<PAGE>
                                                                    Exhibit 10.1


                                                                  EXECUTION COPY



                                U.S. $115,000,000

                      AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of November 2, 2001

                                      Among

                          CROWLEY MARITIME CORPORATION

                                   as Borrower

                                       and

                        THE INITIAL LENDERS NAMED HEREIN

                               as Initial Lenders

                                       and

                               CITICORP USA, INC.

                  as Administrative Agent and Collateral Agent

                                       and

                            SALOMON SMITH BARNEY INC.

                                   as Arranger

                                       and

                                 CITIBANK, N.A.

                       as Issuing Bank and Swing Line Bank
<PAGE>
                                Table of Contents

<TABLE>
<CAPTION>
                                                                                                                    Page
<S>                                                                                                                 <C>
Article I DEFINITIONS AND ACCOUNTING TERMS.......................................................................     1
         Section 1.01.     Certain Defined Terms.................................................................     1
         Section 1.02.     Computation of Time Periods...........................................................    20
         Section 1.03.     Accounting Terms......................................................................    20

Article II AMOUNTS AND TERMS OF THE ADVANCES.....................................................................    21
         Section 2.01.     The Advances.  (a) Revolving Credit Advances..........................................    21
         Section 2.02.     Making the Revolving Credit Advances..................................................    21
         Section 2.03.     Fees     .............................................................................    24
         Section 2.04.     Termination or Reduction of the Commitments...........................................    24
         Section 2.05.     Repayment of Advances.................................................................    24
         Section 2.06.     Interest .............................................................................    25
         Section 2.07.     Interest Rate Determination...........................................................    25
         Section 2.08.     Optional Conversion of Advances.......................................................    26
         Section 2.09.     Prepayments...........................................................................    26
         Section 2.10.     Increased Costs.......................................................................    27
         Section 2.11.     Illegality............................................................................    28
         Section 2.12.     Payments and Computations.............................................................    28
         Section 2.13.     Taxes    .............................................................................    29
         Section 2.14.     Sharing of Payments, Etc..............................................................    31
         Section 2.15.     Use of Proceeds.......................................................................    32
         Section 2.16.     Issuance of and Drawings and Reimbursement Under Letters of Credit....................    32
         Section 2.17.     Increase in Commitments...............................................................    37

Article III CONDITIONS TO EFFECTIVENESS AND LENDING..............................................................    39
         Section 3.01.     Conditions Precedent to Initial Extension of Credit...................................    39
         Section 3.02.     Conditions Precedent to Each Borrowing and Issuance, Etc..............................    40

Article IV REPRESENTATIONS AND WARRANTIES........................................................................    41
         Section 4.01.     Representations and Warranties........................................................    41

Article V COVENANTS OF THE BORROWER..............................................................................    46
         Section 5.01.     Affirmative Covenants.................................................................    46
         Section 5.02.     Negative Covenants....................................................................    53
         Section 5.03.     Financial Covenants...................................................................    62

Article VI EVENTS OF DEFAULT.....................................................................................    62
         Section 6.01.     Events of Default.....................................................................    62
         Section 6.02.     Actions in Respect of the Letters of Credit upon Default..............................    66

Article VII BORROWER GUARANTY....................................................................................    67
         Section 7.01.     Guaranty..............................................................................    67
         Section 7.02.     Guaranty Absolute.....................................................................    67
         Section 7.03.     Waivers and Acknowledgments...........................................................    68
         Section 7.04.     Subrogation...........................................................................    69
</TABLE>
<PAGE>
                                       ii


<TABLE>
<CAPTION>
                                                                                                                    Page
<S>                                                                                                                 <C>
         Section 7.05.     Continuing Guaranty...................................................................    69

Article VIII THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE CO-AGENT.....................................    70
         Section 8.01.     Authorization and Action..............................................................    70
         Section 8.02.     Agent's Reliance, Etc.................................................................    70
         Section 8.03.     CUSA and Affiliates...................................................................    70
         Section 8.04.     Lender Credit Decision................................................................    71
         Section 8.05.     Indemnification.......................................................................    71
         Section 8.06.     Successor Agents......................................................................    72

Article IX MISCELLANEOUS.........................................................................................    72
         Section 9.01.     Amendments............................................................................    72
         Section 9.02.     Notices, Etc..........................................................................    73
         Section 9.03.     No Waiver; Remedies...................................................................    73
         Section 9.04.     Costs and Expenses....................................................................    73
         Section 9.05.     Right of Set-off......................................................................    75
         Section 9.06.     Binding Effect........................................................................    75
         Section 9.07.     Assignments and Participations........................................................    75
         Section 9.08.     Release of Collateral.................................................................    78
         Section 9.09.     Certain Changes in GAAP...............................................................    79
         Section 9.10.     Confidentiality.......................................................................    79
         Section 9.11.     Governing Law.........................................................................    79
         Section 9.12.     Execution in Counterparts.............................................................    79
         Section 9.13.     Jurisdiction, Etc.....................................................................    79
         Section 9.14.     Waiver of Jury Trial..................................................................    80
</TABLE>
<PAGE>
                                       iii


Schedules

Schedule I     -  Commitments and Applicable Lending Offices
Schedule II    -  Existing Letters of Credit
Schedule III   -  Existing Indebtedness; Guaranty Obligations; Liens
Schedule IV    -  Designated Account Parties
Schedule V     -  Ownership of the Borrower
Schedule VI    -  Disclosed Litigation
Schedule VII   -  Subsidiaries of the Borrower
Schedule VIII  -  Permitted Asset Dispositions
Schedule IX    -  Regulated Subsidiaries
Schedule X     -  Material  Subsidiaries
Schedule XI    -  Eligible Vessels and Barges

Exhibits

Exhibit A      -  Form of Promissory Note
Exhibit B      -  Form of Notice of Borrowing
Exhibit C      -  Form of Assignment and Acceptance
Exhibit D      -  Form of Opinion of Gilmartin, Poster & Shafto, counsel to the
                  Loan Parties
Exhibit E      -  Form of Amended and Restated Subsdiary Guaranty
Exhibit F      -  Form of Cash Collateral Agreement
Exhibit G      -  Form of Ship Mortgage
Exhibit H      -  Form of Assignment of Insurances
Exhibit I      -  Form of Assignment of Freights and Hires
Exhibit J      -  Form of Borrowing Base Certificate
<PAGE>
                      AMENDED AND RESTATED CREDIT AGREEMENT


                  AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 2,
2001 among CROWLEY MARITIME CORPORATION, a Delaware corporation, as borrower
(the "Borrower"), the banks, financial institutions and other institutional
lenders (the "Initial Lenders") listed on the signature pages hereof, CITIBANK,
N.A. ("Citibank"), as issuing bank (the "Issuing Bank") and as swing line bank
(the "Swing Line Bank"), CITICORP USA, INC. ("CUSA"), as administrative agent
(together with any successor agent appointed pursuant to Article VIII, the
"Administrative Agent") for the Lender Parties (as hereinafter defined) and as
collateral agent (together with any successor collateral agent appointed
pursuant to Article VIII, the "Collateral Agent") and SALOMON SMITH BARNEY INC.,
as arranger (the "Arranger").


                             PRELIMINARY STATEMENTS:

                  (1) The Borrower, the Administrative Agent, the Collateral
Agent, the Arranger and certain banks, financial institutions and other
institutional lenders have entered into a credit agreement dated as of August
25, 2000 (the "Existing Credit Agreement").

                  (2) The Borrower has requested and the parties hereto have
agreed to amend and restate the Existing Credit Agreement as provided herein.

                  (3) The Borrower has requested that the Lenders (as defined
herein) lend to the Borrower up to $115,000,000 to refinance certain existing
debt incurred in connection with its acquisition of Marine Transport Corporation
("MTC"), to provide working capital for the Borrower and its Subsidiaries and,
from time to time, issue Letters of Credit for the benefit of the Borrower and
its Subsidiaries.

                  (4) Subject to the terms and conditions set forth herein, the
Lender Parties agree to lend such amounts and extend such credit on the terms
and conditions of this Agreement.

                  NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:

                                   Article I
                        DEFINITIONS AND ACCOUNTING TERMS

                  Section 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

                  "Administrative Agent" has the meaning specified in the
         recital of parties to this Agreement.
<PAGE>
                                       2


                  "Administrative Agent's Account" means the account of the
         Administrative Agent maintained by the Administrative Agent at its
         office at Two Penns Way, Suite 200, New Castle, Delaware 19720, Account
         No. 36852248, ABA 021000089, Attention: Joseph Biado, Reference:
         Crowley Maritime, or such other account as the Administrative Agent
         shall specify in writing to the Lender Parties.

                  "Advance" means a Revolving Credit Advance, a Swing Line
         Advance or a Letter of Credit Advance.

                  "Affiliate" means, with respect to any Person, (a) any Person
         (other than a Guarantor) which, directly or indirectly, is in control
         of, is controlled by, or is under common control with, such Person, or
         (b) any Person who is a director or officer (i) of such Person, (ii) of
         any Subsidiary of such Person or (iii) of any Person described in
         clause (a) above. For purposes of this definition, the term "control"
         (including the terms "controlling", "controlled by" and "under common
         control with") of a Person shall mean the power, direct or indirect,
         (i) to vote 10% or more of the securities or other interests having
         ordinary voting power for the election of directors of such Person or
         of Persons serving a similar function, or (ii) to direct or cause the
         direction of the management and policies of such Person, whether by
         contract or otherwise.

                  "Agent" means any of the Administrative Agent or the
         Collateral Agent.

                  "Agreement" means this Credit Agreement, as amended from time
         to time in accordance with the terms hereof.

                  "Amended and Restated Subsidiary Guaranty" has the meaning
         specified in Section 3.01(a)(ii).

                  "Applicable Lending Office" means, with respect to each
         Lender, such Lender's Domestic Lending Office in the case of a Base
         Rate Advance and such Lender's Eurodollar Lending Office in the case of
         a Eurodollar Rate Advance.

                  "Applicable Margin" means (i) for the period from the date
         hereof until the date upon which Administrative Agent receives the
         audited consolidated financial statements of the Borrower for the
         Fiscal Year 2001, 1.50% per annum in the case of Eurodollar Rate
         Advances, and 0.25% per annum in the case of Base Rate Advances and
         (ii) thereafter, a percentage per annum determined by reference to the
         ratio of Net Debt to EBITDA as set forth below:

<TABLE>
<CAPTION>
                             Ratio of Net Debt to    Base Rate   Eurodollar Rate
                                    EBITDA           Advances       Advances
<S>                          <C>                     <C>         <C>
Greater than or equal to           6.50 to 1           0.750%        2.000%
Greater than or equal to           6.00 to 1           0.500%        1.750%
Greater than or equal to           5.50 to 1           0.250%        1.500%
</TABLE>
<PAGE>
                                       3


<TABLE>
<S>                          <C>                     <C>         <C>
Greater than or equal to           4.50 to 1           0.125%        1.375%
Less than                          4.50 to 1           0.000%        1.250%
</TABLE>

         For the purposes of this clause (ii), the Applicable Margin for each
         Base Rate Advance and each Eurodollar Rate Advance shall be determined
         by reference to the ratio of Net Debt to EBITDA in effect from time to
         time; provided, however, that (A) no change in the Applicable Margin
         shall be effective until three Business Days after the date on which
         the Administrative Agent receives the financial statements required to
         be delivered pursuant to subsection 5.01(a)(i) or 5.01(a)(ii), as the
         case may be, and a certificate of the Responsible Officer of the
         Borrower demonstrating such ratio of Net Debt to EBITDA pursuant to
         subsection 5.01(b)(ii), (B) the Applicable Margin shall be determined
         as if the ratio of Net Debt to EBITDA were greater than or equal to
         6.50 to 1 for so long as the Borrower has not submitted to the
         Administrative Agent the information described in clause (A) of this
         proviso as and when required under Section 5.01(a) or (b) and (C) no
         decrease in the Applicable Margin on any date shall exceed 0.50%.

                  "Arranger" has the meaning specified in the recital of parties
         to this Agreement.

                  "Asset Dispositions" has the meaning specified in Section
         5.02(e).

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender and an Eligible Assignee, and accepted by the
         Administrative Agent, in substantially the form of Exhibit C hereto.

                  "Assignment of Insurances" means, with respect to any Eligible
         Vessel and Barge, an assignment of insurances in substantially the form
         of Exhibit H hereto, as the same may be amended, supplemented or
         otherwise modified from time to time in accordance with this Agreement.

                  "Assignment of Freights and Hires" means, with respect to any
         Eligible Vessel and Barge, an assignment of freights and hires in
         substantially the form of Exhibit I hereto, as the same may be amended,
         supplemented or otherwise modified from time to time in accordance with
         this Agreement.

                  "Assuming Lender" has the meaning specified in Section
         2.17(d).

                  "Assumption Agreement" has the meaning specified in Section
         2.17(d)(ii).

                  "Available Amount" of any Letter of Credit means, at any time,
         the maximum amount available to be drawn under such Letter of Credit at
         such time (assuming compliance at such time with all conditions to
         drawing).

                  "Base Rate" means a fluctuating interest rate per annum in
         effect from time to time, which rate per annum shall at all times be
         equal to the highest of:
<PAGE>
                                       4


                           (a) the rate of interest announced publicly by
                  Citibank in New York, New York, from time to time, as
                  Citibank's base rate;

                           (b) the sum (adjusted to the nearest 1/16 of 1% or,
                  if there is no nearest 1/16 of 1%, to the next higher 1/16 of
                  1%) of (i) 1% per annum, plus (ii) the rate obtained by
                  dividing (A) the latest three-week moving average of secondary
                  market morning offering rates in the United States for
                  three-month certificates of deposit of major United States
                  money market banks, such three-week moving average (adjusted
                  to the basis of a year of 360 days) being determined weekly on
                  each Monday (or, if such day is not a Business Day, on the
                  next succeeding Business Day) for the three-week period ending
                  on the previous Friday by Citibank on the basis of such rates
                  reported by certificate of deposit dealers to and published by
                  the Federal Reserve Bank of New York or, if such publication
                  shall be suspended or terminated, on the basis of quotations
                  for such rates received by Citibank from three New York
                  certificate of deposit dealers of recognized standing selected
                  by Citibank, by (B) a percentage equal to 100% minus the
                  average of the daily percentages specified during such
                  three-week period by the Board of Governors of the Federal
                  Reserve System (or any successor) for determining the maximum
                  reserve requirement (including, but not limited to, any
                  emergency, supplemental or other marginal reserve requirement)
                  for Citibank with respect to liabilities consisting of or
                  including (among other liabilities) three-month U.S. dollar
                  non-personal time deposits in the United States, plus (iii)
                  the average during such three-week period of the annual
                  assessment rates estimated by Citibank for determining the
                  then current annual assessment payable by Citibank to the
                  Federal Deposit Insurance Corporation (or any successor) for
                  insuring U.S. dollar deposits of Citibank in the United
                  States; and

                           (c) 1/2 of one percent per annum above the Federal
                  Funds Rate.

                  "Base Rate Advance" means, as the context may require, (i) an
         Advance that initially bears interest at a rate determined in reference
         to the Base Rate as provided in Section 2.06(a)(i), or (ii) any portion
         of the outstanding Advances bearing interest at a rate determined in
         reference to the Base Rate as provided in Section 2.06(a)(i).

                  "Borrower Guaranteed Obligations" has the meaning set forth in
         Section 7.01.

                  "Borrowing" means a Revolving Credit Borrowing or a Swing Line
         Borrowing.

                  "Borrowing Base " means at any time an amount equal to the
         most recently determined Ships Value multiplied by 0.80.

                  "Borrowing Base Availability" means at any time an amount
         equal to the Borrowing Base less the sum of:

                           (a) the aggregate principal amount of all outstanding
                  Advances, and
<PAGE>
                                       5


                           (b) the aggregate Available Amount of all Letters of
                  Credit then outstanding;

         provided, that Borrowing Base Availability shall at no time exceed the
         Revolving Credit Facility.

                  "Borrowing Base Certificate" means a certificate in
         substantially the form of Exhibit J hereto. All calculations of
         Borrowing Base Availability in connection with the preparation of the
         Borrowing Base Certificate shall originally be made by the Borrower and
         certified to the Collateral Agent, provided that the Collateral Agent
         shall have the right to review and adjust, in the exercise of its
         reasonable credit judgment, any such calculation (1) to reflect its
         reasonable estimate of declines in value of any collateral described
         therein, and (2) to the extent that such calculation is not in
         accordance with this Agreement.

                  "Business Day" means a day of the year on which banks are not
         required or authorized by law to close in New York City or San
         Francisco and, if the applicable Business Day relates to any Eurodollar
         Rate Advances, on which dealings are carried on in the London interbank
         market.

                  "Capital Expenditure" means any expenditure (by way of the
         acquisition of securities of a Person, the incurring of obligations
         under a Financing Lease or otherwise) in respect of the purchase or
         other acquisition of property or equipment, excluding any such asset
         (i) acquired in connection with normal replacement and maintenance
         programs properly charged to current operations or (ii) which at the
         time of the purchase or other acquisition thereof is intended in good
         faith by the Borrower to be subjected to a lease, other than a
         Financing Lease, and in fact is subjected to such a lease within 12
         months from the purchase or acquisition of such asset, pursuant to a
         sale-leaseback transaction permitted under subsection 5.02(j).

                  "Capital Stock" means any and all shares, interests,
         participations or other equivalents (however designated) of capital
         stock of a corporation, any and all equivalent ownership interests in a
         Person (other than a corporation) and any and all warrants or options
         to purchase any of the foregoing.

                  "Cash Collateral Agreement" means a cash collateral agreement
         in substantially the form of Exhibit F.

                  "Cash Equivalents" shall mean (a) securities with maturities
         of one year or less from the date of acquisition issued or fully
         guaranteed or insured by the United States Government or any agency
         thereof, (b) certificates of deposit and eurodollar time deposits with
         maturities of one year or less from the date of acquisition and
         overnight bank deposits of any Lender and certificates of deposit with
         maturities of one year or less from the date of acquisition and
         overnight bank deposits of any other commercial bank having capital and
         surplus in excess of $200,000,000, (c) commercial paper of any issuer
         rated at least A-2 by Standard & Poor's Ratings Group or P-2 by Moody's
         Investors Service, Inc., (d) additional money market investments with
         maturities of one year or less from the date of acquisition rated at
         least A-1 or AA by Standard & Poor's Ratings Group or P-1 or Aa by
         Moody's
<PAGE>
                                       6


         Investors Service, Inc. and (e) tax-exempt debt obligations of any
         State of the United States or of any county or other municipal
         governmental subdivision of any State of the United States with
         maturities of one year or less from the date of acquisition rated at
         the highest investment grade rating by Standard & Poor's Ratings Group
         or by Moody's Investors Service, Inc., or publicly traded or open-end
         bond funds that invest exclusively in such tax-exempt debt obligations.

                  "Change in Control" means the failure of the Crowley Family to
         have the power to vote or cause to be voted, directly or indirectly, in
         the aggregate at least 51% of the voting stock of the Borrower.

                  "Citibank " has the meaning specified in the recital of
         parties to this Agreement.

                  "Collateral" means the Eligible Vessels and Barges and all
         other property of the Borrower and its Subsidiaries secured by, or
         intended to be secured by, the Collateral Documents and all other
         property that is or is intended to be subject to any Lien in favor of
         the Collateral Agent for the benefit of the Secured Parties.

                  "Collateral Agent" has the meaning specified in the recital of
         parties to this Agreement.

                  "Collateral Documents" means the Ship Mortgages, the
         Assignments of Freights and Hires, the Assignments of Insurances and
         any other agreement that creates or purports to create a Lien in favor
         of the Collateral Agent for the benefit of the Secured Parties.

                  "Commitment" means, with respect to any Lender at any time,
         the amount set forth opposite such Lender's name on Schedule I hereto
         under the caption "Commitment" or, if such Lender has entered into one
         or more Assignments and Acceptances, set forth for such Lender in the
         Register maintained by the Administrative Agent pursuant to Section
         9.07(d) as such Lender's "Commitment"; provided that each Lender's
         Commitment may be reduced from time to time pursuant to Section 2.04.

                  "Commitment Date" has the meaning specified in Section
         2.17(b).

                  "Commitment Fee Rate" means (i) for the period from the date
         hereof until the date upon which Administrative Agent receives the
         audited consolidated financial statements of the Borrower for the
         Fiscal Year 2001, 0.30% per annum and (ii) thereafter, a percentage per
         annum determined by reference to the ratio of Net Debt to EBITDA as set
         forth below:

<TABLE>
<CAPTION>
                                         Ratio of Net Debt to EBITDA             Commitment Fee Rate
<S>                                      <C>                                     <C>
Greater than or equal to                          6.50 to 1                             0.500%
Greater than or equal to                          6.00 to 1                             0.375%
Greater than or equal to                          5.50 to 1                             0.300%
Greater than or equal to                          4.50 to 1                             0.250%
Less than                                         4.50 to 1                             0.200%
</TABLE>
<PAGE>
                                       7


         For the purposes of this clause (ii), the Commitment Fee Rate shall be
         determined by reference to the ratio of Net Debt to EBITDA in effect
         from time to time; provided, however, that (A) no change in the
         Commitment Fee Rate shall be effective until three Business Days after
         the date on which the Administrative Agent receives the financial
         statements required to be delivered pursuant to subsection 5.01(a)(i)
         or 5.01(a)(ii), as the case may be, and a certificate of the
         Responsible Officer of the Borrower demonstrating such ratio of Net
         Debt to EBITDA pursuant to subsection 5.01(b)(ii), (B) the Commitment
         Fee Rate shall be determined as if the ratio of Net Debt to EBITDA were
         greater than or equal to 6.50 to 1 for so long as the Borrower has not
         submitted to the Administrative Agent the information described in
         clause (A) of this proviso as and when required under Section 5.01(a)
         or (b) and (C) no decrease in the Commitment Fee Rate on any date shall
         exceed 0.15%.

                  "Commitment Increase" has the meaning specified in Section
         2.17(a).

                  "Confidential Information" means information that any Loan
         Party furnishes to any Agent or any Lender in a writing designated as
         confidential, but does not include any such information that is or
         becomes generally available to the public or that is or becomes
         available to such Agent or such Lender from a source other than the
         Loan Parties.

                  "Consolidated" refers to the consolidation of accounts in
         accordance with GAAP.

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

                  "Convert", "Conversion" and "Converted" each refers to a
         conversion of Advances of one Type into Advances of the other Type
         pursuant to Section 2.07 or 2.08.

                  "Crowley Family" means all of the following Persons: (i)
         Thomas B. Crowley, Jr., an individual residing as of the date hereof in
         Oakland, California, together with all Persons who are now or hereafter
         relatives of such Person; and (ii) all trusts, conservatorships and
         estates of or for the benefit of the Persons described in clause (i) of
         this defined term. (For purposes of this definition, "relative" means
         any individual related by affinity or consanguinity within the fourth
         degree as determined by the common law, or any individual in a step or
         adoptive relationship within such fourth degree.)

                  "CUSA" has the meaning specified in the recital of parties to
         this Agreement.

                  "Default" means any Event of Default or any event that would
         constitute an Event of Default but for the requirement that notice be
         given or time elapse or both.

                  "Designated Account Parties" means the collective reference to
         the Subsidiaries and Affiliates of the Borrower listed on Schedule IV
         and any other Person designated by the Borrower as a Designated Account
         Party by written notice from the Borrower to the Administrative Agent
         and any Issuing Bank requested to issue a Letter of Credit for the
         account of such Designated Account Party.
<PAGE>
                                       8


                  "Disclosed Litigation" has the meaning specified in Section
         4.01(f).

                  "Dollars" and the "$" sign each means lawful money of the
         United States.

                  "Domestic Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Domestic Lending Office"
         opposite its name on Schedule I hereto or in the Assignment and
         Acceptance pursuant to which it became a Lender, or such other office
         of such Lender as such Lender may from time to time specify to the
         Borrower and the Administrative Agent.

                  "EBITDA" means the operating income plus the sum of (a)
         depreciation expense and (b) amortization expense as reflected in the
         "Consolidated Statement of Operations" of the Borrower prepared in
         accordance with GAAP; provided that EBITDA shall be calculated on a
         rolling basis for the four fiscal quarters most recently ended.

                  "Eligible Assignee" means (i) a Lender; (ii) a direct or
         indirect wholly owned Subsidiary of any Lender or the controlling
         corporation of such Lender; (iii) any commercial bank organized under
         the laws of the United States, or any State thereof, and having
         combined capital and surplus in excess of $1,000,000,000; (iv) any
         commercial bank organized under the laws of any other country that is a
         member of the Organization for Economic Cooperation and Development
         ("OECD") or has concluded special lending arrangements with the
         International Monetary Fund associated with its General Arrangements to
         Borrow, or a political subdivision of any such country, and having
         combined capital and surplus in excess of $1,000,000,000, so long as
         such bank is acting through a branch or agency located in the United
         States, in the Cayman Islands or in the country in which it is
         organized or another country that is described in this clause (iv); and
         (v) any other Person approved by the Administrative Agent and the
         Borrower, such approval not to be unreasonably withheld; provided,
         however, that neither the Borrower nor an Affiliate of the Borrower
         shall qualify as an Eligible Assignee.

                  "Eligible Vessels and Barges" means the tug boats and barges
         listed on Schedule XI hereto, as such schedule may be amended from time
         to time at the request of the Borrower and with the consent of the
         Collateral Agent, provided that the Collateral Agent has at all times a
         first priority and perfected lien on each such tug boat or barge.

                  "Environmental Action" means any action, suit, demand, demand
         letter, claim, notice of non-compliance or violation, notice of
         liability or potential liability, investigation, proceeding, consent
         order or consent agreement relating in any way to any Environmental
         Law, Environmental Permit or Hazardous Materials or arising from
         alleged injury or threat of injury to public health, public safety or
         the environment, including, without limitation, (a) by any governmental
         or regulatory authority for enforcement, cleanup, removal, response,
         remedial or other actions or damages and (b) by any governmental or
         regulatory authority or any third party for damages, contribution,
         indemnification, cost recovery, compensation or injunctive relief.

                  "Environmental Law" means any Federal, state, local or foreign
         statute, law, ordinance, rule, regulation, code, order, writ, judgment,
         injunction, decree or judicial or
<PAGE>
                                       9


         agency interpretation, policy or guidance relating to pollution or
         protection of the environment, health, safety or natural resources,
         including, without limitation, those relating to the use, handling,
         transportation, treatment, storage, disposal, release or discharge of
         Hazardous Materials.

                  "Environmental Permit" means any permit, approval,
         identification number, license or other authorization required under
         any Environmental Law.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "ERISA Affiliate" means any Person that for purposes of Title
         IV of ERISA is a member of the Borrower's controlled group, or under
         common control with the Borrower, within the meaning of Section 414 of
         the Internal Revenue Code.

                  "ERISA Event" means (a) (i) the occurrence of a reportable
         event, within the meaning of Section 4043 of ERISA, with respect to any
         Plan unless the 30-day notice requirement with respect to such event
         has been waived by the PBGC, or (ii) the requirements of subsection (1)
         of Section 4043(b) of ERISA (without regard to subsection (2) of such
         Section) are met with a contributing sponsor, as defined in Section
         4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
         (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
         expected to occur with respect to such Plan within the following 30
         days; (b) the application for a minimum funding waiver with respect to
         a Plan; (c) the provision by the administrator of any Plan of a notice
         of intent to terminate such Plan pursuant to Section 4041(a)(2) of
         ERISA (including any such notice with respect to a plan amendment
         referred to in Section 4041(e) of ERISA); (d) the cessation of
         operations at a facility of the Borrower or any ERISA Affiliate in the
         circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
         by the Borrower or any ERISA Affiliate from a Multiple Employer Plan
         during a plan year for which it was a substantial employer, as defined
         in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition
         of a lien under Section 302(f) of ERISA shall have been met with
         respect to any Plan; (g) the adoption of an amendment to a Plan
         requiring the provision of security to such Plan pursuant to Section
         307 of ERISA; or (h) the institution by the PBGC of proceedings to
         terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence
         of any event or condition described in Section 4042 of ERISA that
         constitutes grounds for the termination of, or the appointment of a
         trustee to administer, a Plan.

                  "Eurocurrency Liabilities" has the meaning assigned to that
         term in Regulation D of the Board of Governors of the Federal Reserve
         System, as in effect from time to time.

                  "Eurodollar Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Eurodollar Lending Office"
         opposite its name on Schedule I hereto or in the Assignment and
         Acceptance pursuant to which it became a Lender (or, if no such office
         is specified, its Domestic Lending Office), or such other office of
         such Lender as such Lender may from time to time specify to the
         Borrower and the Administrative Agent.

                  "Eurodollar Rate" means, for any Interest Period for each
         Eurodollar Rate Advance comprising part of the same Borrowing, an
         interest rate per annum equal to (i)
<PAGE>
                                       10


         the rate per annum (rounded upwards, if necessary, to the nearest 1/16
         of 1%) at which deposits in U.S. dollars appear on page 3750 (or any
         successor page thereto) of the Dow Jones Telerate Screen two Business
         Days before the first day of such Interest Period and for a term
         comparable to such Interest Period, or (ii) if such rate does not so
         appear on the Dow Jones Telerate Screen on any date of determination,
         the rate per annum (rounded upwards, if necessary, to the nearest 1/16
         of 1%) at which deposits in U.S. dollars appear on the Reuters Screen
         LIBO Page two Business Days before the first day of such Interest
         Period and for a term comparable to such Interest Period, provided,
         however, that if the Reuters Screen LIBO Page is being used to
         determine the Eurodollar Rate at any date of determination and more
         than one rate is specified thereon as the London interbank offered rate
         for deposits in U.S. dollars, the applicable rate shall be the average
         of all such rates (rounded upward, if necessary, to the nearest whole
         multiple of 1/16 of 1% per annum), or (iii) if such rate does not so
         appear on either the Dow Jones Telerate Screen or Reuters Screen LIBO
         Page on any date of determination, then, the average (rounded upward to
         the nearest whole multiple of 1/16 of 1% per annum) of the rates per
         annum at which deposits in Dollars are offered by the principal office
         of Citibank in London, England, to prime banks in the London interbank
         market at 11:00 A.M. (London time) two Business Days before the first
         day of such Interest Period in an amount substantially equal to
         Citibank's Eurodollar Rate Advance comprising part of such Borrowing
         and for a period equal to such Interest Period. In such circumstances,
         the Eurodollar Rate for the Interest Period for each Eurodollar Rate
         Advance comprising part of the same Borrowing shall be determined by
         the Administrative Agent on the basis of the applicable rates given to
         and received by the Administrative Agent from Citibank two Business
         Days prior to the first day of such Interest Period.

                  "Eurodollar Rate Advance" means, as the context may require,
         (i) a Revolving Credit Advance that initially bears interest at a rate
         determined in reference to the Eurodollar Rate as provided in Section
         2.06(a)(ii), or (ii) any portion of the outstanding Revolving Credit
         Advances bearing interest at a rate determined in reference to the
         Eurodollar Rate as provided in Section 2.06(a)(ii).

                  "Eurodollar Rate Tranche" is the collective reference to
         Eurodollar Rate Advances the Interest Periods with respect to all of
         which begin on the same date and end on the same later date.

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Existing Credit Agreement" has the meaning specified in the
         Preliminary Statements to this Agreement.

                  "Existing Letters of Credit" has the meaning specified in
         Section 2.16(j).

                  "Facility" means the Revolving Credit Facility, the Swing Line
         Facility or the Letter of Credit Facility.

                  "Federal Funds Rate" means, for any period, a fluctuating
         interest rate per annum equal for each day during such period to the
         weighted average of the rates on overnight Federal funds transactions
         with members of the Federal Reserve System arranged by
<PAGE>
                                       11


         Federal funds brokers, as published for such day (or, if such day is
         not a Business Day, for the next preceding Business Day) by the Federal
         Reserve Bank of New York, or, if such rate is not so published for any
         day that is a Business Day, the average of the quotations for such day
         on such transactions received by the Administrative Agent from three
         Federal funds brokers of recognized standing selected by it.

                  "Financing Lease" means any lease of property, real or
         personal, the obligations of the lessee in respect of which are
         required in accordance with GAAP to be capitalized on a balance sheet
         of the lessee.

                  "Foreign Subsidiary" means a Subsidiary which is organized
         under the laws of a jurisdiction other than the United States or any
         State thereof or the District of Columbia.

                  "GAAP" has the meaning specified in Section 1.03.

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof and any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government.

                  "Group of Advances" means at any time a group of Advances
         consisting of (i) all Base Rate Advances outstanding at such time or
         (ii) Eurodollar Advances outstanding at such time constituting a single
         Eurodollar Rate Tranche at such time.

                  "Guarantor" means each Material Subsidiary, other than any
         Regulated Subsidiary, and any Subsidiary that has an ownership interest
         in any of the Eligible Vessels and Barges, in each case as of the
         Restatement Effective Date, and thereafter each Subsidiary of the
         Borrower that becomes a party to the Amended and Restated Subsdiary
         Guaranty pursuant to the terms hereof and thereof.

                  "Guaranty Obligation" means, as to any Person (the
         "guaranteeing person"), (a) any obligation of (i) the guaranteeing
         person or (ii) another Person (including, without limitation, any bank
         under any letter of credit) to induce the creation of which the
         guaranteeing person has issued a reimbursement, counterindemnity or
         similar obligation, in either case if such obligation is guaranteeing
         or in effect guaranteeing any Indebtedness, or leases, dividends or
         other obligations which are substitutes for or equivalents of
         Indebtedness (the "primary obligations") of any other third Person (the
         "primary obligor") in any manner, whether directly or indirectly,
         including, without limitation, any obligation of the guaranteeing
         person, whether or not contingent, (A) to purchase any such primary
         obligation or any property constituting direct or indirect security
         therefor, (B) to advance or supply funds (1) for the purchase or
         payment of any such primary obligation or (2) to maintain working
         capital or equity capital of the primary obligor or otherwise to
         maintain the net worth or solvency of the primary obligor, (C) to
         purchase property, securities or services primarily for the purpose of
         assuring the owner of any such primary obligation of the ability of the
         primary obligor to make payment of such primary obligation or (D)
         otherwise to assure or hold harmless the owner of any such primary
         obligation against loss in respect thereof and (b) all obligations of
         such Person in respect of mandatory contributions to capital (including
         without limitation as a result of calls for capital or otherwise) of
         any Joint Venture of such Person; provided, however, that the term
         Guaranty
<PAGE>
                                       12


         Obligation shall not include endorsements of instruments for deposit or
         collection in the ordinary course of business. The amount of any
         Guaranty Obligation of any guaranteeing person shall be deemed to be
         the lower of (x) an amount equal to the stated or determinable amount
         of the primary obligation in respect of which such Guaranty Obligation
         is made and (y) the maximum amount for which such guaranteeing person
         may be liable pursuant to the terms of the instrument embodying such
         Guaranty Obligation, unless such primary obligation and the maximum
         amount for which such guaranteeing person may be liable are not stated
         or determinable, in which case the amount of such Guaranty Obligation
         shall be such guaranteeing person's maximum reasonably anticipated
         liability in respect thereof as determined by the Borrower in good
         faith.

                  "Hamburg Sud" means Hamburg-Sudamerikanische
         Dampfschiffahrtsgesellschaft Eggert & Amsinck.

                  "Hazardous Materials" means (a) petroleum and petroleum
         products, byproducts or breakdown products, radioactive materials,
         asbestos-containing materials, polychlorinated biphenyls and radon gas
         and (b) any other chemicals, materials or substances designated,
         classified or regulated as hazardous or toxic or as a pollutant or
         contaminant under any Environmental Law.

                  "Increase Date" has the meaning specified in Section 2.17(a)

                  "Increasing Lender" has the meaning specified in Section
         2.17(d).

                  "Indebtedness" of any Person at any date means, without
         duplication, (a) all indebtedness of such Person for borrowed money
         (other than current trade liabilities, customer advances and customer
         deposits incurred in the ordinary course of business and payable in
         accordance with customary practices) or which is evidenced by a note,
         bond, debenture or similar instrument, (b) the portion of the
         obligations of such Person under Financing Leases included as
         indebtedness on the balance sheet of such Person in accordance with
         GAAP, (c) the portion of the obligations of such Person in respect of
         acceptances issued or created for the account of such Person included
         as indebtedness on the balance sheet of such Person in accordance with
         GAAP, (d) all reimbursement or counter indemnity obligations of such
         Person in respect of amounts already paid under letters of credit,
         guarantees or similar instruments backing another Person's obligations
         of the types described in the foregoing clauses (a), (b) and (c), and
         (e) the aggregate Non-Qualified Partnership Liabilities of such Person.

                  "Initial Extension of Credit" means the earlier to occur of
         the initial Borrowing and the initial issuance of a Letter of Credit
         hereunder (including the assumption of the Existing Letters of Credit
         pursuant to Section 2.16(j)).

                  "Initial Lenders" has the meaning specified in the recital of
         parties to this Agreement.

                  "Insufficiency" means, with respect to any Plan, the amount,
         if any, of its unfunded benefit liabilities, as defined in Section
         4001(a)(18) of ERISA.
<PAGE>
                                       13


                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Eurodollar Rate Tranche, the period
         commencing on the date of such Eurodollar Rate Advance or the date of
         the Conversion of any Base Rate Advance into such Eurodollar Rate
         Advance and ending on the last day of the period selected by the
         Borrower pursuant to the provisions below and, thereafter, each
         subsequent period commencing on the last day of the immediately
         preceding Interest Period and ending on the last day of the period
         selected by the Borrower pursuant to the provisions below. The duration
         of each such Interest Period shall be one, two, three or six months, as
         the Borrower may, upon notice received by the Administrative Agent not
         later than 1:00 P.M. (New York City time) on the third Business Day
         prior to the first day of such Interest Period, select; provided,
         however, that:

                           (i) the Borrower may not select any Interest Period
                  that ends after the Termination Date;

                           (ii) Eurodollar Rate Advances comprising part of the
                  same Borrowing shall initially belong to the same Eurodollar
                  Rate Tranche;

                           (iii) whenever the last day of any Interest Period
                  would otherwise occur on a day other than a Business Day, the
                  last day of such Interest Period shall be extended to occur on
                  the next succeeding Business Day; provided, however, that, if
                  such extension would cause the last day of such Interest
                  Period to occur in the next following calendar month, the last
                  day of such Interest Period shall occur on the next preceding
                  Business Day; and

                           (iv) whenever the first day of any Interest Period
                  occurs on a day of an initial calendar month for which there
                  is no numerically corresponding day in the calendar month that
                  succeeds such initial calendar month by the number of months
                  equal to the number of months in such Interest Period, such
                  Interest Period shall end on the last Business Day of such
                  succeeding calendar month.

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

                  "Investment" has the meaning specified in Section 5.02(h).

                  "Issuing Bank" means Citibank and any other Lender or
         Affiliate of a Lender approved by the Administrative Agent, the
         Borrower and such other Lender or Affiliate of such other Lender.

                  "Joint Venture" has the meaning specified in Section 5.02(m).

                  "L/C Cash Collateral Account" has the meaning set forth in
         Section 2.16.

                  "L/C Related Documents" has the meaning specified in Section
         2.16.

                  "Lender Parties" means the Lenders, the Issuing Bank and the
         Swing Line Bank.
<PAGE>
                                       14


                  "Lenders" means the Initial Lenders and each Person that shall
         become a party hereto pursuant to Sections 9.07 and 2.17.

                  "Letter of Credit" has the meaning specified in Section 2.16.

                  "Letter of Credit Advance" means an advance made by any
         Issuing Bank or any Lender pursuant to Section 2.16(d).

                  "Letter of Credit Agreement" has the meaning specified in
         Section 2.16.

                  "Letter of Credit Commitment" means, with respect to any
         Issuing Bank at any time, the amount set forth opposite such Issuing
         Bank's name on Schedule I hereto under the caption "Letter of Credit
         Commitment" or, if such Issuing Bank has entered into one or more
         Assignments and Acceptances, set forth for such Issuing Bank in the
         Register maintained by the Administrative Agent pursuant to Section
         9.07(c) as such Issuing Bank's "Letter of Credit Commitment", as such
         amount may be reduced at or prior to such time pursuant to Section
         2.04.

                  "Letter of Credit Facility" means, at any time, an amount
         equal to the lesser of (a) the aggregate amount of the Letter of Credit
         Commitments of the Issuing Banks at such time and (b) $50,000,000, in
         each case as such amount may be reduced at or prior to such time
         pursuant to Section 2.04.

                  "Letter of Credit Fee Rate" means the Applicable Margin for
         Eurodollar Rate Advances as in effect from time to time.

                  "Letter of Credit Sub-Limit" means, at any time, the lesser of
         (a) the Letter of Credit Facility at such time and (b) an amount equal
         to $50,000,000 less the sum of (i) the aggregate principal amount of
         the Letter of Credit Advances outstanding at such time and (ii) the
         aggregate Available Amount of all Letters of Credit outstanding at such
         time.

                  "LIBOR-Only Lender" means any Lender that is organized under
         the laws of a jurisdiction located outside the United States that has
         notified the Administrative Agent and the Borrower in writing, on or
         prior to becoming a Lender, that it is unable to provide same-day
         funding or to receive same-day repayments in connection with Base Rate
         Advances; provided, however, that this definition shall not include any
         Lender that subsequently notifies the Administrative Agent and the
         Borrower in writing that it is no longer a LIBOR-Only Lender from the
         time that such notice is received by the Administrative Agent and the
         Borrower.

                  "Lien" means any lien, security interest or other charge or
         encumbrance of any kind, or any other type of preferential arrangement,
         including, without limitation, the lien or retained security title of a
         conditional vendor and any easement, right of way or other encumberence
         to real property.

                  "Loan Documents" means this Agreement, the Notes, the Amended
         and Restated Subsdiary Guaranty, the Collateral Documents, each Cash
         Collateral Agreement and each Letter of Credit Agreement.
<PAGE>
                                       15


                  "Loan Parties" means the Borrower and each Guarantor.

                  "Majority Lenders" means at any time Lenders owed or holding
         at least a majority in interest of the sum of (a) the aggregate
         principal amount of the Advances outstanding at such time and (b) the
         aggregate Available Amount of all Letters of Credit outstanding at such
         time, or, if no such principal amount and no Letters of Credit are
         outstanding at such time, Lenders holding at least a majority in
         interest of the Revolving Credit Facility at such time.

                  "Material Adverse Effect" means a material adverse effect on
         (a) the business, operations, condition (financial or otherwise),
         performance, properties or prospects of any Loan Party and its
         Restricted Subsidiaries taken as a whole, (b) the ability of any Loan
         Party and its Restricted Subsidiaries taken as a whole to perform the
         obligations under the Loan Documents or (c) the rights and remedies of
         any Agent or any Lender under any Loan Document.

                  "Material Subsidiary" means (i) the Subsidiaries set forth on
         Schedule X and (ii) each other Subsidiary of the Borrower having (x)
         Net Assets greater than $12,000,000 at the end of any fiscal quarter of
         the Borrower or (y) Net Revenue greater than $12,000,000 for the most
         recently ended four consecutive fiscal quarters of the Borrower, in
         each case as determined commencing with the fiscal quarter ending June
         30, 2001.

                  "MTC" has the meaning specified in the Preliminary Statements
         to this Agreement.

                  "MTC Credit Agreement" has the meaning specified in Section
         5.02(k).

                  "MTC Purchase Date" has the meaning specified in Section
         5.02(a)(viii).

                  "MTL" has the meaning specified in Section 5.02(a)(ix).

                  "Multiemployer Plan" means a multiemployer plan, as defined in
         Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
         Affiliate is making or accruing an obligation to make contributions, or
         has within any of the preceding five plan years made or accrued an
         obligation to make contributions.

                  "Multiple Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
         employees of the Borrower or any ERISA Affiliate and at least one
         Person other than the Borrower and the ERISA Affiliates or (b) was so
         maintained and in respect of which the Borrower or any ERISA Affiliate
         could have liability under Section 4064 or 4069 of ERISA in the event
         such plan has been or were to be terminated.

                  "Net Assets" means, as to the Borrower or any Subsidiary of
         the Borrower at any time, the excess of (i) the total assets of such
         Person at such time over (ii) all net intercompany receivables owing to
         such Person at such time, in each case determined in accordance with
         GAAP.
<PAGE>
                                       16


                  "Net Debt" means, as to the Borrower and its Consolidated
         Subsidiaries at any time, the aggregate sum of (i) all Indebtedness (as
         reflected on the consolidated balance sheet of the Borrower), (ii) 300%
         of the amount equal to (A) the operating lease commitments shown in the
         footnotes to the most recent audited financial statements delivered to
         the Lender Parties pursuant to Section 5.01(a)(i) to be contractually
         due in the subsequent fiscal year minus (B) that portion for which (x)
         Hamburg Sud is contractually obligated to pay pursuant to the Purchase
         Agreement and (y) in the reasonable discretion of the Administrative
         Agent, other entities are contractually obligated, for a period of no
         less than 12 months, for the sublease of the assets that are the
         subject of such operating lease commitments and (iii) Guaranty
         Obligations and contingent liabilities, minus 85% of cash and Cash
         Equivalents.

                  "Net Revenue" means, as to the Borrower or any Subsidiary of
         the Borrower for any period of determination, the excess of (i) the
         total revenue of such Person for such period over (ii) all intercompany
         revenue of such Person for such period, in each case determined in
         accordance with GAAP.

                  "Non-Qualified Partnership" means a Joint Venture, partnership
         or other entity in which the Borrower or any Restricted Subsidiary is a
         general partner or has general liability for the obligations of such
         entity, other than any Restricted Subsidiary which is a corporation and
         substantially all of whose assets consist of its interest in such Joint
         Venture, partnership or other entity.

                  "Non-Qualified Partnership Liability" of a Person at any time
         means, with respect to a Non-Qualified Partnership in which such Person
         has an interest, an amount equal to the amount by which (a) the
         aggregate amount of the total liabilities of such Non-Qualified
         Partnership at such time minus (without duplication) (i) the aggregate
         amount of such liabilities that are expressly agreed by the holders of
         such liabilities to be non-recourse to such Non-Qualified Partnership
         (the "Partnership Non-Recourse Liabilities") and (ii) the aggregate
         amount of such liabilities that are expressly agreed by the holders of
         such liabilities to be non-recourse to such Person (the "Partner
         Non-Recourse Liabilities") exceeds (b) 85% of the aggregate amount of
         the total tangible assets of such Non-Qualified Partnership at such
         time minus (without duplication) (x) the aggregate amount of the
         Partnership Non-Recourse Liabilities at such time and (y) the aggregate
         amount of the Partner Non-Recourse Liabilities at such time, as
         determined in accordance with GAAP.

                  "Note" means a promissory note of the Borrower payable to the
         order of any Lender, in substantially the form of Exhibit A hereto,
         evidencing the aggregate indebtedness of the Borrower to such Lender
         resulting from the Advances made by such Lender.

                  "Notice of Borrowing" has the meaning specified in Section
         2.02(a).

                  "Notice of Issuance" has the meaning specified in Section
         2.16.

                  "Notice of Swing Line Borrowing" has the meaning specified in
         Section 2.02(b).
<PAGE>
                                       17


                  "Obligations" means, with respect to any Person, any payment,
         performance or other obligation of such Person of any kind, including,
         without limitation, any liability of such Person on any claim, whether
         or not the right of any creditor to payment in respect of such claim is
         reduced to judgment, liquidated, unliquidated, fixed, contingent,
         matured, disputed, undisputed, legal, equitable, secured or unsecured,
         and whether or not such claim is discharged, stayed or otherwise
         affected by any proceeding referred to in Section 6.01(f). Without
         limiting the generality of the foregoing, the Obligations of any Loan
         Party under the Loan Documents include (a) the obligation to pay
         principal, interest (including interest accruing on or after the filing
         of any petition in bankruptcy or the commencement of any insolvency,
         reorganization or like proceeding, relating to the Borrower, whether or
         not a claim for post-filing or post-petition interest is allowed in
         such proceeding), Letter of Credit commissions, charges, expenses,
         fees, attorneys' fees and disbursements, indemnities and other amounts
         payable by such Loan Party under any Loan Document and (b) the
         obligation of such Loan Party to reimburse any amount in respect of any
         of the foregoing that any Lender Party, in its sole discretion, may
         elect to pay or advance on behalf of such Loan Party.

                  "Other Taxes" has the meaning set forth in Section 2.13(b).

                  "PBGC" means the Pension Benefit Guaranty Corporation (or any
         successor).

                  "Person" means an individual, partnership, corporation
         (including a business trust), joint stock company, trust,
         unincorporated association, joint venture, limited liability company or
         other entity of whatever nature, or a Governmental Authority.

                  "Plan" means a Single Employer Plan or a Multiple Employer
         Plan.

                  "Pro Rata Share" of any amount means, with respect to any
         Lender at any time, the product of such amount times a fraction the
         numerator of which is the amount of such Lender's Commitment at such
         time and the denominator of which is the Revolving Credit Facility at
         such time, provided that for purposes of determining each of the
         foregoing numerator and denominator, each Lender's Commitment shall be
         equal to the amount determined pursuant to clause (i) of the definition
         of Commitment in this Section 1.01.

                  "Purchase Agreement" means the Sale and Purchase Agreement
         between Crowley American Transport, Inc. and Hamburg-Sudamerikanische
         Dampfschiffahrtsgesellschaft Eggert & Amsinck dated as of October 18,
         1999.

                  "Register" has the meaning specified in Section 9.07(d).

                  "Regulated Subsidiary" means Beacon Insurance Company Limited
         and each other Subsidiary that is prohibited by any applicable law,
         rule or regulation from entering into and performing obligations of a
         guarantor under an Amended and Restated Subsidiary Guaranty, each as
         listed on Schedule IX hereto as such schedule may be amended from time
         to time to include any future Subsidiary of the Borrower subject to
         such prohibition.

                  "Regulation U" means Regulation U of the Board of Governors of
         the Federal Reserve System.
<PAGE>
                                       18


                  "Reimbursement Obligation" means the obligation of the
         Borrower or any Designated Account Party to reimburse any Issuing Bank
         for amounts drawn under the Letters of Credit and other amounts
         reimbursable by the Borrower or such Designated Account Party
         thereunder or under any Letter of Credit Agreement.

                  "Required Lenders" means at any time Lenders owed or holding
         greater than 50% of the sum of (a) the aggregate principal amount of
         the Advances outstanding at such time and (b) the aggregate Available
         Amount of all Letters of Credit outstanding at such time, or, if no
         such principal amount and no Letters of Credit are outstanding at such
         time, Lenders holding greater than 50% of the Revolving Credit Facility
         at such time. For purposes of this definition, the aggregate principal
         amount of Swing Line Advances owing to the Swing Line Bank and of
         Letter of Credit Advances owing to the Issuing Bank and the Available
         Amount of each Letter of Credit shall be considered to be owed to
         Lenders ratably in accordance with their Commitments.

                  "Requirement of Law" means as to any Person, the certificate
         of incorporation and by-laws or other organizational or governing
         documents of such Person, and any law, treaty, rule or regulation or
         determination of an arbitrator or a court or other Governmental
         Authority, in each case applicable to or binding upon such Person or
         any of its property or to which such Person or any of its property is
         subject.

                  "Responsible Officer" means the chief executive officer of the
         Borrower, the president of the Borrower, the general counsel of the
         Borrower, any senior vice president of the Borrower or any corporate
         vice president of the Borrower having familiarity with the matters in
         respect of which such corporate vice president is acting as a
         Responsible Officer under this Agreement, or, with respect to financial
         matters, the chief financial officer of the Borrower, the treasurer of
         the Borrower or the chief accounting officer of the Borrower.

                  "Restatement Effective Date" means the date of the Initial
         Extension of Credit hereunder.

                  "Restricted Subsidiary" means each Subsidiary of the Borrower
         or of any Subsidiary of the Borrower, other than any Joint Venture.

                  "Revolving Credit Advance" means an advance made by any Lender
         pursuant to Section 2.02(a).

                  "Revolving Credit Borrowing" means a borrowing consisting of
         Revolving Credit Advances of the same Type made on the same day by the
         Lenders, and in the case of Eurodollar Advances, having the same
         Interest Period.

                  "Revolving Credit Facility" means, at any time, the aggregate
         amount of the Lenders' Commitments at such time.

                  "Secured Parties " means the Agents and the Lender Parties.

                  "Shiloh" has the meaning specified in Section 5.02(a)(viii).
<PAGE>
                                       19


                  "Ship Mortgage" means, with respect to any Eligible Vessel and
         Barge, a first preferred ship mortgage in substantially the form of
         Exhibit G hereto, as the same may be amended, supplemented or otherwise
         modified from time to time in accordance with this Agreement.

                  "Ships Value" means the aggregate value of all of the Eligible
         Vessels and Barges (except for any Eligible Vessel or Barge which has
         been disposed of in accordance with subsection 5.01(l)) as determined
         in accordance with the procedures for determining the fair market value
         of each vessel and barge as set forth in each Ship Mortgage, except
         that the value of each Eligible Vessel and Barge that suffers an Event
         of Loss (as defined in the applicable Ship Mortgage) shall (i) in the
         case any Default shall have occurred and be continuing, or shall result
         from such Event of Loss, be zero or (ii) in the case no Default shall
         have occurred and be continuing, or shall result from such Event of
         Loss, become zero upon the earliest of (x) the date that is 90 days
         after the date of such Event of Loss and (y) the date on which the
         insurance proceeds of such Event of Loss are paid to the Mortgagee (as
         defined in the Ship Mortgages) in accordance with Section 1.15 of the
         applicable Ship Mortgage.

                  "Single Employer Plan" means a single employer plan, as
         defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
         employees of the Borrower or any ERISA Affiliate and no Person other
         than the Borrower and the ERISA Affiliates or (b) was so maintained and
         in respect of which the Borrower or any ERISA Affiliate could have
         liability under Section 4069 of ERISA in the event such plan has been
         or were to be terminated.

                  "Subsidiary" of any Person means any corporation, partnership,
         joint venture, limited liability company, trust or estate or other
         entity of which (or in which) more than 50% of (a) the issued and
         outstanding capital stock or other ownership interests having ordinary
         voting power to elect a majority of the board of directors or a
         majority of other equivalent managers of such corporation, partnership
         or other entity are at the time owned, or the management of which is
         otherwise controlled, directly or indirectly through one or more
         intermediaries, or both, by such Person (irrespective of whether at the
         time capital stock of any other class or classes of such corporation
         shall or might have voting power upon the occurrence of any
         contingency), or (b) the interest in the capital or profits of such
         limited liability company, partnership or joint venture, or (c) the
         beneficial interest in such trust or estate, is at the time directly or
         indirectly owned or controlled by such Person, by such Person and one
         or more of its other Subsidiaries or by one or more of such Person's
         other Subsidiaries.

                  "Swing Line Advance" means an Advance by the Swing Line Bank
         pursuant to Section 2.01(a) or (b) any Lender pursuant to Section
         2.02(b).

                  "Swing Line Bank" has the meaning specified in the recitals to
         this Agreement.

                  "Swing Line Borrowing" means a borrowing consisting of a Swing
         Line Advance pursuant to Section 2.01(b) or the Lenders pursuant to
         Section 2.02(b).
<PAGE>
                                       20


                  "Swing Line Facility" has the meaning specified in Section
         2.01(b).

                  "Taxes" has the meaning set forth in Section 2.13(a).

                  "Termination Date" means the earliest of (i) the date of
         termination in whole of the Commitments pursuant to Section 2.04 or
         6.01 and (ii) October 31, 2004.

                  "Title XI Financing Agreements" means any and all documents
         and agreements executed by the Borrower or any Title XI Subsidiary
         evidencing obligations incurred in connection with any financing
         guaranteed under Title XI of the Merchant Marine Act of 1936, as
         amended.

                  "Title XI Subsidiaries" means the collective reference to
         Crowley Liner Services, Inc., Vessel Management Services, Inc. and
         Crowley Marine Services, Inc.

                  "Type" refers to each of the two categories of Advances,
         namely Advances bearing interest at the Base Rate and Advances bearing
         interest at the Eurodollar Rate.

                  "Unused Commitment" means, with respect to any Lender at any
         time, (a) such Lender's Commitment at such time minus (b) the sum of
         (i) the aggregate principal amount of all Advances made by such Lender
         and outstanding at such time, plus (ii) such Lender's Pro Rata Share of
         each of (A) the aggregate Available Amount of all Letters of Credit
         outstanding at such time, (B) the aggregate principal amount of all
         Letter of Credit Advances outstanding at such time other than any such
         Letter of Credit Advance which, at or prior to such time, has been
         assigned in part to such Lender pursuant to Section 2.16(d) and (C) the
         aggregate principal amount of all Swing Line Advances made by the Swing
         Link Bank pursuant to Section 2.01(b) and outstanding at such time.

                  "Vessel or Barge Disposition" has the meaning specified in
         subsection 5.02(e)(vi).

                  "Welfare Plan" means a welfare plan, as defined in Section
         3(1) of ERISA.

                  "Wholly Owned Subsidiary" means any Restricted Subsidiary of
         the Borrower, all of the outstanding equity interests in which are
         owned, directly or indirectly, by the Borrower.

                  "Withdrawal Liability" has the meaning specified in Part I of
         Subtitle E of Title IV of ERISA.

                  Section 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

                  Section 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles from time to time in effect in the United States
("GAAP").
<PAGE>
                                       21


                                   Article II
                        AMOUNTS AND TERMS OF THE ADVANCES

                  Section 2.01. The Advances. (a) Revolving Credit Advances.
Each Lender severally agrees, on the terms and conditions hereinafter set forth,
to make advances (each a "Revolving Credit Advance") to the Borrower from time
to time on any Business Day during the period from the Restatement Effective
Date until the Termination Date; provided that with respect to any requested
Revolving Credit Advance the amount of such Revolving Credit Advance does not
exceed either such Lender's Unused Commitment at such time or such Lender's Pro
Rata Share of the Borrowing Base Availability. Each Borrowing (other than any
Borrowing comprised of Letter of Credit Advances deemed to be converted to
Revolving Credit Advances pursuant to Section 2.16(f)(i)) shall be in an
aggregate amount of $3,000,000 or an integral multiple of $100,000 in excess
thereof (other than a Borrowing the proceeds of which shall be used solely to
repay or prepay in full outstanding Swing Line Advances or outstanding Letter of
Credit Advances). Each Borrowing shall consist of Revolving Credit Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Unused Commitment,
the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section
2.09 and reborrow under this Section 2.01(a).

                  (b) The Swing Line Advances. The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank may, if in its sole discretion
it elects to do so, make, on the terms and conditions hereinafter set forth,
Swing Line Advances to the Borrower from time to time on any Business Day during
the period from the date hereof until the Termination Date (i) in an aggregate
principal amount not to exceed at any time outstanding $10,000,000 (the "Swing
Line Facility") and (ii) in an amount for each such Swing Line Borrowing not to
exceed the Unused Commitment of the Swing Line Bank at such time. No Swing Line
Advance shall be used for the purpose of funding the payment of principal of any
other Swing Line Advance. Each Swing Line Borrowing shall be in an amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof and shall be
made as a Base Rate Advance. Within the limits of the Swing Line Facility and
within the limits referred to in clause (ii) above, so long as the Swing Line
Bank, in its sole discretion, elects to make Swing Line Advances, the Borrower
may borrow under this Section 2.01(b), repay pursuant to Section 2.05(b) or
prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b).

                  Section 2.02. Making the Revolving Credit Advances. (a) Except
as otherwise provided in Section 2.16(f)(i) in respect of Letter of Credit
Advances deemed converted to Revolving Credit Advances, each Borrowing shall be
made on notice, given not later than 1:00 P.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or by
telecopier, in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Type of Revolving Credit Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such
<PAGE>
                                       22


Advance. Each Lender shall, before 3:00 P.M. (New York City time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Lender's ratable portion of such Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's address referred to in
Section 9.02; provided, however, that the Administrative Agent shall first make
a portion of such funds equal to the aggregate principal amount of any Swing
Line Advances and Letter of Credit Advances made by the Swing Line Bank or any
Issuing Bank, as the case may be, or, in either case, by any other Lender and
outstanding on the date of such Borrowing, plus interest accrued and unpaid
thereon to and as of such date, available to the Swing Line Bank or such Issuing
Bank, as the case may be, and, in either case, such other Lenders for repayment
of such Swing Line Advances and Letter of Credit Advances.

                  (b) Each Swing Line Borrowing shall be made on notice, given
not later than 3:00 P.M. (New York City time) on the date of the proposed Swing
Line Borrowing, by the Borrower to the Swing Line Bank and the Administrative
Agent. Each such notice of a Swing Line Borrowing (a "Notice of Swing Line
Borrowing") shall be by telephone, confirmed immediately in writing or
telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such Borrowing (which maturity
shall be no later than the tenth day after the requested date of such
Borrowing). If, in its sole discretion, it elects to make the requested Swing
Line Advance, the Swing Line Bank will make the amount thereof available to the
Administrative Agent at the Administrative Agent's Account, in same day funds.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account. Upon written demand by the Swing Line Bank, with a copy of such demand
to the Administrative Agent, each other Lender shall purchase from the Swing
Line Bank, and the Swing Line Bank shall sell and assign to each such other
Lender, such other Lender's Pro Rata Share of such outstanding Swing Line
Advance as of the date of such demand, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of the
Swing Line Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Swing Line Advance to be purchased by such Lender. The Borrower hereby
agrees to each such sale and assignment. Each Lender agrees to purchase its Pro
Rata Share of an outstanding Swing Line Advance on (i) if such Lender is not a
LIBOR-Only Lender, the Business Day on which demand therefor is made by the
Swing Line Bank, provided that notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day or (ii) if such Lender is a
LIBOR-Only Lender or, as to each other Lender if notice of such demand is given
after 11:00 A.M. (New York City time) on any Business Day, the first Business
Day next succeeding the Business Day on which notice of such demand is given.
Upon any such assignment by the Swing Line Bank to any other Lender of a portion
of a Swing Line Advance, the Swing Line Bank represents and warrants to such
other Lender that the Swing Line Bank is the legal and beneficial owner of such
interest being assigned by it, but makes no other representation or warranty and
assumes no responsibility with respect to such Swing Line Advance, the Loan
Documents or any Loan Party. If and to the extent that any Lender shall not have
so made the amount of such Swing Line Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date of demand
by the Swing Line Bank
<PAGE>
                                       23


until the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate. If such Lender shall pay to the Administrative Agent such amount for
the account of the Swing Line Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Swing Line Advance made by such Lender
on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Swing Line Advance made by the Swing Line Bank shall be
reduced by such amount on such Business Day.

                  (c) Anything in subsection (a) above to the contrary
notwithstanding, (i) so long as any Lender is a LIBOR-Only Lender, the Borrower
shall not be permitted to request Base Rate Advances and if the obligation of
the Lenders to make Eurodollar Rate Advances shall have been suspended pursuant
to Section 2.07 or 2.11, no additional Borrowings shall be permitted and (ii)
the Eurodollar Rate Advances may not be outstanding as part of more than six
separate Eurodollar Rate Tranches.

                  (d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.

                  (e) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Advances comprising
such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Administrative Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.

                  (f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
<PAGE>
                                       24


                  Section 2.03. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of each Lender a commitment fee on
the average daily Unused Commitment of such Lender plus such Lender's Pro Rata
Share of the average daily outstanding Swing Line Advances during the quarter
for which such commitment fee is payable, from the Restatement Effective Date in
the case of each Initial Lender and from the later of such date and the
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender until the Termination Date at a
rate per annum equal to the Commitment Fee Rate. Such commitment fee shall in
all cases be payable in arrears quarterly on the last Business Day of each
March, June, September and December, commencing on December 31, 2001, and on the
Termination Date.

                  (b) Upfront Fees. The Borrower shall pay to the Administrative
Agent for the account of each Initial Lender on the Restatement Effective Date
an upfront fee on the Commitment of such Initial Lender in an amount equal to
0.25% of such Initial Lender's Commitment.

                  (c) Agents' Fees. The Borrower shall pay to the Administrative
Agent for its account such fees as may from time to time be agreed between the
Borrower and such agent.

                  Section 2.04. Termination or Reduction of the Commitments. (a)
The Borrower shall have the right, upon at least three Business Days' notice to
the Administrative Agent, to terminate in whole or reduce ratably in part the
Unused Commitments or the unused portion of the Letter of Credit Commitments,
provided that each partial reduction of the Revolving Credit Facility or the
Letter of Credit Facility (i) shall be in the aggregate amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof and (ii) shall be made
ratably among the Lenders or the Issuing Banks, as the case may be, in
accordance with their Commitments with respect to the Revolving Credit Facility
or their Letter of Credit Commitment with respect to the Letter of Credit
Facility, as the case may be.

                  (b) The Letter of Credit Facility shall be permanently reduced
from time to time on the date of each reduction in the Revolving Credit Facility
by the amount, if any, by which the amount of the Letter of Credit Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.

                  (c) The Swing Line Facility shall be permanently reduced from
time to time on the date of each reduction in the Revolving Credit Facility by
the amount, if any, by which the amount of the Swing Line Facility exceeds the
Revolving Credit Facility after giving effect to such reduction of the Revolving
Credit Facility.

                  Section 2.05. Repayment of Advances. (a) Revolving Credit
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate principal amount of
the Revolving Credit Advances then outstanding.

                  (b) Swing Line Advances. The Borrower shall repay to the
Administrative Agent for the account of the Swing Line Bank and each other
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them, together with interest accrued
thereon, on the earlier of the maturity date specified in the
<PAGE>
                                       25


applicable Notice of Swing Line Borrowing (which maturity shall be no later than
the tenth day after the requested date of such Borrowing) and the Termination
Date.

                  Section 2.06. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date such Advance is made until such principal amount shall be
paid in full, at the following rates per annum:

                  (i) Base Rate Advances. During such periods as such Advance is
         a Base Rate Advance, at a rate per annum equal at all times to the sum
         of (x) the Base Rate in effect from time to time plus (y) the
         Applicable Margin in effect from time to time, payable in arrears
         quarterly on the last Business Day of each March, June, September and
         December during such periods and on the date such Base Rate Advance
         shall be Converted or paid in full.

                  (ii) Eurodollar Rate Advances. During such periods as such
         Advance is a Eurodollar Rate Advance, at a rate per annum at all times
         during each Interest Period for the Eurodollar Rate Tranche of such
         Advance equal to the sum of (x) the Eurodollar Rate for such Interest
         Period for such Eurodollar Rate Tranche plus (y) the Applicable Margin
         in effect from time to time, payable in arrears on the last day of such
         Interest Period and, if such Interest Period has a duration of more
         than three months, on each day that occurs during such Interest Period
         every three months from the first day of such Interest Period and on
         the date each Eurodollar Rate Advance shall be Converted or paid in
         full.

                  (b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable in arrears
on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Advance pursuant to clause (a)(i) or (a)(ii) above, as the case may be,
and (ii) to the fullest extent permitted by law, the amount of any interest, fee
or other amount payable hereunder that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on Base Rate Advances pursuant to clause (a)(i) above.

                  Section 2.07. Interest Rate Determination. (a) If, with
respect to any Eurodollar Rate Advances, the Required Lenders notify the
Administrative Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.

                  (b) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest
<PAGE>
                                       26


Period" in Section 1.01, the Administrative Agent will forthwith so notify the
Borrower and the Lenders and such Advances will automatically, on the last day
of the then existing Interest Period therefor, Convert into Base Rate Advances.

                  (c) Upon the occurrence and during the continuance of any
Event of Default under Section 6.01(a) or Section 6.01(f), (i) each Eurodollar
Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.

                  Section 2.08. Optional Conversion of Advances. The Advances
included in each Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Borrowing, or in the case
of Letter of Credit Advances deemed to be converted to Revolving Credit Advances
pursuant to Section 2.16(f)(i), initially at the Base Rate. Thereafter, the
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 1:00 P.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.11, Convert all or a portion of Advances of one Type comprising the
same Group of Advances into Advances of the other Type; provided, however, that
any Conversion of Eurodollar Rate Advances into Base Rate Advances pursuant to
this Section 2.08 shall not be permitted if any Lender is a LIBOR-Only Lender at
such time and, if permitted, shall be made only on the last day of an Interest
Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances
into Eurodollar Rate Advances shall be in an amount not less than the minimum
amount specified in Section 2.01(b) and no Conversion of any Advances shall
result in more separate Eurodollar Rate Tranches than permitted under Section
2.02(c); and provided further that with respect to the Conversion of a portion
of Advances comprising part of the same Group, such portion is allocated ratably
among the Advances comprising such Group and each resulting Eurodollar Rate
Tranche is in an aggregate amount of $3,000,000 or an integral multiple of
$100,000 in excess thereof. Each such notice of a Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Advances to be Converted, (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for the Eurodollar Rate
Tranche to be comprised of such Advances and (iv) the Group of Advances (or
portion thereof) to which such notice applies. Each notice of Conversion shall
be irrevocable and binding on the Borrower.

                  Section 2.09. Prepayments. (a) Optional. The Borrower may,
upon at least (i) three Business Days' notice in the case of (A) Eurodollar Rate
Advances and (B) any Advance, if any Lender making such Advance is a LIBOR-Only
Lender at such time, and (ii) one Business Day's notice in the case of any other
Advance, in each case, to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Advances in whole
or ratably in part, and in the case of Eurodollar Advances together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount of $3,000,000 or an integral multiple of $100,000 in excess
thereof and (y) in the event of any such prepayment of a Eurodollar Rate
Advance, the Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to Section 9.04(c).
<PAGE>
                                       27


                  (b) Mandatory. The Borrower shall (i) on each Business Day,
prepay an aggregate principal amount of the Advances equal to the amount by
which (A) the sum of the aggregate principal amount of (x) the Advances and (y)
the aggregate Available Amount of all Letters of Credit then outstanding exceeds
(B) the Revolving Credit Facility on such Business Day, (ii) on each Business
Day, prepay an aggregate principal amount of the Advances equal to the amount by
which (A) the sum of the aggregate principal amount of (x) the Advances and (y)
the aggregate Available Amount of all Letters of Credit then outstanding exceeds
(B) the Borrowing Base on such Business Day and (iii) so long as any Lender is a
LIBOR-Only Lender, on the date that is 90 days following receipt by the Borrower
of written notice from the Administrative Agent of the occurrence of an event
giving rise to the suspension of the obligation of the Lenders to make
Eurodollar Rate Advances pursuant to Section 2.07 or 2.11, prepay all
outstanding Advances, together with all accrued interest and fees. Prepayments
of the Revolving Credit Facility made pursuant to this subsection (b) shall be
first applied to prepay Letter of Credit Advances then outstanding until such
Advances are paid in full, second applied to prepay Swing Line Advances then
outstanding until such Advances are paid in full, and third applied to prepay
Revolving Credit Advances then outstanding comprising part of the same
Borrowings until such Advances are paid in full, in each case, together with the
respective interest accrued thereon. If, after giving effect to the foregoing
payments or if no Advances are at such time outstanding, the aggregate Available
Amount of all Letters of Credit then outstanding exceeds the Letter of Credit
Facility, then the Borrower shall cash collateralize the Letters of Credit in an
aggregate amount equal to such excess in accordance with arrangements reasonably
satisfactory to the Administrative Agent.

                  Section 2.10. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
which compliance was not required as of the date hereof, there shall be any
increase in the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances or of agreeing to issue or of issuing or
maintaining Letters of Credit or of agreeing to make or of making Letter of
Credit Advances (excluding for purposes of this Section 2.10 any such increased
costs resulting from (i) Taxes or Other Taxes (as to which Section 2.13 shall
govern) and (ii) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Applicable
Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, within 30 days after demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost; provided, however, that before making any such
demand, each Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the Borrower
and the Administrative Agent by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.

                  (b) If any Lender determines (taking into account such
Lender's, or its controlling corporation's, policies with respect to capital
adequacy) that compliance, which compliance was not required as of the date
hereof, with any law or regulation or any guideline or
<PAGE>
                                       28


request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by such Lender or any corporation controlling such
Lender and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend hereunder and other commitments of
such type or the issuance or maintenance of Letters of Credit (or similar
contingent obligations), then, within 30 days after demand by such Lender (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder or to the
issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrower and the Administrative Agent by such Lender
shall be conclusive and binding for all purposes, absent manifest error.

                  Section 2.11. Illegality. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such lender to the Borrower
through the Administrative Agent (i) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.

                  Section 2.12. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 1:00 P.M.
(New York City time) on the day when due in Dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds. The Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or facility fees ratably (other than
amounts payable pursuant to Section 2.10, 2.13 or 9.04(c)) to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
<PAGE>
                                       29


                  (b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due. Each Lender agrees
promptly to notify the Borrower after any such charge against the Borrower's
accounts, provided that the failure to give such notice shall not affect the
validity of such charge.

                  (c) All computations of interest based on the rate of interest
set forth in clause (a) of the definition of "Base Rate" shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate, the Federal
Funds Rate or on the rate of interest set forth in clause (b) of the definition
of "Base Rate" and of fees and Letter of Credit commissions shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or Letter of Credit
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or Letter of Credit commission hereunder shall be conclusive
and binding for all purposes, absent manifest error.

                  (d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fee, as the case
may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.

                  (e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.

                  Section 2.13. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and each Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or
such Agent is organized or any political subdivision thereof and, in the case of
each Lender, taxes imposed on its overall net income, and franchise taxes
imposed on it in lieu of net income taxes, by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable
<PAGE>
                                       30


hereunder or under any Note to any Lender or any Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.13), such Lender or such Agent receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.

                  (b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, performing under, or
otherwise with respect to, this Agreement or the Notes (hereinafter referred to
as "Other Taxes").

                  (c) The Borrower shall indemnify each Lender and each Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
taxes imposed by any jurisdiction on amounts payable under this Section 2.13)
imposed on or paid by such Lender or such Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Indemnification payments under this Section 2.13 shall be made
within 30 days from the date such Lender or such Agent (as the case may be)
makes written demand therefor, accompanied by written evidence demonstrating the
payment of such Taxes or Other Taxes.

                  (d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its respective addresses
referred to in Section 9.02, if reasonably available, the original or a
certified copy of a receipt or, if no such receipt is reasonably available,
other evidence of payment thereof satisfactory to the Administrative Agent. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such addresses, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.

                  (e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender, the Initial
Issuing Bank and the Swing Line Bank and on or prior to the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter as reasonably requested in
writing by the Borrower (but only so long thereafter as such Lender remains
lawfully able to do so), provide each of the Administrative Agent and the
Borrower with two original Internal Revenue Service forms W-8BEN or W-8ECI or,
in the case of a Lender that has certified in writing to the Administrative
Agent that it (i) is not a "bank" as defined in Section 881(c)(3)(A) of the
Code, (ii) is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and (iii) is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code), Internal Revenue Service Form W-8BEN, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service,
<PAGE>
                                       31


certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to the Loan Documents or, in
the case of a Lender that has certified that it is not a "bank" as described
above, certifying that such Lender is a foreign corporation, partnership, estate
or trust. If the forms provided by a Lender at the time such Lender first
becomes a party to this Agreement indicate a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be considered
excluded from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender becomes a party to this Agreement, the
Lender assignor was entitled to payments under subsection (a) of this Section
2.13 in respect of United States withholding tax with respect to interest paid
at such date, then, to such extent, the term "Taxes" shall include (in addition
to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to the Lender assignee on such date. If any form or document
referred to in this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and information required
on the date hereof by Internal Revenue Service form W-8BEN or W-8ECI (or the
certificate described above), that the applicable Lender reasonably considers to
be confidential, such Lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such confidential
information.

                  (f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section 2.13(e)
(other than if such failure is due to a change in law or in the interpretation
or application thereof, occurring subsequent to the date on which a form
originally was required to be provided) or if such form otherwise is not
required under subsection (e) of this Section 2.13, such Lender shall not be
entitled to indemnification under Section 2.13(a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall at the Lender's expense take such steps
as the Lender shall reasonably request to assist the Lender to recover such
Taxes.

                  (g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.

                  Section 2.14. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances owing to it (other
than pursuant to Section 2.10, 2.13 or 9.04(c)) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the
<PAGE>
                                       32


extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.

                  Section 2.15. Use of Proceeds. (a) The proceeds of the
Advances shall be used (i) to refinance certain Indebtedness incurred in
connection with the Borrower's acquisition of MTC and (ii) for general corporate
purposes of the Borrower and its Subsidiaries.

                  (b) All Letters of Credit shall be issued and proceeds of
Letters of Credit shall be used to support obligations of the Borrower or a
Designated Account Party, contingent or otherwise, for (i) industrial
development bonds, (ii) conference memberships, (iii) port leases, (iv)
insurance, (v) shortfall guarantees related to shipbuilding contracts, (vi)
workers' compensation, (viii) judgments, or appeal bonds in respect thereof, and
(viii) other general corporate purposes.

                  Section 2.16. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Letters of Credit. Each Issuing Bank severally agrees, on
the terms and conditions hereinafter set forth, to issue standby and, in the
sole discretion of the respective Issuing Bank, direct-pay, letters of credit
(together with the Existing Letters of Credit, the "Letters of Credit") for the
account of the Borrower or a Designated Account Party from time to time on any
Business Day during the period from the Restatement Effective Date until 30 days
before the Termination Date (i) in an aggregate Available Amount for all Letters
of Credit issued by such Issuing Bank not to exceed at any time such Issuing
Bank's Letter of Credit Commitment less such Issuing Bank's Letter of Credit
Advances and (ii) in an Available Amount for each such Letter of Credit not to
exceed the least of (x) the Letter of Credit Sub-Limit at such time, (y) the
Unused Commitments of the Lenders at such time and (z) the Borrowing Base
Availability at such time. No Letter of Credit shall have an expiration date
(including all rights of the Borrower or the beneficiary to require renewal)
later than the earlier of one year after the Termination Date and one year after
the date of issuance thereof. Any Letter of Credit may, upon request of the
Borrower or Designated Account Party, as the case may be, include a provision
whereby such Letter of Credit may be renewed for additional consecutive periods
of 12 months or less, provided that the consent of the Required Lenders and the
Issuing Bank will be required for any such renewal during the continuance of a
Default or Event of Default. Within the limits of the Letter of Credit Facility,
and subject to the limits referred to above, the Borrower or a Designated
Account Party may request the issuance of Letters of Credit under this Section
2.16(a), the Borrower may repay any Letter of Credit Advances resulting from
drawings thereunder pursuant to Section 2.16(d) and the Borrower or a Designated
Account Party may request the issuance of additional Letters of Credit under
this Section 2.16(a). Each Letter of Credit shall be denominated in Dollars.

                  (b) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 1:00 P.M. (New York City time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower or any Designated Account Party
<PAGE>
                                       33


to any Issuing Bank, which shall give to the Administrative Agent and each
Lender prompt notice thereof by telecopier. Each such notice of issuance of a
Letter of Credit (a "Notice of Issuance") shall be by telephone, confirmed
immediately in writing, or telecopier, specifying therein the requested (A) date
of such issuance (which shall be a Business Day), (B) Available Amount of such
Letter of Credit, (C) expiration date of such Letter of Credit, (D) name and
address of the beneficiary of such Letter of Credit and (E) form of such Letter
of Credit, and shall be accompanied by such application and agreement for letter
of credit as such Issuing Bank may specify to the Borrower or such Designated
Account Party for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"). If (x) the requested form of such Letter of
Credit and the identity and location of the proposed beneficiary thereof is
acceptable to the Issuing Bank consistent with such Issuing Bank's established
policies generally applicable to the issuance of letters of credit and any
applicable law and (y) it has not received notice of objection to such issuance
from the Required Lenders such Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower or such Designated Account Party at its office
referred to in Section 9.02 or as otherwise agreed with the Borrower or such
Designated Account Party in connection with such issuance. In the event and to
the extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.
Notwithstanding Section 9.07, from time to time any Issuing Bank may, by notice
to the Administrative Agent and the Borrower, assign to an Affiliate of such
Issuing Bank which is at such time also an Issuing Bank all or a portion of such
assigning Issuing Bank's Letter of Credit Commitment hereunder. Upon the
issuance of a Letter of Credit, each Lender shall be deemed to have a risk
participation in such Letter of Credit to the extent of its Pro Rata Share of
the Available Amount of such Letter of Credit.

                  (c) Letter of Credit Reports. Each Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each month a
written report summarizing issuance and expiration dates of Letters of Credit
issued during the previous month by such Issuing Bank and drawings during such
month under all Letters of Credit, (B) to each Lender on the first Business Day
of each month a written report summarizing issuance and expiration dates of
Letters of Credit issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by such Issuing
Bank and (C) to the Administrative Agent and each Lender on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter of all Letters
of Credit issued by such Issuing Bank.

                  (d) Drawing and Reimbursement. The payment by any Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by such Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of the Reimbursement
Obligations relating to such draft as of the date of such Letter of Credit
Advance. Upon written demand by such Issuing Bank, with a copy of such demand to
the Administrative Agent, each Lender shall purchase from such Issuing Bank, and
such Issuing Bank shall sell and assign to each such Lender, such Lender's Pro
Rata Share of such outstanding Letter of Credit Advance as of the date of such
purchase, by making available for the account of its Applicable Lending Office
to the Administrative Agent for the account of such Issuing Bank, by deposit to
the Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender; provided, that, in the case of any payment of a
draft drawn under a Letter of Credit that is a
<PAGE>
                                       34


direct-pay letter of credit, the applicable Issuing Bank shall not make such
written demand at any time prior to the Business Day immediately following the
date on which such payment is made; provided, further, that at any time prior to
the date on which such written demand is made, the Borrower shall be permitted
to repay the full amount of such payment on same-day notice to the
Administrative Agent and the applicable Issuing Bank. Promptly after receipt of
such payment, the Administrative Agent shall transfer such funds to such Issuing
Bank. The Borrower hereby agrees to each such sale and assignment. Each Lender
agrees to purchase its Pro Rata Share of such an outstanding Letter of Credit
Advance on (i) the Business Day on which demand therefor is made by the Issuing
Bank which made such Advance, provided notice of such demand is given not later
than 11:00 A.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by an Issuing Bank to any other Lender of a
portion of a Letter of Credit Advance, such Issuing Bank represents and warrants
to such Lender that such Issuing Bank is the legal and beneficial owner of such
interest being assigned by it, free and clear of any liens, but makes no other
representation or warranty and assumes no responsibility with respect to such
Letter of Credit Advance, the Loan Documents, any Loan Party or any Designated
Account Party. If and to the extent that any Lender shall not have so made the
amount of such Letter of Credit Advance available to the Administrative Agent,
such Lender agrees to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
such Issuing Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for its account or the account of such Issuing
Bank, as applicable. If such Lender shall pay to the Administrative Agent such
amount for the account of such Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.

                  (e) Failure to Make Letter of Credit Advances. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.16(d) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.

                  (f) Letter of Credit Advances. (i) Upon a Lender making
available to the Administrative Agent the amount of the Letter of Credit Advance
pursuant to Section 2.16(d), such Letter of Credit Advance shall be deemed to be
converted to a Revolving Credit Advance to the extent that at such time such
Lender could make a Revolving Credit Advance pursuant to Section 2.01. The
Borrower shall repay to the Administrative Agent for the account of each Issuing
Bank and each Lender that has a Letter of Credit Advance that has not been
converted pursuant to the immediately preceding sentence on the earliest of (i)
demand, (ii) the date of the next Borrowing and (iii) the Termination Date the
outstanding principal amount of each Letter of Credit Advance made by each of
them.

                  (ii) The obligations of the Borrower under this Agreement with
respect to any Letter of Credit, any Letter of Credit Agreement and any other
agreement or instrument relating to any Letter of Credit, including without
limitation, the obligation to repay any Advance arising from a drawing on a
Letter of Credit, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other
<PAGE>
                                       35


agreement or instrument under all circumstances, including, without limitation,
the following circumstances and regardless of the use of proceeds of any drawing
under any Letter of Credit or any defense related thereto:

                  (A) any lack of validity or enforceability of this Agreement,
         any Note, any Letter of Credit Agreement, any Letter of Credit or any
         other agreement or instrument relating thereto (all of the foregoing
         being, collectively, the "L/C Related Documents");

                  (B) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the obligations of the Borrower or
         any Designated Account Party in respect of any L/C Related Document or
         any other amendment or waiver of or any consent to departure from all
         or any of the L/C Related Documents;

                  (C) the existence of any claim, set-off, defense or other
         right that the Borrower or any Designated Account Party may have at any
         time against any beneficiary or any transferee of a Letter of Credit
         (or any Persons for whom any such beneficiary or any such transferee
         may be acting), any Issuing Bank or any other Person, whether in
         connection with the transactions contemplated by the L/C Related
         Documents or any unrelated transaction;

                  (D) any statement or any other document presented under a
         Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect;

                  (E) payment by any Issuing Bank under a Letter of Credit
         against presentation of a draft or certificate that does not strictly
         comply with the terms of such Letter of Credit;

                  (F) any exchange, release or non-perfection of any collateral,
         or any release or amendment or waiver of or consent to departure from
         any guaranty, for all or any of the obligations of the Borrower or any
         Designated Account Party in respect of the L/C Related Documents; or

                  (G) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing, including, without limitation, any
         other circumstance that might otherwise constitute a defense available
         to, or a discharge of, the Borrower, any Designated Account Party, any
         Guarantor or any other guarantor.

                  (g) Letter of Credit Fees. (i) The Borrower shall pay (or in
the case of a Letter of Credit issued for the account of a Designated Account
Party, cause such Designated Account Party to pay) to the Administrative Agent
for the account of each Lender a fee on such Lender's Pro Rata Share of the
average daily aggregate Available Amount of all Letters of Credit outstanding
from time to time at the Letter of Credit Fee Rate, payable in arrears quarterly
on the last Business Day of each March, June, September and December commencing
December 31, 2001 and on the Termination Date.

                  (ii) The Borrower shall pay to each Issuing Bank a fronting
fee on the terms and in the amount agreed upon between the Borrower and such
Issuing Bank with respect to each Letter of Credit issued by such Issuing Bank,
together with such other commissions, transfer fees
<PAGE>
                                       36


and other fees and charges in connection with the issuance or administration of
each Letter of Credit as the Borrower and such Issuing Bank shall agree.

                  (h) Limited Liability of the Issuing Banks. The Borrower (and
in the case of any Letter of Credit issued for the account of a Designated
Account Party, such Designated Account Party) assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither any Issuing Bank nor any of its
officers or directors shall be liable or responsible for: (a) the use that may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by such Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such
Issuing Bank, and such Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) such Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or (ii) such
Issuing Bank's willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying with
the terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Bank may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.

                  (i) Collateral Account. (i) On or before the Termination Date,
the Borrower hereby agrees to deposit an amount equal to the aggregate amount
available at such time to be drawn under the Letters of Credit (such aggregate
amount as determined from time to time being the "Required Balance") in a cash
collateral account to be established and maintained by the Administrative Agent
pursuant to a Cash Collateral Agreement over which the Administrative Agent
shall have sole dominion and control (the "L/C Cash Collateral Account") upon
terms substantially set forth in such Cash Collateral Agreement. The
Administrative Agent shall, at the Borrower's direction and without assuming any
risk of loss thereof, invest the funds in the L/C Cash Collateral Account in
Cash Equivalents for the account of the Borrower. All interest and other
investment gains earned on such investments shall be added to the L/C Cash
Collateral Account as additional collateral security for the prompt and complete
payment when due of the obligations and liabilities of the Borrower and any
Designated Account Party under and in respect of the Letters of Credit. On (i)
the last Business Day of each calendar month, the Administrative Agent or (ii)
any other date that the Borrower, the Administrative Agent or Required Lenders
through the Administrative Agent shall in writing request, the Administrative
Agent shall determine whether the amount on deposit on such date in the L/C Cash
Collateral Account (A) is greater than the Required Balance on such date (the
amount of such excess being the "Excess Amount") or (B) is less than the
Required Balance on such date (the amount of such deficit being the "Deficit
Amount"). The Administrative Agent shall advise the Borrower on the date of
determination of the existence, if any, of any Excess Amount or Deficit Amount
and thereafter (i) the Borrower shall immediately upon receipt of notice from
the Administrative Agent of the existence of any Deficit Amount, pay to the
Collateral Agent (as defined in the Cash Collateral Agreement), as additional
funds to be deposited and held in such cash collateral account, an
<PAGE>
                                       37


amount equal to such Deficit Amount or (ii) upon request of the Borrower within
5 Business Days of receipt of notice from the Administrative Agent of the
existence of any Excess Amount, the Administrative Agent shall instruct such
Collateral Agent to release to the Borrower from the funds on deposit in the L/C
Cash Collateral Account an amount equal to such Excess Amount. If at any time
the Administrative Agent or such Collateral Agent determines that any funds held
in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than such Collateral Agent, any Agent, any Issuing Bank or the
Lenders, which right or claim could reasonably have the effect of reducing the
value of such funds to the Lenders and the Issuing Banks, the Borrower will,
forthwith upon receipt of a demand by the Administrative Agent, pay to the
Collateral Agent, as additional funds to be deposited and held in such L/C Cash
Collateral Account, an amount equal to the amount by which the value of such
funds to the Lenders and the Issuing Banks has been reduced as determined by the
Administrative Agent.

                  (ii) The Borrower hereby grants a security interest in any
amounts from time to time on deposit in the L/C Cash Collateral Account as
collateral security for the prompt and complete payment when due of the
obligations and liabilities of the Borrower and the Designated Account Parties
under and in respect of the Letters of Credit.

                  (iii) The Borrower, the Administrative Agent, each other
Agent, each Issuing Bank and the Lenders agree that any action taken or omitted
to be taken by the Administrative Agent in connection with the L/C Cash
Collateral Account, if taken or omitted to be taken in good faith and with
reasonable care, shall be binding upon the Borrower, each other Agent, the
Issuing Banks and the Lenders and shall not create any liability on the part of
the Administrative Agent to the Borrower, each other Agent, the Issuing Banks or
the Lenders.

                  (j) Existing Letters of Credit. Effective as of the
Restatement Effective Date, (i) all "Letters of Credit" issued for the account
of the Borrower by Citibank under the Existing Credit Agreement (such "Letters
of Credit" as are outstanding thereunder on the Restatement Effective Date and
set forth on Schedule II hereto being the "Existing Letters of Credit"), will be
deemed to be Letters of Credit hereunder and (ii) the applications and
agreements for such Existing Letters of Credit shall be deemed to be Letter of
Credit Agreements hereunder.

                  Section 2.17. Increase in Commitments.

                  (a) The Borrower may, at any time prior to the Termination
Date, with the consent of the Administrative Agent (not to be unreasonably
withheld), request that the aggregate amount of the Commitments be increased by
an amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof (each a "Commitment Increase") to be effective as of a date that is at
least 90 days prior to the scheduled Termination Date then in effect (the
"Increase Date") as specified in the related notice to the Administrative Agent;
provided, however, that (i) in no event shall the aggregate amount of the
Commitment Increases exceed $10,000,000 and (ii) on the date of any request by
the Borrower for a Commitment Increase and on the related Increase Date, the
applicable conditions set forth in Article III shall be satisfied.

                  (b) The Administrative Agent shall promptly notify such
Eligible Assignees as it shall identify of a request by the Borrower for a
Commitment Increase, which notice shall include (i) the proposed amount of such
requested Commitment Increase, (ii) the proposed Increase Date and (iii) the
date by which Lenders wishing to participate in the Commitment
<PAGE>
                                       38


Increase must commit to an increase in the amount of their respective
Commitments (the "Commitment Date"). The requested Commitment Increase shall be
allocated among the Eligible Assignees willing to participate therein in such
amounts as are agreed between the Borrower and the Administrative Agent.

                  (c) Promptly following each Commitment Date, the
Administrative Agent shall notify the Borrower as to the amount, if any, by
which the Eligible Assignees are willing to participate in the requested
Commitment Increase; provided, however, that the Commitment of each such
Eligible Assignee shall be in an amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.

                  (d) On each Increase Date, each Eligible Assignee that is not
prior to such date a Lender hereunder and accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.17(c) (each such
Eligible Assignee, an "Assuming Lender") shall become a Lender party to this
Agreement as of such Increase Date and the Commitment of each Eligible Assignee
that prior to such date is a Lender and accepts an offer to participate in such
a requested Commitment Increase (an "Increasing Lender") shall be so increased
by such amount as of such Increase Date; provided, however, that the
Administrative Agent shall have received on or before such Increase Date the
following, each dated such date:

                  (i) (A) certified copies of resolutions of the Board of
         Directors of the Borrower or the Executive Committee of such Board
         approving the Commitment Increase and the corresponding modifications
         to this Agreement, (B) a consent executed by each Guarantor approving
         the Commitment Increase and the corresponding modifications to this
         Agreement and (C) an opinion of counsel for the Borrower (which may be
         in-house counsel), in substantially the form of Exhibit D hereto;

                  (ii) an assumption agreement from each Assuming Lender, if
         any, in form and substance satisfactory to the Borrower and the
         Administrative Agent (each an "Assumption Agreement"), duly executed by
         such Eligible Assignee, the Administrative Agent and the Borrower;

                  (iii) confirmation from each Increasing Lender of the increase
         in the amount of its Commitment in a writing satisfactory to the
         Borrower and the Administrative Agent;

                  (iv) Notes payable to the order of the Assuming Lenders and
         the Increasing Lenders evidencing the aggregate indebtedness of the
         Borrower to such Lenders after giving effect to the applicable
         Commitment Increase; and

                  (v) revised Schedule I hereto setting forth the Commitment of
         each Lender after giving effect to the applicable Commitment Increase.

On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.17(d), the Administrative Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
and the Borrower, on or before 1:00 P.M. (New York City time), by telecopier ,
of the occurrence of the Commitment Increase to be effected on such Increase
Date and shall record in the Register the relevant information with respect to
each Increasing Lender and each Assuming Lender on such date.
<PAGE>
                                       39


                                  Article III
                     CONDITIONS TO EFFECTIVENESS AND LENDING

                  Section 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:

                  (a) The Administrative Agent shall have received on or before
         the day of the Initial Extension of Credit the following, each dated
         such day (unless otherwise specified), in form and substance
         satisfactory to the Administrative Agent (unless otherwise specified)
         and (except for the Notes) in sufficient copies for each Lender Party:

                           (i) The Notes payable to the order of the Lenders.

                           (ii) A guaranty in substantially the form of Exhibit
                  E hereto (together with each other guaranty and guaranty
                  supplement delivered pursuant to Sections 5.01(m) or 5.02(k),
                  in each case as amended, the "Amended and Restated Subsidiary
                  Guaranty"), duly executed by each Guarantor.

                           (iii) Ship Mortgages and supplements to existing Ship
                  Mortgages, as the Collateral Agent may determine is necessary,
                  for each Eligible Vessel and Barge listed on Schedule XI
                  hereto, together with evidence that each such Ship Mortgage,
                  together with any such supplement, has been duly recorded and
                  is in full force and effect.

                           (iv) Assignments of Insurances for each Eligible
                  Vessel and Barge listed on Schedule XI hereto.

                           (v) Assignments of Freights and Hires for each
                  Eligible Vessel and Barge listed on Schedule XI hereto.

                           (vi) Copy of the most recent appraisal of the value
                  (as determined in accordance with the appraisal procedures set
                  forth in the Ship Mortgages) required to be delivered under
                  the terms of the Existing Credit Agreement of each Eligible
                  Vessel and Barge listed on Schedule XI hereto by an appraiser
                  acceptable to the Administrative Agent.

                           (vii) Certified copies of the resolutions of the
                  Board of Directors of each Loan Party approving the Agreement
                  and each other Loan Document to which it is or is to be a
                  party, and of all documents evidencing other necessary
                  corporate action and governmental and other third party
                  approvals and consents, if any, with respect to the Agreement
                  and each Loan Document to which it is or is to be a party.

                           (viii) A copy of a certificate of the Secretary of
                  State of the jurisdiction of incorporation of each Loan Party,
                  dated reasonably near the date of the Initial Extension of
                  Credit, certifying (A) as to a true and correct copy of the
                  charter of
<PAGE>
                                       40


                  such Loan Party and each amendment thereto on file in such
                  Secretary's office and (B) that such amendments are the only
                  amendments to such Loan Party's charter on file in such
                  Secretary's office, and (C) such Loan Party is duly
                  incorporated and in good standing or presently subsisting
                  under the laws of the State of the jurisdiction of its
                  incorporation.

                           (ix) A certificate of each Loan Party, signed on
                  behalf of such Loan Party by its President or a Vice President
                  and its Secretary or any Assistant Secretary, dated the date
                  of the Initial Extension of Credit (the statements made in
                  which certificate shall be true on and as of the date of the
                  Initial Extension of Credit), certifying as to (A) the absence
                  of any amendments to the charter of such Loan Party since the
                  date of the Secretary of State's certificate referred to in
                  Section 3.01(a)(viii) and (B) a true and correct copy of the
                  bylaws of such Loan Party as in effect on the date on which
                  the resolutions referred to in Section 3.01(a)(vii) were
                  adopted and on the date of the Initial Extension of Credit.

                           (x) A certificate of the Secretary or an Assistant
                  Secretary of each Loan Party certifying the names and true
                  signatures of the officers of such Loan Party authorized to
                  sign each Loan Document to which it is or is to be a party and
                  the other documents to be delivered hereunder and thereunder.

                           (xi) Evidence of insurance naming the Collateral
                  Agent as additional insured and loss payee with such
                  responsible and reputable insurance companies or associations,
                  and in such amounts and covering such risks as is required by
                  the Ship Mortgages and as is satisfactory to the Lender
                  Parties.

                           (xii) A Notice of Borrowing or Notice of Issuance, as
                  applicable, and a Borrowing Base Certificate relating to the
                  Initial Extension of Credit.

                           (xiii) A favorable opinion of Gilmartin, Poster &
                  Shafto, counsel for the Loan Parties, in substantially the
                  form of Exhibit D hereto and as to such other matters as any
                  Lender Party through the Administrative Agent may reasonably
                  request.

                  (b) The Borrower shall have paid all accrued and unpaid fees
         of the Agents and the Lender Parties which are due and payable on or
         prior to the Restatement Effective Date and all accrued expenses of the
         Agents (including the accrued fees and expenses of counsel to the
         Administrative Agent) and all letters of credit issued thereunder
         (except Existing Letters of Credit) shall have been terminated.

                  Section 3.02. Conditions Precedent to Each Borrowing and
Issuance, Etc. The obligation of each Lender to make an Advance (other than a
Letter of Credit Advance made by an Issuing Bank or a Lender pursuant to Section
2.16(d) and a Swing Line Advance made by a Lender other than the Swing Line Bank
pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
Initial Extension of Credit), and the right of the Borrower or a Designated
Account Party to request the issuance of Letters of Credit (including the
initial issuance of Letters of Credit) and the right of the Borrower to request
a Swing Line Borrowing,
<PAGE>
                                       41


shall be subject to the conditions precedent that the Restatement Effective Date
shall have occurred and on the date of such Borrowing or issuance (a) the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing, Notice of Swing Line Borrowing or Notice of Issuance and
the acceptance by the Borrower of the proceeds of such Borrowing or by the
Borrower or such Designated Account Party of such Letter of Credit shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing or issuance such statements are true):

                  (i) the representations and warranties contained in each Loan
Document are correct on and as of the date of such Borrowing or issuance, before
and after giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a date other
than the date of such Borrowing or issuance;

                  (ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default;

                  (iii) since the Restatement Effective Date there shall have
been no development or event, or any prospective development or event, with
respect to or arising out of the reform (whether arising from any act of
Congress, any regulatory or administrative law change, any determination of any
court in respect of the foregoing or otherwise) of the United States Shipping
Act of 1984, as amended through the Restatement Effective Date, which has had or
is reasonably likely to have a Material Adverse Effect; and

                  (iv) for each Advance or request for the issuance of any
Letter of Credit, the Borrowing Base Availability is greater than zero after
giving effect to such Advance or issuance;

and (b) the Administrative Agent shall have received not less than three, and
not more than five, Business Days prior to the date of the proposed Advance or
proposed issuance a fully completed and executed Borrowing Base Certificate, as
of the date of delivery.

                                   Article IV
                         REPRESENTATIONS AND WARRANTIES

                  Section 4.01. Representations and Warranties. To induce the
Lenders to enter into this Agreement and to make the Advances and the Issuing
Banks to issue the Letters of Credit, the Borrower hereby represents and
warrants to each Agent, each Issuing Bank and each Lender that:

                  (a) Financial Condition; Ownership. (i) The Consolidated
balance sheets of the Borrower and its Subsidiaries as at December 31, 2000 and
December 31, 1999 and the related Consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by Deloitte &
Touche, copies of which have heretofore been furnished to each Lender, present
fairly the Consolidated financial condition of the Borrower and its Subsidiaries
as at such dates, and the Consolidated results of their operations and their
Consolidated cash flows for the fiscal years then ended. The unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
2001 and the related unaudited Consolidated statements of income and
<PAGE>
                                       42


of cash flows for the three-month period ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, present fairly the Consolidated financial condition of the Borrower and
its Subsidiaries as at such date, and the Consolidated results of their
operations and their Consolidated cash flows for the three-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods.

                  (ii) Schedule V sets forth, as of June 30, 2001, each owner of
more than 5% of the voting stock of the Borrower and the percent of such voting
stock owned by each Person listed on such schedule.

                  (b) No Change. Since December 31, 2000 there has been no
development or event nor has there been any prospective development or event,
which has had or is reasonably likely to have a Material Adverse Effect.

                  (c) Corporate Existence; Compliance with Law. Each Loan Party
(a) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and authorized
to do business under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to be so qualified has not had and is not
reasonably likely to have a Material Adverse Effect and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith has not had and is not reasonably likely to have a Material Adverse
Effect.

                  (d) Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party and each Designated Account Party has or will have all necessary
power and authority, and the legal right, to make, deliver and perform each Loan
Document to which it is or will be a party, and to consummate the transactions
contemplated thereby. The Borrower has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement, the Notes
and the other Loan Documents to which it is a party, and each other Loan Party
and Designated Account Party has taken (or will have taken prior to the
execution thereof) all necessary corporate actions to authorize the execution,
delivery and performance of each Loan Document to which it is or will be a
party. No consent or authorization of, filing with or other act by or in respect
of, any Governmental Authority or any other Person is required in connection
with the borrowings hereunder, the issuance of the Letters of Credit or the
execution, delivery, performance, validity or enforceability of this Agreement,
the Notes or the other Loan Documents. This Agreement and the Amended and
Restated Subsdiary Guaranty have been, and each Note and each Letter of Credit
Agreement will be, duly executed and delivered on behalf of each Loan Party
which is a party thereto. This Agreement and the Amended and Restated Subsdiary
Guaranty constitutes, and each Note and each Letter of Credit Agreement when
executed and delivered will constitute, a legal, valid and binding obligation of
each Loan Party which is a party thereto, enforceable against them in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
<PAGE>
                                       43


                  (e) No Legal Bar. The execution, delivery and performance by
the Loan Parties and the Designated Account Parties of this Agreement, the
Letter of Credit Agreements, the Amended and Restated Subsdiary Guaranty, and
the Notes and the other Loan Documents, the borrowings hereunder, the use of the
proceeds thereof and the issuance of the Letters of Credit will not violate any
Requirement of Law applicable to any Loan Party or Designated Account Party or
any Contractual Obligation of any Loan Party or Designated Account Party and
will not result in, or require, the creation or imposition of any Lien on any of
its or their respective properties or revenues pursuant to any such Requirement
of Law or Contractual Obligation.

                  (f) No Material Litigation. No litigation, proceeding, or, to
the best of the Borrower's knowledge, investigation (in each case including,
without limitation, any Environmental Action), of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
Designated Account Party or against any of its or their respective properties or
revenues (a) with respect to this Agreement, the Letter of Credit Agreements,
the Amended and Restated Subsdiary Guaranty or the Notes or any other Loan
Document or any of the transactions contemplated hereby, or (b) which has had or
is reasonably likely to have a Material Adverse Effect. Set forth in Schedule VI
is a description of the most significant pending litigations and proceedings
and, to the best of the Borrower's knowledge, investigations (the "Disclosed
Litigation") involving the Borrower or any of its Subsidiaries as of the
Restatement Effective Date; no such litigation, proceeding and investigation has
had and is reasonably likely to have a Material Adverse Effect.

                  (g) No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which has had or is reasonably likely to have a
Material Adverse Effect.

                  (h) Ownership of Property; Liens. The Borrower and its
Restricted Subsidiaries have good title to the material properties and other
assets reflected in the Consolidated balance sheet and related notes as at
December 31, 2000 referred to in subsection 4.01(a) and to all material
properties and assets acquired by them thereafter (other than, in each case,
those assets subject to Financing Leases) except those which are no longer used
or useful in the conduct of their business and except properties which
singularly or in the aggregate are not material to the Borrower and its
Consolidated Subsidiaries viewed as a whole, and none of such property is
subject to any Lien except as permitted by Section 5.02(b).

                  (i) No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries adversely
affects the business, operations or financial condition of the Borrower and its
Subsidiaries taken as a whole to an extent that has had or is reasonably likely
to have a Material Adverse Effect.

                  (j) Taxes. The Borrower and each of its Subsidiaries has filed
all United States federal and California state income tax returns which are
required to be filed by the Borrower and its Subsidiaries. Except where the
failure to do so has not had and is not reasonably likely to have a Material
Adverse Effect, each of the Borrower and its Subsidiaries has filed or caused to
be filed all other tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any
<PAGE>
                                       44


of its property and all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or its Subsidiaries, as the case may be).
The charges, accruals and reserves in respect of taxes on the books of the
Borrower and its Consolidated Subsidiaries are adequate (determined in
accordance with GAAP). Federal income tax returns submitted as of the
Restatement Effective Date by the Borrower and its Subsidiaries have been
audited by and settled with the Internal Revenue Service or the statute of
limitations has expired for all years to and including the fiscal year ended
December 31, 2000 and the results of such settlement are properly reflected in
the financial statements referred to in subsection 4.01(a). As of the
Restatement Effective Date, the Borrower knows of no proposed material tax
assessment against the Borrower or any of its Subsidiaries. As of the
Restatement Effective Date, no extension of time for the assessment of U.S.
federal, state or local taxes of the Borrower of any of its Subsidiaries is in
effect or has been requested.

                  (k) Federal Margin Regulations. No part of the proceeds of any
Advances will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or to extend credit to others for the purpose of purchasing
or carrying margin stock or to refund indebtedness originally incurred for such
purpose.

                  (l) ERISA Matters. (i) No ERISA Event has occurred or is
reasonably expected to occur with respect to any Plan.

                  (ii) As of the last annual actuarial valuation date, the
funded current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90% and there has been no material adverse change in the
funding status of any such Plan since such date.

                  (iii) Neither the Borrower nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan that has had or is reasonably likely to have a Material
Adverse Effect.

                  (iv) Neither the Borrower nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of ERISA.

                  (v) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.01, the Borrower and its Consolidated
Subsidiaries have no material liability with respect to "expected post
retirement benefit obligations" within the meaning of Statement of Financial
Accounting Standards No. 106 other than unamortized transition costs not
exceeding $5,500,000.

                  (m) Investment Company Act. The Borrower is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
<PAGE>
                                       45


                  (n) Subsidiaries. Schedule VII lists all the Subsidiaries of
the Borrower at the date of this Agreement, the Net Assets of such Subsidiaries
as of June 30, 2001 and the Net Revenues of such Subsidiaries for the four
consecutive fiscal quarters of the Borrower ending June 30, 2001.

                  (o) Environmental Matters. Each of the representations and
warranties set forth in paragraphs (i) through (iii) below is true and correct
to the extent that the facts and circumstances giving rise to any such failure
to be so true and correct have not had, and are not reasonably likely to have, a
Material Adverse Effect.

                  (i) The operations and properties of the Borrower and each of
         its Subsidiaries comply in all material respects with all applicable
         Environmental Laws and Environmental Permits, all past non-compliance
         with such Environmental Laws and Environmental Permits has been
         resolved without ongoing obligations or costs, and no circumstances
         exist that could be reasonably likely to (i) form the basis of an
         Environmental Action against the Borrower or any of its Subsidiaries or
         any of their properties that could have a Material Adverse Effect or
         (ii) cause any such property to be subject to any restrictions on
         ownership, occupancy, use or transferability under any Environmental
         Law that could have a Material Adverse Effect.

                  (ii) None of the properties currently or formerly owned or
         operated by the Borrower or any of its Subsidiaries is listed or
         proposed for listing on the National Priorities List under the
         Comprehensive Environmental Response, Compensation and Liability Act of
         1980 ("NPL") or on the Comprehensive Environmental Response,
         Compensation and Liability Information System maintained by the U.S.
         Environmental Protection Agency ("CERCLIS") or any analogous foreign,
         state or local list or, to the best knowledge of the Borrower, is
         adjacent to any such property; there are no and never have been any
         underground or aboveground storage tanks or any surface impoundments,
         septic tanks, pits, sumps or lagoons in which Hazardous Materials are
         being or have been treated, stored or disposed of on any property
         currently owned or operated by the Borrower or any of its Subsidiaries
         or, to the best of its knowledge, on any property formerly owned or
         operated by the Borrower or any of its Subsidiaries; there is no
         friable asbestos or asbestos-containing material on any property
         currently owned or operated by the Borrower or any of its Subsidiaries;
         and Hazardous Materials have not been released, discharged or disposed
         of on any property currently or formerly owned or operated by the
         Borrower or any of its Subsidiaries or, to the best of its knowledge,
         any adjoining property.

                  (iii) Neither the Borrower nor any of its Subsidiaries is
         undertaking, and has not completed, either individually or together
         with other potentially responsible parties, any investigation or
         assessment or remedial or response action relating to any actual or
         threatened release, discharge or disposal of Hazardous Materials at any
         site, location or operation, either voluntarily or pursuant to the
         order of any governmental or regulatory authority or the requirements
         of any Environmental Law; and all Hazardous Materials generated, used,
         treated, handled or stored at or transported to or from any property
         currently or formerly owned or operated by the Borrower or any of its
         Subsidiaries have been disposed of in a manner not reasonably expected
         to result in material liability to the Borrower or any of its
         Subsidiaries.
<PAGE>
                                       46


                                   Article V
                            COVENANTS OF THE BORROWER

                  Section 5.01. Affirmative Covenants. The Borrower hereby
agrees that, so long as any Advance shall remain unpaid, any Letter of Credit
shall be outstanding other than any Letter of Credit in respect of which cash
collateral has been deposited and is maintained in accordance with subsection
2.16(i), any Lender shall have any Commitment hereunder or any Issuing Bank
shall have any Letter of Credit Commitment hereunder, the Borrower shall and
(except in the case of delivery of financial information, reports and notices
pursuant to subsections 5.01(a) and 5.01(b)) shall cause each of its Restricted
Subsidiaries to:

                  (a) Financial Statements. Furnish to each Lender:

                           (i) as soon as available, but in any event within 90
                  days after the end of each fiscal year of the Borrower, a copy
                  of the Consolidated balance sheet of the Borrower and its
                  Subsidiaries (including all Joint Ventures required by GAAP to
                  be so included) as at the end of such year and the related
                  Consolidated statements of income and retained earnings and of
                  cash flows for such year, setting forth in each case in
                  comparative form the figures for the previous year, reported
                  on without a qualification or exception arising out of the
                  scope of the audit, by Deloitte & Touche or other independent
                  certified public accountants of nationally recognized
                  standing;

                           (ii) as soon as available, but in any event not later
                  than 45 days after the end of each of the first three
                  quarterly periods of each fiscal year of the Borrower, the
                  unaudited Consolidated balance sheet of the Borrower and its
                  Subsidiaries (including all Joint Ventures required by GAAP to
                  be so included) as at the end of such quarter and the related
                  unaudited Consolidated statements of income and retained
                  earnings and of cash flows of the Borrower and its
                  Subsidiaries (including all Joint Ventures) for the portion of
                  the fiscal year through the end of such quarter, setting forth
                  in each case in comparative form the figures for the previous
                  year, certified by a Responsible Officer as being fairly
                  stated in all material respects (subject to normal year-end
                  audit adjustments);

                           (iii) as soon as available but in any event within
                  180 days after the end of each fiscal year of the Borrower, as
                  to the Borrower and each Subsidiary of the Borrower (including
                  each Joint Ventures required by GAAP to be so included), a
                  Consolidating balance sheet as at the end of such year and a
                  related Consolidating statement of income for such year,
                  certified by a Responsible Officer; and

         all such financial statements to present fairly in accordance with
         GAAP, applied consistently throughout the periods reflected therein and
         with prior periods (except as any such inconsistency may be approved by
         such accountants or a Responsible Officer, as the case may be, and
         disclosed therein and subject, in the case of unaudited quarterly
         financial statements, to normal year-end audit adjustments), the
         Consolidated financial condition of the Borrower and its Subsidiaries
         (including all Joint Ventures required by GAAP to be so
<PAGE>
                                       47


         included) as at the dates of such statements, and the Consolidated
         results of their operations and their Consolidated cash flows for the
         periods then ended.

                  (b) Certificates; Other Information. Furnish to each Lender:

                           (i) concurrently with the delivery of the financial
                  statements referred to in subsection 5.01(a)(i), a certificate
                  of the independent certified public accountants reporting on
                  such financial statements stating that in making the
                  examination necessary therefor no knowledge was obtained of
                  any Default or Event of Default, except as specified in such
                  certificate;

                           (ii) concurrently with the delivery of the financial
                  statements referred to in subsections 5.01(a)(i) and
                  5.01(a)(ii), a certificate of a Responsible Officer (i)
                  stating that, to the best of such Responsible Officer's
                  knowledge, the Borrower during such period has observed or
                  performed all of its covenants and other agreements, and
                  satisfied every condition, contained in this Agreement and in
                  the Notes and the other Loan Documents to which it is a party
                  to be observed, performed or satisfied by it, and that such
                  Responsible Officer has obtained no knowledge of any Default
                  or Event of Default except as specified in such certificate,
                  such certificate to include calculations in reasonable detail
                  demonstrating such observance, performance and satisfaction
                  (including, without limitation, all adjustments to any
                  information provided in such financial statements necessary to
                  calculate compliance with the financial covenants set forth in
                  Section 5.03) and (ii) setting forth as of the date of such
                  financial statements the aggregate amount of Investments in
                  each Joint Venture and the percentage of such Joint Venture
                  owned by the Borrower and any Subsidiary of the Borrower;

                           (iii) not later than 120 days after the beginning of
                  each fiscal year of the Borrower a reasonably detailed
                  business plan for such fiscal year;

                           (iv) within five days after the same are sent, copies
                  of all financial statements which the Borrower sends to its
                  stockholders, and within five days after the same are filed,
                  copies of all financial statements and reports which the
                  Borrower may make to, or file with, the Securities and
                  Exchange Commission or any successor or analogous Governmental
                  Authority; and

                           (v) promptly, such additional financial and other
                  information as any Lender may from time to time reasonably
                  request.

                  (c) Payment of Obligations. Pay, discharge or otherwise
         satisfy at or before maturity or before they become delinquent, as the
         case may be, all its obligations of whatever nature, except where (i)
         the amount or validity thereof is currently being contested in good
         faith by appropriate proceedings and reserves in conformity with GAAP
         with respect thereto have been provided on the books of the Borrower or
         its Restricted Subsidiaries, as the case may be, or (ii) the failure to
         pay, discharge or otherwise satisfy the same has not had and is not
         reasonably likely to have a Material Adverse Effect.
<PAGE>
                                       48


                  (d) Conduct of Business and Maintenance of Existence. Continue
         to engage in business of the same general type as now conducted by the
         Borrower and its Restricted Subsidiaries taken as a whole; preserve,
         renew and keep in full force and effect its corporate existence and
         take all reasonable action to maintain all rights, privileges and
         franchises necessary or desirable in the normal conduct of its business
         except as otherwise permitted pursuant to subsection 5.02(d) or except
         where the failure to do so has not had and is not reasonably likely to
         have a Material Adverse Effect; comply with all Contractual Obligations
         and Requirements of Law (except to the extent that the failure to do so
         is not reasonably likely to have a Material Adverse Effect).

                  (e) Maintenance of Property; Insurance. Keep all property
         necessary in the business of the Borrower and its Restricted
         Subsidiaries taken as a whole in good working order and condition;
         maintain in effect all licenses, permits, trade names, trademarks,
         patents and other intellectual property necessary in the business of
         the Borrower and its Restricted Subsidiaries taken as a whole; maintain
         insurance on all Eligible Vessels and Barges as required by the Ship
         Mortgages and on all its other property in at least such amounts and
         against at least such risks (including public liability and product
         liability) as are usually insured against in the same general area by
         companies engaged in the same or a similar business; and furnish to
         each Lender, upon written request, full information as to the insurance
         carried.

                  (f) Inspection of Property; Books and Records; Discussions.
         Keep proper books of records and account in which full, true and
         correct entries in conformity with GAAP and in all material respects in
         conformity with all Requirements of Law shall be made of all dealings
         and transactions in relation to its business and activities; and permit
         representatives of any Lender and any Agent to visit and inspect any of
         its properties and examine and make abstracts from any of its books and
         records at any reasonable time and as often as may reasonably be
         desired and to discuss the business, operations, properties and
         financial and other condition of the Borrower and its Subsidiaries with
         officers and employees of the Borrower and its Restricted Subsidiaries
         and with its independent certified public accountants, provided that
         discussions with the independent certified accountants shall be
         arranged by the Borrower.

                  (g) Notices. Promptly give notice to the Administrative Agent
         and each Lender of:

                           (i) the occurrence of any Default or Event of
                  Default;

                           (ii) (x) in any event within 20 days after the
                  Director of Compensation and Benefits (or its equivalent) of
                  the Borrower or any ERISA Affiliate knows or has reason to
                  know that any ERISA Event has occurred, a statement of the
                  chief financial officer of the Borrower describing such ERISA
                  Event and the action, if any, that the Borrower or any
                  relevant ERISA Affiliate has taken and proposes to take with
                  respect thereto and (y) in any event within 3 Business Days
                  after the date any records, documents or other information
                  must be furnished to the PBGC with respect to any Plan
                  pursuant to Section 4010 of ERISA, a copy of such records,
                  documents and information;
<PAGE>
                                       49


                           (iii) in any event within 3 Business Days after
                  receipt thereof by the Director of Compensation and Benefits
                  (or its equivalent) of the Borrower or any ERISA Affiliate,
                  copies of each notice from the PBGC stating its intention to
                  terminate any Plan or to have a trustee appointed to
                  administer any Plan;

                           (iv) in any event within 30 days after the receipt
                  thereof by the Director of Compensation and Benefits (or its
                  equivalent) of the Borrower or any ERISA Affiliate, a copy of
                  the annual actuarial report for each Plan the funded current
                  liability percentage (as defined in Section 302(d)(8) of
                  ERISA) of which is less than 90% or the unfunded current
                  liability of which exceeds $1,000,000;

                           (v) in any event within 15 days after receipt thereof
                  by the Director of Compensation and Benefits (or its
                  equivalent) of the Borrower or any ERISA Affiliate from the
                  sponsor of a Multiemployer Plan, copies of each notice
                  concerning (A) the imposition of Withdrawal Liability by any
                  such Multiemployer Plan, (B) the reorganization or
                  termination, within the meaning of Title IV of ERISA, of any
                  such Multiemployer Plan or (C) the amount of liability
                  incurred, or that may be incurred, by the Borrower or any
                  ERISA Affiliate in connection with any event described in
                  clause (A) or (B);

                           (vi) promptly after any Responsible Officer has
                  knowledge of the assertion or occurrence thereof, notice of
                  any Environmental Action against or of any noncompliance by
                  the Borrower or any of its Subsidiaries with any Environmental
                  Law or Environmental Permit that could reasonably be expected
                  to have a Material Adverse Effect; and

                           (vii) any development or event (including, without
                  limitation, any litigation, proceeding or, if known to the
                  Borrower, investigation affecting the Borrower or any of its
                  Subsidiaries or any default in any Contractual Obligations of
                  the Borrower or any of its Subsidiaries), known to any
                  Responsible Officer, which has had or is reasonably likely to
                  have a Material Adverse Effect.

         Each notice pursuant to this subsection 5.01(g) shall be accompanied by
         a statement of a Responsible Officer setting forth details of the
         occurrence referred to therein and stating what action the Borrower
         proposes to take with respect thereto.

                  (h) Environmental Laws. (i) Compliance with Environmental
         Laws. Comply, and cause each of its Subsidiaries and all lessees and
         other Persons operating or occupying its properties to comply, in all
         material respects, with all applicable Environmental Laws and
         Environmental Permits except to the extent failure to do so has not had
         and is not reasonably likely to have a Material Adverse Effect; obtain
         and renew and cause each of its Subsidiaries to obtain and renew all
         Environmental Permits necessary for its operations and properties
         except to the extent failure to do so has not had and is not reasonably
         likely to have a Material Adverse Effect; and conduct and cause each of
         its Subsidiaries to conduct any investigation, study, sampling and
         testing, and undertake any cleanup, removal, remedial or other action
         necessary to remove and clean up all Hazardous Materials from any of
         its properties, in accordance with the requirements of all
         Environmental Laws except to the extent failure to do so has not had
         and is not reasonably likely to have a
<PAGE>
                                       50


         Material Adverse Effect; provided, however, that neither the Borrower
         nor any of its Restricted Subsidiaries shall be required to undertake
         any such cleanup, removal, remedial or other action to the extent that
         its obligation to do so is being contested in good faith and by proper
         proceedings and appropriate reserves are being maintained with respect
         to such circumstances.

                  (ii) Preparation of Environmental Reports. If an Event of
         Default shall have occurred and be continuing, at the request of the
         Administrative Agent or the Required Lenders, provide to the Lenders
         within 120 days after such request, at the expense of the Borrower, an
         environmental site assessment report for the properties described in
         such request, prepared by an environmental consulting firm acceptable
         to the Administrative Agent or the Required Lenders, indicating the
         presence or absence of Hazardous Materials and the estimated cost of
         any compliance, removal or remedial action in connection with any
         Hazardous Materials on such properties; without limiting the generality
         of the foregoing, if the Administrative Agent or the Required Lenders
         determines at any time that a material risk exists that any such report
         will not be provided within the time referred to above, the
         Administrative Agent or the Required Lenders, as the case may be, may
         retain an environmental consulting firm to prepare such report at the
         expense of the Borrower, and hereby grants to the Administrative Agent,
         the Lenders, such firm and any agents or representatives thereof an
         irrevocable non-exclusive license, subject to the rights of tenants, to
         enter onto its properties to undertake such an assessment.

                  (i) Joint Venture Separateness. Cause each Joint Venture to
         (i) maintain its funds in accounts which are separate and distinct from
         any account maintained by the Borrower or any of its other
         Subsidiaries, (ii) maintain its own business and financial records,
         (iii) act pursuant to corporate resolutions or similar authority
         granted in accordance with the laws applicable to governance of the
         Joint Venture entity and with procedures required by any organizational
         document of the Joint Venture, (iv) document and record in its
         financial records each transaction between such Joint Venture, on the
         one hand, and the Borrower or any of its other Subsidiaries, on the
         other hand, in accordance with business practices commonly employed by
         enterprises similar to the Joint Venture with respect to transactions
         with non-Affiliates, (v) conduct its business with third parties in the
         name of the Joint Venture and not in the name of the Borrower or any of
         its other Subsidiaries and (vi) have at the time such Joint Venture
         commences the business of the Joint Venture capitalization adequate (in
         the reasonable determination of the Borrower) to meet its reasonably
         anticipated business needs.

                  (j) Further Assurances. Promptly upon the request of the
         Administrative Agent, or any of the Lenders through the Administrative
         Agent, at any time and from time to time:

                           (i) correct, and cause each of its Subsidiaries to
                  correct, any defect or error that may be discovered in any of
                  the Loan Documents or in the execution, acknowledgment, filing
                  or recordation thereof; and

                           (ii) do, execute, acknowledge, deliver, record,
                  rerecord, file, refile, register and reregister, and cause
                  each of its Subsidiaries promptly to do, execute, acknowledge,
                  deliver, record, rerecord, file, refile, register and
                  reregister, any and
<PAGE>
                                       51


                  all further acts, conveyances, pledge agreements, ship
                  mortgages, assignments, financing statements and continuations
                  thereof, termination statements, notices of assignment,
                  transfers, certificates, assurances and other instruments as
                  the Administrative Agent, or any of the Lenders through the
                  Administrative Agent, may reasonably require from time to time
                  in order to (A) carry out more effectively the purposes of
                  this Agreement, the Notes or any of the other Loan Documents,
                  (B) subject any of the property, assets, rights or interests
                  of any of the Loan Parties or any of their respective
                  Subsidiaries included or intended to be included in the
                  Collateral to the Liens created or now or hereafter intended
                  to be created under any of the Collateral Documents, (C)
                  perfect and maintain the validity, effectiveness and priority
                  of any of the Collateral Documents or any of the Liens created
                  or intended to be created thereunder and (D) assure, convey,
                  grant, assign, transfer, preserve, protect and confirm more
                  effectively to the Administrative Agent and the other Secured
                  Parties the rights granted or now or hereafter intended to be
                  granted to the Administrative Agent and the other Secured
                  Parties under any of the Loan Documents, or under any of the
                  other instruments executed in connection with any such Loan
                  Document.

                  (k) Hull Maintenance. On and following the date that is six
         months following the Restatement Effective Date, maintain at all times
         the Ships Value at an amount equal to or greater than 125% of the
         Revolving Credit Facility, whether before or after giving effect to any
         Vessel or Barge Disposition.

                  (l) Vessel or Barge Disposition. (i) Furnish to the
         Administrative Agent, as soon as available but in any event no later
         than 10 Business Days prior to any Vessel or Barge Disposition, (A) a
         notice of such Vessel or Barge Disposition and (B)(1) an appraisal of
         the value of the Eligible Vessel or Barge that is the subject of such
         Vessel or Barge Disposition, as determined in accordance with the
         appraisal procedures set forth in the applicable Ship Mortgage or (2) a
         certificate, in form and substance satisfactory to the Administrative
         Agent and signed by a duly authorized officer of such Loan Party, (x)
         stating the agreed sale price for such Eligible Vessel or Barge and (y)
         certifying that such Eligible Vessel or Barge Disposition was conducted
         on an arms-length basis;

                  (ii) Furnish to the Administrative Agent, on or prior to the
         date of any Vessel or Barge Disposition, a certificate of each Loan
         Party, signed on behalf of such Loan Party by a duly authorized officer
         of such Loan Party, stating that:

                           (A) the representations and warranties contained in
                  each Loan Document are correct on and as of the date of such
                  Vessel or Barge Disposition, before and after giving effect to
                  such Vessel or Barge Disposition and to the application of the
                  proceeds therefrom;

                           (B) no event has occurred and is continuing, or would
                  result from such Vessel or Barge Disposition or from the
                  application of the proceeds therefrom, that constitutes a
                  Default; and

                           (C) since the Restatement Effective Date there have
                  been no development or event, or any prospective development
                  or event, with respect to or
<PAGE>
                                       52


                  arising out of the reform (whether arising from any act of
                  Congress, any regulatory or administrative law change, any
                  determination of any court in respect of the foregoing or
                  otherwise) of the United States Shipping Act of 1984, as
                  amended through the Restatement Effective Date, which has had
                  or is reasonably likely to have a Material Adverse Effect.

                           (D) After giving effect to such Vessel or Barge
                  Disposition, the Borrower will be in compliance with Section
                  2.09(b).

                  (m) New Eligible Vessel and Barge. In the event the Borrower
         shall add any new Eligible Vessel and Barge, whether or not to replace
         any Eligible Vessel and Barge that is the subject of disposal pursuant
         to subsection 5.02(e)(vi), the Borrower shall furnish to the
         Administrative Agent on or prior to the date of addition of such new
         Eligible Vessel and Barge:

                  (i) Ship Mortgages for such new Eligible Vessel and Barge,
         together with evidence that each such Ship Mortgage has been duly filed
         and is in full force and effect as of the date of addition of such new
         Eligible Vessel and Barge.

                  (ii) Assignments of Insurances for such new Eligible Vessel
         and Barge.

                  (iii) Assignments of Freights and Hires for such new Eligible
         Vessel and Barge.

                  (iv) Appraisal of the value of such new Eligible Vessel and
         Barge as determined in accordance with the appraisal procedures set
         forth in the applicable Ship Mortgage.

                  (v) Certificate of each Loan Party, signed on behalf of such
         Loan Party by a duly authorized officer of such Loan Party, stating
         that:

                           (A) the representations and warranties contained in
                  each Loan Document are correct on and as of the date of
                  addition of such new Eligible Vessel and Barge, before and
                  after giving effect to addition of such new Eligible Vessel
                  and Barge;

                           (B) no event has occurred and is continuing, or would
                  result from the addition of such new Eligible Vessel and
                  Barge, that constitutes a Default; and

                           (C) since the Restatement Effective Date there have
                  been no development or event, or any prospective development
                  or event, with respect to or arising out of the reform
                  (whether arising from any act of Congress, any regulatory or
                  administrative law change, any determination of any court in
                  respect of the foregoing or otherwise) of the United States
                  Shipping Act of 1984, as amended through the Restatement
                  Effective Date, which has had or is reasonably likely to have
                  a Material Adverse Effect.
<PAGE>
                                       53


                  (vi) Favorable opinion of Gilmartin, Poster & Shafto, counsel
         for the Loan Parties, in substantially the form of Exhibit D hereto and
         as to such other matters as the Administrative Agent may reasonably
         request.

                  (vii) Amended and Restated Subsdiary Guaranty duly executed by
         each Person who, prior to such execution, was not a Guarantor, and who
         has any ownership interest in such new Eligible Vessel and Barge.

                  (viii) Acknowledgment copies or stamped receipt copies of
         proper financing statements, duly filed on or before the day of the
         Initial Extension of Credit under the Uniform Commercial Code of all
         jurisdictions that the Administrative Agent may deem necessary or
         desirable in order to perfect and protect the first priority liens and
         security interests created under the applicable Assignments of
         Insurances, Assignments of Freights and Hires and other applicable
         Collateral Documents.

                  (n) Repayment of MTC Credit Agreement. No later than five
         Business Days following the Restatement Effective Date, repay in full
         all amounts owing under and in respect of the MTC Credit Agreement ,
         terminate all commitments thereunder and take each action required to
         be taken under Section 5.01(j) in respect of MTC and its Subsidiaries.

                  Section 5.02. Negative Covenants. The Borrower hereby agrees
that, so long as any Advance shall remain unpaid, any Letter of Credit shall be
outstanding other than any Letter of Credit in respect of which cash collateral
has been deposited and is maintained in accordance with subsection 2.16(i), any
Lender shall have any Commitment hereunder or any Issuing Banks shall have a
Letter of Credit Commitment hereunder, the Borrower shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly:

                  (a) Limitation on Indebtedness. Create, incur, assume or
         suffer to exist any Indebtedness, except:

                           (i) Indebtedness in respect of the Advances, the
                  Notes, the Letters of Credit and other obligations of the
                  Borrower under this Agreement;

                           (ii) (A) Indebtedness of the Borrower to any
                  Restricted Subsidiary and of any Restricted Subsidiary to the
                  Borrower or any other Restricted Subsidiary, and (B)
                  Indebtedness of the Borrower or any Restricted Subsidiary to
                  any Person other than a financial institution in an aggregate
                  principal amount at any time outstanding not exceeding
                  $5,000,000;

                           (iii) Indebtedness of the Borrower in principal
                  amount outstanding at any time not to exceed $10,000,000 in
                  the aggregate under lines of credit offered by commercial
                  banks or other financial institutions to the Borrower to
                  finance the working capital needs of the Borrower and its
                  Restricted Subsidiaries;

                           (iv) Indebtedness consisting of reimbursement
                  obligations in respect of letters of credit (other than the
                  Letters of Credit) issued for the account of the Borrower or
                  any Restricted Subsidiary in an aggregate amount not exceeding
                  for
<PAGE>
                                       54


                  the Borrower and its Restricted Subsidiaries $10,000,000 in
                  aggregate principal amount at any time outstanding;

                           (v) Indebtedness of the Borrower to issuers of life
                  insurance policies under which the Borrower is the beneficiary
                  to the extent that such Indebtedness does not exceed at any
                  time, in the aggregate, the lesser of (A) the cash surrender
                  value of such policies and (B) the sum of $2,000,000 plus the
                  amount of proceeds of such Indebtedness applied to pay
                  premiums on such life insurance policies;

                           (vi) Indebtedness and Guaranty Obligations
                  outstanding on the Restatement Effective Date and listed on
                  Schedule III hereto;

                           (vii) Indebtedness incurred in connection with the
                  Capital Expenditures permitted by Section 5.02(g) or secured
                  by Liens described in Section 5.02(b)(vi);

                           (viii) Indebtedness of MTC and its Subsidiaries
                  existing on the date of purchase (the "MTC Purchase Date") of
                  certain shares of common stock of MTC by the Borrower and
                  Shiloh Acquisition, Inc. ("Shiloh"), a Wholly Owned
                  Subsidiary, pursuant to the terms of an Agreement of Merger,
                  dated as of December 20, 2000, among the Borrower, MTC and
                  Shiloh, and other agreements related thereto; and

                           (ix) Indebtedness to be created subsequent to the MTC
                  Purchase Date by Marine Transport Lines, Inc. ("MTL") and
                  Mormac Marine Enterprise, Inc. ("Mormac"), both Subsidiaries
                  of MTC, respectively under two certain Loan and Security
                  Agreements, each providing for loans aggregating not more than
                  $2,250,000 to be made by ALLFIRST BANK.

                  (b) Limitation on Liens. Create, incur, assume or suffer to
         exist any Lien upon any of its property, assets or revenues, whether
         now owned or hereafter acquired, except for:

                           (i) Liens for taxes, assessments or other charges
                  which (x) are not at the time delinquent or are thereafter
                  payable without penalty, or (y) are being contested in good
                  faith by appropriate proceedings, provided with respect to
                  taxes, assessments or other charges referred to in clause (x)
                  and clause (y), that adequate reserves with respect thereto
                  are maintained on the books of the Borrower and its Restricted
                  Subsidiaries to the extent required in conformity with GAAP;

                           (ii) Liens in existence on the Restatement Effective
                  Date listed on Schedule III hereto, provided that no such Lien
                  is spread to cover any additional property or to secure any
                  additional Indebtedness after the Restatement Effective Date
                  except in accordance with provisions of the documents and
                  instruments relating to the Indebtedness or other obligations
                  secured by such Liens which (x) are in effect as of the
                  Restatement Effective Date and (y) are described on Schedule
                  III.
<PAGE>
                                       55


                           (iii) Liens on vessels arising in the event the use
                  or title of such vessel is taken or requisitioned by any
                  Governmental Authority;

                           (iv) Liens securing judgments of less than $7,500,000
                  in the aggregate as to the Borrower and its Restricted
                  Subsidiaries taken as a whole at any time, provided that no
                  such Lien shall have been in existence more than thirty (30)
                  days after the entry of the judgment, or execution thereof
                  shall have been stayed or the payment thereof shall be covered
                  in full by insurance on which the insurer has neither reserved
                  the right to dispute, nor disputed, coverage;

                           (v) Liens on any asset of the Borrower or any of its
                  Restricted Subsidiaries existing at the time such Person is
                  merged into or consolidated with the Borrower or any of its
                  Restricted Subsidiaries, if (x) such merger or consolidation
                  is permitted by this Agreement, and (y) such Lien was
                  otherwise permitted by this Agreement and was not created in
                  contemplation of such event; provided that no such Lien is
                  spread to cover any additional property or to secure any
                  additional Indebtedness after the effective date of such
                  merger or consolidation;

                           (vi) Liens on vessels and related assets existing as
                  of the Restatement Effective Date and created to secure the
                  financing or refinancing of the construction or reconstruction
                  of such vessels, which financing or refinancing is guaranteed
                  under the provisions of Title XI of the Merchant Marine Act of
                  1936, as amended;

                           (vii) Liens arising in connection with deposits of
                  funds from time to time into the capital construction fund
                  created pursuant to the Capital Construction Fund Agreement
                  (no. MA-CCF-370) dated October 21, 1977, as amended, between
                  the Borrower and the United States of America, but only to the
                  extent such Liens arise solely out of such agreement or out of
                  borrowings of such deposits;

                           (viii) Liens in favor of the Agents or the Lenders to
                  secure any or all of the Borrower's Obligations created under
                  the Loan Documents;

                           (ix) Other Liens arising in the ordinary course of
                  the business of the Borrower and its Restricted Subsidiaries
                  viewed as a whole which (x) do not secure Indebtedness and (y)
                  either (A) are being contested in good faith and with respect
                  to which reserves are being maintained on the books of the
                  Borrower and its Consolidated Restricted Subsidiaries in
                  conformity with GAAP or (B) in the aggregate do not have, and
                  are not reasonably likely to have, a Material Adverse Effect
                  and will not reasonably likely materially impair the value of
                  the Consolidated assets of the Borrower and its Consolidated
                  Restricted Subsidiaries;

                           (x) Liens on life insurance policies (including the
                  cash surrender value thereof) securing Indebtedness permitted
                  by subsection 5.02(a)(v);

                           (xi) Liens securing Indebtedness of the Borrower and
                  its Restricted Subsidiaries incurred solely in connection with
                  the conversion into Financing Leases of operating leases of
                  the Borrower and its Restricted Subsidiaries that are in
                  existence on the Restatement Effective Date on the property
                  which is the subject of
<PAGE>
                                       56


                  such operating lease; provided that such Liens do not at any
                  time encumber any property other than such property, their
                  earnings, other related assets having a value which is
                  immaterial in relation to the value of such property, and the
                  proceeds of such property and do not secure any other
                  Indebtedness;

                           (xii) Liens on property that is substituted for or
                  replaces comparable property that was theretofore subject to a
                  Lien permitted to exist under this subsection 5.02(b);

                           (xiii) Liens on any asset leased by the Borrower or
                  any of its Restricted Subsidiaries under a lease that is not a
                  Financing Lease, securing the obligations of the Borrower or
                  such Restricted Subsidiary thereunder;

                           (xiv) Liens arising out of the refinancing,
                  extension, renewal or refunding of any Indebtedness permitted
                  under subsection 5.02(a) and secured by any Lien permitted by
                  this subsection 5.02(b); provided that (x) no such Lien is
                  spread to cover any property other than the property securing
                  such Indebtedness at the time of such refinancing, extension,
                  renewal or refunding and (y) the principal amount of such
                  Indebtedness is not increased to exceed the amount of the
                  Indebtedness on the Restatement Effective Date;

                           (xv) purchase money Liens securing the Indebtedness
                  referred to in Section 5.02(g) solely for the purpose of
                  financing the acquisition, construction or improvement of
                  property to be subject to such Liens, or Liens existing on any
                  such property at the time of acquisition (other than any such
                  Liens created in contemplation of such acquisition that do not
                  secure the purchase price), or extensions, renewals or
                  replacements of any of the foregoing for the same or a lesser
                  amount; provided, however, no such Lien shall extend to or
                  cover any property other than the property being acquired,
                  constructed or improved, or the proceeds or rents thereof, and
                  no such extension, renewal or replacement shall extend to or
                  cover any property, or the proceeds or rents thereof, not
                  theretofore subject to the Lien being extended, renewed or
                  replaced;

                           (xvi) Liens on properties of MTC or its Subsidiaries
                  existing on the MTC Purchase Date; and

                           (xvii) Liens created subsequent to the MTC Purchase
                  Date by Mormac and MTL respectively on two certain contracts
                  with the U.S. Maritime Administration, each relating to
                  management of nine Ready Reserve Force vessels, and the moneys
                  due or to become due under and other proceeds of such
                  contracts.

                  (c) Limitation on Guaranty Obligations. Create, incur, assume
         or suffer to exist any Guaranty Obligation except:

                           (i) the Guaranty Obligation of the Borrower pursuant
                  to Article VII, and the Guaranty Obligations of the Guarantors
                  under the Amended and Restated Subsdiary Guaranty;
<PAGE>
                                       57


                           (ii) the Letters of Credit and other letters of
                  credit in respect of which reimbursement obligations would be
                  permitted by subsection 5.02(a)(iv);

                           (iii) Guaranty Obligations included in Indebtedness
                  permitted pursuant to subsection 5.02(a);

                           (iv) Guaranty Obligations of the Borrower or its
                  Consolidated Restricted Subsidiaries in respect of primary
                  obligations of the Borrower or its Consolidated Restricted
                  Subsidiaries otherwise permitted under this Agreement,
                  provided that Guaranty Obligations in respect of primary
                  obligations of Restricted Subsidiaries that are not Guarantors
                  shall not in the aggregate exceed $15,000,000;

                           (v) Guaranty Obligation of MTC in respect of the
                  respective obligations of MTL and Mormac under the Loan and
                  Security Agreements referred to in Section 5.02(a)(ix);

                           (vi) Guaranty Obligations outstanding on the
                  Restatement Effective Date and listed on Schedule III and
                  renewals and extensions of such existing Guaranty Obligations
                  which do not increase the amount of the primary obligations
                  guaranteed thereby; and

                           (vii) other Guaranty Obligations aggregating not in
                  excess of the lesser of (i) $25,000,000 and (ii) 10% of the
                  stockholders' equity (as reflected on the most recent
                  Consolidated Balance Sheet of the Borrower delivered pursuant
                  hereto), in each case, at any time outstanding.

                  (d) Limitations on Fundamental Changes. (i) Enter into any
         merger, consolidation or amalgamation, or liquidate, wind up or
         dissolve itself (or suffer any liquidation or dissolution), or convey,
         sell, lease, assign, transfer or otherwise dispose of all or
         substantially all of the property, business or assets of the Borrower
         and its Restricted Subsidiaries taken as a whole; except that:

                           (A) any Restricted Subsidiary of the Borrower may be
                  merged or consolidated with or into the Borrower (provided
                  that the Borrower shall be the continuing or surviving
                  corporation) or with or into any one or more Wholly Owned
                  Subsidiaries of the Borrower (provided that the Wholly Owned
                  Subsidiary or Subsidiaries shall be the continuing or
                  surviving corporation and shall be party to the Amended and
                  Restated Subsdiary Guaranty);

                           (B) any Subsidiary may sell, lease, transfer or
                  otherwise dispose of any or all of its assets (upon voluntary
                  liquidation or otherwise) to the Borrower or any Wholly Owned
                  Subsidiary of the Borrower which is a party to the Amended and
                  Restated Subsdiary Guaranty; and

                           (C) any Subsidiary which is not a Loan Party may
                  liquidate, wind up or dissolve;
<PAGE>
                                       58


         provided, in each case, that no Default shall have occurred and be
         continuing at the time of such proposed transaction or would result
         therefrom.

                  (ii) Materially change or depart from the business or
         operating activities presently conducted by the Borrower and its
         Restricted Subsidiaries taken as a whole.

                  (e) Limitation on Sale of Assets. Convey, sell, lease, assign,
         transfer or otherwise dispose of any of its property, business or
         assets (including, without limitation, receivables and leasehold
         interests), whether now owned or hereafter acquired, to any Person
         other than the Borrower or a Guarantor ("Asset Dispositions"), except:


                           (i) Asset Dispositions in the ordinary course of
                  business;

                           (ii) Asset Dispositions in the form of the sale or
                  discount of accounts receivable arising in the ordinary course
                  of business to the capital construction fund created pursuant
                  to the Capital Construction Fund Agreement (No. MA-CCF-370)
                  dated October 21, 1977, as amended between the Borrower and
                  the United States of America;

                           (iii) Asset Dispositions permitted by subsection
                  5.02(d) or subsection 5.02(j);

                           (iv) Asset Dispositions in respect of the assets
                  described in Schedule VIII;

                           (v) Asset Dispositions in any fiscal year for cash
                  and consideration other than cash having an aggregate value
                  (as determined in good faith by the Borrower) not in excess of
                  $25,000,000 net of (a) all legal fees, finder's fees and other
                  similar fees and commissions paid in connection with such
                  Asset Dispositions, (b) taxes payable in connection with or as
                  a result of such Asset Dispositions and (c) other
                  out-of-pocket costs incurred in connection with such Asset
                  Dispositions; provided, however, in the case of each of
                  clauses (a) and (c) above such amounts may be deducted only to
                  the extent that such amounts so deducted are, at the time of
                  such Asset Disposition, paid to a Person that is not an
                  Affiliate of such Person (or, if paid to such an Affiliate, to
                  the extent the terms of such payment are no more favorable to
                  such Affiliate than such terms would be in an arm's-length
                  transaction) and are properly attributable to such transaction
                  or to the asset that is the subject thereof; and

                           (vi) Asset Dispositions with respect to any Eligible
                  Vessel and Barge (each a "Vessel or Barge Disposition") in
                  compliance with Sections 5.01(k) and 5.01(l).

                  (f) Limitation on Dividends and Other Payments. Declare or pay
         any dividend (other than dividends payable solely in common stock of
         the Borrower) on, or make any payment on account of, or set apart
         assets for a sinking or other analogous fund for, the
<PAGE>
                                       59


         purchase, redemption, defeasance, retirement or other acquisition of,
         any shares of any class of Capital Stock of the Borrower, whether now
         or hereafter outstanding, or make any other distribution in respect
         thereof, either directly or indirectly, whether in cash or property or
         in obligations of the Borrower or any Subsidiary except for, so long as
         after giving effect thereto no Default or Event of Default shall have
         occurred and be continuing, (i) common stock repurchases made in
         connection with employee stock ownership plans or other employee stock
         incentive plans, (ii) the purchase by the Borrower of the Borrower's
         Capital Stock from the estate of any shareholder, provided that the
         purchase price thereof is paid entirely with the proceeds received by
         the Borrower from life insurance maintained by it on the life of such
         shareholder, (iii) dividends on the Borrower's Capital Stock, and (iv)
         the redemption, in whole or in part, of the Borrower's Class B
         Redeemable Preferred Stock outstanding on the Restatement Effective
         Date, provided that the aggregate amount expended by the Borrower in
         connection with the dividends and payments described in clauses (i)
         through (iv) above shall not exceed $10,000,000 in any twelve-month
         period.

                  (g) Limitation on Capital Expenditures. Make any Capital
         Expenditures during the period from the Restatement Effective Date
         through the Termination Date, other than (without duplication): (i) the
         purchase of a maximum of six articulated tugs/barges in a cumulative
         amount (including any related assumption of Indebtedness) not to
         exceed, for the period beginning August 25, 2000 until (A) June 30,
         2002, $130,000,000 and (B) through the Termination Date, $210,000,000,
         (ii) since August 25, 2000, the purchase of a maximum of two enhanced
         protector-type escort tugs in a cumulative amount (including any
         related assumption of Indebtedness) not to exceed $30,000,000, and
         (iii) capital expenditures made for purposes other than those described
         in clauses (i) and (ii) above in a cumulative amount not to exceed, for
         the period beginning August 25, 2000 until (A) September 30, 2003,
         $160,000,000 and (B) through the Termination Date, $190,000,000
         (including any related assumption of Indebtedness), provided that,
         capital expenditures made pursuant to this clause (iii) shall not
         exceed $60,000,000 in any calendar year.

                  (h) Limitation on Investments, Loans and Advances. Make any
         advance, loan, extension of credit or capital contribution to, or
         purchase or otherwise acquire any stock, bonds, notes, debentures or
         other securities of or any assets constituting a business unit of, or
         make any other investment in, any other Person (all the foregoing,
         collectively, "Investments"), except:

                           (i) Investments in the form of extensions of trade
                  credit in the ordinary course of business;

                           (ii) Investments in Cash Equivalents;

                           (iii) Investments in the form of loans and advances
                  to employees of the Borrower or its Restricted Subsidiaries in
                  the ordinary course of business and consistent with past
                  practices, and Investments in the form of loans and advances
                  to shareholders of the Borrower or trusts or similar estate
                  planning entities of or for the benefit of any such
                  shareholder the proceeds of which are used to pay life
                  insurance premiums on the life of such shareholder;
<PAGE>
                                       60


                           (iv) Investments by the Borrower in its Restricted
                  Subsidiaries and by any Restricted Subsidiary in the Borrower
                  or in any other Restricted Subsidiary; provided that the
                  aggregate amount of Investments by the Borrower or any
                  Material Subsidiary of the Borrower in Restricted Subsidiaries
                  of the Borrower which are not Guarantors shall not exceed at
                  any time the sum of (A) (x) $2,500,000 in respect of
                  Subsidiaries which are Regulated Subsidiaries on the
                  Restatement Effective Date, (y) $15,000,000 in respect of
                  Regulated Subsidiaries not in existence on the Restatement
                  Effective Date and (z) $10,000,000 in respect of all other
                  non-Guarantor Restricted Subsidiaries plus (B) the aggregate
                  amount of Investments in such Restricted Subsidiaries of the
                  Borrower that are not Guarantors made in accordance with the
                  Borrower's cash management practices in the ordinary course of
                  business, in each case inclusive of any Investments permitted
                  pursuant to any other clause of this subsection 5.02(h),
                  provided, further, that notwithstanding the foregoing proviso,
                  the Investment by the Borrower and its Subsidiaries in the
                  shares of common stock issued by MTC shall be permitted;

                           (v) Investments in the form of notes or securities
                  received as consideration for sales of assets permitted
                  pursuant to subsection 5.02(e);

                           (vi) Investments in Joint Ventures and
                  non-Consolidated Subsidiaries and Affiliates to the extent
                  permitted under Section 5.02(m);

                           (vii) Investments permitted by subsection 5.02(d) or
                  5.02(g);

                           (viii) Investments in foreign currencies or otherwise
                  in time deposits or other securities of foreign Governmental
                  Authorities or other foreign Persons, if required by the
                  action of a foreign Governmental Authority or to fund working
                  capital requirements for the operations of the Borrower or any
                  Restricted Subsidiary in a foreign country; and

                           (ix) Investments to the extent not otherwise
                  prohibited by any other provision of Section 5.02 in the
                  ordinary course of business in an aggregate amount outstanding
                  at any time not to exceed $5,000,000.

                  (i) Transactions with Affiliates. Enter into any transaction,
         including, without limitation, any purchase, sale, lease or exchange of
         property or the rendering of any service, with any Affiliate or any
         Joint Venture unless (i) such transaction is otherwise permitted under
         this Agreement, (ii) such transaction is in the ordinary course of the
         Borrower's or such Restricted Subsidiary's business or (iii) either (x)
         such transaction is upon fair and reasonable terms no less favorable to
         the Borrower or such Restricted Subsidiary, as the case may be, than it
         would obtain in a comparable arm's-length transaction with a Person not
         an Affiliate or (y) such transaction taken together with all other such
         transactions described in this clause (iii) would not be reasonably
         likely to have a material adverse effect on the business, operations,
         condition (financial or otherwise), properties or prospects of the
         Borrower and the Guarantors taken as a whole.

                  (j) Sale and Leaseback. Enter into any arrangement with any
         Person providing for the leasing by the Borrower or any Restricted
         Subsidiary of real or personal property
<PAGE>
                                       61


         which has been or is to be sold or transferred by the Borrower or such
         Restricted Subsidiary to such Person or to any other Person to whom
         funds have been or are to be advanced by such Person on the security of
         such property or rental obligations of the Borrower or such Restricted
         Subsidiary except for (i) any such arrangement permitted by subsection
         5.02(a)(vi) and (ii) any such arrangement not constituting a Financing
         Lease.

                  (k) Non-Guarantor Subsidiaries. Create, acquire or permit to
         exist any Subsidiary that is not party to the Amended and Restated
         Subsdiary Guaranty, except (i) Regulated Subsidiaries, (ii) Joint
         Ventures, (iii) any Material Subsidiary that has become party to the
         Amended and Restated Subsdiary Guaranty within 60 days after becoming a
         Material Subsidiary and (iv) Subsidiaries (other than Regulated
         Subsidiaries and Joint Ventures) that are not Material Subsidiaries;
         provided that if such Subsidiaries have (x) aggregate Net Assets
         greater than $30,000,000 at the end of any fiscal quarter of the
         Borrower or (y) aggregate Net Revenue greater than $60,000,000 for a
         period of the most recently completed four consecutive fiscal quarters
         of the Borrower, one or more of such Subsidiaries shall have become
         party to the Amended and Restated Subsdiary Guaranty within 60 days
         after such Subsidiaries exceed such aggregate amount of Net Assets or
         Net Revenue so that the Subsidiaries not then party to the Amended and
         Restated Subsdiary Guaranty do not exceed such aggregate amounts,
         provided, that on or prior to the date that is five Business Days
         following the Restatement Effective Date, (i) neither MTC or its
         Material Subsidiaries shall be required hereunder to become party to
         the Amended and Restated Subsdiary Guaranty until Den Norske Bank ASA
         shall consent thereto under the terms of that certain Term Loan and
         Revolving Credit Facility Agreement dated as of June 17, 1998 between
         MTC and Den Norske Bank ASA and (ii) neither MTL or its Material
         Subsidiaries, if any, shall be required to become party to the Amended
         and Restated Subsdiary Guaranty until Den Norske Bank ASA shall consent
         thereto under the terms of the Amended and Restated Term Loan and
         Revolving Credit Facility Agreement dated as of June 17, 1998 between
         MTL and Den Norske Bank ASA (the "MTC Credit Agreement").

                  (l) Negative Pledge Agreements. Enter into or suffer to exist
         in favor of any Person other than the Agents, the Lenders and the
         Issuing Banks any agreement prohibiting the Borrower or any Restricted
         Subsidiary from entering into or suffering to exist any agreement that
         prohibits or conditions the creation or assumption of any Lien upon any
         of its property or assets except those in favor of such Person (any
         such agreement, a "Negative Pledge Agreement") unless prior to entering
         into or the existence of such Negative Pledge Agreement the Agents, the
         Lenders and the Issuing Banks are granted in writing substantially
         similar rights.

                  (m) Joint Ventures. Create, acquire or permit to exist any
         Subsidiary that is not a Restricted Subsidiary except any Subsidiary
         which is a special purpose corporation, partnership, limited liability
         company, trust or estate or other entity created after the Restatement
         Effective Date by the Borrower or any Subsidiary of the Borrower and
         any Person or Persons other than the Borrower or a Subsidiary of the
         Borrower in order to conduct a common business enterprise with such
         Person or Persons (each such Subsidiary being a "Joint Venture");
         provided that (i) the total Investments by the Loan Parties in all such
         Joint Ventures from the "Effective Date" (as defined in the Existing
         Credit Agreement) through the Termination Date shall not exceed
         $25,000,000 and (ii) within 60
<PAGE>
                                       62


         days of the creation or acquisition of such Joint Venture the
         Administrative Agent shall have received (x) written notice by the
         Borrower of the creation or acquisition of such Joint Venture,
         including the names of all parties to such Joint Venture, the aggregate
         amount of all Investments of the Borrower and any Restricted Subsidiary
         which are required to be made in such Joint Venture (including any
         Guaranty Obligations in respect thereof) and the percentage ownership
         by the Borrower and any Restricted Subsidiary in such Joint Venture and
         (y) a certified copy of each material formation, capitalization or
         organization agreement of such Joint Venture and each material
         shareholder or investor agreement related to the Joint Venture to which
         the Borrower or any Restricted Subsidiary is a party.

                  (n) Accounts Receivable. Create, incur, assume or suffer to
         exist any Lien upon any of its accounts receivable arising in
         connection with, or in connection with the use of, any Eligible Vessel
         or Barge, whether now owned or hereafter acquired, except for the Liens
         created under the Collateral Documents.

                  Section 5.03. Financial Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding other than any
Letter of Credit in respect of which cash collateral has been deposited and is
maintained in accordance with subsection 2.16(i), any Lender shall have any
Commitment hereunder or any Issuing Bank shall have any Letter of Credit
Commitment hereunder, the Borrower shall, unless the Required Lenders otherwise
consent in writing:

                  (a) Net Debt to EBITDA Ratio. Maintain at all times during
         each fiscal year set forth below a ratio of Net Debt to EBITDA not
         greater than the ratio set forth below opposite such fiscal year for
         each of the fiscal years set below:

<TABLE>
<CAPTION>
            Fiscal Year              Ratio
<S>                                  <C>
               2001                  6.50:1
               2002                  6.50:1
               2003                  6.00:1
               2004                  6.00:1
</TABLE>

                  (b) Interest Coverage Ratio. Maintain at all times a ratio of
         EBITDA to interest expense net of interest income (as reflected on the
         most recent Consolidated financial statements of the Borrower delivered
         pursuant hereto) not less than 4.0:1.

                  (c) Leverage Ratio. Maintain at all times a ratio of Net Debt
         to stockholders' equity (as reflected on the most recent Consolidated
         balance sheet of the Borrower delivered pursuant hereto) not greater
         than, for the period from the date hereof until December 31, 2001,
         2.25:1 and thereafter, 2.50:1.

                                   Article VI
                                EVENTS OF DEFAULT

                  Section 6.01. Events of Default. If any of the following
events shall occur and be continuing:
<PAGE>
                                       63


                  (a) The Borrower shall fail to pay any principal of any Note
         when due in accordance with the terms thereof or hereof; or the
         Borrower shall fail to pay, or cause to be paid, as the case may be,
         any interest on any Note, any fee or any other amount payable
         hereunder, within five days after any such interest or other amount
         becomes due in accordance with the terms thereof or hereof; or

                  (b) Any representation or warranty made or deemed made by any
         Loan Party herein or in any other Loan Document or which is contained
         in any certificate or financial statement furnished at any time under
         this Agreement shall prove to have been incorrect in any material
         respect on or as of the date made or deemed made; or

                  (c) The Borrower or any other Loan Party shall default in the
         observance or performance of any agreement contained in Section 5.02 or
         Section 5.03 (other than any default under subsection 5.02(b) arising
         out of the creation of any non-consensual Lien in violation of such
         subsection), to the extent, in the case of any Guarantor, such
         Guarantor is required under the Amended and Restated Subsdiary Guaranty
         to observe and perform such agreement contained in Section 5.02; or

                  (d) Any Loan Party shall fail to perform or observe any other
         term, content or agreement contained in this Agreement or any other
         Loan Document (other than the Ship Mortgages) on its part to be
         performed or observed (other than as provided in paragraphs (a) through
         (c) of this Section), if such failure shall remain unremedied for 10
         days after the earlier of the date on which (i) a Responsible Officer
         becomes aware of such failure or (ii) written notice thereof shall have
         been given to the Borrower by any Agent or any Lender Party; or

                  (e) Any Loan Party or any of its Subsidiaries shall fail to
         pay any principal of, premium or interest on or any other amount
         payable in respect of any Indebtedness of such Loan Party or such
         Subsidiary (as the case may be) that is outstanding in a principal
         amount of at least $5,000,000 either individually or in the aggregate
         (but excluding Indebtedness outstanding hereunder), when the same
         becomes due and payable (whether by scheduled maturity, required
         prepayment, acceleration, demand or otherwise), and such failure shall
         continue after the applicable grace period, if any, specified in the
         agreement or instrument relating to such Indebtedness; or any other
         event shall occur or condition shall exist under any agreement or
         instrument relating to any such Indebtedness and shall continue after
         the applicable grace period, if any, specified in such agreement or
         instrument, if the effect of such event or condition is to accelerate,
         or to permit the acceleration of, the maturity of such Indebtedness or
         otherwise to cause, or to permit the holder thereof to cause, such
         Indebtedness to mature; or any such Indebtedness shall be declared to
         be due and payable or required to be prepaid or redeemed (other than by
         a regularly scheduled required prepayment or redemption), purchased or
         defeased, or an offer to prepay, redeem, purchase or defease such
         Indebtedness shall be required to be made, in each case prior to the
         stated maturity thereof; or

                  (f) (i) Any Loan Party, Regulated Subsidiary or any Material
         Subsidiary (to the extent not a Loan Party) shall commence any case,
         proceeding or other action (A) under any existing or future law of any
         jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
         reorganization or relief of debtors, seeking to have an order for
         relief entered
<PAGE>
                                       64


         with respect to it, or seeking to adjudicate it a bankrupt or
         insolvent, or seeking reorganization, arrangement, adjustment,
         winding-up, liquidation, dissolution, composition or other relief with
         respect to it or its debts, or (B) seeking appointment of a receiver,
         trustee, custodian or other similar official for it or for all or any
         substantial part of its assets, or any Loan Party, Regulated Subsidiary
         or any Material Subsidiary (to the extent not a Loan Party) shall make
         a general assignment for the benefit of its creditors; or (ii) there
         shall be commenced against any Loan Party, Regulated Subsidiary or any
         Material Subsidiary (to the extent not a Loan Party) any case,
         proceeding or other action of a nature referred to in clause (i) above
         which (A) results in the entry of an order for relief or any such
         adjudication or appointment or (B) remains undismissed, undischarged or
         unbonded for a period of 60 days; or (iii) there shall be commenced
         against any Loan Party, Regulated Subsidiary or any Material Subsidiary
         (to the extent not a Loan Party) any case, proceeding or other action
         seeking issuance of a warrant of attachment, execution, distraint or
         similar process against all or any substantial part of its assets which
         results in the entry of an order for relief which shall not have been
         vacated, discharged, or stayed or bonded pending appeal within 60 days
         from the entry thereof; or (iv) any Loan Party, Regulated Subsidiary or
         any Material Subsidiary (to the extent not a Loan Party) shall take any
         action in furtherance of, or indicating its consent to, approval of, or
         acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
         above; or (v) any Loan Party, Regulated Subsidiary or any Material
         Subsidiary (to the extent not a Loan Party) shall generally not, or
         shall be unable to, or shall admit in writing its inability to, pay its
         debts as they become due; or

                  (g) (i) Any ERISA Event shall have occurred with respect to a
         Plan and the sum (determined as of the date of occurrence of such ERISA
         Event) of the Insufficiency of such Plan and the Insufficiency of any
         and all other Plans with respect to which an ERISA Event shall have
         occurred and then exist (or the liability of the Borrower and the ERISA
         Affiliates related to such ERISA Event) exceeds $7,500,000; or (ii) the
         Borrower or any ERISA Affiliate shall fail to pay when due any payment
         of any Withdrawal Liability to a Multiemployer Plan where the amount of
         such Withdrawal Liability, when aggregated with all other amounts
         required to be paid to Multiemployer Plans by the Borrower and the
         ERISA Affiliates as Withdrawal Liability (determined as of the date of
         such notification), exceeds $7,500,000 or requires payments exceeding
         $1,500,000 per annum; or (iii) the Borrower or any ERISA Affiliate
         shall have been notified by the sponsor of a Multiemployer Plan that
         such Multiemployer Plan is in reorganization or is being terminated,
         within the meaning of Title IV of ERISA, and as a result of such
         reorganization or termination the aggregate annual contributions of the
         Borrower and the ERISA Affiliates to all Multiemployer Plans that are
         then in reorganization or being terminated have been or will be
         increased over the amounts contributed to such Multiemployer Plans for
         the plan years of such Multiemployer Plans immediately preceding the
         plan year in which such reorganization or termination occurs by an
         amount exceeding $1,500,000, which amount is not paid when due; or

                  (h) One or more judgments or decrees shall be entered against
         the Borrower or any of its Subsidiaries involving in the aggregate a
         liability of $7,500,000 or more (calculated after deducting therefrom
         any amount that will be paid by a recognized protection and indemnity
         club that is a member of the International Group Agreement or any
         insurer rated at least B++ by A.M. Best Company, or the equivalent
         thereof provided by a rating service whose ratings of insurance
         companies are internationally recognized, if
<PAGE>
                                       65


         such insurer has been notified of, and has not disputed the claim made
         for payment of, the amount of such judgment or decree) and such
         judgments or decrees involving in the aggregate $7,500,000 or more
         shall not have been vacated, discharged, stayed or bonded pending
         appeal within 60 days from the entry thereof; or

                  (i) Any non-monetary judgment or order shall be rendered
         against the Borrower or any of its Subsidiaries that could reasonably
         be expected to have a Material Adverse Effect, and there shall be any
         period of 60 consecutive days during which a stay of enforcement of
         such judgment or order, by reason of a pending appeal or otherwise,
         shall not be in effect; or

                  (j) With regard to any Title XI Financing Agreement, (A) any
         "Payment Default" shall have occurred with respect to any of the Title
         XI Subsidiaries or the Borrower; or (B) any Secretary's Notice (as
         defined in, or by reference in, any Title XI Financing Agreement) shall
         be issued for any reason; or (C) the Borrower shall be required
         pursuant to any stock Subscription Agreement (as defined in, or by
         reference in, any Title XI Financing Agreement) to purchase any shares
         of or make any cash advances to any Title XI Subsidiaries in an amount,
         together with any deposit or pledge amounts described in clause (D) of
         this subsection, in excess of $5,000,000; or (D) any Title XI
         Subsidiaries or the Borrower shall be required to make any deposit into
         any Title XI Reserve Fund or to make any pledge of cash collateral
         (whether or not such pledge or deposit is made) or any such deposit or
         pledge is made, in an amount, together with any subscription or cash
         advance amounts described in clause (C) of this paragraph (j), in
         excess of $5,000,000; or

                  (k) If at any time the Borrower or its Subsidiaries shall
         become liable (whether, directly or indirectly, by indemnity or
         contribution or otherwise) for remediation and/or environmental
         compliance expenses and/or fines, penalties or other charges which, in
         the aggregate, has had or is reasonably likely to have a Material
         Adverse Effect; or

                  (l) The Amended and Restated Subsdiary Guaranty or Article VII
         hereof shall cease to be in full force and effect, shall be determined
         by any court to be void, voidable or unenforceable, or any Loan Party
         shall assert any defense to any of its obligations under any Loan
         Document to which it is a party or otherwise contest its liability
         thereunder, or any such Loan Party shall rescind or revoke (or attempt
         to rescind or revoke) any of its obligations under any Loan Document,
         whether with respect to future transactions or otherwise;

                  (m) There shall occur and be continuing an "Event of Default"
         as defined in any Ship Mortgage;

                  (n) A Change in Control shall occur; or

                  (o) Except as otherwise permitted hereunder, the Secured
         Parties shall cease to have a first-priority perfected security
         interest in any Collateral;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments and the Letter of Credit Commitments shall
immediately terminate and the Advances hereunder (with accrued
<PAGE>
                                       66


interest thereon) and all other amounts owing under this Agreement and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders (or, in the case of an Event of Default
specified in paragraph (a) above, the Majority Lenders), the Administrative
Agent may, or upon the request of the Required Lenders (or, in the case of an
Event of Default specified in paragraph (a) above, the Majority Lenders), the
Administrative Agent shall, by notice to the Borrower, declare the Commitments
and the Letter of Credit Commitments to be terminated forthwith, whereupon the
Commitments and the Letter of Credit Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders (or, in the case of an Event
of Default specified in paragraph (a) above, the Majority Lenders), the
Administrative Agent may, or upon the request of the Required Lenders (or, in
the case of an Event of Default specified in paragraph (a) above, the Majority
Lenders), the Administrative Agent shall, by notice of default to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.

         Section 6.02. Actions in Respect of the Letters of Credit upon Default.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrower shall at such time deposit in a non-interest
bearing cash collateral account opened by, and under the sole dominion and
control of, the Administrative Agent an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding, and the Borrower hereby grants
to the Administrative Agent for the benefit of the Agents, the Issuing Banks and
the Lenders a security interest in all funds so deposited to and from time to
time held (in the form of cash, certificates or instruments) in the cash
collateral account and proceeds thereof. The Borrower and the Administrative
Agent shall thereafter enter into documentation reaffirming the grant of the
security interest hereunder and otherwise relating to such cash collateral
account in form and substance satisfactory to the Administrative Agent and the
Borrower. The Administrative Agent shall, at the Borrower's direction and
without assuming any risk of loss thereof, invest the funds in the cash
collateral account in Cash Equivalents for the account of the Borrower. All
interest and other investment gains earned on such investments shall be added to
the cash collateral account as additional collateral security for the prompt and
complete payment when due of the obligations and liabilities of the Borrower and
any Designated Account Party under and in respect of the Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the Notes. If at any time the
Administrative Agent determines that any funds held in such cash collateral
account are subject to any right or claim of any Person other than any Agent,
any Issuing Bank or the Lenders, which right or claim could reasonably have the
effect of reducing the value of such funds to the Issuing Banks and the Lenders,
or that the total amount of such funds is less than the aggregate Available
Amount of all Letters of Credit, the Borrower will, forthwith upon receipt of a
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds in Dollars to be deposited and held in such cash collateral
account, an amount equal to (a) the amount by which the value of such funds to
the Lenders and the Issuing Banks has been reduced, or (b) the excess of (i)
such aggregate Available Amount over (ii) the total amount of funds, if any,
then held in such cash collateral account, respectively. On or after
<PAGE>
                                       67


the date all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the Notes then due and payable
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower.

                                  Article VII
                                BORROWER GUARANTY

                  Section 7.01. Guaranty. The Borrower hereby unconditionally
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of each Designated
Account Party now or hereafter existing under the L/C Related Documents, whether
for reimbursement of drawings under any Letter of Credit, principal, interest,
fees, expenses or otherwise (such Obligations being the "Borrower Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including
reasonable counsel fees and expenses) incurred by any Agent, any Issuing Bank or
any Lender in enforcing any rights under the guaranty contained in this Article
VII. Without limiting the generality of the foregoing, the Borrower's liability
shall extend to all amounts that constitute part of the Borrower Guaranteed
Obligations and would be owed by each Designated Account Party to any Agent, any
Issuing Bank or any Lender under the L/C Related Documents but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Designated Account Party.

                  Section 7.02. Guaranty Absolute. The Borrower guarantees that
the Borrower Guaranteed Obligations will be paid strictly in accordance with the
terms of the L/C Related Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Agent, any Issuing Bank or any Lender with respect thereto.
The Obligations of the Borrower under the guaranty contained in this Article VII
are independent of the Borrower Guaranteed Obligations or any other Obligations
of any other Loan Party or Designated Account Party under the L/C Related
Documents, and a separate action or actions may be brought and prosecuted
against the Borrower to enforce the guaranty contained in this Article VII,
irrespective of whether any action is brought against any Designated Account
Party or any other Loan Party or whether any Designated Account Party or any
other Loan Party is joined in any such action or actions. The liability of the
Borrower under the guaranty contained in this Article VII shall be irrevocable,
absolute and unconditional irrespective of, and the Borrower hereby irrevocably
waives, any defenses it may now or hereafter have in any way relating to, any or
all of the following:

                  (a) any lack of validity or enforceability of any L/C Related
         Document or any agreement or instrument relating thereto;

                  (b) any change in the time, manner or place of payment of, or
         in any other term of, all or any of the Borrower Guaranteed Obligations
         or any other Obligations of any Designated Account Party or any Loan
         Party under the L/C Related Documents, or any other amendment or waiver
         of or any consent to departure from any L/C Related Document,
         including, without limitation, any increase in the Borrower Guaranteed
         Obligations resulting from the extension of additional credit to any
         Designated Account Party or any of its Subsidiaries or otherwise;
<PAGE>
                                       68


                  (c) any taking, exchange, release or non-perfection of any
         collateral security, or any taking, release or amendment or waiver of
         or consent to departure from any other guaranty, for all or any of the
         Borrower Guaranteed Obligations;

                  (d) any manner of application of collateral security, or
         proceeds thereof, to all or any of the Borrower Guaranteed Obligations,
         or any manner of sale or other disposition of any collateral security
         for all or any of the Borrower Guaranteed Obligations or any other
         Obligations of any Designated Account Party or any other Loan Party
         under the L/C Related Documents or any other assets of any Designated
         Account Party or any of its Subsidiaries;

                  (e) any change, restructuring or termination of the corporate
         structure or existence of any Designated Account Party or any of its
         Subsidiaries;

                  (f) any failure of any Agent, Issuing Bank or Lender to
         disclose to any Designated Account Party or the Borrower any
         information relating to the financial condition, operations, properties
         or prospects of any other Designated Account Party or any other Loan
         Party now or in the future known to any Agent, Issuing Bank or Lender
         (the Borrower waiving any duty on the part of the Agents, Issuing Banks
         or Lenders to disclose such information); or

                  (g) any other circumstance (including, without limitation, any
         statute of limitations) or any existence of or reliance on any
         representation by any Agent, Issuing Bank or Lender that might
         otherwise constitute a defense available to, or a discharge of, any
         Designated Account Party, the Borrower or any other guarantor or
         surety.

The guaranty contained in this Article VII shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Borrower Guaranteed Obligations is rescinded or must otherwise be returned by
any Agent, Issuing Bank or Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Designated Account Party or any other Loan
Party or otherwise, all as though such payment had not been made.

                  Section 7.03. Waivers and Acknowledgments. (a) The Borrower
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Borrower Guaranteed Obligations and the guaranty
contained in this Article VII and any requirement that any Agent, Issuing Bank
or Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against any Designated Account
Party or any other Person or any collateral security.

                  (b) The Borrower hereby waives any right to revoke the
guaranty contained in this Article VII, and acknowledges that the guaranty
contained in this Article VII is continuing in nature and applies to all
Borrower Guaranteed Obligations, whether existing now or in the future.

                  (c) The Borrower acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in this Section 7.03 are knowingly
made in contemplation of such benefits.
<PAGE>
                                       69


                  Section 7.04. Subrogation. The Borrower will not exercise any
rights that it may now or hereafter acquire against any Designated Account Party
or any other insider guarantor that arise from the existence, payment,
performance or enforcement of the Borrower's Obligations under the guaranty
contained in this Article VII or any other L/C Related Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any Agent, Issuing Bank or Lender against any Designated Account Party
or any other insider guarantor or any collateral security, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Designated Account Party or any other insider guarantor, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment or
security on account of such claim, remedy or right, unless and until all of the
Obligations and all other amounts payable under the guaranty contained in this
Article VII shall have been paid in full in cash, all Letters of Credit shall
have expired or terminated and not have been renewed, all Reimbursement
Obligations shall have been paid in full in cash and the Commitments and the
Letter of Credit Commitments shall have expired or terminated. If any amount
shall be paid to the Borrower in violation of the preceding sentence at any time
prior to the later of the payment in full in cash of the Borrower Guaranteed
Obligations and all other amounts payable under the guaranty contained in this
Article VII and the later of (i) the Termination Date and (ii) the expiration or
termination of all Letters of Credit and the payment in full in cash of all
Reimbursement Obligations, such amount shall be held in trust for the benefit of
the Agents, Issuing Banks and Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Borrower Guaranteed
Obligations and all other amounts payable under the guaranty contained in this
Article VII, whether matured or unmatured, in accordance with the terms of the
L/C Related Documents, or to be held as collateral security for any Borrower
Guaranteed Obligations or other amounts payable under the guaranty contained in
this Article VII thereafter arising. If (i) the Borrower shall make payment to
any Agent, Issuing Bank or Lender of all or any part of the Borrower Guaranteed
Obligations, (ii) all of the Borrower Guaranteed Obligations and all other
amounts payable under the guaranty contained in this Article VII shall be paid
in full in cash and (iii) the Termination Date shall have occurred, all Letters
of Credit shall have expired or terminated and not been renewed and all
Reimbursement Obligations shall have been paid in full in cash, the Agents,
Issuing Banks and Lenders will, at the Borrower's request and expense, execute
and deliver to the Borrower appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Borrower of an interest in the Borrower Guaranteed Obligations resulting
from such payment by the Borrower.

                  Section 7.05. Continuing Guaranty. The guaranty contained in
this Article VII is a continuing guaranty and shall (a) remain in full force and
effect until the later of the payment in full in cash of the Borrower Guaranteed
Obligations and all other amounts payable under the guaranty contained in this
Article VII and the later of (i) the Termination Date and (ii) the expiration or
termination of all Letters of Credit and the payment in full in cash of all
Reimbursement Obligations, (b) be binding upon the Borrower, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Agents,
Issuing Banks and Lenders and their successors, transferees and assigns.
<PAGE>
                                       70


                                  Article VIII
         THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE CO-AGENT

                  Section 8.01. Authorization and Action. Each Lender (in its
capacity as a Lender and, if applicable, an Issuing Bank or Swing Line Bank)
hereby appoints and authorizes the Administrative Agent and the Collateral
Agent, respectively, to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent and the Collateral Agent, respectively, by the terms hereof
and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders (or Majority Lenders, as appropriate), and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that no Agent shall be required to take any action that
exposes any of them to personal liability or that is contrary to this Agreement
or applicable law. Each Agent agrees to give to each Lender prompt notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement.

                  Section 8.02. Agent's Reliance, Etc. Neither any Agent nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(i) may treat the payee of any Note as the holder thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 9.07; (ii) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in connection
with any Loan Document; (iv) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Loan Document on the part of any Loan Party (other than the delivery by
the Loan Parties of items purporting to be deliveries by the Loan Parties
pursuant to Section 3.01(a)) or to inspect the property (including the books and
records) of any Loan Party; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier)
believed by it to be genuine and signed or sent by the proper party or parties.

                  Section 8.03. CUSA and Affiliates. With respect to its
Commitment and Letter of Credit Commitment, the Advances made by it and the Note
issued to it, CUSA shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as
<PAGE>
                                       71


though it were not an Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include CUSA in its individual capacity. CUSA and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, any Loan Party, any of their respective
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if CUSA were not an Agent and without
any duty to account therefor to the Lenders.

                  Section 8.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender 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 8.05. Indemnification. Each Lender severally agrees to
indemnify the Administrative Agent and the Collateral Agent (to the extent not
promptly reimbursed by the Borrower) from and against such Lender's ratable
share of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Agent under the Loan Documents, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct as found in a
final non-appealable judgment by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent and the Collateral Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, the Loan Documents, to the extent that such Agent is not
reimbursed for such expenses by the Borrower. For purposes of this Section 8.05,
the Lenders' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders, (b) their
respective Pro Rata Share of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (c) their respective Unused Commitments at
such time; provided that the aggregate principal amount of Swing Line Advances
owing to the Swing Line Bank shall be considered to be owed to the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lenders to such Agent as provided herein shall
not relieve any other Lender of its obligation hereunder to reimburse such Agent
for its ratable share of such amount, but no Lender shall be responsible for the
failure of any other Lender to reimburse such Agent for such other Lender's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender hereunder the agreement and obligations of each Lender
contained in this Section 8.05 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the other Loan
Documents.
<PAGE>
                                       72


                  Section 8.06. Successor Agents. The Administrative Agent or
Collateral Agent, as the case may be, may resign at any time by giving written
notice thereof to the Lenders and the Borrower and may be removed from such
capacity as an Agent at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent or Collateral Agent, as the case may
be. If no successor Administrative Agent or Collateral Agent, as the case may
be, shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent or Collateral Agent, as the case may be. A successor Agent
shall be a Lender, or if no Lender will accept appointment as such successor
Agent, the successor Agent shall be an Eligible Assignee and a commercial bank
organized under the laws of the United States of America or of any state thereof
and having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Administrative Agent or Collateral Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Administrative Agent or Collateral Agent, as the case may be,
and the retiring Agent shall be discharged from its duties and obligations under
the Loan Documents. If within 45 days after written notice is given of the
retiring Agent's resignation or removal under this Section 8.06 no successor
Agent shall have been appointed and shall have accepted such appointment, then
on such 45th day (a) retiring Agent's resignation or removal shall become
effective, (b) the retiring Agent shall thereupon be discharged from its duties
and obligations under the Loan Documents and (c) the Required Lenders shall
thereafter perform all duties of the retiring Agent under the Loan Documents
until such time, if any, as Required Lenders appoint a successor Agent as
provided above. After any retiring Agent's resignation or removal hereunder as
Administrative Agent or Collateral Agent, as the case may be, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent or Collateral Agent, as the
case may be, under the Loan Documents.

                                   Article IX
                                  MISCELLANEOUS

                  Section 9.01. Amendments. No amendment or waiver of any
provision of any Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders affected by such amendment, waiver or
comment, do any of the following: (a) waive any of the conditions specified in
Section 3.01, (b) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations, (c) reduce the principal of, or interest on, the
Notes, any Reimbursement Obligation or any fees or other amounts payable
hereunder (provided that any Lender may waive, for itself, the timely payment of
any amount owed to it arising from any claim by such Lender in respect of any
indemnity obligation of the Borrower to such Lender pursuant to Section 2.10,
2.11 or 2.13), (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, (e)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes or of the aggregate Available Amount of outstanding
<PAGE>
                                       73


Letters of Credit, or the number of Lenders, that in each case shall be required
for the Lenders or any of them to take any action hereunder, (f) reduce or limit
the obligations of any Guarantor under Section 1 of the Amended and Restated
Subsdiary Guaranty or of the Borrower under Section 7.01 or otherwise limit any
Guarantor's or the Borrower's respective liability with respect to the
Obligations owing to the Agents, the Lenders and the Issuing Banks, (g) amend
this Section 9.01 or (h) release all or substantially all of any cash collateral
securing Reimbursement Obligations under Letters of Credit, except to the extent
permitted by Section 2.16(i) in respect of Excess Amounts described therein; and
provided further that no amendment, waiver or consent shall, unless in writing
and signed by each Issuing Bank or the Swing Line Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Issuing Banks or the Swing Line Bank (in their respective
capacities as Issuing Banks or Swing Line Bank), as the case may be, under this
Agreement; provided further that no amendment, waiver or consent shall, unless
in writing and signed by the Administrative Agent or the Collateral Agent, as
the case may be, in addition to the Lenders required above to take such action,
affect the rights or duties of the Administrative Agent or Collateral Agent in
its capacity as such Agent, under this Agreement or any Note.

                  Section 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier)
and sent by a prepaid nationally recognized overnight courier, telecopied, or
delivered, if to the Borrower, at its address at 155 Grand Avenue, Oakland,
California 94612, Attention: Albert M. Marucco, Vice President and Treasurer; if
to any Guarantor, c/o the Borrower at the foregoing address; if to any Initial
Lender, at its Domestic Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; if to the
Administrative Agent or Collateral Agent, at its address at 399 Park Avenue, New
York, New York 10043, Attention: Mark Johnson; if to any Issuing Bank, at its
Notice Office specified opposite its name on Schedule I hereto; or, as to the
Borrower or any Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, sent by a nationally recognized overnight courier, or
telecopied, be effective when deposited in the mails, delivered to such courier,
or telecopied, respectively, except that notices and communications to the
Administrative pursuant to Article II, III or VIII shall not be effective until
received by the Administrative Agent, as the case may be. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.

                  Section 9.03. No Waiver; Remedies. No failure on the part of
any Lender, any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

                  Section 9.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand all reasonable out-of-pocket costs and expenses of each Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of any Loan Document and the other documents to be
delivered hereunder, including, without limitation, (i)
<PAGE>
                                       74


all reasonable due diligence, collateral review, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses, (ii) the reasonable fees and expenses of counsel
for the Agents with respect thereto and with respect to advising the Agents as
to their respective rights and responsibilities under the Loan Documents and
(iii) all reasonable expenses (including reasonable fees and expenses of
counsel) of the Administrative Agent in connection with any transaction pursuant
to Section 9.07(i). The Borrower further agrees to pay on demand all reasonable
costs and expenses of the Agents and the Lenders, if any (including, without
limitation, reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
the Loan Documents and the other documents to be delivered hereunder and
thereunder, including, without limitation, reasonable fees and expenses of
counsel for each Agent and each Lender in connection with the enforcement of
rights under this Section 9.04(a).

                  (b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, Collateral Agent and each Lender and each of their
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Revolving Credit Facility, the Loan Documents, any of
the transactions contemplated herein or therein or the actual or proposed use of
the proceeds of the Advances or the Letters of Credit or (ii) the actual or
alleged presence of Hazardous Materials on any property of the Borrower or any
of its Subsidiaries, any Environmental Action relating in any way to the
Borrower or any of its Subsidiaries or the violation of or noncompliance with
any Environmental Laws applicable to the real property owned or operated (within
the meaning of any applicable Environmental Law) by the Borrower or any of its
Subsidiaries, or any orders, requirements or demands of Governmental Authorities
related thereto, in each case whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated, except to the extent such claim, damage, loss, liability
or expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. The Borrower also agrees not to assert any claim against any
Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Revolving Credit Facility, the actual or
proposed use of the proceeds of the Advances or the Letters of Credit, the Loan
Documents or any of the transactions contemplated thereby.

                  (c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.07(d) or (e), 2.09 or
2.11, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason or by an Eligible Assignee to a Lender other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 9.07 as a result of a
demand by the Borrower pursuant to
<PAGE>
                                       75


Section 9.07(a) or by addition of an Additional Lender under Section 9.07(i),
the Borrower shall, upon demand by such Lender (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment or Conversion, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.

                  (d) If any Loan Party fails to pay when due any cost, expenses
or other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and Indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender in
its sole discretion.

                  (e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in Sections 2.10, 2.13 and 9.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the Notes.

                  Section 9.05. Right of Set-off. Each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such Affiliate to or for
the credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement and the Note or
Notes held by such Lender then due and payable. Each Lender agrees promptly to
notify the Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and its Affiliates under this Section are
in addition to, and not in limitation of, other rights and remedies (including,
without limitation, other rights of set-off) that such Lender and its Affiliates
may have.

                  Section 9.06. Binding Effect. This Agreement shall become
effective (other than the Lenders' obligations under Section 2.01 and Section
2.16, which shall only become effective upon satisfaction of the conditions
precedent set forth in Section 3.01) when it shall have been executed by the
Borrower and each Agent and when the Administrative Agent shall have been
notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, each
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.

                  Section 9.07. Assignments and Participations. (a) Each Lender,
with the consent of the Borrower, each Agent and each Issuing Bank, may and, in
the case of a Lender if demanded by the Borrower (following a demand by such
Lender pursuant to Section 2.10 or 2.13) upon at least 5 Business Days' notice
to such Lender and the Administrative Agent, will assign to one or more Persons
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment or Commitments, the
Advances owing to it and the Note or Notes held by it); provided, however, that
(i) each such assignment shall be of a constant, and not a varying, percentage
of all rights and obligations under and in respect of the Revolving Credit
Facility, (ii) except in the case of an assignment to a Person that,
<PAGE>
                                       76


immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) except in the case of
an assignment of all of a Lender's rights and obligations under this Agreement,
the remaining Commitment of the assigning Lender shall in no event be less than
$10,000,000, (iv) each such assignment shall be to an Eligible Assignee, (v)
each such assignment made as a result of a demand by the Borrower pursuant to
this Section 9.07(a) shall be arranged by the Borrower after consultation with
the Administrative Agent and shall be either an assignment of all of the rights
and obligations of the assigning Lender under this Agreement or an assignment of
a portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (vi) no Lender shall
be obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 9.07(a) unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts then due and payable to such Lender under this Agreement and (vii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note subject to such assignment and a processing
and recordation fee of $2,500; provided further that if such assignment is to an
Eligible Assignee which is a direct or indirect wholly owned Subsidiary of any
Lender or the controlling corporation of such Lender, no consent of the Borrower
shall be required for such assignment. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

                  (b) Each Issuing Bank may assign to one or more Lenders or
Affiliates of a Lender all or a portion of its rights and obligations under the
undrawn portion of its Letter of Credit Commitment at any time; provided,
however, that (i) except in the case of an assignment to a Person that
immediately prior to such assignment was an Issuing Bank or an assignment of all
of an Issuing Bank's rights and obligations under this Agreement, the amount of
the Letter of Credit Commitment of the assigning Issuing Bank being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 and shall be in an integral multiple of $1,000,000 in excess thereof,
(ii) except in the case of an assignment of all of an Issuing Bank's rights and
obligations under this Agreement, the remaining commitment of the assigning
Issuing Bank shall in no event be less than $5,000,000, (iii) each such
assignment shall be to an Eligible Assignee and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for
<PAGE>
                                       77


its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $2,500.

                  (c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of any Loan Party or the performance or observance by any Loan Party
of any of its respective obligations under the Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Lender or any
other Lender 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; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender or Issuing Bank, as the case may be.

                  (d) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agents and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, any Agent or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

                  (e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the forms such assignee is required to deliver pursuant
to subsection 2.13(e) and any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice (or, if later, the effective date of the
transfer), the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note a new Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Commitment hereunder, a
<PAGE>
                                       78


new Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit A
hereto.

                  (f) Each Lender may sell participations to one or more banks
or other entities (other than any Loan Party or any of its Affiliates) in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, each Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of any Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder (to the extent such participant would be
entitled to share therein), in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.

                  (g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.

                  (h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.

                  Section 9.08. Release of Collateral. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party in
accordance with the terms of the Loan Documents, the Collateral Agent will, at
the Borrower's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents;
provided that if after giving effect to the release of such item of Collateral,
the aggregate amount of Collateral released from the assignment and security
interest granted under the Collateral Documents during the period from 90 days
prior to the date of such release to the date of such release would exceed
$5,000,000 (as determined on the basis of appraisals and certificates provided
to the Collateral
<PAGE>
                                       79


Agent at its request by the Borrower in connection with such Collateral), the
Collateral Agent shall not execute and deliver to such Loan Party such documents
as described above without the prior verbal or written consent of the Required
Lenders.

                  Section 9.09. Certain Changes in GAAP. If the Borrower
defaults in the performance of any of its covenants hereunder as a sole and
direct result of a change in GAAP, the Borrower and the Agents shall enter into
good faith negotiations with a view towards agreeing upon an amendment to this
Agreement (acceptable to the Borrower, the Agents and the Required Lenders)
within thirty days from the date of such change in GAAP, the effect of which
amendment is to amend the ratios and amounts contained in such covenants or in
the definitions related thereto, as the case may be, and the method of
computation thereof, so that the Borrower and the Lenders are in the same
position as if such change in GAAP had not occurred. During such thirty-day
period of good faith negotiations a default of the type referred to in the
preceding sentence shall not constitute a Default or an Event of Default
hereunder. Until such amendment shall become effective and in any event if the
Borrower, the Agents and the Required Lenders fail to execute such amendment
within such thirty day period of good faith negotiations, all covenant
compliance determinations under this Agreement shall, from and after the date of
such change in GAAP, continue to be made in accordance with GAAP in effect prior
to such change, the Borrower shall provide to the Lenders such information as
they may reasonably request to enable them to verify such compliance in
accordance with such GAAP and the default referred to in the first sentence of
this Section 9.08 shall not constitute a Default or an Event of Default
hereunder.

                  Section 9.10. Confidentiality. No Agent nor any Lender shall
disclose any Confidential Information to any other Person without the consent of
the Borrower, other than (a) to such Agent's or such Lender's Affiliates and
their officers, directors, employees, agents and advisors and, as contemplated
by Section 9.07(g), to actual or prospective assignees and participants, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.

                  Section 9.11. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.

                  Section 9.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

                  Section 9.13. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in
<PAGE>
                                       80


respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to any Loan Document in the courts of any
jurisdiction.

                  (b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to any Loan Document to which it
is a party in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

                  Section 9.14. Waiver of Jury Trial. Each of the Borrower, the
Agents and the Lenders hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to the Loan Documents, the Advances, the
Letters of Credit or the actions of any Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
                                       81


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.


                                          CROWLEY MARITIME CORPORATION


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


                                          CITICORP USA, INC., as Administrative
                                             Agent and Collateral Agent


                                          By
                                            ------------------------------------
                                             Title:
<PAGE>
                                       82


                                       Initial Lenders

                                       CITIBANK, N.A., as Initial Issuing Bank,
                                         Swing Line Bank and as Initial Lender


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


                                       CITICORP USA, INC.

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


                                       CHRISTIANIA BANK OG KREDITKASSE ASA,
                                         NEW YORK BRANCH


                                       By
                                         ---------------------------------------
                                          Title:
<PAGE>
                                       83


                                      DEN NORSKE BANK ASA



                                      By
                                        ----------------------------------------
                                         Title:
<PAGE>
                                       84


                                     LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE



                                     By
                                       -----------------------------------------
                                        Title:
<PAGE>
                                       85


                                      NEDSHIP BANK N.V.



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