Document:

<PAGE>
                                                                    EXHIBIT 10.4

                                                                [EXECUTION COPY]

                      AMENDMENT NO. 1 TO SECURITY AGREEMENT

         AMENDMENT NO. 1 dated as of August 26, 2003 (this "Amendment") to the
Security Agreement dated as of August 16, 2002 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Security
Agreement") made by the Grantors from time to time party thereto in favor of the
Bank of America, N.A., as Collateral Agent (together with any successor
collateral agent appointed pursuant to Article VIII of the Credit Agreement
referred to below, the "Collateral Agent") for the Secured Parties.

                              W I T N E S S E T H :

         WHEREAS, the parties hereto have entered into Amendment No. 3 dated as
of July 14, 2003 ("Amendment No. 3") to the Third Amended and Restated Term Loan
and Revolving Credit Agreement dated as of August 2, 2002 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement") among Foster Wheeler LLC, certain of its affiliates, the Lenders
party thereto and Bank of America, N.A., as Administrative Agent and Collateral
Agent (together with any successor collateral agent appointed pursuant to
Article VIII of the Credit Agreement, the "Collateral Agent");

         WHEREAS, Amendment No. 3 requires certain of the Grantors to pledge
additional Equity Interests in certain of their subsidiaries;

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Security Agreement
has the meaning assigned to such term in the Security Agreement. Each reference
to "hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Security Agreement shall, after the Amendment No. 1 Effective
Date, refer to the Security Agreement as amended hereby.

         SECTION 2. Amendments to Security Agreement. (a) Section 2(b) of the
Security Agreement is amended by replacing each reference to "Foreign
Subsidiary" in clause (ii) thereof with "Exempt Foreign Subsidiary".

         (b) Section 3(a) of the Security Agreement is amended by:

                  (i) inserting the following proviso at the end of clause (i)
         thereof:

<PAGE>

         provided that any Restricted Collateral in which a security interest is
         initially granted hereunder after the Amendment No. 3 Effective Date
         shall secure only the Obligations of the undersigned in respect of Term
         Loans in an aggregate principal amount of $57,581,000 (including
         without limitation interest (including Post-Petition Interest) thereon
         and fees and other Obligations in respect thereof) and Letter of Credit
         Obligations,

                  (ii) inserting "in which a security interest is initially
         granted hereunder prior to the Amendment No. 3 Effective Date" after
         "such Grantor" in clause (iv) thereof.

         (c) Section 5(a) of the Security Agreement is amended by replacing the
parenthetical in the second sentence with "(and, in the case of the Pledged
Equity in any Foreign Subsidiary, subject to any approvals required under the
laws of the jurisdiction of organization of such Foreign Subsidiary)".

         (d) Clause (iii) of Section 5(e) of the Security Agreement is amended
by:

                  (i) inserting "or the deadlines established under Section
         5.15(b) or 6.17 of the Credit Agreement, as the case may be)" after
         "Effective Date";

                  (ii) replacing the reference to "clause (ii)" with "clause
         (iii)"; and

                  (iii) inserting "(other than any such actions required in
         connection with the pledges described on Schedule VIII hereof which
         shall be taken by the deadlines established under Section 5.15(b) or
         6.17, as the case may be, of the Credit Agreement)" at the end thereof.

         (e) Section 9 of the Security Agreement is amended by inserting "As of
the date hereof," at the beginning of each of (i) each sentence in subsection
(a), (ii) the first sentence in subsection (e) and (iii) subsection (i)(iii).

         (f) Section 9(g) of the Security Agreement is amended by inserting
"(other than any such actions required in connection with the pledges described
on Schedule VIII hereof which shall be taken by the deadlines established under
Section 5.15(b) or 6.17, as the case may be, of the Credit Agreement)" at the
end of each of clauses (i)(z), (ii)(w) and (ii)(y) thereof.

         (g) Section 20(c) of the Security Agreement is amended by inserting the
following proviso at the end thereof:

                                       2
<PAGE>

         ; and provided further that the foregoing provisions as to the
         application of proceeds of Restricted Collateral are subject to the
         limitations specified in Section 3(a).

         (h) Schedule VIII hereto is added to the Security Agreement as Schedule
VIII thereto.

         SECTION 3. Representations and Warranties. Each Grantor represents and
warrants that (i) the representations and warranties of such Grantor set forth
in the Security Agreement will be true on and as of the Amendment No. 1
Effective Date (except with respect to representations and warranties which
specifically refer to an earlier date, which shall be true as of such earlier
date) and (ii) no Potential Default or Event of Default will have occurred and
be continuing on the Amendment No. 1 Effective Date.

         SECTION 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 5. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         SECTION 6. Effectiveness. This Amendment shall become effective as of
the date hereof on the date (the "Amendment No. 1 Effective Date") when the
Administrative Agent shall have received from each Grantor a counterpart hereof
signed by such party or facsimile or other written confirmation (in form
satisfactory to counsel to the Administrative Agent) that such party has signed
a counterpart hereof.

         SECTION 7. Inconsistency with Foreign Pledge Agreements. In the event
that a Potential Default or Event of Default arises by virtue of a
misrepresentation or breach of warranty in, or a failure to perform any
undertaking imposed by, any Security Document governed by foreign law and
covering Collateral consisting exclusively of Equity Interests in, Indebtedness
owed by or assets owned by one or more Foreign Subsidiaries (a "Foreign Pledge
Agreement"), which Potential Default or Event of Default would not exist if the
related Collateral and the grant of a Lien therein were governed exclusively by
this Security Agreement, then the Potential Default or Event of Default existing
under such Foreign Pledge Agreement shall be deemed a Potential Default or Event
of Default, as the case may be, solely for purposes of such Foreign Pledge
Agreement and not for purposes of any other Loan Document.

                                       3
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

ATTEST:                               FOSTER WHEELER LLC
                                      By: Foster Wheeler Holdings Ltd.
                                          (formerly known as Foreign Holdings
                                          Ltd.), its sole member

By: /s/Steven I. Weinstein            By:   /s/ Ryan J. Esko
    ------------------------------        -----------------------------------
    Name:  Steven I. Weinstein            Name:    Ryan J. Esko
    Title: Vice President &               Title:   Treasurer
           Deputy General Counsel

                                       FOSTER WHEELER USA
                                         CORPORATION

                                       By: /s/ Ryan J. Esko
                                           -----------------------------------
                                           Name:   Ryan J. Esko
                                           Title:  Treasurer

                                       FOSTER WHEELER POWER GROUP,
                                         INC.

                                       By:    /s/ Ryan J. Esko
                                           -----------------------------------
                                           Name:   Ryan J. Esko
                                           Title:  Treasurer

                                       FOSTER WHEELER ENERGY
                                         CORPORATION

                                       By:    /s/ Ryan J. Esko
                                           -----------------------------------
                                           Name:   Ryan J. Esko
                                           Title:  Treasurer

<PAGE>

                                    FOSTER WHEELER LTD.

                                    By: /s/ Ryan J. Esko
                                        ----------------------------------------
                                        Name:  Ryan J. Esko
                                        Title: Treasurer

                                    FOSTER WHEELER HOLDINGS LTD.
                                      (formerly known as Foreign Holdings
                                      Ltd.)

                                    By: /s/ Ryan J. Esko
                                        ----------------------------------------
                                        Name:  Ryan J. Esko
                                        Title: Treasurer

                                    FOSTER WHEELER INC.

                                    By: /s/ Ryan J. Esko
                                        ----------------------------------------
                                        Name: Ryan J. Esko
                                        Title:Treasurer

                                    FOSTER WHEELER
                                      INTERNATIONAL HOLDINGS,
                                        INC.

                                    By: /s/ Ryan J. Esko
                                        ----------------------------------------
                                        Name:  Ryan J. Esko
                                        Title: Treasurer

<PAGE>

                               EQUIPMENT CONSULTANTS, INC.
                               FOSTER WHEELER ASIA LIMITED
                               FOSTER WHEELER CAPITAL &
                                 FINANCE CORPORATION
                               FOSTER WHEELER CONSTRUCTORS,
                                 INC.
                               FOSTER WHEELER DEVELOPMENT
                                 CORPORATION
                               FOSTER WHEELER ENERGY
                                 MANUFACTURING, INC.
                               FOSTER WHEELER ENERGY
                                 SERVICES, INC.
                               FOSTER WHEELER ENVIRESPONSE,
                                 INC.
                               FOSTER WHEELER ENVIRONMENTAL
                                 CORPORATION
                               FOSTER WHEELER FACILITIES
                                 MANAGEMENT, INC.
                               FOSTER WHEELER INTERNATIONAL
                                 CORPORATION
                               FOSTER WHEELER POWER SYSTEMS,
                                 INC.
                               FOSTER WHEELER PYROPOWER, INC.
                               FOSTER WHEELER REAL ESTATE
                                 DEVELOPMENT CORP.
                               FOSTER WHEELER REALTY
                                 SERVICES, INC.
                               FOSTER WHEELER VIRGIN ISLANDS,
                                 INC.
                               FOSTER WHEELER ZACK, INC.
                               FW MORTSHAL, INC.
                               FW TECHNOLOGIES HOLDING, LLC
                               HFM INTERNATIONAL, INC.
                               PROCESS CONSULTANTS, INC.
                               PYROPOWER OPERATING SERVICES
                                COMPANY, INC.

                               By:  /s/ Ryan J. Esko
                                    -----------------------------------------
                                    Name:   Ryan J. Esko
                                     Title: Treasurer

<PAGE>

                             PERRYVILLE III TRUST

                             By:   THE BANK OF NEW YORK, not in
                                   its individual capacity but solely in
                                   its capacity as the Owner Trustee of
                                   the Perryville III Trust

                             By:   /s/ Kalliope E. Katheris
                                   --------------------------------------------
                                   Name:  Kalliope E. Kateris
                                   Title: Assistant Vice President

<PAGE>

                                                        Schedule VIII to the
                                                          Security Agreement

                           LOCAL LAW PLEDGE AGREEMENTS

Pledge agreements under Bermuda law relating to pledges of:
1.  Equity Interests in FWPI Ltd.
2.  Equity Interests in FW European E&C Ltd.
3.  Equity Interests in Continental Finance Company Ltd.

Pledge agreements under English law relating to pledges of:
1.  Equity Interests in Foster Wheeler Europe Limited.
2.  Equity Interests in Foster Wheeler Limited.

Pledge agreements under Dutch law relating to pledges of:
1.  Equity Interests in FW Netherlands C.V.
2.  Equity Interests in FW Energie B.V.

Pledge agreement under Italian law relating to pledge of Equity Interests in
    Foster Wheeler Continental Europe S.r.l.

Pledge agreement under Spanish law relating to pledge of Equity Interests in
    Foster Wheeler Iberia S.A.

Pledge agreement under Luxembourg law relating to pledges of Equity Interests in
    Financial Services S.a.r.l.

Pledge agreement under Hungarian law relating to pledge of Equity Interests in
    FW Hungary Licensing LLC.<PAGE>

                                                                  EXECUTION COPY

                                 AMENDMENT NO. 1
                  TO PURCHASE, SALE AND CONTRIBUTION AGREEMENT

                  AMENDMENT NO. 1, dated as of July 31, 2003 (this "Amendment"),
to the PURCHASE, SALE AND CONTRIBUTION AGREEMENT, dated as of August 15, 2002
(as amended, restated, supplemented or otherwise modified from time to time, the
"Purchase Agreement"), by and among the parties identified on the signature
pages hereof as the "Originators" (each an "Originator" and collectively, the
"Originators"), FOSTER WHEELER FUNDING II LLC, a Delaware limited liability
company (the "Company"), as successor by assignment to Foster Wheeler Funding
LLC, a Delaware limited liability company (the "Original Company"), pursuant to
the Assignment and Assumption (Purchase Agreement) referred to below, and FOSTER
WHEELER INC., a Delaware corporation ("Foster Wheeler Inc."), as the servicer
(in such capacity, the "Servicer") and as successor to the Original Servicer (as
hereinafter defined).

                  WHEREAS, the Original Company, the Originators and Foster
Wheeler Capital & Finance Corporation, a Delaware corporation (the "Original
Servicer"), are parties to the Purchase Agreement;

                  WHEREAS, on the date hereof, pursuant to the Assignment and
Assumption (Purchase Agreement) dated as of the date hereof, by and among the
Original Company, as assignor, the Company, as assignee, the Originators, the
Original Servicer and the Servicer (the "Assignment and Assumption (Purchase
Agreement)"), (i) the Original Servicer has resigned as servicer and the
Servicer has been appointed as the new servicer, and (ii) the Original Company
has assigned to the Company, and the Company has assumed, all of the Original
Company's right, title and interest in, to and under the Purchase Agreement as
of the date set forth therein;

                  WHEREAS, on the date hereof, pursuant to the Receivables
Repurchase Agreement, dated as of the date hereof, by and among the Original
Company, the Company, the Originators and the Servicer (the "Receivables
Transfer Agreement"), the Original Company, the Originators and the Company will
effect the Transfers (as defined in Section 4 hereof);

                  WHEREAS, the Company, as borrower and as successor by
assignment to the Original Company, the Lenders party thereto (the "Lenders")
and WELLS FARGO FOOTHILL, INC., as the arranger and administrative agent for the
Lenders (in such capacity, the "Agent"), are parties to the Loan and Security
Agreement, dated as of August 15, 2002, as amended (as further amended,
restated, supplemented or otherwise modified from time to time, the "Loan and
Security Agreement");

                  WHEREAS, the Lenders and the Agent are third party
beneficiaries of the rights of the Company under the Purchase Agreement, and all
of the Company's rights, title and interests in, to and under the Purchase
Agreement (but none of its obligations) have been collaterally assigned to the
Agent, for the benefit of the Agent and the Lenders, pursuant to the Loan and
Security Agreement;

<PAGE>

                  WHEREAS, on the date hereof, the Company, the Lenders and the
Agent are entering into Amendment No. 3 to Loan and Security Agreement (the
"Loan Agreement Amendment"); and

                  WHEREAS, in connection with the Loan Agreement Amendment, the
Company, the Servicer and the Originators desire to amend the Purchase Agreement
in accordance with the terms and conditions set forth herein, and the Agent and
the Lenders are willing to consent to such amendment in accordance with such
terms and conditions;

                  NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                  1. Definitions. Any capitalized term used herein and not
defined herein shall have the meaning assigned to it in the Purchase Agreement.

                  2. Amendments. The Purchase Agreement is hereby amended as
follows:

                  2.1. Preamble. The preamble to the Purchase Agreement is
amended in its entirety to read as follows:

                                    "THIS PURCHASE, SALE AND CONTRIBUTION
                           AGREEMENT (this "Agreement"), dated as of August 15,
                           2002, is among FOSTER WHEELER INC., a Delaware
                           corporation ("Foster Wheeler Inc."), as the successor
                           to Foster Wheeler Finance & Capital Corporation and
                           servicer hereunder (in such capacity, the
                           "Servicer"), FOSTER WHEELER CONSTRUCTORS, INC.
                           ("Constructors"), a Delaware corporation, FOSTER
                           WHEELER ENERGY CORPORATION ("Energy"), a Delaware
                           corporation, FOSTER WHEELER USA CORPORATION ("USA"),
                           a Delaware corporation, FOSTER WHEELER POWER GROUP,
                           INC. ("Power"), a Delaware corporation, FOSTER
                           WHEELER ZACK, INC. ("Zack"), a Delaware corporation,
                           FOSTER WHEELER ENERGY SERVICES, INC. ("Energy
                           Services"), a California corporation (Constructors,
                           Energy, USA, Power, Zack and Energy Services and the
                           originators described in Section 10.12 are herein
                           collectively called the "Originators" and
                           individually called an "Originator"), and FOSTER
                           WHEELER FUNDING II LLC, a Delaware limited liability
                           company (the "Company"), as successor by assignment
                           to Foster Wheeler Funding LLC, a Delaware limited
                           liability company (the "Original Company"), pursuant
                           to the Assignment and Assumption (Purchase Agreement)
                           (as hereinafter defined)."

                  2.2. Existing Definitions.

                                   (a) The definition of the term "Contribution
Amount" in the Definition Section of the Purchase Agreement is amended in its
entirety to read as follows:

                                     - 2 -
<PAGE>

                                    "'Contribution Amount' means, with respect
                           to any contributed Receivable, the net book value of
                           the contributed property as set forth on the books
                           and records of the applicable Originator; for
                           purposes of this Agreement, "net book value" shall
                           mean the book value, less all applicable reserves
                           determined by the Originator in accordance with
                           GAAP."

                                    (b) The definition of the term "Market
Value" in the Definition Section of the Purchase Agreement is amended in its
entirety to read as follows:

                                    "'Market Value' means, with respect to any
                           Receivable and the Related Rights, (i) in the case of
                           the Receivables purchased by, or contributed to, the
                           Company prior to July 31, 2003, 99% of the
                           Outstanding Balance of such Receivable, and (ii) in
                           the case of Receivables purchased by, or contributed
                           to, the Company on or after July 31, 2003, 100% of
                           the Outstanding Balance of such Receivable."

                  2.3. New Definitions.

                                    (a) The definition of the new term
"Applicable Cash Percentage" is inserted in the Definition Section of the
Purchase Agreement, to read as follows:

                                    "'Applicable Cash Percentage' means, with
                           respect to any reduction in the Purchase Price or
                           Market Value of any Eligible Account pursuant to
                           Section 3.3, the portion, expressed as a percentage,
                           of the initial Purchase Price of such Eligible
                           Account paid in cash by the Company pursuant to
                           Section 3.1 or 3.2, provided that in no event shall
                           the Applicable Cash Percentage be less than 85%".

                                    (b) The definition of the new term
"Applicable Note Percentage" is inserted in the Definition Section of the
Purchase Agreement, to read as follows:

                                    "'Applicable Note Percentage' means, with
                           respect to any reduction in the Purchase Price or
                           Market Value of any Eligible Account pursuant to
                           Section 3.3, the portion, expressed as a percentage,
                           of the initial Purchase Price of such Eligible
                           Account paid by increasing the principal amount of
                           the applicable Company Note pursuant to Section 3.1
                           or 3.2, provided that in no event shall the
                           Applicable Note Percentage be greater than 15%."

                                    (c) The definition of the new term
"Applicable Refund Percentage" is inserted in the Definition Section of the
Purchase Agreement, to read as follows:

                                    "'Applicable Refund Percentage' means, with
                           respect to any refund of any portion of a Transaction
                           Fee pursuant to 3.3(d) in connection with a reduction
                           in the Market Value of a Receivable, a fraction,
                           expressed as a percentage (A) the numerator of which
                           shall be equal to the amount of such reduction, and
                           (B) the denominator of which shall be equal to the
                           original Outstanding Balance of such Receivable."

                                     - 3 -
<PAGE>

                                    (d) The definition of the new term
"Borrowing Base Report" is inserted in the Definition Section of the Purchase
Agreement, to read as follows:

                                    "'Borrowing Base Report' has the meaning
                           given to it in the Reporting Agreement".

                                    (e) The definition of the new term "Invoice
Report" is inserted in the Definition Section of the Purchase Agreement, to read
as follows:

                                    "'Invoice Report' has the meaning given to
                           it in the Reporting Agreement".

                                    (f) The definition of the new term
"Pass-Through Receipts" is inserted in the Definition Section of the Purchase
Agreement, to read as follows:

                                    "'Pass-Through Receipts' has the meaning
                           given to it in the Loan and Security Agreement.".

                                    (g) The definition of the new term
"Reporting Agreement" is inserted in the Definition Section of the Purchase
Agreement, to read as follows:

                                    "Reporting Agreement" means the letter
                           agreement dated as of July 31, 2003, among the Agent,
                           the Servicer, the Company and the Originators, as the
                           same may be amended, restated, supplemented or
                           otherwise modified from time to time.

                                    (h) The definition of the new term
"Reporting Date" is inserted in the Definition Section of the Purchase
Agreement, to read as follows:

                                    "Reporting Date" means any Business Day on
                           which a Purchase Report is required to be delivered
                           by the Servicer pursuant to Section 2.1."

                                    (i) The definition of the new term
"Transaction Fee" is inserted in the Definition Section of the Purchase
Agreement, to read as follows:

                                    "Transaction Fee" has the meaning given to
                           it in Section 1.6 hereof."

                           2.4. Background. Paragraph 1 of the Background
Section of the Purchase Agreement is amended in its entirety to read as follows:

                                    "1. The Company is a limited liability
                           company, all of the outstanding interests of which
                           are owned by the Originators. Foster Wheeler Inc. is
                           a wholly-owned subsidiary of Foster Wheeler Ltd.
                           ("FWL"). Each Originator is a wholly-owned subsidiary
                           of FWL."

                                     - 4 -
<PAGE>

                           2.5. Transaction Fee. Article I of the Purchase
Agreement is amended by inserting the following new Section 1.6 at the end of
such Section, to read as follows:

                                    "Section 1.6 Transaction Fee. On each
                           Payment Date falling on or after July 31, 2003, each
                           Originator shall pay to the Company, by wire transfer
                           in immediately available funds, a fee equal to 1% of
                           the Outstanding Balance of each Receivable purchased
                           from such Originator in respect of Eligible Accounts
                           by the Company on such Payment Date (the "Transaction
                           Fee").

                           2.6. Reporting. Section 2.1 of the Purchase Agreement
is amended in its entirety to read as follows:

                                    "Section 2.1 Purchase Report. On the seventh
                           day following the Servicer's receipt of the weekly
                           Borrowing Base Report pursuant to the Reporting
                           Agreement (by the close of business on such day), or
                           if such seventh day is not a Business Day, on the
                           immediately following Business Day (by the close of
                           business on such day), the Servicer shall deliver to
                           the Company, the Agent and each Originator a report,
                           in substantially the form of Exhibit A (each such
                           report being herein called a "Purchase Report"), with
                           respect to the matters set forth therein and the
                           Company's purchases or contributions of Receivables
                           from each Originator that were made during the
                           preceding week, as applicable; provided, however, if
                           the Servicer shall have received an Invoice Report
                           pursuant to the Reporting Agreement, the Servicer
                           shall deliver such Purchase Report on the second
                           Business Day (by the close of business on such day)
                           following its receipt of the Invoice Report and the
                           Borrowing Base Report."

                           2.7. Subsequent Purchase Price Payments. Section
3.2(a)of the Purchase Agreement is amended by:

                                    (i) deleting the words "equal to 85%" at the
                           end of the second line of clause (i) of such
                           subsection and substituting therefor the words "equal
                           to at least 85%, as determined by the Company,"; and

                                    (ii) deleting the words "an amount equal to
                           15%" at the end of the second line of clause (ii) of
                           such subsection and substituting therefor the words
                           "an amount not to exceed 15%, as determined by the
                           Company,".

                           2.8. Settlement as to Specific Receivables.

                                    (a) Section 3.3(a) of the Purchase Agreement
is amended by inserting the following new sentence at the end of such section:

                           "In addition, the Transaction Fee paid by such
                           Originator with respect to such Receivable shall be
                           refunded to such Originator in the manner provided
                           for in subsection (c) below."

                                     - 5 -
<PAGE>

                                    (b) Section 3.3(b) of the Purchase Agreement
is amended by inserting the following new sentence at the end of such section:

                           "In addition, a pro rata portion of the Transaction
                           Fee paid by such Originator with respect to such
                           Receivable shall be refunded to such Originator in
                           the manner provided for in subsection (d) below."

                                    (c) Section 3.3(c) of the Purchase Agreement
is amended in its entirety to read as follows:

                                    "(c) Any reduction in the Purchase Price of
                           any Eligible Account pursuant to subsection (a) above
                           shall be applied as a credit for the account of the
                           Company against the Purchase Price of Eligible
                           Accounts subsequently purchased by the Company from
                           such Originator hereunder, and any refund of the
                           Transaction Fee in connection therewith pursuant to
                           subsection (a) above shall be applied as a credit for
                           the account of such Originator against any
                           Transaction Fee subsequently required to be paid to
                           the Company by such Originator hereunder; provided,
                           however, if during the period from the date of such
                           reduction in Purchase Price to the next succeeding
                           Reporting Date, there have been no purchases of
                           Eligible Accounts from such Originator (or
                           insufficiently large purchases of Eligible Accounts)
                           to create a Purchase Price and Transaction Fee
                           sufficient to so apply such credit against, then:

                                    (i) an amount equal to (x) the amount of
                           such credit, times (y) the Applicable Cash
                           Percentage, minus (z) the amount of the Transaction
                           Fee paid in connection with the purchase of such
                           Eligible Account, shall be paid in cash to the
                           Company by such Originator in the manner and for
                           application as described in the following proviso;

                                    (ii) an amount equal to (x) the amount of
                           such credit, times (y) the Applicable Note Percentage
                           shall be deemed to be a payment under, and shall be
                           deducted from the principal amount outstanding under,
                           the Company Note payable to such Originator; and

                                    (iii) the Contribution Amount of such
                           Receivable shall be deemed to be a capital
                           contribution from the Originator to the Company equal
                           to such Contribution Amount;

                           provided that the amount of any such credit shall be
                           paid by such Originator to the Company, on or prior
                           to such succeeding Reporting Date, by deposit in
                           immediately available funds into the relevant Cash
                           Management Account for application by Servicer to the
                           same extent as if Collections of the applicable
                           Receivable in such amount had actually been received
                           on such date."

                                    (d) Section 3.3(d) of the Purchase Agreement
is amended in its entirety to read as follows:

                                     - 6 -
<PAGE>

                                    "(d) Any reduction in the Market Value or
                           Contribution Amount of any Receivable pursuant to
                           subsection (b) above shall be applied as a credit for
                           the account of the Company against the Market Value
                           or Contribution Amount, as applicable, of Receivables
                           subsequently purchased or contributed by the Company
                           from such Originator hereunder, as applicable, and
                           any refund of a portion of the Transaction Fee in
                           connection therewith pursuant to subsection (b) above
                           shall be applied as a credit (in an amount equal to
                           (x) the amount of the original Transaction Fee, times
                           (y) the Applicable Refund Percentage) for the account
                           of such Originator against any Transaction Fee
                           subsequently required to be paid to the Company by
                           such Originator hereunder; provided, however if
                           during the period from the date of such reduction in
                           Market Value or Contribution Amount, as the case may
                           be, to the next succeeding Reporting Date, there have
                           been no purchases or contributions of Receivables
                           from such Originator (or insufficiently large
                           purchases or contributions of Receivables) to create
                           a Market Value or Contribution Amount sufficient to
                           so apply such credit against, then:

                                    (i) an amount equal to (A) (x) the amount of
                           such credit in Market Value, times (y) the Applicable
                           Cash Percentage, in the case of an Eligible Account,
                           minus (B) (x) the amount of the Transaction Fee paid
                           in connection with the purchase of such Eligible
                           Account, times (y) the Applicable Refund Percentage,
                           shall be paid in cash to the Company by such
                           Originator in the manner and for application as
                           described in the following proviso;

                                    (ii) an amount equal to (x) the amount of
                           such credit in Market Value, times (y) the Applicable
                           Note Percentage, in the case of an Eligible Account,
                           shall be deemed to be a payment under, and shall be
                           deducted from the principal amount outstanding under,
                           the Company Note payable to such Originator; and

                                    (iii) the reduction in the Contribution
                           Amount of such Receivable, in the case of an
                           Ineligible Account, shall be deemed to be a reduction
                           of the Originator's capital in the Company;

                           provided that the amount of any such credit shall be
                           paid by such Originator to the Company, on or prior
                           to such succeeding Reporting Date, by deposit in
                           immediately available funds into the relevant Cash
                           Management Account for application by Servicer to the
                           same extent as if Collections of the applicable
                           Receivable in such amount had actually been received
                           on such date."

                                     - 7 -
<PAGE>

                           2.9. Collection Procedures. Section 7.2(a) of the
Purchase Agreement is amended by inserting two new sentences at the end of such
subsection, to read as follows:

                           "Notwithstanding the foregoing, no Pass-Through
                           Receipts shall be deposited in any Cash Management
                           Account. All Pass-Through Receipts shall be
                           identified as such and invoiced separately from any
                           other Receivables."

                           2.10. Purchase and Sale Termination Events. Section
8.1(e) of the Purchase Agreement is amended by deleting the words "three (3)
Business Days" in the second line of such Section and substituting therefor the
words "five (5) Business Days".

                           2.11. Additional Originators. Section 10.12 of the
Purchase Agreement is amended by inserting a new parenthetical at the end of
clause (ii) of such Section prior to the comma, to read as follows:

                           "(except that, with the written consent of the Agent,
                           which consent may be granted or withheld by the Agent
                           in its sole discretion, either or both of Foster
                           Wheeler Limited Canada and Foster Wheeler Fired
                           Heaters LTD., each of which is a wholly-owned
                           Subsidiary of the Parent organized under the laws of
                           Canada, may be added as an Originator hereunder,
                           provided, that such Canadian Subsidiary otherwise
                           qualifies as an Originator under the terms and
                           conditions of this Agreement, and provided further
                           that the Agent shall have received such agreements,
                           legal opinions and other documents as the Agent may
                           request in connection with the addition of such
                           Canadian Subsidiary as an Originator)".

                           2.12. Exhibits. Exhibit A to the Purchase Agreement
is hereby replaced with a new Exhibit A, in the form attached hereto as Annex I.
Exhibit B to the Purchase Agreement is hereby replaced with a new Exhibit B, in
the form attached hereto as Annex II. Exhibit C to the Purchase Agreement is
hereby replaced with a new Exhibit C, in the form attached hereto as Annex III.

                  3. Conditions. The effectiveness of this Amendment is subject
to the fulfillment, in a manner satisfactory to the Lenders, of each of the
following conditions precedent (the date such conditions are fulfilled or waived
by the Lenders is hereafter referred to as the "Amendment Effective Date"):

                                    (a) The representations and warranties
contained herein and in Article V of the Purchase Agreement shall be correct on
and as of the Amendment Effective Date as though made on and as of such date,
except to the extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and warranties
shall be true and correct on and as of such date).

                                    (b) Each of the conditions precedent to the
effectiveness of the Loan Agreement Amendment shall have been satisfied or
waived by the Lenders and the Loan Agreement Amendment shall become effective
concurrently with the effectiveness of this Amendment.

                                     - 8 -
<PAGE>

                                    (c) The Agent and the Lenders shall have
executed this Amendment and received counterparts of this Amendment, which bear
the signatures of the Company, the Servicer and each Originator.

                                    (d) The Agent shall have received a fully
executed Assignment and Assumption (Purchase Agreement), in form and substance
satisfactory to the Lenders.

                                    (e) Each of the Originators shall have
delivered to the Original Company the Company Note held by such Originator and
marked "cancelled" and the Company shall have executed a new Company Note made
payable to each Originator.

                                    (f) The Agent, the Company, the Servicer and
the Originators shall have entered into the Reporting Agreement referred to in
Section 2.3(g) of this Amendment.

                                    (g) The Agent, the Company and the Servicer
shall have entered into a new Servicing Agreement, in form and substance
satisfactory to the Lenders.

                                    (h) The Original Company, the Company, the
Originators and the Servicer shall have entered into the Receivables Transfer
Agreement, in form and substance satisfactory to the Lenders, and the Transfers
shall have been effected in accordance therewith (the documents described in
clauses (c), (d), (e), (f) and (g) above and this clause (h) are referred to
herein, individually as an "Amendment Document" and collectively, as the
"Amendment Documents").

                                    (i) The Originators and the Company shall
have authorized the Agent to submit for filing UCC Financing Statements naming
the Originators as debtors, the Company as secured party, and the Agent as
assignee of the Company.

                                    (j) All legal matters incident to this
Amendment shall be satisfactory to the Agent, the Lenders and their counsel.

                                    (k) The Agent, the Lenders and their counsel
shall have received such other documents (including, but not limited to,
resolutions, officer's certificates and other corporate documents) as any such
Person may reasonably request.

                                     - 9 -
<PAGE>

                  4. Transfer, Waiver and Consent. In order to effectuate the
transactions contemplated by the Assignment and Assumption (Purchase Agreement)
and this Amendment, on the date hereof, pursuant to the Receivables Transfer
Agreement: (i) the Original Company will (A) sell, transfer and assign to the
Originators all of the Pool Receivables and all Related Rights, and (B)
distribute to the Originators all cash on hand, (ii) the Originators will cancel
the Company Notes issued by the Original Company, (iii) the Originators will (A)
contribute all of the cash received from the Original Company to the Company,
and (B) sell or contribute all of the Pool Receivables and Related Rights
received from the Original Company to the Company in accordance with Section 3.2
of the Purchase Agreement, and (iv) the Company will issue the Company Notes to
the Originators (the "Transfers"). The Agent hereby consents to the Transfers
and waives any Purchase and Sale Termination Event which would otherwise occur
under Section 8.1(d) of the Purchase Agreement as a result of a breach of
Section 6.3(a) or 6.3(e) of the Purchase Agreement by reason of the Transfers.

                  5. Representations and Warranties. Each of the Company, the
Servicer and each Originator hereby represents and warrants to the Agent and the
Lenders as follows:

                                    (a) The representations and warranties
herein, in Article V of the Purchase Agreement and in each other Amendment
Document or other Transaction Document and certificate or other writing
delivered to the Agent or any Lender pursuant hereto or thereto on or prior to
the Amendment Effective Date are correct on and as of the Amendment Effective
Date as though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties are true and correct on and as of
such date).

                                    (b) No Default or Event of Default has
occurred and is continuing or would result from this Amendment or any of the
other Amendment Documents becoming effective in accordance with its terms.

                                    (c) Each of the Company, the Servicer and
each Originator (i) is duly organized and existing and in good standing under
the laws of the jurisdiction of its organization, (ii) has all requisite power
and authority to execute, deliver and perform this Amendment and each other
Amendment Document to which it is a party, and to perform the Purchase
Agreement, as amended hereby, and (iii) is duly qualified to do business in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified could not be expected to cause a
Material Adverse Effect.

                                    (d) The execution, delivery and performance
by each of the Company, the Servicer and each Originator of this Amendment and
each other Amendment Document to which it is a party, and the performance by
each such Person of the Purchase Agreement, as amended by this Amendment, (i)
have been duly authorized by all necessary corporate action, and (ii) do not and
will not contravene such Person's Governing Documents.

                                    (e) Except for the filing of the UCC
financing statements referred to in Section 3(i) hereof, the execution,
delivery, and performance by each of the Company, the Servicer and each
Originator of this Amendment and each other Amendment Document to which it is a
party, and the performance of the Purchase Agreement, as amended by this
Amendment, do not and will not require any registration with, consent, or
approval of, or notice to, or other action with or by, any Governmental
Authority or other Person.

                                     - 10 -
<PAGE>

                                    (f) This Amendment and each other Amendment
Document to which it is a party, when executed and delivered by each of the
Company, the Servicer and each Originator, and the Purchase Agreement, as
amended by this Amendment, will be the legally valid and binding obligations of
such Person, enforceable against such Person in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally.

                  6. Miscellaneous.

                                    (a) Continued Effectiveness of the Purchase
Agreement. Except as otherwise expressly provided herein, the Purchase Agreement
and the other Transaction Documents are, and shall continue to be, in full force
and effect and are hereby ratified and confirmed in all respects, except that on
and after the Amendment Effective Date (i) all references in the Purchase
Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words of like
import referring to the Purchase Agreement shall mean the Purchase Agreement as
amended by this Amendment, and (ii) all references in the other Transaction
Documents to the "Purchase Agreement", "thereto", "thereof", "thereunder" or
words of like import referring to the Purchase Agreement shall mean the Purchase
Agreement as amended by this Amendment. Except as expressly provided herein, the
execution, delivery and effectiveness of this Amendment shall not operate as an
amendment of any right, power or remedy of the Agent or the Lenders under the
Purchase Agreement or any other Transaction Document, nor constitute an
amendment of any provision of the Purchase Agreement or any other Transaction
Document.

                                    (b) Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same agreement.

                                    (c) Headings. Section headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.

                                    (d) Governing Law. This Amendment shall be
governed by, and construed in accordance with, the law of the State of New York.

                                    (e) Costs and Expenses. The Company agrees
to pay on demand all reasonable fees, costs and expenses of the Agent in
connection with the preparation, execution and delivery of this Amendment and
any other related agreements, instruments and documents.

                                    (f) Amendment as Transaction Document. Each
of the Company, the Servicer and each Originator hereby acknowledges and agrees
that this Amendment constitutes a "Transaction Document" under the Loan and
Security Agreement. Accordingly, it shall be an Event of Default under the Loan
and Security Agreement if any representation or warranty made by any of the
Company, the Servicer or any Originator under or in connection with this
Amendment shall have been untrue, false or misleading in any material respect
when made.

                                     - 11 -
<PAGE>

                                    (g) No Waiver. Except as expressly set forth
herein, this Amendment is not a waiver of, or consent to, any Default or Event
of Default now existing or hereafter arising under any Transaction Document and
the Agent and the Lenders expressly reserve all of their rights and remedies
under the Loan and Security Agreement and the other Transaction Documents, under
applicable law or otherwise.

                                     - 12 -
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered as of the date first above written.

                                          COMPANY:

                                          FOSTER WHEELER FUNDING II LLC

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          ORIGINATORS:

                                          FOSTER WHEELER CONSTRUCTORS, INC.

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          FOSTER WHEELER ENERGY CORPORATION

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          FOSTER WHEELER USA CORPORATION

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          FOSTER WHEELER POWER GROUP, INC.

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

<PAGE>

                                          FOSTER WHEELER ZACK, INC.

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          FOSTER WHEELER ENERGY SERVICES, INC.

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

                                          SERVICER

                                          FOSTER WHEELER INC.

                                          By:  /s/Ronald R. Thau
                                               ---------------------------------
                                          Name:    Ronald R. Thau
                                          Title:   Assistant Treasurer

<PAGE>

Consented and Agreed to:

AGENT AND LENDER:

WELLS FARGO FOOTHILL, INC.,
a California corporation, as Agent and a Lender

By:    /s/Ronald R. Cote
       ------------------------------------
         Name:    Ronald R. Cote
         Title:   Vice President

LENDER:

ABLECO FINANCE LLC,
a Delaware limited liability company, as a Lender

By:      Kevin Genda
       ------------------------------------
        Name:     Kevin Genda
        Title:    Senior Vice President

<PAGE>

                                     Annex I

                                    Exhibit A

                             Form of Purchase Report

<PAGE>

                                    Annex II

                                    Exhibit B

                            Form of Subordinated Note

<PAGE>

                                    Annex III

                                    Exhibit C

                    Form of Originator Assignment Certificate

<PAGE>

                           ACKNOWLEDGMENT AND CONSENT

                  The undersigned, as Guarantor under the Guaranty (as defined
in the Loan and Security Agreement referred to in Amendment No. 1 to Purchase,
Sale and Contribution Agreement dated as of the date hereof (the "Amendment"),
all terms defined therein being used herein as defined therein, to which this
Acknowledgment and Consent is attached), hereby (i) acknowledges and consents to
the Amendment and (ii) confirms and agrees that the Guaranty is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects.

Dated:            July 31, 2003

                                        FOSTER WHEELER LTD.,
                                        a Bermuda limited company

                                        By:    /s/Brian K. Ferraioli
                                             -----------------------------------
                                             Title: Vice President & Controller

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