SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
February 28, 1994

PENTAIR, INC.
(Exact name of Registrant as specified in its Charter)

MINNESOTA                0-4689                 41-0907434
(State or other                  (Commission      (IRS Employer
Jurisdiction of                  File Number)    Identification
Incorporation)                                     Number)

1500 County Road B2 West Suite 400
St. Paul, Minnesota                             55113
(Address of Principal Executive Offices)         (Zip Code)

612-636-7920
(Registrant's Telephone Number, Including Area Code)

Not applicable
(Former name or former address, if changed since last report)

Item 2.  Acquisition or Disposition of Assets.

On February 28, 1994, the Registrant completed the purchase
from Fried. Krupp Hoesch-Krupp of all of the net assets and
business of the Schroff Group (Schroff), including the stock of
its international subsidiaries, for $154 million paid in cash at
closing, which includes $1.7 million in interest accrued from
January 1, 1994, the economic transfer date.

The operating assets of the Schroff manufacturing facilities in
Germany were acquired by a new indirect German subsidiary
of the Registrant, Schroff GmbH, subject to normal payables
and accruals of the business.  These assets were used by
Schroff in the manufacture of cabinets, cases, subracks and
accessories for the electronics industry.  Schroff GmbH is
continuing its predecessor's business and will use the assets in
the same manner as before.

The outstanding stock of all of the European subsidiaries of
Schroff was acquired by a new wholly-owned subsidiary of the
Registrant, EuroPentair GmbH, which also owns the stock of
the new Schroff GmbH.  The outstanding stock of the
non-European subsidiaries of Schroff, which included its U.S.
subsidiary Schroff, Inc., was acquired by FC Holdings Inc., a
wholly-owned subsidiary of the Registrant.

Funds for payment of the cash purchase price were provided
through the Registrant's revolving credit facilities described in
Item 5 of this report.

Item 5.  Other Events.

Effective as of February 11, 1994, Pentair entered into revolving
credit facilities with a group of six banks, Continental Bank N.A.,
Morgan Guaranty Trust Company of New York, J.P. Morgan
Delaware, First Bank National Association, Norwest Bank
Minnesota, N.A. and NBD Bank, N.A.  Two parallel facility
agreements provide for aggregate credit lines of $170 million
divided among two bank groups.  Pentair's outstanding Bid
Loan Agreement with certain of these banks was amended in
a related transaction.  The facility agreements provide for
revolving credits for a three-year period, unless extended, at the
expiration of which period the outstanding loans are converted
into a term loan having a four-year repayment period.  The
credit facilities are unsecured and include certain financial and
other covenants on the part of Pentair.

In addition, Pentair and its new subsidiary formed in connection
with the Schroff acquisition (see Item 2 above), EuroPentair
GmbH, entered into a 115 million Deutschmark (approximately
US $65 million) facility agreement with Morgan Guaranty Trust
Company of New York, Continental Bank N.A., NBD Bank N.A.,
and Dresdner Bank.  This facility is similar to the two other
domestic credit agreements, but provides for borrowings and
repayments in German marks or certain other European
currencies.  This facility also provides for unsecured revolving
loans for a three-year period with a similar term loan conversion
and four-year repayment period.  Substantially all of the
available credit under this agreement was borrowed at the
closing of the Schroff acquisition.

The three revolving credit facilities discussed above replace
previous credit agreements between Pentair and these banks
for revolving credit in the aggregate amount of $225 million.

Item 7.  Financial Statements and Exhibits.

The information supplied under this item is supplemented by
the following:

a.Financial Statements of Business Acquired (Schroff GmbH):

The audited financial statements for the fiscal year ended
December 31, 1993 of the acquired business required under
this item have been prepared by the auditor of Schroff's parent
company, Fried. Krupp AG Hoesch-Krupp.  The financial
statements were prepared in the German language in
accordance with GOB (generally accepted accounting principles
in Germany); the Registrant has not been able to complete the
translation of the financial statements and the adjustments
required to conform presentation thereof to Regulation S-X. 
The financial statements will be filed as soon as reasonably
practicable, but no later than 60 days from the date hereof.

b.Pro Forma Financial Information:

The pro forma financial information required under this item can
not be prepared until the requisite audited financial statements
required under item (a) above have been translated and
conformed.  The pro forma financial information will be filed as
soon as reasonably practicable, but no later than 60 days from
the date hereof.

c.Exhibits:

(2.1)Asset Purchase Agreement among EuroPentair Gmbh,
Pentair Deutschland Gmbh, F.C. Holdings, Inc. USA, and
Schroff Gmbh dated December 22, 1993 (without Exhibits).  The
Registrant agrees to provide a copy of such Exhibits to the
Commission upon request.

(2.2)Agreement between Pentair, Inc. and Fried. AG Krupp
Hoesch-Krupp dated December 22, 1993

(2.3)Non-Competition Agreement dated December 22, 1993

(2.4)Letter of Guarantee to Seller by Pentair, Inc. of Buyer's
obligations under Asset Purchase Agreement 

(2.5)Letter of Guarantee to Buyer by Fried. Krupp AG Hoesch-
Krupp of Seller's obligations under Asset Purchase Agreement 

(4.1)$125,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., Continental Bank N.A. for itself and
as Agent, Morgan Guaranty Trust Company of New York for
itself and as Agent, NBD Bank, N.A., and J. P. Morgan
Delaware.

(4.2)$45,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., First Bank National Association, for
itself and as Agent, and Norwest Bank Minnesota N.A.

(4.3) Second Amendment to Bid Loan Agreement dated as of
February11, 1994 between Pentair, Inc., Continental Bank N.A.
for itself and as Agent, Morgan Guaranty Trust Company of
New York, J. P. Morgan Delaware, First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A.

(4.4)DM 115,000,000 Facility Agreement dated as of February
11, 1994 between EuroPentair, GmbH as Borrower, Pentair,
Inc., as Guarantor, Morgan Guaranty Trust Company of New
York for itself and as Agent, Continental Bank N.A., for itself
and as Agent, NBD  Bank, N.A. and Dresdner Bank.

(99)Press release, dated February 28, 1994, concerning
completion of acquisition of Schroff GmbH.

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 hereunto duly authorized.

PENTAIR, INC

By:  Joseph R. Collins
Senior Vice President,
Chief Financial Officer

Dated:  March 15, 1994

EXHIBIT INDEX

(2.1)Asset Purchase Agreement among EuroPentair Gmbh,
Pentair Deutschland Gmbh, F.C. Holdings, Inc. USA, and
Schroff Gmbh dated December 22, 1993 (without Exhibits).  The
Registrant agrees to provide a copy of such Exhibits to the
Commission upon request. (Incorporated by reference to
Exhibit 2.1 to the Company's Current Report on Form 8-K filed
January 4, 1994)

(2.2)Agreement between Pentair, Inc. and Fried. AG Krupp
Hoesch-Krupp dated December 22, 1993 (Incorporated by
reference to Exhibit 2.2 to the Company's Current Report on
Form 8-K filed January 4, 1994)

(2.3)Non-Competition Agreement dated December 22, 1993
(Incorporated by reference to Exhibit 2.3 to the Company's
Current Report on Form 8-K filed January 4, 1994)

(2.4)Letter of Guarantee to Seller by Pentair, Inc. of Buyer's
obligations under Asset Purchase Agreement (Incorporated by
reference to Exhibit 2.4 to the Company's Current Report on
Form 8-K filed January 4, 1994)

(2.5)Letter of Guarantee to Buyer by Fried. Krupp AG Hoesch-
Krupp of Seller's obligations under Asset Purchase Agreement
(Incorporated by reference to Exhibit 2.5 to the Company's
Current Report on Form 8-K filed January 4, 1994)

(4.1)$125,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., Continental Bank N.A. for itself and
as Agent, Morgan Guaranty Trust Company of New York for
itself and as Agent, NBD Bank, N.A., and J. P. Morgan
Delaware.

(4.2)$45,000,000 Facility Agreement dated as of February11,
1994 between Pentair, Inc., First Bank National Association, for
itself and as Agent, and Norwest Bank Minnesota N.A.

(4.3) Second Amendment to Bid Loan Agreement dated as of
February11, 1994 between Pentair, Inc., Continental Bank N.A.
for itself and as Agent, Morgan Guaranty Trust Company of
New York, J. P. Morgan Delaware, First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A.

(4.4)DM 115,000,000 Facility Agreement dated as of February
11, 1994 between EuroPentair, GmbH as Borrower, Pentair,
Inc., as Guarantor, Morgan Guaranty Trust Company of New
York for itself and as Agent, Continental Bank N.A., for itself
and as Agent, NBD  Bank, N.A. and Dresdner Bank.

(99)Press release, dated February 28, 1994, concerning
completion of acquisition of Schroff GmbH.

EXHIBIT 4.1

$125,000,000
FACILITY AGREEMENT

among

PENTAIR, INC.,

CONTINENTAL BANK N.A.
for itself and as Agent,

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
for itself and as Agent,

NBD BANK, N.A.

and

J. P. MORGAN DELAWARE

Dated as of February 11, 1994

TABLE OF CONTENTS

           
ARTICLE I - DEFINITIONS
    Section 1.01. Definitions                                
           
    Section 1.02. Accounting Terms and Determinations        

ARTICLE II - THE CREDITS
    Section 2.01. Commitments to Lend                        
           
    Section 2.02. Maturity                                   
           
    Section 2.03. Method of Borrowing                        
           
    Section 2.04. Notes                                      
           
    Section 2.05. Duration of Interest Periods                
    Section 2.06. Interest Rate and Payment                  
    
    Section 2.07. Facility Fees                       
    Section 2.08. Intentionally Omitted               
    Section 2.09. Termination or Reduction of Commitments
    Section 2.10. Required Repayments                        
    Section 2.11. Optional Prepayments                       
    Section 2.12. General Provisions as to Payments          
    Section 2.13. Funding Losses                             
    Section 2.14. Computation of Interest and Fees           
    Section 2.15. Coordination with Bid Loan Agreement       
    Section 2.16. Eurodollar Lending Unlawful                
    Section 2.17. Funds Unavailable                          
    Section 2.18. Increased Costs and Reduced Returns        
    Section 2.19. Pro Rata Sharing                           

ARTICLE III - CONDITIONS TO BORROWINGS
    Section 3.01. All Borrowings                             
           
    Section 3.02. First Borrowing                            
           
    Section 3.03. Use of Proceeds of First Borrowing and
Transition 

ARTICLE IV - REPRESENTATIONS AND WARRANTIES
    Section 4.01. Corporate Existence and Power              
           
    Section 4.02. Corporate and Governmental
                         Authorization; Contravention        
           
    Section 4.03. Binding Effect                             
           
    Section 4.04. Financial Information                      
                  Section 4.05. Litigation                   
                         
    Section 4.06. Compliance with ERISA                      
           
    Section 4.07. Taxes                                      
           
    Section 4.08. Subsidiaries                               
           
    Section 4.09. Not an Investment Company                  

ARTICLE V - COVENANTS
    Section 5.01. Information                                
           
    Section 5.02. Current Assets                             
           
    Section 5.03. Leverage Ratio                             
           
    Section 5.04. Minimum Consolidated Tangible Net Worth
    Section 5.05. Expense Ratio                              
    Section 5.06. Subsidiary Debt                            
     
    Section 5.07. Negative Pledge                            
                  Section 5.08. Consolidations, Mergers and
                         Sales of Assets
    Section 5.09. Acquisitions                 
    Section 5.10. Use of Proceeds              
    Section 5.11.  Ratable Borrowings          

ARTICLE VI - DEFAULTS
    Section 6.01. Events of Default            
    Section 6.02. Notice of Default            

ARTICLE VII - THE AGENT
    Section 7.01. Appointment and Authorization       
    Section 7.02. Agent and Affiliates                
    Section 7.03. Action by Agent                     
    Section 7.04. Consultation with Experts           
    Section 7.05. Liability of Agent                  
    Section 7.06. Indemnification                     
    Section 7.07. Agent's Fees                        
    Section 7.08. Bank Credit Decision                
    Section 7.09. Successor Agent                     

ARTICLE VIII - MISCELLANEOUS
    Section 8.01. Notices                             
    Section 8.02. No Waivers                          
    Section 8.03. Expenses; Documentary Taxes         
    Section 8.04. Amendments and Waivers              
    Section 8.05. Collateral                          
    Section 8.06. Successors and Assigns              
    Section 8.07. Minnesota Law                       
    Section 8.08. Counterparts; Effectiveness         
    Section 8.09.  Highly Leveraged Transaction Classification

Signatures                                            

Exhibit A - Note
Exhibit B - Opinion of Counsel For the Borrower

FACILITY AGREEMENT

    Agreement dated as of February 11, 1994, among
PENTAIR, INC., CONTINENTAL BANK N.A. and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, for themselves
and as agents, and NBD BANK, N.A. and J.P. MORGAN
DELAWARE.

    The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

    SECTION 1.01 Definitions.  The following terms, as used
herein, have the following meanings:

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

    "Adjusted Reference Rate" has the meaning set forth in
Section 2.06(a).

    "Agent" means either Continental Bank N.A. or Morgan
Guaranty Trust Company of New York, in their capacity as
agent for the Banks hereunder; "Agents" means both such
institutions.  Continental Bank N.A. shall be the "Managing
Agent" and, if "Agent" is used in the singular, it shall refer to the
Managing Agent, unless the context otherwise requires.

    "Agreement" means the Facility Agreement dated as of
February 11, 1994, among Pentair, Inc. and Continental Bank
N.A. and Morgan Guaranty Trust Company of New York, for
themselves and as Agents, and NBD Bank, N.A. and J.P.
Morgan Delaware.

    "Banks" means Continental Bank N.A., Morgan Guaranty
Trust Company of New York, NBD Bank N.A., J.P. Morgan
Delaware and their successors and assigns.

    "Bid Loan" means a Bid Loan as defined in the Bid Loan
Agreement.

    "Bid Loan Agreement" has the meaning set forth in Section
2.15.

    "Borrower" means Pentair, Inc., a Minnesota corporation,
and its successors.

    "Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by all Banks
severally.  A Borrowing is a "CD Borrowing" if such Loans are
CD Loans, a "Reference Borrowing" if such Loans are
Reference Loans, or a "Eurodollar Borrowing" if such Loans are
Eurodollar Loans.

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

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

    "CD Loan" means an amount loaned to the Borrower under
this Agreement bearing interest at the Fixed CD Rate for the
applicable Interest Period pursuant to the applicable Notice of
Borrowing.

    "CD Margin" has the meaning set forth in Section 2.06(b).

    "CD Reserve Percentage" has the meaning set forth in
Section 2.06(b).

    "Code" means the Internal Revenue Code of 1986, as
amended.

    "Commitment" means at any date, with respect to each
Bank, the amount set forth below opposite such Bank's name,
as such amount may be reduced from time to time pursuant to
Section 2.09, increased from time to time pursuant to Section
2.01(c)(iii), or temporarily reduced from time to time pursuant
to Section 2.15.

    Continental Bank N.A.                      $ 52,500,000
    Morgan Guaranty Trust
     Company of New York                       $ 22,500,000
    NBD Bank, N.A.                             $ 20,000,000
    J. P. Morgan Delaware                      $ 30,000,000

                  Total Commitments =          $125,000,000

    "Commitment Termination Date" means January 1, 2001 (or
if such date is not a Business Day, the next succeeding day
which is a Business Day), as the same may be extended
pursuant to Section 2.01(c).

    "Consolidated Cumulative Net Income" means the total net
income of the Borrower and its Consolidated Subsidiaries
earned or received after December 31, 1993.

    "Consolidated Current Assets" means at any date the
consolidated current assets of the Borrower and its
Consolidated Subsidiaries determined as of such date.

    "Consolidated Current Liabilities" means at any date (i) the
consolidated current liabilities of the Borrower and its
Consolidated Subsidiaries plus (ii) the current liabilities of any
Person (other than the Borrower or a Consolidated Subsidiary)
which are Guaranteed by the Borrower or a Consolidated
Subsidiary.

    "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 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 as of such date.

    "Consolidated Tangible Net Worth" means at any date (1)
the consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries (including without duplication, the
investment of Pentair Duluth Corp. in LSPI and of Pentair Duluth
Pulp Corp. in LSPI Fiber), plus (2) the cumulative effect of the
accounting change of $36.9 million applicable to the adoption
by the Company effective January 1, 1992 of Financial
Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions' and less (3) the
amount of the consolidated Intangible Assets in excess of 15%
of the consolidated assets of the Borrower and its Consolidated
Subsidiaries, 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,
1993 in the book value of any asset owned by the Borrower or
any Consolidated Subsidiary, (ii) all investments in
unconsolidated Subsidiaries and (iii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights,
organizational or developmental expenses and other intangible
items.  Notwithstanding the previous sentence, for this purpose
Intangible Assets does not include the investment of Pentair
Duluth Corp. in LSPI or of Pentair Duluth Pulp Corp. in LSPI
Fiber or the ownership of the Borrower or any Consolidated
Subsidiary in any other joint venture or entity that is not a
Subsidiary.

    "Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with
the Borrower, are treated as a single employer under Sections
414(b) or 414(c) of the Code.

    "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 under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, (vi)the amount of any
proceeds of a Sale of Receivables less amounts collected on
the receivables sold in such Sale of Receivables, and (vi)
subject to the limitations of the following portion of this
definition, all Debt (which will include only for the purpose of
this clause (vii) operating leases of any Person other than a
Subsidiary) of others Guaranteed by such Person. 
Notwithstanding the foregoing, Debt of the Borrower and its
Consolidated Subsidiaries shall be modified as follows:

           (a) Debt does not include any obligations of LSPI,
the Borrower or Pentair Duluth Corp. with respect to the LSPI
1987 Lease under any instruments, including the Cash
Deficiency Agreements and Keepwell Agreement.

    (b)  With respect to any project financing, through loans,
equipment leases or other incurrence of indebtedness, of
expansion by LSPI of its Duluth paper mill, by LSPI Fiber of the
SRFI recycled pulp mill or other investment related to the pulp
or paper industry, including sources of supply of raw materials
for pulp or paper, by LSPI, LSPI Fiber or SRFI or any other joint
venture or entity in which the Borrower or any Consolidated
Subsidiary has an ownership interest, but which is not a
Subsidiary of the Borrower or a Consolidated Subsidiary, if an
event or a series of events such as completion of the project,
commissioning, or refinancing of the project or entity reduces
the aggregate liability of the Borrower or any Consolidated
Subsidiary for any lease payments or debt obligations relating
to the project in the form of credit support, deficiency or
guaranty amounts to 50% or less of the maximum amount of
the Borrower's and any Consolidated Subsidiary's portion of
amounts financed plus amounts advanced by Borrower or such
Consolidated Subsidiary, then the liability of the Borrower and
such Consolidated Subsidiary for any lease payments or debt
obligations in the form of credit support, deficiency or guaranty
shall be included as Debt only to the extent of the greater of (i)
the Borrower's or such Consolidated Subsidiary's portion of
such lease payments or debt obligations due within the
following 12-month period and (ii) 25% of the Borrower's or
such Consolidated Subsidiary's maximum cumulative future
credit support, deficiency or guaranty related to such project.

    "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.

    "DM Facility" means the credit facility established under the
Deutschmark Facility Agreement among EuroPentair GmbH as
Borrower, Pentair, Inc. as Guarantor, Morgan Guaranty Trust
Company of New York and Continental Bank N.A., for
themselves and as agents and the other lenders named therein,
dated as of February 11, 1994.

    "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.

    "Eurodollar Business Day" means a Business Day on which
commercial banks are open for international business (including
dealings in dollar deposits) in the interbank eurodollar market.

    "Eurodollar Loan" means an amount loaned to the Borrower
under this Agreement bearing interest at the Fixed Eurodollar
Rate for the applicable Interest Period pursuant to the
applicable Notice of Borrowing.

    "Eurodollar Margin" has the meaning set forth in Section
2.06(c).

    "Eurodollar Reserve Percentage" has the meaning set forth
in Section 2.06(c).

    "Event of Default" has the meaning set forth in Section 6.01.

    "Facility Agreements" means, collectively, (a) this
Agreement, and (b) the $45,000,000 Facility Agreement with
First Bank National Association, for itself and as agent, and the
other lender named therein dated the date hereof.

    "Fixed CD Rate" has the meaning set forth in Section
2.06(b).

    "Fixed Eurodollar Rate" has the meaning set forth in Section
2.06(c).

    "Fixed Rate Loans" means CD Loans and Eurodollar Loans.

    "Funded Debt" means at any date that portion of the Debt
of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date, included only by
clauses (i) through (vi) of the definition of Debt.

    "Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person or in any manner
providing for the payment of any Debt of any other Person or
otherwise protecting the holder of such Debt against loss
(whether by agreement to keep-well, to purchase assets,
goods, securities, services, or to take-or-pay or otherwise);
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
correlative meaning.

    "Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).

    "Interest Period" means:
    with respect to each CD Borrowing:  the period
commencing on the date of such Borrowing and ending 30, 60,
90, or 180 days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing, provided that:

    any Interest Period which would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the
next succeeding Eurodollar Business Day; and

    if any Interest Period includes a Principal Repayment Date
but does not end on such date, then (a) the principal amount
(if any) of each CD Loan required to be repaid on such date
shall have an Interest Period ending on such date and (b) the
remainder (if any) of each such CD Loan shall have an Interest
Period determined as set forth above.

    with respect to each Eurodollar Borrowing:  the period
commencing on the date of such Borrowing and ending one,
two, three, or six months thereafter, as the Borrower may elect
in the applicable Notice of Borrowing, provided that:

           any Interest Period which would otherwise end on
a day which is not a Eurodollar Business Day shall be extended
to the next succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next
preceding Eurodollar Business Day;

    any Interest Period which begins on the last Eurodollar
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 (iii)
below, end on the last Eurodollar Business Day of a calendar
month; and

    if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made but does not
end on such date, then (a) the principal amount (if any) of each
Eurodollar Loan required to be repaid on such date shall have
an Interest Period ending on such date and (b) the remainder
(if any) of each such Eurodollar Loan shall have an Interest
Period determined as set forth above.

    with respect to each Reference Borrowing:  a period
commencing on the date of such Borrowing and ending 90
days thereafter, provided that any Interest Period which would
otherwise end on a day which is not a Eurodollar Business Day
shall be extended to the next succeeding Eurodollar Business
Day.

    "Leverage Ratio" means at any date the ratio of
Consolidated Debt to Consolidated Tangible Net Worth.

    "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset.  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 assets.

    "Loan" means a Reference Loan or a CD Loan or a
Eurodollar Loan and "Loans" means Reference Loans and/or
CD Loans and/or Eurodollar Loans.

    "LSPI" means Lake Superior Paper Industries, a Minnesota
joint venture between Minnesota Paper, Incorporated and
Pentair Duluth Corp.

    "LSPI 1987 Lease" means the Sale and Leaseback of
LSPI's Supercalendered Paper Mill dated December 31, 1987
and the documents related thereto, as they may be amended
from time to time.

    "LSPI Fiber" means LSPI Fiber Co., a Minnesota joint
venture between Minnesota Pulp Incorporated II and Pentair
Duluth Pulp Corp., a subsidiary of Duluth Holdings (Paper)
Corp., and an indirect subsidiary of Borrower.

    "Notes" means the promissory notes of the Borrower in the
form of Exhibit A.

    "Notice of Borrowing" has the meaning set forth in Section
2.03.

    "Outstanding Loans" has the meaning set forth in Section
3.03.

    "Participant" and "Participation" have the meanings set forth
in Section 8.06(b).

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

    "Principal Repayment Dates" means the dates on which the
principal of the Loans is required to be repaid pursuant to
Section 2.10.

    "Pro Rata Share of Bid Loans" means the amount at any
time which bears the same ratio to the Bid Loans outstanding
as the ratio the Total Commitment bears to the aggregate Total
Commitments under all Facility Agreements.

    "Reference Loan" means an amount loaned to the Borrower
under this Agreement bearing interest at the applicable
Adjusted Reference Rate pursuant to the applicable Notice of
Borrowing for the applicable Interest Period.

    "Reference Rate" means for any day, a fluctuating rate per
annum equal to the greater of (1) the rate of interest then most
recently announced by Continental Bank N.A. at Chicago,
Illinois as its reference rate or (2) a rate per annum (rounded
upward to the next highest 1/8 of 1% if not already an integral
multiple of 1/8 of 1%) equal to the Federal Funds Effective Rate
in effect on such day plus 1/2% per annum.  If for any reason
Continental Bank N.A. shall have determined (which
determination shall be conclusive in the absence of manifest
error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason (including, without limitation, the inability or
failure of Continental Bank N.A. to obtain sufficient bids or
publications in accordance with the terms hereof), the
Reference Rate shall be a fluctuating rate per annum equal to
the reference rate in effect from time to time until the
circumstances giving rise to such inability no longer exist.

    For purposes of this definition, "Federal Funds Effective
Rate" means, for any day, an interest rate per annum 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, as published for such day
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by
Continental Bank N.A. from three Federal funds brokers of
recognized standing selected by it.  In the case of a day which
is not a Business Day, the Federal Funds Effective Rate for
such day shall be the Federal Funds Effective Rate for the next
preceding  Business Day.  For purposes of this Agreement and
the Notes, each change in the Reference Rate due to a change
in the Federal Funds Effective Rate shall take effect on the
effective date of such change in the Federal Funds Effective
Rate.

    "Reference Rate Margin" has the meaning set forth in
Section 2.06(a).

    "Refinancing Loan" means a Loan with respect to which,
after giving effect to the Loan and the application of the
proceeds thereof, no increase results in the aggregate amount
of Loans outstanding.

    "Regulatory Change" means, after the date hereof, the
adoption of any applicable law, rule or regulation, or any
change therein, 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 with any
request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency.

    "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 at least
66-2/3% of all Loans outstanding.

    "Revolving Credit Period" means the period from the date
hereof to and including January 1, 1997 (or if such day is not
a Business Day, the next succeeding day which is a Business
Day), as such Period may be extended in accordance with
Section 2.01(c).

    "Revolving Credit Termination Date" means January 1,
1997, (or if such day is not a Business Day, the next
succeeding day which is a Business Day), as such Date may
be extended in accordance with Section 2.01(c).

    "Sale of Receivables" means a sale by the Borrower or a
Consolidated Subsidiary, with or without recourse or discount,
of an interest in trade receivables of the Borrower or a
Consolidated Subsidiary pursuant to a receivables purchase
program or a loan secured by such receivables provided that
the value of (a) such receivables sold less amounts collected
on the receivables sold or (b) such receivables in which a
security interest is granted, shall not exceed $60,000,000 in the
aggregate at any one time.

    "SRFI" means Superior Recycled Fiber Industries, a
Minnesota joint venture between LSPI Fiber and Superior
Recycled Fiber Corporation.

    "Subsidiary" means 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
person performing similar functions are at the time directly or
indirectly owned by the Borrower.  For purposes of this
Agreement, neither LSPI nor LSPI Fiber shall be deemed to be
a Subsidiary of the Borrower.

    "Total Commitment" shall mean the aggregate of the
Commitments of the Banks, as such may be reduced from time
to time pursuant to Section 2.09 or increased from time to time
pursuant to Section 2.01(c)(iii), but the Total Commitment shall
not be reduced to reflect reductions in the Commitments of the
Banks from time to time pursuant to Section 2.15.

    "Unfunded Vested Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, 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 the Borrower or any
member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.

    "Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the
Borrower or one or more Wholly-Owned Consolidated
Subsidiaries or by the Borrower and one or more
Wholly-Owned Consolidated Subsidiaries.

    SECTION 1.02 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
approved 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.

ARTICLE II

THE CREDITS

    SECTION 2.01 Commitments to Lend.

    During Revolving Credit Period.  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 from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment.  Each Borrowing under this subsection shall be
made from the several Banks ratably in proportion to their
respective Commitments and shall be in an aggregate principal
amount of (i) if a Reference Borrowing, $1,000,000 or any larger
integral multiple of $100,000, or the aggregate amount of the
unused Commitments; (ii) if a CD Borrowing, $1,000,000 or any
larger integral multiple of $100,000; and (iii) if a Eurodollar
Borrowing, $2,000,000 or any larger integral multiple of
$100,000.  Within the foregoing limits, the Borrower may borrow
under this Section 2.01(a), repay under Section 2.02 or 2.11(a),
and reborrow under this Section 2.01(a) at any time during the
Revolving Credit Period.

    After the Revolving Credit Period.  On and after the
Revolving Credit Termination Date, each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to
make Refinancing Loans to the Borrower on the last day of the
Interest Period for each outstanding Loan or on any date that
a Loan is optionally prepaid, in each case in an amount (except
as otherwise provided in Section 2.10) not greater than the
amount of the Loan or Loans made by such Bank maturing and
payable on such day or optionally prepaid on such day.  The
proceeds of each such Refinancing Loan shall be used solely
to repay the Loan or Loans so maturing and payable on such
day or so optionally prepaid on such day.  The obligations of
the Banks to make Loans hereunder, other than Refinancing
Loans, shall cease on the Revolving Credit Termination Date.

    Extension of Commitment Termination Date.  On or before
October 1, 1995, and on or before October 1 of every second
year thereafter, the Borrower may, by written notice to each
Bank, request that both the Revolving Credit Termination Date
and the Commitment Termination Date be extended for two
years, effective as of the following January 1, provided,
however, that no such request will be considered if the
Revolving Credit Termination Date and the Commitment
Termination Date were not extended upon any previous
request.  The Banks will indicate their acceptance or rejection
of any requested extension as follows:

    If all Banks notify the Borrower through the Agent in writing
within 30 days after receipt of notice of a requested extension
of their acceptance of the requested extension, the extension
shall be deemed to have been granted.

    If Banks which hold in the aggregate less than one-third of
the outstanding Commitments of all of the Banks notify the
Borrower in writing (with copies to the Agent) within 30 days
after receipt of notice of a requested extension that they
consent to the requested extension, the extension shall be
deemed to have been rejected.

    If Banks which hold in the aggregate one-third or more but
less than all of the outstanding Commitments of all of the
Banks notify the Borrower (with copies to the Agent) in writing
within 30 days after receipt of notice of a requested extension
that they consent to the requested extension, the extension
shall be deemed to have been rejected unless the Banks which
consented to the requested extension, or any combination of
the consenting Banks, agree, within 15 days after receipt from
the Borrower of written notice that one or more Banks have
consented to the extension, to increase their Commitment(s) by
the amount of the aggregate Commitments of the
non-consenting Banks.  If the consenting Banks, or any
combination of them, agree to increase their Commitments by
the aggregate amount of the Commitments of the
non-consenting Banks, the requested extension shall be
deemed to have been granted and the Commitments of the
Banks altered as follows:

           If only one Bank agrees to increase its Commitment,
the Commitment of such Bank shall be increased as of the
effective date of the extension by the amount of the
Commitments of the non-consenting Banks.  If more than one
Bank agree to increase their Commitments, the Commitments
of the non-consenting Banks shall be allocated among the
Banks desiring increased Commitments in such proportion or
proportions as the Borrower in its sole discretion elects;
provided, however, that no Bank shall be required to accept an
increase in its Commitment which is larger than the increase to
which it has previously agreed.

    On the effective date of the extension of the Revolving
Credit Termination Date and the Commitment Termination Date,
the Banks which have elected to increase their Commitments
shall make Loans to the Borrower, subject to the terms of
Section 3.01, in the amount of the aggregate principal balance
of the Notes payable to the non-consenting Banks.  Each such
Bank shall share in such Loans in the same proportion as the
amount by which its Commitment is increased bears to the
aggregate increases in the Commitments of all of the
consenting Banks.  The proceeds of all Loans made pursuant
to this Section 2.01(c)(iii)(2) shall be paid by the Banks making
the same to the Agent which shall promptly remit the proceeds
of such Loans to the non-consenting Banks in repayment of the
Notes payable to such Banks.  Effective as of the effective date
of the extension of the Revolving Credit Termination Date and
the Commitment Termination Date, the Commitment(s) of the
non-consenting Bank(s) shall terminate.  If the Revolving Credit
Termination Date and the Commitment Termination Date are
extended pursuant hereto, the Borrower shall deliver to each
Bank a new Note, substantially in the form of Exhibit A hereto,
in the amount of the Commitment of such Bank, dated as of the
effective date of the extension.

    SECTION 2.02 Maturity.  Each Loan shall be paid in full by
the Borrower on the earlier of (i) the last day of the Interest
Period applicable thereto and (ii) the Commitment Termination
Date.

    SECTION 2.03 Method of Borrowing.

    The Borrower shall give the Agent notice (a "Notice of
Borrowing" which may be given orally, but if so, shall be
confirmed in writing within two Business Days) at least one
Business Day before each Reference or CD Borrowing and at
least three Eurodollar Business Days before each Eurodollar
Borrowing specifying:

    the date of such Borrowing, which shall be a Business Day
if a Reference Borrowing or CD Borrowing, and a Eurodollar
Business Day if a Eurodollar Borrowing,

    the aggregate amount of such Borrowing,

    whether the Loans comprising such Borrowing are to be
CD Loans or Reference Loans or Eurodollar Loans, and

    if a CD Borrowing or Eurodollar Borrowing, the duration of
the Interest Period applicable to such Borrowing.

In the event that the Borrower does not request a new
borrowing prior to the last day of any Interest Period and does
not otherwise provide funds to pay Loans maturing on such
day, the Borrower shall be deemed to have given the Agent a
Notice of Borrowing requesting Reference Loans on such day
in the principal amount of the Loans coming due on such day
and with an Interest Period of 90 days.

    Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.

    Not later than 12:00 noon (New York time) on the date of
each Borrowing, each Bank shall make available its ratable
share of such Borrowing, in federal or other funds immediately
available to the Agent at its address specified pursuant to
Section 8.01.  Unless the Agent determines that any applicable
condition specified in Article III 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.  Notwithstanding the
foregoing provisions of this Section, to the extent that a Loan
made by a Bank matures on the date of a requested Loan,
such Bank shall apply the proceeds of the Loan it is then
making to the repayment of the maturing Loan.

    SECTION 2.04 Notes.

    The Loans of each Bank shall be evidenced by a single
Note payable to the order of such Bank.

    Upon receipt of each Bank's Note pursuant to Section
3.02(a), the Agent shall forward such Note to such Bank.  Each
Bank may record, and prior to any transfer of its Note may
endorse, on the schedules forming a part of the Note
appropriate notations to evidence the date and amount of each
Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto.  Each
Bank is hereby irrevocably authorized by the Borrower so to
record and endorse and to attach to and make a part of any
Note a continuation of any such schedule as and when
required.

    SECTION 2.05 Duration of Interest Periods.  The duration
of each Interest Period shall be as specified in the applicable
Notice of Borrowing.

    SECTION 2.06 Interest Rate and Payment.

    Reference Loans.  Each Reference 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 Adjusted Reference Rate for such day. 
Such interest shall be payable for each Interest Period on the
last day thereof and on the day of any prepayment.  Any
overdue principal of and, to the extent permitted by law,
overdue interest on any Reference Loan shall bear interest,
payable on demand, for each day until paid at a rate per
annum equal to the sum of 1% plus the otherwise applicable
Adjusted Reference Rate for such day.

    The "Adjusted Reference Rate" on any day means a rate
per annum equal to the sum of the Reference Rate Margin plus
the applicable Reference Rate.

    The "Reference Rate Margin" means 0%.

    CD Loans.  Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the applicable
Fixed CD Rate; provided that if any CD Loan or any portion
thereof shall, as a result of clause (A)(ii)(a) of the definition of
Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at
the rate applicable to Reference 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 and, to the extent permitted by law,
overdue 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 1% plus the higher of (i) the Fixed CD Rate for the
immediately preceding Interest Period and (ii) the rate
applicable to Reference Loans for such day.

    The "Fixed CD Rate" applicable to any CD Loan for any
Interest Period means a rate per annum equal to the sum of the
CD Margin plus the applicable Adjusted CD Rate.

    "CD Margin" means:

    Leverage Ratio:                    CD Margin:

    0.8:1 or less                      .425 of 1%

    equal to or less than 1.2:1
    but more than 0.8:1                .500 of 1%

    more than 1.2:1                    .675 of 1%

    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 - RP  ]

           ACDR          =             Adjusted CD Rate
           CDBR          =             CD Base Rate
           RP            =             CD Reserve Percentage
           AR            =             Assessment Rate

    *      The amount in brackets being rounded upwards,
if necessary, to the next higher 1/100 of 1%

    The "CD Base Rate" applicable to any Interest Period
means the average rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandths of a
percent) bid at 10:00 A.M. (Chicago time) (or as soon thereafter
as practicable) on the first day of such Interest Period by two or
more New York or Chicago certificate of deposit dealers of
recognized standing for the purchase at face value from the
Agent of its certificates of deposit in an amount comparable to
the Agent's portion of the principal amount of the CD Loan to
which such Interest Period applies and having a maturity
comparable to such Interest Period.

    "CD 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 reserve
requirement (including without limitation any basic,
supplemental or emergency reserves) of the Agent in respect
of new time deposits made with the Agent in dollars having a
maturity comparable to the related Interest Period and in an
amount of $100,000 or more.  The Fixed CD Rate shall be
adjusted automatically on and as of the effective date of any
change in the CD Reserve Percentage.

    "Assessment Rate" means for any Interest Period the net
annual assessment rate (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually assessed to the Agent by the
Federal Deposit Insurance Corporation (or any successor) for
such Corporation's (or such successor's) insuring time deposits
at offices of the Agent in the United States during the most
recent period for which such rate has been determined prior to
the commencement of such Interest Period.

    The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
CD Rate.  Assuming a CD Base Rate for a 30 day Interest
Period of 3.7%, a CD Reserve Percentage of 3.0%, an
Assessment Rate of 0.7%, and a CD Margin of .425 of 1%, the
Fixed CD Rate would equal:

   .037
- ----------  + .0007 + .00425 = .03814 + .0007 + .00425 =
.04309 = 4.309%
1.00 - .03

    Eurodollar Loans.  Each Eurodollar Loan shall bear interest
on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the
applicable Fixed Eurodollar Rate; provided that if any Eurodollar
Loan or any portion thereof shall, as a result of clause (B)(iii)(a)
of the definition of Interest Period, have an Interest Period of
less than one month, such portion shall bear interest during
such Interest Period at the rate applicable to Reference 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 three months, at intervals of three months
after the first date thereof.  Any overdue principal of and, to the
extent permitted by law, overdue interest on, any Eurodollar
Loan shall bear interest, payable on demand, for each day from
and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum
equal to the sum of 1% plus the Eurodollar Margin plus the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the interest rate per annum
at which one day (or, if such amount due remains unpaid more
than three Eurodollar Business Days, then for such other period
of time not longer than six months as the Agent may elect)
deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Banks are offered to the
Agent in the London interbank market for the applicable period
determined as provided above by (ii) 1.00 minus the Eurodollar
Reserve Percentage.

    The "Fixed Eurodollar Rate" applicable to any Interest
Period means a rate per annum equal to the sum of (a) the
quotient obtained (rounded upwards, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable Interbank
Offered Rate by (ii) 1.00 minus the Eurodollar Reserve
Percentage plus (b) the Eurodollar Margin.

    The "Interbank Offered Rate" applicable to any Interest
Period means the average rate per annum (rounded upwards,
if necessary, to the next higher one hundred-thousandths of a
percent) at which deposits in dollars are offered to the Agent by
major banks in the interbank eurodollar market at approximately
10:00 a.m. (Chicago time) two Eurodollar Business Days before
the first day of such Interest Period in an amount approximately
equal to the Agent's portion of the principal amount of the
Eurodollar Loan to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.

    The "Eurodollar Reserve Percentage" means for any day
that percentage expressed as a decimal (including all basic,
supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled
changes in reserve requirements during such Interest Period)
which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor)
which is the average of the reserve requirements for the Agent
in effect on such day in respect of new Eurodollar deposits
having a maturity comparable to the Interest Period for such
Eurodollar Loan and in an amount of $100,000 or more.  The
Fixed Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage.

    The "Eurodollar Margin" means

                                               Eurodollar
    Leverage  Ratio:                     Margin  :

    0.8:1 or less                      .300 of 1%

    equal to or less than 1.2:1
    but more than 0.8:1                .375 of 1%

    more than 1.2:1                    .550 of 1%

    The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
Eurodollar Rate.  Assuming an Interbank Offered Rate for a one
month Interest Period of 6.0%, a Eurodollar Reserve Percentage
of 0%, and a Eurodollar Margin of .300 of 1%, the Fixed
Eurodollar Rate would equal:

    .06
- ---------- + .00300 = .06 + .00300 = .06300 = 6.3%
1.00 - 0

    The Agents shall determine each interest rate applicable to
the Loans hereunder and shall give prompt notice to the
Borrower and the other Banks by telex, telecopy or cable of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.

    Except as described in this Section 2.06(e), for purposes of
determining CD Margin and Eurodollar Margin pursuant to
Section 2.06(b) and 2.06(c) and facility fees pursuant to Section
2.07(a) (collectively, the "Varying Rates"), the Leverage Ratio
during any quarter will be treated as if it remained constant
during the quarter.  The Leverage Ratio shall be reported on a
quarterly basis pursuant to Section 5.01(c).  If as reported at the
end of any quarter the Leverage Ratio has increased so that the
Varying Rates based upon such Leverage Ratio will be higher
than during the previous quarter (such increase being a "Higher
Level"), the Borrower shall report which month during the
preceding quarter the Higher Level occurred and shall pay to
the Agent for the account of each Bank in ratable shares, for
such month and all succeeding months of such quarter, the
difference between the Varying Rates if paid at such Higher
Level and the Varying Rates actually paid.  The Borrower may
inform the Agent at any time by written notice, supported by a
summary balance sheet, that the Leverage Ratio has been
reduced so that the Varying Rates based upon such Leverage
Ratio will be lower than previously (such reduction being a
"Lower Level"), and effective upon such notice shall pay as
required by this Agreement the Varying Rates associated with
such Lower Level.

    SECTION 2.07 Facility Fees.

    During the Revolving Credit Period, the Borrower shall pay
to the Agent for the account of each Bank in ratable shares a
facility fee at the rate of .225 of 1% per annum on the Total
Commitment.  Such facility fees shall accrue from and including
the date of this Agreement to but excluding the last day of the
Revolving Credit Period and shall be payable quarterly in
arrears on the last day of each calendar quarter during the
Revolving Credit Period.

    (b)  From and after the last day of the Revolving Credit
Period, the Borrower shall pay to the Agent for the account of
each Bank in ratable shares a facility fee on the amount of
Loans outstanding from time to time at the rate of .225 of 1%
per annum.  Such facility fees shall be payable quarterly in
arrears on the last day of each calendar quarter and on the day
all outstanding Loans are paid in full.

    SECTION 2.08 THIS SECTION IS INTENTIONALLY
OMITTED.

    SECTION 2.09 Termination or Reduction of Commitments. 
The Borrower may, upon at least three Business Days' notice
to the Agent, terminate entirely at any time, or proportionately
reduce from time to time by an aggregate amount of
$5,000,000 or any larger multiple of $1,000,000, the portions of
the Commitments in excess of the sum of the Loans
outstanding and the Pro Rata Share of Bid Loans.  If the
Commitments are terminated in their entirety, all accrued facility
fees shall be payable on the effective date of such termination.

    SECTION 2.10 Required Repayments.  The Borrower shall
repay, and there shall become due and payable, on each April
1, July 1, October 1 and January 1, beginning the April 1
following the Revolving Credit Termination Date and thereafter
until the Commitment Termination Date, an aggregate principal
amount of the Loans equal to one-sixteenth of the aggregate
principal amount of the Loans outstanding at the end of the
Revolving Credit Period; provided that in any event the
outstanding Loans shall be repaid in full on or before the
Commitment Termination Date.  Each such required repayment
shall be applied to repay the Loans of the several Banks in
proportion to their respective Commitments.  Payments made
pursuant to this Section may not be reborrowed.  If at any time
after the end of the Revolving Credit Period the Borrower repays
any Loans in an amount which exceeds the sum of (a) principal
amounts then owing under this Section plus (b) the amount of
any Refinancing Loans borrowed to repay such Loans, then the
amount of such excess shall be applied to reduce the amount
of any subsequent repayment required by this Section in
inverse chronological order.

    SECTION 2.11 Optional Prepayments.

    The Borrower may, upon at least one Business Day's notice
to the Agent, prepay the Reference Loans in whole at any time,
or from time to time in part in amounts aggregating $1,000,000
or any larger multiple of $100,000 (provided that after such
prepayment the aggregate outstanding Reference Loans are in
an aggregate amount of at least $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 after the end of the Revolving Credit Period may
not be reborrowed and shall be applied to prepay the
Reference Loans of the several Banks in proportion to the then
aggregate outstanding amount of their respective Reference
Loans.

    The Borrower may not prepay CD Loans or Eurodollar
Loans prior to the last day of their respective Interest Periods.

    Upon receipt of a notice of prepayment pursuant to this
Section, (which may be given orally or in writing), the Agents
shall promptly notify each Bank of the contents thereof and of
such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.

    SECTION 2.12 General Provisions as to Payments.  The
Borrower shall make each payment of principal of, and interest
on, the Loans and facility fees hereunder not later than 12:00
noon (New York time) on the date when due, in federal or other
funds immediately available to the Agent at its address referred
to in Section 8.01.  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
facility fees or principal of, or interest on, any CD Loans or
Reference Loans shall be due on a day which is not a Business
Day, the date for payment thereof shall be extended to the next
succeeding Business Day.  Whenever any payment of principal
of, or interest on, any Eurodollar Loans shall be due on a day
which is not a Eurodollar Business Day, the date for payment
thereof shall be extended to the next succeeding Eurodollar
Business Day unless as a result thereof it would fall in the next
calendar month, in which case it shall be advanced to the next
preceding Eurodollar 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 CD Loan or Eurodollar
Loan for any reason on any day other than the last day of an
Interest Period applicable thereto, or if the Borrower fails to
borrow any CD Loans or Eurodollar Loans after notice has been
given to any Bank in accordance with Section 2.03(b), the
Borrower shall reimburse each Bank on demand for any
resulting loss or expense incurred by it, 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; 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.  Facility
fees and interest on Reference Loans 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).  Interest on
CD Loans and Eurodollar Loans shall be computed on the
basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each Interest Period from and
including the first day thereof to but excluding the last day
thereof.

    SECTION 2.15 Coordination with Bid Loan Agreement.  The
Borrower has executed a Bid Loan Agreement dated as of
December 14, 1988 and amended as of January 1, 1991 and
February 11, 1994, with Continental Bank N.A. for itself and as
agent, and the other lenders named therein (the "Bid Loan
Agreement").  So long as any Bid Loan is outstanding under
the Bid Loan Agreement, the Commitments shall be
proportionately reduced temporarily by the Pro Rata Share of
Bid Loans.  If the Commitments after such reduction are less
than the sum of the Loans outstanding plus the Pro Rata Share
of Bid Loans, prepayment of the Loans is not required to
reduce such sum to the level of the Commitments, but no
Borrowings can be made in excess of the Commitments. 
Reduction in commitments pursuant to his Section 2.15 shall
not cause any reduction in any Bank's ratable share of facility
fees payable pursuant to Section 2.07 hereof.

    SECTION 2.16 Eurodollar Lending Unlawful.  In the event
that any Regulatory Change shall make it unlawful or
impossible for any Bank to make, maintain or fund any Loan as
a Eurodollar Loan, the obligation of such Bank under Section
2.01 to make or maintain any Loan as a Eurodollar Loan shall,
upon the happening of such Regulatory Change, forthwith
terminate and such Bank shall, by telephonic notice confirmed
in writing to the Borrower and the Agent, declare that such
obligation has so terminated.  Upon receipt of such notice, the
Borrower shall immediately prepay in full the then outstanding
principal amount of each such Eurodollar Loan together with
accrued interest.  Unless the Borrower notifies the Agent to the
contrary within two Eurodollar Business Days after receiving a
notice pursuant to this Section, the Borrower shall, concurrently
with prepaying each such Eurodollar Loan, borrow a Reference
Loan in an equal principal amount.  If circumstances
subsequently change so that such Bank shall no longer be so
affected, it shall so notify the Borrower and the other Banks,
whereupon the obligation of such Bank under Section 2.01 to
make or maintain any Loan as a Eurodollar Loan shall be
reinstated.

    SECTION 2.17 Funds Unavailable.  Notwithstanding any
other provision of this Agreement, if, prior to the date on which
all or any portion of the principal amount of the Loans is to be
made as Eurodollar Loans or CD Loans, any Bank shall
determine for any reason whatsoever (which determination shall
be conclusive and binding on the Borrower), that

    dollar deposits in the relevant amounts and for the relevant
Interest Period are not available to such Bank in the relevant
market, or

    by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to such Eurodollar Loans or CD Loans,

such Bank shall promptly give notice to the Borrower and the
other Banks of such determination, and the obligation of such
Bank under Section 2.01 to make or maintain any Loan as a
Eurodollar Loan or a CD Loan, as the case may be, shall, upon
such notification, forthwith terminate and the Borrower shall
immediately prepay all such Loans then maintained as
Eurodollar Loans or CD Loans, as the case may be, together
with accrued interest.  Unless the Borrower notifies the Agent
to the contrary within two Eurodollar Business Days after
receiving a notice pursuant to this Section, the Borrower shall,
concurrently with prepaying each such Eurodollar Loan or CD
Loan, borrow a Reference Loan in an equal principal amount. 
If circumstances subsequently change so that such Bank shall
no longer be so affected, such Bank shall so notify the
Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan as
a Eurodollar Loan or a CD Loan (whichever was so terminated
and is then available) shall be reinstated.

    SECTION 2.18 Increased Costs and Reduced Returns.

    If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, 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 the
Banks with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable
agency:

           shall subject any Bank to any tax, duty or other
charge with respect to its obligation to make Fixed Rate Loans,
its Fixed Rate Loans, or its Notes, or shall change the basis of
taxation of payments to such Bank of the principal of or interest
on its Fixed Rate Loans or in respect of any other amounts due
under this Agreement, in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans, (except for changes in
the taxation of the overall net income of such Bank; or

    shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any
included in a CD Reserve Percentage or Eurodollar Reserve
Percentage, as applicable), special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, such Bank or shall impose on such
Bank or on the United States market for certificates of deposit
or the interbank eurodollar market any other condition affecting
its obligation to make Fixed Rate Loans, its Fixed Rate Loans
or its Notes;

and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by such
Bank under this Agreement or under its Notes with respect
thereto, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank, the Borrower
agrees to pay to such Bank such additional amount or amounts
as will compensate it for such increased cost or reduction.

    If after the date hereof, any Bank shall have determined that
the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, 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 such
Bank with 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 such Bank's capital as
a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's
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, the Borrower shall
pay to such Bank such additional amount or amounts as will
compensate it for such reduction.

    Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section
2.18 and will designate a different branch or office with respect
to this Agreement, if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in
the sole judgment of such Bank, be otherwise disadvantageous
to such Bank.  A certificate of each Bank claiming
compensation under this Section 2.18 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, each Bank may use any reasonable averaging
and attribution methods.

    If any Bank demands compensation under this Section
2.18, the Borrower may at any time, upon at least five
Eurodollar Business Days' prior notice to such Bank, prepay
outstanding CD Loans or Eurodollar Loans, as the case may
be, of such Bank, together with accrued interest to the date of
prepayment, and, concurrently with prepaying each such CD
Loan or Eurodollar Loan, borrow a Reference Loan in an equal
principal amount and unless and until such Bank notifies the
Borrower that the circumstances giving rise to such demand for
compensation no longer apply, all Loans which would otherwise
be made by such Bank as CD Loans or Eurodollar Loans, as
the case may be, shall be made instead as Reference Loans.

    SECTION 2.19 Pro Rata Sharing.  If any holder of any Note
shall obtain any payment (whether voluntary, involuntary, by
application of offset or otherwise) of principal of or interest on
such Note in excess of its pro rata share of payments then or
thereafter obtained by all holders of principal of or interest on
all Notes, such holder shall purchase from the other holders of
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received ratably
with such other holders; provided, however, that if all or any
portion of the excess payment is thereafter recovered from such
purchasing holder, the purchase shall be rescinded and the
purchase price restored pro rata according to the extent of such
recovery, but without interest.  Upon the occurrence of an Event
of Default hereunder, all payments received by each Bank or
holder of any Note from the Borrower or otherwise received with
regard to the Borrower's obligations to such Bank (whether
such payments are voluntary, involuntary, by application of
offset or otherwise), notwithstanding such other indebtedness
of the Borrower to such Bank or holder, shall be applied in the
manner set forth in the immediately preceding sentence to the
extent such payments are in excess of such Bank's or holder's
pro rata share.  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.

ARTICLE III

CONDITIONS TO BORROWINGS

    The obligations of each Bank to make a Loan on the
occasion of each Borrowing pursuant to Article II is subject to
the satisfaction of the following conditions:

    SECTION 3.01 All Borrowings.  In the case of each
Borrowing:

    receipt by the Agent of a Notice of Borrowing as required
by Section 2.03 (including any Notice of Borrowing deemed
given pursuant to Section 2.03);

    the fact that, as of the time immediately after such
Borrowing, no Default shall have occurred and be continuing;

    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; and

    the fact that, as of the time immediately after such
Borrowing, the aggregate outstanding principal amount of Bid
Loans and Loans under all Facility Agreements shall not exceed
the aggregate Total Commitments under all Facility
Agreements.

Each Notice of Borrowing and 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 (b), (c) and (d) of this Section.

    SECTION 3.02 First Borrowing.  On or before the date of
the execution and delivery of this Agreement:

    receipt by each Bank for the account of such Bank of a
duly executed Note, dated on or before the date of such
Borrowing, complying with the provisions of Section 2.04;

    receipt by each Bank of an opinion of counsel for the
Borrower, substantially in the form of Exhibit B hereto;

    receipt by each Bank of a certificate signed by an officer of
the Borrower, to the effect set forth in clauses (b), (c) and (d) of
Section 3.01, and containing the resolutions of the Borrower
authorizing the execution, delivery and performance of this
Agreement and the Notes; and

    receipt by each Bank of an incumbency certificate which
shall identify by name and title and bear the signatures of the
officers of the Borrower authorized to sign this Agreement and
the Notes, upon which certificate the Banks shall be entitled to
rely until informed in writing by the Borrower of any change.

The documents and opinions referred to in this Section shall be
delivered to each Bank no later than the date of the execution
and delivery of this Agreement.  The certificate and opinions
referred to in clauses (b) and (c) above shall be dated no more
than ten Business Days before the date of the first Borrowing.

    SECTION 3.03 Use of Proceeds of First Borrowing and
Transition.  The Borrower is a party to three facility agreements
(the "Prior Agreements") which consist of Facility Agreements
dated as of December 14, 1988, as amended as of January 1,
1991, between (A) the Borrower and First Bank National
Association, for itself and as agent, and NBD Bank, N.A., (B)
the Borrower and Morgan Guaranty Trust Company of New
York, for itself and as agent, Morgan Bank (Delaware) and
Norwest Bank Minnesota, N.A. and (C) the Borrower and
Continental Bank N.A. for itself and as agent.  A portion of the
first Borrowing shall be used to pay in full all outstanding
obligations, if any, of the Borrower under the Prior Agreements. 
Notwithstanding the previous sentence, until February 28, 1994
any CD Loans or Eurodollar Loans under the Prior Agreements
for which the interest period under the Prior Agreement would
end on a date after the date of this Agreement ("Outstanding
Loans") may continue to be held on a continuous basis by the
bank which made such loan and shall continue to be governed
by the terms of the applicable Prior Agreement.  Until
obligations of the Borrower under the applicable Prior
Agreement are paid in full, each Bank's Commitment hereunder
shall be reduced by the amount of such Bank's Outstanding
Loans under the Prior Agreements.  Upon satisfaction in full of
all obligations, if any, of the Borrower under the Prior
Agreements, the holders of the notes issued by the Borrower
under the Prior Agreements shall deliver the notes, marked
paid, to the Borrower, and the Prior Agreements shall terminate. 
From and after the execution of this Agreement, the Borrower
shall have no further right to borrow funds under the Prior
Agreements.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

    The Borrower represents and warrants that:

    SECTION 4.01 Corporate Existence and Power.  The
Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of Minnesota and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.

    SECTION 4.02 Corporate and Governmental Authorization;
Contravention.  The execution, delivery and performance by the
Borrower of this Agreement and the Notes are within the
Borrower's corporate power, 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 the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.

    SECTION 4.03 Binding Effect.  This Agreement constitutes
a valid and binding agreement of the Borrower and the Notes,
when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of the
Borrower.

    SECTION 4.04 Financial Information.

    The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1992 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Deloitte & Touche
and set forth in the Borrower's annual report for the year ended
December 31, 1992 as filed with the Securities and Exchange
Commission on Form 10-K, a copy of which has been delivered
to each Bank, 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.

    The unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of September 30, 1993
and the related unaudited consolidated statements of income
and cash flows for the nine months then ended, set forth in the
Borrower's quarterly report for the fiscal quarter ended
September 30, 1993 as filed with the Securities and Exchange
Commission on Form 10-Q, a copy of which has been delivered
to each Bank, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent
with the financial statements referred to in paragraph (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).

    Since September 30, 1993 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.

    SECTION 4.05 Litigation.  There is no action, suit or
proceeding pending, 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 or which in any manner questions
the validity of this Agreement or the Notes.

    SECTION 4.06 Compliance with ERISA.  The Borrower and
each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.

    SECTION 4.07 Taxes.  The Borrower and its Subsidiaries
have filed all United States federal, state and local income,
excise and other tax returns which are required to be filed by
them and have paid or made provision for the payment of all
taxes which have become due pursuant to such returns or
pursuant to any assessment in respect thereof received by the
Borrower or any Subsidiary, except such taxes, if any, as are
being contested in good faith and for which adequate reserves
have been provided.  The federal income tax liability of the
Borrower has been determined by the Internal Revenue Service
and paid for all years prior to and including the fiscal year
ended December 31, 1982.

    SECTION 4.08 Subsidiaries.  Each of the Borrower's
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.

    SECTION 4.09 Not an Investment Company.  The Borrower
is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

ARTICLE V

COVENANTS

    The Borrower agrees that so long as any Bank has any
Commitment hereunder or any amount payable under any Note
remains unpaid:

    SECTION 5.01 Information.  The Borrower will deliver to
each of the Banks:

    as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated and
consolidating (only as to direct Subsidiaries of the Borrower)
balance sheet of the Borrower and its Consolidated Subsidiaries
as of the end of such fiscal year and the related consolidated
and consolidating (only as to direct Subsidiaries of the
Borrower) 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 accordance with
the rules and regulations of the Securities and Exchange
Commission by Deloitte & Touche or other independent public
accountants of nationally recognized standing;

    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 and consolidating (only as to
direct Subsidiaries of the Borrower) balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated and consolidating
(only as to direct Subsidiaries of the Borrower) 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 each case 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;

    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 5.02 to 5.09, inclusive, on the
date of such financial statements and (ii) stating whether there
exists on the date of such certificate any Default 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;

    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 there existed on the date of such
statements any Default and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;

    forthwith upon the occurrence of any Default, 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;

    promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;

    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 annual, quarterly
or monthly reports which the Borrower shall have filed with the
Securities and Exchange Commission;

    if and when the Borrower or any member of the Controlled
Group 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 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;

    simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a balance
sheet and statement of income of LSPI for the corresponding
period in detail reasonably comparable to the information
provided by the Borrower with respect to its Consolidated
Subsidiaries on its reports as filed with the Securities and
Exchange Commission on Form 10-K or Form 10-Q; and

    from time to time such additional information regarding the
financial position or business of the Borrower as the Agent, at
the request of any Bank, may reasonably request.

    SECTION 5.02 Current Assets.  Consolidated Current
Assets will at no time be less than 120% of Consolidated
Current Liabilities.

    SECTION 5.03 Leverage Ratio.  The Leverage Ratio will at
no time exceed 2.0:1.0 and the ratio of Funded Debt to
Consolidated Tangible Net Worth will at no time exceed 1.5:1.0.

    SECTION 5.04 Minimum Consolidated Tangible Net Worth. 
Consolidated Tangible Net Worth will at no time be less than
the sum of (a) $300,000,000 plus (b) 50% of Consolidated
Cumulative Net Income, plus (c) 80% of proceeds of all classes
of equity securities issued by the Borrower after February 11,
1994, plus (d) 80% of the amount by which the principal of the
loan made March 7, 1990 by the Borrower to the Pentair ESOP
Trust is reduced after December 31, 1993.

    SECTION 5.05 Expense Ratio.  At any time when the
Leverage Ratio exceeds 1.2:1.0, as of the end of each quarter
of each of the Borrower's fiscal years, the ratio of (a)
consolidated net income before taxes plus (to the extent
deducted in calculating net income before taxes) interest and
rent expense to (b) rent and interest expense, calculated on a
cumulative basis for the four most recent fiscal quarters and
excluding in each case rent and interest expense of LSPI and
of any other joint venture or entity in which the Borrower or a
Consolidated Subsidiary has an ownership interest but which is
not a Subsidiary, will not be less than 1.5:1.0.

    SECTION 5.06 Subsidiary Debt.  Debt incurred by the
Wholly-Owned Consolidated Subsidiaries from and after the
date of this Agreement and outstanding at any time, excluding:

           obligations assumed in connection with acquisitions;

    Debt incurred in respect of LSPI; and

    Debt incurred by such Subsidiary in a country other than
the United States or Canada with respect to operations in such
country, including specifically, but not exclusively, Debt incurred
under the DM Facility; and

    (d)  Debt incurred in respect of any Sale of Receivables;

will not exceed fifteen percent (15%) of Consolidated Tangible
Net Worth.

    SECTION 5.07 Negative Pledge.  Neither the Borrower nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien securing Debt on any asset now owned or
hereafter acquired by it, except:

    Liens existing on the date of this Agreement; each Lien
which secures Debt in an aggregate principal amount of more
than $1,000,000 is disclosed in the financial information referred
to in Section 4.04;

    any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event;

    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;

    any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Borrower or a Consolidated Subsidiary and not created in
contemplation of such event;

    any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not
created in contemplation of such acquisition;

    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;

    any Lien arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with court
proceedings so long as the execution or other enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith by appropriate proceedings;

    any Lien on trade receivables arising from a Sale of
Receivables; and

    Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at
any time outstanding not exceeding 15% of Consolidated
Tangible Net Worth.

    SECTION 5.08 Consolidations, Mergers and Sales of
Assets.  The Borrower will not merge or consolidate with any
other Person or sell, lease, transfer or otherwise dispose of
substantially all of its assets as an entirety to any other Person
unless:

    the Person surviving the merger or consolidation is the
Borrower; and

    immediately after giving effect to any such action, no
Default shall have occurred and be continuing.

    SECTION 5.09 Acquisitions.  At any time when the
Leverage Ratio exceeds 1.2:1, the Borrower will not acquire
other businesses if the aggregate amount of cash used for such
acquisitions since the Leverage Ratio remained in excess of
1.2:1 exceeds $50,000,000.

    SECTION 5.10 Use of Proceeds.  The proceeds of the
Loans made under this Agreement will be used by the Borrower
to refinance the promissory notes executed and delivered by
the Borrower under the Prior Agreements (as defined in Section
3.03) and otherwise for general corporate purposes including
investment in LSPI or in LSPI Fiber, future acquisitions, capital
expenditures and working capital.  None of such proceeds will
be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any
"margin stock" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System.  The Borrower will
not engage principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing
or carrying any such margin stock within the meaning of such
Regulation U.

    SECTION 5.11 Ratable Borrowings.  Contemporaneously
with the execution of this Agreement, the Borrower has
executed one other Facility Agreement.  The Borrower
covenants and agrees that at any time when the Leverage Ratio
exceeds 1.2:1.0, within any period of thirty days, the principal
amount outstanding under this Agreement, plus or minus up to
$5,000,000, will bear the same ratio to the aggregate amount of
the Commitments under this Agreement as the aggregate
principal amount outstanding under each of the other Facility
Agreements bears to the aggregate amount of the
Commitments under such other Facility Agreement and the
Borrower pledges its best efforts to maintain such ratios at
other times, consistent with its business needs.

ARTICLE VI

DEFAULTS

    SECTION 6.01 Events of Default.  If one or more of the
following events ("Events of Default") shall have occurred and
be continuing:

    the Borrower shall fail to pay within five days of the date
due any principal of or interest on any Note, any fees or any
other amount payable hereunder;

    the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.09, inclusive;

    the Borrower shall fail to observe or perform any other
covenant or agreement contained in this Agreement for 30 days
after written notice thereof has been given to the Borrower by
the Agent at the request of any Bank;

    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;

    any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than the Notes)
of the Borrower or any Subsidiary equal to or exceeding
$10,000,000 in the aggregate for all such Debt or enables (or,
with the giving of notice or lapse of time or both, would enable)
the holder of any such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;

    the Borrower or any 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;

    an involuntary case or other proceeding shall be
commenced against the Borrower or any 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 60 days; or an order for relief shall be
entered against the Borrower or any Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;

    the Borrower or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in
excess of $5,000,000 which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or the
Borrower or any member of the Controlled Group shall file a
distress termination notice with the PBGC and the amount of
the Unfunded Vested Liabilities under that filing exceeds
$2,500,000; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;

    a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 60 days;

    any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the
outstanding shares of voting stock of the Borrower; or

    within a period of twelve consecutive months, three-fourths
of the directors of the board of directors of the Borrower shall
have changed;

then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (a) through (e), or (h)
through (k) above, the Agent shall (i) if requested by Banks
having 50% or more 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
Notes evidencing 50% or more in aggregate principal amount
of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes
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; (2) in the case of any
of the Events of Default specified in paragraph (f) or (g) above,
without any notice to the Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon
terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; and (3) in the case
of any of the Events of Default specified in paragraph (j) or (k)
above, in addition to the actions permitted to be taken pursuant
to clause (1) above, if such Event of Default is due to an
unfriendly attempt to acquire control of the Borrower (as
declared in a resolution of the board of directors of the
Borrower), the Banks may declare an additional amount not
greater than 10% of the Total Commitment at such time to be
immediately due and payable to the extent such amount is
permitted by applicable law.

    SECTION 6.02 Notice of Default.  The Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon
being requested to do so by any Bank and shall thereupon
notify all the Banks thereof.

ARTICLE VII

THE AGENT

    SECTION 7.01 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 7.02 Agent and Affiliates.  The Agent 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 the Agent 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
hereunder.

    SECTION 7.03 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 VI.

    SECTION 7.04 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 7.05 Liability of Agent.  Neither the Agent nor any
of its 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 all of the Banks or (ii) in
the absence of its own gross negligence or willful misconduct. 
Neither the Agent nor any of its 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, including any notice given orally by the
Borrower as permitted by the terms of this Agreement; (ii) the
performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III 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 or similar writing) or oral notice
permitted hereunder and believed by it to be genuine or to be
signed or given by the proper party or parties.

    SECTION 7.06 Indemnification.  Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (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 the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.

    SECTION 7.07 Agent's Fees.  The Borrower shall pay to the
Managing Agent, in addition to legal and other expenses
described in Section 8.03, an agency fee of $35,000 per
annum, payable annually in advance, with the first payment of
$35,000 payable on January 1, 1995, and with successive
payments payable on the first day of each January beginning
January 1, 1996 so long as this Agreement shall be in effect.

    SECTION 7.08 Bank Credit Decision.  Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank and based on the financial
statements prepared by the Borrower and such other
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 action under this Agreement.

    SECTION 7.09 Successor Agents.  Any Agent may resign
at any time by giving written notice thereof to the Banks and the
Borrower, and an Agent may be removed at any time with
cause by written notice received by the Agent from the
Required Banks.   Upon any such resignation or removal,
provided no Default exists, the Borrower shall have the right to
appoint another Bank as successor Agent subject to the
consent of the Required Banks, which consent shall not be
unreasonably withheld.  If such consent is not obtained within
30 days, or if a Default exists, then the Required Banks shall
have the right to appoint, on behalf of the Borrower and the
Banks, a successor Agent.  If no successor Agent shall have
been so appointed by the Required Banks and shall have
accepted such appointment within thirty days after the retiring
Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Borrower and the Banks, a successor
Agent.  Such successor Agent shall be a commercial bank with
an office in the United States and capital and retained earnings
of at least $250,000,000.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges 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 VII
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent hereunder.

ARTICLE VIII

MISCELLANEOUS

    SECTION 8.01 Notices.  All notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar writing), except
where specifically permitted to be given orally, and shall be
given to such party at its address or telex number set forth on
the signature pages hereof or such other address 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 answer back is
received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Agent under Sections 2.02, 2.03,
2.05, 2.09, 2.11, 2.16 or 2.17 shall not be effective until
received.

    SECTION 8.02 No Waiver.  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 8.03 Expenses; Documentary Taxes.  The
Borrower shall pay upon demand (i) all reasonable expenses of
the Agents, including fees and disbursements of attorneys for
the Agents (who may be employees of the Agents), in
connection with the preparation of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default
or alleged Default by the Borrower hereunder and (ii) if an Event
of Default occurs, all reasonable out-of-pocket expenses
incurred by the Agents and the Banks, including fees and
disbursements of attorneys for the Agents and the Banks (who
may be employees of the Agents and the Banks), in connection
with such Event of Default and collection and other enforcement
proceedings resulting therefrom.  The Borrower shall indemnify
each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority
by reason of the execution and delivery of this Agreement or
the Notes.

    SECTION 8.04 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 Agents are affected thereby, by the
Agents); provided that no such amendment or waiver shall,
unless signed by all the Banks,

           increase the Commitment of any Bank or subject
any Bank to any additional obligations,

    reduce the principal of or rate of interest on any Loans or
any fees (other than fees provided for in Section 7.07(b))
hereunder,

    postpone the date fixed for any payment of principal of or
interest on any Loan or any fees (other than fees provided for
in Section 7.07(b)) hereunder,

    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 Agreement, or

    amend this Section 8.04.

    SECTION 8.05 Collateral.  Each of the Banks represents
that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U of the Board of Governors of the
Federal Reserve System) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

    SECTION 8.06 Successors and Assigns.

    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.

    Any Bank may at any time sell, assign, transfer, grant
participations in, or otherwise dispose of, all or any portion of
its Loans or Notes or of its right, title and interest therein or
thereto or in or to this Agreement (collectively, "Participations")
to any other lending office or to any other Person
("Participants"), subject to the terms contained in this Section
8.06.  Such Bank shall give Notice to the Borrower of any
Participation exceeding six months in duration or granting a
Participation in this Agreement.  No agreement between any
Bank and a Participant may limit the right of such Bank to
consent to amendments to this Agreement unless the Borrower
shall have consented in advance (which consent shall not be
unreasonably withheld) to the grant of a Participation to such
Participant.  Notwithstanding the foregoing, the consent of the
Borrower is not required for the grant of a Participation on
terms which require the Participant's consent to any
amendment of this Agreement which reduces the principal of or
rate of interest on the Participation or postpones the date (other
than by way of extension pursuant to Section 2.01(c)) fixed for
payment of principal or interest on the Participation.  The
Borrower agrees that any Participant may exercise any and all
rights of banker's lien, setoff and counterclaim with respect to
its Participation as fully as if such Participant were the holder of
a Loan in the amount of its Participation.

    No Participant shall be entitled to receive any greater
payment under Section 2.13 or 2.18 than the Bank granting the
Participation would have been entitled to receive with respect
to the rights assigned or otherwise transferred.

    SECTION 8.07 Minnesota Law.  This Agreement and each
Note shall be construed in accordance with and governed by
the laws of the State of Minnesota.

    SECTION 8.08 Counterparts; 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 shall become effective when the Agent shall
have received counterparts hereof signed by all of the parties
hereto.

    SECTION 8.09 Highly Leveraged Transaction Classification. 
If the Agent (a) receives notice from any Bank that such Bank
has received notice from a governmental authority having
jurisdiction over such Bank requiring that the Loans be
classified as an "HLT" or "Highly Leveraged Transaction" or (b)
determines that the Loans meet the criteria under which the
Loans are required by the applicable governmental authority to
be classified as an HLT, the Agent shall promptly give notice
thereof to the Borrower and the Banks.  The parties hereto
shall, as soon as practicable thereafter, commence negotiations
in good faith to reach agreement in a manner satisfactory to all
parties on the extent to which fees or margins under this
Agreement should be increased so as to reflect the average
incremental increase in pricing of loans that are classified as
HLTs as compared to the same loans if they were not HLTs. 
If agreement is not reached within 90 days, the Banks may
establish the increases to the fees and margins and give notice
thereof to the Borrower, provided that in no event shall the
aggregate increases in fees and margins pursuant to this
Section exceed fifty basis points.  The Banks acknowledge that
such an HLT classification is not a Default or an Event of
Default under the Agreement.  For purposes of this Section,
"HLT" or "Highly Leveraged Transaction" means the definition of
"highly leveraged transaction" as promulgated by the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Board of Governors of the Federal
Reserve System on October 30, 1989, in Banking Circular 242
or any successor definition adopted by such governmental
authorities.

    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.

PENTAIR, INC.

By:   Joseph R. Collins
    Title:  Chief Financial Officer

Waters Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota  55113
Attention:  Chief Financial Officer
Telephone:  (612) 636-7920
Telecopy:  (612) 639-5209

CONTINENTAL BANK N.A.,
  for itself and as Agent

By: Barry Watters 
    Title:  Vice President

231 South LaSalle Street
Chicago, Illinois  60697
Attn:  Barry Watters
Telephone:  (312) 828-6307
Telecopy:  (312) 987-1276

Person to whom Loan correspondence
  should be addressed:

Angelina Monarrez
231 South LaSalle Street
Chicago, Illinois  60697
Telephone:  (312) 828-3879
Telecopy:  (312) 974-9102

Signature page to that certain Facility Agreement dated as of
February 11, 1994 among Pentair, Inc., Continental Bank N.A.
and Morgan Guaranty Trust Company of New York for
themselves and as Agents, and NBD Bank, N.A. and Morgan
Bank (Delaware).

MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, for itself and
as Agent

By:  William Stevenson 
    Title:  Vice President

60 Wall Street
New York, New York  10260
Attn:  William J. Stevenson
Telephone:  (212) 648-6839
Telecopy:  (212) 648-5336

J. P. MORGAN DELAWARE

By:  David J. Morris
    Title:  Vice President

902 Market Street
Wilmington, Delaware  19801
Attn:  David J. Morris
Telephone:  (302) 651-3788
Telecopy:  (302) 654-5336

NBD BANK, N.A.

By:  Patrick Skiles
    Title: Vice President

611 Woodward Avenue
Detroit, Michigan  48226
Attn:  Patrick P. Skiles
Telephone:  (313) 225-1798
Telecopy:  (313) 225-1671

Signature page to that certain Facility Agreement dated as of
February 11, 1994 among Pentair, Inc., Continental Bank N.A.
and Morgan Guaranty Trust of New York for themselves and as
Agents, and NBD Bank, N.A. and Morgan Bank (Delaware).

EXHIBIT A

NOTE

                                  Minneapolis, Minnesota
$                                February 11, 1994

    For value received, PENTAIR, INC., a Minnesota
corporation (the "Borrower"), promises to pay to the order of  
      (the "Bank") the principal sum of    Dollars ($   ) or, if less,
the aggregate unpaid principal amount of all Loans made by
the Bank to the Borrower pursuant to the Facility Agreement
referred to below, together with interest on the unpaid principal
amount thereof at the rates and on the dates set forth in the
Facility Agreement.  The Borrower shall pay each Loan in full on
the earlier of (i) the last day of its Interest Period, including
principal payments due on each Principal Repayment Date and
(ii) the Commitment Termination Date.

    All payments of principal and interest shall be made in
lawful money of the United States in federal or other
immediately available funds at the office of Continental Bank
N.A., 231 South LaSalle Street, Chicago, Illinois 60697.

    All Loans made by the Bank to the Borrower pursuant to
the Facility Agreement and all payments of the principal thereof
may be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof.

    This Note is one of the Notes referred to in the Facility
Agreement dated February 11, 1994 among the Borrower, the
banks listed on the signature pages thereof and Continental
Bank N.A. and Morgan Guaranty Trust Company of New York,
as Agents.  Reference is made to such Facility Agreement for
provisions for the prepayment hereof and the acceleration of
the maturity hereof.

PENTAIR, INC.

By:
   Title: 

LOANS AND PAYMENTS OF PRINCIPAL

                                                      

                   Type   Amount of
        Amount     of     Principal     Maturity   Notation
Date   of Loan     Loan   Repaid        Date     Made By

                                                             
                                                      
Exhibit B

OPINION OF COUNSEL FOR THE BORROWER

[Date as provided in Section 3.02 of the Facility Agreement]

To the Banks and the Agent
  Referred to Below
c/o Continental Bank N.A., as Agent
231 South LaSalle Street
Chicago, Illinois  60697

Gentlemen:

    We have acted as counsel for Pentair, Inc. (the "Borrower")
in connection with the Facility Agreement (the "Facility
Agreement") dated February 11, 1994 among the Borrower,
Continental Bank N.A. and Morgan Guaranty Trust Company of
New York, for themselves and as Agents, and NBD Bank, N.A.
and J. P. Morgan Delaware.  Terms defined in the Facility
Agreement are used herein as therein defined.

    We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.

    Upon the basis of the foregoing, we are of the opinion that:

    1.     The Borrower is a corporation validly existing and in
good standing under the laws of Minnesota and has all
corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.

    2.     The execution, delivery and performance by the
Borrower of the Facility Agreement and the Notes are within the
Borrower's corporate powers, 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 the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.

    3.     The Facility Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy,
moratorium, insolvency or other laws of general application
relating to the enforcement of creditors' rights, by general
principles of equity, and by Minnesota statutes to the extent
compliance is required by other than the Borrower.

    4.     There is no action, suit or proceeding pending, or to
the best of our knowledge 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, or which in any manner
questions the validity of the Facility Agreement or the Notes.

    5.     Each of the Borrower's 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.

EXHIBIT 4.2

$45,000,000

FACILITY AGREEMENT

among

PENTAIR, INC.,

and

FIRST BANK NATIONAL ASSOCIATION,
for itself and as Agent,

and

NORWEST BANK MINNESOTA, N.A.

Dated as of February 11, 1994

TABLE OF CONTENTS

           
ARTICLE I - DEFINITIONS
    Section 1.01. Definitions                                
           
    Section 1.02. Accounting Terms and Determinations        

ARTICLE II - THE CREDITS
    Section 2.01. Commitments to Lend                        
           
    Section 2.02. Maturity                                   
           
    Section 2.03. Method of Borrowing                        
           
    Section 2.04. Notes                                      
           
    Section 2.05. Duration of Interest Periods                
    Section 2.06. Interest Rate and Payment                  
    
    Section 2.07. Facility Fees                       
    Section 2.08. Intentionally Omitted               
    Section 2.09. Termination or Reduction of Commitments
    Section 2.10. Required Repayments                        
    Section 2.11. Optional Prepayments                       
    Section 2.12. General Provisions as to Payments          
    Section 2.13. Funding Losses                             
    Section 2.14. Computation of Interest and Fees           
    Section 2.15. Coordination with Bid Loan Agreement       
    Section 2.16. Eurodollar Lending Unlawful                
    Section 2.17. Funds Unavailable                          
    Section 2.18. Increased Costs and Reduced Returns        
    Section 2.19. Pro Rata Sharing                           

ARTICLE III - CONDITIONS TO BORROWINGS
    Section 3.01. All Borrowings                             
           
    Section 3.02. First Borrowing                            
           
    Section 3.03. Use of Proceeds of First Borrowing and
Transition 

ARTICLE IV - REPRESENTATIONS AND WARRANTIES
    Section 4.01. Corporate Existence and Power              
           
    Section 4.02. Corporate and Governmental
                         Authorization; Contravention        
           
    Section 4.03. Binding Effect                             
           
    Section 4.04. Financial Information                      
                  Section 4.05. Litigation                   
                         
    Section 4.06. Compliance with ERISA                      
           
    Section 4.07. Taxes                                      
           
    Section 4.08. Subsidiaries                               
           
    Section 4.09. Not an Investment Company                  

ARTICLE V - COVENANTS
    Section 5.01. Information                                
           
    Section 5.02. Current Assets                             
           
    Section 5.03. Leverage Ratio                             
           
    Section 5.04. Minimum Consolidated Tangible Net Worth
    Section 5.05. Expense Ratio                              
    Section 5.06. Subsidiary Debt                            
     
    Section 5.07. Negative Pledge                            
                  Section 5.08. Consolidations, Mergers and
                         Sales of Assets
    Section 5.09. Acquisitions                 
    Section 5.10. Use of Proceeds              
    Section 5.11.  Ratable Borrowings          

ARTICLE VI - DEFAULTS
    Section 6.01. Events of Default            
    Section 6.02. Notice of Default            

ARTICLE VII - THE AGENT
    Section 7.01. Appointment and Authorization       
    Section 7.02. Agent and Affiliates                
    Section 7.03. Action by Agent                     
    Section 7.04. Consultation with Experts           
    Section 7.05. Liability of Agent                  
    Section 7.06. Indemnification                     
    Section 7.07. Agent's Fees                        
    Section 7.08. Bank Credit Decision                
    Section 7.09. Successor Agent                     

ARTICLE VIII - MISCELLANEOUS
    Section 8.01. Notices                             
    Section 8.02. No Waivers                          
    Section 8.03. Expenses; Documentary Taxes         
    Section 8.04. Amendments and Waivers              
    Section 8.05. Collateral                          
    Section 8.06. Successors and Assigns              
    Section 8.07. Minnesota Law                       
    Section 8.08. Counterparts; Effectiveness         
    Section 8.09.  Highly Leveraged Transaction Classification

Signatures                                            

Exhibit A - Note
Exhibit B - Opinion of Counsel For the Borrower

FACILITY AGREEMENT

    Agreement dated as of February 11, 1994, among
PENTAIR, INC., FIRST BANK NATIONAL ASSOCIATION, for
itself and as agent and NORWEST BANK MINNESOTA, N.A.

    The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

    SECTION 1.01 Definitions.  The following terms, as used
herein, have the following meanings:

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

    "Adjusted Reference Rate" has the meaning set forth in
Section 2.06(a).

    "Agent" means First Bank National Association in its
capacity as agent for the Banks hereunder.

    "Agreement" means the Facility Agreement dated as of
February 11, 1994, among Pentair, Inc., First Bank National
Association, for itself and as Agent, and Norwest Bank
Minnesota, N.A.

    "Banks" means First Bank National Association, Norwest
Bank Minnesota, N.A. and their successors and assigns.

    "Bid Loan" means a Bid Loan as defined in the Bid Loan
Agreement.

    "Bid Loan Agreement" has the meaning set forth in Section
2.15.

    "Borrower" means Pentair, Inc., a Minnesota corporation,
and its successors.

    "Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by all Banks
severally.  A Borrowing is a "CD Borrowing" if such Loans are
CD Loans, a "Reference Borrowing" if such Loans are
Reference Loans, or a "Eurodollar Borrowing" if such Loans are
Eurodollar Loans.

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

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

    "CD Loan" means an amount loaned to the Borrower under
this Agreement bearing interest at the Fixed CD Rate for the
applicable Interest Period pursuant to the applicable Notice of
Borrowing.

    "CD Margin" has the meaning set forth in Section 2.06(b).

    "CD Reserve Percentage" has the meaning set forth in
Section 2.06(b).

    "Code" means the Internal Revenue Code of 1986, as
amended.

    "Commitment" means at any date, with respect to each
Bank, the amount set forth below opposite such Bank's name,
as such amount may be reduced from time to time pursuant to
Section 2.09, increased from time to time pursuant to Section
2.01(c)(iii), or temporarily reduced from time to time pursuant
to Section 2.15.

    First Bank National Association    $ 25,000,000
    Norwest Bank Minnesota, N.A.         20,000,000

           Total Commitments =         $ 45,000,000

    "Commitment Termination Date" means January 1, 2001 (or
if such date is not a Business Day, the next succeeding day
which is a Business Day), as the same may be extended
pursuant to Section 2.01(c).

    "Consolidated Cumulative Net Income" means the total net
income of the Borrower and its Consolidated Subsidiaries
earned or received after December 31, 1993.

    "Consolidated Current Assets" means at any date the
consolidated current assets of the Borrower and its
Consolidated Subsidiaries determined as of such date.

    "Consolidated Current Liabilities" means at any date (i) the
consolidated current liabilities of the Borrower and its
Consolidated Subsidiaries plus (ii) the current liabilities of any
Person (other than the Borrower or a Consolidated Subsidiary)
which are Guaranteed by the Borrower or a Consolidated
Subsidiary.

    "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 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 as of such date.

    "Consolidated Tangible Net Worth" means at any date (1)
the consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries (including without duplication, the
investment of Pentair Duluth Corp. in LSPI and of Pentair Duluth
Pulp Corp. in LSPI Fiber), plus (2) the cumulative effect of the
accounting change of $36.9 million applicable to the adoption
by the Company effective January 1, 1992 of Financial
Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions' and less (3) the
amount of the consolidated Intangible Assets in excess of 15%
of the consolidated assets of the Borrower and its Consolidated
Subsidiaries, 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,
1993 in the book value of any asset owned by the Borrower or
any Consolidated Subsidiary, (ii) all investments in
unconsolidated Subsidiaries and (iii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights,
organizational or developmental expenses and other intangible
items.  Notwithstanding the previous sentence, for this purpose
Intangible Assets does not include the investment of Pentair
Duluth Corp. in LSPI or of Pentair Duluth Pulp Corp. in LSPI
Fiber or the ownership of the Borrower or any Consolidated
Subsidiary in any other joint venture or entity that is not a
Subsidiary.

    "Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with
the Borrower, are treated as a single employer under Sections
414(b) or 414(c) of the Code.

    "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 under capital leases, (v) all Debt of others
secured by a lien on any asset of such Person, whether or not
such Debt is assumed by such Person, (vi) the amount of any
proceeds of a Sale of Receivables less amounts collected on
the receivables sold in such Sale of Receivables, and (vii)
subject to the limitations of the following portion of this
definition, all Debt (which will include only for the purpose of
this clause  (vii) operating leases of any Person other than a
Subsidiary) of others Guaranteed by such Person. 
Notwithstanding the foregoing, Debt of the Borrower and its
Consolidated Subsidiaries shall be modified as follows:

           (a)  Debt does not include any obligations of LSPI,
the Borrower or Pentair Duluth Corp. with respect to the LSPI
1987 Lease under any instruments, including the Cash
Deficiency Agreements and Keepwell Agreement.

    (b)  With respect to any project financing, through loans,
equipment leases or other incurrence of indebtedness, of
expansion by LSPI of its Duluth paper mill, by LSPI Fiber of the
SRFI recycled pulp mill or other investment related to the pulp
or paper industry, including sources of supply of raw materials
for paper or pulp, by LSPI, LSPI Fiber or SRFI or any other joint
venture or entity in which the Borrower or any Consolidated
Subsidiary has an ownership interest, but which is not a
Subsidiary of the Borrower or a Consolidated Subsidiary, if an
event or a series of events such as completion of the project,
commissioning, or refinancing of the project or entity reduces
the aggregate liability of the Borrower or any Consolidated
Subsidiary for any lease payments or debt obligations relating
to the project in the form of credit support, deficiency or
guaranty amounts to 50% or less of the maximum amount of
the Borrower's and any Consolidated Subsidiary's portion of
amounts financed plus amounts advanced by Borrower or such
Consolidated Subsidiary, then the liability of the Borrower and
such Consolidated Subsidiary for any lease payments or debt
obligations in the form of credit support, deficiency or guaranty
shall be included as Debt only to the extent of the greater of (i)
the Borrower's or such Consolidated Subsidiary's portion of
such lease payments or debt obligations due within the
following 12-month period and (ii) 25% of the Borrower's or
such Consolidated Subsidiary's maximum cumulative future
credit support, deficiency or guaranty related to such project.

    "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.

    "DM Facility" means the credit facility established under the
Deutschmark Facility Agreement among EuroPentair GmbH as
Borrower, Pentair, Inc. as Guarantor, Morgan Guaranty Trust
Company of New York and Continental Bank N.A., for
themselves and as agents and the other lenders named therein,
dated as of February 11, 1994.

    "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.

    "Eurodollar Business Day" means a Business Day on which
commercial banks are open for international business (including
dealings in dollar deposits) in the interbank eurodollar market.

    "Eurodollar Loan" means an amount loaned to the Borrower
under this Agreement bearing interest at the Fixed Eurodollar
Rate for the applicable Interest Period pursuant to the
applicable Notice of Borrowing.

    "Eurodollar Margin" has the meaning set forth in Section
2.06(c).

    "Eurodollar Reserve Percentage" has the meaning set forth
in Section 2.06(c).

    "Event of Default" has the meaning set forth in Section 6.01.

    "Facility Agreements" means, collectively, (a) this
Agreement, and (b) the $125,000,000 Facility Agreement with
Continental Bank N.A. and Morgan Guaranty Trust Company of
New York, for themselves and as agents, and the other lenders
named therein, dated February 11, 1994.

    "Fixed CD Rate" has the meaning set forth in Section
2.06(b).

    "Fixed Eurodollar Rate" has the meaning set forth in Section
2.06(c).

    "Fixed Rate Loans" means CD Loans and Eurodollar Loans.

    "Funded Debt" means at any date that portion of the Debt
of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date, included only by
clauses (i) through (vi) of the definition of Debt.

    "Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person or in any manner
providing for the payment of any Debt of any other Person or
otherwise protecting the holder of such Debt against loss
(whether by agreement to keep-well, to purchase assets,
goods, securities, services, or to take-or-pay or otherwise);
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
correlative meaning.

    "Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).

    "Interest Period" means:

    with respect to each CD Borrowing:  the period
commencing on the date of such Borrowing and ending 30, 60,
90, or 180 days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing, provided that:

           any Interest Period which would otherwise end on
a day which is not a Eurodollar Business Day shall be extended
to the next succeeding Eurodollar Business Day; and

    if any Interest Period includes a Principal Repayment Date
but does not end on such date, then (a) the principal amount
(if any) of each CD Loan required to be repaid on such date
shall have an Interest Period ending on such date and (b) the
remainder (if any) of each such CD Loan shall have an Interest
Period determined as set forth above.

    with respect to each Eurodollar Borrowing:  the period
commencing on the date of such Borrowing and ending one,
two, three, or six months thereafter, as the Borrower may elect
in the applicable Notice of Borrowing, provided that:

           any Interest Period which would otherwise end on
a day which is not a Eurodollar Business Day shall be extended
to the next succeeding Eurodollar Business Day unless such
Eurodollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next
preceding Eurodollar Business Day;

    any Interest Period which begins on the last Eurodollar
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 (iii)
below, end on the last Eurodollar Business Day of a calendar
month; and

    if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made but does not
end on such date, then (a) the principal amount (if any) of each
Eurodollar Loan required to be repaid on such date shall have
an Interest Period ending on such date and (b) the remainder
(if any) of each such Eurodollar Loan shall have an Interest
Period determined as set forth above.

    with respect to each Reference Borrowing:  a period
commencing on the date of such Borrowing and ending 90
days thereafter, provided that any Interest Period which would
otherwise end on a day which is not a Eurodollar Business Day
shall be extended to the next succeeding Eurodollar Business
Day.

    "Leverage Ratio" means at any date the ratio of
Consolidated Debt to Consolidated Tangible Net Worth.

    "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset.  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 assets.

    "Loan" means a Reference Loan or a CD Loan or a
Eurodollar Loan and "Loans" means Reference Loans and/or
CD Loans and/or Eurodollar Loans.

    "LSPI" means Lake Superior Paper Industries, a Minnesota
joint venture between Minnesota Paper, Incorporated and
Pentair Duluth Corp.

    "LSPI 1987 Lease" means the Sale and Leaseback of
LSPI's Supercalendered Paper Mill dated December 31, 1987
and the documents related thereto, as they may be amended
from time to time.

    "LSPI Fiber" means LSPI Fiber Co., a Minnesota joint
venture between Minnesota Pulp Incorporated II and Pentair
Duluth Pulp Corp., a subsidiary of Duluth Holdings (Paper)
Corp., and an indirect subsidiary of Borrower.

    "Notes" means the promissory notes of the Borrower in the
form of Exhibit A.

    "Notice of Borrowing" has the meaning set forth in Section
2.03.

    "Outstanding Loans" has the meaning set forth in Section
3.03.

    "Participant" and "Participation" have the meanings set forth
in Section 8.06(b).

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

    "Principal Repayment Dates" means the dates on which the
principal of the Loans is required to be repaid pursuant to
Section 2.10.

    "Pro Rata Share of Bid Loans" means the amount at any
time which bears the same ratio to the Bid Loans outstanding
as the ratio the Total Commitment bears to the aggregate Total
Commitments under all Facility Agreements.

    "Reference Loan" means an amount loaned to the Borrower
under this Agreement bearing interest at the applicable
Adjusted Reference Rate pursuant to the applicable Notice of
Borrowing for the applicable Interest Period.

    "Reference Rate" means for any day, a fluctuating rate per
annum equal to the greater of (1) the rate of interest then most
recently announced by First Bank National Association at
Minneapolis, Minnesota as its reference rate or (2) a rate per
annum (rounded upward to the next highest 1/8 of 1% if not
already an integral multiple of 1/8 of 1%) equal to the Federal
Funds Effective Rate in effect on such day plus 1/2% per
annum.  If for any reason First Bank National Association shall
have determined (which determination shall be conclusive in the
absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason (including, without
limitation, the inability or failure of First Bank National
Association to obtain sufficient bids or publications in
accordance with the terms hereof), the Reference Rate shall be
a fluctuating rate per annum equal to the reference rate in effect
from time to time until the circumstances giving rise to such
inability no longer exist.

    For purposes of this definition, "Federal Funds Effective
Rate" means, for any day, an interest rate per annum 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, as published for such day
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by
First Bank National Association from three Federal funds
brokers of recognized standing selected by it.  In the case of a
day which is not a Business Day, the Federal Funds Effective
Rate for such day shall be the Federal Funds Effective Rate for
the next preceding  Business Day.  For purposes of this
Agreement and the Notes, each change in the Reference Rate
due to a change in the Federal Funds Effective Rate shall take
effect on the effective date of such change in the Federal Funds
Effective Rate.

    "Reference Rate Margin" has the meaning set forth in
Section 2.06(a).

    "Refinancing Loan" means a Loan with respect to which,
after giving effect to the Loan and the application of the
proceeds thereof, no increase results in the aggregate amount
of Loans outstanding.

    "Regulatory Change" means, after the date hereof, the
adoption of any applicable law, rule or regulation, or any
change therein, 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 with any
request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency.

    "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 at least
66-2/3% of all Loans outstanding.

    "Revolving Credit Period" means the period from the date
hereof to and including January 1, 1997 (or if such day is not
a Business Day, the next succeeding day which is a Business
Day), as such Period may be extended in accordance with
Section 2.01(c).

    "Revolving Credit Termination Date" means January 1,
1997, (or if such day is not a Business Day, the next
succeeding day which is a Business Day), as such Date may
be extended in accordance with Section 2.01(c).

    "Sale of Receivables" means a sale by the Borrower or a
Consolidated Subsidiary, with or without recourse or discount,
of an interest in trade receivables of the Borrower or a
Consolidated Subsidiary pursuant to a receivables purchase
program or a loan secured by such receivables provided that
the value of (a) such receivables sold less amounts collected
on the receivables sold or (b) such receivables in which a
security interest is granted, shall not exceed $60,000,000 in the
aggregate at any one time.

    "SRFI" means Superior Recycled Fiber Industries, a
Minnesota joint venture between LSPI Fiber and Superior
Recycled Fiber Corporation.

    "Subsidiary" means 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
person performing similar functions are at the time directly or
indirectly owned by the Borrower.  For purposes of this
Agreement, neither LSPI nor LSPI Fiber shall be deemed to be
a Subsidiary of the Borrower.

    "Total Commitment" shall mean the aggregate of the
Commitments of the Banks, as such may be reduced from time
to time pursuant to Section 2.09 or increased from time to time
pursuant to Section 2.01(c)(iii), but the Total Commitment shall
not be reduced to reflect reductions in the Commitments of the
Banks from time to time pursuant to Section 2.15.

    "Unfunded Vested Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, 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 the Borrower or any
member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.

    "Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the
Borrower or one or more Wholly-Owned Consolidated
Subsidiaries or by the Borrower and one or more
Wholly-Owned Consolidated Subsidiaries.

    SECTION 1.02 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
approved 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.

ARTICLE II

THE CREDITS

    SECTION 2.01 Commitments to Lend.

    During Revolving Credit Period.  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 from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment.  Each Borrowing under this subsection shall be
made from the several Banks ratably in proportion to their
respective Commitments and shall be in an aggregate principal
amount of (i) if a Reference Borrowing, $1,000,000 or any larger
integral multiple of $100,000, or the aggregate amount of the
unused Commitments; (ii) if a CD Borrowing, $1,000,000 or any
larger integral multiple of $100,000; and (iii) if a Eurodollar
Borrowing, $2,000,000 or any larger integral multiple of
$100,000.  Within the foregoing limits, the Borrower may borrow
under this Section 2.01(a), repay under Section 2.02 or 2.11(a),
and reborrow under this Section 2.01(a) at any time during the
Revolving Credit Period.

    After the Revolving Credit Period.  On and after the
Revolving Credit Termination Date, each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to
make Refinancing Loans to the Borrower on the last day of the
Interest Period for each outstanding Loan or on any date that
a Loan is optionally prepaid, in each case in an amount (except
as otherwise provided in Section 2.10) not greater than the
amount of the Loan or Loans made by such Bank maturing and
payable on such day or optionally prepaid on such day.  The
proceeds of each such Refinancing Loan shall be used solely
to repay the Loan or Loans so maturing and payable on such
day or so optionally prepaid on such day.  The obligations of
the Banks to make Loans hereunder, other than Refinancing
Loans, shall cease on the Revolving Credit Termination Date.

    Extension of Commitment Termination Date.  On or before
October 1, 1995, and on or before October 1 of every second
year thereafter, the Borrower may, by written notice to each
Bank, request that both the Revolving Credit Termination Date
and the Commitment Termination Date be extended for two
years, effective as of the following January 1, provided,
however, that no such request will be considered if the
Revolving Credit Termination Date and the Commitment
Termination Date were not extended upon any previous
request.  The Banks will indicate their acceptance or rejection
of any requested extension as follows:

    If all Banks notify the Borrower through the Agent in writing
within 30 days after receipt of notice of a requested extension
of their acceptance of the requested extension, the extension
shall be deemed to have been granted.

    If Banks which hold in the aggregate less than one-third of
the outstanding Commitments of all of the Banks notify the
Borrower in writing (with copies to the Agent) within 30 days
after receipt of notice of a requested extension that they
consent to the requested extension, the extension shall be
deemed to have been rejected.

    If Banks which hold in the aggregate one-third or more but
less than all of the outstanding Commitments of all of the
Banks notify the Borrower (with copies to the Agent) in writing
within 30 days after receipt of notice of a requested extension
that they consent to the requested extension, the extension
shall be deemed to have been rejected unless the Banks which
consented to the requested extension, or any combination of
the consenting Banks, agree, within 15 days after receipt from
the Borrower of written notice that one or more Banks have
consented to the extension, to increase their Commitment(s) by
the amount of the aggregate Commitments of the
non-consenting Banks.  If the consenting Banks, or any
combination of them, agree to increase their Commitments by
the aggregate amount of the Commitments of the
non-consenting Banks, the requested extension shall be
deemed to have been granted and the Commitments of the
Banks altered as follows:

           If only one Bank agrees to increase its Commitment,
the Commitment of such Bank shall be increased as of the
effective date of the extension by the amount of the
Commitments of the non-consenting Banks.  If more than one
Bank agree to increase their Commitments, the Commitments
of the non-consenting Banks shall be allocated among the
Banks desiring increased Commitments in such proportion or
proportions as the Borrower in its sole discretion elects;
provided, however, that no Bank shall be required to accept an
increase in its Commitment which is larger than the increase to
which it has previously agreed.

    On the effective date of the extension of the Revolving
Credit Termination Date and the Commitment Termination Date,
the Banks which have elected to increase their Commitments
shall make Loans to the Borrower, subject to the terms of
Section 3.01, in the amount of the aggregate principal balance
of the Notes payable to the non-consenting Banks.  Each such
Bank shall share in such Loans in the same proportion as the
amount by which its Commitment is increased bears to the
aggregate increases in the Commitments of all of the
consenting Banks.  The proceeds of all Loans made pursuant
to this Section 2.01(c)(iii)(2) shall be paid by the Banks making
the same to the Agent which shall promptly remit the proceeds
of such Loans to the non-consenting Banks in repayment of the
Notes payable to such Banks.  Effective as of the effective date
of the extension of the Revolving Credit Termination Date and
the Commitment Termination Date, the Commitment(s) of the
non-consenting Bank(s) shall terminate.  If the Revolving Credit
Termination Date and the Commitment Termination Date are
extended pursuant hereto, the Borrower shall deliver to each
Bank a new Note, substantially in the form of Exhibit A hereto,
in the amount of the Commitment of such Bank, dated as of the
effective date of the extension.

    SECTION 2.02 Maturity.  Each Loan shall be paid in full by
the Borrower on the earlier of (i) the last day of the Interest
Period applicable thereto and (ii) the Commitment Termination
Date.

    SECTION 2.03 Method of Borrowing.

    The Borrower shall give the Agent notice (a "Notice of
Borrowing" which may be given orally, but if so, shall be
confirmed in writing within two Business Days) at least one
Business Day before each Reference or CD Borrowing and at
least three Eurodollar Business Days before each Eurodollar
Borrowing specifying:

    the date of such Borrowing, which shall be a Business Day
if a Reference Borrowing or CD Borrowing, and a Eurodollar
Business Day if a Eurodollar Borrowing,

    the aggregate amount of such Borrowing,

    whether the Loans comprising such Borrowing are to be
CD Loans or Reference Loans or Eurodollar Loans, and

    if a CD Borrowing or Eurodollar Borrowing, the duration of
the Interest Period applicable to such Borrowing.

In the event that the Borrower does not request a new
borrowing prior to the last day of any Interest Period and does
not otherwise provide funds to pay Loans maturing on such
day, the Borrower shall be deemed to have given the Agent a
Notice of Borrowing requesting Reference Loans on such day
in the principal amount of the Loans coming due on such day
and with an Interest Period of 90 days.

    Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.

    Not later than 12:00 noon (New York time) on the date of
each Borrowing, each Bank shall make available its ratable
share of such Borrowing, in federal or other funds immediately
available to the Agent at its address specified pursuant to
Section 8.01.  Unless the Agent determines that any applicable
condition specified in Article III 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.  Notwithstanding the
foregoing provisions of this Section, to the extent that a Loan
made by a Bank matures on the date of a requested Loan,
such Bank shall apply the proceeds of the Loan it is then
making to the repayment of the maturing Loan.

    SECTION 2.04 Notes.

    The Loans of each Bank shall be evidenced by a single
Note payable to the order of such Bank.

    Upon receipt of each Bank's Note pursuant to Section
3.02(a), the Agent shall forward such Note to such Bank.  Each
Bank may record, and prior to any transfer of its Note may
endorse, on the schedules forming a part of the Note
appropriate notations to evidence the date and amount of each
Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto.  Each
Bank is hereby irrevocably authorized by the Borrower so to
record and endorse and to attach to and make a part of any
Note a continuation of any such schedule as and when
required.

    SECTION 2.05 Duration of Interest Periods.  The duration
of each Interest Period shall be as specified in the applicable
Notice of Borrowing.

    SECTION 2.06 Interest Rate and Payment.

    Reference Loans.  Each Reference 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 Adjusted Reference Rate for such day. 
Such interest shall be payable for each Interest Period on the
last day thereof and on the day of any prepayment.  Any
overdue principal of and, to the extent permitted by law,
overdue interest on any Reference Loan shall bear interest,
payable on demand, for each day until paid at a rate per
annum equal to the sum of 1% plus the otherwise applicable
Adjusted Reference Rate for such day.

    The "Adjusted Reference Rate" on any day means a rate
per annum equal to the sum of the Reference Rate Margin plus
the applicable Reference Rate.

    The "Reference Rate Margin" means 0%.

    CD Loans.  Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each Interest Period
applicable thereto, at a rate per annum equal to the applicable
Fixed CD Rate; provided that if any CD Loan or any portion
thereof shall, as a result of clause (A)(ii)(a) of the definition of
Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at
the rate applicable to Reference 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 and, to the extent permitted by law,
overdue 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 1% plus the higher of (i) the Fixed CD Rate for the
immediately preceding Interest Period and (ii) the rate
applicable to Reference Loans for such day.

    The "Fixed CD Rate" applicable to any CD Loan for any
Interest Period means a rate per annum equal to the sum of the
CD Margin plus the applicable Adjusted CD Rate.

    "CD Margin" means:

    Leverage Ratio:                    CD Margin:

    0.8:1 or less                      .425 of 1%

    equal to or less than 1.2:1
    but more than 0.8:1                .500 of 1%

    more than 1.2:1                    .675 of 1%

    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 - RP  ]

           ACDR          =             Adjusted CD Rate
           CDBR          =             CD Base Rate
           RP            =             CD Reserve Percentage
           AR            =             Assessment Rate

    *      The amount in brackets being rounded upwards,
if necessary, to the next higher 1/100 of 1%

    The "CD Base Rate" applicable to any Interest Period
means the average rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandths of a
percent) bid at 10:00 A.M. (New York 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 the
Agent of its certificates of deposit in an amount comparable to
the Agent's portion of the principal amount of the CD Loan to
which such Interest Period applies and having a maturity
comparable to such Interest Period, as such rate is adjusted to
compensate the Agent for brokers' fees incurred in selling its
certificates of deposit, irrespective of whether or not it actually
sells certificates of deposit to fund its CD Loans.

    "CD 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) which is the average of the
reserve requirements (including without limitation any basic,
supplemental or emergency reserves) of the Agent in effect on
such day in respect of new time deposits made with the Agent
in dollars having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more.  The Fixed CD
Rate shall be adjusted automatically on and as of the effective
date of any change in the CD Reserve Percentage.

    "Assessment Rate" means for any Interest Period the net
annual assessment rate (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually assessed to the Agent by the
Federal Deposit Insurance Corporation (or any successor) for
such Corporation's (or such successor's) insuring time deposits
at offices of the Agent in the United States during the most
recent period for which such rate has been determined prior to
the commencement of such Interest Period.

    The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
CD Rate.  Assuming a CD Base Rate for a 30 day Interest
Period of 3.7%, a broker's fee of .05%, a CD Reserve
Percentage of 3.7%, an Assessment Rate of .07%, and a CD
Margin of .425 of 1%, the Fixed CD Rate would equal:

   .037 + .0005 + .0007 + .00425 = .03866 + .0007  + .00425
=  .04361 = 4.361%
    1.00 - .03
   
    Eurodollar Loans.  Each Eurodollar Loan shall bear interest
on the outstanding principal amount thereof, for each Interest
Period applicable thereto, at a rate per annum equal to the
applicable Fixed Eurodollar Rate; provided that if any Eurodollar
Loan or any portion thereof shall, as a result of clause (B)(iii)(a)
of the definition of Interest Period, have an Interest Period of
less than one month, such portion shall bear interest during
such Interest Period at the rate applicable to Reference 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 three months, at intervals of three months
after the first date thereof.  Any overdue principal of and, to the
extent permitted by law, overdue interest on, any Eurodollar
Loan shall bear interest, payable on demand, for each day from
and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum
equal to the sum of 1% plus the Eurodollar Margin plus the
quotient obtained (rounded upward, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the interest rate per annum
at which one day (or, if such amount due remains unpaid more
than three Eurodollar Business Days, then for such other period
of time not longer than six months as the Agent may elect)
deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Banks are offered to the
Agent in the London interbank market for the applicable period
determined as provided above by (ii) 1.00 minus the Eurodollar
Reserve Percentage.

    The "Fixed Eurodollar Rate" applicable to any Interest
Period means a rate per annum equal to the sum of (a) the
quotient obtained (rounded upwards, if necessary, to the next
higher 1/100 of 1%) by dividing (i) the applicable Interbank
Offered Rate by (ii) 1.00 minus the Eurodollar Reserve
Percentage plus (b) the Eurodollar Margin.

    The "Interbank Offered Rate" applicable to any Interest
Period means the average rate per annum (rounded upwards,
if necessary, to the next higher one hundred-thousandths of a
percent) at which deposits in dollars are offered to the Agent by
major banks in the interbank eurodollar market at approximately
10:00 a.m. (New York time) two Eurodollar Business Days
before the first day of such Interest Period in an amount
approximately equal to the Agent's portion of the principal
amount of the Eurodollar Loan to which such Interest Period is
to apply and for a period of time comparable to such Interest
Period.

    The "Eurodollar Reserve Percentage" means for any day
that percentage expressed as a decimal (including all basic,
supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled
changes in reserve requirements during such Interest Period)
which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor)
which is the average of the reserve requirements for the Agent
in effect on such day in respect of new Eurodollar deposits
having a maturity comparable to the Interest Period for such
Eurodollar Loan and in an amount of $100,000 or more.  The
Fixed Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve
Percentage.

    The "Eurodollar Margin" means

                                               Eurodollar
    Leverage  Ratio:                     Margin  :

    0.8:1 or less                      .300 of 1%

    equal to or less than 1.2:1
    but more than 0.8:1                .375 of 1%

    more than 1.2:1                    .550 of 1%

    The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
Eurodollar Rate.  Assuming an Interbank Offered Rate for a two
month Interest Period of 6.0%, a Eurodollar Reserve Percentage
of 0%, and a Eurodollar Margin of .300 of 1%, the Fixed
Eurodollar Rate would equal:

    .06     + .00300 = .06 + .00300 = .06300 = 6.3%
 1.00 - 0

    The Agent shall determine each interest rate applicable to
the Loans hereunder and shall give prompt notice to the
Borrower and the other Banks by telex, telecopy or cable of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.

    Except as described in this Section 2.06(e), for purposes of
determining CD Margin and Eurodollar Margin pursuant to
Section 2.06(b) and 2.06(c) and facility fees pursuant to Section
2.07(a) (collectively, the "Varying Rates"), the Leverage Ratio
during any quarter will be treated as if it remained constant
during the quarter.  The Leverage Ratio shall be reported on a
quarterly basis pursuant to Section 5.01(c).  If as reported at the
end of any quarter the Leverage Ratio has increased so that the
Varying Rates based upon such Leverage Ratio will be higher
than during the previous quarter (such increase being a "Higher
Level"), the Borrower shall report which month during the
preceding quarter the Higher Level occurred and shall pay to
the Agent for the account of each Bank in ratable shares, for
such month and all succeeding months of such quarter, the
difference between the Varying Rates if paid at such Higher
Level and the Varying Rates actually paid.  The Borrower may
inform the Agent at any time by written notice, supported by a
summary balance sheet, that the Leverage Ratio has been
reduced so that the Varying Rates based upon such Leverage
Ratio will be lower than previously (such reduction being a
"Lower Level"), and effective upon such notice shall pay as
required by this Agreement the Varying Rates associated with
such Lower Level.

    SECTION 2.07 Facility Fees.

    (a)  During the Revolving Credit Period, the Borrower shall
pay to the Agent for the account of each Bank in ratable shares
a facility fee at the rate of .225 of 1% per annum on the Total
Commitment.  Such facility fees shall accrue from and including
the date of this Agreement to but excluding the last day of the
Revolving Credit Period and shall be payable quarterly in
arrears on the last day of each calendar quarter during the
Revolving Credit Period.

    (b)  From and after the last day of the Revolving Credit
Period, the Borrower shall pay to the Agent for the account of
each Bank in ratable shares a facility fee on the amount of
Loans outstanding from time to time at the rate of .225 of 1%
per annum.  Such facility fees shall be payable quarterly in
arrears on the last day of each calendar quarter and on the day
all outstanding Loans are paid in full.

    SECTION 2.08 THIS SECTION IS INTENTIONALLY
OMITTED.

    SECTION 2.09 Termination or Reduction of Commitments. 
The Borrower may, upon at least three Business Days' notice
to the Agent, terminate entirely at any time, or proportionately
reduce from time to time by an aggregate amount of
$5,000,000 or any larger multiple of $1,000,000, the portions of
the Commitments in excess of the sum of the Loans
outstanding and the Pro Rata Share of Bid Loans.  If the
Commitments are terminated in their entirety, all accrued facility
fees shall be payable on the effective date of such termination.

    SECTION 2.10 Required Repayments.  The Borrower shall
repay, and there shall become due and payable, on each April
1, July 1, October 1 and January 1, beginning the April 1
following the Revolving Credit Termination Date and thereafter
until the Commitment Termination Date, an aggregate principal
amount of the Loans equal to one-sixteenth of the aggregate
principal amount of the Loans outstanding at the end of the
Revolving Credit Period; provided that in any event the
outstanding Loans shall be repaid in full on or before the
Commitment Termination Date.  Each such required repayment
shall be applied to repay the Loans of the several Banks in
proportion to their respective Commitments.  Payments made
pursuant to this Section may not be reborrowed.  If at any time
after the end of the Revolving Credit Period the Borrower repays
any Loans in an amount which exceeds the sum of (a) principal
amounts then owing under this Section plus (b) the amount of
any Refinancing Loans borrowed to repay such Loans, then the
amount of such excess shall be applied to reduce the amount
of any subsequent repayment required by this Section in
inverse chronological order.

    SECTION 2.11 Optional Prepayments.

    The Borrower may, upon at least one Business Day's notice
to the Agent, prepay the Reference Loans in whole at any time,
or from time to time in part in amounts aggregating $1,000,000
or any larger multiple of $100,000 (provided that after such
prepayment the aggregate outstanding Reference Loans are in
an aggregate amount of at least $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 after the end of the Revolving Credit Period may
not be reborrowed and shall be applied to prepay the
Reference Loans of the several Banks in proportion to the then
aggregate outstanding amount of their respective Reference
Loans.

    The Borrower may not prepay CD Loans or Eurodollar
Loans prior to the last day of their respective Interest Periods.

    Upon receipt of a notice of prepayment pursuant to this
Section, (which may be given orally or in writing), the Agent
shall promptly notify each Bank of the contents thereof and of
such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.

    SECTION 2.12 General Provisions as to Payments.  The
Borrower shall make each payment of principal of, and interest
on, the Loans and facility fees hereunder not later than 12:00
noon (New York time) on the date when due, in federal or other
funds immediately available to the Agent at its address referred
to in Section 8.01.  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
facility fees or principal of, or interest on, any CD Loans or
Reference Loans shall be due on a day which is not a Business
Day, the date for payment thereof shall be extended to the next
succeeding Business Day.  Whenever any payment of principal
of, or interest on, any Eurodollar Loans shall be due on a day
which is not a Eurodollar Business Day, the date for payment
thereof shall be extended to the next succeeding Eurodollar
Business Day unless as a result thereof it would fall in the next
calendar month, in which case it shall be advanced to the next
preceding Eurodollar 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 CD Loan or Eurodollar
Loan for any reason on any day other than the last day of an
Interest Period applicable thereto, or if the Borrower fails to
borrow any CD Loans or Eurodollar Loans after notice has been
given to any Bank in accordance with Section 2.03(b), the
Borrower shall reimburse each Bank on demand for any
resulting loss or expense incurred by it, 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; 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.  Facility
fees and interest on Reference Loans 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).  Interest on
CD Loans and Eurodollar Loans shall be computed on the
basis of a year of 360 days and paid for the actual number of
days elapsed, calculated as to each Interest Period from and
including the first day thereof to but excluding the last day
thereof.

    SECTION 2.15 Coordination with Bid Loan Agreement.  The
Borrower has executed a Bid Loan Agreement dated as of
December 14, 1988 and amended as of January 1, 1991 and
February 11, 1994, with Continental Bank N.A. for itself and as
agent, and the other lenders named therein (the "Bid Loan
Agreement").  So long as any Bid Loan is outstanding under
the Bid Loan Agreement, the Commitments shall be
proportionately reduced temporarily by the Pro Rata Share of
Bid Loans.  If the Commitments after such reduction are less
than the sum of the Loans outstanding plus the Pro Rata Share
of Bid Loans, prepayment of the Loans is not required to
reduce such sum to the level of the Commitments, but no
Borrowings can be made in excess of the Commitments. 
Reduction in commitments pursuant to his Section 2.15 shall
not cause any reduction in any Bank's ratable share of facility
fees payable pursuant to Section 2.07 hereof.

    SECTION 2.16 Eurodollar Lending Unlawful.  In the event
that any Regulatory Change shall make it unlawful or
impossible for any Bank to make, maintain or fund any Loan as
a Eurodollar Loan, the obligation of such Bank under Section
2.01 to make or maintain any Loan as a Eurodollar Loan shall,
upon the happening of such Regulatory Change, forthwith
terminate and such Bank shall, by telephonic notice confirmed
in writing to the Borrower and the Agent, declare that such
obligation has so terminated.  Upon receipt of such notice, the
Borrower shall immediately prepay in full the then outstanding
principal amount of each such Eurodollar Loan together with
accrued interest.  Unless the Borrower notifies the Agent to the
contrary within two Eurodollar Business Days after receiving a
notice pursuant to this Section, the Borrower shall, concurrently
with prepaying each such Eurodollar Loan, borrow a Reference
Loan in an equal principal amount.  If circumstances
subsequently change so that such Bank shall no longer be so
affected, it shall so notify the Borrower and the other Banks,
whereupon the obligation of such Bank under Section 2.01 to
make or maintain any Loan as a Eurodollar Loan shall be
reinstated.

    SECTION 2.17 Funds Unavailable.  Notwithstanding any
other provision of this Agreement, if, prior to the date on which
all or any portion of the principal amount of the Loans is to be
made as Eurodollar Loans or CD Loans, any Bank shall
determine for any reason whatsoever (which determination shall
be conclusive and binding on the Borrower), that

    dollar deposits in the relevant amounts and for the relevant
Interest Period are not available to such Bank in the relevant
market, or

    by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to such Eurodollar Loans or CD Loans,

such Bank shall promptly give notice to the Borrower and the
other Banks of such determination, and the obligation of such
Bank under Section 2.01 to make or maintain any Loan as a
Eurodollar Loan or a CD Loan, as the case may be, shall, upon
such notification, forthwith terminate and the Borrower shall
immediately prepay all such Loans then maintained as
Eurodollar Loans or CD Loans, as the case may be, together
with accrued interest.  Unless the Borrower notifies the Agent
to the contrary within two Eurodollar Business Days after
receiving a notice pursuant to this Section, the Borrower shall,
concurrently with prepaying each such Eurodollar Loan or CD
Loan, borrow a Reference Loan in an equal principal amount. 
If circumstances subsequently change so that such Bank shall
no longer be so affected, such Bank shall so notify the
Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan as
a Eurodollar Loan or a CD Loan (whichever was so terminated
and is then available) shall be reinstated.

    SECTION 2.18 Increased Costs and Reduced Returns.

    If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, 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 the
Banks with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable
agency:

           shall subject any Bank to any tax, duty or other
charge with respect to its obligation to make Fixed Rate Loans,
its Fixed Rate Loans, or its Notes, or shall change the basis of
taxation of payments to such Bank of the principal of or interest
on its Fixed Rate Loans or in respect of any other amounts due
under this Agreement, in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans, (except for changes in
the taxation of the overall net income of such Bank); or

    shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any
included in a CD Reserve Percentage or Eurodollar Reserve
Percentage, as applicable), special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, such Bank or shall impose on such
Bank or on the United States market for certificates of deposit
or the interbank eurodollar market any other condition affecting
its obligation to make Fixed Rate Loans, its Fixed Rate Loans
or its Notes;

and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by such
Bank under this Agreement or under its Notes with respect
thereto, by an amount deemed by such Bank to be material,
then, within 15 days after demand by such Bank, the Borrower
agrees to pay to such Bank such additional amount or amounts
as will compensate it for such increased cost or reduction.

    If after the date hereof, any Bank shall have determined that
the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, 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 such
Bank with 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 such Bank's capital as
a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's
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, the Borrower shall
pay to such Bank such additional amount or amounts as will
compensate it for such reduction.

    Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section
2.18 and will designate a different branch or office with respect
to this Agreement, if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in
the sole judgment of such Bank, be otherwise disadvantageous
to such Bank.  A certificate of each Bank claiming
compensation under this Section 2.18 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, each Bank may use any reasonable averaging
and attribution methods.

    If any Bank demands compensation under this Section
2.18, the Borrower may at any time, upon at least five
Eurodollar Business Days' prior notice to such Bank, prepay
outstanding CD Loans or Eurodollar Loans, as the case may
be, of such Bank, together with accrued interest to the date of
prepayment, and, concurrently with prepaying each such CD
Loan or Eurodollar Loan, borrow a Reference Loan in an equal
principal amount and unless and until such Bank notifies the
Borrower that the circumstances giving rise to such demand for
compensation no longer apply, all Loans which would otherwise
be made by such Bank as CD Loans or Eurodollar Loans, as
the case may be, shall be made instead as Reference Loans.

    SECTION 2.19.  Pro Rata Sharing.  If any holder of any
Note shall obtain any payment (whether voluntary, involuntary,
by application of offset or otherwise) of principal of or interest
on such Note in excess of its pro rata share of payments then
or thereafter obtained by all holders of principal of or interest on
all Notes, such holder shall purchase from the other holders of
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received ratably
with such other holders; provided, however, that if all or any
portion of the excess payment is thereafter recovered from such
purchasing holder, the purchase shall be rescinded and the
purchase price restored pro rata according to the extent of such
recovery, but without interest.  Upon the occurrence of an Event
of Default hereunder, all payments received by each Bank or
holder of any Note from the Borrower or otherwise received with
regard to the Borrower's obligations to such Bank (whether
such payments are voluntary, involuntary, by application of
offset or otherwise), notwithstanding such other indebtedness
of the Borrower to such Bank or holder, shall be applied in the
manner set forth in the immediately preceding sentence to the
extent such payments are in excess of such Bank's or holder's
pro rata share.  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.

ARTICLE III

CONDITIONS TO BORROWINGS

    The obligations of each Bank to make a Loan on the
occasion of each Borrowing pursuant to Article II is subject to
the satisfaction of the following conditions:

    SECTION 3.01 All Borrowings.  In the case of each
Borrowing:

    receipt by the Agent of a Notice of Borrowing as required
by Section 2.03 (including any Notice of Borrowing deemed
given pursuant to Section 2.03);

    the fact that, as of the time immediately after such
Borrowing, no Default shall have occurred and be continuing;

    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; and

    the fact that, as of the time immediately after such
Borrowing, the aggregate outstanding principal amount of Bid
Loans and Loans under all Facility Agreements shall not exceed
the aggregate Total Commitments under all Facility
Agreements.

Each Notice of Borrowing and 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 (b), (c) and (d) of this Section.

    SECTION 3.02 First Borrowing.  On or before the date of
the execution and delivery of this Agreement:

    receipt by each Bank for the account of such Bank of a
duly executed Note, dated on or before the date of such
Borrowing, complying with the provisions of Section 2.04;

    receipt by each Bank of an opinion of counsel for the
Borrower, substantially in the form of Exhibit B hereto;

    receipt by each Bank of a certificate signed by an officer of
the Borrower, to the effect set forth in clauses (b), (c) and (d) of
Section 3.01, and containing the resolutions of the Borrower
authorizing the execution, delivery and performance of this
Agreement and the Notes; and

    receipt by each Bank of an incumbency certificate which
shall identify by name and title and bear the signatures of the
officers of the Borrower authorized to sign this Agreement and
the Notes, upon which certificate the Banks shall be entitled to
rely until informed in writing by the Borrower of any change.

The documents and opinions referred to in this Section shall be
delivered to each Bank no later than the date of the execution
and delivery of this Agreement.  The certificate and opinions
referred to in clauses (b) and (c) above shall be dated no more
than ten Business Days before the date of the first Borrowing.

    SECTION 3.03 Use of Proceeds of First Borrowing and
Transition.  The Borrower is a party to three facility agreements
(the "Prior Agreements") which consist of Facility Agreements
dated as of December 14, 1988, as amended as of January 1,
1991, between (A) the Borrower and First Bank National
Association, for itself and as agent, and NBD Bank, N.A., (B)
the Borrower and Morgan Guaranty Trust Company of New
York for itself and as agent, Morgan Bank (Delaware), and
Norwest Bank Minnesota, N.A., and (C) the Borrower and
Continental Bank N.A., for itself and as agent.  A portion of the
first Borrowing shall be used to pay in full all outstanding
obligations, if any, of the Borrower under the Prior Agreements. 
Notwithstanding the previous sentence, until February 28, 1994
any CD Loans or Eurodollar Loans under the Prior Agreements
for which the interest period under the Prior Agreement would
end on a date after the date of this Agreement ("Outstanding
Loans") may continue to be held on a continuous basis by the
bank which made such loan and shall continue to be governed
by the terms of the applicable Prior Agreement.  Until
obligations of the Borrower under the applicable Prior
Agreement are paid in full, each Bank's Commitment hereunder
shall be reduced by the amount of such Bank's Outstanding
Loans under the Prior Agreements.  Upon satisfaction in full of
all obligations, if any, of the Borrower under the Prior
Agreements, the holders of the notes issued by the Borrower
under the Prior Agreements shall deliver the notes, marked
paid, to the Borrower, and the Prior Agreements shall terminate. 
From and after the execution of this Agreement, the Borrower
shall have no further right to borrow funds under the Prior
Agreements.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

    The Borrower represents and warrants that:

    SECTION 4.01 Corporate Existence and Power.  The
Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of Minnesota and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.

    SECTION 4.02 Corporate and Governmental Authorization;
Contravention.  The execution, delivery and performance by the
Borrower of this Agreement and the Notes are within the
Borrower's corporate power, 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 the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.

    SECTION 4.03 Binding Effect.  This Agreement constitutes
a valid and binding agreement of the Borrower and the Notes,
when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of the
Borrower.

    SECTION 4.04 Financial Information.

    The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1992 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Deloitte Haskins &
Sells and set forth in the Borrower's annual report for the year
ended December 31, 1992 as filed with the Securities and
Exchange Commission on Form 10-K, a copy of which has
been delivered to each Bank, 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.

    The unaudited consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of September 30, 1993
and the related unaudited consolidated statements of income
and cash flows for the nine months then ended, set forth in the
Borrower's quarterly report for the fiscal quarter ended
September 30, 1993 as filed with the Securities and Exchange
Commission on Form 10-Q, a copy of which has been delivered
to each Bank, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent
with the financial statements referred to in paragraph (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).

    Since September 30, 1993 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.

    SECTION 4.05 Litigation.  There is no action, suit or
proceeding pending, 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 or which in any manner questions
the validity of this Agreement or the Notes.

    SECTION 4.06 Compliance with ERISA.  The Borrower and
each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.

    SECTION 4.07 Taxes.  The Borrower and its Subsidiaries
have filed all United States federal, state and local income,
excise and other tax returns which are required to be filed by
them and have paid or made provision for the payment of all
taxes which have become due pursuant to such returns or
pursuant to any assessment in respect thereof received by the
Borrower or any Subsidiary, except such taxes, if any, as are
being contested in good faith and for which adequate reserves
have been provided.  The federal income tax liability of the
Borrower has been determined by the Internal Revenue Service
and paid for all years prior to and including the fiscal year
ended December 31, 1982.

    SECTION 4.08 Subsidiaries.  Each of the Borrower's
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.

    SECTION 4.09 Not an Investment Company.  The Borrower
is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

ARTICLE V

COVENANTS

    The Borrower agrees that so long as any Bank has any
Commitment hereunder or any amount payable under any Note
remains unpaid:

    SECTION 5.01 Information.  The Borrower will deliver to
each of the Banks:

    as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated and
consolidating (only as to direct Subsidiaries of the Borrower)
balance sheet of the Borrower and its Consolidated Subsidiaries
as of the end of such fiscal year and the related consolidated
and consolidating (only as to direct Subsidiaries of the
Borrower) 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 accordance with
the rules and regulations of the Securities and Exchange
Commission by Deloitte Haskins & Sells or other independent
public accountants of nationally recognized standing;

    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 and consolidating (only as to
direct Subsidiaries of the Borrower) balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated and consolidating
(only as to direct Subsidiaries of the Borrower) 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 each case 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;

    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 5.02 to 5.09, inclusive, on the
date of such financial statements and (ii) stating whether there
exists on the date of such certificate any Default 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;

    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 there existed on the date of such
statements any Default and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;

    forthwith upon the occurrence of any Default, 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;

    promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;

    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 annual, quarterly
or monthly reports which the Borrower shall have filed with the
Securities and Exchange Commission;

    if and when the Borrower or any member of the Controlled
Group 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 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;

    simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a balance
sheet and statement of income of LSPI for the corresponding
period in detail reasonably comparable to the information
provided by the Borrower with respect to its Consolidated
Subsidiaries on its reports as filed with the Securities and
Exchange Commission on Form 10-K or Form 10-Q; and

    from time to time such additional information regarding the
financial position or business of the Borrower as the Agent, at
the request of any Bank, may reasonably request.

    SECTION 5.02 Current Assets.  Consolidated Current
Assets will at no time be less than 120% of Consolidated
Current Liabilities.

    SECTION 5.03 Leverage Ratio.  The Leverage Ratio will at
no time exceed 2.0:1.0 and the ratio of Funded Debt to
Consolidated Tangible Net Worth will at no time exceed 1.5:1.0.

    SECTION 5.04 Minimum Consolidated Tangible Net Worth. 
Consolidated Tangible Net Worth will at no time be less than
the sum of (a) $300,000,000 plus (b) 50% of Consolidated
Cumulative Net Income, plus (c) 80% of proceeds of all classes
of equity securities issued by the Borrower after February 11,
1994, plus (d) 80% of the amount by which the principal of the
loan made March 7, 1990 by the Borrower to the Pentair ESOP
Trust is reduced after December 31, 1993.

    SECTION 5.05 Expense Ratio.  At any time when the
Leverage Ratio exceeds 1.2:1.0, as of the end of each quarter
of each of the Borrower's fiscal years, the ratio of (a)
consolidated net income before taxes plus (to the extent
deducted in calculating net income before taxes) interest and
rent expense to (b) rent and interest expense, calculated on a
cumulative basis for the four most recent fiscal quarters and
excluding in each case rent and interest expense of LSPI and
of any other joint venture or entity in which the Borrower or a
Consolidated Subsidiary has an ownership interest but which is
not a Subsidiary, will not be less than 1.5:1.0.

    SECTION 5.06 Subsidiary Debt.  Debt incurred by the
Wholly-Owned Consolidated Subsidiaries from and after the
date of this Agreement and outstanding at any time, excluding:

           obligations assumed in connection with acquisitions;

    Debt incurred in respect of LSPI;

    Debt incurred by such Subsidiary in a country other than
the United States or Canada with respect to operations in such
country, including specifically but not exclusively, Debt incurred
under the DM Facility; and

    Debt incurred in respect of any sale of Receivables.

will not exceed fifteen percent (15%) of Consolidated Tangible
Net Worth.

    SECTION 5.07 Negative Pledge.  Neither the Borrower nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien securing Debt on any asset now owned or
hereafter acquired by it, except:

    Liens existing on the date of this Agreement; each Lien
which secures Debt in an aggregate principal amount of more
than $1,000,000 is disclosed in the financial information referred
to in Section 4.04;

    any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event;

    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;

    any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Borrower or a Consolidated Subsidiary and not created in
contemplation of such event;

    any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Consolidated Subsidiary and not
created in contemplation of such acquisition;

    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;

    any Lien arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with court
proceedings so long as the execution or other enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith by appropriate proceedings;

    any Lien on trade receivables arising from a Sale of
Receivables; and

    Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at
any time outstanding not exceeding 15% of Consolidated
Tangible Net Worth.

    SECTION 5.08 Consolidations, Mergers and Sales of
Assets.  The Borrower will not merge or consolidate with any
other Person or sell, lease, transfer or otherwise dispose of
substantially all of its assets as an entirety to any other Person
unless:

    the Person surviving the merger or consolidation is the
Borrower; and

    immediately after giving effect to any such action, no
Default shall have occurred and be continuing.

    SECTION 5.09 Acquisitions.  At any time when the
Leverage Ratio exceeds 1.2:1, the Borrower will not acquire
other businesses if the aggregate amount of cash used for such
acquisitions since the Leverage Ratio remained in excess of
1.2:1 exceeds $50,000,000.

    SECTION 5.10 Use of Proceeds.  The proceeds of the
Loans made under this Agreement will be used by the Borrower
to refinance the promissory notes executed and delivered by
the Borrower under the Prior Agreements (as defined in Section
3.03) and otherwise for general corporate purposes including
investment in LSPI or in LSPI Fiber, future acquisitions, capital
expenditures and working capital.  None of such proceeds will
be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any
"margin stock" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System.  The Borrower will
not engage principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing
or carrying any such margin stock within the meaning of such
Regulation U.

    SECTION 5.11 Ratable Borrowings.  Contemporaneously
with the execution of this Agreement, the Borrower has
executed one other Facility Agreement.  The Borrower
covenants and agrees that at any time when the Leverage Ratio
exceeds 1.2:1.0, within any period of thirty days, the principal
amount outstanding under this Agreement, plus or minus up to
$5,000,000, will bear the same ratio to the aggregate amount of
the Commitments under this Agreement as the aggregate
principal amount outstanding under each of the other Facility
Agreements bears to the aggregate amount of the
Commitments under such other Facility Agreement and the
Borrower pledges its best efforts to maintain such ratios at
other times, consistent with its business needs.

ARTICLE VI

DEFAULTS

    SECTION 6.01 Events of Default.  If one or more of the
following events ("Events of Default") shall have occurred and
be continuing:

    the Borrower shall fail to pay within five days of the date
due any principal of or interest on any Note, any fees or any
other amount payable hereunder;

    the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.09, inclusive;

    the Borrower shall fail to observe or perform any other
covenant or agreement contained in this Agreement for 30 days
after written notice thereof has been given to the Borrower by
the Agent at the request of any Bank;

    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;

    any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than the Notes)
of the Borrower or any Subsidiary equal to or exceeding
$10,000,000 in the aggregate for all such Debt or enables (or,
with the giving of notice or lapse of time or both, would enable)
the holder of any such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;

    the Borrower or any 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;

    an involuntary case or other proceeding shall be
commenced against the Borrower or any 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 60 days; or an order for relief shall be
entered against the Borrower or any Subsidiary under the
federal bankruptcy laws as now or hereafter in effect;

    the Borrower or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in
excess of $5,000,000 which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or the
Borrower or any member of the Controlled Group shall file a
distress termination notice with the PBGC and the amount of
the Unfunded Vested Liabilities under that filing exceeds
$2,500,000; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;

    a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 60 days;

    any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the
outstanding shares of voting stock of the Borrower; or

    within a period of twelve consecutive months, three-fourths
of the directors of the board of directors of the Borrower shall
have changed;

then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (a) through (e), or (h)
through (k) above, the Agent shall (i) if requested by Banks
having 50% or more 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
Notes evidencing 50% or more in aggregate principal amount
of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes
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; (2) in the case of any
of the Events of Default specified in paragraph (f) or (g) above,
without any notice to the Borrower or any other act by the
Agent or the Banks, the Commitments shall thereupon
terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; and (3) in the case
of any of the Events of Default specified in paragraph (j) or (k)
above, in addition to the actions permitted to be taken pursuant
to clause (1) above, if such Event of Default is due to an
unfriendly attempt to acquire control of the Borrower (as
declared in a resolution of the board of directors of the
Borrower), the Banks may declare an additional amount not
greater than 10% of the Total Commitment at such time to be
immediately due and payable to the extent such amount is
permitted by applicable law.

    SECTION 6.02 Notice of Default.  The Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon
being requested to do so by any Bank and shall thereupon
notify all the Banks thereof.

ARTICLE VII

THE AGENT

    SECTION 7.01 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 7.02 Agent and Affiliates.  The Agent 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 the Agent 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
hereunder.

    SECTION 7.03 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 VI.

    SECTION 7.04 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 7.05 Liability of Agent.  Neither the Agent nor any
of its 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 all of the Banks or (ii) in
the absence of its own gross negligence or willful misconduct. 
Neither the Agent nor any of its 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, including any notice given orally by the
Borrower as permitted by the terms of this Agreement; (ii) the
performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, 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 or similar writing) or oral notice
permitted hereunder and believed by it to be genuine or to be
signed or given by the proper party or parties.

    SECTION 7.06 Indemnification.  Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (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 the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.

    SECTION 7.07 Agent's Fees.  The Borrower shall pay to the
Agent, in addition to legal and other expenses described in
Section 8.03, an agency fee of $10,000 per annum, payable
annually in advance, with the first payment of $10,000 payable
on January 1, 1995, and with successive payments payable on
the first day of each January beginning January 1, 1996 so long
as this Agreement shall be in effect.

    SECTION 7.08 Bank Credit Decision.  Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank and based on the financial
statements prepared by the Borrower and such other
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 action under this Agreement.

    SECTION 7.09 Successor Agent.  The Agent may resign at
any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with
cause by written notice received by the Agent from the
Required Banks.   Upon any such resignation or removal,
provided no Default exists, the Borrower shall have the right to
appoint another Bank as successor Agent subject to the
consent of the Required Banks, which consent shall not be
unreasonably withheld.  If such consent is not obtained within
30 days, or if a Default exists, then the Required Banks shall
have the right to appoint, on behalf of the Borrower and the
Banks, a successor Agent.  If no successor Agent shall have
been so appointed by the Required Banks and shall have
accepted such appointment within thirty days after the retiring
Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Borrower and the Banks, a successor
Agent.  Such successor Agent shall be a commercial bank with
an office in the United States and capital and retained earnings
of at least $250,000,000.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges 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 VII
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent hereunder.

ARTICLE VIII

MISCELLANEOUS

    SECTION 8.01 Notices.  All notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar writing), except
where specifically permitted to be given orally, and shall be
given to such party at its address or telex number set forth on
the signature pages hereof or such other address 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 answer back is
received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Agent under Sections 2.02, 2.03,
2.06, 2.09, 2.11, 2.16 or 2.17 shall not be effective until
received.

    SECTION 8.02 No Waiver.  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 8.03 Expenses; Documentary Taxes.  The
Borrower shall pay upon demand (i) all reasonable expenses of
the Agent, including fees and disbursements of attorneys for
the Agent (who may be employees of the Agent), in connection
with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default by the Borrower hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by the
Agent and the Banks, including fees and disbursements of
attorneys for the Agent and the Banks (who may be employees
of the Agent and the Banks), in connection with such Event of
Default and collection and other enforcement proceedings
resulting therefrom.  The Borrower shall indemnify each Bank
against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.

    SECTION 8.04 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,

           increase the Commitment of any Bank or subject
any Bank to any additional obligations,

    reduce the principal of or rate of interest on any Loans or
any fees (other than fees provided for in Section 7.07(b))
hereunder,

    postpone the date fixed for any payment of principal of or
interest on any Loan or any fees (other than fees provided for
in Section 7.07(b)) hereunder,

    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 Agreement, or

    amend this Section 8.04.

    SECTION 8.05 Collateral.  Each of the Banks represents
that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U of the Board of Governors of the
Federal Reserve System) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

    SECTION 8.06 Successors and Assigns.

    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.

    Any Bank may at any time sell, assign, transfer, grant
participations in, or otherwise dispose of, all or any portion of
its Loans or Notes or of its right, title and interest therein or
thereto or in or to this Agreement (collectively, "Participations")
to any other lending office or to any other Person
("Participants"), subject to the terms contained in this Section
8.06.  Such Bank shall give Notice to the Borrower of any
Participation exceeding six months in duration or granting a
Participation in this Agreement.  No agreement between any
Bank and a Participant may limit the right of such Bank to
consent to amendments to this Agreement unless the Borrower
shall have consented in advance (which consent shall not be
unreasonably withheld) to the grant of a Participation to such
Participant.  Notwithstanding the foregoing, the consent of the
Borrower is not required for the grant of a Participation on
terms which require the Participant's consent to any
amendment of this Agreement which reduces the principal of or
rate of interest on the Participation or postpones the date (other
than by way of extension pursuant to Section 2.01(c)) fixed for
payment of principal or interest on the Participation.  The
Borrower agrees that any Participant may exercise any and all
rights of banker's lien, setoff and counterclaim with respect to
its Participation as fully as if such Participant were the holder of
a Loan in the amount of its Participation.

    No Participant shall be entitled to receive any greater
payment under Section 2.13 or 2.18 than the Bank granting the
Participation would have been entitled to receive with respect
to the rights assigned or otherwise transferred.

    SECTION 8.07 Minnesota Law.  This Agreement and each
Note shall be construed in accordance with and governed by
the laws of the State of Minnesota.

    SECTION 8.08 Counterparts; 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 shall become effective when the Agent shall
have received counterparts hereof signed by all of the parties
hereto.

    SECTION 8.09 Highly Leveraged Transaction Classification. 
If the Agent (a) receives notice from any Bank that such Bank
has received notice from a governmental authority having
jurisdiction over such Bank requiring that the Loans be
classified as an "HLT" or "Highly Leveraged Transaction" or (b)
determines that the Loans meet the criteria under which the
Loans are required by the applicable governmental authority to
be classified as an HLT, the Agent shall promptly give notice
thereof to the Borrower and the Banks.  The parties hereto
shall, as soon as practicable thereafter, commence negotiations
in good faith to reach agreement in a manner satisfactory to all
parties on the extent to which fees or margins under this
Agreement should be increased so as to reflect the average
incremental increase in pricing of loans that are classified as
HLTs as compared to the same loans if they were not HLTs. 
If agreement is not reached within 90 days, the Banks may
establish the increases to the fees and margins and give notice
thereof to the Borrower, provided that in no event shall the
aggregate increases in fees and margins pursuant to this
Section exceed fifty basis points.  The Banks acknowledge that
such an HLT classification is not a Default or an Event of
Default under the Agreement.  For purposes of this Section,
"HLT" or "Highly Leveraged Transaction" means the definition of
"highly leveraged transaction" as promulgated by the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Board of Governors of the Federal
Reserve System on October 30, 1989, in Banking Circular 242
or any successor definition adopted by such governmental
authorities.
    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.

PENTAIR, INC.

By:  Joseph R. Collins
    Title:  Chief Financial Officer

Water's Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota  55113
Attention:  Chief Financial Officer
Telephone:  (612) 636-7920
Telecopy:  (612) 639-5209

FIRST BANK NATIONAL ASSOCIATION,
  for itself and as Agent

By: Deborah O. Hall
    Title: Vice President

First Bank Place
601 Second Avenue South
Minneapolis, Minnesota  55402-4302
Attn:  Deborah O Hall
Telephone:  (612) 973-0543
Telecopy:  (612) 973-0824

NORWEST BANK MINNESOTA, N.A.

By: Gloria A. Charley
    Title:  Corporate Banking Officer

Norwest Center
6th and Marquette
Minneapolis, Minnesota 55479-0085
Attn:  National Division
      Gloria J. Charley
Telex Number:  290734
Answerback:  NORWEST BK MPS
Telephone:  (612) 667-8219
Telecopy:  (612) 667-4145
EXHIBIT A

NOTE

                                       Minneapolis, Minnesota
$                                      February 11, 1994

    For value received, PENTAIR, INC., a Minnesota
corporation (the "Borrower"), promises to pay to the order of
(the "Bank") the principal sum of Dollars ($  ) or, if less, the
aggregate unpaid principal amount of all Loans made by the
Bank to the Borrower pursuant to the Facility Agreement
referred to below, together with interest on the unpaid principal
amount thereof at the rates and on the dates set forth in the
Facility Agreement.  The Borrower shall pay each Loan in full on
the earlier of (i) the last day of its Interest Period, including
principal payments due on each Principal Repayment Date and
(ii) the Commitment Termination Date.

    All payments of principal and interest shall be made in
lawful money of the United States in federal or other
immediately available funds at the office of First Bank National
Association, First Bank Place, Minneapolis, Minnesota 55480.

    All Loans made by the Bank to the Borrower pursuant to
the Facility Agreement and all payments of the principal thereof
may be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof.

    This Note is one of the Notes referred to in the Facility
Agreement dated February 11, 1994 among the Borrower, the
banks listed on the signature pages thereof and First Bank
National Association, as Agent.  Reference is made to such
Facility Agreement for provisions for the prepayment hereof and
the acceleration of the maturity hereof.

PENTAIR, INC.

By 
   Title: 
LOANS AND PAYMENTS OF PRINCIPAL

                                                      

                   Type   Amount of
        Amount     of     Principal     Maturity   Notation
Date    of Loan    Loan   Repaid        Date     Made By

                                       
Exhibit B

OPINION OF COUNSEL FOR THE BORROWER

[Date as provided in
Section 3.02 of the
Facility Agreement]

To the Banks and the Agent
  Referred to Below
c/o First Bank National Association,
  as Agent
First Bank Place
Minneapolis, Minnesota  55480

Gentlemen:

    We have acted as counsel for Pentair, Inc. (the "Borrower")
in connection with the Facility Agreement (the "Facility
Agreement") dated February 11, 1994 among the Borrower and
First Bank National Association, for itself and as Agent, and
Norwest Bank Minnesota, N.A.  Terms defined in the Facility
Agreement are used herein as therein defined.

    We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.

    Upon the basis of the foregoing, we are of the opinion that:

    1.     The Borrower is a corporation validly existing and in
good standing under the laws of Minnesota and has all
corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.

    2.     The execution, delivery and performance by the
Borrower of the Facility Agreement and the Notes are within the
Borrower's corporate powers, 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 the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.

    3.     The Facility Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy,
moratorium, insolvency or other laws of general application
relating to the enforcement of creditors' rights, by general
principles of equity, and by Minnesota statutes to the extent
compliance is required by other than the Borrower.

    4.     There is no action, suit or proceeding pending, or to
the best of our knowledge 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, or which in any manner
questions the validity of the Facility Agreement or the Notes.

    5.     Each of the Borrower's 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.

                                       Very truly yours,

EXHIBIT 4.3

SECOND AMENDMENT TO BID LOAN AGREEMENT

THIS SECOND AMENDMENT to Bid Loan Agreement ("Second
Amendment"), dated as of February 11, 1994, is entered into
among Pentair, Inc., Continental Bank N.A., for itself and as
Agent, Morgan Guaranty Trust Company of New York, J.P.
Morgan Delaware, First Bank National Association, Norwest
Bank Minnesota, N.A., and NBD Bank, N.A.

WHEREAS, Mellon Bank, N.A. and the parties other than NBD
Bank, N.A. entered into a Bid Loan Agreement dated as of
December 14, 1988 (as amended, the "Agreement"); and

WHEREAS, by the First Amendment to the Bid Loan Agreement
dated as of January 1, 1991, Mellon Bank, N.A. withdrew as a
party to the Agreement and NBD Bank, N.A. was added as a
party thereto;

    NOW, THEREFORE, the parties agree as follows:

    Definitions Amended.  Section 1.01 of the Agreement is
amended by amending the definitions of the following terms to
read as follows:

    "Facility Agreements" means the Facility Agreement dated
as of February 11, 1994 between the Borrower and Continental
Bank N.A. and Morgan Guaranty Trust Company of New York,
as Agents, and the other lenders named therein, and the
Facility Agreement dated as of February 11, 1994 between the
Borrower and First Bank National Association, as Agent, and
the other lenders named therein, as each may be amended
from time to time.

    "Notes" means the Bid Loan Notes of the Borrower in the
form of amended Exhibit A to this Second Amendment.

    "Termination Date" means January 1, 1997 (or if such date
is not a Business Day, the next succeeding day which is a
Business Day), or such later date corresponding to a Revolving
Credit Termination Date under the Facility Agreements, as the
same may be extended pursuant to Section 2.01(c) of the
Facility Agreements.

    Section 3.01(c) Amended.  Section 3.01(c) of the
Agreement is amended to read in its entirety as follows:

"(c) the fact that, as of the time immediately after the making of
such Bid Loan, the aggregate outstanding principal amount of
Bid Loans and Loans under all Facility Agreements shall not
exceed the aggregate Total Commitments under all Facility
Agreements."

    Section 8.01 Amended.  Section 8.01 of the Agreement is
hereby amended by adding, at the end thereof, the expression
";provided that notices to the Agent under Article II shall not be
effective until received".

    Section 8.03 Amended.  Section 8.03 of the Agreement is
amended by adding, following the word "hereof" on the sixth
line thereof, the expression "or any Default or alleged Default by
the Borrower hereunder".

    Representations and Warranties.  The Borrower represents
and warrants that the representations and warranties made in
Article IV of the Agreement are true as of the date of this
Second Amendment and that no Default under the Agreement
has occurred and is continuing.

    Conditions to Effectiveness of Second Amendment.  This
Second Amendment shall become effective only upon
satisfaction of the following conditions:

          (a)   Receipt by each Bank for the account of
such Bank of a duly executed Note in the form of Amended
Exhibit A;

    (b)   Receipt by each Bank of an opinion of counsel for
the Borrower, substantially in the form of Amended Exhibit E;
and

    (c)   Receipt by each Bank of a certificate signed by an
officer of the Borrower certifying the resolutions of the Borrower
authorizing the execution, delivery and performance of this
Second Amendment and the Notes.

    Continued Validity; Counterparts.  Except as amended by
this Second Amendment, the Agreement as amended by the
First Amendment remains in full force and effect.  This Second
Amendment 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 Second Amendment shall become effective when the
Agent shall have received counterparts hereof signed by all of
the parties hereto.
    IN WITNESS WHEREOF, the parties hereto have caused
this Second Amendment to Bid Loan Agreement to be duly
executed by their respective authorized officers as of the day
and year first above written.

PENTAIR, INC.

By: Joseph R. Collins
    Title:  Chief Financial Officer

Water's Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota  55113
Attention:  Chief Financial Officer
Telecopy:  (612) 639-5251
Telephone:  (612) 636-7920

CONTINENTAL BANK N.A.,
  for itself and as Agent

By Barry Watters
    Title:  Vice President

231 South LaSalle Street
Chicago, Illinois  60697
Attn:  Barry Watters
Telephone:  (312) 828-6307
Telecopy:  (312) 987-1276

Person to whom Bid Loan corres-
 pondence should be addressed:

Jessica Greenfield
231 South LaSalle Street
Chicago, Illinois  60697
Telephone:  (312) 828-6145
Telecopy:  (312) 974-9102

MORGAN GUARANTY TRUST COMPANY
  OF NEW YORK, for itself and
  as Agent

By William Stevenson
    Title:  Vice President

60 Wall Street
New York, New York  10260
Attn:  William J. Stevenson
Telephone:  (212) 648-6839
Telecopy:  (212) 648-5336

J. P. MORGAN DELAWARE

By: David J. Morris
    Title:  Vice President

902 Market Street
Wilmington, Delaware  19801
Attn:  David J. Morris
Telephone:  (302) 651-3788
Telecopy:  (302) 654-5336

FIRST BANK NATIONAL ASSOCIATION

By: Deborah O. Hall
    Title:  Vice President

First Bank Place 601 Second Ave. South
Minneapolis, Minnesota  55402-4302
Attn:  Deborah O. Hall
Telecopy:  (612) 973-0824
Telephone:  (612) 973-0543

NORWEST BANK MINNESOTA, N.A.

By: Gloria J. Charley
    Title:  Corporate Banking Officer

Norwest Center
6th & Marquette
Minneapolis, Minnesota  55479-0085
Attn:  National Division
      Gloria J. Charley
Telex Number:  290734
Answerback:  NORWEST BK MPS
Telephone:  (612) 667-3503
Telecopy:  (612) 667-8219

NBD BANK, N.A.

By: Patrick Skiles
    Title: Vice President
611 Woodward Avenue
Detroit, Michigan  48226
Attn:  Patrick P. Skiles
Telephone: (313) 225-1798
Telecopy:  (313) 225-1671

AMENDED EXHIBIT A

BID LOAN NOTE

                            Minneapolis, Minnesota
$170,000,000                February 11, 1994

    For value received, PENTAIR, INC., a Minnesota
corporation (the "Borrower"), promises to pay to the order of
(the "Bank") the principal sum of One Hundred Seventy Million
Dollars ($170,000,000) or, if less, the aggregate unpaid principal
amount of all Bid Loans made by the Bank to the Borrower
pursuant to the Bid Loan Agreement referred to below, together
with interest on the unpaid principal amount thereof at the rates
and on the dates set forth in the Bid Loan Agreement.  The
Borrower shall pay each Bid Loan in full on the earlier of (i) the
last day of its Interest Period, and (ii) the Termination Date.

    All payments of principal and interest shall be made in
lawful money of the United States in federal or other
immediately available funds at the office of Continental Bank
N.A., 231 South LaSalle Street, Chicago, Illinois, 60697.

    All Bid Loans made by the Bank to the Borrower pursuant
to the Bid Loan Agreement and all payments of the principal
thereof may be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a
part hereof.

    This Note is one of the Notes referred to in the Bid Loan
Agreement dated December 14, 1988, as amended January 1,
1991 and February 11, 1994, among the Borrower, the banks
listed on the signature pages thereof and Continental Bank
N.A., as Agent.  Reference is made to such Bid Loan
Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.

PENTAIR, INC.

By 
   Title: 

LOANS AND PAYMENTS OF PRINCIPAL

                                              

                 Type  Amount of
       Amount    of    Principal   Maturity   Notation
Date   of Loan   Loan  Repaid      Date       Made By

                                                    
                                              
OPINION OF COUNSEL FOR THE BORROWER

To the Banks and the Agent
  Referred to Below
c/o Continental Bank N.A.,
  as Agent
231 South LaSalle Street
Chicago, Illinois  60697

Gentlemen:

    We have acted as counsel for Pentair, Inc. (the "Borrower")
in connection with the Second Amendment dated February 11,
1994 ("Second Amendment") to the Bid Loan Agreement (the
"Bid Loan Agreement") dated December 14, 1988 as amended
January 1, 1991 among the Borrower, Continental Bank N.A.,
for itself and as Agent, Morgan Guaranty Trust Company of
New York, Morgan Bank (Delaware), First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A.  Terms defined in the Bid Loan Agreement are used herein
as therein defined.

    We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.

    Upon the basis of the foregoing, we are of the opinion that:

    1.    The Borrower is a corporation validly existing and in
good standing under the laws of Minnesota and has all
corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.

    2.    The execution, delivery and performance by the
Borrower of the Second Amendment and the Notes are within
the Borrower's corporate powers, 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 the Borrower.

    3.    The Second Amendment constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy,
moratorium, insolvency or other laws of general application
relating to the enforcement of creditors' rights, and by general
principles of equity, and by Minnesota statutes to the extent
compliance is required by other than the Borrower.

                                        Very truly yours,

EXHIBIT 4.4

DM 115,000,000

DEUTSCHMARK
FACILITY AGREEMENT

among

EuroPentair GmbH,
Borrower,

PENTAIR, INC.,
Guarantor,

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
for itself and as Agent,

CONTINENTAL BANK N.A.,
for itself and as Agent,

NBD BANK, N.A.

and

DRESDNER BANK

Dated as of February 11, 1994

TABLE OF CONTENTS

ARTICLE I - DEFINITIONS
    Section 1.01.   Definitions
    Section 1.02.   Accounting Terms and Determinations

ARTICLE II - THE CREDITS
    Section 2.01.   Commitments to Lend
    Section 2.02.   Maturity
    Section 2.03.   Method of Borrowing
    Section 2.04.   Loans in an Alternative Currency
    Section 2.05.   Notes
    Section 2.06.   Interest Rate and Payment
    Section 2.07.   Facility Fees
    Section 2.08    Duration of Interest Periods
    Section 2.09.   Termination or Reduction of
                            Commitments
    Section 2.10.   Required Repayments
    Section 2.11.   No Optional Prepayments
    Section 2.12.   General Provisions as to Payments
    Section 2.13.   Funding Losses
    Section 2.14.   Computation of Interest and Fees
    Section 2.15.   Lending Unlawful
    Section 2.16.   Funds Unavailable
    Section 2.17.   Increased Costs and Reduced Returns
    Section 2.18.   Pro Rata Sharing
    Section 2.19.   INTENTIONALLY OMITTED
    Section 2.20.   Judgment Currency
    Section 2.21.   Taxes and Costs

ARTICLE III - CONDITIONS TO BORROWINGS
    Section 3.01.   All Borrowings
    Section 3.02.   First Borrowing

ARTICLE IV - REPRESENTATIONS AND WARRANTIES
    Section 4.01.   Corporate Existence and Power
    Section 4.02.   Corporate and Governmental
                            Authorization; Contravention
    Section 4.03.   Binding Effect
    Section 4.04.   Financial Information
    Section 4.05.   Litigation
    Section 4.06.   Compliance with ERISA
    Section 4.07.   Taxes
    Section 4.08.   Subsidiaries
    Section 4.09.   Not an Investment Company

ARTICLE V - COVENANTS
    Section 5.01.   Information
    Section 5.02.   Current Assets
    Section 5.03.   Leverage Ratio
    Section 5.04.   Minimum Consolidated Tangible Net
                            Worth
    Section 5.05.   Expense Ratio
    Section 5.06.   Subsidiary Debt
    Section 5.07.   Negative Pledge
    Section 5.08.   Consolidations, Mergers and
                            Sales of Assets
    Section 5.09.   Acquisitions
    Section 5.10.   Use of Proceeds

ARTICLE VI - DEFAULTS
    Section 6.01.   Events of Default
    Section 6.02.   Notice of Default

ARTICLE VII - THE AGENT
    Section 7.01.   Appointment and Authorization
    Section 7.02.   Agent and Affiliates
    Section 7.03.   Action by Agent
    Section 7.04.   Consultation with Experts
    Section 7.05.   Liability of Agent
    Section 7.06.   Indemnification
    Section 7.07.   Agent's Fees
    Section 7.08.   Bank Credit Decision
    Section 7.09.   Successor Agent

ARTICLE VIII - MISCELLANEOUS
    Section 8.01.   Notices
    Section 8.02.   No Waivers
    Section 8.03.   Expenses; Documentary Taxes
    Section 8.04.   Amendments and Waivers
    Section 8.05.   Collateral
    Section 8.06.   Successors and Assigns
    Section 8.07.   Minnesota Law
    Section 8.08.   Counterparts; Effectiveness
    Section 8.09.  Highly Leveraged Transaction Classi-
                            fication

ARTICLE IX - GUARANTY
    Section 9.01.   Guaranty
    Section 9.02.   Guaranty Unconditional
    Section 9.03.   Discharge Only Upon Payment in Full;
                            Reinstatement in Certain
Circumstances
    Section 9.04.   Waiver by the Guarantor
    Section 9.05.   Subrogation
    Section 9.06.   Stay of Acceleration

Signatures

Exhibit A - Note
Exhibit B - Opinion of Counsel For the Borrower

DEUTSCHMARK
FACILITY AGREEMENT

    Agreement dated as of February 11, 1994, among
EuroPentair GmbH, PENTAIR, INC., MORGAN GUARANTY
TRUST COMPANY OF NEW YORK and CONTINENTAL BANK
N.A., for themselves and as agents, NBD BANK, N.A. and
DRESDNER BANK AG.

    The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

    SECTION 1.01 Definitions.  The following terms, as used
herein, have the following meanings:

    "Agent" means either Morgan Guaranty Trust Company of
New York or Continental Bank N.A. in their capacity as agents
for the Banks hereunder; "Agents" means both of such
institutions.  Morgan Guaranty Trust Company of New York
shall be the "Managing Agent" and if the word "Agent" is used
in the singular, it shall refer to the Managing Agent, unless the
context otherwise requires.

    "Agreement" means the Deutschmark Facility Agreement
dated as of February 11, 1994, among EuroPentair GmbH,
Pentair, Inc., Morgan Guaranty Trust Company of New York,
Continental Bank N.A., for themselves and as Agents, NBD
Bank, N.A. and Dresdner Bank AG.

    "Alternative Currency" means French Francs or British
Pounds Sterling.

    "Banks" means Morgan Guaranty Trust Company of New
York, Continental Bank N.A., NBD Bank, N.A. and Dresdner
Bank AG, and their successors and assigns.

    "Borrower" means EuroPentair GmbH, a German limited
liability company, and its successors.

    "Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by all Banks
severally.

    "Business Day" means any business day (except a
Saturday, Sunday or other day on which commercial banks in
New York City or Frankfurt are authorized by law to close) on
which commercial banks are open for international business
(including dealings in Deutschmark deposits) in London, and,
where funds are to be paid or made available in an Alternative
Currency, on which commercial banks are open for domestic
and international business (including dealings in deposits in
such Alternative Currency) in both London and the place where
such funds are paid or made available.

    "Code" means the Internal Revenue Code of 1986, as
amended.

    "Commitment" means at any date, with respect to each
Bank, the amount set forth below opposite such Bank's name,
as such amount may be reduced from time to time pursuant to
Section 2.09, or increased from time to time pursuant to
Section 2.01(c)(iii).

    Morgan Guaranty Trust
      Company of New York           DM 40,000,000
    Continental Bank N.A.           DM 40,000,000
    NBD Bank, N.A.                  DM 17,500,000
    Dresdner Bank                   DM 17,500,000

    Total Commitments =             DM 115,000,000

    "Commitment Termination Date" means January 1, 2001 (or
if such date is not a Business Day, the next succeeding day
which is a Business Day), as the same may be extended
pursuant to Section 2.01(c).

    "Consolidated Cumulative Net Income" means the total net
income of the Guarantor and its Consolidated Subsidiaries
earned or received after December 31, 1993.

    "Consolidated Current Assets" means at any date the
consolidated current assets of the Guarantor and its
Consolidated Subsidiaries determined as of such date.

    "Consolidated Current Liabilities" means at any date (i) the
consolidated current liabilities of the Guarantor and its
Consolidated Subsidiaries plus (ii) the current liabilities of any
Person (other than the Guarantor or a Consolidated Subsidiary)
which are Guaranteed by the Guarantor or a Consolidated
Subsidiary.

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

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

    "Consolidated Tangible Net Worth" means at any date (1)
the consolidated stockholders' equity of the Guarantor and its
Consolidated Subsidiaries (including without duplication, the
investment of Pentair Duluth Corp. in LSPI and of Pentair Duluth
Pulp Corp. in LSPI Fiber), plus (2) the cumulative effect of the
accounting change of $36.9 million applicable to the adoption
by the Guarantor effective January 1, 1992 of Financial
Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and less (3) the
amount of the consolidated Intangible Assets in excess of 15%
of the consolidated assets of the Guarantor and its
Consolidated Subsidiaries, 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, 1993 in the book value of any
asset owned by the Guarantor or any Consolidated Subsidiary,
(ii) all investments in unconsolidated Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, organizational or developmental expenses
and other intangible items.  Notwithstanding the previous
sentence, for this purpose Intangible Assets does not include
the investment of Pentair Duluth Corp. in LSPI or of Pentair
Duluth Pulp Corp. in LSPI Fiber or the ownership of the
Guarantor or any Consolidated Subsidiary in any other joint
venture or entity that is not a Subsidiary.

    "Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with
the Guarantor, are treated as a single employer under Sections
414(b) or 414(c) of the Code.

    "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 under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, (vi) the amount of any
proceeds of a Sale of Receivables less amounts collected on
the receivables sold in such Sale of Receivables and (vii)
subject to the limitations of the following portion of this
definition, all Debt (which will include only for the purpose of
this clause (vii) operating leases of any Person other than a
Subsidiary) of others Guaranteed by such Person. 
Notwithstanding the foregoing, Debt of the Guarantor and its
Consolidated Subsidiaries shall be modified as follows:

            (a)     Debt does not include any obligations of
LSPI, the Guarantor or Pentair Duluth Corp. with respect to the
LSPI 1987 Lease under any instruments, including the Cash
Deficiency Agreements and Keepwell Agreement.

    (b)  With respect to any project financing, through loans,
equipment leases or other incurrence of indebtedness, of
expansion by LSPI of its Duluth paper mill or by LSPI Fiber of
the SRFI recycled pulp mill or other investment related to the
pulp or paper industry, including sources of supply of raw
materials for pulp or paper, by LSPI, LSPI Fiber, SRFI or any
other joint venture or entity in which the Guarantor or any
Consolidated Subsidiary has an ownership interest, but which
is not a Subsidiary of the Guarantor or a Consolidated
Subsidiary, if an event or a series of events such as completion
of the project, commissioning, or refinancing of the project or
entity reduces the aggregate liability of the Guarantor or any
Consolidated Subsidiary for any lease payments or debt
obligations relating to the project in the form of credit support,
deficiency or guaranty amounts to 50% or less of the maximum
amount of the Guarantor's and any Consolidated Subsidiary's
portion of amounts financed plus amounts advanced by
Guarantor or such Consolidated Subsidiary, then the liability of
the Guarantor and such Consolidated Subsidiary for any lease
payments or debt obligations in the form of credit support,
deficiency or guaranty shall be included as Debt only to the
extent of the greater of (i) the Guarantor's or such Consolidated
Subsidiary's portion of such lease payments or debt obligations
due within the following 12-month period and (ii) 25% of the
Guarantor's or such Consolidated Subsidiary's maximum
cumulative future credit support, deficiency or guaranty related
to such project.

    "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.

    "Deutschmarks" and the sign "DM" mean lawful money of
the Federal Republic of Germany.

    "Deutschmark Amount" means in relation to any Borrowing
denominated in an Alternative Currency, the amount designated
by the Borrower as the Deutschmark amount of such Borrowing
in the related Notice of Borrowing.  Each Borrowing
denominated in an Alternative Currency shall be deemed a
utilization of the Commitments in an amount equal to the
Deutschmark Amount thereof.

    "Dollars" and the sign "$" mean lawful money of the United
States of America.

    "Equivalent Amount" means on any date, the amount of
Alternative Currency converted from Deutschmarks at the
Agent's spot buying rate (based on the London interbank
market rate then prevailing) for Deutschmarks against such
Alternative Currency as of approximately 11:00 a.m. (London
time) three Business Days before such date.

    "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 6.01.

    "Fixed Rate" has the meaning set forth in Section 2.06.

    "Funded Debt" means at any date that portion of the Debt
of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date, included only by
clauses (i) through (vi) of the definition of Debt.

    "Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person or in any manner
providing for the payment of any Debt of any other Person or
otherwise protecting the holder of such Debt against loss
(whether by agreement to keep-well, to purchase assets,
goods, securities, services, or to take-or-pay or otherwise);
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
correlative meaning.

    "Guarantor" means Pentair, Inc., a Minnesota corporation,
and its successors.

    "Interbank Offered Rate" has the meaning set forth in
Section 2.06.

    "Interest Period" means the period commencing on the date
of such Borrowing and ending one, two, three, or six months
thereafter, as the Borrower may elect in the applicable Notice
of Borrowing, provided that:

            any Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;

    any Interest Period which begins on the last 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 (iii) below,
end on the last Business Day of a calendar month; and

    if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made but does not
end on such date, then (a) the principal amount (if any) of each
Loan required to be repaid on such date shall have an Interest
Period ending on such date and (b) the remainder (if any) of
each such Loan shall have an Interest Period determined as set
forth above.

    "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 Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Lending Office
by notice to the Borrower and the Agent.

    "Leverage Ratio" means at any date the ratio of
Consolidated Debt to Consolidated Tangible Net Worth.

    "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset.  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 assets.

    "Loan" means a Loan to be made by a Bank pursuant to
Section 2.01; unless otherwise provided in a notice pursuant to
Section 2.04, all Loans shall be made in Deutschmarks.

    "LSPI" means Lake Superior Paper Industries, a Minnesota
joint venture between Minnesota Paper, Incorporated and
Pentair Duluth Corp.

    "LSPI 1987 Lease" means the Sale and Leaseback of
LSPI's Supercalendered Paper Mill dated December 31, 1987
and the documents related thereto, as they may be amended
from time to time.

    "LSPI Fiber" means LSPI Fiber Co., a Minnesota joint
venture between Minnesota Pulp Incorporated II and Pentair
Duluth Pulp Corp., a subsidiary of Duluth Holdings (Paper)
Corp., and an indirect subsidiary of Guarantor.

    "Margin" has the meaning set forth in Section 2.06.

    "Notes" means the promissory notes of the Borrower in the
form of Exhibit A.

    "Notice of Borrowing" has the meaning set forth in Section
2.03.

    "Participant" and "Participation" have the meanings set forth
in Section 8.06(b).

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

    "Principal Repayment Dates" means the dates on which the
principal of the Loans is required to be repaid pursuant to
Section 2.10.

    "Refinancing Loan" means a Loan with respect to which,
after giving effect to the Loan and the application of the
proceeds thereof, no increase results in the aggregate
outstanding principal amount of Loans made by any Bank.

    "Regulatory Change" means, after the date hereof, the
adoption of any applicable law, rule or regulation, or any
change therein, 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 with any
request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency.

    "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 at least
66-2/3% of all Loans outstanding.

    "Reserve Percentage" has the meaning set forth in Section
2.06.

    "Revolving Credit Period" means the period from the date
hereof to and including January 1, 1997 (or if such day is not
a Business Day, the next succeeding day which is a Business
Day), as such Period may be extended in accordance with
Section 2.01(c).

    "Revolving Credit Termination Date" means January 1,
1997, (or if such day is not a Business Day, the next
succeeding day which is a Business Day), as such Date may
be extended in accordance with Section 2.01(c).

    "Sale of Receivables" means a sale by the Guarantor or a
Consolidated Subsidiary, with or without recourse or discount,
of an interest in trade receivables of the Guarantor or a
Consolidated Subsidiary pursuant to a receivables purchase
program or a loan secured by such receivables provided that
the value of (a) such receivables sold less amounts collected
on the receivables sold or (b) such receivables in which a
security interest is granted, shall not exceed $60,000,000 in the
aggregate at any one time.

    "SRFI" means Superior Recycled Fiber Industries, a
Minnesota joint venture between LSPI Fiber and Superior
Recycled Fiber Corporation.

    "Subsidiary" means 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
person performing similar functions are at the time directly or
indirectly owned by the Guarantor.  For purposes of this
Agreement, neither LSPI nor LSPI Fiber shall be deemed to be
a Subsidiary of the Guarantor.

    "Taxes" has the meaning set forth in Section 2.21(a).

    "Total Commitment" shall mean the aggregate of the
Commitments of the Banks, as such may be reduced from time
to time pursuant to Section 2.09 or increased from time to time
pursuant to Section 2.01(c)(iii).

    "Unfunded Vested Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, 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 the Guarantor or any
member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.

    "Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the
Guarantor or one or more Wholly-Owned Consolidated
Subsidiaries or by the Guarantor and one or more
Wholly-Owned Consolidated Subsidiaries.

    SECTION 1.02 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
approved 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.

ARTICLE II

THE CREDITS

    SECTION 2.01 Commitments to Lend.

    During Revolving Credit Period.  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 from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment.  Each Borrowing under this subsection shall be
made from the several Banks ratably in proportion to their
respective Commitments and shall be in an aggregate principal
amount of DM 3,000,000 or any larger integral multiple of DM
100,000.  Within the foregoing limits, the Borrower may borrow
under this Section 2.01(a), repay under Section 2.02 or 2.11(a),
and reborrow under this Section 2.01(a) at any time during the
Revolving Credit Period.

    After the Revolving Credit Period.  On and after the
Revolving Credit Termination Date, each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to
make Refinancing Loans to the Borrower on the last day of the
Interest Period for each outstanding Loan in an amount (except
as otherwise provided in Section 2.10) not greater than the
amount of the Loan or Loans made by such Bank maturing and
payable on such day (or, in the case of a Loan in an Alternative
Currency, in an amount not exceeding the Deutschmark
Amount thereof).  The proceeds of each such Refinancing Loan
shall be used solely to repay the Loan or Loans so maturing
and payable on such day or so optionally prepaid on such day. 
The obligations of the Banks to make Loans hereunder, other
than Refinancing Loans, shall cease on the Revolving Credit
Termination Date.

    Extension of Commitment Termination Date.  On or before
October 1, 1995, and on or before October 1 of every second
year thereafter, the Borrower may, by written notice to each
Bank, request that both the Revolving Credit Termination Date
and the Commitment Termination Date be extended for two
years, effective as of the following January 1, provided,
however, that no such request will be considered if the
Revolving Credit Termination Date and the Commitment
Termination Date were not extended upon any previous
request.  The Banks will indicate their acceptance or rejection
of any requested extension as follows:

    If all Banks notify the Borrower through the Agent in writing
within 30 days after receipt of notice of a requested extension
of their acceptance of the requested extension, the extension
shall be deemed to have been granted.

    If Banks which hold in the aggregate less than one-third of
the outstanding Commitments of all of the Banks notify the
Borrower in writing (with copies to the Agent) within 30 days
after receipt of notice of a requested extension that they
consent to the requested extension, the extension shall be
deemed to have been rejected.

    If Banks which hold in the aggregate one-third or more but
less than all of the outstanding Commitments of all of the
Banks notify the Borrower (with copies to the Agent) in writing
within 30 days after receipt of notice of a requested extension
that they consent to the requested extension, the extension
shall be deemed to have been rejected unless the Banks which
consented to the requested extension, or any combination of
the consenting Banks, agree, within 15 days after receipt from
the Borrower of written notice that one or more Banks have
consented to the extension, to increase their Commitment(s) by
the amount of the aggregate Commitments of the
non-consenting Banks.  If the consenting Banks, or any
combination of them, agree to increase their Commitments by
the aggregate amount of the Commitments of the
non-consenting Banks, the requested extension shall be
deemed to have been granted and the Commitments of the
Banks altered as follows:

            If only one Bank agrees to increase its Commitment,
the Commitment of such Bank shall be increased as of the
effective date of the extension by the amount of the
Commitments of the non-consenting Banks.  If more than one
Bank agree to increase their Commitments, the Commitments
of the non-consenting Banks shall be allocated among the
Banks desiring increased Commitments in such proportion or
proportions as the Borrower in its sole discretion elects;
provided, however, that no Bank shall be required to accept an
increase in its Commitment which is larger than the increase to
which it has previously agreed.

    On the effective date of the extension of the Revolving
Credit Termination Date and the Commitment Termination Date,
the Banks which have elected to increase their Commitments
shall make Loans to the Borrower, subject to the terms of
Section 3.01, in the amounts and in the currencies of the
aggregate principal balance of the Notes payable to the
non-consenting Banks.  Each such Bank shall share in such
Loans in the same proportion as the amount by which its
Commitment is increased bears to the aggregate increases in
the Commitments of all of the consenting Banks.  The proceeds
of all Loans made pursuant to this Section 2.01(c)(iii)(2) shall be
paid by the Banks making the same to the Agent which shall
promptly remit the proceeds of such Loans to the
non-consenting Banks in repayment of the Notes payable to
such Banks.  Effective as of the effective date of the extension
of the Revolving Credit Termination Date and the Commitment
Termination Date, the Commitment(s) of the non-consenting
Bank(s) shall terminate.  If the Revolving Credit Termination
Date and the Commitment Termination Date are extended
pursuant hereto, the Borrower shall deliver to each Bank a new
Note, substantially in the form of Exhibit A hereto, in the
amount of the Commitment of such Bank, dated as of the
effective date of the extension.

    Notwithstanding the satisfaction of all conditions referred to
in this Agreement with respect to any Borrowing to be
denominated in Deutschmarks (whether pursuant to Section
2.04(c) or otherwise), if there shall occur on or prior to the date
of such borrowing any change in national or international
financial, political or economic conditions or currency exchange
rates or exchange controls which would in the opinion of the
Agent make it impracticable for the Loans comprising such
borrowing to be denominated in Deutschmarks, then the Agent
shall forthwith give notice thereof to the Borrower and the
Banks, and such Loans shall not be made.

    SECTION 2.02 Maturity.  Each Loan shall be paid in full by
the Borrower on the earlier of (i) the last day of the Interest
Period applicable thereto and (ii) the Commitment Termination
Date.

    SECTION 2.03 Method of Borrowing.

    The Borrower shall give the Agent notice (a "Notice of
Borrowing") by 10:00 a.m. (London time) at least three (one in
the case of the initial Borrowing and eight, in the case of a
Borrowing to be made in an Alternative Currency in accordance
with the provisions of Section 2.04) Business Days before each
Borrowing specifying:

    the date of such Borrowing, which shall be a Business Day,

    the aggregate amount (in Deutschmarks) of such
Borrowing, and

    the duration of the Interest Period applicable to such
Borrowing.

    Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.

    Not later than 12:00 noon (London time) on the date of
each Borrowing, each Bank shall make available its ratable
share of such Borrowing, in Deutschmarks immediately
available to the Agent at its address specified pursuant to
Section 8.01, or, subject to the provisions of Section 2.04, if
such Borrowing is to be made in an Alternative Currency, make
available the Equivalent Amount of such Alternative Currency on
that day in such funds as may then be customary for the
settlement of international transactions in the Alternative
Currency) to the account of the Agent at such place as shall
have been notified by the Agent to the Banks by not less than
five Business Days' notice.  Unless the Agent determines that
any applicable condition specified in Article III 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.  Notwithstanding the foregoing provisions of this
Section, to the extent that a Loan made by a Bank matures on
the date of a requested Loan in the same currency, such Bank
shall apply the proceeds of the Loan it is then making to the
repayment of the maturing Loan.

    SECTION 2.04 Loans in an Alternative Currency.

    Each Bank severally agrees to make Loans pursuant to
Section 2.01 in an Alternative Currency upon satisfaction of
each of the following conditions:

              the Borrower by notice to the Agent not less than
eight Business Days prior to the date of Borrowing shall have
requested that such Loans be denominated in an Alternative
Currency specified in such notice for the specified period to
constitute the Interest Period applicable to such Loan,

     after giving effect to such Borrowing the Loans shall be
denominated in not more than two Alternative Currencies,

    each of the Banks shall have confirmed its agreement that
such Loans shall be so denominated by notice to the Agent not
later than the close of business in London on the sixth Business
Day prior to the date of such Borrowing, and

     not later than Noon (London time) on the fifth Business
Day prior to the date of such Borrowing the Agent shall have
received notice from the Borrower of its irrevocable election to
have such Loans so denominated.

    Any Borrowing pursuant to Section 2.01 which is to be
made in an Alternative Currency in accordance with subsection
(a) shall be advanced in the Equivalent Amount of the
Deutschmark Amount thereof and shall be repaid or prepaid in
such Alternative Currency in the amount borrowed.  Interest
payable on any Loan denominated in an Alternative Currency
shall be paid in such Alternative Currency.

    Notwithstanding the satisfaction of all conditions referred to
in subsection (a) with respect to any Borrowing, if there shall
occur on or prior to the date of such Borrowing any change in
national or international financial, political or economic
conditions or currency exchange rates or exchange controls
which would in the opinion of the Agent make it impracticable
for the Loans comprising such Borrowing to be denominated in
the Alternative Currency specified by the Borrower, then the
Agent shall forthwith give notice thereof to the Borrower and the
Banks, and such Loans shall not be denominated in such
Alternative Currency but, subject to Section 2.01(d), shall be
made on the date of such Borrowing in Deutschmarks unless
the Borrower notifies the Agent at least three Business Days
before such date that it elects not to borrow on such date.

    SECTION 2.05 Notes.

    The Loans of each Bank shall be evidenced by a single
Note payable to the order of such Bank for the account of its
Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.

    Upon receipt of each Bank's Note pursuant to Section
3.02(a), the Agent shall forward such Note to such Bank.  Each
Bank may record, and prior to any transfer of its Note may
endorse, on the schedules forming a part of the Note
appropriate notations to evidence the date and amount of each
Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto and, in the
case of Loans denominated in an Alternative Currency, the
currency, amount and Deutschmark Amount of such Loans. 
Each Bank is hereby irrevocably authorized by the Borrower so
to record and endorse and to attach to and make a part of any
Note a continuation of any such schedule as and when
required.

    SECTION 2.06 Interest Rate and Payment.

    Each Loan shall bear interest on the outstanding principal
amount thereof, for each Interest Period applicable thereto, at
a rate per annum equal to the applicable Fixed Rate.  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 date thereof.  Any
overdue principal of and, to the extent permitted by law,
overdue interest on, any Loan shall bear interest, payable on
demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at
a rate per annum equal to the sum of 1% plus the Margin plus
the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (i) the interest rate per
annum at which one day (or, if such amount due remains
unpaid more than three Business Days, then for such other
period of time not longer than six months as the Agent may
elect) deposits in Deutschmarks in an amount approximately
equal to the Agent's portion of such overdue payment are
offered to the Agent in the London interbank market for the
applicable period determined as provided above by (ii) 1.00
minus the Reserve Percentage.

    The "Fixed Rate" applicable to any Interest Period means a
rate per annum equal to the sum of (a) the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of
1%) by dividing (i) the applicable Interbank Offered Rate by (ii)
1.00 minus the Reserve Percentage plus (b) the Margin.

    The "Interbank Offered Rate" applicable to any Interest
Period means the average rate per annum (rounded upwards,
if necessary, to the next higher one hundred-thousandths of a
percent) at which deposits in Deutschmarks are offered to the
Agent by major banks in the interbank eurodollar market at
approximately 11:00 a.m. (London time) two Business Days
before the first day of such Interest Period in an amount
approximately equal to the Agent's portion of the principal
amount of the Borrowing to which such Interest Period is to
apply and for a period of time comparable to such Interest
Period.

    The "Reserve Percentage" means for any day that
percentage expressed as a decimal (including all basic,
supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled
changes in reserve requirements during such Interest Period)
which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor)
which is the average of the reserve requirements for the Agent
in effect on such day in respect of new deposits having a
maturity comparable to the Interest Period for such Loan and
in an amount of $100,000 or more.  The Fixed Rate shall be
adjusted automatically on and as of the effective date of any
change in the Reserve Percentage.

    The "Margin" means

    Leverage  Ratio:                          Margin  :

    0.8:1 or less                           .300 of 1%

    equal to or less than 1.2:1
    but more than 0.8:1                     .375 of 1%

    more than 1.2:1                         .550 of 1%

    The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
Rate.  Assuming an Interbank Offered Rate for a two month
Interest Period of 6.0%, a Reserve Percentage of 0%, and a
Margin of .300 of 1%, the Fixed Rate would equal:

   .06
- ---------- + .00300 = .06 + .00300 = .06300 = 6.3%
1.00 - 0

    The Agent shall determine each interest rate applicable to
the Loans hereunder and shall give prompt notice to the
Borrower and the other Banks by telex, telecopy or cable of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.

    Except as described in this Section 2.06(c), for purposes of
determining Margin pursuant to Section 2.06(a), the Leverage
Ratio during any quarter will be treated as if it remained
constant during the quarter.  The Leverage Ratio shall be
reported on a quarterly basis pursuant to Section 5.01(c).  If as
reported at the end of any quarter the Leverage Ratio has
increased so that the Margin based upon such Leverage Ratio
will be higher than during the previous quarter (such increase
being a "Higher Level"), the Borrower shall report which month
during the preceding quarter the Higher Level occurred and
shall pay to the Agent for the account of each Bank in ratable
shares, for such month and all succeeding months of such
quarter, the difference between the Margin if paid at such
Higher Level and the Margin actually paid.  The Borrower may
inform the Agent at any time by written notice, supported by a
summary balance sheet, that the Leverage Ratio has been
reduced so that the Margin based upon such Leverage Ratio
will be lower than previously (such reduction being a "Lower
Level"), and effective upon such notice shall pay as required by
this Agreement the Margin associated with such Lower Level.

    SECTION 2.07 Facility Fees.

    (a)     During the Revolving Credit Period, the Borrower
shall pay to the Agent for the account of each Bank in ratable
shares a facility fee at the rate of .225 of 1% per annum on the
Total Commitment.  Such facility fees shall accrue from and
including the date of this Agreement to but excluding the last
day of the Revolving Credit Period and shall be payable
quarterly in arrears on the last day of each calendar quarter
during the Revolving Credit Period.

    (b)     From and after the last day of the Revolving Credit
Period, the Borrower shall pay to the Agent for the account of
each Bank in ratable shares a facility fee on the amount of
Loans outstanding from time to time at the rate of .225 of 1%
per annum.  Such facility fees shall be payable quarterly in
arrears on the last day of each calendar quarter and on the day
all outstanding Loans are paid in full.

    SECTION 2.08 Duration of Interest Periods.  The duration
of each Interest Period shall be as specified in the applicable
Notice of Borrowing.

    SECTION 2.09 Termination or Reduction of Commitments. 
The Borrower may, upon at least three Business Days' notice
to the Agent, terminate entirely at any time, or proportionately
reduce from time to time by an aggregate amount of DM
5,000,000 or any larger multiple of DM 1,000,000, the portions
of the Commitments in excess of the sum of the Loans
outstanding.  If the Commitments are terminated in their
entirety, all accrued facility fees shall be payable on the effective
date of such termination.

    SECTION 2.10 Required Repayments.  The Borrower shall
repay, and there shall become due and payable, on each April
1, July 1, October 1 and January 1, beginning the April 1
following the Revolving Credit Termination Date and thereafter
until the Commitment Termination Date, an aggregate principal
amount of the Loans equal to one-sixteenth of the aggregate
principal amount of the Loans outstanding at the end of the
Revolving Credit Period; provided that in any event the
outstanding Loans shall be repaid in full on or before the
Commitment Termination Date.  Each such required repayment
shall be applied to repay the Loans of the several Banks in
proportion to their respective Commitments.  Payments made
pursuant to this Section may not be reborrowed.  If at any time
after the end of the Revolving Credit Period the Borrower repays
any Loans in an amount which exceeds the sum of (a) principal
amounts then owing under this Section plus (b) the amount of
any Refinancing Loans borrowed to repay such Loans, then the
amount of such excess shall be applied to reduce the amount
of any subsequent repayment required by this Section in
inverse chronological order.

    SECTION 2.11 No Optional Prepayment.  The Borrower
may not prepay Loans prior to the last day of their respective
Interest Periods.

    SECTION 2.12 General Provisions as to Payments.

            The Borrower shall make each payment to be made
in Deutschmarks of principal of, and interest on, the Loans and
facility fees hereunder not later than 12:00 noon (London time)
on the date when due, in Deutschmark funds as may then be
customary for settlement of similar transactions immediately
available to the Agent at its address referred to in Section 8.01
(or in the case of fees payable in Dollars not later than 12:00
noon (New York time) on the date when due, in federal or other
funds immediately available to the Agent at such address.  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.

    All payments to be made by the Borrower hereunder or
under the Notes in an Alternative Currency pursuant to Section
2.04 shall be made in such Alternative Currency in such funds
as may then be customary for the settlement of international
transactions in such Alternative Currency for the account of the
Agent, at such time and at such place as shall have been
notified by the Agent to the Borrower and the Banks by not less
than four Business Days' notice.  The Agent will promptly cause
such payments to be distributed to each Bank in like funds.

    Whenever any payment of facility fees or principal of, or
interest on, any Loans shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended
to the next succeeding Business Day unless as a result thereof
it would fall in the next calendar month, in which case it shall be
advanced to the next preceding 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 Loan for any reason on
any day other than the last day of an Interest Period applicable
thereto, or if the Borrower fails to borrow any Loans after notice
has been given to any Bank in accordance with Section 2.03(b),
the Borrower shall reimburse each Bank on demand for any
resulting loss or expense incurred by it, 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; 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.  Facility
fees 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
thereof).  Interest on Loans shall be computed on the basis of
a year of 360 days and paid for the actual number of days
elapsed, calculated as to each Interest Period from and
including the first day thereof to but excluding the last day
thereof.

    SECTION 2.15 Lending Unlawful.  In the event that any
Regulatory Change shall make it unlawful or impossible for any
Bank to make, maintain or fund any Loan, the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall, upon the happening of such Regulatory Change, forthwith
terminate and such Bank shall, by telephonic notice confirmed
in writing to the Borrower and the Agent, declare that such
obligation has so terminated.  Upon receipt of such notice, the
Borrower shall immediately prepay in full the then outstanding
principal amount of each such Loan together with accrued
interest.  If circumstances subsequently change so that such
Bank shall no longer be so affected, it shall so notify the
Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall be reinstated.

    SECTION 2.16 Funds Unavailable.  Notwithstanding any
other provision of this Agreement, if, prior to the date on which
all or any portion of the principal amount of the Loans is to be
made, any Bank shall determine for any reason whatsoever
(which determination shall be conclusive and binding on the
Borrower), that

    deposits in the applicable currency and amounts and for
the relevant Interest Period are not available to such Bank in the
relevant market, or

    by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to such Loans,

such Bank shall promptly give notice to the Borrower and the
other Banks of such determination, and the obligation of such
Bank under Section 2.01 to make or maintain any Loan shall,
upon such notification, forthwith terminate and the Borrower
shall immediately prepay all such Loans, together with accrued
interest.  If circumstances subsequently change so that such
Bank shall no longer be so affected, such Bank shall so notify
the Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall be reinstated.

    SECTION 2.17 Increased Costs and Reduced Returns.

    If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, 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 the
Banks (or their Lending Offices) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency:

            shall subject any Bank to any tax, duty or other
charge with respect to its obligation to make Loans, its Loans,
or its Notes, or shall change the basis of taxation of payments
to such Bank of the principal of or interest on its Loans or in
respect of any other amounts due under this Agreement, in
respect of its Loans or its obligation to make Loans, (except for
changes in the taxation of the overall net income of such Bank);
or

    shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any
included in a Reserve Percentage, as applicable), special
deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, such Bank or shall
impose on such Bank or the interbank eurocurrency market any
other condition affecting its obligation to make Loans, its Loans
or its Notes;

and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any Loan, or to reduce the
amount of any sum received or receivable by such Bank under
this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15
days after demand by such Bank, the Borrower agrees to pay
to such Bank such additional amount or amounts as will
compensate it for such increased cost or reduction.

    If after the date hereof, any Bank shall have determined that
the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, 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 such
Bank with 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 such Bank's capital as
a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's
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, the Borrower shall
pay to such Bank such additional amount or amounts as will
compensate it for such reduction.

    Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section
2.17 and will designate a different branch or office with respect
to this Agreement, if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in
the sole judgment of such Bank, be otherwise disadvantageous
to such Bank.  A certificate of each Bank claiming
compensation under this Section 2.17 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, each Bank may use any reasonable averaging
and attribution methods.

    If any Bank demands compensation under this Section
2.17, the Borrower may at any time, upon at least five Business
Days' prior notice to such Bank, prepay outstanding Loans of
such Bank, together with accrued interest to the date of
prepayment.

    SECTION 2.18 Pro Rata Sharing.  If any holder of any Note
shall obtain any payment (whether voluntary, involuntary, by
application of offset or otherwise) of principal of or interest on
such Note in excess of its pro rata share of payments then or
thereafter obtained by all holders of principal of or interest on
all Notes, such holder shall purchase from the other holders of
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received ratably
with such other holders; provided, however, that if all or any
portion of the excess payment is thereafter recovered from such
purchasing holder, the purchase shall be rescinded and the
purchase price restored pro rata according to the extent of such
recovery, but without interest.  Upon the occurrence of an Event
of Default hereunder, all payments received by each Bank or
holder of any Note from the Borrower or otherwise received with
regard to the Borrower's obligations to such Bank (whether
such payments are voluntary, involuntary, by application of
offset or otherwise), notwithstanding such other indebtedness
of the Borrower to such Bank or holder, shall be applied in the
manner set forth in the immediately preceding sentence to the
extent such payments are in excess of such Bank's or holder's
pro rata share.  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 2.19 INTENTIONALLY OMITTED.

    SECTION 2.20.  Judgment Currency.  If for the purposes of
obtaining judgment in any court it is necessary to convert a
sum due from the Borrower hereunder or under any of the
Notes in the currency expressed to be payable herein or under
the Note (the "specified currency") into another currency, the
parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent
could purchase the specified currency with such other currency
at the Agent's London office on the Business Day preceding
that on which final judgment is given.  The obligations of the
Borrower in respect of any sum due to any Bank or the Agent
hereunder or under any Note shall, notwithstanding any
judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day
following receipt by such Bank or the Agent (as the case may
be) of any sum adjudged to be so due in such other currency
such Bank or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the
specified currency with such other currency; if the amount of
the specified currency so purchased is less than the sum
originally due to such Bank or the Agent, as the case may be,
in the specified currency, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank or
the Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the
sum originally due to any Bank or the Agent, as the case may
be, in the specified currency and (b) any amounts shared with
other Banks as a result of allocations of such excess as a
disproportionate payment to such Bank under Section 2.18,
such Bank or the Agent, as the case may be, agrees to remit
such excess to the Borrower.

    SECTION 2.21.  Taxes and Costs.  

    All payments made by the Borrower or the Guarantor of
principal of and interest on any Loans or of fees or other
amounts payable hereunder are payable without deduction for
or on account of any present or future taxes, duties or other
charges (except for income and franchise taxes of the
jurisdiction in which the Lending Office of a Bank is located or
under whose law such Bank is incorporated) levied or imposed
by the government of any jurisdiction or by any political
subdivision or taxing authority thereof or therein through
withholding or deduction with respect to any such taxes, duties
or other charges (hereinafter called, with such exceptions,
"Taxes").  If any Taxes are so levied or imposed the Borrower
or the Guarantor, as the case may be, will pay additional
interest or will make additional payments in such amounts so
that every net payment of principal of and interest on the Loans
and of other amounts payable hereunder, after withholding or
deduction for or on account of any present or future Taxes, will
not be less than the amount agreed.  The Borrower or the
Guarantor, as the case may be, shall furnish to each Bank
certified copies of official receipts evidencing the payment by
the Borrower or the Guarantor, as the case may be, of all Taxes
so levied or imposed within 45 days after the date any such
payment is due pursuant to applicable law.  In addition, the
Borrower will indemnify and hold harmless each Bank against
and reimburse to each Bank upon demand the amount of any
Taxes so levied or imposed and paid by such Bank.  The
agreements of the Borrower and the Guarantor under this
Section 2.21 shall survive the repayment and cancellation of the
Loans.

    If the cost to any Bank of making or maintaining any Loans
is increased, or the amount of any sum received or receivable
by any Bank (or its Lending Office) in respect of its Loans is
reduced, by an amount deemed by such Bank to be material,
by reason of the fact that the Borrower is incorporated in, or
conducts business in, a jurisdiction outside the United States,
the Borrower shall indemnify such Bank for the increased cost
or reduction within 15 days of demand by such Bank (with a
copy to the Agent).  A certificate of any Bank claiming
compensation under this Section 2.21(b) and setting forth the
additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error.

    Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation or the payment of
additional amounts pursuant to this Section 2.21 and will
designate a different Lending Office if such designation will
avoid the need for, or reduce the amount of, such
compensation or additional amounts and will not, in the sole
judgment of such Bank, be otherwise disadvantageous to such
Bank.

ARTICLE III

CONDITIONS TO BORROWINGS

    The obligations of each Bank to make a Loan on the
occasion of each Borrowing pursuant to Article II is subject to
the satisfaction of the following conditions:

    SECTION 3.01 All Borrowings.  In the case of each
Borrowing:

    receipt by the Agent of a Notice of Borrowing as required
by Sections 2.03 or 2.04;

    the fact that, as of the time immediately after such
Borrowing, no Default shall have occurred and be continuing;

    the fact that the representations and warranties of the
Borrower and Guarantor contained in this Agreement shall be
true on and as of the date of such Borrowing; and

    the fact that, as of the time immediately after such
Borrowing, the aggregate principal amount of all Loans
outstanding shall not exceed the Total Commitment hereunder.

Each Notice of Borrowing and 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 (b), (c) and (d) of this Section.

    SECTION 3.02 First Borrowing.  On or before the date of
the execution and delivery of this Agreement:

    receipt by each Bank for the account of such Bank of a
duly executed Note, dated on or before the date of such
Borrowing, complying with the provisions of Section 2.05;

    receipt by each Bank of an opinion of counsel for the
Borrower and Guarantor, substantially in the form of Exhibit B
hereto;

    receipt by each Bank of a certificate signed by an officer of
the Borrower and of the Guarantor, to the effect set forth in
clauses (b), (c) and (d) of Section 3.01, and containing the
resolutions of the Borrower and the Guarantor authorizing the
execution, delivery and performance of this Agreement, the
Notes and the Guaranty Agreement; and

    receipt by each Bank of an incumbency certificate which
shall identify by name and title and bear the signatures of the
officers of the Borrower authorized to sign this Agreement and
the Notes, upon which certificate the Banks shall be entitled to
rely until informed in writing by the Borrower of any change.

The documents and opinions referred to in this Section shall be
delivered to each Bank no later than the date of the execution
and delivery of this Agreement.  The certificate and opinions
referred to in clauses (b) and (c) above shall be dated no more
than ten Business Days before the date of the first Borrowing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

    The Borrower and Guarantor represent and warrant that:

    SECTION 4.01 Corporate Existence and Power.  The
Borrower is a limited liability company under the laws of
Germany, with its seat in Straubenhardt, Germany and
registered in the Handelsregister in the Amtsgericht Pforzheim,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted and proposed to be
conducted.  The Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of
Minnesota and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.

    SECTION 4.02 Corporate and Governmental Authorization;
Contravention.  The execution, delivery and performance by the
Borrower and the Guarantor of this Agreement and by the
Borrower of the Notes are within their respective corporate
power, 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 Guarantor respectively or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower or Guarantor respectively or result in the
creation or imposition of any Lien on any asset of the Borrower
or Guarantor respectively or any of the Guarantor's
Subsidiaries.

    SECTION 4.03 Binding Effect.  This Agreement constitutes
a valid and binding agreement of the Borrower and Guarantor
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding obligations
of the Borrower.

    SECTION 4.04 Financial Information.

    The consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of December 31, 1992 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Deloitte & Touche
and set forth in the Guarantor's annual report for the year
ended December 31, 1992 as filed with the Securities and
Exchange Commission on Form 10-K, a copy of which has
been delivered to each Bank, fairly present, in conformity with
generally accepted accounting principles, the consolidated
financial position of the Guarantor and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.

    The unaudited consolidated balance sheet of the Guarantor
and its Consolidated Subsidiaries as of September 30, 1993
and the related unaudited consolidated statements of income
and cash flows for the nine months then ended, set forth in the
Guarantor's quarterly report for the fiscal quarter ended
September 30, 1993 as filed with the Securities and Exchange
Commission on Form 10-Q, a copy of which has been delivered
to each Bank, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent
with the financial statements referred to in paragraph (a) of this
Section, the consolidated financial position of the Guarantor
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).

    Since September 30, 1993 there has been no material
adverse change in the business, financial position, results of
operations or prospects of the Guarantor and its Consolidated
Subsidiaries, considered as a whole.

    SECTION 4.05 Litigation.  There is no action, suit or
proceeding pending, or to the knowledge of the Borrower or
Guarantor threatened, against or affecting the Guarantor or any
of its Subsidiaries, including the Borrower, 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 or the Guarantor and its Consolidated Subsidiaries or
which in any manner questions the validity of this Agreement or
the Notes.

    SECTION 4.06 Compliance with ERISA.  The Guarantor and
each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.

    SECTION 4.07 Taxes.  The Guarantor and its Subsidiaries
have filed all foreign, United States federal, state and local
income, excise and other tax returns which are required to be
filed by them and have paid or made provision for the payment
of all taxes which have become due pursuant to such returns
or pursuant to any assessment in respect thereof received by
the Guarantor or any Subsidiary, except such taxes, if any, as
are being contested in good faith and for which adequate
reserves have been provided.  The federal income tax liability
of the Guarantor has been determined by the Internal Revenue
Service and paid for all years prior to and including the fiscal
year ended December 31, 1982.

    SECTION 4.08 Subsidiaries.  Each of the Guarantor's
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.

    SECTION 4.09 Not an Investment Company.  Neither the
Borrower nor the Guarantor is an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended.

ARTICLE V

COVENANTS

    The Borrower and Guarantor agree that so long as any
Bank has any Commitment hereunder or any amount payable
under any Note remains unpaid:

    SECTION 5.01 Information.  The Guarantor will deliver to
each of the Banks:

    as soon as available and in any event within 90 days after
the end of each fiscal year of the Guarantor, a consolidated
balance sheet of the Guarantor 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
accordance with the rules and regulations of the Securities and
Exchange Commission by Deloitte & Touche or other
independent public accountants of nationally recognized
standing;

    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 Guarantor, a consolidated balance sheet of the Guarantor
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 Guarantor's
fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the
Guarantor'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 Guarantor;

    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
Guarantor (i) setting forth in reasonable detail the calculations
required to establish whether the Guarantor was in compliance
with the requirements of Sections 5.02 to 5.09, inclusive, on the
date of such financial statements and (ii) stating whether there
exists on the date of such certificate any Default and, if any
Default then exists, setting forth the details thereof and the
action which the Guarantor is taking or proposes to take with
respect thereto;

    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 there existed on the date of such
statements any Default and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;

    forthwith upon the occurrence of any Default, a certificate
of the chief financial officer or the chief accounting officer of the
Guarantor setting forth the details thereof and the action which
the Guarantor is taking or proposes to take with respect
thereto;

    promptly upon the mailing thereof to the shareholders of
the Guarantor generally, copies of all financial statements,
reports and proxy statements so mailed;

    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 annual, quarterly
or monthly reports which the Guarantor shall have filed with the
Securities and Exchange Commission;

    if and when the Guarantor or any member of the Controlled
Group 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 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;

    simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a balance
sheet and statement of income of LSPI for the corresponding
period in detail reasonably comparable to the information
provided by the Guarantor with respect to its Consolidated
Subsidiaries on its reports as filed with the Securities and
Exchange Commission on Form 10-K or Form 10-Q;

    from time to time such additional information regarding the
financial position or business of the Borrower or the Guarantor
as the Agent, at the request of any Bank, may reasonably
request;

    as soon as available and in any event (i) within 90 days
after the end of each fiscal year of the Guarantor and (ii) within
45 days of the end of each of the first three quarters of each
fiscal year of the Guarantor, a consolidating balance sheet and
the related consolidating statement of income, with respect only
to Guarantor's operating businesses, for the relevant fiscal
period (and, for interim fiscal quarters, for the portion of the
year ended at the end of such adjustments) certified as to
fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the
chief accounting officer of the Guarantor; and

    as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a balance sheet of
the Borrower as of the end of such fiscal year and the related
statement of income for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year,
certified as to fairness of presentation, GOB (generally accepted
accounting principals in Germany) and consistency by the chief
financial officer or the chief accounting officer of the Borrower;
and

    simultaneously with the delivery of the financial statements
referred to in clause (l) above, a certificate of the chief financial
officer or the chief accounting officer of the Borrower stating
whether there exists on the date of such certificate any Default
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.

    SECTION 5.02 Current Assets.  Consolidated Current
Assets will at no time be less than 120% of Consolidated
Current Liabilities.

    SECTION 5.03 Leverage Ratio.  The Leverage Ratio will at
no time exceed 2.0:1.0 and the ratio of Funded Debt to
Consolidated Tangible Net Worth will at no time exceed 1.5:1.0.

    SECTION 5.04 Minimum Consolidated Tangible Net Worth. 
Consolidated Tangible Net Worth will at no time be less than
the sum of (a) $300,000,000 plus (b) 50% of Consolidated
Cumulative Net Income, plus (c) 80% of proceeds of all classes
of equity securities issued by the Guarantor after February 11,
1994, plus (d) 80% of the amount by which the principal of the
Loan made March 7, 1990 by the Guarantor to the Pentair
ESOP Trust is reduced after December 31, 1993.

    SECTION 5.05 Expense Ratio.  At any time when the
Leverage Ratio exceeds 1.2:1.0, as of the end of each quarter
of each of the Guarantor's fiscal years, the ratio of (a)
consolidated net income before taxes plus (to the extent
deducted in calculating net income before taxes) interest and
rent expense to (b) rent and interest expense, calculated on a
cumulative basis for the four most recent fiscal quarters and
excluding in each case rent and interest expense of LSPI and
of any other joint venture or entity in which the Guarantor or a
Consolidated Subsidiary has an ownership interest but which is
not a Subsidiary, will not be less than 1.5:1.0.

    SECTION 5.06 Subsidiary Debt.  Debt incurred by the
Wholly-Owned Consolidated Subsidiaries from and after the
date of this Agreement and outstanding at any time, excluding:

            obligations assumed in connection with acquisitions;

    Debt incurred in respect of LSPI;

    Debt incurred by such Subsidiary in a country other than
the United States or Canada with respect to operations in such
country including specifically but not exclusively indebtedness
incurred under this Agreement; and

    Debt incurred in respect of any Sale of Receivables;

will not exceed fifteen percent (15%) of Consolidated Tangible
Net Worth.

    SECTION 5.07 Negative Pledge.  Neither the Guarantor nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien securing Debt on any asset now owned or
hereafter acquired by it, except:

    Liens existing on the date of this Agreement; each Lien
which secures Debt in an aggregate principal amount of more
than $1,000,000 is disclosed in the financial information referred
to in Section 4.04;

    any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event;

    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;

    any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Guarantor or a Consolidated Subsidiary and not created in
contemplation of such event;

    any Lien existing on any asset prior to the acquisition
thereof by the Guarantor or a Consolidated Subsidiary and not
created in contemplation of such acquisition;

    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;

    any Lien arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with court
proceedings so long as the execution or other enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith by appropriate proceedings;

    any Lien on trade receivables arising from a Sale of
Receivables; and

    Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at
any time outstanding not exceeding 15% of Consolidated
Tangible Net Worth.

    SECTION 5.08 Consolidations, Mergers and Sales of
Assets.  Neither the Borrower nor the Guarantor will merge or
consolidate with any other Person or sell, lease, transfer or
otherwise dispose of substantially all of its assets as an entirety
to any other Person unless:

            the Person surviving the merger or consolidation is
the Borrower or the Guarantor, as the case may be; and

    immediately after giving effect to any such action, no
Default shall have occurred and be continuing.

    SECTION 5.09 Acquisitions.  At any time when the
Leverage Ratio exceeds 1.2:1, the Guarantor will not acquire
other businesses if the aggregate amount of cash used for such
acquisitions since the Leverage Ratio remained in excess of
1.2:1 exceeds $50,000,000.

    SECTION 5.10 Use of Proceeds.  The proceeds of the
Loans made under this Agreement will be used by the Borrower
for general corporate purposes including future acquisitions,
capital expenditures and working capital.  None of such
proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or
carrying any "margin stock" within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System. 
Neither the Borrower nor the Guarantor will engage principally,
or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any such
margin stock within the meaning of such Regulation U.

ARTICLE VI

DEFAULTS

    SECTION 6.01 Events of Default.  If one or more of the
following events ("Events of Default") shall have occurred and
be continuing:

    the Borrower shall fail to pay within five days of the date
due any principal of or interest on any Note, any fees or any
other amount payable hereunder;

    the Borrower or the Guarantor shall fail to observe or
perform any covenant contained in Sections 5.02 to 5.09,
inclusive;

    the Borrower or Guarantor shall fail to observe or perform
any other covenant or agreement contained in this Agreement
for 30 days after written notice thereof has been given to the
Borrower by the Agent at the request of any Bank;

    any representation, warranty, certification or statement
made by the Borrower or Guarantor 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;

    any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than the Notes)
of the Guarantor or any Subsidiary equal to or exceeding
$10,000,000 in the aggregate for all such Debt or enables (or,
with the giving of notice or lapse of time or both, would enable)
the holder of any such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;

    the Borrower, Guarantor or any 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;

    an involuntary case or other proceeding shall be
commenced against the Borrower, the Guarantor or any
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 60 days; or an order
for relief shall be entered against the Borrower, Guarantor or
any Subsidiary under the federal bankruptcy laws or similar
bankruptcy or insolvency laws of any other applicable
jurisdiction as now or hereafter in effect;

    the Guarantor or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in
excess of $5,000,000 which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or the
Guarantor or any member of the Controlled Group shall file a
distress termination notice with the PBGC and the amount of
the Unfunded Vested Liabilities under that filing exceeds
$2,500,000; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;

    a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Guarantor or any
Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 60 days;

    any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the
outstanding shares of voting stock of the Guarantor; or

    within a period of twelve consecutive months, three-fourths
of the directors of the board of directors of the Guarantor shall
have changed;

then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (a) through (e), or (h)
through (k) above, the Agent shall (i) if requested by Banks
having 50% or more in aggregate amount of the Commitments,
by notice to the Borrower and Guarantor terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing 50% or more in
aggregate principal amount of the Loans, by notice to the
Borrower and Guarantor declare the Notes (together with
accrued interest thereon) to be, and the Notes 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 and Guarantor; (2) in the case
of any of the Events of Default specified in paragraph (f) or (g)
above, without any notice to the Borrower and Guarantor or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower and
Guarantor; and (3) in the case of any of the Events of Default
specified in paragraph (j) or (k) above, in addition to the actions
permitted to be taken pursuant to clause (1) above, if such
Event of Default is due to an unfriendly attempt to acquire
control of the Guarantor (as declared in a resolution of the
board of directors of the Guarantor), the Banks may declare an
additional amount not greater than 10% of the Total
Commitment at such time to be immediately due and payable
to the extent such amount is permitted by applicable law.

    SECTION 6.02 Notice of Default.  The Agent shall give
notice to the Borrower and Guarantor under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.

ARTICLE VII

THE AGENT

    SECTION 7.01 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 7.02 Agent and Affiliates.  The Agent 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 the Agent 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
hereunder.

    SECTION 7.03 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 VI.

    SECTION 7.04 Consultation with Experts.  The Agent may
consult with legal counsel (who may be counsel for the
Borrower or the Guarantor), 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 7.05 Liability of Agent.  Neither the Agent nor any
of its 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 all of the Banks or (ii) in
the absence of its own gross negligence or willful misconduct. 
Neither the Agent nor any of its 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, including any notice given orally by the
Borrower as permitted by the terms of this Agreement; (ii) the
performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, 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 or similar writing) or oral notice
permitted hereunder and believed by it to be genuine or to be
signed or given by the proper party or parties.

    SECTION 7.06 Indemnification.  Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (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 the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.

    SECTION 7.07 Agent's Fees.  The Borrower shall pay to the
Managing Agent, in addition to legal and other expenses
described in Section 8.03, an agency fee of $35,000 per
annum, payable annually in advance, with the first payment of
$35,000 payable on January 1, 1995 and with successive
payments payable on the first day of each January beginning
January 1, 1996 so long as this Agreement shall be in effect.

    SECTION 7.08 Bank Credit Decision.  Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank and based on the financial
statements prepared by the Borrower and such other
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 action under this Agreement.

    SECTION 7.09 Successor Agent.  The Agent may resign at
any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with
cause by written notice received by the Agent from the
Required Banks.   Upon any such resignation or removal,
provided no Default exists, the Borrower shall have the right to
appoint another Bank as successor Agent subject to the
consent of the Required Banks, which consent shall not be
unreasonably withheld.  If such consent is not obtained within
30 days, or if a Default exists, then the Required Banks shall
have the right to appoint, on behalf of the Borrower and the
Banks, a successor Agent.  If no successor Agent shall have
been so appointed by the Required Banks and shall have
accepted such appointment within thirty days after the retiring
Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Borrower and the Banks, a successor
Agent.  Such successor Agent shall be a commercial bank with
an office in the United States and capital and retained earnings
of at least $250,000,000.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges 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 VII
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent hereunder.

ARTICLE VIII

MISCELLANEOUS

    SECTION 8.01 Notices.  All notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar writing), except
where specifically permitted to be given orally, and shall be
given to such party at its address or telex number set forth on
the signature pages hereof or such other address 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 answer back is
received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Agent under Sections 2.01, 2.03,
2.04, 2.06, 2.09, 2.15 or 2.16 shall not be effective until
received.

    SECTION 8.02 No Waiver.  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 8.03 Expenses; Documentary Taxes.  The
Borrower shall pay upon demand (i) all reasonable expenses of
the Agent, including fees and disbursements of attorneys for
the Agent (who may be employees of the Agent), in connection
with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default by the Borrower hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by the
Agent and the Banks, including fees and disbursements of
attorneys for the Agent and the Banks (who may be employees
of the Agent and the Banks), in connection with such Event of
Default and collection and other enforcement proceedings
resulting therefrom.  The Borrower shall indemnify each Bank
against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.

    SECTION 8.04 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,

            increase the Commitment of any Bank or subject
any Bank to any additional obligations,

    reduce the principal of or rate of interest on any Loans or
any fees (other than fees provided for in Section 7.07)
hereunder,

    postpone the date fixed for any payment of principal of or
interest on any Loan or any fees (other than fees provided for
in Section 7.07) hereunder,

    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 Agreement, or

    amend this Section 8.04.

    SECTION 8.05 Collateral.  Each of the Banks represents
that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U of the Board of Governors of the
Federal Reserve System) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

    SECTION 8.06 Successors and Assigns.

    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.

    Any Bank may at any time sell, assign, transfer, grant
participations in, or otherwise dispose of, all or any portion of
its Loans or Notes or of its right, title and interest therein or
thereto or in or to this Agreement (collectively, "Participations")
to any other lending office or to any other Person
("Participants"), subject to the terms contained in this Section
8.06.  Such Bank shall give Notice to the Borrower of any
Participation exceeding six months in duration or granting a
Participation in this Agreement.  No agreement between any
Bank and a Participant may limit the right of such Bank to
consent to amendments to this Agreement unless the Borrower
shall have consented in advance (which consent shall not be
unreasonably withheld) to the grant of a Participation to such
Participant.  Notwithstanding the foregoing, the consent of the
Borrower is not required for the grant of a Participation on
terms which require the Participant's consent to any
amendment of this Agreement which reduces the principal of or
rate of interest on the Participation or postpones the date (other
than by way of extension pursuant to Section 2.01(c)) fixed for
payment of principal or interest on the Participation.  The
Borrower agrees that any Participant may exercise any and all
rights of banker's lien, setoff and counterclaim with respect to
its Participation as fully as if such Participant were the holder of
a Loan in the amount of its Participation.

    No Participant shall be entitled to receive any greater
payment under Section 2.13, 2.17 or 2.21 than the Bank
granting the Participation would have been entitled to receive
with respect to the rights assigned or otherwise transferred.

    SECTION 8.07 Minnesota Law.  This Agreement and each
Note shall be construed in accordance with and governed by
the laws of the State of Minnesota.

    SECTION 8.08 Counterparts; 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 shall become effective when the Agent shall
have received counterparts hereof signed by all of the parties
hereto.

    SECTION 8.09 Highly Leveraged Transaction Classification. 
If the Agent (a) receives notice from any Bank that such Bank
has received notice from a governmental authority having
jurisdiction over such Bank requiring that the Loans be
classified as an "HLT" or "Highly Leveraged Transaction" or (b)
determines that the Loans meet the criteria under which the
Loans are required by the applicable governmental authority to
be classified as an HLT, the Agent shall promptly give notice
thereof to the Borrower, the Guarantor and the Banks.  The
parties hereto shall, as soon as practicable thereafter,
commence negotiations in good faith to reach agreement in a
manner satisfactory to all parties on the extent to which fees or
margins under this Agreement should be increased so as to
reflect the average incremental increase in pricing of loans that
are classified as HLTs as compared to the same loans if they
were not HLTs.  If agreement is not reached within 90 days, the
Banks may establish the increases to the fees and margins and
give notice thereof to the Borrower and the Guarantor, provided
that in no event shall the aggregate increases in fees and
margins pursuant to this Section exceed fifty basis points.  The
Banks acknowledge that such an HLT classification is not a
Default or an Event of Default under the Agreement.  For
purposes of this Section, "HLT" or "Highly Leveraged
Transaction" means the definition of "highly leveraged
transaction" as promulgated by the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, and the Board of
Governors of the Federal Reserve System on October 30, 1989,
in Banking Circular 242 or any successor definition adopted by
such governmental authorities.

ARTICLE IX

GUARANTY

    SECTION 9.01.  Guaranty.  The Guarantor hereby
unconditionally guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of
the principal of and interest on each Note issued by the
Borrower pursuant to this Agreement, and the full and punctual
payment of all other amounts payable by the Borrower under
this Agreement.  Upon failure by the Borrower to pay punctually
any such amount, the Guarantor shall forthwith on demand pay
the amount not so paid at the place and in the manner
specified in this Agreement.

    SECTION 9.02.  Guaranty Unconditional.  The obligations
of the Guarantor hereunder shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:

    any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower under this
Agreement or any Note, by operation of law or otherwise;

    any modification or amendment of or supplement to this
Agreement or any Note;

    any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower
under this Agreement or any Note;

    any change in the corporate existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the
Borrower or its assets or any resulting release or discharge of
any obligation of the Borrower contained in this Agreement or
any Note;

    the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, the
Agent, any Bank or any other corporation or person, whether
in connection herewith or any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim
by separate suit or compulsory counterclaim;

    any invalidity or unenforceability relating to or against the
Borrower for any reason of this Agreement or any Note, or any
provision of applicable law or regulation purporting to prohibit
the payment by the Borrower of the principal of or interest on
any Note or any other amount payable by the Borrower under
this Agreement; or

    any other act or omission to act or delay of any kind by the
Borrower, the Agent, any Bank or any other corporation or
person or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or
equitable discharge of the Guarantor's obligations hereunder.

    SECTION 9.03.  Discharge only upon Payment in Full;
Reinstatement in Certain Circumstances.  The Guarantor's
obligations hereunder shall remain in full force and effect until
the Commitments shall have terminated and the principal of
and interest on the Notes and all other amounts payable by the
Borrower under this Agreement shall have been paid in full.  If
at any time any payment of the principal of or interest on any
Note or any other amount payable by the Borrower under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, the Guarantor's obligations
hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such
time.

    SECTION 9.04.  Waiver by the Guarantor.  The Guarantor
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any
corporation or person against the Borrower or any other
corporation or person.

    SECTION 9.05.  Subrogation.  The Guarantor irrevocably
waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment
hereunder to be subrogated to the rights of the payee against
the Borrower with respect to such payment or against any
direct or indirect security therefor, or otherwise to be
reimbursed, indemnified or exonerated by or for the account of
the Borrower in respect thereof.

    SECTION 9.06.  Stay of Acceleration.  If acceleration of the
time for payment of any amount payable by the Borrower under
this Agreement or the Notes is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this
Agreement shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Agent made at the
request of the requisite proportion of the Banks specified in
Article VI of this Agreement.

    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.

EUROPENTAIR GmbH                    EUROPENTAIR GmbH

                                                    
By: Gerald C. Kitch                 By: Roy T. Rueb
   Title:  Geschaeftsfuehrer           Title:  Prokurist

Waters Edge Plaza                   Waters Edge Plaza
1500 County Road B2 West            1500 County Road B2 West
St. Paul, Minnesota  55113          St. Paul, Minnesota  55113
Attention: Chief Financial Officer  Attention: Chief Financial
                                     Officer
Telecopy:  (612) 639-5209           Telecopy:  (612) 639-5209
Telephone:  (612) 636-7920          Telephone:  (612) 636-7920

PENTAIR, INC.

By: Joseph R. Collins
   Title:  Chief Financial Officer

Waters Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota  55113
Attention:  Chief Financial Officer
Telecopy:  (612) 639-5209
Telephone:  (612) 636-7920

MORGAN GUARANTY TRUST COMPANY
  OF NEW YORK, for itself and
  as Agent

By:William J. Stevenson
    Title:  Vice President

60 Victoria Embankment
London EC4Y OJP
Attn:  Credit Operations
Telex number:  896631 MGT
Telecopy:  (071) 325-8114
Telephone:  (071) 325-1484

with a copy to:

60 Wall Street
New York, New York  10260
Attn:  John M. Mikolay
Telex number:  177615 MGT UT
Telecopy:  (212) 837-5022
Telephone:  (212) 648-6988

CONTINENTAL BANK N.A.,
  for itself and as Agent

By: Barry Watters
    Title:  Vice President

231 South LaSalle Street
Chicago, Illinois  60697
Attn: Barry Watters
Telephone:  (312) 828-6307
Telecopy:  (312) 987-1276

Person to whom Loan correspondence
  should be addressed:

Beverly Boone
231 South LaSalle Street
Chicago, Illinois  60697
Telephone:  (312) 828-1295
Telecopy:  (312) 765-2080

NBD BANK, N.A.

By: Patrick Skiles
    Title: Vice President

611 Woodward Avenue
Detroit, Michigan  48226
Attn:  Patrick P. Skiles
Telephone:  (313) 225-1798
Telecopy:  (313) 225-1671

DRESDNER BANK AG CHICAGO 
AND GRAND CAYMAN BRANCHES

By: John H. Schaus 
    Title:  First Vice President

By: W. J. Murray
    Title:  Vice President

190 South LaSalle Street
Chicago, IL  60603
Attn:  William J. Murray
Telephone:  (312) 444-1318
Telecopy:   (312) 444-1305

Operations Contact:

Ms. Feixiao Dai
Dresdner Bank AG
75 Wall Street
New York, NY  10005
Telephone: (212) 574-0269
Telecopy:  (212) 574-0130

EXHIBIT A

NOTE

                                       Minneapolis, Minnesota
                                                        , 1994

    For value received, EuroPentair GmbH, a German limited
liability company (the "Borrower"), promises to pay to the order
of (the "Bank") the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower pursuant to the
Facility Agreement referred to below, together with interest on
the unpaid principal amounts thereof at the rates and on the
dates set forth in the Facility Agreement.  The Borrower shall
pay each Loan in full on the earlier of (i) the last day of its
Interest Period, including principal payments due on each
Principal Repayment Date and (ii) the Commitment Termination
Date.

    All payments of principal and interest shall be made (i) if in
Deutschmarks, in lawful money of the Federal Republic of
Germany in such funds as may then be customary for the
settlement of international transactions in Deutschmarks at the
office of Morgan Guaranty Trust Company of New York,
London, England or (ii) if in an Alternative Currency, in such
funds as may then be customary for the settlement of
international transactions in such Alternative Currency at the
place specified for payment thereof pursuant to the Facility
Agreement.

    All Loans made by the Bank to the Borrower pursuant to
the Facility Agreement and all payments of the principal thereof
may be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof.

    This Note is one of the Notes referred to in the
Deutschmark Facility Agreement dated February 11, 1994
among the Borrower, Pentair, Inc., the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company
of New York and Continental Bank N.A., as Agents (as
amended from time to time, the "Facility Agreement"). 
Reference is made to such Facility Agreement for provisions for
the prepayment hereof and the acceleration of the maturity
hereof.

PENTAIR, INC.

By 
   Title: 

LOANS AND PAYMENTS OF PRINCIPAL

                                                            

                     Type    Amount of
        Amount       of      Principal       Maturity   Notation
Date    of Loan      Loan    Repaid          Date     Made By

Exhibit B

OPINION OF COUNSEL FOR THE BORROWER

[Date as provided in Section 3.02 of the Facility Agreement]

To the Banks and the Agent
  Referred to Below
c/o Morgan Guaranty Trust Company
  of New York, as Agent
60 Wall Street
New York, New York  10015

Gentlemen:

    We have acted as counsel for EuroPentair GmbH (the
"Borrower") and for Pentair, Inc. (the "Guarantor") in connection
with the Deutschmark Facility Agreement (the "Facility
Agreement") dated as of February 11, 1994 among the
Borrower, the Guarantor, NBD Bank, N.A., Dresdner Bank AG,
Morgan Guaranty Trust Company of New York and Continental
Bank N.A., for themselves and as Agents.  Terms defined in the
Facility Agreement are used herein as therein defined.

    We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion. In such examination we have
assumed the genuineness of all signatures, the authority of all
documents submitted to us as originals and the conformity with
the originals of all documents submitted to us as copies.  We
also assume, for the purposes of this opinion, the due
execution and delivery of the Facility Agreement by each of the
Banks.

    Upon the basis of the foregoing, we are of the opinion that:

    The Borrower is a limited liability company validly existing
under the laws of Germany and has all corporate power and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.

    The execution, delivery and performance by the Borrower
of the Facility Agreement and the Notes are within the
Borrower's corporate powers, 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 the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.

    The Facility Agreement constitutes a valid and binding
agreement of the Borrower and the Notes constitute valid and
binding obligations of the Borrower, enforceable in accordance
with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, moratorium, insolvency or other
laws of general application relating to the enforcement of
creditors' rights or by general principles of equity.

    The Guarantor is a corporation validly existing and in good
standing under the laws of Minnesota and has all corporate
power and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as
now conducted.

    The execution, delivery and performance by the Guarantor
of the Facility Agreement are within the Guarantor's corporate
powers, 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
Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Guarantor or result
in the creation or imposition of any Lien on any asset of the
Guarantor or any of its Subsidiaries.

    The Facility Agreement constitutes a valid and binding
agreement of the Guarantor, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, moratorium, insolvency or other laws of general
application relating to the enforcement of creditors' rights or by
general principles of equity.

    There is no action, suit or proceeding pending, or to the
best of our knowledge threatened, against or affecting the
Borrower or Guarantor or any of their respective 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,
or which in any manner questions the validity of the Facility
Agreement or the Notes.

    Each of the Borrower's and the Guarantor's 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.

    There is no income, stamp or other tax of the Federal
Republic of Germany, or any taxing authority thereof or therein,
imposed by or in the nature of withholding or otherwise, which
is imposed on any payment to be made by the Borrower
pursuant to the Facility Agreement or the Notes, or is imposed
on or by virtue of the execution, delivery or enforcement of the
Facility Agreement or of the Notes.

    As to any matter relating to the Borrower in paragraphs 1
through 3, 7 and 8 above and as to the opinion expressed in
Paragraph 9 above, we have, with your consent, relied solely on
the opinion of Faegre & Benson, Frankfurt, Germany, special
international counsel to the Borrower and Guarantor, a copy of
which opinion is attached.

EXHIBIT 99

PENTAIR
WATERS EDGE PLAZA
1500 COUNTY ROAD B2 WEST
SAINT PAUL, MN 55113-3105
612.636.7920

NEWS RELEASE

DATE:  DECEMBER 22, 1993

FOR RELEASE:  IMMEDIATELY

CONTACT:  MARK CAIN (612) 636-7920

PENTAIR COMPLETES SCHROFF ACQUISITION

ST PAUL, MN - Pentair, Inc. (NASDAQ/NMS:PNTA), the St.
Paul-based manufacturer of industrial products and paper,
today announced it has completed the acquisition of the Schroff
Group, Straubenhardt, Germany.  The transaction included the
net assets and business of the Schroff Group, including its
international subsidiaries.  The purchase is retroactive to
January 1, 1994.

Schroff designs, manufactures and markets cabinets, cases,
subracks and accessories for the electronics industry.  The
company has approximately 1,400 employees with operations
in Germany, France, England, the United States, Japan,
Sweden, Finland, Italy and Taiwan.  Schroff is the largest
manufacturer in Europe's electronic enclosure market and a
world technical leader.  The company's 1993 sales were
approximately $160 million.

Pentair's Hoffman Engineering subsidiary is the leading North
American manufacturer of electrical enclosures and related
products. Schroff and Hoffman Engineering together will
represent leadership in the world-wide enclosure market.  The
combination of electronic enclosures from Schroff and electrical
enclosures from Hoffman provides the most comprehensive
product offering in the world.

Pentair, Inc. is a St. Paul, Minnesota-based company with 1993
sales of $1.3 billion.  The company comprises approximately
9,700 employees in 11 businesses which manufacture electrical
and electronics enclosures; woodworking equipment; power
tools; sporting ammunition; automotive service equipment;
industrial lubrication systems and material dispensing
equipment; pumps; and paper.  Pentair common stock is
quoted on the NASDAQ National Market System under the
symbol: PNTA.