other amounts shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

For purposes of this Section, the following terms have the
following meanings:

CREDIT AGREEMENT, PAGE 16
<PAGE> 22
A "Change of Control" shall occur if (i) any person or group
of persons (with-in the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 45% or more in
voting power of the outstanding Voting Stock of the Borrower or (ii)
during any period of 12 consecutive calendar months, individuals who
were either (x) directors of the Borrower on the first day of such
period or (y) elected to fill vacancies caused by the ordinary course
resignation or retirement of any other director and whose nomination
or election was approved by a vote of at least a majority of the
directors then still in office who were directors of the Borrower on
the first day of such period, shall cease to constitute a majority of
the board of directors of the Borrower.

ARTICLE 3

CONDITIONS

SECTION 3.1. Closing. The closing hereunder shall occur
upon receipt by the Agent of the following, each dated the Closing Date unless
otherwise indicated or not applicable:

(a) a duly executed Note for the account of each Bank
dated on or before the Closing Date complying with the provisions of
Section 2.4;

(b) an opinion of New York and in-house counsel to the
Borrower covering such matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;

(c) evidence satisfactory to Agent that the fees required
to be paid on the Closing Date under the terms of the Fee and
Procedure Letter have been paid; and

(d) all documents the Agent may reasonably request
relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement and the Notes, and any other
matters relevant hereto, all in form and substance satisfactory to the
Agent.

The Agent shall promptly notify the Borrower and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.

SECTION 3.2. Borrowings. The obligation of any Bank to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:

(a) the fact that the Closing Date shall have occurred on
or prior to September 30, 1996;

CREDIT AGREEMENT, PAGE 17
<PAGE> 23
(b) receipt by the Agent of a Notice of Borrowing as
required by Section 2.2;

(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed
the aggregate amount of the Commitments;

(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and

(e) the fact that the representations and warranties of
the Borrower contained in this Agreement shall be true on and as of
the date of such Borrowing.

Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(c), (d) and (e) of this Section.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

SECTION 4.1. Corporate Existence and Power. The Borrower
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.

SECTION 4.2. Corporate and Governmental Authorization, No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the corporate powers of the Borrower, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official or
other third Person and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Subsidiaries (except for the potential default under the Consolidated
Debt to Total Capital covenant set forth in the Morgan Credit Agreement) or
result in the creation or imposition of any Lien on any asset of the Borrower
or any of its Subsidiaries.

SECTION 4.3. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights and general
principles of equity.

SECTION 4.4. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of December
31, 1995 and the related consolidated

CREDIT AGREEMENT, PAGE 18
<PAGE> 24
statements of income and cash flows for the fiscal year then ended, reported on
by Coopers & Lybrand L.L.P. and incorporated by reference in the Borrower's
1995 Form 10-K, a copy of which has been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting principles, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year.

(b) The unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of June 30, 1996 and the related
unaudited consolidated statements of income and cash flows for the six months
then ended, set forth in the Borrower's Latest Form 10-Q, a copy of which has
been delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six month period (subject to normal year-end adjustments).

(c) Since December 31, 1995 there has been no material
adverse change in the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole (including without limitation any such material adverse change caused by
any action, suit or proceeding disclosed in the Borrower's periodic reports
filed with the Securities and Exchange Commission from time to time).

SECTION 4.5. Litigation. Except as set forth in the
Borrower's periodic reports filed with the Securities and Exchange Commission
from time to time, there is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.

SECTION 4.7. Environmental Matters. In the ordinary
course of its business, the Borrower conducts an ongoing review of the effect
of Environmental Laws on the business,

CREDIT AGREEMENT, PAGE 19
<PAGE> 25
operations and properties of the Borrower and its Subsidiaries, in the course
of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any
capital or operating expenditures required to achieve or maintain compliance
with environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in
the level of or change in the nature of operations conducted thereat, any costs
or liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis of this review,
the Borrower has reasonably concluded that such associated liabilities and
costs, including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.

SECTION 4.8. Taxes. The Borrower and its Subsidiaries
have filed (or have made timely requests for an extension to file) all United
States Federal income tax returns and all other material tax returns which are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary, other than any such taxes the non-payment of which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.

SECTION 4.9. Subsidiaries. Each of the Borrower's
corporate subsidiaries is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted
(except for any governmental licenses, authorizations, consents or approvals
the absence of which could not reasonably be expected to have a Material
Adverse Effect).

SECTION 4.11. Full Disclosure. The information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby taken as
a whole does not, and the information hereafter so furnished, taken as a whole
with all information previously furnished will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

SECTION 4.12. Defaults. Neither the Borrower nor any of
its Subsidiaries is in default in any respect in the performance, observance,
or fulfillment of any of the obligations,

CREDIT AGREEMENT, PAGE 20
<PAGE> 26
covenants, or conditions contained in any agreement or instrument to which it
is a party other than defaults which will not have a Material Adverse Effect.

SECTION 4.13. Debt Rating;. Borrower's senior unsecured
long-term debt is rated as of the date hereof as BBB by Standard & Poor's
Rating Group and Baa1 by Moody's Investors Service, Inc.

SECTION 4.14. Use of Proceeds; Ranking. The proceeds of
the Loans will be or have been utilized as required by Section 5.8. The Loans
rank pari passu in right of payment to all other senior unsecured Debt of
Borrower.

ARTICLE 5

COVENANTS

The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:

SECTION 5.1. Information. The Borrower will deliver to
each of the Banks:

(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer or the chief accounting
officer of the Borrower (i) setting forth in reasonable detail the
calculations required to establish whether the Borrower was in
compliance with the requirements of Sections 5.9 through 5.13,
inclusive, on the date of such financial statements and (ii) stating
whether any Default exists on the date of such certificate and, if any
Default then exists

CREDIT AGREEMENT, PAGE 21
<PAGE> 27
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;

(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement of
the firm of independent public accountants which reported on such
statements (i) whether anything has come to their attention to cause
them to believe that any Default existed on the date of such
statements and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant to
clause (c) above;

(e) within ten days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing,
a certificate of the chief financial officer or the chief accounting
officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;

(f) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;

(h) if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which
the Borrower reasonably believes might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given or is required to give notice
of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA or
notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such
application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any amendment
to any Plan or Benefit Arrangement which has resulted or which the
Borrower reasonably believes could result in the imposition of a Lien
or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group is required or
proposes to take;

CREDIT AGREEMENT, PAGE 22
<PAGE> 28
(i) promptly after any officer of the Borrower obtains
knowledge thereof, notice of any change in the rating of the
Borrower's senior unsecured long-term debt securities; and

(j) from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.

SECTION 5.2. Payment of Obligations. The Borrower will
pay and discharge, and will cause each Subsidiary to pay and discharge, at or
before maturity, all their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien),
except where the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of any of the same.

(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary's own name) with financially sound and responsible insurance
companies, insurance on all their respective material properties in at least
such amounts, against at least such risks and with such risk retention as are
usually maintained, insured against or retained, as the case may be, in the
same general area by companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon request from the Agent,
information presented in reasonable detail as to the insurance so carried.

CREDIT AGREEMENT, PAGE 23
<PAGE> 29
therewith is contested in good faith by appropriate proceedings or (ii) where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

SECTION 5.6. Inspection of Property, Books and Records.
The Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each Subsidiary to permit, representatives of any Bank
at such Bank's expense to visit and inspect any of their respective properties,
to examine and make abstracts from any of their respective books and records
and to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.

SECTION 5.7. Mergers and Sales of Assets. The Borrower
will not consolidate or merge with or into any other Person; provided that, the
Borrower may merge with another Person if (x) the Borrower is the corporation
surviving such merger and (y) after giving effect to such merger, no Default
shall have occurred and be continuing. The Borrower will not sell, lease or
otherwise transfer directly or indirectly, all or substantially all of its
assets to any other Person or Persons.

SECTION 5.8. Use of Proceeds. The proceeds of the Loans
made under this Agreement will be used by the Borrower to acquire the stock of
Medo Industries, Inc .and certain of its affiliated entities. None of such
proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.

SECTION 5.9. Negative Pledge. Neither the Borrower nor
any Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:

(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $26,000,000;

(b) any Lien existing on any asset of any Person at the
time such Person becomes a Subsidiary and not created in contemplation
of such event;

(c) any Lien on any asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;

(d) any Lien on any asset of any Person existing at the
time such Person is merged or consolidated with or into the Borrower
or a Subsidiary and not created in contemplation of such event;

(e) any Lien existing on any asset prior to the
acquisition thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition;

CREDIT AGREEMENT, PAGE 24
<PAGE> 30
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section, provided that such Debt is
not increased and is not secured by any additional assets;

(h) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount of cash
and cash equivalents subject to such Liens may at no time exceed
$10,000,000; and

(i) Liens not otherwise permitted by the foregoing
clauses of this Section securing Debt in an aggregate principal or
face amount at any date not to exceed 20% of Consolidated Tangible Net
Worth at such date.

SECTION 5.10. Debt to Total Capital. The ratio of
Consolidated Debt to Total Capital shall not exceed at any time 0.6:1.0.

SECTION 5.11. Debt of Subsidiaries. The Borrower will not
permit any of its Material Subsidiaries to incur or at any time be liable with
respect to any Debt except:

(a) Debt owed to the Borrower or to a wholly owned
Subsidiary;

(b) Debt secured by a Lien permitted by Section 5.9(c)
and any refinancing, extension, renewal or refunding thereof;

(c) Debt of any Person existing at the time such Person
is merged or consolidated with or into any Material Subsidiary and not
incurred in contemplation of such merger or consolidation;

(d) Debt of any Person existing at the time such Person
becomes a Material Subsidiary, regardless of whether such Debt was
incurred in contemplation of such event; and

(e) Debt not otherwise permitted by the foregoing clauses
in an aggregate principal or face amount at any time outstanding not
to exceed $35,000,000.

SECTION 5.12. Fixed Charge Coverage Ratio. As of the last
day of each fiscal quarter of the Borrower, the Fixed Charge Ratio will not be
less than 1.4:1.

SECTION 5.13. Transactions with Affiliates. The Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, pay
any funds to or for the account of, make any Investment in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible, to, or

CREDIT AGREEMENT, PAGE 25
<PAGE> 31
participate in, or effect, any transaction with, any Affiliate except on an
arms-length basis on terms at least as favorable to the Borrower or such
Subsidiary than could have been obtained from a third party who was not an
Affiliate; Provided that the foregoing provisions of this Section shall not
prohibit any such Person from declaring or paying any lawful dividend or other
payment ratably in respect of all of its capital stock of the relevant class so
long as, after giving effect thereto, no Default shall have occurred and be
continuing.

ARTICLE 6

DEFAULTS

SECTION 6.1. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:

(a) the Borrower shall fail to pay any principal of any
Loan when due. Borrower shall fail to pay any interest, any fees or
any other amount payable hereunder within 5 days of the due date
thereof;

(b) the Borrower shall fail to observe or perform any
covenant contained in Article 5, other than those contained in
Sections 5.1 through 5.6;

(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
covered by clause (a) or (b) above) for 30 days after notice thereof
has been given to the Borrower by the Agent at the request of any
Bank;

(d) any representation, warranty, certification or
statement made by the Borrower in this Agreement or in any
certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material
respect when made (or deemed made);

(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations when due or
within any applicable grace period;

(f) any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt or enables the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;

(g) the Borrower or any Material Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of

CREDIT AGREEMENT, PAGE 26
<PAGE> 32
creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the
foregoing;

(j) judgments or orders for the payment of money in
excess of $10,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgments or orders shall continue unsatisfied and
unstayed for a period of 10 days;

then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% of the aggregate principal amount of
the Loans, by notice to the Borrower declare the Loans (together with accrued
interest thereon) to be, and the Loans shall thereupon become, immediately due
and payable without further notice of intent to accelerate, notice of
acceleration, presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any of
the Events of Default specified in clause 6.1(g) or, 6.1(h) above with respect
to the Borrower, without any notice to the Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon terminate and the Loans
(together with accrued interest thereon) shall become immediately due and
payable without notice of acceleration, notice of intent to accelerate,
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

CREDIT AGREEMENT, PAGE 27
<PAGE> 33
Notwithstanding anything contained in the foregoing paragraph, if at
any time within 60 days after the Notes have been declared due pursuant to the
preceding paragraph, the Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than by
acceleration and all Events of Default (other than non-payment of the principal
of and accrued interest on the Loans, in each case which is due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 9.5, then the Required Banks by written notice to the Borrower to be
delivered by the Agent, may at their option rescind and annul the acceleration
and its consequences; but such action shall not affect any subsequent Event of
Default or Default or impair any right of the Banks consequent thereon.

SECTION 6.2. Notice of Default. The Agent shall give
notice to the Borrower under Section 6.1(c) promptly upon being requested to do
so by any Bank and shall thereupon notify all the Banks thereof.

ARTICLE 7

THE AGENT

SECTION 7.2. Agent and Affiliates. Texas Commerce shall
have the same rights and powers under this Agreement as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent,
and Texas Commerce and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not the Agent.

SECTION 7.3. Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article 6.

CREDIT AGREEMENT, PAGE 28
<PAGE> 34
observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.

SECTION 7.6. INDEMNIFICATION. EACH BANK, RATABLY IN
ACCORDANCE WITH ITS COMMITMENT, INDEMNIFIES THE AGENT, ITS AFFILIATES AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES (TO THE EXTENT NOT
REIMBURSED BY THE BORROWER) AGAINST ANY COST, EXPENSE (INCLUDING COUNSEL FEES
AND DISBURSEMENTS), CLAIM, DEMAND, ACTION, LOSS OR LIABILITY (EXCEPT SUCH AS
RESULT FROM SUCH INDEMNITEES' GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) THAT SUCH
INDEMNITEES MAY SUFFER OR INCUR IN CONNECTION WITH THIS AGREEMENT OR ANY ACTION
TAKEN OR OMITTED BY SUCH INDEMNITEES HEREUNDER.

SECTION 7.7. Credit Decision. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Bank
also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.

SECTION 7.9. Agent's Fee. The Borrower shall pay to the
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and the Agent.

CREDIT AGREEMENT, PAGE 29
<PAGE> 35
ARTICLE 8

CHANGE IN CIRCUMSTANCES

SECTION 8.1. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any Interest Period
for any LIBOR Loan:

(a) the Agent is advised by the Reference Bank that
deposits in dollars (in the applicable amounts) are not being offered
to the Reference Bank in the relevant market for such Interest Period,
or

(b) Banks having 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the Adjusted London
Interbank Offered Rate, as determined by the Agent, will not
adequately and fairly reflect the cost to such Banks of funding their
LIBOR Loans for such Interest Period,

SECTION 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its LIBOR Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its LIBOR Lending Office) to make, maintain or fund
its LIBOR Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make LIBOR Loans, or to convert outstanding Base Rate Loans into LIBOR Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different LIBOR Lending office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such
notice is given, each LIBOR Loan of such Bank then outstanding shall be
converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such LIBOR Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Bank shall determine that it may not lawfully continue to maintain and fund
such Loan to such day.

CREDIT AGREEMENT, PAGE 30
<PAGE> 36
SECTION 8.3. Increased Cost and Reduced Return. (a) If on
or after the date hereof, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding any such requirement included in an applicable LIBOR Reserve
Percentage), special deposit, insurance assessment or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or the London interbank market any other condition
affecting its LIBOR Loans, its Note or its obligation to make LIBOR Loans and
the result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any LIBOR Loan, or
to-reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased cost or reduction.

(b) If any Bank shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.

(c) Each Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.

SECTION 8.4. Taxes. (a) For the purposes of this Section
8.4, the following terms have the following meanings:

CREDIT AGREEMENT, PAGE 31
<PAGE> 37
"Taxes" means any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings with
respect to any payment by the Borrower pursuant to this Agreement or
under any Note, and all liabilities with respect thereto, excluding
(i) in the case of each Bank and the Agent, taxes imposed on its
income, and franchise or similar taxes imposed on it, by a
jurisdiction under the laws of which such Bank or the Agent (as the
case may be) is organized or in which its principal executive office
is located or, in the case of each Bank, in which its Applicable
Lending office is located and (ii) in the case of each Bank, any
United States withholding tax imposed on such payments but only to the
extent that such Bank is subject to United States withholding tax at
the time such Bank first becomes a party to this Agreement.

"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar
charges or levies, which arise from any payment made pursuant to this
Agreement or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note.

(c) THE BORROWER INDEMNIFIES EACH BANK AND THE AGENT FOR
THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY
TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE
UNDER THIS SECTION) PAID BY SUCH BANK OR THE AGENT (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR
WITH RESPECT THERETO. THIS INDEMNIFICATION SHALL BE PAID WITHIN 15 DAYS AFTER
SUCH BANK OR THE AGENT (AS THE CASE MAY BE) MAKES DEMAND THEREFOR.

CREDIT AGREEMENT, PAGE 32
<PAGE> 38
that the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States.

(e) For any period with respect to which a Bank has
failed to provide the Borrower or the Agent with the appropriate form pursuant
to Section 8.4(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.4(b) or (c) with respect to Taxes imposed by the United States;
provided that if a Bank, which is otherwise exempt from or subject to a reduced
rate of withholding tax, becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.

(f) If the Borrower is required to pay additional amounts
to or for the account of any Bank pursuant to this Section, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.

SECTION 8.5. Base Rate Loans Substituted for Affected
LIBOR Loans. If (i) the obligation of any Bank to make, or convert outstanding
Loans to, LIBOR Loans has been suspended pursuant to Section 8.2 or (ii) any
Bank has demanded compensation under Section 8.3 or 8.4 with respect to its
LIBOR Loans and the Borrower shall, by at least five LIBOR Business Days, prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:

(a) all Loans which would otherwise be made by such Bank
as (or continued as or converted into) LIBOR Loans shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related LIBOR Loans of the other Banks);
and

(b) after each of its LIBOR Loans has been repaid (or
converted to a Base Rate Loan), all payments of principal which would
otherwise be applied to repay such LIBOR Loans shall be applied to
repay its Base Rate Loans instead.

If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a LIBOR Loan on the first day of the next succeeding Interest
Period applicable to the related LIBOR Loans of the other Banks.

CREDIT AGREEMENT, PAGE 33
<PAGE> 39
ARTICLE 9

MISCELLANEOUS

SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Borrower, the Agent or Texas Commerce, at its
address, facsimile number or telex number set forth on the signature pages
hereof, (b) in the case of any other Bank, at its address, facsimile number or
telex number set forth in its Administrative Questionnaire or (c) in the case
of any party, such other address, facsimile number or telex number as such
party may hereafter specify for the purpose by notice to the Agent and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (iii) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iv) if given by any
other means, when delivered at the address specified in this Section; provided
that notices to the Agent under Article 2 or Article 8 shall not be effective
until received.

SECTION 9.2. No Waivers. No failure or delay by the Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 9.3. Expenses; Indemnification. (a) The Borrower
shall pay (i) all out-of-pocket expenses of the Agent, including reasonable
fees and disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including (without duplication) the reasonable fees
and disbursements of counsel, in connection with such Event of Default and the
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.

(b) THE BORROWER INDEMNIFIES THE AGENT AND EACH BANK,
THEIR RESPECTIVE AFFILIATES AND THE RESPECTIVE DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES OF THE FOREGOING (EACH AN "INDEMNITEE") AND HOLDS EACH INDEMNITEE
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND
EXPENSES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL, WHICH MAY BE INCURRED BY SUCH INDEMNITEE IN
CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS FINANCED OR OTHERWISE
CONTEMPLATED HEREBY OR THE SYNDICATION OF THE LOANS BY TEXAS COMMERCE OR ITS
AFFILIATES; OR ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING

CREDIT AGREEMENT, PAGE 34
<PAGE> 40
(WHETHER OR NOT SUCH INDEMNITEE SHALL BE DESIGNATED A PARTY THERETO) BROUGHT OR
THREATENED RELATING THERETO OR ARISING THEREFROM; PROVIDED THAT NO INDEMNITEE
SHALL HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER FOR SUCH INDEMNITEE'S OWN
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION.

SECTION 9.4. Sharing of Set-Offs. Each Bank agrees that
if it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in a Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the amount of such
participation.

SECTION 9.5. Amendments and Waivers. Any provision of
this Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed
by all the Banks, (i) increase or decrease the Commitment of any Bank (except
for a ratable decrease in the Commitments of all Banks) or subject any Bank to
any additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder or for any
scheduled reduction or termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes, or the number of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement.

SECTION 9.6. Successors and Assigns. (a) The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.

CREDIT AGREEMENT, PAGE 35
<PAGE> 41
such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; Provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), or (iii)
of Section 9.5 without the consent of the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article 8 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).

(c) Any Bank may at any time assign to one or more banks
or other institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000) of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit B hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower, which shall not be unreasonably withheld, and the
Agent; provided that (a) if an Assignee is an affiliate of such transferor Bank
or was a Bank immediately prior to such assignment, no such consent shall be
required and (b) Texas Commerce agrees as long as no Default exists it will not
assign any portion of its Loans until after May 31, 1997. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and further
consent or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor Bank, the Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in
accordance with Section 8.4.

(d) Any Bank may at any time assign all or any portion of
its rights under this Agreement and its Note to a Federal Reserve Bank. No
such assignment shall release the transferor Bank from its obligations
hereunder.

CREDIT AGREEMENT, PAGE 36
<PAGE> 42
SECTION 9.7. Collateral. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.

SECTION 9.8. Governing Law; Submission to Jurisdiction.
This Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Courts located in
Dallas or Harris County and of any Texas State court sitting in Dallas or
Harris County for purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.

SECTION 9.9. Counterparts; Integration; Effectiveness.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. THIS AGREEMENT AND THE NOTES EMBODY THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF (PROVIDED THAT THE BORROWER'S
AGREEMENTS SET FORTH IN THE FEE AND PROCEDURAL LETTER TO ENGAGE THE CHASE
SECURITIES INC. TO STRUCTURE AND ARRANGE THE LOANS, TO PAY THE FEES DESCRIBED
IN THE FEE AND PROCEDURAL LETTER AND COOPERATE IN THE SYNDICATION OF THE LOANS
AND THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE FEE AND PROCEDURAL
LETTER SHALL SURVIVE AND SHALL NOT BE SUPERSEDED BY THIS AGREEMENT) AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES HERETO. This Agreement shall become
effective upon receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile or other written
confirmation from such party of execution of a counterpart hereof by such
party).

CREDIT AGREEMENT, PAGE 37
<PAGE> 43
herein shall prevent any Bank from disclosing such information (a) to any other
Bank or to the Agent, (b) subject to provisions substantially similar to those
contained in this Section, to any other Person if reasonably incidental to the
administration of the credit facility contemplated hereby, (c) upon the order
of any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly disclosed other
than as a result of a disclosure by the Agent or any Bank prohibited by this
Agreement, (f) in connection with any litigation to which the Agent, any Bank
or its subsidiaries or Parent may be a party, (g) to the extent necessary in
connection with the exercise of any remedy hereunder, (h) to such Bank's or
Agent's legal counsel and independent auditors and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed Participant or Assignee. The Agent or any Bank, as the case may be,
shall give prompt notice of any disclosure made by it pursuant to clauses (c)
or (f) of this Section; provided that the Agent or such Bank shall be required
to give such notice with respect to any disclosure made by it pursuant to
clause (f) solely to the extent that the interests of the Agent or such Bank,
as the case may be, and the Borrower in the relevant litigation are not adverse
in any material respect.

SECTION 9.12. Maximum Interest Rate.

(a) No interest rate specified in this Agreement or any
Note shall at any time exceed the Maximum Rate. If at any time the
interest rate (the "Contract Rate") for any obligation owed under this
Agreement or any Note shall exceed the Maximum Rate, thereby causing
the interest accruing on such obligation to be limited to the Maximum
Rate, then any subsequent reduction in the Contract Rate for such
obligation shall not reduce the rate of interest on such obligation
below the Maximum Rate until the aggregate amount of interest accrued
on such obligation equals the aggregate amount of interest which would
have accrued on such obligation if the Contract Rate for such
obligation had at all times been in effect. The term "Maximum Rate"
means, at any time and with respect to any Bank, the maximum rate of
nonusurious interest under applicable law that such Bank may charge
the Borrower. The Maximum Rate shall be calculated in a manner that
takes into account any and all fees, payments, and other charges
contracted for, charged, or receive in connection with this Agreement
and any Note that constitute interest under applicable law. Each
change in any interest rate provided for herein based upon the Maximum
Rate resulting from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under
Texas law, to the extent applicable, the applicable rate ceiling shall
be the indicated rate ceiling described in, and computed in accordance
with, Article 5069-1.04, Vernon's Texas Civil Statutes.

(b) No provision of this Agreement or any Note shall
require the payment or the collection of interest in excess of the
maximum amount permitted by applicable law. If any excess of interest
in such respect is hereby provided for, or shall be adjudicated to be
so provided, in this Agreement or any Note or otherwise in connection
with this loan transaction, the provisions of this Section shall
govern and prevail and neither the Borrower nor the sureties,
guarantors, successors, or assigns of the Borrower shall be obligated
to pay the excess amount of such interest or any other excess sum paid
for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event any Bank ever receives, collects, or applies as interest
any such sum, such amount which would be in excess of the maximum

CREDIT AGREEMENT, PAGE 38
<PAGE> 44
amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the obligations owed under this
Agreement or any Note and, if the principal of such obligations has
been paid in full, any remaining excess shall forthwith be paid to the
Borrower. In determining whether or not the interest paid or payable
exceeds the Maximum Rate, the Borrower and each Bank shall, to the
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of
such obligations so that interest for the entire term does not exceed
the Maximum Rate.

SECTION 9.13. Non-Application of Chapter 15 of Texas Credit
Code. To the extent if any that the laws of the State of Texas may apply to
the transactions contemplated hereby, the provisions of Chapter 15 of the
Texas Credit Code (Vernon's Texas Civil Statutes, Article 5069-15) are
specifically declared by the parties hereto not to be applicable to this
Agreement or any Note or to the transactions contemplated thereby.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.

QUAKER STATE CORPORATION

By:/s/ CONRAD A. CONRAD
----------------------------------------------
Name: Conrad A. Conrad
-------------------------------------------
Title: Vice Chairman and Chief Financial Officer
------------------------------------------

Address: 225 East John Carpenter Freeway
Irving, Texas 75062
Telephone: (214) 868-0400
Facsimile: (214) 868-0688

CREDIT AGREEMENT, PAGE 39
<PAGE> 45
<TABLE>
<S> <C>
Total Commitments: TEXAS COMMERCE BANK NATIONAL
- ------------------ ASSOCIATION, individually as a Bank and as
$165,000,000 Agent

By /s/ MATTHEW H. HILDRETH
-------------------------------------------------
Matthew H. Hildreth
Vice President

Address for Notices:
-------------------

1111 Fannin, 9th Floor, MS46
Houston, Texas 77002
Fax No.: (713) 216-2291
Telex: 166-350 TCB HOU
Telephone No.: (713) 750-2784
Attention: Loan Syndication Services
Re: Quaker State Corporation

With a copy to:
P. O. Box 660197
2200 Ross Avenue
Dallas, Texas 75266-0197
Fax No.: (214) 965-2044
Telex: 496-20477
Telephone No.: (214) 965-2591
Attention: Corporate Banking Group

Domestic Lending Office and
LIBOR Lending Office
--------------------
1111 Fannin
Houston, Texas 77002
</TABLE>

CREDIT AGREEMENT, PAGE 40
<PAGE> 46
INDEX TO SCHEDULES AND EXHIBITS

Schedules

Schedule 2.6 - Pricing Schedule
Schedule 4.6 - Potential Liability under Title IV of ERISA

Exhibits

Exhibit A - Note
Exhibit B - Assignment and Assumption Agreement
Exhibit C - Administrative Questionnaire

CREDIT AGREEMENT, PAGE 41

<PAGE> 1
EXHIBIT 10(a)

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment to Employment Agreement ("Amendment") is made and
entered into as of the 10th day of May, 1996, by and between Quaker State
Corporation (the "Corporation"), a Delaware corporation, and Herbert M. Baum
(the "Executive"), an individual currently residing in Dallas, Texas.

WHEREAS, the Corporation and the Executive entered into an Employment
Agreement (the "Agreement") dated as of August 1, 1994; and

WHEREAS, the parties desire by this Amendment to modify certain terms
of the Agreement;

NOW, therefore, the Corporation and the Employee, in consideration of
their mutual covenants herein, hereby agree as follows:

1. All capitalized terms used in this Amendment without definition shall
have the meanings assigned to them in the Agreement.

2. Paragraph 1(a) of the Agreement is hereby amended and restated in its
entirety to provide as follows:

(a) Employment. The Corporation hereby offers to employ
the Executive, and the Executive hereby accepts such employment, for
the term set forth in Paragraph 1(b).

3. The first sentence of Paragraph 2 of the Agreement is hereby amended
and restated in its entirety to provide as follows:

2. Duties. During the period of employment from August
1, 1994 through June 30, 1995, the Executive shall serve as Chairman,
President and Chief Executive Officer of the Corporation, and during
the period of employment commencing July 1, 1995, the Executive shall
serve as Chairman and Chief Executive Officer of the Corporation, and
in each case, he shall have all powers and duties consistent with such
positions subject to the direction of the Board.

4. Subparagraphs (a) and (b) of Paragraph 10 are hereby amended and
restated in their entirety to provide as follows:

(a) if to the Board or the Corporation, to:

Quaker State Corporation
225 East John Carpenter Freeway
Irving, Texas 75062
<PAGE> 2
Attention: Secretary

(b) if to the Executive, to:

Herbert M. Baum
5101 Lakehill Court
Dallas, Texas 75220

In witness whereof, the parties hereto have executed this Amendment as
of the day and year first above written.

QUAKER STATE CORPORATION

By: /s/ Conrad A. Conrad
---------------------

Title: Vice Chairman / CFO
---------------------

EXECUTIVE

/s/ Herbert M. Baum
-----------------------------
Herbert M. Baum

<PAGE> 1
EXHIBIT 10(b)

FIRST AMENDMENT TO THE
QUAKER STATE CORPORATION
1994 STOCK INCENTIVE PLAN

This First Amendment made effective the 24th day of October, 1996 by
Quaker State Corporation (the "Corporation")

WITNESSETH:

WHEREAS, the Corporation established the Quaker State Corporation 1994
Stock Incentive Plan on May 12, 1994 (the "Plan"); and

WHEREAS, the Plan may be amended in accordance with SECTION 11 thereof; and

WHEREAS, the Corporation wishes to amend the Plan as a result of
changes in the requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended;

NOW, THEREFORE, under the powers retained by the Corporation's Board
of Directors under SECTION 11 of the Plan and pursuant to the authorization of
the Board of Directors granted on October 24, 1996, the Corporation hereby
amends the Plan as follows:

1. The first paragraph of Section 1, ADMINISTRATION, is hereby amended by
deleting sub-part (i) thereof and substituting the following in lieu thereof:

"(i) a "non-employee director" as defined under Rule 16b-3(b)(3) under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
any successor Rule".

2. Section 3, SHARES AVAILABLE UNDER THE PLAN, is hereby amended,
effective May 16, 1996, by deleting "1,250,000 shares" from the second line
thereof and substituting the following in lieu thereof "1,362,978 shares".

3. Section 10, WITHHOLDING, is hereby amended by deleting the third
paragraph thereof in its entirety.

4. In all other respects, the provisions of the Plan are hereby ratified
and confirmed, and shall continue in full force and effect. In order to
continue to set forth all provisions of the Plan in a single document, the
changes made by this First Amendment may be incorporated into a restatement of
the Plan.

IN WITNESS WHEREOF, the Corporation has evidenced the adoption of this
First Amendment to the Plan by the signature of its duly authorized officer.

QUAKER STATE CORPORATION

Attest:
By: /s/ Paul E. Konney
------------------
/s/ Carrie L. Sherwood Paul E. Konney
-------------------------- Senior Vice President, General
Assistant Secretary Counsel and Secretary

(SEAL)

<PAGE> 1
EXHIBIT 10(c)

THIRD AMENDMENT TO THE
QUAKER STATE CORPORATION
(formerly Quaker State Oil Refining Corporation)
1986 STOCK OPTION PLAN

This Third Amendment made effective this 24th day of October, 1996 by
Quaker State Corporation (the "Corporation")

WITNESSETH:

WHEREAS, the Corporation established the Quaker State Corporation 1986
Stock Option Plan (the "Plan") on March 27, 1986, amended and restated the Plan
on April 30, 1987, and amended the Plan on February 27, 1992; and

WHEREAS, the Plan may be amended in accordance with SECTION 8
thereof; and

WHEREAS, the Corporation wishes to amend the Plan as a result of
changes in the requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended;

NOW, THEREFORE, under the powers retained by the Corporation's Board
of Directors under SECTION 8 of the Plan and pursuant to the authorization of
the Board of Directors granted on October 24, 1996, the Corporation hereby
amends the Plan as follows:

1. Section 1, Administration, is hereby amended by deleting the first
paragraph and substituting the following in lieu thereof:

"The Plan shall be administered by a Committee (the "Committee")
appointed by the Board of Directors (the "Board") and shall consist of
not less than three directors, each of whom is a "non-employee
director" as defined in Rule 16b-3(b)(3) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor rule.
From and after October 24, 1996, the Plan shall not be administered by
the committee appointed by the Board to administer the Corporation's
1976 Stock Option Plan, as amended (the "1976 Plan"), unless each
director on such committee also satisfies the requirements specified
in Rule 16b-3(b)(3) of the Exchange Act."

2. Section 5, Terms and Conditions of Stock Options and Stock
Appreciation Rights, subsection D is hereby amended by deleting same in its
entirety and substituting the following in lieu thereof:

"Stock appreciation rights shall be exercisable to the extent that the
related stock option is exercisable and only by the same person or
persons who are entitled to exercise the related stock option. Stock
appreciation rights shall entitle the optionee to surrender the
related stock option, or any portion thereof, and to receive from the
Corporation in exchange therefor that number of shares of the Capital
Stock having an aggregate fair market value on the date of exercise of
the stock appreciation rights equal to the excess of the fair market
value of one share of the Capital Stock on such date of exercise over
the option price per share times the number of shares covered by the
related stock option, or portion thereof, which is surrendered. Stock
appreciation rights granted in conjunction with an incentive stock
option shall not be exercisable unless the then fair market value of
the Capital Stock exceeds the option price of the shares subject to
the incentive stock option. Cash shall be paid in lieu of any
fractional shares. The Committee shall have the authority, in its
discretion, to determine that the obligation of the Corporation shall
be paid in cash or part in cash and part in shares. The date of
exercise of stock appreciation rights shall be determined under
procedures established by the Committee, and payment under this
Section 5(D) shall be made by the Corporation as soon as practicable
after the date of exercise. To the extent that a stock option as to
which stock appreciation rights have been granted in conjunction
therewith is exercised, the stock appreciation rights shall be
cancelled. For the purposes of this Section 5(D), the fair market
value of the Capital Stock shall be determined as provided in Section
5(H)".
<PAGE> 2
3. Section 8, Withholding, is hereby amended by deleting the third
paragraph thereof in its entirety.

4. In all other respects, the provisions of the Plan are hereby ratified
and confirmed, and shall continue in full force and effect. In order to
continue to set forth all provisions of the Plan in a single document, changes
made by this Third Amendment may be incorporated into a restatement of the
Plan.

IN WITNESS WHEREOF, the Corporation has evidenced the adoption of this
Third Amendment to the Plan by the signature of its duly authorized officer.

QUAKER STATE CORPORATION

Attest:
By: /s/ Paul E. Konney
------------------
/s/ Carrie L. Sherwood Paul E. Konney
-------------------------- Senior Vice President, General
Assistant Secretary Counsel and Secretary

(SEAL)

<PAGE> 1
EXHIBIT 10(d)

FIRST AMENDMENT TO THE
QUAKER STATE CORPORATION
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

This First Amendment is made effective the 24th day of October, 1996
by Quaker State Corporation (the "Corporation")

WITNESSETH:

WHEREAS, the Corporation established the Quaker State Corporation 1994
Non-Employee Directors' Stock Option Plan on May 12, 1994 (the "Plan"); and

WHEREAS, the Plan may be amended in accordance with SECTION 8 thereof; and

WHEREAS, the Corporation wishes to amend the Plan as a result of
changes in the requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended;

NOW, THEREFORE, pursuant to the powers retained by the Corporation's
Board of Directors under SECTION 8 of the Plan and pursuant to the
authorization of the Board of Directors granted on October 24, 1996, the
Corporation hereby amends the Plan as follows :

1. Section 4, TERMS AND CONDITIONS OF STOCK OPTIONS, is hereby amended by
deleting the last sentence under sub- section D.

2. In all other respects, the provisions of the Plan are hereby ratified
and confirmed, and shall continue in full force and effect. In order to
continue to set forth all provisions of the Plan in a single document, the
changes made by this First Amendment may be incorporated into a restatement of
the Plan.

IN WITNESS WHEREOF, the Corporation has evidenced the adoption of this
First Amendment to the Plan by the signature of its duly authorized officer.

QUAKER STATE CORPORATION

Attest:
By: /s/ Paul E. Konney
------------------
/s/ Carrie L. Sherwood Paul E. Konney
-------------------------- Senior Vice President, General
Assistant Secretary Counsel and Secretary

(SEAL)

<PAGE> 1
EXHIBIT 10(e)

QUAKER STATE CORPORATION
1996 DIRECTORS' FEE PLAN
(AS AMENDED EFFECTIVE JANUARY 1, 1997)

PURPOSE; RESERVATION OF SHARES

The purposes of the 1996 Directors' Fee Plan (the "Plan") are to provide
Directors of Quaker State Corporation (the "Corporation") with payment
alternatives for fees payable for future services as a member of the Board of
Directors of the Corporation (hereinafter referred to as the "Board") or as a
member of any committee thereof ("Director Fees") and to increase the
identification of interests between such Directors and the stockholders of the
Corporation by providing Directors the opportunity to elect to receive payment
of Director Fees in shares of Capital Stock, par value $1.00 per share, of the
Corporation ("Capital Stock"). For each calendar year, the aggregate number of
shares of Capital Stock which may be issued under Current Stock Elections or
credited to Deferred Stock Compensation Accounts for subsequent issuance under
the Plan is limited to 50,000 shares, subject to adjustment and substitution as
set forth in Section 5(b).

ELIGIBILITY

Any Director of the Corporation who is separately compensated for
services on the Board or on any committee of the Board shall be eligible to
participate in the Plan.

ELECTIONS

(a) DIRECTOR FEE PAYMENT ALTERNATIVES. For each calendar year beginning
January 1, 1997, a Director may elect any one of the following alternatives for
the payment of Director Fees:

(1) to receive current payment in cash, on the date on which the
Director Fees are payable, of all Director Fees for the calendar year;

(2) to receive current payment in shares of Capital Stock, on
the date on which the Director Fees are payable, of all Director Fees for
the calendar year (a "Current Stock Election");

(3) to defer payment of all or a portion of the Director Fees
for the calendar year for subsequent payment in cash (a "Cash Deferral
Election"); or

(4) to defer payment of all the Director Fees for the calendar
year for subsequent payment in shares of Capital Stock (a "Stock Deferral
Election").

(b) FILING AND EFFECTIVENESS OF ELECTIONS. The election by a Director
to receive payment of Director Fees other than in cash on the date on which the
Director Fees are otherwise payable is made

<PAGE> 2

by filing with the Secretary of the Corporation a Notice of Election in the
form prescribed by the Corporation (an "Election"). In order to be effective
for any calendar year, an Election must be received by the Secretary of the
Corporation on or before December 31 of the preceding calendar year, except
that if a Director files a Notice of Election on or before 30 days subsequent
to the Director's initial election to the office of Director, the Election
shall be effective on the date of filing with respect to Director Fees payable
for any portion of the calendar year which remains at the date of such filing.
An Election may not be modified or terminated after the beginning of a calendar
year for which it is effective. Unless modified or terminated by filing a new
Notice of Election on or before December 31 immediately preceding the calendar
year for which such modification or termination is effective, an Election shall
be effective for and apply to Director Fees payable for each subsequent
calendar year. Director Fees earned at any time for which an Election is not
effective shall be paid in cash on the date when the Director Fees are
otherwise payable. Any Election shall terminate on the date a Director ceases
to be a member of the Board.

(c) CURRENT STOCK ELECTIONS. During the period a Current Stock Election
is effective, all Director Fees payable shall be paid by the issuance to the
Director of a number of whole shares of Capital Stock equal to (x) 105% of the
cash amount of the Director Fees payable divided by (y) the Fair Market Value
of one share of the Capital Stock, as defined in Section 11 hereof, on the date
on which such Director Fees are payable. Any amount of Director Fees which is
not paid in Capital Stock on the date otherwise payable because less than the
Fair Market Value of a whole share shall be accumulated in cash without
interest and added to the amount used in computing the number of shares of
Capital Stock issuable on the next succeeding date on which Director Fees are
payable under the Current Stock Election. Any such accumulated fractional
amount remaining as of the effective date of any termination of a Current Stock
Election or of the termination of the Plan shall be paid to the Director in
cash on the next succeeding date on which Director Fees would have been payable
to the Director under the Current Stock Election. The Corporation shall issue
share certificates to the Director for the shares of Capital Stock acquired or,
if requested in writing by the Director and permitted under such plan, the
shares acquired shall be added to the Director's account under the
Corporation's Automatic Dividend Reinvestment Plan. As of the date on which
the Director Fees are payable in shares of Capital Stock, the Director shall be
a stockholder of the Corporation with respect to such shares.

(d) CASH DEFERRAL ELECTIONS. Director Fees deferred pursuant to a Cash
Deferral Election shall be deferred and paid as provided in Sections 4 and 6.
If only a portion of the Director Fees otherwise payable for a calendar year
are deferred pursuant to a Cash Deferral Election, the Director Fees deferred
shall be the first Director Fees earned during such year after the Cash
Deferral Election becomes effective up to the amount of the Director Fees
subject to such Cash Deferral Election, and any later Director Fees with
respect to such calendar year shall be paid to the Director currently in cash.

(e) STOCK DEFERRAL ELECTIONS. Director Fees deferred pursuant to a
Stock Deferral Election shall be deferred and paid as provided in Sections 5
and 6. A Stock Deferral Election shall apply to all Director Fees otherwise
payable with respect to a calendar year, or portion thereof, for which such
Stock Deferral Election is effective.

DEFERRED CASH COMPENSATION ACCOUNT

(a) GENERAL. The amount of any Director Fees deferred in accordance
with a Cash Deferral Election shall be credited on the date on which such
Director Fees are otherwise payable to a deferred cash compensation account
maintained by the Corporation in the name of the Director (a "Deferred

-2-
<PAGE> 3

Cash Compensation Account"). A separate Deferred Cash Compensation Account
shall be maintained for each calendar year for which a Director has elected a
different number of payment installments or as otherwise determined by the
Board.

(b) ADJUSTMENT FOR EARNINGS OR LOSSES. The amount in the Director's
Deferred Cash Compensation Account shall be adjusted on a quarterly basis as of
the last day of each calendar quarter to reflect net earnings, gains or losses
for the quarter. The adjustment for earnings, gains or losses for each quarter
shall be equal to the amount determined under (1) below as follows:

(1) DEEMED INVESTMENT OPTIONS. The total amount determined by
multiplying the rate earned (positive or negative) by each fund available
below (taking into account earnings distributed and share appreciation
(gains) or depreciation (losses) on the value of shares of the fund) for
each month of the current calendar quarter by the portion of the balance
in the Director's Deferred Cash Compensation Account as of the end of
each such month, respectively, which is deemed to be invested in such
fund pursuant to paragraph (2) below.

Subject to elimination, modification or addition by the Board,
the following shall be the funds available for the Director's election of
deemed investments pursuant to paragraph (2) below:

(A) Income Fund. The Income Fund shall be the same as the
Income Fund (Fund A) used from time to time by the Quaker State
Corporation Thrift and Stock Purchase Plan (the "Thrift Plan").
Fund A is currently primarily invested in the PNC Money Market
Portfolio. According to information supplied by PNC Bank, the
PNC Money Market Portfolio is a mutual fund comprised of
investments in a broad range of short-term, high quality, U.S.
dollar-denominated instruments, such as government bonds, bank
deposits, commercial and other short-term investments. The
objective is to provide as high a level of current interest
income as possible while maintaining liquidity and stability of
principal; however, principal is not guaranteed. Earnings on
Fund A investments are reinvested in the PNC Money Market
Portfolio.

(B) Bond Fund. The Bond Fund shall be the same as the
Bond Fund (Fund B) used from time to time by the Thrift Plan.
Fund B is currently invested in the PNC Intermediate Government
Portfolio. According to information supplied by PNC Bank, the
PNC Intermediate Government Portfolio is a mutual fund comprised
primarily of U.S. Treasury and Agency obligations or instruments
collateralized by such obligations. This portfolio tends to
perform best when interest rates are stable or in decline. The
objective is to maximize current income while preserving capital;
however, principal is not guaranteed. Until Thrift Plan
contributions directed to Fund B are used to purchase
investments, and at such other times as are necessary to properly
administer the Thrift Plan, monies may be invested by the Trustee
of the Thrift Plan in the PNC Money Market Portfolio described
above. Earnings on Fund B investments are reinvested in Fund B.

(C) Equity Fund. The Equity Fund shall be the same as the
Equity Fund (Fund D) used from time to time by the Thrift Plan.
Fund D is currently invested in the PNC Index Equity Portfolio.
According to information supplied by PNC Bank, the PNC Index
Equity Portfolio is a mutual fund consisting of a diversified
holding of common stocks of companies which make up the Standard
& Poor's 500 Stock Index in approximately the same proportions as
represented on the Index. The objective of the Portfolio is to
duplicate or exceed the capital performance and dividend income
of the Standard & Poor's 500 Stock Index. The Portfolio will
fluctuate along with the stock market and will experience gain
or loss on investments similar to the gain or loss represented by
the Standard & Poor's 500 Stock Index; principal is not
guaranteed. Until Thrift Plan

-3-
<PAGE> 4

contributions directed to Fund D are used to purchase
investments, and at such other times as are necessary to properly
administer the Thrift Plan, monies may be invested by the Thrift
Plan Trustee in the PNC Money Market Portfolio described above.
Earnings on Fund D investments are reinvested in Fund D.

(D) Other Options. In addition to, or in lieu of, the
investment options described above, other funds may be
established from time to time, as determined by the Board, and
the Board may provide any other form of investment option it
determines to be advisable; provided, however, that such funds
and options shall be made available and communicated to all
Directors on a uniform basis.

(2) DEEMED INVESTMENT ELECTIONS.

(A) The Director shall designate, on a form prescribed by the
Corporation, the percentage, in ten percent (10%) multiples (or such
other percentage as permitted from time to time by the Board), of the
deferred Director Fees that are to be deemed to be invested in the
available funds under paragraph (1) above. Said designation shall be
effective on a date specified by the Board and remain in effect and apply
to all subsequent deferred Director Fees until changed as provided below.

(B) A Director may elect to change, on a calendar quarter basis
(or on such other basis as permitted from time to time by the Board), the
deemed investment election under paragraph (A) above with respect to
future deferred Director Fees among one or more of the options then
available by written notice to the Secretary of the Corporation, on a
form prescribed by the Corporation (or by voice or other form of notice
permitted by the Corporation), at least 10 days before the first day of
the calendar quarter as of which the change is to be effective, with such
change to be effective for deferred Director Fees credited to the
Deferred Cash Compensation Account on or after the effective date.

(C) A Director may elect to reallocate the balance of his
Deferred Cash Compensation Account, subject to limitations imposed by the
Board, on a calendar quarter basis, in ten percent (10%) multiples (or
such other percentage as permitted from time to time by the Board), among
the deemed investment options then available. A Director may make such
an election by written notice to the Secretary of the Corporation, on a
form prescribed by the Corporation (or by voice or other form of notice
permitted by the Corporation), at least 10 days before the first day of
the calendar quarter as of which the transfer election is to be
effective, with such transfer to be based on the value of the Deferred
Cash Compensation Account on the last day of the preceding quarter.

(D) The election of deemed investments among the options
provided above shall be the sole responsibility of each Director. The
Corporation and Board members are not authorized to make any
recommendation to any Director with respect to such election. Each
Director assumes all risk connected with any adjustment to the value of
his Deferred Cash Compensation Account. Neither the Board nor the
Corporation in any way guarantees against loss or depreciation.

(E) All payments from the Plan shall be made pro rata from the
portion of the Director's Deferred Cash Compensation Account which is
deemed to be invested in the Income Fund, the Bond Fund and the Equity
Fund and/or such other funds as may be available from time to time for
deemed investment elections under the Plan.

(c) MANNER OF PAYMENT. The balance of a Director's Deferred Cash
Compensation Account will be paid to the Director or, in the event of the
Director's death, to the Director's designated beneficiary, in accordance with
the Cash Deferral Election. A Director may elect at the time of filing

-4-
<PAGE> 5

of the Notice of Election for a Cash Deferral Election to receive payment of
the Director Fees in annual installments rather than a lump sum, provided that
the payment period for installment payments shall not exceed ten years
following the Payment Commencement Date, as described in Section 6 hereof. The
amount of any installment shall be determined by multiplying (i) the balance in
the Director's Deferred Cash Compensation Account on the date of such
installment by (ii) a fraction, the numerator of which is one and the
denominator of which is the number of remaining unpaid installments. The
balance of the Deferred Cash Compensation Account shall be appropriately
reduced on the date of payment to the Director or the Director's designated
beneficiary to reflect the installment payments made hereunder. Amounts held
pending distribution pursuant to this Section 4(c) shall continue to be
credited with the earnings, gains or losses on a quarterly basis as described
in Section 4(b) hereof.

DEFERRED STOCK COMPENSATION ACCOUNT

(a) GENERAL. The amount of any Director Fees deferred in accordance
with a Stock Deferral Election shall be credited to a deferred stock
compensation account maintained by the Corporation in the name of the Director
(a "Deferred Stock Compensation Account"). A separate Deferred Stock
Compensation Account shall be maintained for each calendar year for which a
Director has elected a different number of payment installments or as otherwise
determined by the Board. On each date on which Director Fees are otherwise
payable and a Stock Deferral Election is effective for a Director, the
Director's Deferred Stock Compensation Account for that calendar year shall be
credited with a number of shares of Capital Stock (including fractional shares)
equal to (x) 105% of the cash amount of the Director Fees payable divided by
(y) the Fair Market Value of one share of the Capital Stock, as defined in
Section 11 hereof, on the date on which such Director Fees are payable. If a
dividend or distribution is paid on the Capital Stock in cash or property other
than Capital Stock, on the date of payment of the dividend or distribution to
holders of the Capital Stock each Deferred Stock Compensation Account shall be
credited with a number of shares of Capital Stock (including fractional shares)
equal to the number of shares of Capital Stock credited to such Account on the
date fixed for determining the stockholders entitled to receive such dividend
or distribution times the amount of the dividend or distribution paid per share
of Capital Stock divided by the Fair Market Value of one share of the Capital
Stock, as defined in Section 11 hereof, on the date on which the dividend or
distribution is paid. If the dividend or distribution is paid in property, the
amount of the dividend or distribution shall equal the fair market value of the
property on the date on which the dividend or distribution is paid. The
Deferred Stock Compensation Account of a Director shall be charged on the date
of distribution with any distribution of shares of Capital Stock made to the
Director from such Account pursuant to Section 5(c) hereof.

(b) ADJUSTMENT AND SUBSTITUTION. The number of shares of Capital Stock
credited to each Deferred Stock Compensation Account, and the number of shares
of Capital Stock available for issuance or crediting under the Plan in each
calendar year in accordance with Section 1 hereof, shall be proportionately
adjusted to reflect any dividend or other distribution on the outstanding
Capital Stock payable in shares of Capital Stock or any split or consolidation
of the outstanding shares of Capital Stock. If the outstanding Capital Stock
shall, in whole or in part, be changed into or exchangeable for a different
class or classes of securities of the Corporation or securities of another
corporation or cash or property other than Capital Stock, whether through
reorganization, reclassification, recapitalization, merger, consolidation or
otherwise, the Board shall adopt such amendments to the Plan as it deems
necessary to carry out the purposes of the Plan, including the continuing
deferral of any amount of any Deferred Stock Compensation Account.

(c) MANNER OF PAYMENT. The balance of a Director's Deferred Stock
Compensation Account will be paid in shares of Capital Stock to the Director
or, in the event of the Director's death, to the

-5-
<PAGE> 6

Director's designated beneficiary, in accordance with the Stock Deferral
Election. A Director may elect at the time of filing of the Notice of Election
for a Stock Deferral Election to receive payment of the shares of Capital Stock
credited to the Director's Deferred Stock Compensation Account in annual
installments rather than a lump sum, provided that the payment period for
installment payments shall not exceed ten years following the Payment
Commencement Date as described in Section 6 hereof. The number of shares of
Capital Stock distributed in each installment shall be determined by
multiplying (i) the number of shares of Capital Stock in the Deferred Stock
Compensation Account on the date of payment of such installment, by (ii) a
fraction, the numerator of which is one and the denominator of which is the
number of remaining unpaid installments, and by rounding such result down to
the nearest whole number of shares. The balance of the number of shares of
Capital Stock in the Deferred Stock Compensation Account shall be appropriately
reduced in accordance with Section 5(a) hereof to reflect the installment
payments made hereunder. Shares of Capital Stock remaining in a Deferred Stock
Compensation Account pending distribution pursuant to this Section 5(c) shall
continue to be credited with respect to dividends or distributions paid on the
Capital Stock pursuant to Section 5(a) hereof and shall be subject to
adjustment pursuant to Section 5(b) hereof. If a lump sum payment or the final
installment payment hereunder would result in the issuance of a fractional
share of Capital Stock, such fractional share shall not be issued and cash in
lieu of such fractional share shall be paid to the Director based on the Fair
Market Value of a share of Capital Stock, as defined in Section 11 hereof, on
the date immediately preceding the date of such payment. The Corporation shall
issue share certificates to the Director, or the Director's designated
beneficiary, for the shares of Capital Stock distributed hereunder, or if
requested in writing by the Director and permitted under such plan, the shares
to be distributed shall be added to the Director's account under the
Corporation's Automatic Dividend Reinvestment Plan. As of the date on which
the Director is entitled to receive payment of shares of Capital Stock, a
Director shall be a stockholder of the Corporation with respect to such shares.

PAYMENT COMMENCEMENT DATE

Payment of amounts in a Deferred Cash Compensation Account or a Deferred
Stock Compensation Account shall commence on March 30 (or if March 30 is not a
business day, on the first preceding business day) of the calendar year
following the calendar year during which the Director ceases to be a member of
the Board for any reason, including death or disability.

BENEFICIARY DESIGNATION

A Director may designate, in the Beneficiary Designation form prescribed
by the Corporation, any person to whom payments of cash or shares of Capital
Stock are to be made if the Director dies before receiving payment of all
amounts due hereunder. A beneficiary designation will be effective only after
the signed beneficiary designation form is filed with the Secretary of the
Corporation while the Director is alive and will cancel all beneficiary
designations signed and filed earlier. If the Director fails to designate a
beneficiary, or if all designated beneficiaries of the Director die before the
Director or before complete payment of all amounts due hereunder, any remaining
unpaid amounts shall be paid in one lump sum to the estate of the last to die
of the Director or the Director's designated beneficiaries, if any.

-6-
<PAGE> 7

NON-ALIENABILITY OF BENEFITS

Neither the Director nor any beneficiary designated by the Director shall
have the right to, directly or indirectly, alienate, assign, transfer, pledge,
anticipate or encumber (except by reason of death) any amount that is or may be
payable hereunder, nor shall any such amount be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Director or the Director's designated
beneficiary or to the debts, contracts, liabilities, engagements, or torts of
any Director or designated beneficiary, or transfer by operation of law in the
event of bankruptcy or insolvency of the Director or any beneficiary, or any
legal process.

NATURE OF DEFERRED ACCOUNTS

Any Deferred Cash Compensation Account or Deferred Stock Compensation
Account and any cash fractional amount accumulated under Section 3(c) shall be
established and maintained only on the books and records of the Corporation,
and no assets or funds of the Corporation or the Plan or shares of Capital
Stock of the Corporation shall be removed from the claims of the Corporation's
general or judgment creditors or otherwise made available until such amounts
are actually payable to Directors or their designated beneficiaries as provided
herein. The Plan constitutes a mere promise by the Corporation to make
payments in the future. The Directors and their designated beneficiaries shall
have the status of, and their rights to receive a payment of cash or shares of
Capital Stock under the Plan shall be no greater than the rights of, general
unsecured creditors of the Corporation. No person shall be entitled to any
voting rights with respect to shares credited to a Deferred Stock Compensation
Account and not yet payable to a Director or the Director's designated
beneficiary. The Corporation shall not be obligated under any circumstance to
fund its financial obligations under the Plan, and the Plan is intended to
constitute an unfunded plan for tax purposes. However, the Corporation may, in
its discretion, set aside funds in a trust or other vehicle, subject to the
claims of its creditors, in order to assist it in meeting its obligations under
the Plan, if such arrangement will not cause the Plan to be considered a funded
deferred compensation plan under the Internal Revenue Code of 1986, as amended.

ADMINISTRATION OF PLAN; HARDSHIP WITHDRAWAL

Full power and authority to construe, interpret, and administer the Plan
shall be vested in the Board. Decisions of the Board shall be final,
conclusive, and binding upon all parties. Notwithstanding the terms of a Cash
Deferral Election or a Stock Deferral Election made by a Director hereunder,
the Board may, in its sole discretion, permit the withdrawal of amounts
credited to a Deferred Cash Compensation Account or shares credited to a
Deferred Stock Compensation Account with respect to Director Fees previously
payable, upon the request of a Director or the Director's representative, or
following the death of a Director upon the request of a Director's beneficiary
or such beneficiary's representative, if such Board determines that the
Director or the Director's beneficiary, as the case may be, is confronted with
an unforeseeable emergency. For this purpose, an unforeseeable emergency is an
unanticipated emergency caused by an event that is beyond the control of the
Director or the Director's beneficiary and that would result in severe
financial hardship to the Director or the Director's beneficiary if an early
hardship withdrawal were not permitted. The Director or the Director's
beneficiary shall provide to such Board such evidence as the Board, in its
discretion, may

-7-
<PAGE> 8

require to demonstrate that such emergency exists and financial hardship would
occur if the withdrawal were not permitted. The withdrawal shall be limited to
the amount or to the number of shares, as the case may be, necessary to meet
the emergency. For purposes of the Plan, a hardship shall be considered to
constitute an immediate and unforeseen financial hardship if the Director has
an unexpected need for cash to pay for expenses incurred by him or a member of
his immediate family (spouse and/or natural or adopted children) such as those
arising from illness, casualty loss, or death. Cash needs arising from
foreseeable events, such as the purchase or building of a house or education
expenses, will not be considered to be the result of an unforeseeable financial
emergency. Payment shall be made as soon as practicable after the Board
approves the payment and determines the amount of the payment or number of
shares which shall be withdrawn, in a single lump sum from the portion of the
Deferred Cash Compensation Account or Deferred Stock Compensation Account, as
applicable, with the longest number of installment payments first, in each case
in accordance with Section 4(b)(2)(E) if the distribution is from the Deferred
Cash Compensation Account. No Director shall participate in any decision of
the Board regarding such Director's request for a withdrawal under this Section
10.

FAIR MARKET VALUE

Fair market value of the Capital Stock shall be the mean between the
following prices, as applicable, for the date as of which fair market value is
to be determined as quoted in The Wall Street Journal (or in such other
reliable publication as the Board or its delegate, in its discretion, may
determine to rely upon): (a) if the Capital Stock is listed on the New York
Stock Exchange, the highest and lowest sales prices per share of the Capital
Stock as quoted in the NYSE-Composite Transactions listing for such date, (b)
if the Capital Stock is not listed on such exchange, the highest and lowest
sales prices per share of Capital Stock for such date on (or on any composite
index including) the principal United States securities exchange registered
under the Securities Exchange Act of 1934 on which the Capital Stock is listed,
or (c) if the Capital Stock is not listed on any such exchange, the highest and
lowest sales prices per share of the Capital Stock for such date on the
National Association of Securities Dealers Automated Quotations System or any
successor system then in use ("NASDAQ"). If there are no such sale price
quotations for the date as of which fair market value is to be determined but
there are such sale price quotations within a reasonable period both before and
after such date, then fair market value shall be determined by taking a
weighted average of the means between the highest and lowest sales prices per
share of the Capital Stock as so quoted on the nearest date before and the
nearest date after the date as of which fair market value is to be determined.
The average should be weighted inversely by the respective numbers of trading
days between the selling dates and the date as of which fair market value is to
be determined. If there are no such sale price quotations on or within a
reasonable period both before and after the date as of which fair market value
is to be determined, then fair market value of the Capital Stock shall be the
mean between the bona fide bid and asked prices per share of Capital Stock as
so quoted for such date on NASDAQ, or if none, the weighted average of the
means between such bona fide bid and asked prices on the nearest trading date
before and the nearest trading date after the date as of which fair market
value is to be determined, if both such dates are within a reasonable period.
The average is to be determined in the manner described above in this Section
11. If the fair market value of the Capital Stock cannot be determined on the
basis previously set forth in this Section 11 on the date as of which fair
market value is to be determined, the Board or its delegate shall in good faith
determine the fair market value of the Capital Stock on such date. Fair market
value shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse.

-8-
<PAGE> 9

SECURITIES LAWS; ISSUANCE OF SHARES

The obligation of the Corporation to issue or credit shares of Capital
Stock under the Plan shall be subject to (i) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, with
respect to such shares, if deemed necessary or appropriate by counsel for the
Corporation, (ii) the condition that the shares shall have been listed (or
authorized for listing upon official notice of issuance) upon each stock
exchange, if any, on which the Capital Stock shares may then be listed and
(iii) all other applicable laws, regulations, rules and orders which may then
be in effect. If, on the date on which any shares of Capital Stock would be
issued pursuant to a Current Stock Election or credited to a Deferred Stock
Compensation Account, sufficient shares of Capital Stock are not available
under the Plan or the Corporation is not obligated to issue shares pursuant to
this Section 12, then no shares of Capital Stock shall be issued or credited
but rather, in the case of a Current Stock Election, cash shall be paid in
payment of the Director Fees payable, and in the case of a Deferred Stock
Compensation Account, Director Fees and dividends which would otherwise have
been credited in shares of Capital Stock shall be credited in cash to a
Deferred Cash Compensation Account in the name of the Director. The Board
shall adopt appropriate rules and regulations to carry out the intent of the
immediately preceding sentence if the need for such rules and regulations
arises.

GOVERNING LAW

The provisions of this Plan shall be interpreted and construed in
accordance with the laws of the State of Delaware.

EFFECTIVE DATE; AMENDMENT AND TERMINATION

The Plan was adopted by the Board on March 21, 1996 and became effective
upon approval by the stockholders of the Corporation at its 1996 Annual Meeting
held on May 16, 1996. On October 24, 1996, the Board amended the Plan
effective as of January 1, 1997. The Board may further amend or terminate the
Plan at any time, provided that no such amendment or termination shall
adversely affect rights with respect to amounts or shares then credited to any
Deferred Cash Compensation Account or Deferred Stock Compensation Account.

-9-

<PAGE> 1
EXHIBIT 11

COMPUTATION OF NET INCOME PER SHARE
Quaker State Corporation and Subsidiaries

<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
9/30/96 9/30/95 9/30/96 9/30/95
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands except per share data, unaudited)
<S> <C> <C> <C> <C> <C>
1. Net income $ 6,754 $ 15,328 $ 19,633 $ 17,699
==============================================================================================================================
2. Average number of shares of capital
stock outstanding 35,842 32,712 33,848 31,892

3. Shares issuable upon exercise of dilutive stock
options outstanding during the period, based on
average market prices 225 166 154 126

4. Shares issuable upon exercise of dilutive stock
options outstanding during the period, based on
higher of average or period-end market prices 353 166 346 145

5. Average number of capital and capital equivalent
shares outstanding (2 + 3) 36,067 32,878 34,002 32,018

6. Average number of capital shares outstanding,
assuming full dilution (2 + 4) 36,195 32,878 34,194 32,037

7. Net income per capital and capital equivalent share
(1 divided by 5) $ 0.19 $ 0.47 $ 0.58 $ 0.55
==============================================================================================================================

8. Net income per capital share assuming full dilution
(1 divided by 6) $ 0.19 $ 0.47 $ 0.57 $ 0.55
==============================================================================================================================
</TABLE>

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,498
<SECURITIES> 0
<RECEIVABLES> 163,020
<ALLOWANCES> 4,671
<INVENTORY> 98,259
<CURRENT-ASSETS> 307,206
<PP&E> 455,025
<DEPRECIATION> (226,429)
<TOTAL-ASSETS> 861,579
<CURRENT-LIABILITIES> 170,710
<BONDS> 0
0
0
<COMMON> 35,929
<OTHER-SE> 290,691
<TOTAL-LIABILITY-AND-EQUITY> 861,579
<SALES> 890,595
<TOTAL-REVENUES> 896,385
<CGS> 479,010
<TOTAL-COSTS> 611,329
<OTHER-EXPENSES> 244,917
<LOSS-PROVISION> 347
<INTEREST-EXPENSE> 7,059
<INCOME-PRETAX> 32,733
<INCOME-TAX> 13,100
<INCOME-CONTINUING> 19,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,633
<EPS-PRIMARY> 0.58
<EPS-DILUTED> 0.57

</TABLE>