Document:

Exhibit 10.3

 

AMENDMENT
NO. 2, dated as of June 14, 2007 (this “Amendment”), to the Fixed Asset Credit
Agreement, dated as of July 18, 2006 (as amended, restated, supplemented, or
otherwise modified as of the date hereof, the “Credit Agreement”), among
PLIANT CORPORATION PTY LTD., PLIANT CORPORATION OF CANADA LTD., PLIANT FILM
PRODUCTS GMBH and ASPEN INDUSTRIAL, S.A. DE C.V. (collectively, the “Borrowers”),
the Lenders party thereto and MERRILL LYNCH BANK USA, as Administrative Agent.

 

A.            The Borrowers desire to refinance in full the
aggregate outstanding principal amount of 13% senior subordinated notes due
2010 of the Parent outstanding on the date hereof with the proceeds of the 18%
senior subordinated notes due 2012 of the Parent (the “Specified Transactions”)
and has asked that the undersigned (i) consent to the Specified Transactions
(and waive any Defaults or Events of Default resulting solely therefrom) and
(ii) amend the Credit Agreement as set forth herein.

 

B.            The undersigned have agreed to (i) consent to
the Specified Transactions (and waive any Defaults or Events of Default
resulting solely therefrom) and (ii) amend the Credit Agreement as set forth
herein.

 

C.            Capitalized terms used and not otherwise
defined herein shall have the meanings assigned thereto in the Credit
Agreement.

 

SECTION
1.           Consent and Waiver. Effective as of Second Amendment Effective
Date (as defined below) and subject to the satisfaction (or due waiver) of the
conditions set forth in Section 4 hereof, the undersigned hereby consent to the
Specified Transactions and waive any Defaults or Events of Default resulting
solely therefrom.

 

SECTION
2.           Amendments to Credit Agreement.  The
Credit Agreement is hereby amended as follows:

 

(a)           The definition of “Senior Subordinated Notes” in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

““Senior
Subordinated Notes” means the 18% senior subordinated notes due 2012 of the
Parent in an aggregate principal amount not to exceed $24,000,000 and any
Permitted Refinancing Indebtedness in respect thereof.”

 

(b)           Section 6.01(ix) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows: 

 

“(ix)         the Senior Subordinated Notes in an aggregate
principal amount not exceeding $24,000,000 plus the amount of additional
Permitted Refinancing Indebtedness in respect thereof incurred in respect of
unpaid accrued interest and premium thereon;”

 

(c)           Section 6.09(b)(iii) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

“(iii) payment of regularly scheduled interest payments as and when due
in respect of the Senior Subordinated Notes.”

 

SECTION
3.           Representations and Warranties.  Each
of the Loan Parties represents and warrants to the Administrative Agent and to
each of the Lenders that:

 

 

(a)           This Amendment has been duly authorized, executed and delivered by such
Loan Party and constitutes a legal, valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms.

 

(b)           After giving effect to this Amendment, the representations and
warranties set forth in Article III of the Credit Agreement and in the
other Loan Documents qualified as to materiality are true and correct and those
not so qualified are true and correct in all material respects on and as of the
date hereof with the same effect as if made on and as of the date hereof,
except to the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties are true and
correct as of such earlier date.

 

(c)           After giving effect to this Amendment, no Default has occurred and is
continuing.

 

SECTION
4.           Conditions to Effectiveness.  This Amendment shall become
effective when the following conditions have been satisfied (the “Second
Amendment Effective Date”):

 

(a)           The Administrative Agent shall have received counterparts to this Amendment
from the Borrowers, the other Loan Parties, the Required Lenders and the
Administrative Agent.

 

(b)           The Administrative Agent shall have received all reasonable fees and
expenses required to be paid or reimbursed by the Borrowers pursuant hereto or
the Credit Agreement or otherwise, in each case to the extent invoiced to the
Borrowers on or prior to the date hereof, including all such reasonable fees
and expenses of counsel to the Administrative Agent.

 

(c)           The Administrative Agent shall have received copies of the Senior
Subordinated Note Documents certified by a Financial Officer as complete and
correct. 

 

SECTION
5.           Continuing Effect. 
Except as specifically amended hereby, the Credit Agreement shall
continue in full force and effect in accordance with the provisions thereof as
in existence on the date hereof.  Each
Loan Party hereby consents to this Amendment and agrees that the terms hereof
shall not affect in any way its obligations and liabilities under the Loan
Documents (as amended and otherwise expressly modified by this Amendment) to
which it is a party, all of which obligations and liabilities shall remain in
full force and effect and each of which is hereby reaffirmed (as amended and
otherwise expressly modified by this Amendment).  After the date hereof, any reference to the
Credit Agreement shall mean the Credit Agreement as amended hereby.  This Amendment shall be a Loan Document for
all purposes.

 

SECTION
6.           Applicable Law. 
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

SECTION
7.           Counterparts.  This
Amendment may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute
but one agreement.  Delivery of an
executed signature page to this Amendment by facsimile transmission shall be
effective as delivery of a manually signed counterpart of this Amendment.

 

2

 

SECTION
8.           Expenses.  The Borrowers agree to reimburse
the Administrative Agent for reasonable out-of-pocket expenses in connection
with this Amendment, including the reasonable fees, charges and disbursements
of Weil, Gotshal & Manges LLP, counsel for the Administrative Agent.

 

SECTION
9.           Headings.  The headings of this Amendment
are for purposes of reference only and shall not limit or otherwise affect the
meaning hereof.

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their respective authorized officers as
of the day and year first written above.

 

	
   

  	
  PLIANT CORPORATION PTY LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kevin Hubbard

  	
   

  
	
   

  	
  Name:

  	
  Kevin Hubbard

  
	
   

  	
  Title:

  	
  Director of Finance

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Ian Rayner

  	
   

  
	
   

  	
  Name:

  	
  Ian Rayner

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION OF CANADA LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Chris M. Nielsen

  	
   

  
	
   

  	
  Name:

  	
  Chris M. Nielsen

  
	
   

  	
  Title:

  	
  Assistant Treasurer/Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  PLIANT FILM PRODUCTS GMBH

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Heinz Flicker

  	
   

  
	
   

  	
  Name:

  	
  Heinz Flicker

  
	
   

  	
  Title:

  	
  Director of Finance

  
	
   

  	
   

  	
   

  
	
   

  	
  ASPEN INDUSTRIAL, S.A. DE C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Chris M. Nielsen

  	
   

  
	
   

  	
  Name:

  	
  Chris M. Nielsen

  
	
   

  	
  Title:

  	
  Treasurer/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  JACINTO MEXICO, S.A. DE C.V.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Chris M. Nielsen

  	
   

  
	
   

  	
  Name:

  	
  Chris M. Nielsen

  
	
   

  	
  Title:

  	
  Treasurer/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  PLIANT DE MEXICO, S.A. DE C.V.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Chris M. Nielsen

  	
   

  
	
   

  	
  Name:

  	
  Chris M. Nielsen

  
	
   

  	
  Title:

  	
  Treasurer/Secretary

  
					

 

 

	
   

  	
  MERRILL LYNCH BANK USA, as Administrative 

  Agent and Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH INTERNATIONAL 

  (AUSTRALIA) LIMITED, as Australian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL CANADA INC., as 

  Canadian Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL MARKETS BANK 

  LIMITED, as German Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MERRILL LYNCH MORTGAGE CAPITAL INC.,

  as Mexican Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:Exhibit
10.1

CREDIT AGREEMENT

dated as of June 12, 2007

among

GREAT LAKES DREDGE &
DOCK CORPORATION,

as the Borrower,

THE OTHER LOAN PARTIES
HERETO,

as Loan Parties,

THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO,

as the Lenders,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Syndication Agent,

CHARTER ONE BANK, FIFTH THIRD
BANK and NATIONAL CITY BANK,

as
Co-Documentation Agents

and

LASALLE BANK NATIONAL
ASSOCIATION,

as Swing Line Lender, Sole Lead Arranger and Administrative Agent

 

TABLE OF CONTENTS

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.1.

  	
  Defined Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.2.

  	
  Use of Defined Terms

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.3.

  	
  Interpretation

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 1.4.

  	
  Accounting Terms

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  AMOUNT AND TERM OF COMMITMENTS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.

  	
  Commitments

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.1.

  	
  Revolving Commitment

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.1.2.

  	
  Swing Line Facility

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.2.

  	
  Reduction of Revolving Commitment Amount

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.3.

  	
  Various Types of Loans

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.4.

  	
  Borrowing Procedures

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.5.

  	
  Evidence of Loans

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.6.

  	
  Continuation/Conversion Procedures

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.7.

  	
  Pro Rata Treatment

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.8.

  	
  Principal Payments

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.8.1.

  	
  Repayments and Prepayments

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.8.2.

  	
  Application

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.9.

  	
  Interest Payments

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.9.1.

  	
  Rates

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.9.2.

  	
  Default Rate

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.9.3.

  	
  Payment Dates

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.9.4.

  	
  Rate Determinations

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.10.

  	
  Increased Costs and Reduction of Returns

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.11.

  	
  Funding Losses

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION
  2.12.

  	
  Illegality

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.13.

  	
  Right of the Lenders to Fund through Other Offices

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.14.

  	
  Non-Use Fee and Fee Obligations Generally

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.15.

  	
  Payments and Computations

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.16.

  	
  Taxes

  	
   

  	
  19

  
																																		

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.17.

  	
  Sharing of Payments, Etc

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.18.

  	
  Warranty

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.19.

  	
  Conditions

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.20.

  	
  All Obligations Secured

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.21.

  	
  Use of Proceeds

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.22.

  	
  Assignment of Commitments Under Certain Circumstances

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 2.23.  

  	
  Increase in the Revolving Commitment Amount

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  LETTERS OF CREDIT

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.1.

  	
  Commitment for Letters of Credit

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.2.

  	
  Issuance of Letters of Credit

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.3.

  	
  Letter of Credit Fee

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.4.

  	
  Obligations of the Lenders to an Issuing Lender under
  a Letter of Credit

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.5.

  	
  Reimbursement Obligation

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.6.

  	
  Representatives of Beneficiaries

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.7.

  	
  Responsibility of the Administrative Agent, the
  Issuing Lenders and the Lenders

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.8.

  	
  Modifications to Letters of Credit

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.9.

  	
  Uniform Customs and Practice for Documentary Credits

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.10.

  	
  Indemnification

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 3.11.

  	
  Transitional Provisions

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  CONDITIONS OF LENDING

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.1.

  	
  Conditions Precedent to Initial Borrowing and Initial
  Issuance of Letters of Credit

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.2.

  	
  Conditions Precedent to Each Borrowing and Each
  Issuance of a Letter of Credit

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 4.3.

  	
  No Waiver

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 5.1.

  	
  Representations and Warranties of the Loan Parties

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI.

  	
  COVENANTS

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.1.

  	
  Affirmative Covenants

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.2.

  	
  Negative Covenants

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.3.

  	
  Financial Covenants

  	
   

  	
  61

  
																											

 

 ii
 

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 6.4.

  	
  Financial Reporting

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  EVENTS OF DEFAULT; REMEDIES

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.1.

  	
  Events of Default

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.2.

  	
  Acceleration

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.3.

  	
  Injunctive Relief

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 7.4.

  	
  Allocation Among Secured Parties

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  THE ADMINISTRATIVE AGENT

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.1.

  	
  Appointment and Authorization

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.2.

  	
  Delegation of Duties

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.3.

  	
  Liability of Administrative Agent

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.4.

  	
  Reliance by Administrative Agent

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.5.

  	
  Notice of Default

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.6.

  	
  Credit Decision

  	
   

  	
  71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.7.

  	
  Indemnification

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.8.

  	
  Administrative Agent in Individual Capacity

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.9.

  	
  Successor Administrative Agent

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 8.10.

  	
  Collateral Matters; Release of Collateral

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  IX.

  	
  MISCELLANEOUS

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.1.

  	
  Amendments, Etc

  	
   

  	
  74

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.2.

  	
  Notices, Etc

  	
   

  	
  76

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.3.

  	
  No Waiver; Remedies

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.4.

  	
  Costs and Expenses; Indemnification

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.5.

  	
  Setoff

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.6.

  	
  Effectiveness

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.7.

  	
  Successors and Assigns; Participations and Assignments

  	
   

  	
  79

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.8.

  	
  Survival of Warranties and Agreements

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.9.

  	
  Marshalling; Recourse to Security; Payments Set Aside

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.10.

  	
  Submission To Jurisdiction; Waivers

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.11.

  	
  Performance of Obligations

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.12.

  	
  Construction

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.13.

  	
  GOVERNING LAW

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.14.

  	
  Execution in Counterparts

  	
   

  	
  83

  
																											

 

 iii
 

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.15.

  	
  Entire Agreement

  	
   

  	
  83

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.16.

  	
  Non-Confidentiality of Tax Structure

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.17.

  	
  Additional Alternative Currencies

  	
   

  	
  84

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECTION 9.18.

  	
  Exchange Rates; Currency Equivalents

  	
   

  	
  85

  
									

 

 

 

	
  Schedules to Credit
  Agreement

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule I

  	
   

  	
  —

  	
   

  	
  Definitions

  
	
  Schedule II

  	
   

  	
  —

  	
   

  	
  Existing Letters of Credit

  
	
  Schedule III

  	
   

  	
  —

  	
   

  	
  Closing Documents

  
	
  Schedule IV

  	
   

  	
   

  	
   

  	
  Lending Offices

  
	
  Schedule V

  	
   

  	
   

  	
   

  	
  Commitment Schedule

  
	
  Schedule VI

  	
   

  	
   

  	
   

  	
  Leases/Subleases

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.1(g)

  	
   

  	
  —

  	
  Existing Liens

  	
   

  
	
  Schedule 5.1(i)

  	
   

  	
  —

  	
  Litigation

  	
   

  
	
  Schedule 5.1(k)

  	
   

  	
  —

  	
  ERISA Plans

  	
   

  
	
  Schedule 5.1(1)

  	
   

  	
  —

  	
  Environmental Matters

  	
   

  
	
  Schedule 5.1(r)(i)

  	
   

  	
  —

  	
  Subsidiaries

  	
   

  
	
  Schedule 5.1(r)(ii)

  	
   

  	
  —

  	
  Ownership of Borrower’s Subsidiaries’ Equity

  	
   

  
	
  Schedule 5.1(t)

  	
   

  	
  —

  	
  Insurance Policies

  	
   

  
	
  Schedule 6.2(b)(i)

  	
   

  	
  —

  	
  Existing Investments

  	
   

  
	
  Schedule 6.2(d)

  	
   

  	
  —

  	
  Transactions with Affiliates

  	
   

  
	
  Schedule 6.2(e)

  	
   

  	
  —

  	
  Existing Restrictive Agreements

  	
   

  
	
  Schedule 6.2(f)

  	
   

  	
  —

  	
  Existing Guaranties

  	
   

  
	
  Schedule 6.2(i)

  	
   

  	
  —

  	
  Existing Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits to Credit Agreement

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  —

  	
   

  	
  Form of Assignment and Acceptance

  
	
  Exhibit B

  	
   

  	
  —

  	
   

  	
  Form of Notice of Borrowing

  
	
  Exhibit C

  	
   

  	
  —

  	
   

  	
  Form of Continuation/Conversion Notice

  
	
  Exhibit D

  	
   

  	
  —

  	
   

  	
  Form of Letter of Credit Request

  
	
  Exhibit E

  	
   

  	
  —

  	
   

  	
  Form of Opinion of Winston & Strawn LLP

  
	
  Exhibit F

  	
   

  	
  —

  	
   

  	
  Form of Compliance Certificate

  
														

 

 iv

CREDIT AGREEMENT

THIS CREDIT AGREEMENT
(including all Schedules and Exhibits hereto, this “Agreement”)
dated as of June 12, 2007, is by and among GREAT LAKES DREDGE & DOCK
CORPORATION, a Delaware corporation (the “Borrower”),
the OTHER LOAN PARTIES FROM TIME TO TIME PARTY HERETO, the FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO (the “Lenders”),
GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication Agent, FIFTH THIRD BANK,
NATIONAL CITY BANK and CHARTER ONE BANK, as Co-Documentation Agents, and LASALLE
BANK NATIONAL ASSOCIATION (“LaSalle”) as Sole Lead Arranger (in such
capacity, the “Arranger”), as an issuer of the Letters of Credit (in
such capacity an “Issuing Lender”), as
Swing Line Lender and as representative for the Lenders (in such representative
capacity, together with any successor representative appointed pursuant to Section
8.9, the “Administrative Agent”).

WHEREAS, the Borrower has
requested that the Lenders make available a $155,000,000 revolving credit and
letter of credit facility to provide for (i) the working capital requirements
and general corporate purposes of the Borrower and its Subsidiaries, (ii) the
refinancing of existing debt of the Loan Parties, (iii) the payment of fees and
expenses in connection with the transactions contemplated hereunder and the
other Loan Documents and (iv) the financing of Capital Expenditures, including
for the purchase of certain vessels and improvements thereto and related
mobilization costs;

WHEREAS, the Borrower has
requested that the Lenders and the Issuing Lenders make available, for the
purposes specified in this agreement, such revolving credit and letter of
credit facility, all on the terms and conditions set forth herein; and

WHEREAS, the Lenders and
the Issuing Lenders are willing to make available to the Borrower such credit
facilities, upon the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in
consideration of the premises and the agreements hereinafter set forth, the
parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS AND INTERPRETATION

SECTION
1.1.  Defined
Terms.  Capitalized terms
(whether or not underscored) used in this Agreement, including its preamble,
shall (unless a clear contrary intention explicitly appears) have the
respective meanings assigned thereto in Schedule I.

SECTION
1.2.  Use of
Defined Terms.  Unless
otherwise defined or the context otherwise explicitly requires, terms for which
meanings are provided in this Agreement shall have such meanings when used in
the Schedules and each Notice of Borrowing, Continuation/Conversion Notice,
Compliance Certificate, Assignment and Acceptance, notice and other
communication delivered from time to time in connection with this Agreement or
any other Loan Document.

SECTION
1.3.  Interpretation.  In this Agreement and each other Loan
Document, unless a clear contrary intention explicitly appears:

(a)           the
singular number includes the plural number and vice versa;

(b)           reference
to any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any
other capacity or individually;

(c)           reference
to any gender includes each other gender;

(d)           unless
explicitly provided otherwise herein, reference to any agreement (including
this Agreement and the Schedules and Exhibits hereto), document or instrument
means such agreement, document or instrument as amended, restated, supplemented
or modified and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms hereof and reference to any promissory
note includes any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor;

(e)           reference
to any Applicable Law means such Applicable Law as amended, modified, codified
or reenacted, in whole or in part, and in effect from time to time, including
rules and regulations promulgated thereunder;

(f)            unless
the context explicitly indicates otherwise, reference to the preamble or any
Article, Section, Schedule or Exhibit means the preamble hereto or such
Article, or Section hereof or Schedule or Exhibit hereto;

(g)           “hereunder,”
“hereof,” “hereto” and words of similar import shall be deemed references to
this Agreement as a whole and not to any particular Article, Section or other
provision hereof;

(h)           “including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term; and

 2
 

(i)            relative
to the determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “to and including.”

SECTION
1.4.  Accounting
Terms.  All accounting terms
not specifically defined herein shall be construed in accordance with
GAAP.  Except as otherwise provided
herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements referred to in Section
5.1(f) are hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) and are adopted by the Borrower with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found in Section 6.3 or in the related
definitions of terms used therein, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to reflect equitably such
changes with the desired result that the criteria for evaluating the Borrower’s
financial condition shall be the same after such changes as if such changes had
not been made, provided that no change in GAAP that would affect the method of
calculation of any of the financial covenants, standards or terms shall be
given effect in such calculations until such provisions are amended, in a
manner satisfactory to the Majority Lenders, so as to reflect such change in
accounting principles.

ARTICLE II.

AMOUNT AND TERM OF COMMITMENTS

SECTION
2.1.  Commitments.  The Lenders shall make Loans to or for the
benefit of the Borrower in accordance with their respective Revolving
Commitments as provided below in this Section 2.1.

SECTION 2.1.1.  Revolving Commitment.  On the terms and subject to the conditions of
this Agreement (including Article IV), each
Lender severally and for itself alone agrees to make Loans to, and to issue or
participate in the issuance of Letters of Credit and Swing Line Loans for the
account of, the Borrower pursuant to its Revolving Commitment, as described in
this Article II and in Article III, respectively.  From time to time on any Business Day occurring
prior to the Revolving Commitment Termination Date, each Lender, severally and
for itself alone, agrees to make revolving loans in Dollars or in one or more
Alternative Currencies (relative to such Lender, its “Revolving Loans”) to the Borrower equal to such Lender’s
Revolving Credit Percentage of the aggregate amount of the applicable Borrowing
requested by the Borrower to be made on such day pursuant to this Section 2.1.1. 
The commitment of each Lender described in this Section
2.1.1 is herein referred to as its “Revolving
Commitment” and shall be in the amount set forth on the Commitment
Schedule as such Lender’s “Revolving Commitment”; provided,
however that (a) the
aggregate Dollar Equivalent of all Loans which any Lender shall be committed to
have outstanding hereunder shall not at any time exceed the product of (i) such
Lender’s Revolving Credit Percentage multiplied by the Revolving Loan
Availability, (b) the aggregate Dollar Equivalent amount of all Revolving Loans
which the Lenders shall be committed to have outstanding hereunder shall not at
any time exceed the Revolving Loan Availability and (c) the Dollar Equivalent
amount of all Revolving Loans denominated in Alternative Currencies shall not
exceed the Alternative Currency Sublimit.

 3
 

SECTION 2.1.2.  Swing Line Facility.

(a)           Subject
to the terms and conditions hereof, the Swing Line Lender may, in its sole
discretion, make available from time to time until the Revolving Commitment
Termination Date swing line loans in Dollars (each, a “Swing Line Loan”).  The aggregate amount of Swing Line Loans
outstanding shall not exceed at any time Swing Line Availability.  Notwithstanding anything herein to the
contrary, the aggregate outstanding principal balance of the Swing Line Loans
may exceed the Swing Line Lender’s Revolving Credit Percentage of the Revolving
Commitment Amount.  Until the Revolving
Commitment Termination Date, the Borrower may from time to time borrow, repay
and reborrow Swing Line Loans under this Section 2.1.2.  Each Swing Line Loan shall be made pursuant
to a Notice of Borrowing delivered by the Borrower to the Administrative Agent
in accordance with Section 2.4. 
Unless the Swing Line Lender has received at least one Business Day’s
prior written notice from the Majority Lenders instructing it not to make a
Swing Line Loan, the Swing Line Lender shall, notwithstanding the failure of
any condition precedent set forth in Section 4.2, be entitled to fund
such Swing Line Loan, and to have such Lenders make Revolving Loans in
accordance with Section 2.1.2(c) or purchase participating interests in
such Swing Line Loan in accordance with Section 2.1.2(d).  Notwithstanding any other provision of this
Agreement or the other Loan Documents, each Swing Line Loan shall constitute a
Base Rate Loan.  The Borrower shall repay
the aggregate outstanding principal amount of each Swing Line Loan upon demand
therefor by the Administrative Agent.

(b)           The
entire unpaid balance of each Swing Line Loan and all other Obligations shall
be immediately due and payable in full in immediately available funds on the
Revolving Commitment Termination Date if not sooner paid in full.

(c)           The
Swing Line Lender, at any time and from time to time no less frequently than
once weekly, shall on behalf of the Borrower (and the Borrower hereby
irrevocably authorizes the Swing Line Lender to so act on its behalf) request
each Lender with a Revolving Commitment (including the Swing Line Lender) to
make a Revolving Loan to the Borrower (which shall be a Base Rate Loan) in an
amount equal to that Lender’s Revolving Credit Percentage of the principal
amount of all Swing Line Loans (the “Refunded Swing Line Loan”)
outstanding on the date such notice is given. 
Unless any of the events described in Section 7.1(e) has occurred
(in which event the procedures of Section 2.1.2(d) shall apply) and
regardless of whether the conditions precedent set forth in this Agreement to
the making of a Revolving Loan are then satisfied, each Lender shall disburse
directly to the Administrative Agent, its Revolving Credit Percentage on behalf
of the Swing Line Lender, prior to 2:00 P.M., Chicago time, in immediately
available funds on the date that notice is given (provided that such
notice is given by 12:00 p.m., Chicago time, on such date).  The proceeds of those Revolving Loans shall
be immediately paid to the Swing Line Lender and applied to repay the Refunded
Swing Line Loan.

(d)           If,
prior to refunding a Swing Line Loan with a Revolving Loan pursuant to Section
2.1.2(c), one of the events described in Section 7.1(e) has
occurred, then, subject to the provisions of Section 2.1.2(e) below,
each Lender shall, on the date such Revolving Loan was to have been made for
the benefit of the Borrower, purchase from the Swing Line Lender an undivided
participation interest in the Swing Line Loan in an amount equal to its
Revolving

 4
 

Credit Percentage of such Swing Line Loan.  Upon request, each Lender shall promptly
transfer to the Swing Line Lender, in immediately available funds, the amount
of its participation interest.

(e)           Each
Lender’s obligation to make Revolving Loans in accordance with Section
2.1.2(c) and to purchase participation interests in accordance with Section
2.1.2(d) shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right that such Lender may have against the Swing Line Lender, any
Loan Party or any other Person for any reason whatsoever; (ii) the occurrence
or continuance of any Default or Event of Default; (iii) any inability of the
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement at any time or (iv) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.  If and to the extent any Lender shall not
have made available to the Administrative Agent or the Swing Line Lender, as
applicable, by 2:00 P.M., Chicago time, the amount required pursuant to Sections
2.1.2(c) or 2.1.2(d), as the case may be, on the Business Day on which
such Lender receives notice from the Administrative Agent of such payment or
disbursement (it being understood that any such notice received after noon,
Chicago time, on any Business Day shall be deemed to have been received on the
next following Business Day), such Lender agrees to pay interest on such amount
to the Administrative Agent for the Swing Line Lender’s account forthwith on
demand, for each day from the date such amount was to have been delivered to
the Administrative Agent to the date such amount is paid, at a rate per annum
equal to (a) for the first three days after demand, the Federal Funds Rate from
time to time in effect and (b) thereafter, the Base Rate from time to time in
effect.

SECTION
2.2.  Reduction
of Revolving Commitment Amount. 
The Borrower shall have the right, upon not less than two Business Days’
notice to the Administrative Agent, to terminate the Revolving Commitments or,
from time to time, to reduce the aggregate amount of the Revolving Commitments;
provided that no such termination or
reduction of Revolving Commitments shall be permitted if, after giving effect
thereto and to any prepayments of the Loans made on the effective date thereof,
the total Revolving Extensions of Credit would exceed the Revolving Commitments.
 Any such reduction shall be in an amount
equal to $1,000,000, or a multiple of $500,000 in excess thereof, and shall
reduce permanently the Revolving Commitments then in effect.

SECTION
2.3.  Various
Types of Loans.  Each Loan
shall be either a Base Rate Loan or a Eurodollar Rate Loan (each a “type” of Loan), as the Borrower shall specify in
the related Notice of Borrowing or Continuation/Conversion Notice pursuant to Section 2.4 or 2.6;
provided, however,
that the Borrower may not request or have outstanding Eurodollar Rate Loans
having more than eight (8) different Interest Periods.

SECTION
2.4.  Borrowing
Procedures.  (a) The Borrower
shall give notice to the Administrative Agent of each proposed Borrowing not
later than (i) in the case of a Borrowing of Revolving Loans denominated in
Dollars that are Base Rate Loans, 11:00 A.M. (Chicago time) on the proposed
date of such Borrowing, (ii) in the case of a Borrowing of a Swing Line Loan,
2:00 (Chicago time) on the proposed date of such Borrowing, (iii) in the case
of a Borrowing of Revolving Loans that are Eurodollar Rate Loans that are
denominated in Dollars, 11:00 A.M. 
(Chicago time) at least two (2) Business Days prior to the proposed date
of such Borrowing and 

 5
 

(iv) in the case of a Borrowing of Revolving Loans that are Eurodollar
Rate Loans that are denominated in an Alternative Currency, 11:00 A.M.  (Chicago time) at least four (4) Business
Days prior to the proposed date of such Borrowing.  Each such notice (a “Notice
of Borrowing”) shall be requested by telephone with same day written
confirmation by facsimile transmission, substantially in the form of Exhibit B hereto, specifying therein the date,
the amount and type of such Borrowing and, in the case of a Borrowing of
Eurodollar Rate Loans, the initial Interest Period therefor.  Promptly following receipt of any such
notice, the Administrative Agent shall advise each Lender thereof.  All Loans requested on the Closing Date shall
be Base Rate Loans.

(b)           Except
in the case of a Swing Line Loan, each Lender receiving such notice in a prompt
manner (as described in clause (a) above) shall, before 2:00 P.M. (Chicago
time) on the date of each proposed Borrowing, make available for the account of
its Applicable Lending Office at the principal office of the Administrative
Agent in same day funds in Dollars or the applicable Alternative Currency, as
applicable, such Lender’s Revolving Credit Percentage of such Borrowing.  Subject to Section
2.4(f), after the Administrative Agent’s receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article IV, the Administrative Agent will make
such funds available to the Borrower to such account as the Borrower shall
designate from time to time.

(c)           Any
Lender which does not make funds available at the applicable time specified
under this Section 2.4 (any such Lender a “Defaulting Lender”) shall pay to the
Administrative Agent on demand interest thereon at the Federal Funds Rate for
the number of days from the date of the applicable Borrowing to the date on
which such amount becomes immediately available to the Administrative Agent,
together with such other compensatory amounts as may be required to be paid by
such Lender to the Administrative Agent pursuant to the Rules for Interbank
Compensation of the Council on International Banking or the Clearinghouse
Compensation Committee, as the case may be, as in effect from time to
time.  A statement of the Administrative
Agent submitted to any Lender with respect to any amounts owing under this Section 2.4 shall be conclusive in the absence of
manifest error.  If such amount is not in
fact made available to the Administrative Agent by such Lender on the same
Business Day as the date of such Borrowing, the Administrative Agent shall be
entitled to recover such amount from the Borrower (net of any amount received
from the Defaulting Lender pursuant to the provisions of the first sentence of
this Section), with interest thereon at the rate then applicable to the Loans
comprising such Borrowing, on demand, provided that such payment by the
Borrower shall in no way limit or restrict its ability to hold such Lender
liable for its failure to so fund.

(d)           Each
Borrowing shall be in an aggregate amount not less than $1,000,000, or an
integral multiple of $500,000 in excess thereof.

(e)           Each
Notice of Borrowing (whether in writing or by telephone) shall be irrevocable
and binding on the Borrower.  The
Borrower shall provide the Administrative Agent with documents reasonably
satisfactory to the Administrative Agent indicating the names of those
employees of the Borrower authorized by the Borrower to make telephonic
requests for Loans and continuations and conversions thereof, and the
Administrative Agent shall be entitled to rely upon such documentation until
notified in writing by the Borrower of any change(s) in the names of the
employees so authorized.  The
Administrative Agent shall be entitled, in the 

 6
 

absence of willful misconduct, bad faith or gross negligence, to act on
the instructions of anyone identifying himself as one of the persons authorized
to request Loans and continuations and conversions thereof by telephone and the
Borrower shall be bound thereby in the same manner as if the Person were
actually so authorized.  The Borrower
agrees to indemnify and hold the Administrative Agent and each Lender harmless
from any and all claims, damages, liabilities, losses, and reasonable
out-of-pocket costs and expenses (including Attorney Costs and excluding loss
of anticipated profits) which may arise or be created by the acceptance of
instructions for making, continuing or converting any Loans by telephone, in
the absence of willful misconduct, bad faith or gross negligence.  In the case of any request for a Borrowing of
Eurodollar Rate Loans, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure (i) to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article
IV or (ii) to otherwise make the Borrowing in accordance with such
Notice of Borrowing, including any loss (excluding 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 Loan to be made
by such Lender as part of such Borrowing when such Loan, as a result of such
failure, is not made on such date.

(f)            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 Revolving Credit Percentage of such
Borrowing, the Administrative Agent may assume that such Lender has made such
Revolving Credit Percentage available to the Administrative Agent on the date
of such Borrowing in accordance with Section 2.4(b)
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 made such Revolving Credit Percentage 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 (net of any amounts received from such Defaulting Lender
in respect of such Defaulting Lender’s Revolving Credit Percentage of such
Borrowing), 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
Loans 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 Loans as part of such Borrowing for
purposes of this Agreement.

(g)           The
failure of any Lender to make the Loans 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 Loan on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Loan to be made
by such other Lender on the date of any Borrowing.

SECTION
2.5.  Evidence
of Loans.  The Loans made by
each Lender shall, if requested by such Lender, be evidenced by the Notes
payable to such Lender.  All Loans and
payments hereunder shall be recorded on the books of the Lender making such
Loan or receiving such payment, which shall be rebuttable presumptive evidence
of the amount of such Loans outstanding at any time hereunder.  Notwithstanding any term or condition of this
Agreement to the contrary, however, the failure of any Lender to record the
date and amount of any Loan made 

 7
 

by such Lender hereunder or error in so
recording shall not limit or otherwise affect the obligations of the Borrower
to repay any such Loan and interest thereon; provided
that if there is an error in so recording there shall be a rebuttable
presumption that the records of the Administrative Agent are true and correct
as to the amount of the Loan.

SECTION
2.6.  Continuation/Conversion
Procedures.  Subject to Sections 2.3 and 2.4,
the Borrower may convert any outstanding Loans (other than Swing Line Loans) of
one type into Loans of another type or continue any outstanding Eurodollar Rate
Loan as a Eurodollar Rate Loan, in each case by giving notice thereof to the
Administrative Agent not later than 11:00 A.M. (Chicago time), (a) in the case
of a conversion of a Eurodollar Rate Loan into a Base Rate Loan, on or before
the proposed date of such conversion and (b) in the case of a continuation of a
Eurodollar Rate Loan as, or a conversion of a Base Rate Loan into, a Eurodollar
Rate Loan, at least two (2) Business Days prior to the proposed date of such
continuation or conversion; provided, that Eurodollar Rate Loans may be continued or
converted only as of the last day of the Interest Period applicable thereto
(unless all payments which are due, if any, under Section
2.11 are made in connection with such continuation or
conversion).  Each such notice (a Continuation/Conversion Notice”) shall be by
telephone with same day written confirmation by facsimile transmission
substantially in the form of Exhibit C,
specifying therein the date and amount of such continuation or conversion, the
type of the Loan to be so converted or continued, and, in the case of a
continuation of or conversion into a Eurodollar Rate Loan, the new Interest
Period therefor.  Promptly upon receipt
of such notice (which shall be effective upon receipt by the Administrative
Agent), the Administrative Agent shall advise each Lender thereof.  Subject to Sections
2.18 and 2.19, such Loan shall
be so converted or continued on the requested date of conversion or
continuation; provided that each conversion
or continuation shall be on a Business Day and, after giving effect to any such
conversion or continuation, the aggregate principal amount of each outstanding
Eurodollar Rate Loan shall be at least $1,000,000 and an integral multiple of
$500,000.  Each Eurodollar Rate Loan
shall automatically convert to a Base Rate Loan at the end of the Interest
Period applicable thereto, unless (i) in the case of an expiring Eurodollar
Rate Loan, the Borrower shall have delivered to the Administrative Agent a
Continuation/Conversion Notice not less than two (2) nor more than ten (10)
Business Days prior to the last day of the Interest Period applicable thereto,
and (ii) all of the other conditions contained in this Section
2.6 are satisfied; provided, however, that, in the
case of a failure to timely request a continuation of Revolving Loans
denominated in an Alternative Currency, such Revolving Loans shall be continued
as Eurodollar Rate Loans in their original currency with an Interest Period of
one month.

SECTION
2.7.  Pro Rata
Treatment.  All Borrowings,
continuations, conversions, prepayments, repayments and mandatory and voluntary
Revolving Commitment Amount reductions shall be effected so that after giving
effect thereto each Lender will have a ratable share (according to its
Revolving Credit Percentage) of all Loans and Letters of Credit and of the
Revolving Commitment Amount.

SECTION
2.8.  Principal
Payments.  Repayments and
prepayments of principal of the Loans shall be made in accordance with this Section 2.8.

 8
 

SECTION 2.8.1.  Repayments and
Prepayments.

The Borrower will make
payment in full in Dollars or the applicable Alternative Currency of all unpaid
principal of all Loans and all other principal Obligations which are then
outstanding on the Revolving Commitment Termination Date.  Without limiting the foregoing, and in
addition thereto, the Borrower:

(a)           may,
from time to time on any Business Day, make a voluntary prepayment, in whole or
in part, of the outstanding principal amount of any Loans; provided that:

(i)            any such prepayment
of a Eurodollar Rate Loan prior to the last day of the Interest Period for such
Loan shall be subject to Section 2.11,

(ii)           no such prepayment
of a Eurodollar Rate Loan may be made which, after giving effect thereto, would
result in the aggregate outstanding principal amount of any remaining
Eurodollar Rate Loans to be equal to an amount other than $1,000,000 or an
integral multiple of $500,000 in excess thereof,

(iii)          each such voluntary
prepayment shall require written notice by 11:00 A.M.  (Chicago time) on such Business Day but no
more than five (5) Business Days prior to such prepayment, and

(iv)          each such voluntary
prepayment shall be in a minimum amount of $1,000,000 and an integral multiple
of $500,000 in excess thereof (or, if less, the aggregate principal amount of
all Loans outstanding);

(b)           shall,
unless the Majority Lenders and the Borrower shall otherwise agree, and subject
to the Intercreditor Agreement, upon the consummation of any Disposition of any
property of the Borrower or any of its Subsidiaries (excluding Dispositions
permitted under Section 6.2(g) (other than
any Permitted Dispositions to the extent a prepayment is required pursuant to
the clause (c)(iii)(B) of the definition of
“Permitted Disposition” set forth herein)) or Recovery Event, unless a
Reinvestment Notice shall be delivered in respect thereof, make a mandatory
prepayment of the Loans in an amount equal to the Net Cash Proceeds with
respect to such transaction within three (3) Business Days of the receipt by
the Borrower or any of its Subsidiaries of the Net Cash Proceeds (provided that the Borrower shall promptly provide
notice to the Administrative Agent of the receipt of such Net Cash Proceeds) of
such Disposition or Recovery Event; provided,
however, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of any Recovery Events that may
be excluded from the foregoing application requirement pursuant to a
Reinvestment Notice shall not exceed $15,000,000 in any Fiscal Year of the
Borrower and (ii) on each Reinvestment Prepayment Date Revolving Loans shall be
prepaid by an amount equal to the Reinvestment Prepayment Amount with respect
to the relevant Reinvestment Event, as set forth above.  The provisions of this Section do not
constitute a consent to the consummation of any transaction not permitted by
this Agreement;

(c)           shall,
at any time that the Revolving Extensions of Credit at such time exceed an
amount equal to 105% of the Revolving Commitment Amount then in effect, then,
within two Business Days after receipt of notice from the Administrative Agent,
the Borrower shall prepay Loans and/or the Borrower shall Cash Collateralize
the Letter of Credit Obligations in an aggregate amount sufficient to reduce
such Revolving Extensions of Credit as of such date 

 9
 

of payment to an amount not to exceed 100% of the Revolving Commitment
Amount then in effect;

(d)           shall,
at any time that the Letter of Credit Obligations in respect of all Letters of
Credit exceeds an amount equal to 105% of the Letter of Credit Sublimit then in
effect, then, within two Business Days after receipt of notice from the
Administrative Agent, the Borrower shall Cash Collateralize the Letter of
Credit Obligations in an aggregate amount sufficient to reduce such Letter of
Credit Obligations as of such date of payment to an amount not to exceed 100%
of the Letter of Credit Sublimit then in effect;

(e)           shall,
at any time that the Letter of Credit Obligations in respect of all Financial
Letters of Credit exceeds an amount equal to 105% of the Financial Letter of
Credit Sublimit then in effect, then, within two Business Days after receipt of
notice from the Administrative Agent, the Borrower shall Cash Collateralize the
Letter of Credit Obligations in respect of Financial Letters of Credit in an
aggregate amount sufficient to reduce such Letter of Credit Obligations in
respect of Financial Letters of Credit as of such date of payment to an amount
not to exceed 100% of the Financial Letter of Credit Sublimit then in effect;

(f)            shall,
at any time that the Dollar Equivalent amount of all Revolving Loans
denominated in Alternative Currencies exceeds an amount equal to 105% of the
Alternative Currency Sublimit then in effect, then, within two Business Days
after receipt of notice from the Administrative Agent, the Borrower shall
prepay such Revolving Loans in an aggregate amount sufficient to reduce such
the Dollar Equivalent Amount of Revolving Loans as of such date of payment to
an amount not to exceed 100% of the Alternative Currency Sublimit then in
effect;

(g)           shall,
immediately upon any acceleration of the maturity of any Loans pursuant to Section 7.2, repay all Loans; and

(h)           each
repayment and prepayment of any Loans made pursuant to this Section 2.8.1 shall be without premium or
penalty, except as may be required by Section 2.11,
and shall be applied in accordance with  Section 2.8.2.  Other than any mandatory prepayment of
principal of the Loans in accordance with Section 2.8.1(b) and as
provided in Sections 2.2 and 7.2, no mandatory or voluntary prepayment of
principal of the Loans shall cause a permanent reduction in the Revolving
Commitment Amount.  Each mandatory
prepayment of principal of the Loans in accordance with Section 2.8.1(b)
shall result in a permanent reduction in the Revolving Commitment Amount in an
amount equal to such mandatory prepayment. 
Each such permanent reduction in the Revolving Commitment Amount shall
be allocated among the Lenders in accordance with their respective Revolving
Credit Percentage.  Prior to the
occurrence of a Default, at the Borrower’s option, the Administrative Agent
shall hold all mandatory prepayments made pursuant to Section 2.8.1(c)
or (f) in escrow in an account for the benefit of the Lenders and shall
release such amounts upon the expiration of the Interest Periods applicable to
any Revolving Loans being prepaid (it being understood that interest shall
continue to accrue on such Revolving Loans until such time as such prepayments
are released from escrow and applied to reduce such Revolving Loans).

 10

SECTION 2.8.2.  Application.
Amounts to be applied in connection with the voluntary and mandatory
prepayments paid pursuant to the provisions of Section
2.8.1 (other than, for the avoidance of doubt, any Cash Collateral)
shall be applied to the repayment of any outstanding Loans (without any
permanent reduction to the Revolving Commitments other than pursuant to Sections
2.8.1(b), 2.2 and 7.2).

SECTION
2.9.  Interest
Payments.  Interest on all
Loans shall accrue and be payable in accordance with this Section 2.9.

SECTION 2.9.1.  Rates. 
From the date any Loan is made to the date the principal amount of such
Loan is repaid in full, interest shall accrue on the outstanding principal
amount of such Loan at a rate per  annum:

(a)           on
that portion of the outstanding principal amount thereof maintained from time
to time as a Base Rate Loan (including, without limitation, any Swing Line
Loans) equal to the Base Rate from time to time in effect, plus, the
then Applicable Base Rate Margin; and

(b)           on
that portion of the outstanding principal amount thereof maintained from time
to time as a Eurodollar Rate Loan, during each Interest Period applicable
thereto, equal to the sum of the LIBOR Rate for such Interest Period, plus
the then Applicable Eurodollar Rate Margin.

SECTION 2.9.2.  Default Rate.  If all or a portion of the principal amount
of any Loan or Reimbursement Obligation shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2% (the “Default Rate”). 
If all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the
Default Rate.

SECTION 2.9.3.  Payment Dates.  Interest accrued on each Loan shall be payable,
without duplication:

(a)           with
respect to any Loans, on the Revolving Commitment Termination Date;

(b)           in
the case of any Loan:

(i)            on that portion of
the outstanding principal amount thereof maintained as a Base Rate Loan, on the
last day of each Fiscal Quarter, commencing with the first such day following
the Closing Date; and

 11
 

(ii)           on that portion of
the outstanding principal amount thereof maintained as a Eurodollar Rate Loan,
on the last day of each applicable Interest Period and, if such Interest Period
shall exceed three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period (or, if there is
no numerically corresponding day in such subsequent month or if such
numerically corresponding day is not a Business Day, on the next preceding
Business Day); and

(c)           on
that portion of any Loans the maturity of which is accelerated pursuant to Section 7.2, immediately upon such acceleration.

Interest accrued on the
principal amount of each Loan or other monetary Obligation arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Revolving Commitment Termination Date, upon
acceleration or otherwise) shall be payable upon demand.

SECTION 2.9.4.  Rate Determinations.

(a)           All
determinations by the Administrative Agent of any rate of interest applicable
to any Loan or other monetary Obligation shall be presumptive evidence of such
rate.

(b)           If
the Administrative Agent shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan or that the
LIBOR Rate applicable pursuant to Section 2.9.1
for any requested Interest Period with respect to a proposed Eurodollar Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Administrative Agent will immediately give notice of such
determination to the Borrower and each Lender. 
Thereafter, the obligation of the Lenders to make or continue Eurodollar
Rate Loans hereunder, or permit the conversion of Base Rate Loans into
Eurodollar Rate Loans, shall be suspended until the Administrative Agent
revokes such notice in writing promptly after determining that the
circumstances relating to its determination that adequate and reasonable means
do not exist for ascertaining the LIBOR Rate no longer exist and no new such
circumstances have come into being.  Upon
receipt of such notice, the Borrower may revoke any Notice of Borrowing or
Continuation/Conversion Notice then submitted by it; provided,
however, that such revocation shall not
cause the Borrower to be obligated to reimburse the Lenders for costs under Section 2.11 in connection with such
revocation.  If the Borrower does not
revoke such notice, the Lenders shall make, convert or continue the Loans, as
originally proposed by the Borrower, in the amount specified in the applicable
notice submitted by the Borrower, but such Loans shall be made, converted or
continued as Base Rate Loans.

(c)           On
the date on which the aggregate unpaid principal amount of Loans shall be
reduced, by payment or prepayment or otherwise, to less than $1,000,000, such
Loans shall, if they are Eurodollar Rate Loans, automatically convert into Base
Rate Loans, and on and after such date the right of the Borrower to convert
Base Rate Loans into Eurodollar Rate Loans shall terminate.  The Borrower shall be obligated to reimburse
the Lenders for costs incurred in connection with such automatic conversion in
accordance with Section 2.11.

 12
 

SECTION 2.10. 
Increased Costs and Reduction of Returns.

(a)           If
any Issuing Lender or any Lender shall determine that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR Rate)
in or in the interpretation of any law or regulation occurring after the
Closing Date (other than a change in tax law) or (ii) the compliance with any
guideline or request (other than a guideline or request relating to taxes)
issued after the Closing Date from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to (including a reduction in the sum receivable by) such Issuing
Lender or such Lender of agreeing to make or making, funding, continuing or
maintaining any of its Loans as, or converting (or its obligation to convert)
any portion of the principal amount of any of its Loans into, Eurodollar Rate
Loans, or issuing, maintaining or participating in any Letter of Credit, then
the Borrower shall be liable for, and shall from time to time, within fifteen
(15) days after written demand therefor by the Administrative Agent on behalf
of such Issuing Lender or such Lender in the form of a certificate as to such
amounts, showing a calculation of such amounts in reasonable detail, submitted
to the Borrower and the Administrative Agent by such Issuing Lender or such
Lender which certificate shall be presumptive evidence of such amounts (which
demand the Administrative Agent hereby agrees to deliver), immediately pay to
the Administrative Agent for the account of such Issuing Lender or such Lender,
from time to time as specified by such Issuing Lender or such Lender,
additional amounts as are sufficient to compensate such Issuing Lender or such
Lender for such increased cost (including such reduced amount).

(b)           If
any Issuing Lender or any Lender shall have determined that (i) the
introduction after the Closing Date of any Capital Adequacy Regulation, (ii)
any change after the Closing Date in any Capital Adequacy Regulation, (iii) any
change after the Closing Date in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance
by such Issuing Lender or such Lender (or its Applicable Lending Office) or any
corporation controlling such Issuing Lender or such Lender, with any Capital
Adequacy Regulation issued after the Closing Date, in any such case affects or
would affect the amount of capital required or expected to be maintained by
such Issuing Lender or such Lender or any corporation controlling such Issuing
Lender or such Lender and (taking into consideration such Issuing Lender’s or
such Lender’s or such corporation’s policies with respect to capital adequacy
and such Issuing Lender’s or such Lender’s desired return on capital)
determines that the amount of such capital is increased as a consequence of its
commitment to issue, its issuance of or participation in any Letter of Credit
or its Revolving Commitments, Loans, credits or obligations under this
Agreement, then, within fifteen (15) days after written demand therefor by the
Administrative Agent on behalf of such Issuing Lender or such Lender in the
form of a certificate as to such amounts, showing a calculation of such amounts
in reasonable detail, submitted to the Borrower and the Administrative Agent by
such Issuing Lender or such Lender which certificate shall be presumptive
evidence of such amounts (which demand the Administrative Agent hereby agrees
to deliver), the Borrower shall pay to the Administrative Agent for the account
of such Issuing Lender or such Lender, from time to time as specified by such
Issuing Lender or such Lender, additional amounts as are sufficient to
compensate such Issuing Lender or such Lender or such corporation for such
increase.

 13
 

(c)           Without
limiting the generality of clauses (a) and (b) of this Section 2.10,
in the event that any Issuing Lender, in compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) or any Capital Adequacy Regulation issued after the
Closing Date, or as a result of any change after the Closing Date in the
interpretation or administration of any such guideline or Capital Adequacy
Regulation by any central bank or Governmental Authority charged with the interpretation
or administration thereof, determines that a Performance Letter of Credit
should have been characterized at the time of issuance thereof or should be
recharacterized as a Financial Letter of Credit, then the Borrower shall be
liable for, and shall from time to time, upon demand therefor by such Issuing
Lender in the form of a certificate as to such amounts, showing a calculation
of such amounts in reasonable detail, submitted to the Borrower and the
Administrative Agent by such Issuing Lender, which certificate shall be
presumptive evidence of such amounts (with a copy to the Administrative Agent),
within fifteen (15) days after written demand therefor by the Administrative
Agent on behalf of such Issuing Lender (which demand the Administrative Agent
hereby agrees to deliver), pay to the Administrative Agent, for the account of
such Issuing Lender, from time to time as specified by such Issuing Lender,
such additional amounts as are sufficient to cause such Issuing Lender to
receive Letter of Credit Fees under Section 3.3(a)
from the date of issuance or recharacterization, as the case may be.

(d)           Each
Issuing Lender and each Lender agree to notify the Borrower and the
Administrative Agent in writing promptly of any circumstances that would cause
the Borrower to pay additional amounts pursuant to this Section
2.10, provided that the failure
to give such notice shall not affect the Borrower’s obligation to pay such
additional amounts hereunder. 
Notwithstanding anything to the contrary in this  Section 2.10, the Borrower shall have
no obligation to pay any additional amounts under clause
(a), (b) or (c) of this Section 2.10
unless the claiming Issuing Lender or Lender shall have made demand upon the
Borrower for such additional amounts within six (6) months after the claiming
Issuing Lender or Lender obtained knowledge of the circumstances that would
cause the Borrower to pay such additional amounts; provided,
however, that the foregoing limitation
shall not apply to any such additional amounts arising out of the retroactive
application of any law, regulation, rule guideline or directive within such six
(6) month period.  A Lender or Issuing
Lender shall be deemed to have obtained knowledge of any circumstances that
would cause the Borrower to pay such additional amounts if any rules with
respect to such increase have been published in the Federal Register and such
knowledge shall be deemed to have been obtained on the later of the date when
such new rule (i) is published in the Federal Register and (ii) becomes
effective.  Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower in this Section 2.10
shall survive the payment of all other Obligations.

(e)           If
the Borrower is required to pay additional amounts to any Lender or the
Administrative Agent pursuant to Section 2.10,
then such Lender shall use its reasonable best efforts (consistent with legal
and regulatory restrictions) to take such actions (including, if applicable, to
change the jurisdiction of its Applicable Lending Office) so as to minimize any
such additional payment by the Borrower which may thereafter accrue if such
change in the judgment of such Lender is not otherwise disadvantageous to such
Lender.

SECTION
2.11.  Funding
Losses.  In the event any
Lender shall incur any loss or expense (including any loss or expense incurred
by reason of the liquidation or reemployment of 

 14
 

deposits or other funds acquired by such
Lender to make, continue or maintain any portion of the principal amount of any
Loan as, or to convert any portion of the principal amount of any Loan into, a
Eurodollar Rate Loan) as a result of:

(a)           repayment
or prepayment of the principal amount of any Eurodollar Rate Loans on a date
other than the last day of the Interest Period applicable thereto, whether
pursuant to Section 2.8 or otherwise, or
the compulsory assignment of a Eurodollar Rate Loan of a Non-Consenting Lender
pursuant to Section 9.1;

(b)           any
conversion of all or any portion of the outstanding principal amount of any
Eurodollar Rate Loans to Base Rate Loans prior to the expiration of the
Interest Period then applicable thereto;

(c)           any
Loans not being made as Eurodollar Rate Loans in accordance with the Notice of
Borrowing therefor (except in the event of a revocation of a Notice of
Borrowing pursuant to Section 2.9.4 (b));
or

(d)           any
Loans not being continued as, or converted into, Eurodollar Rate Loans in
accordance with the Continuation/Conversion Notice given therefor, then, upon
the request by the Administrative Agent on behalf of such Lender in the form of
a certificate as to such amounts, showing a calculation of such amounts in
reasonable detail, submitted to the Borrower and the Administrative Agent by
such Lender, which shall be presumptive evidence of such amounts (which request
the Administrative Agent hereby agrees to deliver), the Borrower shall pay to
the Administrative Agent for the account of such Lender such amount as will (in
the reasonable determination of such Lender) reimburse such Lender for such
loss or expense.  Solely for purposes of
calculating amounts payable by the Borrower to such Lenders under this Section 2.11, each Eurodollar Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the rate used in determining the
LIBOR Rate for such Eurodollar Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Eurodollar Rate Loan is in fact so
funded.  Any claim by a Lender for
reimbursement under this Section 2.11 shall
be set forth in a certificate delivered by such Lender to the Borrower and the
Administrative Agent showing in reasonable detail the basis for such
calculation and shall be presumptive evidence of such amounts.  The agreements and obligations of the
Borrower in this Section 2.11 shall survive
the payment of all other Obligations.

If the Borrower is required to pay additional
amounts to any Lender or the Administrative Agent pursuant to Section 2.11, then such Lender shall use its
reasonable best efforts (consistent with legal and regulatory restrictions) to
take such actions (including, if applicable, to change the jurisdiction of its
Applicable Lending Office) so as to minimize any such additional payment by the
Borrower which may thereafter accrue if such change in the judgment of such
Lender is not otherwise disadvantageous to such Lender.

 15
 

SECTION
2.12.  Illegality.

(a)           If
any Lender shall determine that the introduction of any Applicable Law, or any
change in any Applicable Law or in the interpretation or administration
thereof, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its Applicable
Lending Office to make Eurodollar Rate Loans, then, on notice thereof by such
Lender to the Borrower through the Administrative Agent, the obligation of that
Lender to make, convert into or continue Eurodollar Rate Loans, shall be
suspended until such Lender shall have notified the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist.

(b)           If
a Lender shall determine that it is unlawful to maintain any Eurodollar Rate
Loan, the Borrower shall prepay in full all Eurodollar Rate Loans of that
Lender then outstanding, together with interest accrued thereon, or convert
such Eurodollar Rate Loans into Base Rate Loans, either on the last day of the
Interest Period thereof if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, upon request therefor if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans
until the last day of the Interest Period, together with any amounts required
to be paid in connection therewith pursuant to Section
2.11.

(c)           If
the Borrower is required to prepay any Eurodollar Rate Loan immediately as
provided in Section 2.12(b), then
concurrently with such prepayment, the Borrower shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.

(d)           If
the obligation of any Lender to make or maintain Eurodollar Rate Loans has been
terminated, the Borrower may elect, by giving notice to such Lender through the
Administrative Agent that all Loans which would otherwise be made by such
Lender as Eurodollar Rate Loans shall instead be Base Rate Loans.

(e)           Before
giving any notice to the Administrative Agent pursuant to this Section 2.12, the affected Lender shall designate
a different Eurodollar Office with respect to its Eurodollar Rate Loans if such
designation will avoid the need for giving such notice or making such demand
and will not, in the judgment of such Lender, be illegal or otherwise disadvantageous
to such Lender.

(f)            If
the Borrower is required to pay additional amounts to any Lender or the
Administrative Agent pursuant to Section 2.12,
then such Lender shall use its reasonable best efforts (consistent with legal
and regulatory restrictions) to take such actions (including, if applicable, to
change the jurisdiction of its Applicable Lending Office) so as to minimize any
such additional payment by the Borrower which may thereafter accrue if such
change in the judgment of such Lender is not otherwise disadvantageous to such
Lender.

SECTION
2.13.  Right of
the Lenders to Fund through Other Offices.  Each Lender may, if it so elects, fulfill its
commitment as to any Eurodollar Rate Loan by causing a foreign branch or
affiliate of such Lender to make such Loan; provided
that in such event for the purposes of this Agreement such Loan shall be deemed
to have been made by such Lender and the obligation of the Borrower to repay
such Loan shall nevertheless be to such Lender and shall be deemed held by it,
to the extent of such Loan, for the account of such branch or affiliate.

 

 16

SECTION
2.14.  Non-Use
Fee and Fee Obligations Generally.

(a)           Non-Use Fee. 
The Borrower agrees to pay to the Administrative Agent, for the account
of each Lender, a Non-Use Fee (the “Non-Use Fee”)
in an amount equal to the product of (i) the Applicable Non-Use Fee Percentage
multiplied by (ii) the daily average amount by which the Revolving Commitment
Amount exceeds the sum of the outstanding principal balance of the Revolving
Loans plus the then Letter of Credit
Obligations, for the period from the Closing Date until the Revolving
Commitment Termination Date.  The Non-Use
Fee shall be payable quarterly in arrears on the last day of each Fiscal
Quarter for the Fiscal Quarter then ended and on the Revolving Commitment Termination
Date.  Solely for purposes of calculating
the Non-Use Fee under this Section 2.14(a),
the equivalent in Dollars of the undrawn face amount of each Letter of Credit
made in an Alternative Currency shall be determined on the date of issuance of
such Letter of Credit and shall be redetermined as of the last Business Day of
each calendar month thereafter during which such Letter of Credit remains
outstanding, with no interim adjustments with respect to any fluctuations in
the value of such Alternative Currency.

(b)           Other Fees. 
The Borrower agrees to pay to the Administrative Agent the fees in the
amounts and on the dates from time to time agreed to in writing by the Borrower
and the Administrative Agent.

(c)           Fee Obligations. 
The obligation of the Borrower to pay the fees described in this Section 2.14, and the Letter of Credit Fees
described in Section 3.3, shall be in
addition to, and not in lieu of, the obligation of the Borrower to pay interest
and expenses and other amounts otherwise described in this Agreement.  The fees described in this Section 2.14 shall be fully earned on the earlier
of the date paid or accrued and shall be non-refundable.  The Letter of Credit Fees and the fees
described in this Section 2.14 shall bear
interest, if not paid when due, at the Default Rate.

SECTION 2.15.  Payments and
Computations.

(a)           Allocation. 
All payments by the Borrower pursuant to this Agreement or any other
Loan Document, whether in respect of principal of or interest on Loans or other
Obligations, shall be made by the Borrower in Dollars or in the applicable
Alternative Currency no later than 1:00 P.M. 
(Chicago time) on the day when due to the Administrative Agent in same
day funds.  Without limiting the
generality of the foregoing, the Administrative Agent may require that any
payments due under this Agreement be made in the United States.  If, for any reason, the Borrower is
prohibited by any Applicable Law from making any required payment hereunder in
an Alternative Currency, the Borrower shall make such payment in Dollars in the
Dollar Equivalent of the Alternative Currency payment amount.  All payments in respect of principal of or
interest on Loans or Letter of Credit Obligations shall (unless otherwise
specified herein) be made by the Borrower to the Administrative Agent for the
account of the Lenders pro  rata according to the respective unpaid principal
amounts of the Loans made by them or to their respective participation or other
interests in such Letter of Credit Obligations, as the case may be.  The payment of all fees referred to in Section 2.14 and Section
3.3 shall (unless otherwise specified therein) be made by the
Borrower to the Administrative Agent for the account of the Lenders entitled
thereto.  All other amounts payable to
the Administrative Agent or any Lender under this Agreement or any other Loan
Document shall be paid to the Administrative Agent for 

 17
 

the account of the Person entitled thereto.  Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 9.7(d), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder 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.  The Administrative Agent
shall promptly remit to each Lender in immediately available funds and in
Dollars such Lender’s share of all such payments received by the Administrative
Agent for the account of such Lender.

(b)           All
computations of interest or fees hereunder or under any other Loan Document
shall be made by the Administrative Agent on the basis of a year of 360 days,
except that, with respect to Base Rate Loans, the interest thereon shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, 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 or fees are
payable.  Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

(c)           Whenever
any payment hereunder 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 fees, as the case may be; provided
if such extension would cause payment of interest on or principal of Eurodollar
Rate Loans to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day.

(d)           Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders 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 Lender on such due date an amount equal to the amount
then due such Lender.  If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each 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.

(e)           All
payments of principal, interest, fees and all expenses and other amounts due
hereunder or under any other Loan Document payable to the Lenders shall be made
without condition and in same day funds and delivered to the Administrative
Agent on the date thereof not later than the applicable cut-off time described
in Section 2.15(a), and funds received by
the Administrative Agent after that time shall be deemed to have been paid on
the next succeeding Business Day.

(f)            Each
payment of principal shall be applied to such Loans as the Borrower shall
direct by notice received by the Administrative Agent on or before the date of
such payment or, in the absence of such notice, first, to the unpaid principal
amount of any 

 18
 

outstanding Base Rate Loans, second, to the unpaid principal amount of
any outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which
have earlier expiring Interest Periods being repaid prior to those which have
later expiring Interest Periods, and then as the Administrative Agent shall
determine in its discretion. 
Concurrently with each remittance to any Lender of its share of any such
payment, the Administrative Agent shall advise such Lender as to the
application of such payment.

SECTION
2.16.  Taxes.

(a)           Subject
to Section 2.16(d), any and all payments by
the Borrower to each Lender or the Administrative Agent under this Agreement
shall be made free and clear of, and without, unless required by Applicable Law
(in which case Section 2.16(d) shall
apply), deduction or withholding 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 the Administrative
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Person’s net income (including branch profits taxes), and
franchise taxes are imposed on it by the jurisdiction under the laws of which
such Lender or the Administrative Agent, as the case may be, is organized or
maintains any Applicable Lending Office or any political subdivision of the
foregoing (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”).

(b)           In
addition, the Borrower shall pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents other than amounts as are being contested in good faith (hereinafter
referred to as “Other Taxes”).

(c)           Subject
to Section 2.16(g), the Borrower shall
indemnify and hold harmless each Lender and the Administrative Agent for the
full amount of Taxes or Other Taxes paid by Lender or the Administrative Agent
as a result of its Revolving Commitment, any Loans made by it hereunder, or
otherwise in connection with its participation in this Agreement and any
liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto (other than liability resulting from
the gross negligence, bad faith or willful misconduct of such Lender or the
Administrative Agent), whether or not such Taxes or Other Taxes were correctly
or legally asserted.  Payment under this
indemnification shall be made within thirty (30) days from the date Lender or
the Administrative Agent makes written demand therefor in the form of a
certificate as to such amounts, showing a calculation of such amounts in
reasonable detail, submitted to the Borrower and the Administrative Agent by such
Lender, which shall be presumptive evidence of such amounts, which written
demand shall be made no sooner than thirty (30) days prior to the date Lender
intends to pay such Taxes or Other Taxes and no later than ninety (90) days
after such payment.

(d)           If
the Borrower shall be required by law to deduct or withhold any Taxes or Other
Taxes from or in respect of any sum payable hereunder to any Lender or the
Administrative Agent, then, subject to Section 2.16(g):

 19
 

(i)            the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section 2.16) such Lender or the Administrative
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;

(ii)           the Borrower shall
make such deductions; and

(iii)          the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

(e)           Within
thirty (30) days after the date of any payment by the Borrower of Taxes or
Other Taxes, the Borrower shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment reasonably satisfactory to the Administrative Agent.

(f)            Each
Lender other than a Lender which is (1) a U.S. person (within the meaning of
IRC Section 7701(a)(30)) and (2) treated as a corporation for U.S. federal
income tax purposes agrees that:

(i)            it shall, no later
than the Closing Date (or, in the case of a Lender which becomes a party hereto
pursuant to Section 9.7 after the Closing
Date, the date upon which Lender becomes a party hereto) deliver to the
Borrower through the Administrative Agent two accurate and complete signed
originals of IRS Form W-9, Form W-8BEN or W-8 ECI or any successor thereto, in
each case (“Withholding Forms”) indicating
that the Lender is on the date of delivery thereof exempt from United States
withholding tax and entitled to receive payments under this Agreement free from
withholding of United States Federal income tax;

(ii)           if at any time the
Lender makes any changes necessitating a new Withholding Form, it shall with
reasonable promptness deliver to the Borrower through the Administrative Agent
in replacement for, or in addition to, the forms previously delivered by it
hereunder, two accurate and complete signed originals of Withholding Forms
indicating that the Lender is on the date of delivery thereof exempt from
United States withholding tax and entitled to receive all payments under this
Agreement free from withholding of United States Federal income tax;

(iii)          it shall, before or
promptly after the occurrence of any event (including the passing of time but
excluding any event mentioned in clause (ii)
above) requiring a change in or renewal of the most recent Withholding Forms
previously delivered by such Lender, deliver to the Borrower through the
Administrative Agent two accurate and complete original signed copies of
Withholding Forms in replacement for the forms previously delivered by the
Lender; and

(iv)          it shall, promptly
upon the Borrower’s or the Administrative Agent’s reasonable request to that
effect, deliver to the Borrower or the Administrative Agent (as the case may
be) such other forms or similar documentation as may be required

 20
 

from time to time by any applicable law, treaty, rule or regulation in
order to establish such Lender’s tax status for withholding purposes.

(g)           The
Borrower will not be required to pay any amounts in respect of United States
Federal income tax pursuant to Section 2.16(c)
or Section 2.16(d) to any Lender for the
account of any Applicable Lending Office of such Lender:

(i)            if the obligation
to pay such additional amounts would not have arisen but for a failure by such
Lender to comply with its obligations under Section
2.16(f) in respect of such Applicable Lending Office;

(ii)           if such Lender
shall have delivered to the Borrower a Withholding Form in respect of such
Applicable Lending Office pursuant to Section 2.16(f),
and such Lender shall not at any time be entitled to exemption from deduction
or withholding of United States Federal income tax in respect of payments by
the Borrower hereunder for the account of such Applicable Lending Office for
any reason other than a change in United States law or regulations or in the
official interpretation of such law or regulations by any governmental
authority charged with the interpretation or administration thereof (whether or
not having the force of law) after the date of delivery of such Withholding
Form; or

(iii)          if the Lender shall
have delivered to the Borrower a Withholding Form in respect of such Applicable
Lending Office pursuant to Section 2.16(f),
and such Lender shall not at any time be entitled to exemption from deduction
or withholding of United States Federal income tax in respect of payments by
the Borrower hereunder for the account of such Applicable Lending Office for
any reason other than a change in United States law or regulations or any
applicable tax treaty or regulations or in the official interpretation of any
such law, treaty or regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Withholding Form.

(h)           If
the Borrower is required to pay additional amounts to any Lender or the
Administrative Agent pursuant to Section 2.16(d),
then such Lender shall use its reasonable best efforts (consistent with legal
and regulatory restrictions) (including changing the jurisdiction of its
Applicable Lending Office) so as to eliminate any such additional payment by
the Borrower which may thereafter accrue if such change in the judgment of such
Lender is not otherwise disadvantageous to such Lender.

(i)            If
the Administrative Agent or any Lender determines that it has received a refund
or direct credit in respect of and specifically associated with any Taxes or
Other Taxes as to which it has been indemnified by the Borrower, or with
respect to which the Borrower has paid additional amounts, it shall promptly
notify the Borrower of such refund or direct credit and shall within 30 days
from the date of receipt of such refund or benefit of such direct credit
(including any interest paid or credited by the relevant Governmental Authority
attributable to such refund or direct credit) to the Borrower but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
with respect to the Taxes or Other Taxes giving rise to such refund or direct
credit net of all out-of-pocket expenses of such Person.

 21
 

(j)            Without
prejudice to the survival of any other agreement of the Borrower, the Lenders
and the Administrative Agent hereunder, the agreements and obligations of the
Borrower, the Lenders and the Administrative Agent contained in this Section 2.16 shall survive the payment of all
other Obligations.

SECTION
2.17.  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, but not including any payment
made from an assigning Lender to an assignee Lender or a Lender to a
Participant on account of an assignment of Loans or participation) on account
of the Loans or the Letters of Credit (other than pursuant to Section 2.10, 2.11,
2.12(b), 2.16
or 3.3(b)) in excess of its ratable share
of payments on account of such Loans and/or the Letters of Credit obtained by
all the Lenders entitled thereto, such Lender shall forthwith purchase from the
other Lenders notified of such payment such participations in such Loans and/or
Letters of Credit made by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender, such
purchase from each such Lender shall be rescinded and each such Lender shall
repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender’s ratable share
(according to the proportion of (a) the amount of such Lender’s required
repayment to (b) 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 2.17
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) 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
2.18.  Warranty.  Each Notice of Borrowing pursuant to Section 2.4 and the delivery of each Letter of
Credit Request pursuant to Section 3.2,
shall automatically constitute a warranty by the Borrower to the Administrative
Agent and each Lender to the effect that on the date of such requested
Borrowing or the issuance of the requested Letter of Credit, as the case may
be, (a) the warranties contained in the Loan Documents (except to the extent
changes in facts or conditions are expressly permitted or required hereunder or
thereunder) shall be true and correct in all material respects as of such
requested date as though made on the date thereof unless an earlier date is so
specified in such representation and warranty and (b) no Event of Default or
Default shall have then occurred and be continuing or will result therefrom.

SECTION
2.19.  Conditions.  Notwithstanding any other provision of this
Agreement (other than as set forth in Section 3.4),
(a) no Lender (including the Swing Line Lender) shall be obligated to make any
Loan, (b) no Lender shall be obligated to convert into or permit the continuation
at the end of the applicable Interest Period of any Eurodollar Rate Loan (other
than any Eurodollar Rate Loan denominated in an Alternative Currency, in which
case such Eurodollar Rate Loans may be continued as Eurodollar Rate Loans in
their original currency with an Interest Period of one month), and (c) no
Issuing Lender shall be obligated to issue any Letter of Credit if, in any such
case, an Event of Default or Default exists or would result therefrom.

 

 22

SECTION
2.20.  All
Obligations Secured.  The
Loans, the Reimbursement Obligations, and all other Obligations of the Borrower
and each other Person to the Administrative Agent, any Issuing Lender, any
Lender or any other Secured Party, shall be secured by the Administrative Agent’s
Lien, for the benefit of the Secured Parties, on all of the Collateral and by
all other Liens heretofore, now, or at any time or times hereafter granted by
the Borrower or any other Person to the Administrative Agent, any Issuing Lender,
any Lender or any other Secured Party to secure any Obligations.  The Borrower agrees that all of the rights of
the Secured Parties set forth in this Agreement shall apply to any
modification, amendment or restatement of, or supplement to, this Agreement,
any supplements or exhibits hereto, and the other Loan Documents, unless
otherwise agreed in writing.

SECTION
2.21.  Use of
Proceeds.  The Borrower shall
use the proceeds of the Loans for (a) the working capital requirements and
general corporate purposes of the Borrower and its Subsidiaries, (b) the
refinancing of existing debt of the Loan Parties, (c) the payment of fees and
expenses in connection with the consummation of the transactions contemplated
by this Agreement and (d) the financing of Capital Expenditures, including the
purchase of certain vessels and improvements thereto and related mobilization
costs.

SECTION
2.22.  Assignment
of Commitments Under Certain Circumstances.  In the event that the Administrative Agent
shall have delivered a notice or certificate on behalf of any Lender pursuant
to Section 2.10, 2.12
or 2.16, the Loan Parties shall be required
to make additional payments to any Lender under Section
2.16, or any Lender shall become a Defaulting Lender, the Borrower
shall have the right, at its own expense, upon notice to such Lender and
Administrative Agent, not later than sixty (60) days following such Lender’s
delivery of such notice or certificate, to require such Lender or Defaulting
Lender to transfer and assign, without recourse or discount, in accordance with
and subject to the restrictions contained in Section
9.7, all of its interests, rights and obligations under this
Agreement (including, without limitation, its Revolving Commitments and its
Revolving Credit Percentage of the Obligations) to one or more financial
institutions chosen by the Borrower (and approved by the Administrative Agent
and the Issuing Lender, which approval shall not be unreasonably withheld)
which have agreed to so acquire and assume such interests, rights and
obligations.  A Lender shall not be
required to make any such transfer and assignment unless all Obligations owing
to such Lender, including, without limitation, those arising under Sections 2.10, 2.12
and 2.16, have been paid in full and such Lender
shall have no further obligations with respect to its Revolving Commitments,
and no Lender shall be required to make any such transfer and assignment if
prior thereto the circumstances entitling the Borrower to require such a
transfer and assignment cease to apply as a result of such Lender’s withdrawing
its notice or certificate pursuant to Section 2.10,
2.12 or 2.16,
as applicable.

SECTION 2.23.  Increase in the Revolving Commitment Amount.

(a)           Request for Increase.  Provided
there exists no Default, upon notice to the Administrative Agent (which shall
promptly notify the Lenders), the Borrower may on one or more occasions,
request an increase in the Revolving Commitments by an amount not exceeding
$25,000,000 in the aggregate for all such increases (subject to a minimum
amount of $10,000,000 for any individual increase).  At the time of sending such notice, the
Borrower (in consultation with the Administrative Agent) shall specify the time
period within which each 

 23
 

Lender is requested to respond (which shall
in no event be less than ten Business Days from the date of delivery of such
notice to the Lenders).

(b)           Lender Elections to Increase.  Each Lender
shall notify the Administrative Agent within such time period whether or not it
agrees to increase its Revolving Commitment and, if so, whether by an amount
equal to, greater than, or less than its Revolving Credit Percentage of such
requested increase.  Any Lender not
responding within such time period shall be deemed to have declined to increase
its Revolving Commitment.

(c)           Notification by Administrative
Agent; Additional Lenders.  The
Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder. 
To achieve the full amount of a requested increase and subject to the
approval of the Administrative Agent and the Issuing Lender (which approvals
shall not be unreasonably withheld or delayed), the Arranger, in consultation
with the Borrower, may also invite additional financial institutions to become
Lenders pursuant to a joinder agreement in form and substance satisfactory to
the Administrative Agent and its counsel.

(d)           Effective Date and Allocations.  If the
Revolving Commitments are increased in accordance with this Section, the
Administrative Agent and the Borrower shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase
and the Increase Effective Date.  Each of
the parties hereto hereby agrees that, upon any Increase Effective Date, this
Agreement and the Commitment Schedule shall be deemed amended to the extent
(but only to the extent) necessary to reflect the increase to the Revolving
Commitment Amount and the increases to the Revolving Commitments under this
Section.  Any such deemed amendment may
be memorialized in writing by the Administrative Agent and the Borrower
furnished to the other parties hereto.

(e)           Conditions to Effectiveness of
Increase.  As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent a certificate of the
Borrower dated as of the Increase Effective Date signed by an Authorized
Officer of the Borrower (i) certifying and attaching the resolutions adopted by
such Loan Party approving or consenting to such increase, and (ii) certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained herein and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and (B) no
Default exists.  The Borrower shall
prepay on a non-ratable basis any Loans outstanding on the Increase Effective
Date (and pay any additional amounts required pursuant to Section 2.11) to the extent necessary to keep the outstanding
Loans ratable with any revised Revolving Credit Percentages of the Revolving
Commitments arising from any nonratable increase in the Revolving Commitments
under this Section.

(f)             Increase in the Letter of Credit
Sublimit.  On any Increase Effective
Date, with the written consent of each Issuing Lender, the Letter of Credit
Sublimit may be increased by an amount up to the amount of the increase in the
Revolving Commitment Amount on such Increase Effective Date.

 24
 

(g)           Conflicting Provisions.  This
Section shall supersede any provisions in Sections 2.17 or 9.1 to the contrary.

ARTICLE III.

LETTERS OF CREDIT

SECTION
3.1.  Commitment
for Letters of Credit.  Prior
to the Closing Date, Bank of America, N.A., as “Issuing Lender” under the
Existing Credit Agreement has issued the Existing L/Cs, which from and after
the Closing Date, shall constitute Letters of Credit hereunder.  Subject to the terms and conditions hereof,
each Issuing Lender hereunder, in reliance on the agreements of the other
Lenders, set forth in Section  3.4, agrees to issue letters of
credit (the letters of credit issued on and after the Closing Date pursuant to
this Section 3.1 together with the Existing
L/Cs, the “Letters of Credit”) in Dollars
or in Alternative Currencies for the account of the Borrower, and each Lender
severally agrees to participate in the Letters of Credit (including Existing
L/Cs) issued by each Issuing Lender hereunder, in a Dollar Equivalent amount
equal to such Lender’s Revolving Credit Percentage, from time to time, on any
Business Day during the period commencing on the date hereof, and continuing
until the Revolving Commitment Termination Date in such form as may be approved
from time to time by the applicable Issuing Lender; provided,
that no Issuing Lender shall have any obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the Letter of Credit Obligations
would exceed the Letter of Credit Availability, (ii) the Letter of Credit
Obligations in respect of Financial Letters of Credit exceed the Financial
Letter of Credit Availability or (iii) the aggregate amount of Available
Revolving Commitments would be less than zero. 
Each Letter of Credit shall expire no later than the earlier of (x) the
fourth anniversary of its date of issuance and (y) the date which is prior to the
Revolving Commitment Termination Date as in effect at the time of the issuance
of the Letter of Credit; provided that any
Letter of Credit with a one-year term may provide for renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).

SECTION
3.2.  Issuance
of Letters of Credit.

(a)           The
Borrower shall give the applicable Issuing Lender prior written notice (a “Letter of Credit Request”) not later than 11:00
A.M. (Chicago time) on the Business Day immediately preceding the date on which
the issuance or amendment of a Letter of Credit is requested or, in the case of
a requested Letter of Credit to be denominated in an Alternative Currency, on
the Business Day immediately preceding the date on which the issuance or
amendment of such a Letter of Credit is requested (or, in either case, such
shorter time if consented to by the Administrative Agent and such Issuing
Lender), specifying:

(i)            the requested date
for issuance or amendment of such Letter of Credit, which shall be a Business
Day;

(ii)           the expiry date of
such Letter of Credit, which shall be a Business Day;

(iii)          the beneficiary of
such Letter of Credit;

 25
 

(iv)          the aggregate face
amount of such Letter of Credit and the requested currency in which such Letter
of Credit is to be denominated;

(v)           whether the Letter
of Credit to be issued is a Financial Letter of Credit or a Performance Letter
of Credit; and

(vi)          the conditions for
drawing to be included in such Letter of Credit.

Each such Letter of
Credit Request shall be by telecopier, telex or cable, confirmed immediately in
writing by mail, in substantially the form of Exhibit
D and executed by an Authorized Officer of the Borrower.

(b)           Upon receipt of a Letter of Credit
Request, the applicable Issuing Lender shall promptly send a copy thereof to
the Administrative Agent who shall then notify each Lender of the contents
thereof.  Upon satisfaction of the
conditions precedent specified in Article IV
hereof, and subject to the provisions of Section
3.2(c), such Issuing Lender shall issue the Letter of Credit
requested to be issued by it or amend the Letter of Credit requested to be
amended, as the case may be, on the date specified in the Letter of Credit
Request; provided that no Issuing Lender
shall issue or maintain a Letter of Credit having an expiry date later than the
date specified in Section 3.1.  Promptly after the issuance by an Issuing
Lender of a Letter of Credit, such Issuing Lender shall furnish a copy of such
Letter of Credit to the Administrative Agent and the Borrower.

(c)           In the case of a requested Letter of
Credit to be denominated in an Alternative Currency, the obligation of the
applicable Issuing Lender to issue such Letter of Credit is subject to the
confirmation by such Issuing Lender to the Administrative Agent on the Business
Day of the requested date of such issuance that such Issuing Lender agrees to
issue such Letter of Credit in the requested Alternative Currency, which
confirmation shall be promptly forwarded by the Administrative Agent to the
Borrower.  If such Issuing Lender shall
not have so provided to the Administrative Agent such confirmation, the
Administrative Agent shall promptly notify the Borrower that such Issuing
Lender has not provided such confirmation, and the Borrower’s request for such
Letter of Credit in such Alternative Currency shall be deemed to have been
thereupon withdrawn by the Borrower.

SECTION 3.3.  Letter of Credit Fee.  The Borrower agrees to pay to the
Administrative Agent (a) ratably for the account of each Lender, a letter of
credit fee for the term of such Letter of Credit at the rate equal to the
aggregate face amount outstanding of such Letter of Credit multiplied by (i) in
the case of Performance Letters of Credit, subject to Section 2.10(c),
the then Applicable Performance Letter of Credit Fee Percentage and (ii) in the
case of Financial Letters of Credit, the then Applicable Financial Letter of
Credit Fee Percentage, and (b) for the applicable Issuing Lender’s own account
(in addition to its Revolving Credit Percentage of the fee payable to it as a
Lender, in accordance with clause (a) above), a letter of credit fee for the
term of such Letter of Credit of 0.125 of 1% per annum (or such lower amount if
agreed to by the applicable Issuing Lender) based upon the aggregate face
amount outstanding of each such Letter of Credit and the applicable Issuing
Lender’s customary processing fees for the issuance, amendment or renewal of
the Letter of Credit.  The fee for any
Letter of Credit issued by any Issuing Lender hereunder, as determined in
accordance with clauses (a) and (b) above (the

 26
 

“Letter of
Credit Fee”), shall be payable quarterly in arrears on the last day of each
Fiscal Quarter, on the Revolving Commitment Termination Date and on the
earliest of the cancellation, expiration or return of such Letter of Credit to
the applicable Issuing Lender; provided
that if any Letter of Credit is canceled and/or returned to the applicable
Issuing Lender prior to the expiration thereof, the Borrower shall from time to
time, upon demand by such Issuing Lender and/or any Lender therefor,
immediately pay to such Issuing Lender and/or such Lender additional amounts
sufficient to compensate it for its expenses not covered by a previously
received Letter of Credit Fee.  A
certificate as to the amount of such expenses submitted to the Borrower and the
Administrative Agent by such Issuing Lender and/or such Lender, showing in
reasonable detail the calculation thereof, shall be presumptive evidence of such
amount.

SECTION 3.4.  Obligations of the Lenders to an Issuing Lender under a
Letter of Credit.  Each
Issuing Lender will notify the Borrower and the Administrative Agent, and the
Administrative Agent will thereupon notify each other Lender, promptly upon
presentation to it of a draft for payment drawn under, or purporting to be
drawn under, a Letter of Credit issued by it; provided
that the Administrative Agent and each Lender shall have received notice by
2:00 P.M. (Chicago time) on the Business Day on which such Issuing Lender
intends to make payment of each such draft, to the extent that the Borrower
fails to provide funds therefor, each other Lender shall make payment to the
Administrative Agent, for the benefit of the applicable Issuing Lender in immediately
available funds and in Dollars at the applicable Issuing Lender’s Domestic
Lending Office of an amount equal to the Dollar Equivalent amount (as
calculated by the applicable Issuing Lender) of such Issuing Lender’s payment
multiplied by such other Lender’s Revolving Credit Percentage.  The obligation of each Lender to make
payments to the Administrative Agent for the benefit of each Issuing Lender
under this Section 3.4 shall be
unconditional, continuing, irrevocable and absolute regardless of whether or
not any of the conditions set forth in Article IV
are then satisfied.  In the event that
any Lender fails to make payment to the Administrative Agent for the benefit of
any Issuing Lender of any amount due under this Section
3.4, such Issuing Lender shall be entitled to receive the principal
and interest otherwise payable to such Lender hereunder with respect to such
amount until such Issuing Lender receives such payment from such Lender; provided that nothing contained in this sentence
shall relieve such Lender of its obligation to make payment to any Issuing
Lender for such amounts in accordance with this Section
3.4.

SECTION 3.5.  Reimbursement Obligation.  The Borrower agrees unconditionally and
irrevocably to pay to the Administrative Agent in Dollars and in immediately
available funds for the account of the applicable Issuing Lender (and, to the
extent such payments were made by the Lenders pursuant to Section 3.4, for the account of such Lenders),
upon demand therefor by the Administrative Agent (which demand the
Administrative Agent hereby agrees to deliver), the Dollar Equivalent amount of
each payment which is drawn under a Letter of Credit, or which purports to be
so drawn (such obligation of the Borrower being referred to herein as a “Reimbursement Obligation” with respect to such
Letter of Credit).  If at any time the
Borrower fails immediately to repay a Reimbursement Obligation pursuant to this
Section 3.5, the Borrower shall be deemed
to have requested a Revolving Loan which is a Base Rate Loan, as of the date of
the payment giving rise to the Reimbursement Obligation, from each Lender,
equal in amount to such Lender’s Revolving Credit Percentage multiplied by the
Dollar Equivalent amount of the unpaid Reimbursement Obligation, the proceeds
of which shall be used to repay such Reimbursement Obligation.  If, as a result of a Default or an Event of
Default, a Revolving 

 27
 

Loan may not
be made on a date on which such Loan would be deemed to have been requested
pursuant to the preceding sentence, the unpaid Dollar Equivalent amount of the
Reimbursement Obligation shall bear interest at the Default Rate and shall be
payable on demand.  Regardless of the
expiration date of any Letter of Credit, the Borrower shall remain liable with
respect to each Letter of Credit and all letter of credit fees shall continue
to accrue, until the applicable Issuing Lender is released from liability by
every Person which is entitled to draw or demand payment under such Letter of
Credit.

SECTION 3.6.  Representatives of Beneficiaries.  Each Issuing Lender may receive, accept or
pay as complying with the terms of such Letter of Credit, any drafts or other
documents, otherwise in order, which may be signed by, or issued to, the
administrator or executor of, or the trustee in bankruptcy of, or the receiver
for any of the property of, the party in whose name such Letter of Credit
provides that any drafts or other document should be drawn or issued.

SECTION 3.7.  Responsibility of the Administrative Agent, the Issuing
Lenders and the Lenders.  None
of the Administrative Agent, any Issuing Lender or any Lender shall be liable
or responsible for:

(a)           the use which may be made of the
Letters of Credit or for any acts or omissions of the beneficiary(ies) in
connection therewith;

(b)           the validity, sufficiency or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged;

(c)           failure of any draft to bear any
reference or adequate reference to a Letter of Credit, or failure of documents
to accompany any draft at negotiation, or failure of any Person to surrender or
to take up a Letter of Credit or to send forward documents, apart from drafts
required by the terms of the relevant Letter of Credit, each of which
provisions, if contained in such Letter of Credit itself, it is agreed may be
waived by the applicable Issuing Lender;

(d)           errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
wireless, or otherwise, whether or not they may be in cipher; or

(e)           any other circumstances whatsoever in
making or failing to make payment under a Letter of Credit;

except only that the
Borrower shall have a claim against an Issuing Lender, and such Issuing Lender
shall be liable to the Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential, damages suffered by the Borrower which are
determined to be caused by (i) such Issuing Lender’s willful misconduct, bad
faith or gross negligence or (ii) such Issuing Lender’s willful or grossly
negligent failure to pay under the relevant Letter of Credit after the
presentation to such Issuing Lender by the relevant beneficiary of such Letter
of Credit of a sight draft and certificate strictly complying with the terms
and conditions of such Letter of Credit.

 28

The happening of any one
or more of the contingencies referred to in subparagraphs
(a), (b),
(c), (d)
or (e) above shall not affect, impair or
prevent the vesting of any of the rights or powers of the Issuing Lenders, the
Lenders or the Administrative Agent hereunder. 
In furtherance and extension and not in limitation of the specific
provisions hereinbefore set forth, it is hereby further agreed that any action,
inaction or omission taken or suffered by the Administrative Agent, any Issuing
Lender or any Lender, under or in connection with a Letter of Credit or the
relative drafts, documents or assets, if in conformity with such foreign or
domestic laws, customs or regulations as are applicable thereto and without
willful misconduct, bad faith or gross negligence, shall be binding upon the
Borrower and shall not place the Administrative Agent, any Issuing Lender or
any Lender under any resulting liability to the Borrower.  The word “assets” as used in this Section 3.7 includes goods and merchandise, as
well as any and all documents relative thereto, securities, funds, choses in
action, and any and all other forms of property, whether real, personal or
mixed and any right or interest of the Borrower therein or thereto.

SECTION 3.8.  Modifications to Letters of Credit.  In the event of any change or modification
with respect to (a) the amount or duration of any Letter of Credit, (b) the
drawing, negotiation, presentation, acceptance, or maturity of any drafts,
acceptances or other documents, or (c) any of the other terms or provisions of
any Letter of Credit, such being done at the request of the Borrower, this
Agreement shall be binding upon the Borrower in all respects with regard to the
Letter of Credit so changed or modified, inclusive of any action taken by the
applicable Issuing Lender or any Lender with respect to such Letter of Credit.

SECTION 3.9.  Uniform Customs and Practice for Documentary Credits.  Except as otherwise expressly provided in
this Agreement or as the Borrower and the Lenders may otherwise expressly agree
with regard to, and prior to the issuance of, a Letter of Credit, the “Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No.  500,”
as hereafter amended, revised, supplemented, or replaced by other publication
of similar effect, shall in all respects be deemed a part hereof as fully as if
incorporated herein and shall apply to such Letter of Credit.

SECTION 3.10.  Indemnification. 
The Borrower hereby agrees to indemnify and hold harmless the
Administrative Agent, each Issuing Lender and each Lender from and against any
and all claims, damages, losses, liabilities, and reasonable out-of-pocket
costs or expenses whatsoever (in each case, excluding loss of anticipated
profits) which the Administrative Agent, an Issuing Lender or a Lender may
incur (or which may be claimed against the Administrative Agent, an Issuing
Lender or a Lender by any Person) by reason of or in connection with the
execution and delivery or transfer of, or payment or failure to pay under, any
Letter of Credit; provided that the
Borrower shall not be required to indemnify any Issuing Lender for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by the willful misconduct, bad faith or gross negligence of such
Issuing Lender, the Administrative Agent or any Lender.  Nothing in this Section
3.10 is intended to limit the reimbursement obligation of the
Borrower contained in Section 3.5 hereof.

SECTION 3.11.  Transitional Provisions.  The Borrower, Bank of America, N.A., as “Administrative
Agent,” and the Existing Lenders are currently parties to the Existing Credit
Agreement pursuant to which, among other things, Bank of America, N.A., as “Issuing
Lender” 

 29
 

thereunder
issued certain “Letters of Credit” (as defined therein) for the account of the
Borrower (to the extent outstanding on the Closing Date and set forth on  Schedule
II, the “Existing L/C’s”).  Each of the Existing L/C’s shall remain
outstanding and constitute Letters of Credit issued by an Issuing Lender for
the account of the Borrower pursuant to this Agreement on the Closing Date for
all purposes under this Agreement and any other Loan Document, including, for
the purpose of the accrual and payment of Letter of Credit Fees payable
pursuant to Section 3.3 for the remaining
term of such Existing L/C’s (other than for customary processing fees for the
issuance, amendment or renewal of such Existing L/C’s occurring prior to the
Closing Date or relating to the deemed issuance thereof occurring on the
Closing Date).  All “Reimbursement
Obligations” and other “Letter of Credit Obligations” (as respectively defined
in the Existing Credit Agreement) which remain outstanding on the Closing Date
with respect to the Existing L/C’s shall constitute Reimbursement Obligations
and Letter of Credit Obligations of the Borrower under this Agreement and shall
be included in the calculations of Revolving Loan Availability, Letter of
Credit Availability, Swing Line Availability and Financial Letter of Credit
Availability.  Schedule II sets forth, as
of the date hereof, the aggregate outstanding face amount, identifying number,
expiry date and name of the beneficiary, with respect to the Existing L/C’s.

SECTION 3.12.  Supporting L/C
Documents.  The Borrower hereby
agrees to execute and deliver to each Issuing Lender such letter of credit
applications, master letter of credit agreements and other documents as such
Issuing Lender may reasonably request in connection with the Letters of Credit
issued by such Issuing Lender hereunder (each, a “Supporting L/C Document”).  Notwithstanding anything to the contrary
herein, to the extent that the terms of any Supporting L/C Document conflict
with the terms of this Agreement, the terms of this Agreement shall govern.

ARTICLE IV.

CONDITIONS OF LENDING

SECTION 4.1.  Conditions Precedent to Initial Borrowing and Initial
Issuance of Letters of Credit. 
The obligation of each Lender on the Closing Date to make the Loans
requested to be made by it and the agreement of the Issuing Lenders to issue
the initial Letters of Credit to be issued or deemed issued on the Closing Date
shall be subject to the satisfaction of each of the following conditions
precedent set forth in this Section 4.1:

(a)           Delivery of
Documents.  The Administrative
Agent shall have received counterparts of this Agreement and all other
agreements, documents and instruments described in the List of Closing
Documents attached hereto as Schedule III
(including a legal opinion from counsel to the Loan Parties substantially in
the form attached hereto as Exhibit E and
the Loan Parties hereby direct their counsel to prepare and deliver the same to
the Administrative Agent and the Lenders), each duly executed, completed and
acknowledged where appropriate and in form and substance reasonably
satisfactory to the Lenders.

(b)           Financial Statements.  The Administrative Agent shall
have received (i) audited consolidated financial statements for the Borrower
and its Subsidiaries for the Fiscal Years ended December 31, 2004, 2005 and
2006, (ii) unaudited interim consolidated financial statements for the Fiscal
Quarter ended March 31, 2007 and (iii) a pro forma unaudited
consolidated balance sheet of the Borrower and its Subsidiaries based upon the Borrower’s

 30
 

March 31, 2007 consolidated balance sheet
(the “Pro Forma Balance Sheet”), adjusted to give effect to the
Transactions as if such Transactions had occurred on such date, which is
consistent in all material respects with the sources and uses of cash for the
Transactions previously provided to the Administrative Agent by or on behalf of
the Borrower and the forecasts previously provided to the Administrative Agent
by or on behalf of the Borrower.

(c)           Lender Tax
Forms.  The Administrative
Agent shall have received from each Lender required under Section 2.16
to deliver any Withholding Form, two executed copies of the appropriate
Withholding Forms or such other forms or documents (or successor forms or
documents) appropriately completed, as may be applicable to establish the
extent, if any, to which payments to such Lender pursuant to this Agreement are
exempt from withholding or deduction of Taxes imposed by the United States
government.

(d)           Certification
of Pro Forma Financial Tests. 
The Lenders shall have received a certificate of the chief financial
officer of the Borrower certifying on behalf of the Borrower that, after giving
pro forma effect to the Transactions, the other transactions
contemplated hereby (including the initial Loans made hereunder) and the
payment of fees and expenses associated therewith, (i) the Total Leverage Ratio
does not exceed the ratio of 5.00 to 1.0 (with Total Funded Debt determined as
of the Closing Date and Adjusted Consolidated EBITDA determined for the twelve
month period ended March 31, 2007) and (ii) the Interest Coverage Ratio shall
not be less than the ratio of 2.00 to 1.00 (determined for the twelve month
period ended March 31, 2007).

(e)           Lien Search Reports.  The
Administrative Agent shall have received the results of recent tax, judgment
and UCC lien searches in each relevant jurisdiction with respect to the Loan
Parties, and such searches shall reveal no liens on any of the assets of the
Loan Parties except for liens permitted by this Agreement.

(f)            Solvency
Certificate.  The
Administrative Agent shall have received a solvency certificate from the chief
financial officer of the Borrower certifying on behalf of the Borrower that the
Borrower and its Subsidiaries on a consolidated basis, after giving effect to the
Transactions and the other transactions contemplated hereby, are Solvent.

(g)           Other
Documents.  The Administrative
Agent shall have received such other approvals, opinions or documents as the
Administrative Agent or any Lender may reasonably request.

(h)           Representations and Warranties.  The Administrative Agent shall have received
evidence reasonably satisfactory to it that each of the representations and
warranties set forth in Section 5.1(v) are
true and accurate.

(i)            Satisfactory
Legal Form.  All documents
executed or submitted pursuant hereto by or on behalf of the Borrower or any of
its Subsidiaries or any other Loan Party shall be in form and substance
reasonably satisfactory to the Administrative Agent and its counsel; the
Administrative Agent and its counsel shall have received all information,
approvals, opinions, documents or instruments as the Administrative Agent or
its counsel may reasonably request.

 31
 

(j)            Evidence
and Perfection of Liens; Allocation of Collateral.  The Administrative Agent shall have received
(i) such documents, filings, recordings, or searches as the Administrative
Agent may reasonably request to evidence and perfect all Liens granted by the
Collateral Documents and (ii) such other evidence that all other actions,
including, but not limited to, the payment of all filing and recording fees and
taxes, necessary or, in the opinion of the Administrative Agent, desirable to
perfect and protect the priority of the security interests and liens created by
the Collateral Documents, and to enhance the Administrative Agent’s ability to
preserve and protect its interests in and access to the Collateral, have been
taken or arrangements satisfactory to the Administrative Agent are in place
therefor.  The Lenders shall have
received, prior to the date hereof, an appraisal valuation by Merrill Marine of
the assets described in clauses (i) and (ii) of Section
6.1(p) (which appraisal valuation provides that the assets subject
to such appraisal valuation have OLVs in the amounts specified in clauses (i)
and (ii) of Section 6.1(p)) and such additional assets as may be agreed
upon by the parties, and the equipment to be allocated to the collateral
described in such clauses shall have been so allocated in a manner reasonably
agreed by the Administrative Agent.

(k)           Termination
of Existing Credit Facilities. 
The Administrative Agent shall have received evidence satisfactory to
the Administrative Agent that all Debt and all other obligations of the Loan
Parties under the Bareboat Charter Agreement dated as of December 18, 1998, as
amended, between CEF 2002, LLC and Great Lakes, the Equipment Financing Debt
and the Existing Credit Agreement (other than contingent indemnification and
expense reimbursement obligations and obligations with respect to Existing
L/Cs) shall be repaid from the proceeds of the initial Loans hereunder, and all
agreements and instruments evidencing and securing such Debt shall be
terminated.  The Administrative Agent
shall have received evidence satisfactory to it that, if applicable,
arrangements satisfactory to the Administrative Agent have been made for the
termination of Liens and security interests granted in connection with the
Equipment Financing Debt and the Existing Credit Agreement.

(l)            Bonding and
Intercreditor Agreements.  The
Administrative Agent shall have received a fully executed Intercreditor
Agreement which shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders, and a certified copy of the Bonding
Agreement in existence on the Closing Date, which shall be in form and
substance reasonably satisfactory to the Administrative Agent.

(m)          Closing Fees,
Expenses, etc.  The
Administrative Agent shall have received for its own account, or for the
account of each Lender, as the case may be, all fees then earned and due and
payable pursuant to Section 2.14 and all
costs and expenses which have been invoiced and are payable pursuant to Section 9.4.

(n)           Ownership
Structure, etc.  Each of the
Lenders shall be reasonably satisfied with the ownership structure and the
shareholder arrangements of the Borrower and each of the Subsidiary Guarantors,
including, without limitation, the charter and bylaws (or equivalent documents)
of each Loan Party.

(o)           Insurance. 
The Lenders shall be satisfied that the amount, types and terms and
conditions of all insurance maintained by the Borrower and each of the Borrower’s
Subsidiaries shall be substantially similar to each such Person’s existing
insurance and that such 

 32
 

insurance reasonably satisfies the requirements
of Section 6.1.  The Lenders shall have received endorsements
naming the Administrative Agent, on behalf of the Lenders, as additional
insured or loss payee, as the case may be, under all insurance policies to be
maintained with respect to the properties of the Borrower and the Borrower’s
Subsidiaries forming part of the Collateral and all liability policies required
by the Loan Documents.

(p)           Anti-Terrorism
Regulation.  To the extent
requested, the Administrative Agent and Lenders shall have received all
documentation and other information required by bank regulatory authorities
under applicable “Know Your Customer” and anti-money laundering rules and
regulations, including without limitation, the USA Patriot Act.

(q)           Other
Conditions.  The conditions
precedent to each Borrowing as provided in Section 4.2
shall be satisfied on the Closing Date.

SECTION 4.2.  Conditions Precedent to Each Borrowing and Each Issuance of
a Letter of Credit.  The
obligation (a) of each Lender to make its initial Loans and each subsequent
Loan and (b) of each Issuing Lender to issue its initial and each subsequent
Letter of Credit (other than the Existing L/C’s) and the Lenders’ obligations
to participate in such Letters of Credit shall be subject to each of the
following conditions precedent on the date of each such Borrowing or the
issuance of such Letter of Credit:

(a)           the following statements shall be
true and correct (and each of the giving of an applicable Notice of Borrowing,
or a Letter of Credit Request, and the acceptance by the Borrower of the
proceeds of such Loan, or the issuance of such Letter of Credit, shall
constitute a representation and warranty by the Borrower that on the date of
such Loan, or the issuance of such Letter of Credit, such statements set forth
in clauses (i) through (iii) are true):

(i)            The
representations and warranties contained in Section 5.1 and in the other
Loan Documents are true and correct in all material respects on and as of the
date of such Loan or the issuance of such Letter of Credit, as the case may be,
both before and after giving effect to such Loan or the issuance of such Letter
of Credit, and, in the case of any such Loan, to the application of the
proceeds therefrom, as though made on and as of such date except for any representation
or warranty which is specified as being made as of an earlier date, in which
case such representation or warranty shall only speak as to such earlier date;

(ii)           No
event has occurred and is continuing, or would result from such Loan or the
issuance of such Letter of Credit, as the case may be, or, in the case of any
such Loan, from the application of the proceeds therefrom, which constitutes a
Default or an Event of Default; and

(iii)          (A) Loans outstanding plus
Letter of Credit Obligations shall not exceed the Revolving Commitment Amount,
both before and after giving effect to such Loan and/or Letter of Credit, (B)
in the case of the issuance of a Letter of Credit, the Letter of Credit
Obligations shall not exceed the Letter of Credit Availability, both before and
after giving effect to such Letter of Credit and (C) in the case of the
issuance of a Financial Letter of Credit, the Letter of Credit Obligations in
respect of Financial Letters 

 33
 

of Credit shall not exceed the Financial
Letter of Credit Availability, both before and after giving effect to such
Financial Letter of Credit.

(b)           no law or regulation shall prohibit,
and no order, judgment or decree of any Governmental Authority shall enjoin,
prohibit or restrain, such Lender from making the requested Loan, or issuing or
participating in the requested Letter of Credit, as the case may be; and

(c)           In the case of any Revolving Loan or
Letter of Credit to be denominated in an Alternative Currency, there shall not
have occurred any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which in
the reasonable opinion of the Administrative Agent, the Majority Lenders (in
the case of any Revolving Loans to be denominated in an Alternative Currency)
or the applicable Issuing Lender (in the case of any Letter of Credit to be
denominated in an Alternative Currency) would make it impracticable for such
Revolving Loan or Letter of Credit to be denominated in the relevant
Alternative Currency.

SECTION
4.3.  No Waiver.  In no event shall any Lender’s making of any
Loan or issuance of or participation in a Letter of Credit hereunder at a time
when any condition precedent to any Loan or Letter of Credit, as specified in
this Article IV, was not satisfied (a)
constitute a waiver of such condition by such Lender with respect to
subsequently requested Loans or Letters of Credit, or (b) to the extent such
unsatisfied condition constituted a Default or Event of Default, constitute a
waiver by any Lender of such Default or Event of Default.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

SECTION
5.1.  Representations
and Warranties of the Loan Parties. 
In order to induce the Lenders and the Issuing Lenders to enter into
this Agreement, and to make the Loans and issue, maintain and/or participate in
the Letters of Credit, each Loan Party which is a party hereto represents and
warrants to each Lender and each Issuing Lender as of the Closing Date, and
(unless specified to speak only as of a specified date) on and as of the date
of any Loan or the issuance, amendment or extension of any Letter of Credit
that:

(a)           Organization;
Corporate Powers.  Each Loan
Party (i) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization (except to the extent that such
Loan Party’s failure to be in good standing under such laws could not
reasonably be expected to have a Material Adverse Effect and except as
otherwise as a result of a transaction permitted under Section
6.2(a)(i)), (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction in which
such qualification and good standing are necessary in order for it to conduct
its business and own its property as heretofore conducted and owned (except
such jurisdictions where failure to so qualify could not reasonably be expected
to have a Material Adverse Effect), and (iii) has all requisite power to
conduct its business, to own and operate its property and to execute, deliver
and perform all of its obligations under the Loan Documents to which it is a
party.

 34
 

(b)           Authorizations;
Enforceability.  Each Loan
Party has the requisite authority to execute, deliver and perform each of the
Loan Documents executed by it.  Each of
the Loan Documents to which any Loan Party is party has been duly executed and
delivered by such Loan Party and constitutes the legal, valid and binding
obligation of such Loan Party, enforceable against such Loan Party in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and to
general principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.

(c)           No Conflict.  The execution, delivery and/or performance by
each Loan Party of each Loan Document to which it is a party do not and will
not, by the lapse of time, the giving of notice or otherwise, (i) constitute a
violation of any Applicable Law or a breach of any provision contained in such
party’s charter or by-laws or other organizational documents or contained in
any material agreement, instrument or document to which the Borrower or any of
the Borrower’s Subsidiaries is a party or by which it is bound or (ii) result
in or require the creation or imposition of any Lien whatsoever upon any of the
properties or assets of Borrower or any of its Subsidiaries (other than Liens
granted pursuant to the Collateral Documents).

(d)           Approvals.  No approval, consent or authorization of, or
notice to or filing with, any Governmental Authority or any securities exchange
is required in connection with the execution, delivery or performance by any
Loan Party of any of the Loan Documents or the granting of a Lien on any of the
Collateral in the manner and for the purpose contemplated by the Collateral
Documents, except (i) filings and recording to perfect such Liens, (ii) those
obtained on or prior to the Closing Date and (iii) those which, if not
obtained, could not reasonably be expected to have a Material Adverse Effect.

(e)           Licenses and
Permits.  Each of the Borrower
and each of the Borrower’s Subsidiaries owns or possesses or is licensed or
otherwise has the right to use all Permits and other governmental approvals and
authorizations, franchises, authorizations and other rights that are reasonably
necessary for the operations of its business as currently conducted, without,
to the knowledge of Borrower or any of its Subsidiaries, conflict with the
rights of any other Person with respect thereto, except where the failure to be
so licensed or to have such Permits would not have a Material Adverse Effect.

(f)            Financial
Reports.

(i)            The
Pro Forma Balance Sheet, copies of which have heretofore been furnished to each
Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the consummation of the Transactions on the Closing Date, (ii) the
Loans to be made and (iii) the payment of fees and expenses in connection with
the foregoing.  The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof, and presents fairly in all material
respects on a pro  forma
basis the estimated financial position of Borrower and its consolidated Subsidiaries
as at March 31, 2007, assuming that the events specified in the preceding
sentence had actually occurred at such date.

 35
 

(ii)           The
consolidated balance sheets of the Borrower and its Subsidiaries as at December
31, 2004, December 31, 2005, December 31, 2006 and March 31, 2007, and the
related consolidated statements of earnings and cash flows of the Borrower and
its Subsidiaries for the Fiscal Year ended December 31, 2004 and December 31,
2005 and December 31, 2006 and the Fiscal Quarter ended March 31, 2007 copies
of each of which have been furnished to each Lender, fairly present in all
material respects the consolidated financial condition of the Borrower and its
Subsidiaries as at such respective dates and the consolidated results of the
operations of the Borrower and its Subsidiaries for such respective periods
ended on such dates, all in accordance with GAAP, consistently applied; provided that such financial statements delivered
for any period other than a Fiscal Year may lack certain footnote disclosures
which would otherwise be required by GAAP and may be subject to normal year-end
adjustments.  Since December 31, 2006,
there has been no change in any circumstances, facts or conditions nor shall an
event have taken place which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

(g)           Title to
Property; Liens; Vessel Due Documentation

(i)            Each
of the Borrower and each of the Borrower’s Subsidiaries has good and marketable
title to, or a valid leasehold interest in, all of its properties and assets,
real and personal, of any nature whatsoever, free and clear of all Liens,
except for Liens permitted by Section 6.2(h).  The assets and properties owned by and leased
to the Borrower or any of the Borrower’s Subsidiaries which are necessary in
the conduct of their respective businesses are in adequate operating condition
and repair, ordinary wear and tear and damage due to casualty excepted, are
free and clear of any known defects except such defects as do not substantially
interfere with the continued use thereof in the conduct of normal operations,
and are able to serve the function for which they are intended in the conduct
of such Person’s business.

(ii)           As
of the Closing Date and as of the date of each annual delivery of the list of
Designated Vessels pursuant to Section 6.4(g),
the Borrower and the Subsidiary Guarantors are the sole owners of each
Designated Vessel and hold valid legal title to the whole of such Designated
Vessels.  The Borrower and the Subsidiary
Guarantors lawfully own and are lawfully possessed of each Designated Vessel
free from any Lien, charge or encumbrance whatsoever, except as permitted
pursuant to Section 6.2(h) and except to the extent set forth on Schedule 5.1(g), and will warrant and defend the
title and possession thereto and to every part thereof for the benefit of the
Lenders against the material claims and demands of any Person whomsoever.

(h)           No Default.  None of the Borrower or any of the Borrower’s
Subsidiaries is in violation of any Applicable Law, or in default under any
agreement or instrument to which any of such Persons is a party or by which any
of their respective properties or assets is bound or affected, which violation
or default could reasonably be expected to have a Material Adverse Effect.  No Event of Default or Default has occurred
and is continuing.

(i)            Litigation;
Contingent Liabilities; Labor Matters.

 36

(i)            Except
as set forth in Schedule 5.1(i) or in the
financial statements described in Section 5.1(f),
no claims, litigation, arbitration proceedings or governmental proceedings are
pending or, to the knowledge of the Loan Parties, overtly threatened against
or, to the knowledge of the Loan Parties, are affecting the Borrower or any of
the Borrower’s Subsidiaries, or any of their respective properties, assets or
revenues, the results of which could reasonably be expected to have a Material
Adverse Effect.

(ii)           Other
than any liability incident to the claims, litigation or proceedings disclosed
in Schedule 5.1(i), or provided for or
disclosed in the financial statements referred to in Section
5.1(f), as of the Closing Date, none of the Borrower or any of the Borrower’s
Subsidiaries has any contingent liabilities which could reasonably be expected
to have a Material Adverse Effect.

(j)            Patents,
Trademarks and Licenses.  The
Borrower and each of the Borrower’s Subsidiaries owns or possesses all the
licenses, patents, copyrights, trademarks, service marks, trade names, and
other similar property rights which are reasonably necessary for the present
conduct of its business, without, to the knowledge of Borrower or any of its
Subsidiaries, conflict with the rights of any other Person with respect
thereto, except where the failure to own or possess such property, or the
existence of any such conflict, could not reasonably be expected to have a
Material Adverse Effect.

(k)           ERISA.  As
to each Plan which is not a Multiemployer Plan and which is intended to be
qualified under Section 401(a) of the IRC as currently in effect, either (i)
such Plan has been determined by the IRS to be so qualified, and each trust
related to such Plan has been determined to be exempt from federal income
taxation under Section 501(a) of the IRC as currently in effect, (ii) an
application for a determination for such Plan has been filed and is now pending
with the IRS, or (iii) the failure of such Plan to be so qualified or
determined to be exempt could not reasonably be expected to have a Material
Adverse Effect.  As of the Closing Date,
except as disclosed on Schedule 5.1(k),
none of the Borrower or any of the Borrower’s Subsidiaries maintains or
contributes to any employee welfare benefit plan within the meaning of Section
3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA.  None of the Borrower, or any of the Borrower’s
Subsidiaries or any ERISA Affiliate has failed to comply with any of the
responsibilities, obligations or duties imposed on it by ERISA or regulations
promulgated thereunder with respect to any Plan which failure could reasonably
be expected to have a Material Adverse Effect. 
No Plan has incurred any accumulated funding deficiency (as defined in
Sections 302(a)(2) of ERISA and 412(a) of the IRC) whether or not waived.  Except as disclosed on Schedule
5.1(k), none of the Borrower, or any of its Subsidiaries or any
ERISA Affiliate nor to the knowledge of the Loan Parties any fiduciary of any
Plan which is not a Multiemployer Plan (i) has engaged in a nonexempt
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
IRC which could reasonably be expected to have a Material Adverse Effect or
(ii) has taken or failed to take with respect to any Plan any action which
would constitute or result in a Termination Event.  None of the Borrower or any of the Borrower’s
Subsidiaries or any ERISA Affiliate has incurred any potential liability under
Section 4063, 4064, 4069, 4204 or 4212(c) of ERISA.  None of the Borrower or any of the Borrower’s
Subsidiaries or any ERISA Affiliate has incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there are no
premium payments which 

 37
 

have become due which are unpaid.  Except as disclosed on Schedule
5.1(k), none of the Borrower or any of the Borrower’s Subsidiaries
or any ERISA Affiliate has (i) failed to make a required contribution or
payment to a Multiemployer Plan or (ii) made a complete or partial withdrawal
under Sections 4203 or 4205 of ERISA from a Multiemployer Plan.  None of the Borrower or any of its
Subsidiaries or any ERISA Affiliate has failed to make a required installment
or any other required payment under Section 412 of the IRC on or before the due
date for such installment or other payment. 
None of the Borrower or any of the Borrower’s Subsidiaries or any ERISA
Affiliate is required to provide security to a Plan under Section 401(a)(29) of
the IRC due to a Plan amendment that results in an increase in current
liability for the plan year.

(l)            Environmental
Matters.

(i)            Except
as specifically disclosed in Schedule 5.1(l),
the ongoing operations of the Borrower and each of the Borrower’s Subsidiaries
have complied and currently comply in all respects with all Environmental Laws,
except to the extent that such noncompliance could not reasonably be expected
to have a Material Adverse Effect.

(ii)           Except
as specifically disclosed in Schedule 5.1(1),
each of the Borrower and each of the Borrower’s Subsidiaries has obtained all
Permits required under any Environmental Law (“Environmental
Permits”) and necessary for its ordinary course operations, all such
Environmental Permits have been and are currently in good standing in all
respects, and the Borrower and each of the Borrower’s Subsidiaries is and has
been in compliance with all terms and conditions of each such Environmental
Permit, except in each case, where the failure to obtain, remain in good standing,
or otherwise be in compliance with, such Environmental Permit could not
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect.

(iii)          None
of the Borrower or any of the Borrower’s Subsidiaries or any of their respective
present or to the Loan Parties’ knowledge, former Property or operations is
subject to any outstanding written order from or agreement with any
Governmental Authority nor subject to any pending or, to any Loan Party’s
knowledge threatened, claim or  proceeding under Environmental Laws, nor has
been notified that it is a potentially responsible party, respecting any
Environmental Law, Environmental Claim or Hazardous Material which, in any such
case, could reasonably be expected to have a Material Adverse Effect.

(iv)          As
of the Closing Date, except as specifically disclosed in Schedule
5.1(l), none of the Borrower or any of the Borrower’s Subsidiaries
or any of their respective present or to the Loan Parties’ knowledge, former
Property or operations is subject to any outstanding written order from or
agreement with any Governmental Authority nor subject to any pending or, to any
Loan Party’s knowledge threatened, claim or 
proceeding under Environmental Laws, nor has been notified that it is a
potentially responsible party, respecting any Environmental Law, Environmental
Claim or Hazardous Material which, in any such case, could reasonably be
expected to result in liabilities or expenses of the Borrower or any of the
Borrower’s Subsidiaries in excess of $3,000,000.

 38
 

(v)           Except
as specifically disclosed in Schedule 5.1(l),
there are no Hazardous Materials or other conditions or circumstances existing
with respect to any current or, to the knowledge of any Loan Party, former
Property, or arising from operations prior to the Closing Date, of the Borrower
or any of the Borrower’s Subsidiaries that could reasonably be expected to give
rise to Environmental Claims which would have a Material Adverse Effect.  To the best knowledge of the Loan Parties, as
of the Closing Date, none of the Borrower or any of the Borrower’s Subsidiaries
has any underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, (y) that are not in compliance
with any Environmental Permits or Environmental Laws, or (z) with respect to
which a Release has occurred, on or off-site. 
The Borrower and each of the Borrower’s Subsidiaries has notified all of
its employees of the existence, if any, of any health hazard arising from the
conditions of their employment of which the Loan Parties have knowledge in a
manner consistent with all applicable laws and have met all notification
requirements under Title III of CERCLA and all other Environmental Laws except
where a failure to so notify such employees could not reasonably be expected to
have a Material Adverse Effect.

(vi)          To
the best knowledge of the Loan Parties, except as specifically disclosed in Schedule 5.1(l), as of the Closing Date, none of
the Properties has at any time been operated as a treatment, storage or
disposal facility.

(vii)         To
the best knowledge of the Loan Parties, except as set forth in Schedule 5.1(l), none of the Borrower or any of
the Borrower’s Subsidiaries has any contingent liability in connection with (1)
any actual, threatened, or potential Release into the environment of, or
otherwise with respect to, any Hazardous Material or other hazardous, toxic or
dangerous waste, substance or constituent, or other substance, whether on any
premises now or previously owned or occupied by the Borrower or any of the
Borrower’s Subsidiaries or on any other premises or from any vessel or vehicle
owned, operated or leased by the Borrower or any of Borrower’s Subsidiaries
that could reasonably be expected to have a Material Adverse Effect or (2) any
other unsafe or unhealthful condition that could reasonably be expected to have
a Material Adverse Effect.

(m)          Payment of
Taxes.  The Borrower and each
of the Borrower’s Subsidiaries have filed all federal income and other federal,
state and local tax returns and other reports as required by law, and have paid
all taxes and other similar charges (including employment taxes) that are due
and payable, after giving effect to any extensions therefor, except (i) such
taxes, if any, that are being contested in good faith by appropriate
proceedings and have been adequately reserved against in accordance with GAAP
or (ii) any such returns, taxes, or charges the nonfiling or nonpayment of
which could not be reasonably expected to have a Material Adverse Effect.  None of the Loan Parties has any knowledge of
any proposed tax assessment against any of them or against any Subsidiaries of
the Borrower not constituting Loan Parties for which adequate provision has not
been made on its accounts.  The
provisions for taxes on the books of the Borrower and each of the Borrower’s  Subsidiaries are adequate for all open years,
and for its current fiscal period.

 39
 

(n)           Fiscal Year.  The Borrower and each of the other Loan
Parties has established a Fiscal Year ending on December 31 each year.

(o)           Governmental
Regulation.  None of the Loan
Parties is subject to regulation under the Interstate Commerce Act, the
Investment Company Act of 1940, the Federal Power Act or any other Applicable
Law that restricts such Loan Party’s ability to incur debt, guaranty
obligations or grant Liens, except to the extent that such regulation could not
reasonably be expected to have a Material Adverse Effect.

(p)           Margin
Regulations.  None of the
Borrower or any of the Borrower’s Subsidiaries is engaged, principally or as
one of its important activities, in the business of extending credit for the
purpose of “purchasing” or “carrying” any “margin stock” (as each of the quoted
terms is defined or used in Regulation T, U or X of the Board of Governors of
the Federal Reserve System as in effect from time to time).  No part of the proceeds of any of the Loans
and no Letter of Credit has been used for so purchasing or carrying margin
stock or for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X.

(q)           Other Loan
Documents.  The
representations and warranties made by each Loan Party contained in each Loan
Document are true and correct in all material respects.

(r)            Corporate
Structure; Capitalization; Citizenship.  As of the Closing Date, a complete and
correct disclosure of each Subsidiary of the Borrower in existence as of the
Closing Date is set forth in Schedule 5.1(r)(i),
together with the names, jurisdictions of organization, and the percentage of shares
of such Persons owned by the Borrower and each Subsidiary of the Borrower as of
the Closing Date.  As of the Closing
Date, the names and ownership percentages (stated both on an outstanding and
fully-diluted basis) of each legal, record owner of each class of the issued
and outstanding shares of Capital Stock of each Subsidiary of the Borrower, and
of all issued and outstanding warrants, options, stock appreciation rights and
other convertible interests with respect to such Subsidiary’s Capital Stock,
are completely and accurately set forth in Schedule
5.1(r)(ii).  As of the Closing
Date, the issued and outstanding shares of Capital Stock of the Borrower and
each Subsidiary of the Borrower have been validly issued, are fully paid and
nonassessable and the issued and outstanding shares of Capital Stock of each
Subsidiary of the Borrower are owned directly or indirectly by the Borrower or
the other applicable Persons as described in Schedule
5.1(r)(i), free and clear of all Liens (other than Liens permitted
hereunder).  No shares of Capital Stock
of such Subsidiary are held as or otherwise constitute treasury stock.  As of the Closing Date, no authorized but
unissued shares of Capital Stock of any Subsidiary of the Borrower are subject
to any option, warrant, right to call, preemptive right or other commitment of
any kind whatsoever.  Each of the Borrower and Great Lakes is a
citizen of the United States within the meaning of Section 2 of the Shipping
Act of 1916, as amended, and pursuant to 46 U.S.C. Section 12103(b) and 46
U.S.C. Section 50501, as amended, and is entitled to own, document and operate
vessels in the coastwise trade under the laws of the United States.

(s)           Debt; Contingent Obligations; Solvency.  As of the Closing Date, the financial statements
referred to in Section 5.1(f) contain a
complete and accurate disclosure in all material respects of (i) all Debt of
Borrower and its Subsidiaries outstanding as of the respective 

 40
 

dates of such financial statements and (ii)
all material loss contingencies and other material contingent obligations of
Borrower and its Subsidiaries as of such dates, except for Guaranties disclosed
on Schedule 6.2(f).  As of the Closing Date, none of the Borrower
or any of the Borrower’s Subsidiaries has incurred any other Debt or Guaranties
since the respective dates of such financial statements, except as would have
been permitted under Sections 6.2(f) and 6.2(i) of this Agreement had this Agreement been
in effect at the time of the incurrence of any such additional Debt or
Guaranties.  As of the Closing Date, none
of the Borrower or any of its Subsidiaries has incurred any loss contingencies
or other contingent obligations since the respective dates of such financial
statements which could reasonably be expected to have a Material Adverse
Effect.  The Borrower and the other Loan
Parties, on a consolidated basis, are Solvent prior to, and on the date of each
Borrowing or Issuance of a Letter of Credit, after giving effect to the consummation
of the Transactions, including the Loans made, or to be made, and Letters of
Credit issued, or to be issued, to the Borrower.

(t)            Insurance.  As of the Closing Date, Schedule 5.1(t) sets forth a complete and
accurate list in all material respects of insurance policies and programs in effect
with respect to the properties and businesses of the Borrower and each of the
Borrower’s Subsidiaries, specifying for each such policy and program, (i) the
amount thereof, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder and (iv) the policy or other
identification number thereof.  Such
insurance policies and programs are in such forms and amounts, and provide
coverage against such risks as are required by Section
6.1(c) and are customary for corporations
of established reputation engaged in the same or a similar business and owning
and operating similar properties.

(u)           Collateral
Documents.  The provisions of
the Collateral Documents executed by any Loan Party in favor of the
Administrative Agent evidence legal, valid, enforceable and continuing Liens,
in favor of the Administrative Agent for the benefit of the Secured Parties, in
all right, title and interest of such Loan Party in any and all of the
Collateral described therein, securing the Obligations from time to time
outstanding, and upon all proper filings and recordings being duly made in the
locations referred to in the applicable Collateral Documents or the taking of
possession of the Collateral by the Administrative Agent in accordance with the
provisions of such Collateral Documents, each of such Liens created pursuant to
the Collateral Documents constitutes a fully perfected first or second priority
Lien in all right, title and interest of such Loan Party in such Collateral
superior in right to any Liens (other than the Liens of Travelers), existing or
future, which such Loan Party or any creditors thereof or purchasers therefrom,
or any other Person, may have against such Collateral or interests therein,
except for Liens permitted by Section 6.2(h).  Each Ship Mortgage on United States flag
vessels will constitute as of the date and time of filing with the NVDC a
preferred mortgage pursuant to § 31322(a) of Title 46 of the United States
Code.  Each Ship Mortgage on Republic of
the Marshall Islands flag vessels will constitute as of the date and time of
filing with the Maritime Administrator of the Republic of the Marshall Islands
a preferred mortgage pursuant to the Republic of the Marshall Islands Preferred
Ship Mortgage and Maritime Liens Act, codified at § 303 of the Republic of the
Marshall Islands Maritime Act, 1990, as amended, and also pursuant to
§31301(6)(B) of Title 46 of the United States Code.

(v)           The
Transactions.  (i) All
governmental and material third party approvals necessary in connection with
the Transactions have been obtained and are in full force and effect, 

 41
 

and all applicable waiting periods have
expired without any action being taken or threatened by any Governmental
Authority which would restrain, prevent or otherwise impose materially adverse
conditions on any of the Transactions and (ii) no actions, suits or proceedings
are pending or threatened with respect to any of the Transactions or any Loan
Document which the Administrative Agent or the Majority Lenders shall reasonably
determine could reasonably be expected to have a Material Adverse Effect.

(w)          Accuracy of
Information.  The schedules,
certificates and other written statements and information furnished to the
Administrative Agent, the Issuing Lenders and the Lenders by or on behalf of
any Loan Party in connection with the negotiation of this Agreement and the
other Loan Documents do not contain any material misstatement of material fact
or omit to state a material fact or any fact necessary to make the material statements
contained therein not misleading in any material respect in light of the
circumstances under which such information was provided as of the time when
delivered.  As of the Closing Date, there
is no fact currently known to any Loan Party which now or in the future could
reasonably be expected to have a Material Adverse Effect and which has not been
set forth or referred to in this Agreement, the other Loan Documents, or such
schedules, certificates, statements or information heretofore furnished to the
Administrative Agent.

(x)            Obligations
and Guaranties “Senior Debt” under Note Indenture.  The Obligations and the Guaranties constitute
“Senior Debt” as defined in the Note Indenture.

ARTICLE VI.

COVENANTS

SECTION 6.1.  Affirmative Covenants.  Each Loan Party which is a party hereto
covenants and agrees that so long as any of the Lenders shall have any
Commitment hereunder, there shall exist any outstanding Loans, any Letter of
Credit shall remain outstanding, or any other Obligations (other than contingent
obligations hereunder for which no claim has been, or is reasonably expected to
be, made) shall remain outstanding:

(a)           Corporate
Existence.  Except as
otherwise permitted under Sections 6.2(a)(i) and 6.2(g), the
Borrower and each of the Borrower’s Subsidiaries shall maintain its corporate
existence, qualification and good standing in all jurisdictions in which such
qualification and good standing are necessary in order for each such Person to
conduct its business and own its property as presently conducted and owned in
such jurisdictions (except in such jurisdictions where the failure to remain so
qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect) and the Borrower and each of the Borrower’s
Subsidiaries shall maintain all rights, privileges, licenses, patents, patent
rights, copyrights, trademarks, trade names, trade styles, franchises and other
authority for the conduct of its respective business in the ordinary course as
conducted from time to time, except to the extent that the failure to maintain
such rights, privileges, licenses, patents, patent rights, copyrights,
trademarks, trade names, trade styles, franchises and other authority would not
be reasonably expected to have a Material Adverse Effect.  The Borrower will remain a citizen of the United States as set forth in
Section 2 of the Shipping Act, 1916, as amended, qualified to engage in the
U.S. coastwise trade.

 42
 

(b)           Compliance
with Laws.  The Borrower and
each of the Borrower’s Subsidiaries shall (i) comply with all Applicable Laws
(including without limitation Section 409(P) of the IRC) applicable to such
Person (except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect) and, without limiting the generality of the
foregoing, (x) ensure, and cause each Subsidiary to ensure, that no person who
owns a controlling interest in or otherwise controls the Borrower or any
Subsidiary is or shall be (i) listed on the Specially Designated Nationals and
Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”),
Department of the Treasury, and/or any other similar lists maintained by OFAC
pursuant to any authorizing statute, Executive Order or regulation or (ii) a
person designated under Section 1(b), (c) or (d) of Executive Order No. 13224
(September 23, 2001), any related enabling legislation or any other similar
Executive Orders,  and (y) comply, and
cause each Subsidiary to comply, in all material respects with all applicable
Bank Secrecy Act and anti-money laundering laws and regulations and (ii) obtain
as needed, and maintain in good standing, all Permits and other governmental
approvals and authorizations necessary for its operations (except where the
failure to obtain or maintain such Permits and approvals could not reasonably
be expected to have a Material Adverse Effect).

(c)           Maintenance
of Properties; Insurance.

(i)            The
Borrower and each of the Borrower’s Subsidiaries shall (A) obtain the consent
or approval of any Person whose consent or approval is required in order for
the Borrower or such Subsidiary to grant or keep effective Liens to or for the
benefit of the Administrative Agent in any property of the Borrower or such
Subsidiary intended to secure the Obligations; and (B) maintain in good repair,
working order and condition, excepting ordinary wear and tear and damage due to
casualty, all of its material properties which are used in the conduct of its
business (whether owned or leased by such party) and make or cause to be made all
appropriate repairs, renewals and replacements thereof, in each case consistent
with sound business practices; provided
that such obligation shall not apply to property that the Borrower or such
Subsidiary reasonably determines in good faith that maintenance thereof is no
longer economically desirable.

(ii)           The
Borrower and each of the Borrower’s Subsidiaries shall maintain the following
insurance policies and programs:

(A)          physical damage insurance on all
material real and personal property (including inventory) covering (1) for all
open and operating facilities, repair and replacement cost of all such property
and (2) for all closed, inactive vacant facilities, the actual cash value of
such facilities;

(B)           general liability insurance
(including products and completed operations liability coverage) in an
aggregate amount of not less than $65,000,000;

(C)           Longshoremen and Harbor Workers
insurance per statutory limits;

 

 43

(D)          hull and machinery insurance in an
aggregate amount of not less than $200,000,000;

(E)           protection and indemnity, including
Masters and Members of Crew insurance in an aggregate amount of not less than
$75,000,000;

(F)           Workers compensation insurance per
statutory limits;

(G)           Wrongful draw insurance with respect
to each Letter of Credit having an aggregate Dollar Equivalent face amount in
excess of $10,000,000 and supporting contracts to be performed in a country
other than the United States or for a beneficiary in a country other than the
United States in an amount equal to such excess, unless (1) the Borrower shall
have notified the Administrative Agent that it has determined, in good faith,
that such insurance with respect to such Letter of Credit is not available at a
reasonable economic cost or not available from a reputable insurer and (2) the
Administrative Agent shall have concurred with such conclusion in writing
(which concurrence shall not be unreasonably withheld or delayed);

(H)          insurance to protect against asset
seizure with respect to each contract to be performed by the Borrower or its
Subsidiaries in a country outside of the United States, in an amount equal to
the aggregate fair market value of the assets used by the Borrower and its Subsidiaries
in fulfilling their respective obligations under such contract unless (1) the
Borrower shall have notified the Administrative Agent that it has determined,
in good faith, that such insurance with respect to such contract is not
available at a reasonable economic cost or not available from a reputable
insurer, or the property to be used in connection with such contract is not
subject to a material risk of asset seizure in such country and (2) the
Administrative Agent shall have concurred with such conclusion in writing
(which concurrence shall not be unreasonably withheld or delayed);

(I)            contractors pollution liability
coverage of not less than $5,000,000; and

(J)            such other additional insurance
coverage and with respect to such risks as is customary for businesses similar
to that of the Borrower and its Subsidiaries.

All such insurance shall
be provided by (x) the insurers listed on Schedule
5.1(t), (y) insurers that have an A.M. Best policy-holders rating of
not less than A, or if no such rating is applicable, having a credit quality
comparable to those rated A or better, or (z) such other insurers as the
Administrative Agent may approve reasonably in writing, and shall contain
endorsements, in form and substance reasonably satisfactory to the Administrative
Agent, naming the Administrative Agent as a loss payee with respect to each
casualty insurance policy which insures any Collateral (and loss payee in the
event of a casualty that constitutes a total loss) and as an additional insured
with respect to each liability insurance policy.

 44
 

(iii)          The Borrower shall
deliver or cause to be delivered to the Administrative Agent, on or before the
Closing Date, copies of certificates of insurance with respect to each of the
Borrower’s and its Subsidiaries’ policies of insurance described in Section 6.1(c), as in effect on the Closing
Date.  In addition, the Borrower shall
deliver to the Administrative Agent prompt written notice of any cancellation
or reduction in the amount or coverage of any of the insurance policies
required by this Section 6.1(c) and, in the
event any new or substitute policies shall be issued, the Borrower shall
promptly request its insurers (or their agents) to deliver certificates
evidencing such new or substitute insurance to the Administrative Agent.

(d)           Notice of Litigation.  The Borrower shall deliver or cause to be
delivered to the Administrative Agent, promptly following the occurrence and
the Borrower acquiring knowledge thereof, notice of any of the following
events:  (i) the institution of, or
threat in writing of, any action, suit, proceeding, governmental investigation
or arbitration against or affecting the Borrower or any of the Borrower’s
Subsidiaries, which (A) could reasonably be expected to have a Material Adverse
Effect or (B) relates to any Loan Document, (ii) any development in any action,
suit, proceeding, governmental investigation or arbitration already disclosed
which could reasonably be expected to have a Material Adverse Effect and (iii)
any judgment (or judgments) or money judgment (or judgments), writ or warrant
of attachment, or similar process involving in excess of $15,000,000 (or
$6,000,000 in the aggregate to the extent not covered by insurance which is
confirmed in writing by the insurers or agents of the Borrower or any of the
Borrower’s Subsidiaries as covering such judgment or process) in the aggregate
being entered or filed against any of the Loan Parties or any of their
respective assets.

(e)           Taxes; Claims. 
The Borrower and each of the Borrower’s Subsidiaries shall (i) promptly
file all material federal, state and local tax returns and other reports which
such Person is required by law to file, (ii) maintain adequate reserves for the
payment of all material taxes, assessments, governmental charges, and other
similar charges, and pay promptly, when due, all such taxes, assessments, and
other charges (including employment taxes) in such manner as will not give rise
to any Lien other than Customary Permitted Liens, (iii) promptly pay all other
Claims (including claims for labor, services, materials and supplies) that have
become due and payable and that by law have or may give rise to a Lien on such
Person’s property or assets, prior to the time when any penalty or fine may be
incurred with respect thereto and otherwise in such manner as will not give
rise to any Lien other than Customary Permitted Liens, and (iv) pay all trade
accounts payable in accordance with customary business terms; provided that none of the Borrower or any of the
Borrower’s Subsidiaries shall be required to pay any such tax, assessment,
charge, claim or account which (x) (1) is being contested in good faith by
appropriate proceedings which will prevent the forfeiture or sale of any
Property or any material interference with the use thereof by such Person, and
(2) has been adequately reserved against in accordance with GAAP or (y) if not
so paid, could not reasonably be expected to have a Material Adverse Effect.

(f)            ERISA Notices. 
The Borrower shall deliver or cause to be delivered to the Administrative
Agent, at the Borrower’s expense, the following information and notices:

(i)            within ten (10)
Business Days after any of the Borrower, any of the Borrower’s Subsidiaries or
any ERISA Affiliate knows that a Termination Event has 

 45
 

occurred, a written
statement of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or any of its
Subsidiaries or ERISA Affiliate has taken, is taking or proposes to take with
respect thereto, and when known, any action taken or threatened by the IRS, DOL
or PBGC with respect thereto;

(ii)           within ten (10)
Business Days after any of the Borrower, any of the Borrower’s Subsidiaries or
any ERISA Affiliate knows that a prohibited transaction (defined in Sections
406 of ERISA and 4975 of the IRC) has occurred which could reasonably be
expected to result in liabilities to the Borrower or any of the Borrower’s
Subsidiaries in excess of $3,000,000, a statement of the chief financial
officer of the Borrower describing such transaction and the action which
Borrower and its Subsidiaries or ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;

(iii)          within ten (10)
Business Days after the filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Plan and all communications received by the
Borrower or any of the Borrower’s Subsidiaries or any ERISA Affiliate with
respect to such request;

(iv)          within ten (10)
Business Days after receipt by the Borrower or any of the Borrower’s
Subsidiaries or any ERISA Affiliate of the PBGC’s intention to terminate a Plan
or to have a trustee appointed to administer a Plan in either case in a
distress termination under Section 4041(c) of ERISA, copies of each such
notice;

(v)           within ten (10)
Business Days after receipt by Borrower or any of the Borrower’s Subsidiaries
or any ERISA Affiliate of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the IRC which
could reasonably be expected to result in liabilities to the Borrower or any of
the Borrower’s Subsidiaries in excess of $3,000,000, copies of each such
letter;

(vi)          within ten (10)
Business Days after the receipt by the Borrower or any of the Borrower’s
Subsidiaries or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability which could reasonably be
expected to result in liabilities to the Borrower or any of its Subsidiaries in
excess of $3,000,000, copies of each such notice;

(vii)         within ten (10)
Business Days after Borrower, or any of its Subsidiaries or any ERISA Affiliate
fails to make a required installment or any other required payment under
Section 412 of the IRC on or before the due date for such installment or
payment which could reasonably be expected to result in the imposition of a
Lien under Section 412(n) of the IRC, a notification of such failure; and

(viii)        within ten (10)
Business Days after the Borrower or any of its Subsidiaries or any ERISA Affiliate
knows (A) a Multiemployer Plan has been terminated, (B) the administrator or
plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (C) the PBGC has instituted or will institute proceedings under Section 4042
of ERISA to terminate a Multiemployer Plan which, in 

 46
 

any such case,
could reasonably be expected to result in liabilities to the Borrower and its
Subsidiaries in excess of $3,000,000, a notification of such event or fact.

For purposes of this Section 6.1(f), any Loan Party and any ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which such Loan Party or such ERISA Affiliate is the plan sponsor.

(g)           ERISA Compliance. 
The Borrower shall, and shall cause each of the Borrower’s Subsidiaries
and each other ERISA Affiliate to, establish, maintain and operate all Plans to
comply in all respects with the provisions of ERISA, IRC, and all other
applicable laws, and the regulations and interpretations thereunder except to
the extent such noncompliance could not reasonably be expected to have a
Material Adverse Effect.

(h)           Patents, Trademarks and Licenses.  The Borrower shall, and shall cause each of
the Borrower’s Subsidiaries to, obtain and maintain adequate licenses, patents,
copyrights, trademarks, service marks, trade names, and other similar property
rights to conduct its business as currently conducted, except where the failure
to obtain or maintain such property rights could not reasonably be expected to
have a Material Adverse Effect.

(i)            Notice of Labor Disputes.  The Borrower shall notify the Administrative
Agent as soon as possible and in any event within three (3) days, following (A)
the Borrower’s learning of any labor dispute to which the Borrower or any of
the Borrower’s Subsidiaries is likely to become a party, any strikes or
walkouts, or threatened strikes or walkouts, relating to any of its plants or
other facilities, and (B) the expiration or termination of any labor contract
to which the Borrower or any of the Borrower’s Subsidiaries is a party or by
which the Borrower or any of the Borrower’s Subsidiaries is bound (other than
an expiration or termination of a labor contract which has been replaced by a
new labor contract or an extension of an existing labor contract), which, in
any case under clause (A) or (B) hereof, could reasonably be expected to have
a Material Adverse Effect.

(j)            Notice of Default.  The Borrower shall promptly notify the
Administrative Agent, (i) of any condition or event that constitutes a Default
or an Event of Default and (ii) of any other default under any contractual
obligation to which the Borrower or any of the Borrower’s Subsidiaries is a
party or by which any of them or their respective properties may be bound
(which default could reasonably be expected to have a Material Adverse Effect),
such notice to specify the nature and period of existence of any such
condition, event, or default and what action the Borrower or such Subsidiary,
as applicable, has taken, is taking or proposes to take with respect thereto.

(k)           Environmental
Notices.  The Borrower shall notify
the Administrative Agent in writing no later than ten (10) Business Days after
becoming aware of any of the following which could reasonably be expected to
result in liabilities or expenses of the Borrower or any of the Borrower’s
Subsidiaries in excess of $3,000,000: 
(i) any and all enforcement, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the Borrower or
any of its Subsidiaries or any of their respective current or former Properties
pursuant to any applicable Environmental Laws; (ii) all other Environmental
Claims; (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of 

 47
 

the Property of the Borrower or any of the Borrower’s Subsidiaries that
could reasonably be expected to cause such Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws; (iv) new and material changes to
any existing Environmental Law; and (v) any filing or report made by the
Borrower or any of its Subsidiaries with any Governmental Authority with
respect to (A) the violation of any Environmental Law, (B) any unpermitted
Release or threatened Release of a Contaminant that is reportable under 40
C.F.R.  302 or (C) any unsafe or
unhealthful condition at any Property of the Borrower or any of its
Subsidiaries.

(l)            Environmental
Laws.

(i)            The Borrower shall,
and shall cause each of the Borrower’s Subsidiaries to, conduct its operations
and keep and maintain its Property in compliance with all Environmental Laws,
and will obtain, maintain in good order, and comply in all material respects
with, all Environmental Permits and registrations, except to the extent any
such noncompliance, or failure to obtain, or maintain such Environmental
Permits or registrations, could not reasonably be expected to have a Material
Adverse Effect.

(ii)           Upon the written
request of the Administrative Agent, the Loan Parties shall submit to the
Administrative Agent with sufficient copies for each Lender, at the Loan
Parties’ sole cost and expense, at reasonable intervals, a report providing an
update of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant to Section 6.1(k), that could, individually or in
the aggregate, result in liability in excess of $3,000,000.

(m)          Books, Records and Inspections.  The Borrower and each of the Borrower’s
Subsidiaries shall keep books of record and account (including records relating
to the Collateral) which accurately reflect all of its business affairs and
transactions in relation to its business and activities in all material respects.  The Borrower and each of the Borrower’s
Subsidiaries shall permit officers and designated representatives of the
Administrative Agent and, if accompanied by the Administrative Agent, each
Lender, to visit and inspect any of the properties and operations of the
Borrower and each of the Borrower’s Subsidiaries and to conduct field
examinations, and to examine the books of account and other documents of the
Borrower and each of the Borrower’s Subsidiaries and (at the expense of the
Loan Parties) make copies thereof and discuss the affairs, finances and
accounts of the Borrower and the Borrower’s Subsidiaries with, and be advised
as to the same by, its and their officers and to interview any of the
employees, representatives or agents of the Borrower and the Borrower’s
Subsidiaries regarding environmental compliance, hazard or liability, and its
independent auditors, and each Loan Party hereby authorizes its independent
auditors to discuss such financial matters with the Administrative Agent or any
representative thereof, in each such case, at such reasonable times and
intervals, so long as no Event of Default is continuing upon reasonable prior
written notice, during regular business hours, and to such reasonable extent as
the Administrative Agent may desire (but, so long as no Event of Default is
continuing, with the Borrower in attendance for such discussions); provided,
however, that, following the occurrence and during the continuation of an Event
of Default, the rights of the Administrative Agent and the Lenders may be
exercised at any time, with any frequency upon reasonable notice.  Unless an Event of Default shall have
occurred and be continuing, the Loan Parties shall only be obligated to pay the
fees and expenses 

 48
 

of the Administrative Agent and its auditors in respect of one visit
and inspection (which includes a field examination) in any calendar year,
commencing with calendar year 2008.

(n)           Bonding Agreement.  The Borrower will take all action necessary
to maintain the Bonding Agreement in full force and effect and will promptly
notify the Administrative Agent of any supplement, replacement or amendment
thereof.

(o)           Foreign Exchange Hedging.  Prior to the Borrower or any of the Borrower’s
Subsidiaries entering into any contract or series of contracts under which the
amounts payable to it are payable in whole or in part in the currency of any
country other than the United States (a “Foreign
Currency Contract”) and the amount payable thereunder, when
aggregated with the amounts payable under all other Foreign Currency Contracts
for such country, exceeds $20,000,000 (on a Dollar Equivalent basis), net of
the amounts thereafter payable by the Borrower and its Subsidiaries in the
currency of such country (on a Dollar Equivalent basis) for related services or
products, whether under subcontracts or otherwise, as estimated by the Borrower
in good faith, and if foreign exchange hedging arrangements are available from
a reputable financial institution or through a contract traded on a reputable
exchange at a reasonable economic cost, the Borrower or such Subsidiary shall,
if the Borrower determines in its good faith judgement in consultation with the
Administrative Agent that entering into a foreign currency arrangement is
necessary to protect it against foreign currency fluctuations, obtain foreign
currency hedging arrangements with respect to the amounts payable under all
such Foreign Currency Contracts involving such country.  For purposes of this Section
6.1(o), a foreign exchange hedging arrangement with respect to any
currency shall be presumed to be available from a reputable financial
institution or through a contract traded on a reputable exchange at a
reasonable economic cost, unless the Borrower shall notify the Administrative
Agent that it has determined, in good faith, that such a foreign exchange
hedging arrangement with respect to such currency is not so available.

(p)           Liens
on Collateral.  The Liens granted to
the Administrative Agent securing the Obligations for the benefit of the
Secured Parties shall, as set forth in the Guaranties and Collateral Documents
(subject to changes in the Collateral resulting from Dispositions and
substitutions of Collateral permitted hereunder pursuant to clause (c) of the
definition of Permitted Dispositions and the effect of Recovery Events, and
changes pursuant to Section 8.10) for the term of this Agreement be
comprised of (i) a perfected first priority lien (or a preferred Ship Mortgage,
as the case may be) on equipment of the Borrower and the Guarantors that as of
the Closing Date, according to the appraisal performed by Merrill Marine in
connection with the execution and delivery of the Loan Documents, was
determined to have an orderly liquidation value (“OLV”) of at least
$108,500,000, (ii) a perfected second priority lien on other equipment of the
Borrower and the Guarantors that as of the Closing Date, according to the
appraisal performed by Merrill Marine immediately prior to the Closing Date was
determined to have an OLV of at least $80,000,000 (subject only to Liens
permitted by this Agreement and the Liens of Travelers pursuant to the Bonding
Agreement), (iii) a perfected Lien on all intercompany receivables of the
Borrower and the Subsidiary Guarantors having an equal priority to the Liens of
Travelers, and having a senior priority to all other Liens and (iv) a perfected
second priority lien on all accounts receivables of the Borrower and the
Subsidiary Guarantors arising from projects that are bonded pursuant to the
Bonding Agreement (subject only to Liens permitted by this Agreement and the
Liens of Travelers pursuant to the Bonding Agreement).

 49
 

(q)           Future Subsidiaries.  Upon any Person becoming, after the Closing
Date, a Subsidiary of the Borrower, or upon the Borrower or any Subsidiary of
the Borrower acquiring additional Capital Stock of any existing Subsidiary,
unless such Subsidiary is an Immaterial Subsidiary or organized in a
jurisdiction outside the United States of America or otherwise agreed to
between the Borrower and the Administrative Agent, such Person shall execute a
Loan Party Guaranty and other Collateral Documents in substantially the same
forms as the other Loan Party Guaranties and Collateral Documents then in
existence and otherwise in form and substance reasonably satisfactory to the
Administrative Agent together with opinions, certificates and other
documentation reasonably requested by the Administrative Agent in connection
with the Collateral Documents (but only to the extent not conflicting with the
terms of the Intercreditor Agreement).

(r)            Further Assurances.  Each Loan Party agrees that, until all
Obligations (other than contingent obligations for which no claim has been, or
is reasonably expected to be, made) have been indefeasibly paid and fully
satisfied and the Commitments have been terminated, the Administrative Agent’s
security interests in and Liens on and against the Collateral, and all proceeds
thereof, shall, subject to Section 8.10, continue in full force and
effect.  Each Loan Party shall perform,
from time to time, any and all steps reasonably requested by the Administrative
Agent to perfect, maintain and protect the Administrative Agent’s security
interests in and Liens on and against the Collateral granted or purported to be
granted by the Collateral Documents, as well as the priority of such security
interests and Liens, or to enable the Administrative Agent to exercise its
rights and remedies hereunder with respect to any Collateral, including (i)
executing and filing ship mortgages, financing or continuation statements, or
amendments thereof, and terminations of ship mortgages, financing statements
and other releases, in form and substance reasonably satisfactory to the
Administrative Agent, (ii) delivering to the Administrative Agent all
instruments representing or evidencing the Collateral duly endorsed and
accompanied by duly executed instruments of transfer or assignment, including
note powers or allonges, all in form and substance reasonably satisfactory to
the Administrative Agent, and (iii) executing and delivering all further
instruments and documents, and taking all further action, as the Administrative
Agent may reasonably request.  The
Lenders hereby authorize the Administrative Agent, without further consent of
any Lender, to enter into such amendments, restatements, supplements and other
modifications to the Collateral Documents (including entering into new
Collateral Documents) in connection with any transaction permitted under this
Agreement, including, without limitation, transactions permitted by Section
6.2(a)(i), to the extent that the Administrative Agent deems such action to
be reasonably necessary to protect and preserve the Liens on the Collateral as
described in Section 6.1(p), subject to changes in the Collateral
resulting from Dispositions and substitutions of Collateral permitted hereunder
and the effect of Recovery Events, and changes pursuant to Section 8.10.  Upon the effectiveness of any increase in the
Revolving Commitment Amount pursuant to Section 2.23, the Loan Parties
shall grant to the Administrative Agent for the benefit of the Secured Parties
additional Collateral comprised of a perfected first priority lien on equipment
of the Loan Parties that as of such date, according to a recent appraisal by
Merrill Marine or such other appraiser reasonably acceptable to the
Administrative Agent, was determined to have an OLV of at least the product of
(1) 70% and (2) the amount of increase in the Revolving Commitment Amount
occurring at such time (subject only to Liens permitted by this Agreement and
the Liens of Travelers pursuant to the Bonding Agreement).

 50
 

(s)           Appraisals.

(i)            If an Event of
Default is not continuing, upon the request of the Majority Lenders, the
Administrative Agent may request and obtain one updated appraisal of the
Collateral from and after the Closing Date and, notwithstanding the terms of Section
9.4 hereof, each Lender hereby agrees to pay the fees and expenses of such
appraisal, in each case, based upon the Revolving Credit Percentage of such
Lender.

(ii)           Following the occurrence
and during the continuation of an Event of Default, the Administrative Agent
may request and obtain updated appraisals of the Collateral once per calendar
year and the Borrower agrees to pay the reasonable fees and expenses of such
appraisers.

SECTION
6.2.  Negative
Covenants.  Each Loan Party
which is a party hereto covenants and agrees that so long as any of the Lenders
shall have any Commitment hereunder, there shall exist any outstanding Loans,
any Letter of Credit shall remain outstanding, or any other Obligations (other
than contingent obligations hereunder for which no claim has been, or is
reasonably expected to be, made) shall remain outstanding:

(a)           Consolidation, Mergers and Acquisitions.  The Borrower shall not and shall not permit
any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge
into or with, any other corporation or Person, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or of any division
thereof) except:

(i)            (A) any Subsidiary
of the Borrower may liquidate or dissolve voluntarily into the Borrower or any
Subsidiary Guarantor (provided that NASDI may liquidate or dissolve voluntarily
and its assets and properties distributed in accordance with NASDI’s limited
liability company agreement and other applicable law in connection with any
transaction or series of related transactions permitted under Section 6.2(g)),
(B) any Subsidiary of the Borrower may consolidate with or merge into or with
the Borrower or any Subsidiary Guarantor, provided, in the case of a merger
involving the Borrower, the Borrower shall be the continuing Person, and in the
case of a merger not involving the Borrower, a 
Subsidiary Guarantor shall be the continuing Person, (C) the Borrower
may consolidate with or merge with any Subsidiary Guarantor, provided, in the
case of a merger, the Borrower shall be the continuing or surviving Person, (D)
any Subsidiary of the Borrower may consolidate with or merge into or with any
Person pursuant to a transaction or series of related transactions permitted
under Section 6.2(g), (E) the assets or Capital Stock of the Borrower or
any of the Borrower’s Subsidiaries may be purchased or otherwise acquired by
the Borrower or any Subsidiary Guarantor, and (F) any Subsidiary that is not a
Subsidiary Guarantor may liquidate or dissolve voluntarily into, or consolidate
with or merge into or with, and the assets or Capital Stock of such Subsidiary
may be purchased or otherwise acquired by, any other Subsidiary of the Borrower
that is not a Subsidiary Guarantor;

(ii)           Capital
Expenditures; and

 51

(iii)          Permitted Business
Acquisitions, if permitted (without duplication) by Section
6.2(b)(v) to be made as an Investment.

(b)           Investments. 
The Borrower shall not and shall not permit any of its Subsidiaries to,
make any Investments, except:

(i)            Investments
existing on the Closing Date, as set forth on Schedule
6.2(b)(i);

(ii)           Investments that,
when made, constituted Customary Permitted Investments;

(iii)          without
duplication, Investments permitted as Debt pursuant to Section
6.2(i) and Investments permitted as Guaranties under Section 6.2(f);

(iv)          Capital
Expenditures;

(v)           without duplication,
Permitted Business Acquisitions to the extent that the aggregate consideration
paid (including any assumption of Debt and the fair market value of any
non-cash consideration) to make each such acquisition together with the
aggregate consideration paid (including any assumptions of Debt and the fair
market value of any non-cash consideration) for all other Permitted Business
Acquisitions consummated after the Closing Date does not exceed $20,000,000; provided, that any such Permitted  Business Acquisition only shall be permitted
if after giving effect to such Permitted Business Acquisition (x) the Borrower
and its Subsidiaries will be in compliance with each financial covenant ratio
set forth in Sections 6.3(a) and (b) as of the most recently
ended Fiscal Quarter for which financial statements (and the related compliance
certificate) have been delivered pursuant to Section 6.4 after adjusting
each such ratio (solely for purposes of this Section 6.2(b)(v)) to make
each such ratio 0.25 to 1.00 more restrictive on the Borrower as of the end of
such Fiscal Quarter, and (y) the amount of the aggregate Available Revolving
Commitments is not less than $15,000,000;

(vi)          (A) loans and
advances to employees of the Borrower and its Subsidiaries not to exceed
$2,500,000 in the aggregate at any time outstanding, and (B) advances of
payroll payments and expenses to employees in the ordinary course of business; provided, however,
that, once made, loans and advances made pursuant to this clause (vi) shall be deemed to remain outstanding
except to the extent such loans or advances are repaid in cash without
discount;

(vii)         accounts receivable
arising, and trade credit granted, in the ordinary course of business and any
securities received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in
order to prevent or limit loss, which securities shall not be greater than $5,000,000
in the aggregate;

(viii)        (A) Investments by
the Borrower in Subsidiary Guarantors and Investments by any Subsidiary of the
Borrower in the Borrower or any Subsidiary Guarantor, and (B) Investments
(other than in the form of transfers of Collateral) by the 

 52
 

Borrower in
Subsidiaries of the Borrower which are not Subsidiary Guarantors, and
Investments (other than in the form of transfers of Collateral) by any
Subsidiary of the Borrower in Subsidiaries of the Borrower which are not
Subsidiary Guarantors, provided that, in the case of this clause (B), the aggregate amount of such
Investments made on and after the date hereof shall not exceed $15,000,000;

(ix)           Investments made in
connection with the receipt by the Borrower or any of its Subsidiaries of consideration
other than cash for the sale by the Borrower or such Subsidiary of any assets
permitted to be sold under clause (a) of
the definition of Permitted Disposition;

(x)            Investments in
joint ventures or partnerships organized and maintained for specific single
projects, provided that the aggregate amount of such Investments made and
maintained does not at any time exceed $20,000,000;

(xi)           other Investments
in an aggregate amount at any one time not to exceed $10,000,000; provided, however,
that, once made, Investments made pursuant to this clause
(xi) shall be deemed to remain outstanding except to the extent such
Investment is repaid or otherwise returned in cash or in kind (in reasonably
equivalent value), without discount;

(xii)          Investments in
interest rate, foreign exchange and commodity hedges that are entered into in
the ordinary course of business and not for any speculative purpose;

(xiii)         Investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with customers and suppliers, in each case
in the ordinary course of business;

(xiv)        Investments
constituting deposits made in the ordinary course consistent with past practice
to secure the performance of leases;

(xv)         Investments constituting
loans to employees of the Borrower and its Subsidiaries to purchase Capital
Stock of the Borrower not exceeding in the aggregate $5,000,000 at any time
outstanding; and

(xvi)        Investments
constituting (A) accounts receivable arising, (B) trade debt granted, or (C)
deposits made in connection with the purchase price of goods or services, in
each case in the ordinary course of business on customary terms.

(c)           Restricted Payments.  The Borrower shall not and shall not permit
any of its Subsidiaries to, declare, pay or make, or offer to pay or make any
Restricted Payment (directly or indirectly through any Affiliate) except that
so long as no Event of Default exists immediately prior to any Restricted
Payment otherwise permitted below or would result therefrom (other than with
respect of clause (ii) below): (i) the Borrower may repurchase, redeem or
otherwise acquire shares of, or options to purchase, Capital Stock of the
Borrower or stock appreciation rights from directors, officers and employees
(or their legal representatives or heirs, as the case may be) of the Borrower
or any Subsidiary of the Borrower whose employment 

 53
 

has terminated or who has died or retired or become disabled, or who
has suffered some other hardship and with respect to whom the Board of
Directors of the Borrower has otherwise determined to make such a repurchase,
redemption or other acquisition in light of such hardship or upon the vesting
of stock appreciation rights; provided
that, (a) the amounts paid in cash or other immediately available funds in
connection with such Restricted Payments shall not exceed $7,000,000 in the
aggregate after the date hereof and (b) the aggregate principal amount of Debt
issued by the Borrower or any of its Subsidiaries to finance such Restricted Payments
shall not exceed $5,000,000 in the aggregate at any time outstanding; (ii) any
Subsidiary of the Borrower may make Restricted Payments ratably among all of
its equity holders; (iii) the Capital Stock of North American Site Developers,
Inc. owned by Berardi may be redeemed, repurchased or otherwise acquired for an
amount not greater than $50,000 as part of the NASI Restructuring and (iv) the
Borrower may make Restricted Payments not to exceed $5,000,000 in the aggregate
for all such Restricted Payments made during any fiscal year.

(d)           Transactions with Affiliates.  The Borrower shall not and shall not permit
any of its Subsidiaries to, enter into, or cause, suffer or permit to exist any
arrangement or contract with any of its other Affiliates unless such
arrangement or contract is fair and equitable to Borrower or such Subsidiary
and is an arrangement or contract of the kind which would be entered into by a
prudent Person in the position of Borrower or such Subsidiary with a Person
that is not one of its Affiliates; provided,
however, that nothing in this Section 6.2(d) shall prohibit (i) any
transactions otherwise permitted hereby pursuant to any Tax Sharing Agreement,
(ii) any transaction among the Borrower and any Subsidiary Guarantor, (iii) the
transaction described on Schedule 6.2(d) or (iv) the NASDI
Restructuring.

(e)           Negative Pledges, etc.  The Borrower shall not and shall not permit
any of its Subsidiaries to, enter into (or suffer to exist) any agreement
prohibiting (i) the creation or assumption of any Lien upon the Borrower or
such Subsidiary’s properties, revenues or assets, whether now owned or
hereafter acquired; (ii) the ability of the Borrower or any such Subsidiary to
amend or otherwise modify this Agreement or any other Loan Document; or (iii)
the ability of any of the Borrower’s Subsidiaries to make any payments,
directly or indirectly, to the Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments, or
any other agreement or arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to the Borrower other
than (A) this Agreement and each Loan Document; (B) agreements existing as of
the Closing Date and identified in Schedule 6.2(e);
(C) agreements governing Debt permitted by clause (ii)
of Section 6.2(i) as in effect on the
Closing Date, which agreements shall be in form and substance reasonably
acceptable to the Administrative Agent; (D) agreements governing Debt permitted
by clause (v) of Section
6.2(i), with any such restrictions being applicable solely to the
assets financed with the proceeds of such Debt; (E) the Bonding Agreement, the
Wells Fargo Documents, the Intercreditor Agreement and the Note Indenture; (F)
such restrictions or circumstances existing under or by reason of Applicable
Laws; and (G) such restrictions or encumbrances existing under or by reason of
customary non-assignment provisions in operating leases, bareboat charter
agreements, and licenses of real or personal property (including intellectual
property) entered into by any Loan Party or lessee or licensee in the ordinary
course of business (provided that such
restrictions and encumbrances pertain only to the property that is the subject
matter of the applicable lease or licenses).

 54
 

(f)            Guaranties. 
The Borrower shall not and shall not permit any of its Subsidiaries to,
create or become or be liable, whether directly or indirectly, with respect to
any Guaranty, except that the Borrower or any such Subsidiary may incur (i)
Guaranties for the benefit of the Borrower or any such Subsidiary if the
primary obligation is permitted by this Agreement, (ii) an unsecured Guaranty
by the Borrower of Debt owing by Amboy Aggregates so long as the maximum amount
of such Guaranty does not exceed $5,000,000 at any time, (iii) Guaranties
existing on the Closing Date and described in Schedule
6.2(f) hereto, and the replacement, refinancing and renewal of each
such Guaranty which does not increase the amount guaranteed thereunder, (iv)
Guaranties of Debt arising under the Bonding Agreement, (v) Guaranties of the
Note Indenture Obligations by Subsidiary Guarantors, (vi) unsecured Guaranties
of Debt which, when combined (without duplication) with all unsecured Debt
incurred and permitted under clause (xiii)
of Section 6.2(i), do not exceed
$10,000,000 at any time outstanding and (vii) a  secured
Guaranty by Great Lakes and certain other Subsidiaries of Borrower of the
obligations of the Borrower under the Wells Fargo Documents; provided,
that such Guaranty may be secured only by the Permitted Wells Fargo Facility
Collateral and each such Subsidiary has executed and delivered a Loan Party
Guaranty and Collateral Documents and provided other deliveries described in Section
6.1(q).  Notwithstanding the
foregoing, no such Guaranty shall be permitted unless after the incurrence of
any such Guaranty, there would exist no Default or Event of Default.

(g)           Sales of Assets. 
The Borrower shall not and shall not permit any of its Subsidiaries to,
Dispose of any properties or assets (including accounts receivable and Capital
Stock or other equity of Subsidiaries), whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any agreement or
grant any right or option to do so, in one transaction or a series of
transactions, unless such transaction or arrangement (i) constitutes a
Permitted Disposition, (ii) consists of a transfer of property among the Borrower
and its Subsidiaries permitted under Section 6.2(a)
or transfers of property permitted as Investments under Section
6.2(b), (iii) consists of the lease of equipment (including vessels)
by the Borrower or any Subsidiary to Persons which are not Affiliates (other
than the Borrower or any Subsidiaries of the Borrower) in the ordinary course
of business (iv) constitutes a Disposition of accounts receivables arising from
projects performed outside of the United States of America or Canada or (v)
consists of the issuance by NASDI of no more than 35% of the non-voting profits
interest of NASDI to Berardi in connection with the NASDI Restructuring.

(h)           Liens, etc. 
The Borrower shall not and shall not permit any of its Subsidiaries to,
create, incur, assume or permit to exist, whether directly or indirectly, any
Lien on or with respect to the Borrower’s or such Subsidiary’s properties and
assets, whether now or hereafter acquired or upon any income or profits
therefrom, except:

(i)            Liens granted
pursuant to the Loan Documents;

(ii)           Customary Permitted
Liens;

(iii)          Liens existing on
the Closing Date and disclosed on Schedule 5.1(g);

 55
 

(iv)          Liens securing
payment of Debt permitted and described in clause
(viii) of Section 6.2(i);

(v)           Liens securing
payment of Debt permitted and described in clause (v)
of Section 6.2(i) and covering only those
assets acquired, constructed or improved in whole or in part with the proceeds
of such Debt;

(vi)          Existing Liens on
property (other than Collateral) pledged as collateral for liabilities assumed
by the Borrower or any Subsidiary of the Borrower in connection with any merger
or acquisition permitted by Section 6.2(a)
(provided that such liabilities were not
incurred in anticipation of, or to finance, any such merger or acquisition);

(vii)         Liens granted to
sureties under the Bonding Agreement, to the extent permitted by the
Intercreditor Agreement;

(viii)        Liens on any
property or assets used by the Borrower or any Subsidiary in the ordinary
course of business and not constituting Collateral, provided that such Liens
existed prior to the acquisition thereof by the Borrower or such Subsidiary and
were not created in contemplation of such acquisition;

(ix)           Liens securing
Obligations under any Rate Protection Agreement, provided that such Lien is
granted in favor of a Secured Party or an Affiliate thereof,

(x)            Leases or subleases
(including bareboat charters) of Property other than Collateral by the Borrower
or any of its Subsidiaries as lessor or sublessor, provided that such leases
and subleases do not interfere in any material respect with the businesses of
the Borrower and its Subsidiaries, and are not otherwise prohibited under the
other terms of this Agreement, and leases or subleases (including bareboat
charters) of Property constituting Collateral, provided that such leases and
subleases do not interfere in any material respect with the businesses of the
Borrower and its Subsidiaries, are not otherwise prohibited under the other
terms of this Agreement and are made in the ordinary course of business;

(xi)           [RESERVED];

(xii)          renewals or
replacements of any of the foregoing, provided that such renewed or replaced
Lien does not extend to property other than that which was encumbered by the
originally permitted Lien hereunder;

(xiii)         Liens arising from
precautionary UCC financing statements filed under any lease permitted by this
Agreement but only to the extent such Liens pertain to the property that is the
subject of such leases;

(xiv)        Liens arising by
operation of law or by contract in each case encumbering insurance policies and
proceeds thereof to secure the financing of premiums payable under such
policies;

 56
 

(xv)         customary rights of
set-off, revocation, refund, or charge back under deposit agreements or under
the UCC of banks or other financial institutions in respect of charges relating
to deposit accounts and returned items (but not in respect of Debt generally);

(xvi)        Liens pursuant to a
purchase agreement or sale agreement securing the obligations under such
purchase agreement or sale agreement and encumbering solely the assets that are
to be sold in any asset disposition permitted by this Agreement;

(xvii)       Liens on accounts
receivables for which attempts at collection have been undertaken by a third
party (provided that the face amount of such accounts receivables subject to
such Lien shall not exceed $2,500,000 in the aggregate at any time);

(xviii)      such other Liens with
respect to which neither the Debt secured by such Lien nor the fair market
value of the property subject to such Liens exceed in the aggregate for all
such Liens $5,000,000; and

(xix)         Liens on Permitted
Wells Fargo Facility Collateral securing Debt permitted under Section
6.2(i)(xvi) and Guaranties permitted under Section 6.2(f)(vii).

provided,
however, that notwithstanding the
foregoing, in no event shall any contractual Liens be permitted to exist on any
common stock of or other equity interests in any of the Borrower’s Subsidiaries
which is wholly-owned by the Borrower or any of its Subsidiaries.

(i)            Debt.  The Borrower shall not and shall not permit
any of its Subsidiaries to, create, incur, assume or otherwise become or remain
liable with respect to any Debt, other than, without duplication, the
following:

(i)            Debt
in respect of the Loans and other Obligations;

(ii)           Debt,
including Debt in respect of Guaranties, existing on the Closing Date, as set
forth on Schedule 6.2(i), and (except as
may otherwise be restricted by Sections 6.2(c)
or 6.2(n)) any renewal, extension,
refinancing or replacement thereof so long as (A) the terms of any such
renewal, extension, refinancing or replacement are not materially less
favorable to such Loan Party than the original Debt, (B) the then aggregate
outstanding amount of such Debt at the time of such renewal, extension, refinancing
or replacement, as the case may be, is not increased, and (C) the average life
to maturity of such Debt at the time of such renewal, extension, refinancing or
replacement, as the case may be, is not decreased thereby;

(iii)          unsecured
Debt incurred in the ordinary course of business of the Borrower and its
Subsidiaries in the nature of open accounts (extended by suppliers on normal
trade terms in connection with purchases of goods and services), accrued
liabilities and deferred income, taxes and judgments or orders for the payment
of money to the extent such judgments or orders do not result in any Event of
Default or result in any Liens prohibited by Section
6.2(h);

 57
 

(iv)          unsecured
Debt of the Borrower or any of its Subsidiaries owing to one another, provided
that all such Debt owing to the Borrower or to any Subsidiary Guarantor shall
be evidenced by one or more promissory notes, in form and substance reasonably
acceptable to the Administrative Agent, which promissory notes shall be pledged
to the Administrative Agent pursuant to the Note Pledge Agreement;

(v)           Capitalized
Rentals or purchase money Debt incurred by the Borrower or any of its
Subsidiaries to any Person to finance the acquisition, construction, repair or
improvement of assets, including any such Debt incurred after the acquisition,
construction, repair or improvement of such assets, so long as in each case,
the amount of such Debt does not exceed 100% of the purchase price,
construction cost, repair cost or improvement cost of the assets acquired,
constructed, repaired or improved with the proceeds thereof and, in the case of
Debt incurred after the acquisition, construction, repair or improvement of the
assets to be financed, such Debt is incurred no later than twelve calendar
months after such assets are acquired, constructed, repaired or improved;

(vi)          Debt
incurred in connection with any Rate Protection Agreement entered into for
hedging but not speculative purposes;

(vii)         Debt
of Subsidiaries of the Borrower which represents the assumption by such
Subsidiaries of Debt of another Subsidiary of the Borrower in connection with
the merger of such other Subsidiary with and into the assuming Subsidiary or
the purchase of all or substantially all the assets of such other Subsidiary;

(viii)        Debt
(contingent or otherwise) for the reimbursement of the surety or sureties which
issue (A) license, bid, performance and lien, and payment bonds under the
Bonding Agreement for amounts expended by them in the performance of such
bonds, and (B) bonds issued pursuant to the Bonding Agreement with respect to
projects in a country other than the United States which are used to obtain
letters of credit, financial guaranties or other bonds under which the Borrower
or a Subsidiary of the Borrower is the primary obligor provided
that, the aggregate amount of the Debt
permitted by this subclause (B) shall not exceed $25,000,000 at any time
outstanding;

(ix)           Guaranties
permitted under Section 6.2(f);

(x)            Debt
constituting Note Indenture Obligations;

(xi)           Debt
in respect of taxes, assessments, governmental charges and claims for labor,
materials or supplies, to the extent that payment thereof is not required
pursuant to Section 6.1(e);

(xii)          all
premiums (if any), interest (including post-petition interest), fees, expenses,
indemnities, charges and additional or contingent interest on obligations
described in clauses (i) through (xvi) of this Section
6.2(i);

(xiii)         other
unsecured Debt of the Borrower and its Subsidiaries which when combined
(without duplication) with all unsecured Guaranties incurred and 

 58
 

permitted under clause (vii) of Section 6.2(f), does not exceed $10,000,000 at
any time outstanding;

(xiv)        [RESERVED];

(xv)         unsecured Debt issued
to finance Restricted Payments permitted under Section 6.2(c)(i) in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
and

(xvi)        Debt incurred  pursuant to the Wells Fargo Documents not
exceeding $40,000,000 in aggregate principal amount at any time outstanding.

Any Person which becomes
a Subsidiary after the Closing Date shall for all purposes of this Section 6.2(i) be deemed to have created, assumed
or incurred, at the time it becomes a Subsidiary, all Debt of such Person
existing immediately after it becomes a Subsidiary.

(j)            ERISA.  The
Borrower shall not and shall not permit any of its Subsidiaries to (i) engage,
nor shall the Borrower or any of its Subsidiaries permit any ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the IRC for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the IRC), whether or not waived; (iii) fail, or
permit any ERISA Affiliate to fail, to pay timely required contributions or
annual installments due with respect to any waived funding deficiency to any
Plan; (iv) terminate, or permit any ERISA Affiliate to terminate, any Plan
which would result in any liability of the Borrower or any ERISA Affiliate, or
the imposition of any Lien on their respective property, under Title IV of
ERISA; (v) fail to make any contribution or payment to any Multiemployer Plan
which the Borrower or any ERISA Affiliate is required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the IRC on or
before the due date for such installment or other payment; or (vii) amend, or
permit any ERISA Affiliate to amend, a Plan resulting in an increase in current
liability for the plan year such that the Borrower or any ERISA Affiliate is
required to provide security to such Plan under Section 401 (a)(29) of the IRC;
provided, however,
that no act, omission or event specified in clause (i)
through (vii) shall be considered a
violation of this Section 6.2(j) unless
such act, omission or event could reasonably be expected to have a Material
Adverse Effect.

(k)           Sales and Leasebacks.  Except for transactions described in clause
(b) of the definition of Permitted Disposition or permitted pursuant to Section
6.2(i)(v), the Borrower shall not and shall not permit any of its
Subsidiaries to, become liable, directly or by way of any Guaranties, with
respect to any lease of any property (whether real or personal or mixed)
whether now owned or hereafter acquired, (i) which any Loan Party has sold or
transferred or is to sell or transfer to any other Person, or (ii) which any
Loan Party intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by that entity to any
other Person in connection with such lease.

 59

(l)            Margin Regulation.  The Borrower shall not and shall not permit
any other Person to, use any portion of the proceeds of any credit extended
under this Agreement in any manner which might cause the extension of credit or
the application of such proceeds to violate the 1933 Act or the 1934 Act (each
as amended to the Closing Date and from time to time thereafter, and any
successor statute) or to violate Regulation U, or Regulation X, or any other
regulation of the Federal Reserve Board, in each case as in effect on the date
or dates of such extension of credit and such use of proceeds.

(m)          Lease Obligations.  The Borrower shall not and shall not permit
any of its Subsidiaries to, enter into any operating lease (which is not a
Capitalized Lease) with respect to any real or personal property (or any
interest therein), except (i) operating leases which, together with all other
such arrangements (excluding those described in clauses
(ii) and (iii) below) which
shall then be in effect, will not require the payment of an aggregate amount of
rentals by the Borrower and its Subsidiaries (determined on a consolidated
basis) in excess of $25,000,000 for any Fiscal Year, (ii) operating leases for
not more than eighteen (18) months and (iii) operating leases in connection
with the performance of specific projects for the period of such projects; provided, however,
that any calculation made for purposes of this section shall exclude any
amounts required to be expended for maintenance, repairs, insurance, taxes,
assessments, and other similar charges.

(n)           Modification of Material Agreements and Documents.  The Borrower shall not and shall not permit
any of its Subsidiaries to, consent to any amendment, supplement or other
modification of any terms or provisions contained in, or applicable to (i) the
Bonding Agreement or any agreement relating thereto that is either material or
related to the creation, attachment or perfection of a security interest in any
collateral securing the obligations under the Bonding Agreement in any manner
materially adverse to the Borrower or the rights or interests of the Secured
Parties under the Loan Documents, (ii) its certificate or articles of
incorporation, by-laws or other organizational documents in any manner
materially adverse to the rights or interests of the Secured Parties under the
Loan Documents, (iii) the Wells Fargo Agreement or any agreement relating
thereto that is either material or related to the creation, attachment or
perfection of a security interest in any collateral securing the obligations
under the Wells Fargo Agreement, in each case in any manner materially adverse
to the Borrower or the rights or interests of the Secured Parties under the
Loan Documents or (iv) the Note Indenture, other than any amendment or
modification which, if effected pursuant to a refinancing of the obligations
under the Note Indenture would constitute a “Permitted Note Refinancing.”

(o)           Change of Location or Name.  None of the Loan Parties shall change (i) the
location of its principal place of business, chief executive office, major
executive office, jurisdiction or organization, chief place of business or its
records concerning its business and financial affairs; or (ii) its name or the
name under or by which it conducts its business, in each case without giving
the Administrative Agent written notice thereof promptly upon the effectiveness
of such name change (and in any event no later than 30 days after the
effectiveness of such name change) and taking any and all actions which may be
reasonably necessary or desirable, or which the Administrative Agent may
reasonably request, to maintain and preserve all Liens in favor of the
Administrative Agent granted pursuant to the Collateral Documents; provided
that notwithstanding the foregoing, none of the Loan Parties shall change the
location of its principal place of business, chief executive office, chief
place of business or its records 

 60
 

concerning its business and financial affairs from the contiguous
continental United States of America to any place outside the contiguous
continental United States of America.

(p)           Take or Pay Contracts.  The Borrower shall not and shall not permit
any of its Subsidiaries to, enter into or be a party to any arrangement for the
purchase of materials, supplies, other property or services if such arrangement
by its express terms requires that payment be made by the Borrower or such
Subsidiary regardless of whether such materials, supplies, other property or
services are delivered or furnished to it; provided,
however, the Borrower may, and may permit
its Subsidiaries to, enter into such arrangements which are incidental to its
business and not entered into for speculation.

(q)           Use of Proceeds. 
The Borrower shall not and shall not permit any of the its Subsidiaries
to, directly or indirectly use or apply any of the proceeds of any Loans in a
manner inconsistent with the provisions of Section
2.21.

(r)            Certain Collateral Matters.  Notwithstanding anything set forth in this Section 6.2, no Loan Party shall Dispose of any
Collateral (other than in a Permitted Disposition described in clause (c) of
the Definition of Permitted Disposition) or shall consummate any transaction
otherwise not prohibited by this Section 6.2,
if such Disposition or transaction would result in any modification of the
existence, perfection or priority of any Lien on Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties (as set forth in Section 6.1(p)), in any manner adverse to the
interests of the Secured Parties.  Any
transaction that would otherwise be permitted under this Section
6.2 but for the immediately preceding sentence, shall be permitted
so long as, prior to the consummation of such Disposition or transaction, the
Loan Parties (and any other Person receiving such Collateral) perform any and
all steps reasonably requested by the Administrative Agent to perfect, maintain
and protect the Administrative Agent’s security interests in and Liens on and
against the Collateral granted or purported to be granted by the Collateral
Documents, as well as the priority of such security interests and Liens, or to
enable the Administrative Agent to exercise its rights and remedies hereunder
with respect to any Collateral.

SECTION
6.3.  Financial Covenants.  The Borrower covenants and agrees that so
long as the Lenders shall have any Commitment hereunder, any Letter of Credit
shall remain outstanding, or any other Obligation (other than contingent
obligations hereunder for which no claim has been, or is reasonably expected to
be, made) shall remain outstanding:

(a)           Maximum
Total Leverage. The Borrower and its consolidated Subsidiaries shall not
permit the ratio (the “Total Leverage Ratio”) of (i) the aggregate
unpaid principal amount of Total Funded Debt as of the last day of any Fiscal
Quarter ending during the periods described below to (ii) Adjusted Consolidated
EBITDA for the four (4) consecutive Fiscal Quarter period ending as of such
date, to exceed the corresponding ratio set forth below opposite such period:

	
  Period

  	
   

  	
  Ratio

  
	
  Closing Date
  through and including September 30, 2008

  	
   

  	
  6.00 to 1.00

  
	
  October 1, 2008
  through and including September 30, 2009

  	
   

  	
  5.50 to 1.00

  
	
  October 1, 2009
  and thereafter

  	
   

  	
  5.00 to 1.00

  

 

 61
 

 

(b)           Interest
Coverage Ratio.  The Borrower and its
consolidated Subsidiaries shall not permit the ratio (the “Interest Coverage
Ratio”) of (i)  Adjusted Consolidated EBITDA for any four (4)
consecutive Fiscal Quarter period ending as of the last day of any Fiscal
Quarter ending during the periods described below to (ii) Interest Expense
for such period ending as of such date, to be less than the corresponding ratio
set forth below opposite such period:

	
  Period

  	
   

  	
  Ratio

  
	
  Closing Date
  through and including December 31, 2008

  	
   

  	
  1.75 to 1.00

  
	
  January 1, 2009
  and thereafter

  	
   

  	
  2.00 to 1.00

  

SECTION 6.4. 
Financial Reporting.  The Borrower covenants and agrees that so
long as any of the Lenders shall have any Commitment hereunder, there shall
exist any outstanding principal under any Loans, any Letter of Credit shall
remain outstanding, or any other Obligation (other than contingent obligations
hereunder for which no claim has been, or is reasonably expected to be, made)
shall remain outstanding:

(a)           System of Accounting.  The Borrower shall maintain the
percentage-of-completion accounting policies relative to change orders and
work-in-progress as in effect on the Closing Date and shall in any event
maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP (except as may be otherwise required pursuant to Section 1.4), and each of the financial
statements described below shall be prepared from such system and records.

(b)           Quarterly Reports.  The Borrower shall provide the Administrative
Agent within 45 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year, unaudited consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and
unaudited consolidated and consolidating statements of earnings and
consolidated statements of cash flow of the Borrower and its Subsidiaries for
such Fiscal Quarter and for the period commencing at the end of such Fiscal
Quarter, certified on behalf of the Borrower by an Authorized Officer of the
Borrower.

(c)           Annual Reports. 
The Borrower shall provide to the Administrative Agent, within 90 days
after the end of each Fiscal Year, a copy of the annual audit report for such
Fiscal Year for the Borrower and its Subsidiaries, including therein
consolidated (and unaudited consolidating) balance sheets of the Borrower and
its Subsidiaries as of the end of such Fiscal Year and consolidated (and
unaudited consolidating) statements of earnings and cash flow of the Borrower
and its Subsidiaries for such Fiscal Year by Deloitte & Touche LLP or other
independent public accountants reasonably acceptable to the Administrative Agent,
together with such accountants’ opinion, which shall not be subject to any
Impermissible Qualification, and a certificate from such accountants containing
a computation of, and showing compliance with, each of the financial ratios and
restrictions contained in Section 6.3 and
to the effect that, in making the examination necessary for the signing of such
annual report by such accountants, they have not become aware of any Default or
Event of Default in respect of the financial covenants set forth in Section 6.3 that has occurred and is continuing,
or, if they have become 

 62
 

aware of such Default or Event of Default in respect of the financial
covenants set forth in Section 6.3,
describing such Default or Event of Default.

(d)           Compliance Certificate.  The Borrower shall provide to the
Administrative Agent, within 45 days after the end of each of the first three
Fiscal Quarters of each Fiscal Year and within 90 days after the end of the
last Fiscal Quarter of each Fiscal Year, (i) a certificate substantially in the
form of Exhibit F (the “Compliance Certificate”), executed on
behalf of the Borrower by the Authorized Officer who is the chief financial
officer, treasurer, assistant treasurer or controller of the Borrower, showing
(in reasonable detail and appropriate calculations and computations in form
reasonably satisfactory to the Administrative Agent) compliance with the
financial covenants set forth in Section 6.3, (ii) notice of the
occurrence of any Permitted Disposition or any Permitted Business Acquisition,
describing, in detail reasonably satisfactory to the Administrative Agent, the
assets sold or disposed of or the assets acquired and the purchase price or
sale price thereof, as the case may be, during the preceding Fiscal Quarter,
(iii) notice of the receipt of any sales proceeds, insurance or requisition
proceeds or condemnation awards received in connection with the sale, damage,
destruction, requisition or condemnation of any Collateral during the preceding
Fiscal Quarter, including a statement with regard to whether the Borrower or
such Subsidiary intends to apply such sales proceeds, insurance or requisition
proceeds or awards, as the case may be, to replace, within one year of receipt
thereof, such sold, damaged, destroyed, requisitioned or condemned  Collateral used for substantially the same
purpose as such Collateral sold, damaged, destroyed, requisitioned or condemned
and (iv) notice of any (A) voluntary liquidation or dissolution by any
Subsidiary of the Borrower into the Borrower or another Subsidiary of the
Borrower, (B) merger by any such Subsidiary with and into the Borrower or
another Subsidiary of the Borrower or (C) the purchase by the Borrower or any
of its Subsidiaries of any Capital Stock of any other Subsidiary of the
Borrower during the preceding Fiscal Quarter.

(e)           Budget. 
The Borrower shall deliver to the Administrative Agent, within 75 days
after the end of each Fiscal Year, a budget for the next succeeding Fiscal
Year, which budget shall be prepared on a Fiscal Quarter basis and shall
contain a projected, consolidated balance sheet, consolidated statement of
earnings (broken out in reasonable detail by business segment) and a
consolidated statement of cash flow of the Borrower and its Subsidiaries for
such succeeding Fiscal Year.  It is
understood that (i) any projections or budget furnished to the Administrative
Agent or any Lender are subject to significant uncertainties and contingencies,
which are beyond the control of the Borrower and its Subsidiaries, (ii) no
assurance is given by the Borrower and its Subsidiaries that such projections
will be realized, and (iii) the actual results may differ from such projections
and such differences may be material.

(f)            Securities Reports.  With reasonable promptness after the sending
or filing thereof, the Borrower shall deliver to the Administrative Agent
copies of all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange.

(g)           Vessels. 
The Borrower shall deliver to the Administrative Agent, within ninety
(90) days after the end of each Fiscal Year, a certificate of an Authorized
Officer of the Borrower listing (i) all Designated Vessels and (ii) in the case
of any Designated Vessels constituting Collateral, the geographic location of
such Designated Vessels as of a recent date.

 63
 

 

(h)           Other Information.  With reasonable promptness, Borrower shall
deliver such other data and information (including, without limitation,
intercompany loan and advance balances among the Borrower and each of its
Subsidiaries) as the Administrative Agent or a Lender through the
Administrative Agent shall reasonably request.

(i)            Delivery of Financial Information to the Lenders.  The Administrative Agent shall promptly
deliver to each Lender a copy of all delivered to the Administrative Agent by
the Borrower pursuant to this Section 6.4.

(j)            New Subsidiaries. 
As soon as practicable after the end of the Fiscal Year ending on or
about December 31, 2007 and each Fiscal Year thereafter, the Borrower shall
provide the Administrative Agent with an updated Schedule
5.1(r) containing all of the information which would be required to
be included in such schedule pursuant to Section 5.1
if such schedule were to be made true and complete as of the last day of such
Fiscal Quarter (including, without limitation, information with respect to any
newly acquired or created Subsidiaries); provided,
however, that, no such updated schedule
need be delivered to the Administrative Agent if the schedule which has been
then most recently delivered to the Administrative Agent pursuant to this
section (or attached to this Agreement as Schedule
5.1(r)) remains true and complete in all material respects as of the
last day of such Fiscal Year.

(k)           Backlog
Forecast.   The Borrower shall
provide the Administrative Agent, within 45 days after the end of each calendar
month of each calendar year, a backlog schedule and a schedule of all
work-in-progress, identified by contract or project, of the Borrower and its
Subsidiaries for the performance of dredging, construction or other services as
of the end of such calendar month, prepared in a manner consistent with past
practice.

(l)            Schedule
of Pending Major Projects.  The
Borrower shall provide the Administrative Agent, within 45 days after the end
of each Fiscal Quarter of each Fiscal Year, a schedule of pending major
projects of the Borrower and its Subsidiaries as of the end of such Fiscal
Quarter.

(m)          Wells
Fargo Agreement. The Borrower shall provide to the Administrative Agent,
(i) within 45 days after the end of each month ending on the last day of each
of the first three Fiscal Quarters of each Fiscal Year, and 90 days after the
end of each Fiscal Year for each month of December, (A) a schedule of all
outstanding letters of credit under the Wells Fargo Agreement and (B) a
schedule of the accounts receivable pledged to secure the obligations of the
Borrower under the Wells Fargo Documents and (ii) from time to time upon the
written request of the Administrative Agent, any other information as the
Administrative Agent may reasonably request regarding the Wells Fargo Documents
and the transactions contemplated thereby.

ARTICLE VII.

EVENTS OF DEFAULT; REMEDIES

SECTION
7.1.  Events of
Default.  Each of the
following occurrences shall constitute an Event of Default under this
Agreement:

(a)           Failure to Make Payments When Due.  Any Loan Party shall fail to pay on the date
when due (i) any principal of any Loan or Reimbursement Obligation or (ii) any
interest 

 64
 

or fees under the Loan Documents or any other Obligations and such
failure described in this clause (ii) shall continue for five (5) Business
Days.

(b)           Breach of Covenants.

(i)            Any Loan Party
shall fail duly and punctually to perform or observe any covenant or agreement
binding on such Loan Party under Section 6.l(a),
(c)(ii), (f) or (m), Section 6.2,
Section 6.3 of this Agreement or any “Default”
under and as defined in any Ship Mortgage shall occur.

(ii)           Any Loan Party
shall fail duly and punctually to perform or observe any covenant or agreement
binding on such Loan Party under Section 6.1(d),
(i), (j),
or Section 6.4 of this Agreement, and such
failure shall continue unremedied for ten (10) Business Days (or in the case of
Section 6.1(j), three (3) Business Days)
after an officer of such Loan Party first has knowledge of such failure or such
Loan Party receives written notice thereof from the Administrative Agent,
whichever is earlier.

(iii)          Any Loan Party
shall fail duly and punctually to perform or observe any covenant or agreement
binding on such Loan Party under this Agreement (other than as provided in subsection (a) above or in clause
(i) or (ii) of this subsection (b)) or under any of the other Loan
Documents, and such failure shall continue unremedied for thirty (30) days
after an Authorized Officer first has knowledge of such failure or such Loan
Party receives written notice thereof from the Administrative Agent, whichever
is earlier.

(c)           Incorrect Representation or Warranty.  Any representation or warranty made by any
Loan Party or any officer of any Loan Party under this Agreement, any other
Loan Document or any amendment, waiver or modification of any of the terms
thereof shall prove to have been incorrect or misleading when made in any material
respect.

(d)           Default as to Other Debt.  Default in the payment when due subject to
any applicable grace period (whether by scheduled maturity, required
prepayment, required redemption, acceleration, demand or otherwise) on any Debt
(other than the Obligations), individually or in the aggregate, having an
outstanding principal amount in excess of $5,000,000, of or guaranteed by, any
Loan Party or Subsidiary of the Borrower; or any breach, default or event of
default shall occur, or any other event shall occur or condition shall exist,
under any instrument, agreement or indenture pertaining thereto, if the effect
thereof, after giving effect to any applicable grace or cure period, is to
accelerate, or permit the holder(s) of such Debt to accelerate the maturity of
such Debt, or require a mandatory redemption or repurchase of such Debt prior
to its scheduled redemption or repurchase; or any such Debt or any Debt under
the Wells Fargo Agreement shall be declared due and payable or required to be
prepaid (other than by a regularly scheduled required prepayment (including,
without limitation, pursuant to Section 3.1 (or any comparable section) of the
Wells Fargo Agreement)), repurchased or redeemed prior to the originally stated
maturity thereof; or the holder of any Lien related to a Debt in excess of
$5,000,000 or the holder of any Lien in respect of Debt under the Wells Fargo
Agreement shall commence foreclosure of such Lien; or an “Event of Default”
shall have occurred under and as defined in the Travelers Agreement after
giving effect to any applicable cure periods and any 

 65
 

 waivers thereof; an “Event of Default”
shall have occurred under and as defined in Section 6.01 of the Note Indenture;
or an “Event of Default” shall have occurred under and as defined in Section
10.1 (or any comparable section) of the Wells Fargo Agreement.

(e)           Bankruptcy.

(i)            Any Loan Party or
Subsidiary of the Borrower shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or

(ii)           any proceeding
shall be instituted by or against any Loan Party or Subsidiary of the Borrower
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation (other
than in a transaction permitted under Section
6.2(a)(i)), winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed, undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days, or any of the actions sought in such
proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or any substantial part of its property) shall occur; or

(iii)          any Loan Party or
Subsidiary of the Borrower shall take any corporate action pursuant to a
resolution or consent of its board of directors or shareholders to authorize
any of the actions set forth in this Section 7.1(e).

(f)            Judgments and Attachments.  Any final judgment (or judgments) or money
judgment (or judgments), writ or warrant of attachment, or similar process
involving in excess of $5,000,000 (to the extent not covered by insurance which
is confirmed in writing by the insurers or agents of the Borrower or any of its
Subsidiaries as covering such judgment or process) in the aggregate shall be
entered or filed against any Loan Party or Subsidiary of the Borrower or any of
their respective assets and either (1) shall remain undischarged, unpaid,
unvacated, unbonded or unstayed for a period of thirty (30) days from the date
of its entry, or (2) there shall be any period of thirty (30) 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.

(g)           ERISA Termination Event.  Any Termination Event occurs which the
Majority Lenders reasonably believe could have a Material Adverse Effect.

(h)           ERISA Waiver. 
If the plan administrator of any Plan applies under Section 412(d) of
the IRC for a waiver of the minimum funding standards of Section 412(a) of the
IRC and the Majority Lenders reasonably believe that the business hardship upon
which the application for such waiver is based could have a Material Adverse
Effect.

(i)            Termination of Documents; Failure of Security.  Any of the Loan Documents shall cease for any
reason (other than by reason of any action or inaction by the Administrative
Agent or any Lender) to be in full force and effect against any Loan Party
(other 

 66
 

than in accordance with the terms hereof or thereof), or any Loan Party
shall disavow its obligations under, or shall contest the validity or enforceability
of, any of the Loan Documents or the Obligations, or any material Lien intended
to be created thereby ceases to be or is not valid and perfected in any
material respect (other than in accordance with Section 8.10); or any
such Lien shall be subordinated or shall not have the priority contemplated by
this Agreement, any of the other Loan Documents, for any reason, or any Loan
Party or Affiliate thereof shall institute any action seeking a determination
of any of the foregoing, or the subordination provisions of the Note Indenture
shall fail to be in full force and effect.

(j)            Change in Control.  Any of the following events occur:

(i)            (A) any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the 1934 Act,
but excluding any employee benefit plan of such person or its Subsidiaries, and
any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) other than one or more Principals
or their Related Parties becomes the Beneficial Owner, directly or indirectly,
of more than 35% of the Voting Stock of the Borrower (measured by the voting
power rather than the number of shares); or

(ii)           except as otherwise
permitted under Sections 6.2(a)(i) and 6.2(g), the failure of the
Borrower (A) to own (directly or indirectly), free and clear of all Liens or
other encumbrances (other than any Lien or encumbrance created by the Loan
Documents), 100% of the outstanding shares of each class of Capital Stock of
any Subsidiary Guarantor on a fully diluted basis, or, in the case of NASDI, at
least 65% of the outstanding equity capital, or 100% of the outstanding Voting
Stock, of NASDI, or (B) to have the power (directly or indirectly) to direct or
cause the direction of the management or policies of any such Subsidiary
Guarantor (subject, in the case of NASDI, to the terms of NASDI’s limited
liability company agreement and other organizational documents); or

(iii)          a majority of the
Board of Directors of the Borrower are not Continuing Directors; or

(iv)          any “Change of
Control” (as defined in the Note Indenture) occurs.

For purposes of this, clause (j), (i)”Voting Stock” of any Person as of
any date means the Capital Stock of such Person that is at the time entitled to
vote in the election of the Board of Directors of such Person and (ii) “Capital
Stock” means (a) in the case of a corporation, corporate stock, (b) in the case
of any association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

(k)           Bonding Agreement.

 

 67

(i)            Any Person
executing bonds, undertakings or instruments of guaranty as surety for the
Borrower or any of its Subsidiaries with respect to any marine construction or
dredging contracts to be entered into by the Borrower or any such Subsidiary
for any reason ceases to issue such bonds, undertakings or instruments of
guaranty and (A) the Borrower and its Subsidiaries fail to cause another Person
reasonably acceptable to the Administrative Agent (provided that any such
Person shall be deemed to be acceptable if its bonds, undertakings or
instruments of guaranty are accepted by contract providers for the Borrower and
its Subsidiaries) to issue bonds, undertakings or instruments of guaranty
within 90 days of the date that such original Person ceased to issue bonds,
undertakings or instruments of guaranty, or (B) such denial, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
or

(ii)           Travelers provides
notice to the Administrative Agent (pursuant to Section 4.4 of the
Intercreditor Agreement) of any breach or default under any bonded contract or
under the Travelers Agreement and, as a result thereof, Travelers has taken
action pursuant to Section 4.1(a) of the Intercreditor Agreement; or

(iii)          The Borrower or any
of its Subsidiaries defaults in the payment when due of any amount due under
the Bonding Agreement or breaches or defaults with respect to any other term of
the Bonding Agreement, if the effect of such failure to pay, default or breach
is to cause any Person executing bonds, undertakings or instruments of guaranty
as surety for the Borrower or any of its Subsidiaries to take possession of the
work under any of the bonded contracts of the Borrower or any of its
Subsidiaries and such possession could reasonably be expected to result in a
Material Adverse Effect; or

(iv)          Any Loan Party
breaches or defaults with respect to any term under any of the bonded contracts
of such Loan Party, if the effect of such default or breach is to cause any
Person executing bonds, undertakings or instruments of guaranty as surety for
such Loan Party to take possession of the work under such bonded contract and
such possession could reasonably be expected to result in a Material Adverse
Effect.

SECTION
7.2.  Acceleration.  Upon the occurrence of any Event of Default
described in clause (ii) or (iii) of Section 7.1(e),
the Commitments shall each automatically and immediately terminate and all
unpaid Obligations shall automatically become immediately due and payable,
without presentment, demand, or protest or other requirements of any kind
(including valuation and appraisement diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by the Borrower, and the obligation of each Lender to make any Loan and
of the Issuing Lenders to issue and of the Lenders to participate in any Letter
of Credit hereunder shall thereupon terminate; and upon the occurrence and
during the continuance of any other Event of Default, the Administrative Agent
may, and at the direction of the Majority Lenders, shall, by written notice to
the Borrower, immediately terminate the Commitments and/or declare all of the
Obligations of the Borrower to be, and the same shall forthwith become,
immediately due and payable together with accrued interest thereon, and the
obligation of each Lender to make any Loan and of the Issuing Lenders to issue
and of the Lenders to participate in any Letter of Credit hereunder shall
thereupon terminate.  In addition to and
not in limitation of any other right available to the Lenders under any of the
Loan

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Documents or otherwise at law or equity, upon the giving of such notice
by the Administrative Agent, the Borrower shall be required to deposit
immediately with the Administrative Agent for the benefit of the Lenders, in
immediately available funds, an amount equal to the Letter of Credit
Obligations (the “Deposit”).  The Borrower’s obligation to pay the Deposit
shall be absolute and unconditional, and the Deposit shall be deposited in a
special collateral account with the Administrative Agent to ensure
reimbursement of any drawings under such Letters of Credit and payment of all
other amounts due and payable under any of the Loan Documents regarding the
Letters of Credit.

SECTION
7.3.  Injunctive
Relief.  The Borrower
recognizes that in the event the Borrower fails to perform, observe or
discharge any of its Obligations, any remedy of law may prove to be inadequate
relief to the Administrative Agent or any Lender, therefore the Borrower agrees
that the Administrative Agent and each Lender, if the Administrative Agent or
such Lender so requests, shall be entitled to temporary and permanent
injunctive relief during the continuation of an Event of Default in any such
case without the necessity of proving actual damages or inadequacy of damages
as an available remedy therefor.

SECTION
7.4.  Allocation
Among Secured Parties. 
Following the occurrence of an Event of Default, and notwithstanding
anything in this Agreement to the contrary, all payments, and collections with
respect to proceeds of Collateral and all other payments and other applications
otherwise on account of any of the Obligations, shall be applied to the
Obligations which are then due and payable and if such payments and proceeds
are insufficient to satisfy all such Obligations which are due and payable,
such payments and proceeds shall be applied in the following order in each case
ratably among such Obligations: (i) to the payment of all amounts then due with
respect to reasonable out-of-pocket fees (including Attorney Costs), charges,
expenses and indemnity claims due the Administrative Agent, (ii) to the payment
of all other amounts then due with respect to reasonable out-of-pocket fees
(including Attorney Costs), charges, expenses and indemnity claims due the
other Secured Parties, (iii) to the payment of amounts then due with respect to
interest on the Loans, (iv) to the payment of amounts then due with respect to
principal of the Loans and Reimbursement Obligations (and to the extent Letter
of Credit Obligations are contingent, cash collateral with respect thereto),
and amounts then due the Secured Parties with respect to Rate Protection
Agreements and (v) to the payment of all other Obligations.

ARTICLE VIII.

THE ADMINISTRATIVE AGENT

SECTION 8.1.1.  Appointment and
Authorization.  (a)  Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to
it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto, including, without
limitation, acting as the representative of each Secured Party for the
perfection of the Liens granted pursuant to the Collateral Documents.  Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary 

 69
 

relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.  Notwithstanding
the use of the term “Administrative Agent”, the Administrative Agent’s legal
relationship with the Lenders shall not be one of agency, it being understood
and agreed to by the Lenders that the Administrative Agent is an independent
contractor for the Lenders.

(b)           For the sole purpose of the Ship Mortgages,
the Administrative Agent is hereby appointed as trustee for purposes of holding
the Ship Mortgages as mortgagee on behalf of the Lenders, and the
Administrative Agent hereby accepts such appointment as trustee and agrees to
act as mortgagee under the Ship Mortgages in such capacity.

SECTION
8.2.  Delegation
of Duties.  The Administrative
Agent may execute any of its duties under this Agreement or any other Loan
Document by or through its agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

SECTION
8.3.  Liability
of Administrative Agent.  None
of the Administrative Agent-Related Persons shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for its own gross negligence, bad
faith or willful misconduct), or (ii) be responsible in any manner to any of
the Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or for the value of any Collateral or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder.  No Administrative Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions, of this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries or
Affiliates.

SECTION
8.4.  Reliance
by Administrative Agent.

(a)           The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Loan Parties),
independent accountants and other experts selected by the Administrative
Agent.  Except for its express
obligations set forth in Article II hereof,
the Administrative Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the 

 70
 

Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Majority Lenders or such greater number of Lenders required by Section
9.1 and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.

(b)           For
purposes of determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has executed this Agreement, or an Assignment and Acceptance,
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter either sent by the Administrative Agent to
such Lender for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Lender, unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Lender prior to the initial Borrowing specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the
Administrative Agent to that effect or such Lender shall not have made
available to the Administrative Agent such Lender’s ratable portion of such
Borrowing.

SECTION
8.5.  Notice of
Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent
for the account of the Lenders, unless the Administrative Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default.” In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be requested by the Majority Lenders in accordance
with Article VII; provided that unless and
until the Administrative Agent shall have received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.

SECTION
8.6.  Credit
Decision.  Each Lender
expressly acknowledges that none of the Administrative Agent-Related Persons
has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Loan Parties shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties, and all applicable bank regulatory laws relating to the transactions
contemplated thereby, and made its own decision to enter into this Agreement
and extend credit to the Borrower hereunder. 
Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make 

 71
 

such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower.  Except
for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower which may
come into the possession of any of the Administrative Agent-Related Persons.

SECTION
8.7.  Indemnification.  Whether or not the transactions contemplated
hereby shall be consummated, the Lenders shall indemnify upon demand the
Administrative Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to
do so), ratably according to such Lender’s Revolving Credit Percentage from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Loans and the termination or resignation of the related Administrative
Agent) be imposed on, incurred by or asserted against any such Person and which
are in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such
Person under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment to the Administrative
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person’s gross negligence, bad faith or willful
misconduct.  Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Administrative 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, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of the Borrower.  Without
limiting the generality of the foregoing, if the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Administrative Agent fully for all amounts
paid, directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this
Section, together with all costs and expenses (including Attorney Costs).  The obligation of the Lenders in this Section
shall survive the payment of all Obligations hereunder.

SECTION
8.8.  Administrative
Agent in Individual Capacity. 
LaSalle and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory or other
business with the Loan Parties and their Affiliates as though LaSalle were not
the Administrative Agent hereunder and without notice to or consent of the
Lenders.  With respect to its Loans and 

 72
 

interests in Letters of Credit issued hereunder, LaSalle shall have the
same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
“Lender” and the “Lenders” shall include LaSalle in its individual capacity.

SECTION
8.9.  Successor
Administrative Agent.  The
Administrative Agent may, and at the request of the Majority Lenders shall,
resign as Administrative Agent upon thirty (30) days’ notice to the Lenders and
the Borrower.  If the Administrative
Agent shall resign as Administrative Agent under this Agreement, the Majority
Lenders shall appoint from among the Lenders a successor representative for the
Lenders.  If no successor representative
is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor representative from among the
Lenders.  Upon the acceptance of its
appointment as successor representative hereunder, such successor
representative shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor representative and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be
terminated.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article VIII and Sections 9.4 and 9.10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.  If no successor representative has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Majority Lenders appoint a
successor representative as provided for above. 
Upon resignation, the Administrative Agent shall execute and deliver
such assignments and take such other actions as the Lenders shall reasonably
request in order to transfer and assign its rights and interests under the
Collateral Documents to the Lenders or any successor representative appointed
by the Lenders; provided that any costs and expenses incurred by the
Administrative Agent in taking such actions shall be reimbursed in accordance
with Section 9.4(a).

SECTION
8.10.  Collateral
Matters; Release of Collateral.

(a)           The
Administrative Agent is authorized on behalf of all the Lenders, without the
necessity of any notice to or further consent from the Lenders, from time to
time to take any action with respect to any Collateral or the Collateral
Documents which may be necessary to perfect and maintain perfected the security
interest in and Liens upon the Collateral granted pursuant to the Collateral Documents.

(b)           The
Lenders irrevocably authorize the Administrative Agent, and the Administrative
Agent hereby agrees upon the request of the Borrower, to release any Lien
granted to or held by the Administrative Agent upon any Collateral (i) upon
termination of the Commitments and payment in full of all Loans and all other
Obligations (or cash collateralization of any outstanding Letters of Credit in
a manner acceptable to the applicable Issuing Lender) payable under this
Agreement and under any other Loan Document (other than contingent obligations
for which no claim has been, or is reasonably expected to be, made); (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any 

 73
 

disposition permitted hereunder; (iii) constituting property in which
none of the Loan Parties owned any interest at the time the Lien was granted or
at any time thereafter; (iv) constituting property leased to any Loan Party
under a lease which has expired or been terminated in a transaction permitted
under this Agreement or is about to expire and which has not been, and is not
intended by such Loan Party to be, renewed or extended; (v) consisting of an
instrument evidencing Debt or other debt instrument, if the Debt evidenced
thereby has been paid in full; (vi) if required by the Intercreditor Agreement;
(vii) with respect to which (A) the Borrower shall have requested in writing
that the Administrative Agent release its Lien thereon, (B) the Borrower shall
have provided, or caused one or more of its Subsidiaries to provide, substitute
Collateral of reasonably equivalent or greater value to that of such Collateral
subject to such requested Lien release, (C) the Administrative Agent shall have
reasonably determined that such substitute Collateral is otherwise acceptable,
(D) such substitute Collateral (and the Administrative Agent’s substitute Lien
thereon) shall be subject to documentation reasonably satisfactory to the
Administrative Agent and (E) such release and substitution is otherwise made in
compliance with Section 3.1 of the
Intercreditor Agreement; (viii) with respect to any Liens on the vessels Buster, Jack, Key West and G.L. 142 arising under the
Collateral Documents; provided, that (A) the Borrower shall have
requested in writing that the Administrative Agent release its Lien thereon,
(B) the vessel Ohio shall constitute Collateral
at the time of such release (C) the Administrative Agent shall have received a
recent appraisal of the vessel Ohio by Merrill
Marine or such other appraiser reasonably acceptable to the Administrative
Agent providing that the vessel Ohio has an OLV
of at least $25,500,000 and (D) the Ohio
(and the Administrative Agent’s Lien thereon) shall be subject to documentation
reasonably satisfactory to the Administrative Agent, (ix) in connection with
any permanent reduction in the Revolving Commitment Amount in accordance with Section
2.2 hereof, in Collateral selected by the Borrower in consultation with the
Administrative Agent having an aggregate OLV according to a recent appraisal by
Merrill Marine or such other appraiser reasonably acceptable to the
Administrative Agent no greater than 50% of the amount of such permanent
reduction in the Revolving Commitment Amount or (x) subject to Section
9.1(g), if approved, authorized or ratified in writing by the Majority
Lenders.  Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent’s authority to release particular types or items of
Collateral pursuant to this Section 8.10(b).  The Administrative Agent hereby agrees to
execute and deliver to the Borrower such instruments and documents as are
requested by the Borrower (and prepared and filed at Borrower’s sole cost and
expense) to effect each release permitted hereunder.

(c)           Intercreditor Agreement and other Loan Documents.  Except to the extent provided in Section 9.1, each Lender from time to time party
hereto authorizes and consents, by its execution hereof or by the Assignment
and Acceptance by which it became a Lender, to the Administrative Agent’s
entering into the Intercreditor Agreement and each of the other Loan Documents
on such Lender’s behalf and taking all actions taken, required or permitted to
be taken by the Administrative Agent thereunder.

ARTICLE IX.

MISCELLANEOUS

SECTION
9.1.  Amendments,
Etc.  No amendment or waiver
of any provision of this Agreement or any other Loan Document, nor consent to
any departure by the Borrower 

 74
 

therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders and the Borrower and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and signed by all
of the affected Lenders and the Borrower do any of the following: (a) reduce
the rate of interest on any Loan or obligation or reduce any fee payable to the
Lenders, (b) reduce or forgive the principal of, or interest on, the Loans or
any fees or other amounts payable hereunder, (c) postpone any date fixed for
any payment of principal (excluding any mandatory prepayment) of, or interest
on, the Loans or any fees or other amounts payable hereunder, (d) reduce the
percentage specified in the definition of Majority Lenders, (e) extend the
expiration of or change the percentage of any of the Commitments or increase
the number of the Lenders which shall be required for the Lenders or any of
them to take any action hereunder, (f) require additional consents, to be
obtained with respect to the sale or any assignment or participation of any
Lenders hereunder, (g) release all or substantially all of the Guarantees or
the Liens of the Administrative Agent and the Lenders on all or substantially
all of the Collateral (other than to the extent permitted by Section
8.10(b)(i), (vi) or (vii) hereof), (h) amend Section 9.17
or the definition of “Alternative Currency” without the written consent of each
Lender in a manner which is more burdensome to the Lenders; or (i) amend this Section 9.1 or otherwise modify the voting
provisions of this Agreement or amend the definition of Majority Lenders; provided, further,
that no amendment, waiver or consent shall (i) unless in writing and signed by
the Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement, (ii) unless in writing and signed by the Swing Line Lender in
addition to the Lenders required above to take such action, affect the rights
or duties of the Swing Line Lender under this Agreement or (iii) effect an
increase in any of the Commitments of any Lender without such Lender’s express
written approval.

If, in connection with
any proposed amendment, modification, waiver or termination (a “Proposed Change”) requiring the consent of all
affected Lenders, the consent of Majority Lenders is obtained but the consent
of other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described in this Section
9.1 being referred to as a “Non-Consenting
Lender”), then, so long as the Lender acting as the Administrative
Agent is not a Non-Consenting Lender, at the Borrower’s request, an assignee
acceptable to the Administrative Agent shall have the right with the
Administrative Agent’s consent and in the Administrative Agent’s sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall, upon the Administrative
Agent’s request, sell and assign to the Lender acting as the Administrative
Agent or such Assignee, all of the interests, rights and obligations under this
Agreement (including, without limitation, the Commitments and the Revolving
Credit Percentage of the Obligations) of such Non-Consenting Lender for an
amount equal to the principal balance of all Loans held by the Non-Consenting
Lender and all accrued interest and fees with respect thereto through the date
of sale; provided, however,
that such purchase and sale shall not be effective until the Administrative
Agent shall have received from such assignee an agreement in form and substance
satisfactory to the Administrative Agent and the Borrower whereby such assignee
shall agree to be bound by the terms hereof. 
Each Lender agrees that, if it becomes a Non-Consenting Lender, it shall
execute and deliver to the Administrative Agent an Assignment and Acceptance to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Note (if the assigning Lender’s Loans are evidenced by Notes) subject

 75
 

to such Assignment
and Acceptance; provided, however, that the failure of any Non-Consenting
Lender to execute an Assignment and Acceptance shall not render such sale and
purchase (and the corresponding assignment) invalid.

SECTION
9.2.  Notices,
Etc.  Unless otherwise
specifically permitted herein, all notices and other communications provided
for hereunder shall be in writing (including telecopier, telegraphic, telex or
cable communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, and addressed as follows:

(a)           if to the Borrower
or any other Loan Party:

Great Lakes Dredge & Dock Corporation

2212 York Road

Oak Brook, IL 60523

Attention:  Chief Financial Officer

Facsimile:  (630) 574-3007

with a copy to:

Winston & Strawn LLP

35 West Wacker Drive

Chicago, IL 60601

Attention:  Brian S. Hart, Esq.

Facsimile:  312-558-5700

(b)           if
to any Lender, an original party hereto, at its Domestic Lending Office
specified on Schedule IV hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and

(c)           if
to LaSalle:

(i)            as the Administrative Agent:

LaSalle Bank National
Association

135 S. LaSalle Street

Chicago, Illinois 60603

Attention:  Steve Trepiccione

Facsimile:  (312) 904-6021

steve.trepiccione
@abnamro.com

with a copy to:

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention:  Michael Gold, Esq.

Telecopier: (312) 853-7036

 

 76

(ii)           as an Issuing Lender

Brad Nelson

Vice President

LaSalle Bank National
Association

135 S LaSalle St. Suite
1425

Chicago, IL 60603

Facsimile:  312 904 4448

bradley.nelson@abnamro.com

with a copy to:

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention:  Michael Gold, Esq.

Telecopier: (312) 853-7036

or, as to the Borrower or
the Administrative 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 telecopier, telegraphic, telex or cable notices and
communications shall, when telecopied, telegraphed, telexed or cabled, be
effective when telecopied delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively, and all such
mail notices and communications shall be effective five (5) days after deposit
in the mails; except that notices and communications by any of the above means
to the Administrative Agent pursuant to Articles II,
III or VIII
shall not be effective until received by the Administrative Agent.

SECTION
9.3.  No Waiver;
Remedies.  No failure on the
part of any Lender or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder 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
9.4.  Costs and
Expenses; Indemnification. 
The Borrower agrees (a) to pay or reimburse the Administrative Agent and
the Arranger for all their reasonable out-of-pocket costs and expenses incurred
in connection with the syndication of the Facilities (other than fees payable
to syndicate members) and the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements and other charges of counsel to the Administrative Agent and the
Arranger, (b) to pay or reimburse each Lender and the Administrative Agent for
all their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any other documents prepared in connection herewith or therewith, including,
without limitation, 

 77
 

the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent, (c) to pay, indemnify, or
reimburse each Lender and the Administrative Agent for, and hold each Lender
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay,
in paying, stamp, excise and other taxes, if any, which may be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify or reimburse each Lender, the Administrative Agent, the
Arranger, their respective affiliates, and their respective officers,
directors, trustees, employees, advisors, agents and controlling persons (each,
an “Indemnitee”) for, and hold each
Indemnitee harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans
or the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Borrower or any of its Subsidiaries or
any of the Properties and the fees and disbursements and other charges of legal
counsel in connection with claims, actions or proceedings by any Indemnitee
against the Borrower hereunder (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”), provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence, bad faith or willful misconduct of such
Indemnitee.  No Indemnitee shall be
liable for (i) consequential damages as a result of any failure to fund any of
the Facilities or (ii) any damages arising from the use by unauthorized Persons
of Information or other materials sent through electronic, telecommunications
or other information transmission systems that are intercepted by such Persons
or for any special, indirect, consequential or punitive damages in connection
with the Facilities (unless such damages resulted directly from the gross
negligence, bad faith or willful misconduct of the Person claiming the
protections of clause (ii)).  Without
limiting the foregoing, and to the extent permitted by applicable law, the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries so to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee; provided, however,
that the Borrower shall retain all such rights of recovery with respect to any
liabilities arising under Environmental Laws resulting from the gross
negligence, bad faith or willful misconduct of such Indemnitee.  All amounts due under this Section shall be
payable not later than 30 days after written demand therefor.  Statements payable by the Borrower pursuant
to this Section shall be submitted to Deborah A. Wensel (Telephone No. (630)
574-2948) (Fax No. (630) 574-3007), at the address of the Borrower set forth in
Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent.  The agreements in this Section shall survive
repayment of the Loans and all other amounts payable hereunder.

SECTION
9.5.  Setoff.  In addition to and not in limitation
of any rights of any Lender under Applicable Law, each Lender shall, upon the
occurrence and during the continuance of any 

 78
 

Event of Default described in Section 7.1(a) or Section
7.1(e), have the right to appropriate and apply to the payment of
the Obligations then due and unpaid, and, as security for such Obligations,
each of the Loan Parties hereby grants to each Lender a continuing security
interest in, any and all deposits or accounts of the Borrower then or
thereafter maintained with such Lender or participant; provided
that any such appropriation and application shall be subject to the provisions
of Section 2.17.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender; provided that the failure
to give such notice shall not affect the validity of such setoff and
application.  The rights of each Lender
under this Section 9.5 are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.

SECTION
9.6.  Effectiveness.  This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have been notified by each Lender that such
Lender has executed it.

SECTION
9.7.  Successors
and Assigns; Participations and Assignments.  (a) This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lenders, the Administrative Agent,
all future holders of the Loans and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender.

(b)           Any
Lender may, without the consent of the Borrower, in accordance with applicable
law, at any time sell to one or more banks, financial institutions or other
entities (each, a “Participant”)
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents.  In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and the other Loan Documents.  In no event shall any Participant under any
such participation 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 require the consent of the Lender from which such participation was
purchased pursuant to Section 9.1.  The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that,
in purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if such Participant
were a Lender hereunder.  The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections 2.10, 2.11, 2.12 and 2.16 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if such Participant
were a Lender; provided that, in the case of Sections
2.12 and 2.16,
such 

 79
 

Participant shall have complied with the
requirements of said Section, and provided,
further, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

(c)           Any
Lender (an “Assignor”) may, in accordance
with applicable law and upon written notice to the Administrative Agent, at any
time and from time to time assign to any Lender or any Affiliate, Related Fund
or Control Investment Affiliate thereof or, with the written consent of the
Borrower and the Administrative Agent and, in the case of any assignment of
Revolving Commitments, the written consent of the Issuing Lenders (which, in
each case, shall not be unreasonably withheld or delayed) (provided that no such consent need be obtained by
the Arranger or any of its Affiliates with respect to any assignment by either
of them), to an additional bank, financial institution or other entity (an “Assignee”) all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit A,
executed by such Assignee and such Assignor (and, where the consent of the
Borrower, the Administrative Agent or the Issuing Lenders is required pursuant
to the foregoing provisions, by the Borrower and such other Persons) and
delivered to the Administrative Agent for its acceptance and recording in the
Register; provided that no such assignment
to an Assignee (other than any Lender or any Affiliate or Related Fund), in the
case of an assignment of Revolving Commitments and/or Loans, shall be in an
aggregate principal amount of less than $5,000,000 (other than in the case of
an assignment of all of a Lender’s interests under this Agreement), and after
giving effect thereto, the Assignor, in the case of an assignment of Revolving
Commitments and/or Loans, shall have Revolving Commitments and/or Loans
aggregating at least $5,000,000 unless otherwise agreed by the Borrower and the
Administrative Agent.  Any such
assignment need not be ratable as among the Facilities.  Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with Commitments and/or Loans as set
forth therein, (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor’s rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto, except as to Section 2.10,
2.11, 2.12
and 9.4 in respect of the period prior to
such effective date), and (z) the assignee shall comply with Section 2.16 (f). 
Notwithstanding any provision of this Section, the consent of the
Borrower shall not be required for any assignment that occurs at any time when
any Event of Default shall have occurred and be continuing.  For purposes of the minimum assignment
amounts set forth in this paragraph, multiple assignments by or to two or more
Related Funds shall be aggregated. 
Notwithstanding anything herein to the contrary, neither the Borrower
nor any Affiliate thereof may be an “Assignee” hereunder.

(d)           The
Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 9.2 a copy of each
Assignment and Acceptance delivered to it and a register (the “Register”) for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, each Lender from time to time. 
The entries in the Register shall be presumptive evidence of the amounts
so entered, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is 

 80
 

recorded in the Register as the owner of the
Loans and any Notes evidencing such Loans recorded therein for all purposes of
this Agreement.  Any assignment of any
Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide).  Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment
or transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance; thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the designated Assignee, and the
old Notes shall be returned by the Administrative Agent to the Borrower marked “canceled”.  The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender’s Loans) 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 Assignor and an
Assignee (and, in any case where the consent of any other Person is required by
Section 9.7(c), by each such other Person)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (except that no such registration and processing fee
shall be payable in the case of an Assignee which is already a Lender or is an
Affiliate or Related Fund of a Lender or a Person under common management with
a Lender), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice of
such acceptance and recordation to the Borrower.  On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the applicable Notes of the assigning
Lender) a new Note to the order of such Assignee in an amount equal to the
Revolving Commitment assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the Assignor has retained a Revolving Commitment upon request, a new
Note and/or Notes, as the case may be, to the order of the Assignor in an
amount equal to the Revolving Commitment retained by it hereunder.  Such new Note or Notes shall be dated the
Closing Date and shall otherwise be in the form of the Note or Notes replaced
thereby.

(f)            For
avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 9.7 concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in Loans and Notes, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

(g)           Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose
funding vehicle (an “SPC”), identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower, the option to provide to the Borrower all or any part
of any Loan that such Granting Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to make any
Loan and (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Loan, the Granting Lender shall be obligated
to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. 

 81
 

Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other Debt of any SPC,
it will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof.  In addition, notwithstanding anything to the
contrary in this Section 9.7(g), any SPC
may (A) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender,
or with the prior written consent of the Borrower and the Administrative Agent
(which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; provided that non-public
information with respect to the Borrower may be disclosed only with the
Borrower’s consent which will not be unreasonably withheld.  This Section 9.7(g)
may not be amended without the written consent of any SPC with Loans
outstanding at the time of such proposed amendment.

SECTION
9.8.  Survival
of Warranties and Agreements.  All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement and the
other Loan Documents and the making and repayment of the Obligations hereunder.

SECTION
9.9.  Marshalling;
Recourse to Security; Payments Set Aside.  Neither any Lender nor the Administrative
Agent shall be under any obligation to marshall any assets in favor of the
Borrower or any other Loan Party or against or in payment of any or all of the
Obligations.  Recourse to security shall
not be required at any time.  To the
extent that any Loan Party makes a payment or payments to the Administrative
Agent or the Lenders, or the Administrative Agent or the Lenders enforce their
security interests or exercise their rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or set-off had not occurred.

SECTION
9.10.  Submission
To Jurisdiction; Waivers.

(a)           All
judicial proceedings brought against any party to this Agreement with respect
to this Agreement or any other Loan Document may be brought in any state or
federal court of competent jurisdiction in New York, New York, and by execution
and delivery of this Agreement, each party accepts, for itself and in
connection with its properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Agreement or any of 

 82
 

the other Loan Documents from which no appeal
has been taken or is available.  Each
party irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to its notice address
specified on the signature pages hereof, such service to become effective ten
(10) days after such mailing.  EACH LOAN
PARTY, EACH ISSUING LENDER, THE ADMINISTRATIVE AGENT, AND EACH LENDER
IRREVOCABLY WAIVES (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. 
Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Administrative Agent or
any Lender or any Loan Party to bring proceedings against any Loan Party in the
courts of any other jurisdiction.

SECTION
9.11.  Performance
of Obligations.  Each Loan
Party agrees that the Administrative Agent, the Issuing Lenders and the
Lenders, or any one or more of them, may, but shall have no obligation to, make
any payment or perform any act required of such Loan Party under any Loan
Document or take any other action which such party in its discretion deems
necessary or desirable to protect or preserve the Collateral, including any
action to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral.

SECTION
9.12.  Construction.  The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and the other Loan
Documents and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Loan Documents or any amendments or exhibits
thereto.

SECTION
9.13.  GOVERNING
LAW.  THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS (UNLESS ANY SUCH LOAN DOCUMENT EXPRESSLY PROVIDES
OTHERWISE), AND THE LETTERS OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CONFLICTS OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS OF 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).

SECTION
9.14.  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.

SECTION
9.15.  Entire
Agreement.  This Agreement,
together with the other Loan Documents, embodies the entire agreement and
understanding among the Loan Parties, the Lenders, the Issuing Lenders and the
Administrative Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to 

 83
 

the subject matter hereof and thereof, except
for the fee letter dated May 7, 2007 among the Borrower and LaSalle, and any
prior arrangements made with respect to the payment by the Borrower of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Administrative Agent or the Lenders

SECTION
9.16.  Non-Confidentiality
of Tax Structure. 
Notwithstanding anything herein to the contrary, each party hereto (and
each affiliate and person acting on behalf of any such party) agrees that each
party (and each employee, representative, and other agent of such party) may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the transaction contemplated by this Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to such party or such Person relating to such tax treatment and
tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws.  This
authorization is not intended to permit disclosure of any other information
including (without limitation) (i) any portion of any materials to the extent
not related to the tax treatment or tax structure of the transaction, (ii) the
identities of participants or potential participants in the transaction, (iii)
the existence or status of any negotiations, (iv) any pricing or financial
information (except to the extent such pricing or financial information is
related to the tax treatment or tax structure of the transaction), or (v) any
other term or detail not relevant to the tax treatment or the tax structure of
the transaction.

SECTION 9.17. 
Additional
Alternative Currencies.

(a)           The
Borrower may from time to time request that Eurodollar Rate Loans be made
and/or Letters of Credit be issued in a currency other than those specifically
listed in the definition of “Alternative Currency;” provided that such
requested currency is a lawful currency (other than Dollars) that is readily
available and freely transferable and convertible into Dollars.  In the case of any such request with respect
to the making of Eurodollar Rate Loans, such request shall be subject to the
approval of the Administrative Agent and the Lenders; and in the case of any
such request with respect to the issuance of Letters of Credit, such request
shall be subject to the approval of the Administrative Agent and the applicable
Issuing Lender.

(b)           Any
such request shall be made to the Administrative Agent not later than 11:00
a.m., 10 Business Days prior to the date of the desired Revolving Loan or
Letter of Credit (or such other time or date as may be agreed by the
Administrative Agent and, in the case of any such request pertaining to Letters
of Credit, the Issuing Lenders, in its or their sole discretion).  In the case of any such request pertaining to
Eurodollar Rate Loans, the Administrative Agent shall promptly notify each
Lender thereof; and in the case of any such request pertaining to Letters of
Credit, the Administrative Agent shall promptly notify the applicable Issuing
Lender thereof.  Each Lender (in the case
of any such request pertaining to Eurodollar Rate Loans) or the applicable
Issuing Lender (in the case of a request pertaining to Letters of Credit) shall
notify the Administrative Agent, not later than 11:00 a.m., five Business Days
after receipt of such request whether it consents, in its sole discretion, to
the making of Eurodollar Rate Loans or the issuance of Letters of Credit, as
the case may be, in such requested currency.

(c)           Any
failure by a Lender or a Issuing Lender, as the case may be, to respond to such
request within the time period specified in the preceding sentence shall be
deemed to be a refusal by such Lender or Issuing Lender, as the case may be, to
permit 

 84
 

Eurodollar Rate Loans to be made or Letters
of Credit to be issued in such requested currency.  If the Administrative Agent and all the
Lenders consent to making Eurodollar Rate Loans in such requested currency, the
Administrative Agent shall so notify the Borrower and such currency shall
thereupon be deemed for all purposes to be an Alternative Currency hereunder
for purposes of any Eurodollar Rate Loans; and if the Administrative Agent and
the applicable Issuing Lender consent to the issuance of Letters of Credit in
such requested currency, the Administrative Agent shall so notify the Borrower
and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder for purposes of any Letter of Credit issuances.
If the Administrative Agent shall fail to obtain consent to any request for an
additional currency under this Section 9.17, the Administrative Agent
shall promptly so notify the Borrower.  Any specified currency of an Existing
Letter of Credit that is neither Dollars nor one of the Alternative Currencies
specifically listed in the definition of “Alternative Currency” shall be deemed
an Alternative Currency with respect to such Existing Letter of Credit only.

SECTION 9.18. 
Exchange Rates; Currency Equivalents.

(a)           The
Administrative Agent shall determine the Spot Rates as of each Revaluation Date
to be used for calculating Dollar Equivalent amounts of Letters of  Credit and Revolving Loans denominated in
Alternative Currencies.  Such Spot Rates
shall become effective as of such Revaluation Date and shall be the Spot Rates
employed in converting any amounts between the applicable currencies until the
next Revaluation Date to occur.  Except
for purposes of financial statements delivered by Loan Parties hereunder or
calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than Dollars) for purposes
of the Loan Documents shall be such Dollar Equivalent amount as so determined
by the Administrative Agent.

(b)           Wherever
in this Agreement in connection with a borrowing, conversion, continuation or
prepayment of a Revolving Loan or the issuance, amendment or extension of a
Letter of Credit, an amount, such as a required minimum or multiple amount, is
expressed in Dollars, but such Revolving Loan or Letter of Credit is
denominated in an Alternative Currency, such amount shall be the relevant
Alternative Currency Equivalent of such Dollar amount (rounded to the nearest
unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as
determined by the Administrative Agent.

SECTION 9.19. 
Cash Collateral.  The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Secured Parties, a security interest in all Cash Collateral delivered by the
Borrower in connection with Section 2.8.1.

SECTION 9.20. 
Syndication Agent and Co-Documentation Agents.  No Person named as a “Syndication Agent” or “Co-Documentation
Agent” herein shall have any rights or obligations under this Agreement or any
other Loan Document in its capacity as “Syndication Agent” or “Co-Documentation
Agent.”

*  *  * 
*  *

 85

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

GREAT LAKES DREDGE & DOCK CORPORATION, as the
Borrower and a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
          and Treasurer

GREAT LAKES CARIBBEAN DREDGING, INC., as a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
          and Treasurer

GREAT LAKES DREDGE & DOCK COMPANY, LLC, as a Loan
Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
           and Treasurer

DAWSON MARINE SERVICES
COMPANY, as a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
           and Treasurer

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

JDC SOIL MANAGEMENT &
DEVELOPMENT INC., as a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
           and Treasurer

NASDI HOLDINGS CORPORATION, as a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
           and Treasurer

NORTH AMERICAN
SITE DEVELOPERS, INC., as a Loan Party

By: /s/ Deborah
A. Wensel                                                        

Name: Deborah A. Wensel                                                         

Title:  Senior Vice President, Chief
Financial Officer
           and Treasurer

FIFTY-THREE DREDGING CORPORATION, as a Loan Party

By: /s/ Paul E.
Dinquel                                                                

Name: Paul E. Dinquel                                                                 

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

LASALLE BANK NATIONAL ASSOCIATION, as the
Administrative Agent, a  Lender, an
Issuing Lender, the Swing Line Lender and the Arranger

By: /s/ Steve
Trepiccione                                                           

Name: Steve Trepiccione                                                            

Title:  Senior Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

GENERAL ELECTRIC CAPITAL CORPORATION, as a  Lender and as Syndication Agent

By: /s/ Reuel Andrews                                                                

Name: Reyek Andrews                                                                

Title:  Duly Authorized Signatory

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

FIFTH THIRD BANK, as a 
Lender and as Co-Documentation Agent

By: /s/ Neil G. Mesch                                                                  

Name: Neil G. Mesch                                                                   

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

NATIONAL CITY BANK, as
a  Lender and as Co-Documentation Agent

By: /s/ Renee M.
Bonnell                                                            

Name: Renee M. Bonnell                                                            

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

CHARTER ONE BANK, as
a  Lender and as Co-Documentation Agent

By: /s/ R. Michael
Newton                                                         

Name: R. Michael Newton                                                          

Title: Senior Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a  Lender

By: /s/ Reginald M.
Goldsmith, III                                             

Name: Reginald M. Goldsmith, III, CFA                                   

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

BANK OF AMERICA, N.A., as a  Lender and as an Issuing Lender

By: /s/ Jonathan M.
Phillips                                                       

Name: Jonathan M. Phillps                                                         

Title:  Vice President  

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

MB FINANCIAL BANK, as
a  Lender

By: /s/ Henry Wessel                                                                  

Name: Henry Wessel                                                                   

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007
 

LEHMAN COMMERCIAL PAPER INC., as a  Lender

By: /s/ Maria Maslennikova
Lund                                            

Name: Maria Maslennikova Lund                                             

Title:  Vice President

 Great Lakes Dredge & Dock Corporation
 Credit Agreement
 June 2007

SCHEDULE I

DEFINITIONS

“1933
Act” means the Securities Act of 1933, as amended from time to time.

“1934
Act” means the Securities Exchange Act of 1934, as amended from time
to time.

“Adjusted
Consolidated EBITDA” means EBITDA adjusted as required or permitted
by Regulation S-X of the 1933 Act, but in any event in a manner consistent with
the Borrower’s applicable filings submitted with the Securities and Exchange
Commission.

“Administrative
Agent” has the meaning specified in the preamble.

“Administrative
Agent-Related Persons” means LaSalle and any successor
Administrative Agent arising under Section 8.9,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

“Affiliate”
means, with respect to any Person, any other Person:

(i)            which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, such Person (excluding any trustee under, or any committee with
responsibility for administering any Plan);

(ii)           which beneficially owns or holds ten
percent (10%) or more of any class of the Voting Stock of such Person (or, in
the case of a Person which is not a corporation, ten percent (10%) or more of
the equity interests); or

(iii)          ten percent (10%) or more of the
Voting Stock (or, in the case of a Person which is not a corporation, ten
percent (10%) or more of the equity interests) of which, is beneficially owned
or held, directly or indirectly, by such Person.

The term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.

“Agreement”
has the meaning specified in the preamble.

“Alternative
Currency” means (i) in respect of any Revolving Loans, Euro and each
other lawful currency (other than Dollars) that is approved in accordance with Section 9.17
hereof and (ii) in respect of any Letters of Credit, (A) Euro, British Pounds
Sterling and Canadian Dollars and each other lawful currency (other than
Dollars which is freely transferable and convertible into Dollars) that is
approved in accordance with Section 9.17 hereof and (B) the lawful
currencies of Bahrain, Qatar, Oman and the United Arab Emirates, in each case,
to the extent such currencies are freely transferable and convertible into
Dollars.

“Alternative
Currency Equivalent” means, at any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent or the
applicable Issuing Bank, as the case may be, at such time on the basis of the
Spot Rate (determined in respect of the most recent Revaluation Date) for the
purchase of such Alternative Currency with Dollars.

“Alternative Currency
Sublimit” means an amount equal to the lesser of the Revolving Commitment
Amount and $15,000,000.  The Alternative
Currency Sublimit is part of, and not in addition to, the Revolving Commitment
Amount.

“Applicable Base Rate
Margin,” “Applicable Non-Use Fee Percentage,” “Applicable
Eurodollar Rate Margin,” “Applicable Financial Letter of Credit Fee
Percentage,” and “Applicable Performance Letter of Credit Fee Percentage”
respectively mean, during any Pricing Period, the amount set forth below for
such Applicable Base Rate Margin, Applicable Non-Use Fee Percentage, Applicable
Eurodollar Rate Margin, Applicable Financial Letter of Credit Fee Percentage
and Applicable Performance Letter of Credit Fee Percentage, as the case may be,
depending upon the Total Leverage Ratio as of the last day of the Fiscal
Quarter most recently ended prior to the first day of such Pricing Period:

	
  Total Leverage

   Ratio

  	
   

  	
  Applicable

  Eurodollar 

  Rate 

  Margin

  	
   

  	
  Applicable

  Base Rate

  Margin

  	
   

  	
  Applicable 

  Non-Use 

  Fee 

  Percentage

  	
   

  	
  Applicable 

  Financial 

  Letter of 

  Credit Fee 

  Percentage

  	
   

  	
  Applicable Performance 

  Letter of Credit Fee 

  Percentage

  	
   

  
	
  3 5.50 to 1.00

  	
   

  	
   

  	
  3.00%

  	
   

  	
   

  	
   

  	
  1.25%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  3.00%

  	
   

  	
   

  	
   

  	
  1.50%

  	
   

  	
   

  
	
  3 5.00 to 1.00 but
  < 5.50 to 1.00

  	
   

  	
   

  	
  2.75%

  	
   

  	
   

  	
   

  	
  1.00%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  2.75%

  	
   

  	
   

  	
   

  	
  1.375%

  	
   

  	
   

  
	
  3 4.50 to 1.00 but < 5.00 to 1.00

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
  0.75%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
  1.25%

  	
   

  	
   

  
	
  3 4.00 to 1.00 but
  < 4.50 to 1.00

  	
   

  	
   

  	
  2.25%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  0.375%

  	
   

  	
   

  	
   

  	
  2.25%

  	
   

  	
   

  	
   

  	
  1.125%

  	
   

  	
   

  
	
  3 3.25 to 1.00 but
  < 4.00 to 1.00

  	
   

  	
   

  	
  2.00%

  	
   

  	
   

  	
   

  	
  0.25%

  	
   

  	
   

  	
   

  	
  0.375%

  	
   

  	
   

  	
   

  	
  2.00%

  	
   

  	
   

  	
   

  	
  1.00%

  	
   

  	
   

  
	
  < 3.25 to 1.00

  	
   

  	
   

  	
  1.75%

  	
   

  	
   

  	
   

  	
  0.00%

  	
   

  	
   

  	
   

  	
  0.25%

  	
   

  	
   

  	
   

  	
  1.75%

  	
   

  	
   

  	
   

  	
  0.875%

  	
   

  	
   

  

 

provided,
however, that (i) if and for so long as the Borrower shall have
failed to timely deliver a Compliance Certificate under Section 6.4(d)
with respect to such Fiscal Quarter most recently ended, the Applicable Base
Rate Margin, Applicable Non-Use Fee Percentage, Applicable Eurodollar Rate
Margin, Applicable Financial Letter of Credit Fee Percentage and Applicable
Performance Letter of Credit Fee Percentage for such Pricing Period shall be
determined as if the Total Leverage Ratio is greater than or equal to 5.50 to
1.00 and (ii) notwithstanding the foregoing, for the period beginning on the
Closing Date and ending on the date that is 180 days after the Closing Date,
the Applicable Base Rate Margin, Applicable Non-Use Fee Percentage, Applicable
Eurodollar Rate Margin, Applicable Financial Letter of Credit Fee Percentage
and Applicable Performance Letter of Credit Fee Percentage, respectively mean,
in respect of any Pricing Period (or portion thereof) during such 180 day
period, the amount set forth below for such Applicable Base Rate Margin,
Applicable Non-Use Fee Percentage, Applicable Eurodollar 

 2
 

Rate Margin, Applicable
Financial Letter of Credit Fee Percentage and Applicable Performance Letter of
Credit Fee Percentage, as the case may be, depending upon the Total Leverage
Ratio as of the last day of the Fiscal Quarter most recently ended prior to the
first day of such Pricing Period:

	
  Total Leverage

  Ratio

  	
   

  	
  Applicable

  Eurodollar 

  Rate 

  Margin

  	
   

  	
  Applicable 

  Base Rate 

  Margin

  	
   

  	
  Applicable 

  Non-Use 

  Fee 

  Percentage

  	
   

  	
  Applicable 

  Financial 

  Letter of 

  Credit Fee 

  Percentage

  	
   

  	
  Applicable Performance

   Letter of Credit Fee

  Percentage

  	
   

  
	
  3 5.50 to 1.00

  	
   

  	
   

  	
  3.00%

  	
   

  	
   

  	
   

  	
  1.25%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  3.00%

  	
   

  	
   

  	
   

  	
  1.50%

  	
   

  	
   

  
	
  3 5.00 to 1.00 but
  < 5.50 to 1.00

  	
   

  	
   

  	
  2.75%

  	
   

  	
   

  	
   

  	
  1.00%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  2.75%

  	
   

  	
   

  	
   

  	
  1.375%

  	
   

  	
   

  
	
  < 5.00 to 1.00

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
  0.75%

  	
   

  	
   

  	
   

  	
  0.50%

  	
   

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
  1.25%

  	
   

  	
   

  

 

If, as a result of
any restatement or other adjustment to the financial statements of the Borrower
and its Subsidiaries for any reason, the Borrower, the Administrative Agent or
the Majority Lenders determine that (i) the Total Leverage Ratio as calculated
by the Borrower as of any applicable date was inaccurate (other than as a
result of a subsequent change in GAAP) and (ii) a proper calculation of the
Total Leverage Ratio would have resulted in higher pricing for such period, the
Borrower shall immediately and retroactively be obligated to pay to the Administrative
Agent for the account of the applicable Lenders and applicable Issuing Lenders,
promptly on demand by the Administrative Agent (or, after the occurrence of an
actual or deemed entry of an order for relief with respect to the Borrower
under the Bankruptcy Code, automatically and without further action by the
Administrative Agent, any Lender or any Issuing Lender), an amount equal to the
excess of the amount of interest and fees that should have been paid for such
period over the amount of interest and fees actually paid for such period.  This paragraph shall not limit the rights of
the Administrative Agent, any Lender or any Issuing Lender otherwise set forth
in this Agreement.  The Borrower’s
obligations under this paragraph shall survive the termination of the Revolving
Commitments and the repayment of all other Obligations hereunder.

“Applicable
Law” means, with respect to any Person or matter, any law, rule,
regulation, order, decree or other requirement having the force of law relating
to such Person or matter and, where applicable, any interpretation thereof by
any Person having jurisdiction with respect thereto or charged with the
administration or interpretation thereof.

“Applicable
Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Loan and such Lender’s
Eurodollar Office in the case of a Eurodollar Rate Loan.

“Arranger”
has the meaning specified in the preamble.

“Assignee”
has the meaning specified in Section 9.7.

 3
 

“Assignment
and Acceptance” means an assignment and acceptance entered into by a
Lender and an Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit A.

“Assignor”  has the meaning specified in Section 9.7.

“Attorney
Costs” means and includes all reasonable out-of-pocket fees and
disbursements of any law firm or other external counsel.

“Authorized
Officer” means, relative to any Loan Party, the officers of such
Loan Party whose signatures and incumbency shall have been certified to the
Administrative Agent pursuant to Section 4.1.

“Available
Revolving Commitments” means with respect to any Lender at any time,
an amount equal to the excess, if any, of (a) such Lender’s Revolving
Commitment then in effect over (b) such
Lender’s Revolving Extensions of Credit then outstanding.

“Bankruptcy
Code” means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.  § 101, et
seq.), as amended.

“Base
Rate” means the higher of:

(i)            the Prime Rate; and

(ii)           0.50% per annum above the Federal
Funds Rate.

“Base
Rate Loan” means a Loan which bears interest at or determined by
reference to the Base Rate.

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the
1934 Act, except that in calculating the beneficial ownership of any particular
“person” (as such term is used in Section 13(d)(3) of the 1934 Act), such “person”
shall be deemed to have beneficial ownership of all securities that such “person”
has the right to acquire by conversion or exercise of other securities, whether
such right is currently exercisable or is exercisable only upon the occurrence
of a subsequent condition.

“Berardi” means
Christopher A. Berardi or an entity controlled by Christopher A. Berardi, and
includes any heirs, executors and permitted assigns or transferees.

“Board of Directors”
means (i) in respect of a corporation, the board of directors of such
corporation, and (ii) in respect of any other Person, the board or committee of
that Person serving an equivalent function.

“Bonding
Agreement” means, collectively, the Travelers Agreement and any
supplement thereto or replacement thereof, and any similar contractual
arrangement with providers of bid, performance or payment bonds, each of which
supplement, replacement or similar arrangement being subject to the
Intercreditor Agreement.

 4
 

“Borrower”
has the meaning specified in the preamble.

“Borrowing”
means a borrowing of Revolving Loans or Swing Line Loans made pursuant to this
Agreement.

“Business
Day” means a day of the year on which banks are not required or
authorized to close in any of New York City or Chicago and, if the applicable
Business Day relates to any Eurodollar Rate Loan, a day of the year on which
dealings are carried on in the interbank Eurodollar market.

“Capital
Adequacy Regulation” means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.

“Capital
Expenditures” means, for any period, the aggregate amount of all
expenditures of the Borrower and its Subsidiaries for fixed or capital assets
made or incurred during such period (whether or not paid in cash and including
that portion of Capitalized Leases which is capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries) which, in accordance with
GAAP, would be classified as capital expenditures.

“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)
including, without limitation, membership interests and partnership interests
or units, and any and all warrants, rights or options to purchase any of the
foregoing.

“Capitalized
Lease” means, with respect to any Person, any lease of any property
by that Person as lessee, the obligation for Rentals with respect to which is
required to be accounted for as a capital lease on the balance sheet of such
person in accordance with GAAP.

“Capitalized
Rentals” means, as of the date of any determination, the amount at
which the aggregate Rentals due and to become due under all Capitalized Leases
under which the Borrower or any of its Subsidiaries is a lessee would be
reflected as a liability on a consolidated balance sheet of the Borrower and
its Subsidiaries.

“Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the Issuing Lenders and the Lenders, as collateral for the Letter of
Credit Obligations, cash or deposit account balances pursuant to customary
documentation in form and substance reasonably satisfactory to the
Administrative Agent (which documents are hereby consented to by the Lenders
and the Issuing Lenders).  Derivatives of
such term have corresponding meanings. Cash Collateral shall be maintained in
blocked deposit accounts at the Administrative Agent.

“CERCLA”
has the meaning specified in the definition of “Environmental
Laws.”

“Claims”
means any claim or demand, by any Person, of whatsoever kind or nature for any
alleged Liabilities and Costs, whether based in contract, tort, implied or
express 

 5
 

warranty, strict
liability, criminal or civil statute, Permit, ordinance or regulation, common
law or otherwise.

“Closing
Date” means June 12, 2007.

“Code”
means the Uniform Commercial Code of the State of New York.

“Collateral”
means all Property and interests in Property now owned or hereafter acquired by
the Borrower or any of its Subsidiaries in or upon which a Lien is granted
under the Collateral Documents.

“Collateral
Documents” means the First Preferred Fleet Mortgages, the Second
Preferred Fleet Mortgages, the Note Pledge Agreement, the Equipment Security
Agreements, the Receivables Security Agreements, the Proceeds Agent Agreement,
financing statements and all other similar agreements, assignments, instruments
and documents delivered to the Administrative Agent from time to time to create,
evidence or perfect Liens securing the Obligations, and all amendments,
supplements, modifications, renewals, replacements, restatements,
consolidations, substitutions, and extensions of any of the foregoing.

“Commitment Schedule”
means Schedule V hereto, as such schedule may be modified from time to
time in connection with (i) the execution and delivery of any Assignment and
Acceptance pursuant to the terms hereof, (ii) the reduction of the Revolving
Commitment Amount pursuant to Section 2.2 hereof and (iii) any increase
in the Revolving Commitment Amount pursuant to Section 2.23 hereof.

“Compliance
Certificate” shall have the meaning specified in Section 6.4(d).

“Contaminant”
means any waste, pollutant, hazardous substance, radioactive substance or
material, toxic substance, hazardous waste, radioactive waste, special waste,
petroleum or petroleum-derived substance or waste, asbestos in any form or
condition, polychlorinated biphenyls (“PCBs”), or any hazardous or toxic
constituent thereof and includes, but is not limited to, these terms as defined
in any Environmental Law.

“Continuation/Conversion
Notice” shall have the meaning specified in Section 2.6.

“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors of the Borrower who (i) was a member of such Board of
Directors as of the Closing Date or (ii) was nominated for election or elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election or was otherwise designated by a Principal or a Related
Party of a Principal.

“Control
Investment Affiliate” means, as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more
companies.  For purposes of this
definition, “control” of a Person 

 6
 

means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.

“Customary
Permitted Investment” means, at any time, Investments of the
Borrower or any of its Subsidiaries in (a) any obligation, maturing not more
than one year after such time, issued or guaranteed by the United States
Government or issued by an agency thereof and backed by the full faith and
credit of the United States of America; (b) marketable general obligations, maturing
not more than six months after such time, issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof and rated A-2 by Standard & Poor’s Rating Group, a
division of McGraw Hill Inc.  or P-2 or
higher by Moody’s Investors Service, Inc.; (c) commercial paper, maturing not
more than nine months from the date of issue, which is issued by (i) a
corporation (other than an Affiliate of any Loan Party) organized under the
laws of any state of the United States or of the District of Columbia and rated
A-2 or higher by Standard & Poor’s Rating Group, a division of McGraw Hill
Inc.  or P-2 by Moody’s Investors
Service, Inc., or (ii) any Lender (or its holding company); (d) any certificate
of deposit, time or demand deposit (including Eurodollar time deposits) or
bankers acceptance, maturing not more than one year after such time, which is
issued by either (i) a commercial banking institution organized under the laws
of the United States of America or any State thereof or the District of
Columbia that has a combined capital, surplus and undivided profits of not less
than $500,000,000, (ii) any Lender, or (iii) (A) any branch of any Lender, (B)
any commercial banking institution organized under the laws of the United
States of America or any State thereof or any Organization for Economic
Co-operation and Development country which has a combined capital, surplus and
undivided profits of not less than $500,000,000 or (C) any financial institution
organized under the laws of a country where the Borrower or any of its
Subsidiaries is engaged in a dredging or construction project to the extent
such certificates of deposit, time or demand deposits (including Eurodollar
time deposits) or bankers acceptances are reasonably necessary in connection
with such dredging or construction project; (e) fully collateralized repurchase
agreements with a term of not more than 30 days for underlying securities of
the type described in clauses (a) and (b) above, entered into with any institution
meeting the qualifications specified in clause (d)
above; (f) participation in loans made to a
borrower (other than an Affiliate of any Loan Party) with a debt rating of A-2
or higher from Standard & Poor’s Rating Group, a division of McGraw Hill
Inc.  or P-2 or higher from Moody’s
Investors Service, Inc.; provided, however, that such loans must mature within six
months from the date such participation is purchased; (g) short-term asset
management accounts offered by any Lender for the purpose of investing in notes
issued by a corporation (other than an Affiliate of any Loan Party) organized
under the laws of any state of the United States or of the District of Columbia
and rated A-2 or higher by Standard & Poor’s Rating Group, a division of
McGraw Hill, Inc.  or P-2 or higher by
Moody’s Investors Service, Inc.; or (h) bonds issued by a municipality or
governmental agency and rated not lower than BBB by Standard & Poor’s
Rating Group, a division of McGraw Hill, Inc. or Baa2 by Moody’s Investors
Service, Inc. and purchased by the Borrower or any of its Subsidiaries in the
ordinary course of its business in connection with retainage under contracts
with its customers; or (i) United States Dollars or money in other currencies
received in the ordinary course of business; or (j) money market funds at least
95% of the assets of which constitute Cash Equivalents of the kinds described
in clauses (a) through (e), and (i) of this definition; or (k) securities with
maturities of one year or less from the date of acquisition issued or fully and
unconditionally guaranteed by any state, commonwealth or territory of the
United States of America or the federal government of Canada, 

 7
 

by any political
subdivision or taxing authority thereof, and having one of the two highest
ratings obtainable from Standard & Poor’s Rating Group, a division of
McGraw Hill Inc., or Moody’s Investors Service, Inc.; or (l) in the case of any
Subsidiary of the Borrower that is not domiciled in the United States, investments
comparable to the foregoing that have been approved by the Administrative
Agent.

“Customary
Permitted Liens” means:

(a)           Liens (other than those arising with
respect to any noncompliance with ERISA or Environmental Laws) for taxes,
assessments or governmental charges, but only to the extent that such taxes,
assessments or charges are either not delinquent or are being contested in good
faith by appropriate proceedings, and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with GAAP;

(b)           statutory Liens of landlords and
Liens of carriers, warehousemen, mechanics, materialmen, suppliers and other
Liens imposed by law (including maritime law) created in the ordinary course of
business of the Borrower and its Subsidiaries, but only to the extent that the
amounts secured or to be secured by such Liens are either not overdue or are
being contested in good faith and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP;

(c)           Liens (other than any Lien imposed by
ERISA or Environmental Laws) incurred or deposits (including, without
limitation, security deposits) made in the ordinary course of the Borrower’s
business or any of its Subsidiaries’ businesses (including, without limitation,
surety bonds and appeal bonds) in connection with workers’ compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, contracts (other than for the repayment of
borrowed money or to stay a judgment pending an appeal thereof), statutory
obligations and other similar obligations or arising as a result of progress
payments under government contracts, but only to the extent that the amounts
secured or to be secured by such Liens are either not delinquent or are being
contested in good faith and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;

(d)           survey exceptions or encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use of real
property, which do not materially interfere with the ordinary conduct of the
business of the Borrower and its Subsidiaries; and

(e)           Liens of or resulting from any
judgment or award, other than any judgment or award that gives rise to an Event
of Default, the time for appeal or petition for rehearing of which shall not
have expired, or in respect of which the Borrower or any of its Subsidiaries
shall at any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured.

 

 8

“Debt”
means and includes, with respect to any Person, (i) indebtedness for borrowed
money, (ii) obligations evidenced by bonds (including, without limitation,
license, bid, performance, lien or payment bonds), debentures, notes or other
similar instruments, (iii) obligations which have been incurred in connection
with the acquisition of property or services (including, without limitation,
obligations to pay the deferred purchase price of property or services),
excluding trade payables and accrued expenses incurred in the ordinary course
of business, (iv) obligations secured by any Lien or other charge upon property
or assets owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations, (v) obligations created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (vi) the
principal amount of Capitalized Rentals under any Capitalized Lease, (vii)
reimbursement obligations with respect to letters of credit, (viii) obligations
under Rate Protection Agreements and (ix) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (viii)
above.  For the avoidance of doubt and
notwithstanding the requirements of GAAP, Capital Stock issued by Borrower
hereafter shall not constitute Debt (including for the purpose of calculation
of the covenants in Section 6.3) so long as
such Capital Stock does not require any cash payments or dividends thereon or
require any mandatory redemption or repurchase prior to the date one year after
the maturity of the Obligations.

“Default”
means an event which, with the lapse of time or the giving of notice, or both,
would be an Event of Default.

“Defaulting
Lender” has the meaning specified in Section
2.4(c).

“Default
Rate” has the meaning specified in Section
2.9.2.

“Deposit”
has the meaning specified in Section 7.2.

“Designated
Vessel” means (i) all vessels owned by the Borrower or any of its
Subsidiaries and documented under the federal laws of the United States of
America, (ii) any vessels, whether or not documented in compliance with clause (i), with a book value of at least
$750,000, and (iii) any vessels constituting Collateral.

“Disposition”
means with respect to any Property, any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed
of” shall have correlative meanings.

“DOL”
means the United States Department of Labor.

“Dollar Equivalent”
means, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in any
Alternative Currency, the equivalent amount thereof in Dollars as determined by
the Administrative Agent, as the case may be, at such time on the basis of the
Spot Rate (determined 

 9
 

in respect of the most recent Revaluation Date) for the purchase of
Dollars with such Alternative Currency.

“Dollars”
and the sign “$” each means lawful money of
the United States of America.

“Domestic
Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Domestic Lending Office” on Schedule IV 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, with respect to any period, as determined in accordance with GAAP, the
sum of the amounts for such period of Net Income, (a) plus,
without duplication and to the extent reflected as a charge in the consolidated
statement of such Net Income for such period: (i) depreciation, depletion and
amortization expense, (ii) federal, state, local and foreign income taxes,
(iii) Interest Expense, (iv) transaction fees and expenses incurred in
connection with the Transactions to the extent not capitalized and to the
extent not exceeding in the aggregate $3,000,000, (v) non-cash charges and
losses (excluding any such non-cash charges or losses to the extent (x) there
were cash charges with respect to such charges and losses in past accounting
periods or (y) there is a reasonable expectation that there will be cash
charges with respect to such charges and losses in future accounting periods),
(vi) any amounts included in the calculation of Net Income for amortization or
non-cash charges for the write-off or impairment of goodwill, intangibles or
other purchase accounting adjustments related to the accounting for the
Transactions or other acquisitions under GAAP (including Financial Accounting
Standards No. 141 and 142), (vii) fees and expenses incurred in connection with
the Bonding Agreement and the Equipment Financing Debt, (viii) Net Income
attributable to the minority equity interest in NASDI that is not owned by the
Borrower to the extent the Net Income in respect of such minority equity
interest is received by the Borrower and (ix) transaction fees and expenses
incurred in connection with the acquisition of the vessels Ohio and
Terrapin Island to the extent not
capitalized, and (b) minus, without duplication, (i) non-cash gains (excluding
any such non-cash gains to the extent (x) there were cash gains with respect to
such gains in past accounting periods or (y) there is a reasonable expectation
that there will be cash gains with respect to such gains in future accounting
periods) and (ii) Net Income attributable to the minority equity interest in
NASDI that is not owned, directly or indirectly, by the Borrower to the extent
the Net Income in respect of such minority equity interest is distributed to
the holder or holders of such minority equity interest and (c) plus,
without duplication, cash dividends received by the Borrower or any Subsidiary
from Amboy Aggregates, a New Jersey joint venture, and any other equity joint
ventures.

“Environmental
Claim” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential or actual liability under
Environmental Laws or responsibility for violation of any Environmental Law or
for release or injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages (punitive
or otherwise), cleanup, removal, remedial or response costs, restitution, civil
or criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon (a) the presence, placement, or Release (including
intentional and unintentional, 

 10
 

negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental or Releases) of any Hazardous Material at, in, or from Property,
whether or not owned by the Borrower, or (b) any other circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.

“Environmental
Laws” means all international, foreign, federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative or judicial orders, licenses, authorizations
and permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use and natural resource
matters now or hereafter in effect; including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”),
the Oil Pollution Act of 1990, as amended, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, as amended, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act, and
the Emergency Planning and Community Right-to-Know Act, and the Occupational
Safety and Health Act, and any analogous state or local laws.

“Equipment
Financing Debt” means Debt incurred pursuant to the Credit Agreement
dated December 17, 2003 between General Electric Capital Corporation and Great
Lakes to finance certain equipment of the Borrower and the Subsidiary
Guarantors existing on the Closing Date.

“Equipment
Security Agreement” means the “Lender Equipment Security Agreement”
referred to and as defined in the Intercreditor Agreement.

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

“ERISA
Affiliate” means any (a) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
IRC) as the Borrower, (b) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the IRC) with the Borrower, and (c) member of the same affiliated service group
(within the meaning of Section 414(m) of the IRC) as the Borrower, any
corporation described in clause (a) above or any partnership or trade or
business described in clause (b) above.

“Euro” mean the
lawful currency of the Participating Member States introduced in accordance
with the EMU Legislation.

“Eurodollar
Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Office” on Schedule IV 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.

 11
 

“Eurodollar
Rate Loan” means a Loan bearing interest, at all times during the
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBOR Rate. All Loans denominated in an Alternative Currency
must be Eurodollar Rate Loans.

“Events
of Default” has the meaning specified in Section
7.1.

“Existing Credit
Agreement” means that certain Credit Agreement dated as of December 22,
2003 among the Borrower, certain of the Loan Parties, the lenders from time to
time party thereto and Bank of America, N.A., as amended, supplemented or
otherwise modified prior to the Closing Date.

“Existing
L/C’s” has the meaning specified in Section
3.11.

“Existing
Lenders” means the “Lenders” party to the Existing Credit Agreement.

“Facility”
means the Revolving Commitments and the extensions of credit made thereunder.

“Federal Funds Rate”
means, for any day, a fluctuating interest rate 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 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 which 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 the Administrative Agent. 
The Administrative Agent’s determination of such rate shall be binding
and conclusive absent manifest error.

“Federal
Reserve Board” means the Board of Governors of the Federal Reserve
System, or any successor thereto.

“Financial
Letter of Credit” means any standby letter of credit issued pursuant
to this Agreement, other than a Performance Letter of Credit.  The Administrative Agent shall determine
whether any Letter of Credit constitutes a “Financial Letter of Credit” in its
reasonable discretion in consultation with the Borrower.

“Financial Letter of
Credit Availability” means, at any time of determination, an amount equal
to the lesser of (a) the Letter of Credit Availability at such time and (b) the
Financial Letter of Credit Sublimit.

“Financial
Letter of Credit Sublimit” means $15,000,000.

“First
Preferred Fleet Mortgages” means (i) the First Preferred Fleet Mortgage of even date herewith, as
amended, restated, supplemented or modified from time to time, executed and
delivered by Great Lakes and any other applicable Loan Party in favor of the
Administrative Agent, for the benefit of the Secured Parties, granting a first
priority lien on and security interest in certain United States flag vessels,
(ii) the First Preferred Ship Mortgage of even date herewith, as amended,
restated, supplemented or modified from time to time, executed and delivered by

 12
 

Great
Lakes and any other applicable Loan Party in favor of the Administrative Agent,
for the benefit of the Secured Parties, granting a first priority lien on and
security interest in a certain Republic of the Marshall Islands flag vessel and
(iii) any other first preferred fleet or ship mortgages hereafter
executed and delivered by any Loan Party in favor of the Administrative Agent,
for the benefit of the Lender Secured Parties.

“Fiscal
Quarter” means any quarter of any Fiscal Year.

“Fiscal
Year” means the fiscal year of the Loan Parties consisting of a
period of twelve consecutive months ending on December 31.

“Foreign
Currency Contract” has the meaning specified in Section 6.1(o).

“FX
Trading Office”  means the Chicago office of the Administrative
Agent, or such other office of the Administrative Agent or its parent, ABN AMRO
Bank, N.V., as the Administrative Agent may designate from time to time.

“GAAP”
means generally accepted accounting principles set forth in the rules,
regulations, statements, opinions and pronouncements of the American Institute
of Certified Public Accountants and of the Financial Accounting Standards Board
(or agencies with similar functions of comparable stature and authority within
the accounting profession), except as provided in the definitions of “Debt” and
“Interest Expense” in respect of the treatment of Capital Stock of the Borrower
pursuant to Statement of Financial Accounting Standards No. 150 (“FAS 150”),
which, subject to Section 1.4, are
applicable to the circumstances as of the date of determination.

“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.

“Granting
Lender” has the meaning specified in Section 9.7.

“Great
Lakes” means Great Lakes Dredge & Dock Company, LLC, a Delaware
limited liability company.

“Guaranties”
by any Person shall mean all obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any Debt,
dividend or other obligation, of any other Person (the “Primary
Obligor”) in any manner, including, without limitation, all
obligations incurred through an agreement, contingent or otherwise, by such
Person:  (i) to purchase such Debt or
obligation or any property or assets constituting security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of such Debt or
obligation or (y) to maintain working capital or other balance sheet condition
or otherwise to advance or make available funds for the purchase or payment of
such Debt or obligation, or (iii) to lease property or to purchase Securities
or other property or services primarily for the purpose of assuring the owner
of such Debt or obligation of the ability of the Primary Obligor to make
payment of the Debt or obligation, or (iv) otherwise to assure the owner of the
Debt or obligation of the Primary Obligor against loss in respect thereof.  For the purposes of all computations made under
this 

 13
 

Agreement, a Guaranty in respect of any Debt for borrowed money shall
be deemed to be Debt equal to the principal amount of such Debt for borrowed
money which has been guaranteed (or the aggregate amount of such Debt which is
guaranteed under such Guaranty, whichever is less), and a Guaranty in respect
of any other obligation or liability or any dividend shall be deemed to be Debt
equal to the maximum aggregate amount of such obligation, liability or dividend
so guaranteed.  Guaranties shall not include
reimbursement obligations with respect to letters of credit but shall include
guaranties of reimbursement obligations with respect to such letters of credit.

“Hazardous
Materials” means all those substances, materials or wastes, which
are regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances, materials or wastes identified
under any Environmental Law as a hazardous waste, hazardous constituent,
special waste, hazardous substance, hazardous material, or toxic substance,
pollutant, contaminant or words of similar meaning, asbestos, or petroleum,
including crude oil or any fraction thereof, and all substances identified
under CERCLA as hazardous.

“Immaterial Subsidiary”
means any Subsidiary of the Borrower that at any time has Total Assets of less
than $500,000.

“Impermissible
Qualification” means, relative to the opinion or certification of
any independent public accountant as to any financial statements of the
Borrower and its Subsidiaries, any qualification or exception to such opinion
or certification:  (a) which is of a “going
concern” or similar nature, (b) which relates to the limited scope of
examination of matters relevant to such financial statement, or (c) which
relates to the treatment or classification of any item in such financial
statements and which, as a condition to its removal, would require an
adjustment to such item the effect of which would be to cause any violation of Section 6.3.

“Increase Effective
Date” has the meaning specified in Section 2.23(d).

“Indemnified
Liabilities” has the meaning specified in Section
9.4.

“Indemnitee”
has the meaning specified in Section 9.4.

“Intercreditor
Agreement” means the Intercreditor Agreement of even date herewith
by and among the Administrative Agent, Travelers, the other “Sureties” and “Great
Lakes Entities” party thereto and referred to and defined therein, as amended,
restated, supplemented or otherwise modified from time to time.

“Interest
Coverage Ratio” has the meaning specified in Section
6.3(b).

“Interest
Expense” means, for any Fiscal Quarter, the aggregate consolidated
interest expense (net of interest income) of the Borrower and its consolidated
Subsidiaries for such Fiscal Quarter, as determined in accordance with GAAP,
including (i) Non-Use Fees paid or payable during such Fiscal Quarter, (ii) all
other fees paid or payable with respect to the issuance or maintenance of any
Guaranty or contingent Debt (including Letters of Credit but excluding fees
paid under the Bonding Agreement), which, in accordance with GAAP, would be
included as interest expense, (iii) net costs or benefits under any Rate
Protection Agreement (excluding (A) any gain or loss recognized under GAAP
resulting from the mark to market 

 14
 

valuation of any Rate Protection Agreement and (B) the costs of any
commodity hedging transaction or foreign currency hedging transaction) and (iv)
the portion of any payments made in respect of Capitalized Rentals of the
Borrower and its consolidated Subsidiaries allocable to interest expense, but
excluding any amortization of costs and expenses incurred in connection with,
and relating to, this Agreement or other financings permitted by this
Agreement.  Notwithstanding the
foregoing, “Interest Expense” shall not include (a) any non-cash dividends or
other non-cash payments in respect of any Capital Stock of the Borrower  that is not included in the definition of “Debt”
pursuant to the last sentence of such definition or (b) the positive or
negative mark to market value of any interest rate hedging transaction.

“Interest
Period” means, relative to any Eurodollar Rate Loan, the period from
the date on which such Eurodollar Rate Loan is made or continued as, or
converted into, a Eurodollar Rate Loan pursuant to Section
2.4 or 2.6 as the case may be,
and, unless the maturity of such Eurodollar Rate Loan is accelerated, the day
which numerically corresponds to such date one, two, three or six months
thereafter (or such other periods as available and agreed to by all the Lenders
and the Administrative Agent), as the Borrower may select in its relevant
notice pursuant to Section 2.4 or 2.6, as the case may be; provided that:

(a)           the Borrower shall not be permitted
to select Interest Periods to be in effect at any one time which have
expiration dates occurring on more than 8 
different dates;

(b)           if there exists no numerically
corresponding day in such month, such Interest Period shall end on the last
Business Day of such month;

(c)           if such Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next following Business Day (unless such next following Business Day
is a Business Day falling in a new calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and

(d)           the Borrower shall not be permitted
to select, and there shall not be applicable, any Interest Period that would
end later than the Revolving Commitment Termination Date.

“Investment”
means, as applied to any Person, any purchase or other acquisition by that
Person of Securities or Debt, or of a beneficial interest in Securities or
Debt, of any other Person, any loan, advance (other than deposits with
financial institutions available for withdrawal on demand, prepaid expenses,
advances to employees, officers and directors and similar items made or
incurred in the ordinary course of business), capital contribution by that
Person to any other Person, and all other items that are or would be classified
as investments on a balance sheet prepared in accordance with GAAP.  The amount of any Investment shall be
determined in conformity with GAAP.  The
amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon.

“IRC”
means the Internal Revenue Code of 1986, as amended.

“IRS”
means the Internal Revenue Service.

 15
 

“Issuing
Lender” means any Lender designated by the Borrower and consenting
to such designation as an Issuing Lender, including, as of the Closing Date,
LaSalle and Bank of America, N.A.; provided, that as of any date of
determination, only three Lenders may be “Issuing Lenders” hereunder without
the prior written consent of the Administrative Agent.

“Lenders”
means the institutions listed on the signature pages hereof and each
institution that shall become a party hereto pursuant to Section
9.7.

“Letters
of Credit” has the meaning specified in Section
3.1

“Letter of Credit
Availability” means, at any time of determination, an amount  equal to the lesser of (a) the Revolving
Commitment Amount then in effect minus the then outstanding Dollar
Equivalent principal balance of the Loans and (b) the Letter of Credit
Sublimit.

“Letter
of Credit Fee” has the meaning specified in Section
3.3.

“Letter
of Credit Obligations” means at any time, but without duplication,
an amount equal to the sum of (a) the Dollar Equivalent amount available to be
drawn under outstanding Letters of Credit, plus
(b) all Dollar Equivalent amounts drawn, but not yet reimbursed, under Letters
of Credit.

“Letter
of Credit Request” has the meaning specified in Section 3.2.

“Letter of Credit
Sublimit” means $85,000,000, as the same may be increased in accordance
with Section 2.23 hereof.

“Liabilities
and Costs” means all liabilities, obligations, responsibilities,
losses, damages, punitive damages, consequential damages, treble damages,
reasonable out-of-pocket costs and expenses (including, without limitation,
Attorney Costs, expert and consulting fees and costs of investigation and feasibility
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future.

“LIBOR Rate” means
a rate of interest equal to (a) the per annum rate of interest at which United
States dollar deposits in an amount comparable to the amount of the relevant
Eurodollar Rate Loan and for a period equal to the relevant Interest Period are
offered in the London Interbank Eurodollar market at 11:00 A.M. (London time)
two (2) Business Days prior to the commencement of such Interest Period (or
three (3) Business Days prior to the commencement of such Interest Period if
banks in London, England were not open and dealing in offshore United States
dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Administrative Agent in its sole discretion) or, if the Bloomberg Financial Markets system or another authoritative
source is not available, as the LIBOR Rate is otherwise determined by the
Administrative Agent in its sole and absolute discretion, divided by (b) a
number determined by subtracting from 1.00 the then stated maximum reserve
percentage for determining reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation 

 16
 

D), such rate to remain fixed for such Interest Period.  The Administrative Agent’s determination of
the LIBOR Rate shall be conclusive, absent manifest error

“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance for the payment of money, lien
(statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financial lease having
substantially the same economic effect as any of the foregoing and the filing
of any financing statement (other than a financing statement filed by a “true”
lessor pursuant to Section 9-408 of the Code or other comparable law of any
jurisdiction) naming the owner of the asset to which such Lien relates as
debtor under the Code or other comparable law of any jurisdiction but excluding
unauthorized financing statements filed under the UCC (or any similar law) with
respect to which no security interest exists in the assets described in such
financing statements.

“Loan”
means, as the context may require, Revolving Loans and/or Swing Line Loans.

“Loan
Documents” means this Agreement, the Notes, the Letters of Credit,
the Loan Party Guaranties, the Intercreditor Agreement, the Collateral
Documents, all material agreements, instruments and documents which create or
perfect any of the Liens securing the Obligations or create any obligation
between any Loan Party and the Administrative Agent or any Lender, each Notice
of Borrowing, Continuation/Conversion Notice, Letter of Credit Request,
Compliance Certificate, the Supporting L/C Documents, and all documents and
instruments that are agreed by the Borrower and the Administrative Agent to
constitute a “Loan Document” hereunder heretofore, now or hereafter executed by
or on behalf of any Loan Party and delivered to or for the benefit of the
Administrative Agent or any Secured Party in connection with this Agreement,
and all amendments, supplements, modifications, renewals, replacements,
restatements, consolidations, substitutions, and extensions of any of the
foregoing.

“Loan
Party” means the Borrower, each Subsidiary Guarantor and each other
Affiliate of the Borrower executing a Loan Document.

“Loan
Party Guaranties” means the Guaranties of even date herewith
executed and delivered pursuant to Section 4.1,
pursuant to which the Subsidiary Guarantors fully, unconditionally and
irrevocably guaranty the prompt and complete payment and performance of the
Obligations of the Borrower, as amended, restated, supplemented or otherwise
modified from time to time.

“Madison Dearborn
Partners” means Madison Dearborn Partners, LLC.

“Majority
Lenders” means, at any time, the Lenders having, in the aggregate, a
Revolving Credit Percentage of more than 50% of the total Revolving Credit
Percentages of all of the Lenders at such time.

“Management Investors”
means those executive officers of the Borrower or its Subsidiaries owning
Capital Stock of the Borrower.

 17
 

“Material
Adverse Effect” means (a) a material adverse effect upon (i) the
condition (financial or otherwise), operating results, assets, liabilities,
business or operations of the Borrower and its Subsidiaries, taken as a whole,
or (ii) the validity or enforceability of any of the Loan Documents, the Liens
granted to the Administrative Agent and the Secured Parties, or the rights and
remedies of the Administrative Agent and the Lenders thereunder.

“Multiemployer
Plan” means a “multiemployer plan” as defined in Section 4001(a)(3)
of ERISA which is, or within the immediately preceding six (6) years was,
contributed to by the Borrower or any ERISA Affiliate.

“NASDI” means
North American Site Developers, Inc., a Massachusetts corporation, and, upon
the consummation of the NASDI Restructuring, means North American Site
Developers, LLC, a Delaware limited liability company.

“NASDI Holdings”
means NASDI Holdings Corporation, a Delaware corporation.

“NASDI
Restructuring” means, collectively, (i) the redemption, repurchase
or other acquisition of all of the capital stock of North American Site
Developers, Inc. owned by Berardi for an amount not greater than $50,000, (ii)
the conversion of up to $28,000,000 of intercompany indebtedness owing by North
American Site Developers, Inc. to the Borrower into capital stock of North
American Site Developers, Inc., (iii) the Borrower’s contribution of all of the
issued and outstanding shares of capital stock of North American Site
Developers, Inc., a Massachusetts corporation, to NASDI Holdings or another wholly-owned
Subsidiary, (iv) the conversion of North American Site Developers, Inc., a
Massachusetts corporation, into North American Site Developers, LLC, a Delaware
limited liability company and (v) the admission of Berardi as a member of NASDI
and the issuance to Berardi of a 35% non-voting profits interest in NASDI.

“Net
Cash Proceeds” means the gross cash proceeds received by the
Borrower and its Subsidiaries in connection with the consummation of any of the
transactions of the type resulting in a mandatory prepayment under clause (b)
of Section 2.8.1, in any such case, net of
all fees, expenses, charges, taxes, commissions and costs incurred by the
Borrower or any of its Subsidiaries in connection with the consummation of such
transactions; provided, however, that Net Cash Proceeds shall exclude
any cash proceeds received by the Borrower or any of its Subsidiaries from the
sale of any assets or equity interests (including, without limitation, by way
of merger, consolidation, reorganization or similar transaction) of NASDI or
NASDI Holdings to the extent that (a) the Borrower or such Subsidiary is
required to (i) distribute such proceeds as an equity distribution to the
holders of NASDI’s equity interests other than the Borrower or any of its
Subsidiaries (including, without limitation, distributions of available cash
flow and liquidating distributions) pursuant to NASDI’s limited liability
company agreement or other organizational documents or (ii) pay such proceeds
to Christopher Berardi (or his heirs, executor or assigns) as a bonus pursuant
to his employment agreement as then in effect and (b) the aggregate amount so
excluded does not exceed 35% of the gross amount of such cash proceeds
(including the amount of cash subsequently received in respect of any non-cash
proceeds) received by the Borrower and its Subsidiaries from such sale or
similar transaction.

 18

“Net
Income” means, for any period, the aggregate of all amounts
(exclusive of all amounts in respect of any extraordinary or non-recurring gain
or loss) which, in accordance with GAAP, would be included as net income on a
consolidated statement of income of the Borrower and its Subsidiaries for such
period.

“Non-Consenting
Lender” has the meaning specified in Section 9.1.

“Non-Use
Fee” shall have the meaning specified in Section
2.14(a).

“Note
Indenture” means that certain Indenture dated as of December 22,
2003 between The Bank of New York, as trustee, and the Borrower and the
Subsidiary Guarantors.

“Note
Indenture Obligations” means all of (a) the Borrower’s obligations
under and with respect to the Note Indenture, including, without limitation,
all obligations to pay principal in an aggregate principal amount not to exceed
$175,000,000 under its 7-3/4% Senior Subordinated Notes due 2013, and all
interest, premium, fees, charges, expenses and indemnities with respect
thereto, and to effect redemptions, repurchases and prepayments with respect
thereto, in any case, whether fixed, contingent, matured or unmatured, or (b)
the Borrower’s obligations under and with respect to such other unsecured Debt
the net proceeds of which are designated to be used, and are used reasonably
promptly after the incurrence thereof, to refinance in whole or in part the
Note Indenture Obligations described in clause (a) above; provided, that
such refinancing Debt (i) is in an aggregate principal amount not greater than
the aggregate principal amount of the Debt being refinanced plus the
amount of any premium required to be paid thereon and any interest, fees and
costs incurred in such refinancing, (ii) has a final maturity more than 180
days after the Revolving Commitment Termination Date and requires no scheduled
payment of principal in cash prior to such date, and (iii) includes (A)
subordination provisions reasonably acceptable to the Administrative Agent and
(B) covenants, events of default and other terms and provisions (including
quantities thereof) that are no more restrictive, when taken as a whole, to the
Borrower and its Subsidiaries than are (x) in the case of any public issuance
of Debt to the Borrower, customary at the time of such refinancing of such type
for issuers with a debt rating similar to that of the Borrower and (y) in the
case of any private issuance of Debt to the Borrower, as set forth in the Note
Indenture (any such refinancing as described in this clause (b), a “Permitted
Note Refinancing”).

“Note
Pledge Agreement” means the “Lender Pledge Agreement” referred to
and as defined in the Intercreditor Agreement.

“Notes”
means the promissory notes made by the Borrower and delivered to each Lender
evidencing such Lender’s Loans and participations in Letters of Credit.

“Notice
of Borrowing” has the meaning specified in Section
2.4.

“NVDC”
means the United States Coast Guard’s National Vessel Documentation Center in
Falling Waters, West Virginia.

“Obligations”
means all loans, advances, debts, liabilities, obligations, covenants and
duties of any kind or nature, present or future, owing by any Loan Party to any
Lender, the Administrative Agent, or any Affiliate of any Lender or the
Administrative Agent, or Person 

 19
 

entitled to indemnification pursuant to this Agreement, whether
evidenced by any note, guaranty or other instrument, arising under this
Agreement or under any other Loan Document or any Rate Protection Agreement
between any Loan Party and a Lender or any Person that was an Affiliate of a
Lender at the time of the entry into of such Rate Protection Agreement, whether
or not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification, interest rate hedging transaction,
commodity hedging transaction, foreign currency hedging transaction or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. 
The term includes, without limitation, all interest (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing 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), charges, expenses, fees,
Attorney Costs and any other sum chargeable to any Loan Party under this
Agreement or any other Loan Document. 
Unless otherwise specified in this Agreement, any determination of the
amount of outstanding Obligations shall be made on a Dollar Equivalent basis.

“OLV”
has the meaning specified in Section 6.1(p).

“Other
Taxes” has the meaning specified in Section
2.16(b).

“Participant”
has the meaning specified in Section 9.7.

“PBGC”
means the Pension Benefit Guaranty Corporation.

“Performance
Letter of Credit” means any standby letter of credit issued pursuant
to this Agreement to assure completion of performance of a nonfinancial or
commercial obligation of Borrower or any of its Subsidiaries, until such time,
if any, as such letter of credit is recharacterized as relating to a financial
obligation of the Borrower or such Subsidiaries.  The Administrative Agent shall determine
whether any Letter of Credit constitutes a “Performance Letter of Credit” in
its reasonable discretion after consultation with the Borrower.

“Permit”
means any permit, approval, authorization, license, variance, or permission required
from any Governmental Authority under any Applicable Law.

“Permitted
Business Acquisition” means any acquisition by the Borrower or any
of its Subsidiaries of all or any part of the assets, shares or other equity
interests in a corporation or other Person engaged in the same business or a
business reasonably related, complimentary or incidental to the business of the
Borrower or any of its Subsidiaries but only if no Default or Event of Default
shall have occurred or be continuing immediately prior to such acquisition or
after giving effect thereto.

“Permitted
Disposition” means any Disposition of any assets of the Borrower or
any of its Subsidiaries, whether in a single transaction or a series of related
transactions, to any Person, but only if

 20
 

(a)           such Disposition of property which is
not Collateral and which (i) is made in the ordinary course of business of the
Borrower or such Subsidiary, (ii) is a Disposition from (A) the Borrower to any
of its Subsidiary Guarantors or from a Subsidiary Guarantor to the Borrower or
to another Subsidiary Guarantor, or (B) (x) the Borrower or any Subsidiary
Guarantor to a Subsidiary of the Borrower which is not a Subsidiary Guarantor,
or (y) a Subsidiary of the Borrower which is not a Subsidiary Guarantor to any
other such Subsidiary, provided that, in the case of clause (B)(x), the
aggregate amount of all such Permitted Dispositions (other than renewals and
extensions of the leases and subleases set forth on Schedule VI) made
after the Closing Date does not exceed $15,000,000 (net of the fair market
value of any property received in exchange for such Dispositions), (iii) is a
sale, lease or transfer to another Person of assets determined by the Borrower
or such Subsidiary, in its reasonable judgment, to be no longer useful or
necessary in the operations or businesses of the Borrower or such Subsidiaries
(it being understood that committing a vessel and related equipment of the
Borrower or any of its Subsidiaries to the performance of a contract to which
it is a party shall not constitute a lease of such vessel and related
equipment), or (iv) is a Disposition of any property or assets that secure any
Indebtedness permitted by Section 6.2(i),
including any Recovery Event with respect to such property or assets;

(b)           such Disposition is made in
connection with a sale and leaseback transaction involving the Disposition of
capital assets (other than Collateral, unless the disposition of such
Collateral also complies with clause (iii)
of subparagraph (c) of this definition) of
the Borrower or any of its Subsidiaries to a Person other than the Borrower or
any of its Subsidiaries and (i) such Disposition of such capital assets is for
an amount not less than the fair market value thereof (as determined by the
Borrower or such Subsidiary in its reasonable judgment), (ii) no Default or
Event of Default shall have occurred or be continuing either immediately prior
to such disposition or after giving effect thereto, (iii) the rental payments
of the lease relative to such transaction shall not be greater than the fair
market rental value (as determined by the Borrower or such Subsidiary in its
reasonable judgment) for the assets subject to such lease, and (iv) 100% of the
consideration for such Disposition shall be cash; and

(c)           such Disposition is made in
connection with the Disposition of any assets of the Borrower or its
Subsidiaries other than those of the type described in clauses
(a) and (b) above and (i) such
sale or disposition of such assets is for an amount not less than the fair
market value thereof; as determined by the Borrower or such Subsidiary in its
reasonable judgment, (ii) no Event of Default shall have occurred and be
continuing either immediately prior to such disposition or after giving effect
thereto and (iii) (A) prior to or simultaneously with such disposition, the
Borrower shall have provided, or caused one or more of its Subsidiaries to
provide, Collateral (or substitute Collateral), in the case of any Disposition
of Collateral, of equal or greater OLV (in each case, for purposes of such
substitute Collateral, as determined by the Borrower and reasonably accepted by
the Administrative Agent) to the OLV as of the Closing Date (or such later date
that the property subject to such disposition was added as Collateral
hereunder) of the property subject to such disposition (but, if the OLV of such
substitute Collateral is greater the OLV of the property subject to such
disposition, then such excess shall carry-over to any future substitution and
be credited against such future substitution) that is 

 21
 

otherwise
reasonably acceptable to the Administrative Agent, and such Collateral (or
substitute Collateral) and the Administrative Agent’s substitute Lien thereon
are subject to documentation reasonably satisfactory to the Administrative
Agent (provided that such documentation shall be satisfactory if substantially
similar to the applicable Collateral Documents executed on the Closing Date),
including, without limitation, any consents required under the Bonding
Agreement or Intercreditor Agreement, or (B) (1) at least seventy-five percent
(75%) of the consideration therefor shall be in cash and the Net Cash Proceeds
therefrom shall be payable to the Borrower or its Subsidiaries at the time of
the consummation of such Disposition, (2) in the case of any Disposition of
Collateral, the Borrower shall have concurrently with the consummation of such
Disposition prepaid the Loans and permanently reduced the Revolving Commitments
in an amount equal to such cash (except that the Borrower shall not be required
to make any such prepayment and permanent reduction to the extent that such Net
Cash Proceeds do not exceed $100,000 in any Fiscal Year), and (3) the aggregate
of all non-cash proceeds received by the Borrower and its Subsidiaries after
the Closing Date in consideration for all dispositions pursuant to this clause (c) does not exceed an amount equal to the
sum of (A) $7,500,000 plus (B) the amount
of cash subsequently received in respect of such non-cash proceeds that are
applied to permanently reduce the Revolving Commitments.

“Permitted Note
Refinancing” has the meaning specified in the definition of “Note Indenture Obligations.”

“Permitted Wells Fargo
Facility Collateral” means accounts receivable originated by the Borrower
or one of its Subsidiaries and arising out of the rendering of services by the
Borrower or such Subsidiary outside the United States of America, inventory
related to such accounts receivable, general intangibles related to such
accounts receivable and inventory, joint venture interests owned by the
Borrower or any Subsidiary with respect to joint ventures formed to render
services by the Borrower or such Subsidiary outside the United States of
America, cash collateral delivered pursuant to the terms of the Wells Fargo
Agreement to satisfy borrowing base shortfalls or pursuant to the remedies
provisions of such agreement, other property related to the foregoing or
approved in writing by the Administrative Agent and, if such other property
constitutes Collateral, the Majority Lenders, deposit accounts into which only
proceeds of the foregoing property are deposited, proceeds of the foregoing,
and books and records with respect to the foregoing.

 “Person”
means and includes any person, employee, individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
limited liability company, corporation, institution, entity, party,
Governmental Authority or a government or any political subdivision or agency
thereof.

“Plan”
means (i) an employee benefit plan defined in Section 3(3) of ERISA in respect
of which the Borrower is, or within the immediately preceding six (6) years
was, an “employer” as defined in Section 3(5) of ERISA or (ii) a defined
benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer
Plan) in respect of which the Borrower or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an “employer” as defined in Section
3(5) of ERISA.

 22
 

“Pricing
Period” means the period commencing on the forty-fifth (45th) day
after the end of a Fiscal Quarter (or in the case of the last Fiscal Quarter of
the Fiscal Year, commencing on the ninetieth (90th) day after the end of such
Fiscal Quarter) and ending on the forty-fourth (44th) day after the end of the
succeeding Fiscal Quarter (unless such succeeding Fiscal Quarter is the last
Fiscal Quarter of the Fiscal Year, in which case such period shall end on the
eighty-ninth (89th) date after the end of such Fiscal Quarter).

“Primary
Obligor” has the meaning specified in the definition of “Guaranties.”

“Prime Rate”
means, for any day, the rate of interest in effect for such day as publicly
announced from time to time by the Administrative Agent as its prime rate
(whether or not such rate is actually charged by the Administrative Agent),
which is not intended to be the Administrative Agent’s lowest or most favorable
rate of interest at any one time.  Any
change in the Prime Rate announced by the Administrative Agent shall take
effect at the opening of business on the day specified in the public
announcement of such change; provided that the Administrative Agent
shall not be obligated to give notice of any change in the Prime Rate.

“Principals”
means (i) Madison Dearborn Partners, (ii) the Management Investors and (iii)
any Related Party of a Person referred to in clauses (i) and (ii).

“Pro Forma Balance
Sheet” has the meaning specified in Section 4.1(b).

“Proceeds
Agent Agreement” has the meaning specified in the Intercreditor
Agreement.

“Property”
means any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed, plant, building, facility, structure, vessel,
underground storage tank, equipment or unit, whether tangible or intangible, or
other asset owned, leased or operated by the Borrower or any of its
Subsidiaries.

“Proposed
Change” has the meaning specified in Section 9.1.

“Rate
Protection Agreement” means any interest rate hedging transaction,
commodity hedging transaction, foreign currency hedging transaction or similar
arrangement entered into pursuant to an agreement in form and substance
(including amounts subject to such agreement) reasonably satisfactory to the
Administrative Agent.

“Receivables
Security Agreements” means the “Lender Receivables Security Agreement”
referred to in and as defined in the Intercreditor Agreement.

“Recovery
Event” means any settlement of or payment in respect of any property
or casualty insurance claim, any condemnation proceeding or requisition of
assets relating to any asset of the Borrower or any of its Subsidiaries, but
excluding any settlement of or payment in respect of any property or casualty
insurance claim, any condemnation proceeding or requisition of assets relating
to any property that is the subject of Liens permitted under Section 6.2(h)
(other than the Liens securing the Obligations and the Liens of Travelers
securing the obligations under the Bonding Agreement) securing Indebtedness
permitted under Section 6.2(i).

 23
 

“Refinancing”
means the repayment in full of the Borrower’s obligations under and with
respect to the Existing Credit Agreement, the Equipment Financing Debt and the
termination of all credit facilities or commitments, if any, with respect
thereto and, if applicable, related liens and other security granted in
connection therewith (except for the continuation of UCC financing statements
for the benefit of the Administrative Agent and the Lenders and except as
otherwise provided in Section 3.11).

“Refunded Swing Line
Loan” has the meaning specified in Section 2.1.2(c).

“Register”
has the meaning specified in Section 9.7.

“Reimbursement
Obligation” has the meaning specified in Section
3.5.

“Reinvestment
Deferred Amount” means, with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by the Borrower or any of its Subsidiaries
in connection therewith that are not applied to reduce the Revolving
Commitments pursuant to Section 2.8.1(b) as a result of the delivery of
a Reinvestment Notice.

“Reinvestment
Event” means any Disposition or Recovery Event in respect of which
the Borrower has delivered a Reinvestment Notice.

“Reinvestment
Notice” means, a written notice executed by the chief financial
officer or treasurer of the Borrower stating that no Default or Event of
Default has occurred and is continuing and that the Borrower (directly or
indirectly through a Subsidiary) intends and expects to use all or a specified
portion of the Net Cash Proceeds of a Disposition or Recovery Event to acquire,
improve, construct or repair assets used or useful in the business of the
Borrower and its Subsidiaries.

“Reinvestment
Prepayment Amount” means, with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended
prior to the relevant Reinvestment Prepayment Date to acquire assets used or
useful in the business of the Borrower or any of its Subsidiaries.

“Reinvestment
Prepayment Date” means, with respect to any Reinvestment Event, the
earlier of (a) the date occurring 365 days after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire assets useful in the Borrower’s business with all
or any portion of the relevant Reinvestment Deferred Amount.

“Related
Fund” means, with respect to any Lender, any fund that (x) invests
in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.

“Related Party “
means, (a) with respect to Madison Dearborn Partners, (i) any investment fund
controlled by or under common control with, Madison Dearborn Partners, and any
officer, director or employee of Madison Dearborn Partners or any entity
controlled by, or under common control with, Madison Dearborn Partners, (ii) any
spouse or lineal descendant (including by adoption and stepchildren) of the
officers, directors and employees referred to in 

 24
 

clause (a)(i) above, (iii) any trust, corporation, partnership or other
entity, of which 80% in interest is held by beneficiaries, stockholders,
partners or owners who are one or more of the Persons described in clause
(a)(i) or (ii) above; and (b) with respect to any officer or employee of the
Borrower or a Subsidiary of the Borrower (i) any spouse or lineal descendant
(including by adoption and stepchildren) of the officer or employee and (ii)
any trust, corporation, partnership or other entity, of which 80% in interest
is held by beneficiaries, stockholders, partners or owners who are the officer
or employee of any of the persons described in clause (b)(i) above or any
combination of these identified relationships.

“Release”
means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or
outdoor environment.

“Rentals”
means and includes as of the date of any determination thereof all fixed rents
(including as such all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property and including all
payments on Capitalized Leases) payable by the Borrower or a Subsidiary, as
lessee or sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Borrower or a Subsidiary
(whether designated as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. 
Fixed rents under any so-called “percentage leases” shall be computed
not only on the basis of the minimum rents, if any, required to be paid by the
lessee but also on the basis of any additional rents whether based on sales
volume or gross revenues or otherwise. 
With respect to leases providing for period of free rent or discounted
rent, Rentals means the amount of the actual cash payments required under the
lease, even though accounting convention may require that the rents be accrued
on an amortized basis over the term of the lease.

“Reportable
Event” means any of the events described in Section 4043 of ERISA
other than an event with respect to which the notice requirements have been
waived by regulation.

“Restricted
Payments” means (i) any dividend or other distribution on account of
any shares of any class of Capital Stock of the Borrower or any Subsidiary of
the Borrower that is not a wholly-owned Subsidiary of the Borrower (including,
without limitation, any class of preferred stock) now or hereafter outstanding
(except a dividend payable solely in shares or any warrants, options or other
rights with respect thereto or rights to acquire shares, of common stock of the
Borrower or any Subsidiary of the Borrower), (ii) any redemption, retirement,
repurchase, sinking fund or similar payment, purchase or other acquisition for
value of any shares of any class of Capital Stock of the Borrower or any
Subsidiary of the Borrower that is not a wholly-owned Subsidiary of the
Borrower now or hereafter outstanding or any warrants, options or other rights
with respect thereto, (iii) any voluntary or mandatory redemption, repurchase,
retirement, sinking fund payment or other payment of principal with respect to
the Note Indenture Obligations, or any voluntary payment or other prepayment of
interest with respect to the Note Indenture Obligations, except in each case in
connection with a Permitted Note Refinancing or (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries.

 25
 

“Revaluation Date”
means (a) with respect to any Loan, each of the following:  (i) each date of a Borrowing of a Eurodollar
Rate Loan denominated in an Alternative Currency, (ii) each date of a
continuation of a Eurodollar Rate Loan denominated in an Alternative Currency,
and (iii) such additional dates as the Administrative Agent shall determine or
the Majority Lenders shall require; and (b) with respect to any Letter of
Credit, each of the following:  (i) each
date of issuance of a Letter of Credit denominated in an Alternative Currency,
(ii) each date of an amendment of any such Letter of Credit having the effect
of increasing the amount thereof (solely with respect to the increased amount),
(iii) each date of any payment by the Issuing Lender under any Letter of Credit
denominated in an Alternative Currency, (iv) in the case of the Existing
Letters of Credit, the Closing Date and (v) such additional dates as the
Administrative Agent or the applicable Issuing Lender shall determine or the
Majority Lenders shall require.

“Revolving
Commitment” has the meaning specified in Section
2.1.1.

“Revolving
Commitment Amount” means $155,000,000, as the same may be reduced
after the Closing Date pursuant to Section 2.2
or increased after the Closing Date pursuant to Section
2.23.

“Revolving
Commitment Termination Date” means the fifth anniversary of the
Closing Date or the earlier date of termination in whole of all of the
Revolving Commitments pursuant to Section 2.2
or 7.2.

“Revolving
Credit Percentage” means, relative to any Lender, its percentage of
the Revolving Commitment Amount as set forth on the Commitment Schedule, or if
such Lender has entered into an Assignment and Acceptance, the percentage set
forth for such Lender in the Register maintained pursuant to Section 9.7(d) (or, at any time after the
Revolving Commitments shall have expired or terminated, the percentage which
the aggregate amount of such Lender’s Revolving Extensions of Credit then
outstanding constitutes of the amount of the Total Revolving Extensions of
Credit then outstanding).

“Revolving
Extensions of Credit” means, with respect to any Revolving  Lender at any time, an amount equal to the
sum of (a) the aggregate Dollar Equivalent amount of all Revolving Loans made
by such Lender then outstanding, (b) such Lender’s Revolving Credit Percentage
of the Swing Line Loans then outstanding and (c) such Lender’s Revolving Credit
Percentage of the Letter of Credit Obligations then outstanding.

“Revolving Loan”
has the meaning specified in Section 2.1.1.

“Revolving Loan
Availability” means, at any time, an amount equal to the Revolving
Commitment Amount then in effect minus the Letter of Credit Obligations minus
the outstanding Swing Line Loans.

“Second
Preferred Fleet Mortgages” means (i) the Second Preferred Fleet Mortgage of
even date herewith, as amended, restated, supplemented or modified from time to
time, executed and delivered by Great Lakes or any other applicable Loan Party
in favor of the Administrative Agent, for the benefit of the Secured Parties,
granting a second priority lien on and security interest in certain United
States flag vessels, (ii) the Second Preferred Mortgage of even date herewith,
as amended, restated, supplemented or modified from time to time, executed 

 26
 

and
delivered by Great Lakes or any other applicable Loan Party in favor of the
Administrative Agent, for the benefit of the Secured Parties, granting a second
priority lien on and security interest in a certain Republic of the Marshall
Islands flag vessel and (iii) any other second preferred fleet or ship
mortgages hereafter executed and delivered by any Loan Party in favor of the
Administrative Agent, for the benefit of the Lender Secured Parties.

“Secured
Parties” means, collectively, the Administrative Agent, the Issuing
Lenders, the Lenders and each other Person to whom any Obligations are owing,
including, without limitation, each Person entitled to indemnification pursuant
to Section 9.4.

“Security”
has the meaning specified in Section 2(1) of the 1933 Act.

“Ship
Mortgages” means both of, and “Ship Mortgage” means each of, the First
Preferred Fleet Mortgages and the Second Preferred Fleet Mortgages.

“Solvent”
means when used with respect to any Person that (a) the fair value of all its
assets is in excess of the total amount of its debts (including contingent
liabilities) determined on a going concern basis; (b) it is able to pay its
matured debts and its other debts as they mature in the ordinary course of
business; (c) it does not have unreasonably small capital for the business in
which it is engaged or for any business or transaction in which it is about to
engage; and (d) it is not “insolvent” as such term is defined in Section
101(32) of the Bankruptcy Code.

“SPC”
has the meaning specified in Section 9.7.

“Spot Rate”  shall
mean, for any currency, the rate quoted by the Administrative Agent as the spot
rate for the purchase by the Administrative Agent of such currency at the
prevailing interbank rate with another currency through its FX Trading Office
at approximately 9:00 A.M. (Eastern time) on the date two Business Days prior
to the date as of which the foreign exchange computation is made.

“Subsidiary”
of any Person means any corporation, partnership, limited liability company or
other association or entity of which more than fifty percent (50%) of the
Voting Stock of such entity is at any time, directly or indirectly, owned by
such Person.

“Subsidiary
Guarantors” means each domestic Subsidiary of the Borrower which
executes and delivers a Loan Party Guaranty in connection with this Agreement.

“Supporting L/C
Document has the meaning set forth in Section 3.12.

“Swing Line
Availability” means, as of any date of determination, the lesser of (i) the
Swing Line Commitment Amount and (ii) the Revolving Loan Availability.

“Swing Line Commitment
Amount” means $5,000,000, which commitment constitutes a subfacility of the
Revolving Commitment of the Swing Line Lender.

“Swing Line Lender”
means LaSalle.

 27
 

“Swing Line Loan”
has the meaning set forth in Section 2.1.2.

“Tax
Sharing Agreement” means any tax sharing agreement entered into by
the Loan Parties after the Closing Date and reasonably approved by the
Administrative Agent.

“Taxes”
has the meaning specified in Section 2.16(a).

“Termination
Event” means (i) a Reportable Event with respect to any  Plan; (ii) the withdrawal of the Borrower or
any ERISA Affiliate from a Plan during a plan year in which the Borrower or
such ERISA Affiliate was a “substantial employer” as defined in Section
400l(a)(2) of ERISA; (iii) the imposition of an obligation on the Borrower or
any ERISA Affiliate under Section 4041 of ERISA to provide affected parties
written notice of intent to terminate a Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Plan; (v) any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; or (vi) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan.

“Total Assets”
means, with respect to any Person, the aggregate of all assets of such Person
and its Subsidiaries as would be shown on the most recently prepared
consolidated balance sheet of such Person in accordance with GAAP.

“Total
Funded Debt” of any Person means as of any date of determination,
all Debt of the Borrower and its consolidated Subsidiaries which, in accordance
with GAAP, should be included as liabilities in the consolidated balance sheet
of the Borrower and its Subsidiaries at such time (excluding, however, the
undrawn face amount of all Letters of Credit and all Capitalized Rentals due
within one year from the date of determination hereunder).  “Total Funded Debt,” when used with respect
to the Borrower, shall mean the aggregate amount of all such Total Funded Debt
of the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP (eliminating intercompany items).  “Total Funded Debt” shall be calculated net
of cash and cash equivalents held by the Borrower and its Subsidiaries in the
United States.

“Total
Leverage Ratio” has the meaning specified in Section
6.3(a).

“Total
Revolving Extensions of Credit” means at any time the aggregate
amount of Revolving Extensions of Credit of the Lenders at such time.

“Transactions”
means, collectively, the Refinancing, the execution and delivery of the Loan
Documents, the making of the initial Loans, the issuance of the initial Letters
of Credit if any on the Closing Date, the granting of Liens to the
Administrative Agent pursuant to the terms of the Loan Documents, and the
application of all proceeds of any of the foregoing.

“Travelers”
means, collectively, Travelers Casualty and Surety Company and Travelers
Casualty and Surety Company of America, together with their successors and
assigns.

 28
 

“Travelers
Agreement” means, collectively, the “Bonding Agreement” and “Underwriting
Documents” referred to and as respectively defined in the Intercreditor
Agreement.

“type”
has the meaning specified in Section 2.3.

“Voting
Stock” means Securities or other equity interests of any class or
classes of a corporation, partnership, limited liability company or other
association or entity the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the board of directors,
managers, general partners, managing members or Persons performing similar
functions.

“Wells Fargo Agreement”
means that certain International Letter of Credit Agreement dated as of
September 29, 2006 among the Borrower, Great Lakes and Wells Fargo HSBC Trade
Bank, N.A., as refinanced or replaced in whole or in part from time to time, as
permitted hereunder.

“Wells Fargo Documents”
means the Wells Fargo Agreement and each of the “International Loan Documents”,
the “Borrower Agreement”, the “Fast Track Agreement”, the “Fast Track Borrower
Agreement Supplement” and the “Ex-Im Bank Guaranty” (as such terms are defined
in the Wells Fargo Agreement), in each case, as refinanced or replaced in whole
or in part from time to time, as permitted hereunder.

“Withholding
Forms” has the meaning specified in Section
2.16.

* * * * *

 29

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